Getting Your Parents Help With Financing A Home

When buying your first home, there are a lot of hurdles to overcome. Financing is one of them. For many people, this means applying to the friendly bank of mom and dad.

Getting Your Parents Help With Financing A Home

They say you should never do business with your friends. It is a time tested way to make them former friends. The bonds that tie us together can get tangled when differences of opinion arise. While this is all true, it barely registers compared to the complexities of a family. When a group of people live together for twenty years or so, the complexities only get more and more tangled.

While doing business with family members is often unwise, buying your first home often requires help from them. Coming up with cash for down payments, closing costs and even qualifying for a loan can be problematic. The bank of mom and dad often represent your best option to getting the deal done. While this is true, most people are uncomfortable with the idea of hitting up their parents for the help. You are out of the house and supposed to be independent. Walking through the door with hat in hand doesn't exactly make you feel independent. Well, there is a solution that both you and your parents can use without too much suffering.

Allow me to introduce you to the equity sharing agreement. This little dandy can be used by anyone, but is most often used by parents and their kids when that first home is purchased. The agreement is pretty much what it sounds like. You find a home you want to buy and then agree to an equity sharing arrangement. Let's take a closer look.

Assume I find a home for sale for $300,000. I need a $60,000 down payment for it, and cannot float this amount no matter how many quarters I roll. I go to dear old mom and dad and hit them up with an idea. If they agree to pay the deposit and closing costs, I will make all the mortgage payments, pay the property taxes and agree to keep my room clean. In exchange for this, they will own 20 percent of the home and I will own 80. When the home is eventually sold, I will pay them 20 percent of the gain. Simply put, I get their help in purchasing the home, they eventually get something out of it and I don't feel too guilty about asking them for help. Hey, it is as close to a win-win as you are going to find.

Buying your first home can be a challenge from a monetary stand point. Don't feel too guilty about applying to the bank of mom and dad.

About the Author

Dan Lewis is with Great Western Mortgage - providing home loans for borrowers with good credit, bad credit and unique situations.

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Ask The Home Seller For Help With Your Financing

Finding enough cash to make a solid down payment on the home of your dreams is often a difficult task. With home prices at all time highs, coming up with 10 or 20 percent equates to a large amount of money. Well, the seller might just help you if you ask.

Ask The Home Seller For Help With Your Financing

As you know, we have just finished up one of the hottest real estate markets every recorded. With massive appreciation rates and incredibly low interest rates on loans, it was a seller market through and through. Alas, those heady days are now over and done with. For many a buyer, this presents some interesting financing options.

During the sellers market, homes were being snatched by buyers before they were even appearing in the MLS listings. Sellers could sit back and come up with an outrageous price and the offers would practically flood through the door. Any buyer that didn't show up with financing arranged was laughed out the door. The seller had all the leverage, so why mess about?

With the current market, sellers know longer have the leverage. Now, they are having problems getting interest in their homes, much less offers. The market is flooded with too many homes. On top of this, interest rates have risen which reduces the potential pool of buyers. In simple terms, the tide has turned. A seller that might have laughed one year ago if you asked them to help with financing will probably be listening closely this year.

What is seller financing? It is simply a situation where the seller agrees to take part of the purchase price as a second mortgage on the property. Let's say you want to buy a home for $300,000. You have 10 percent or $30,000 for the deposit. The lender, however, will only loan you 80 percent of the value of the home. You need to come up with another 10 percent. In such a situation, the seller will agree to finance you by taking a second on the home for the 10 percent. The repayment terms are up to negotiation, but this is how it happens in a nutshell.

At one point in time, seller financing was views as a fairly aggressive, rare form of financing. These days, it is very common given the high prices of homes on the market. If you are short on the deposit, make sure to address the issue with the seller of the home.

About the Author

Dan Lewis is with Great Western Mortgage - mortgage brokers providing home loans.

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We have hundreds of listings of homes for sale in your area. If you are interested in buying a house feel free to search through our database. This is a free service and we have a low-pressure policy. We list homes for sale in Manalapan NJ, Point Pleasant Beach real estate, Aberdeen NJ and many other New Jersey properties for sale. There is a lot of property for sale in New Jersey. Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ. We are the realtors NJ!

Christmas Curb Appeal- Selling Your Home Over the Holidays

Christmas is a great time to give your home extra appeal inside and out when selling your home. The rule of thumb is to keep it non religious so you do not offend any other religious denominations. Using fresh greenery in wreaths on doors and urns are always crowd pleasers. There is nothing more uninviting than walking up to a front door and seeing dead flowers from the summer or frozen black earth in a discoloured flower pot/urn.

When decorating inside, think simplicity and in themes to keep your home looking current and up to date. Reproduce/copy a colour accent throughout the rooms or connecting rooms. If your accent is red, then don't try to introduce blue in the same room or connecting room. Accent pieces like throw pillows, or accent curtains are a great way to brighten up the holiday time (but in the same colour). Also keep things simply, and think symmetry. Decorating in threes (3's) is a good rule to use. Instead of putting one candle on a mantel or table, put out three candles, or two groups of threes on either side . Instead of putting out one large vase with flowers on a table, put out three smaller ones (but keep the flowers one of a kind per vase). Don't forget to add a little holiday cheer to your bathrooms and bedrooms as well!

Happy selling!

About the Author

by Lea Jensen is top-selling Royal Lepage real estate agent selling homes in Mississauga and Oakville , Ontario.

