City Live/Work Incentives

St. Louis Park, MN

Have you checked to see if your city has any live and/or work incentives? Cities need for you to live and work in them because you pay the bills and generate tax revenue for wherever you live. In this economy, many cities are beginning to compete, not only for industry, but for population. There just may be incentives to live where you want.

St. Louis Park, Minnesota, has just such programs. The population is 47,000 and St. Louis Park is located just 10 minutes from downtown Minneapolis. If you work for a local business there, you qualify for a $2500 loan toward buying a home and an additional $1000 if you buy a foreclosure. Don’t like that it’s just a loan? Stay in the home for at least 3 years and the loan is forgiven! Great way to improve their economy and sell distressed properties!

The City of Cleveland offers residential tax abatement on newly constructed and rehabilitated homes in all 36 neighborhoods.  A newly constructed home in Cleveland receives 100 percent, 15-year tax abatement for construction of the home.  Rehabilitated properties receive a 100 percent, 10-year abatement on the increased value of their property after the work has been completed.

As an example, a $150,000 home without the tax abatement pays $2970 per year in tax.  With the abatement, they pay $594 for a savings of $198/month!

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5 Things that can Hurt Your Chances of Getting a Mortgage

Mortgages

1. Credit Report errors

The key to getting the best mortgage rate is good credit.  One in four adults have serious errors on their credit reports. The Fair Credit Reporting Act requires credit-reporting agencies to fix these mistakes but it’s up to you to find the problems and to ask for the errors to be corrected.  We discussed Increasing Your Credit Score in an earlier post.

Order a free copy of your credit report from each of the three reporting agencies:
Experian
TransUnion
Equifax

Tell the credit reporting agency about any errors you find.

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FHFA Reports Mortgage Interest Rates

Mortgage Rate graph

Need to get a loan?  Rates are still ridiculously low!  I hear on the news that rates are going up but I found these actual numbers and they’re inching up at best.  Yes, in the next few years they will be higher, they have to be higher if we want to get through this inflationary period, but read these rates!  Low, low, low.

The Federal Housing Finance Agency reported that the average rate on a conventional 30-year, fixed-rate, mortgage loan of $417,000 or less increased to 5.12 percent in June.  The average interest rate on a 15-year, fixed-rate loan of $417,000 or less increased to 4.8 percent in June.

These results are for loans closed during from June 24-30.  Typically, the interest rate is determined 30 to 45 days before a loan is closed so the  reported rates show market conditions in mid-to late-May.

The contract rate on the composite of all mortgage loans (fixed- and adjustable-rate) was 5.08 percent in June, up from 4.87 percent in May.  The effective interest rate, which reflects the amortization of initial fees and charges, was 5.16 percent in June, up from 4.95 percent in May.

These are definitely troubled economic times but we still can’t complain about mortgage interest rates!

HOPE NOW – Helping Homeowners Stay in their Homes

Hope Now

This great site offers lots of resources for distressed homeowners.

HOPE NOW is an alliance between counselors, mortgage companies, investors, and other mortgage market participants. This alliance will maximize outreach efforts to homeowners in distress to help them stay in their homes and will create a unified, coordinated plan to reach and help as many homeowners as possible. The members of this alliance recognize that by working together, they will be more effective than by working independently.

Check it out!

Home Equity Loan

Money
photo by AMagill

What is a Home Equity Loan? Can you get one? Do you want one?

A Home Equity Loan or Home Equity Line of Credit (HELOC) is a loan secured by the equity value in your home. The property is the security for the loan, which is usable for any purpose. A home equity loan creates a lien against your house and reduces actual home equity.

There is a specific difference between a home equity loan and a Home Equity Line of Credit (HELOC). A HELOC is a line of revolving credit based on the equity in your home and has an adjustable interest rate. You will be charged monthly based on how much available credit you have used, whereas a home equity loan is a one time lump-sum loan, often with a fixed interest rate and a regular monthly payment amount.

Why use a Home Equity Loan or a HELOC rather than a credit card for larger expenses?

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Credit Cards for finanacing deals?

Credit Card photo

How many ways are there to raise funds for deals? Many. Have you ever used your credit cards for cash advances? This is one quick way to get the financing you need.

There are a number of important things to consider here. Some of those include: What is the interest rate on the cash advance? How long can you use it? What is the fee to do the transaction?

When you get the offer in the mail, it can be very tempting. I just got a great 2.99% for a year with a cap on the cost of the transaction at $250. I took it and will use the money for a year. Where else can I get money at that rate? And I got a good sized chunk.

However, I have learned the hard way some pit falls to watch out for. First, of course, always make your payments on-time; early is better. If you’re late on any, you’ll pay the higher interest rate on the entire amount you borrowed for the entire time you’ve had it. All deals are off.

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