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Please call us at 732-364-2015 and see what ERA Othello Realty can do for you and your real estate needs. We specialize in handling all aspects of real estate transactions throughout the New Jersey. Whether you wish to buy a home or sell a home we will be there every step of the way. From searching for your dream house, finding the home, negotiating the price, assisting with financing, inspection and at the closing ERA Othello Realty can help you buy your home. We list homes for sale in Freehold NJ, Jersey Shore real estate and many other New Jersey properties for sale. Aberdeen NJ Homes for Sale. Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ. We are the realtors NJ!

Self-Directing Your IRA Funds into Real Estate Investments

As we all know, an IRA fund is a great way to invest in your future by deferring taxes and building equity for retirement. The fluctuating state of the stock market has many people feeling unsafe with their current investments. As a result, more and more people have begun taking advantage of a little known section of the internal revenue code which allows IRA funds to be invested in real estate. While this could provide a more stable investment opportunity, investors still need to research and understand this option to ensure it's done properly. Investors can use the funds in a traditional IRA, Roth IRA, and SEP-IRA to purchase most types of real estate, including: land, commercial property, condominiums, and residential properties. The down-payment, taxes and insurance must come from the IRA and all rent and profit from the sale feed back into the IRA. If there are not enough funds available in the IRA account, investors can buy a share of the property with a friend, relative, or business associate.

In many cases, financing is available up to 65% of the property's LTV (loan to value) when purchased within the IRA, but there are restrictions. The loan must be non-recourse, meaning you cannot personally guarantee the loan in your IRA. Also, the IRA will pay tax on UDFI (Unrelated Debt Financed Income), which is the income and/or capital gains attributable to the leveraged portion. UDFI is taxed at the trust tax rate because an IRA is treated as a trust for this purpose. Be sure to use a lender who is experienced with self-directed IRA financing.

While most types of real estate are included in this type of sale, there are also several restrictions on what property can be purchased. You cannot purchase any property that you, your parents, or your children have owned at any time. You also cannot use property you purchase as your residence, vacation house, or place of business. The property must be treated as a pure investment.

Investing your IRA in real estate can be confusing and can result in penalties and tax issues if not done properly. That's why it's important to have the proper guidance from experienced professionals. For example, the self-directed IRA must be held with a qualified custodian. This custodian will buy and sell real estate for you in their name. Most IRA options don't include real estate, so you must search for a custodian who specializes in real estate and self-directed IRA's. In addition to your custodian, you must hire a property manager to collect rent and perform all maintenance on your properties.

Adding real estate to you IRA fund can be a great way to counter market fluctuations. When real estate investments are not leveraged, both income and capital gains can flow back to IRA's tax-deferred (or tax-free if the IRA is a Roth IRA). Keep in mind that some of the tax advantages of owning real estate do not apply to real estate owned within the IRA since the income is already tax-deferred (including depreciation expenses.) This and other tax issues are the reasons you should work with experienced tax advisors and real estate professionals before making the investment.

(The foregoing is a general discussion. It is not intended, and should not be relied upon, as an opinion or advice on any legal, tax or investment aspects of IRAs. An IRA owner considering an IRA investment in real property should consult with his or her own advisor.)

About the Author

Kathy Fettke is a real estate investor, certified personal coach, and host of The Real Wealth radio show. Kathy specializes in helping people build multi-million dollar real estate portfolios through creative finance and careful planning. Learn more at RealWealthNetwork.com

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If you need assistance selling your house ERA Othello Realty can share their expertise and experience with you in a friendly and professional manner. From all aspects of selling your house: from getting a qualified CMA (Comparative Market Analysis) to advising you on the presentation of your house, marketing your home online and in print, conducting an open house, showing your house within your guidelines and discretion, constant communication, negotiating the best price for your home and being with you until closing and beyond. We can also assist you in your search for a new home. Please call us at 732-364-2015. We are the realtors NJ! Look at these Listings of Homes for Sale in NJ. Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ.

Investing in Fixer Uppers and Flipping Properties

There are many people who make a great living buying and selling "fixer upper" homes. If done properly, this can be a great way to make money. But if you're thinking of getting into the business of flipping property, you should be aware of the problems and challenges you may face.

The first challenge you will face is finding the right property to buy. Real estate listings often try to make the home seem as inviting as possible, so it may be hard to spot a house that needs some work. You should look through ads and classifieds for key phrases like "needs some TLC" and other indications that the home isn't in the best condition. You may also want to drive around neighborhoods you are interested in and look closely at the homes for sale.

To be able to make a profit, you don't want to buy just any run-down home. Try to find a property that's not in an area where all the homes seem like fixer uppers. You want an area where house values are already rising or where other homes in the area are worth substantially more than the home that needs fixing. This will give you the most profit from your investment.

You'll find the best bargains from homes that have been left vacant by their previous owners. You also want to determine if the damage can be fixed reasonably. The best houses to flip easily are those that require mostly cosmetic fixes, like new paint, countertops and carpeting, as opposed to damaged pipes, roofs, or foundations.

Once you've found a home you think has potential, find out if it will be worth your time and money. First, get the property inspected; this way you won't have any surprise repairs later on. Then, talk to an appraiser to find out the value of the house as is and what it could be with the needed repairs. You can also get comps (comparables - other homes that have recently sold in the area) from your real estate agent. Finally, get quotes from several contractors to find out how much repairs will cost. This will help you determine if what seems like a great real estate deal really is one.

While investing in fixer upper properties can be a great investment, be sure to do research and be well prepared before making a purchase.

About the Author

Kathy Fettke is a real estate investor, certified personal coach, and host of The Real Wealth radio show. Kathy specializes in helping people build multi-million dollar real estate portfolios through creative finance and careful planning. Learn more at RealWealthNetwork.com

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