In an effort to raise capital and avoid a taxpayer bailout, the Federal Housing Administration (FHA) will issue a series of changes to its mortgage programs this year. These changes will also impact potential home buyers, especially those will low credit scores. (more…)

Business, FHA, Mortgage, Real Estate, real estate investment, Regulations

Local investors and property owners are up in arms over the possibility of increasing property taxes by the City of Providence.  As of late December, the City Tax Assessor’s Office began conducting a 3-year tax evaluation—with permission of tenant or owner–on all taxable income or investment properties.

In partnership with Vision Government Solutions Inc. (Vision) of Northborough, MA, assessors will be using the income analysis approach, to determine the value of commercial or investment properties. According to the Providence Tax Assessor’s website, property owners should expect to be approached by assessors with questionnaires regarding the income/expense on their property, as well as measuring the exterior and inspecting the property’s interior.

Is This Approach Effective?

Sure, this approach is similar to how banks may qualify you for a loan. However, the income analysis approach is used on income-producing investments and will apply “market” rate income to publicly assess the value of these properties. If you know Providence, you would know that it is quite difficult to correctly assess the taxable value of each property.

Although the approach isn’t objectionable, it does provide an inaccurate calculation of a property’s value. Many investors are worried that their property taxes may ultimately increase as a result.

Geo Properties’ president and co-owner, George Potsidis, is one of many who feel that this tax evaluation is just another ploy used to raises taxes and earn money. “They conducted an evaluation three years ago and my taxes have almost doubled,” says George. “The possibility of taxes going up again is sending owners over the edge. Why another one?”

What You Can Do

Filling out the questionnaire isn’t mandatory so owners have the option of not filling it out. However, in the event that owners choose to not participate, the city will apply a “market” rate income, which can be appealed by providing their own data.

The City of Providence will be asking the General Assembly to consider mandating this questionnaire this year.

Business, Mortgage, Providence, Real Estate, real estate investment, Rhode Island, Taxes

Many real estate guru’s predict that the buyer’s market will carry into a lucrative 2013. An article by the Wall Street Journal states that buyers are expected to will feel a sense of urgency to purchase before home prices begin rising even higher. The cause?

For the first time since 2006, home prices have “ended the previous year in positive territory” as 2012 was the year the market finally hit rock bottom. And in result, according to surveys reported by the WSJ, buyers’ expectations have been improving over the past year. “Every single thing about housing is flashing green,” said James Dimon, chief executive of J.P. Morgan Chase, in an interview with CNBC last month.

Is this true? What about several housing reports exhausting the topic of “Renting is the new Buying”?

“People will pay more for a home if they expect prices to rise and give them a better return on their investment,” said Jed Kolko, Trulia’s chief economist. Renting prices have been escalating over the past couple years, and in some cities, renting has become more expensive than buying. According to Trulia, 98 of the top 100 housing markets report that buying a home is more affordable. This is predicted to be one of the largest factors contributing to buyer’s feeling the urge to buy.

“Rising prices could eventually encourage more sellers to put their homes on the market, which would help boost demand even further,” The Wall Street Journal reports.

first time home buyer, Mortgage, purchase, real estate investment

The real estate industry can be a tricky and confusing world to navigate through, especially if you are first-time homebuyer. While most real estate terms can seem straightforward, like “fixed-rate loan” or “closing”, real estate jargon can be pretty confusing and may leave you scratching your head. (more…)

first time home buyer, Marketing, Mortgage, Regulations

As realtors, we often have the complicated, and highly sensitive task of running background credit checks of our clients. Landlords want to make sure that a potential tenant is a responsible person who earns a solid income and is able to pay rent on time. Just as well, potential home buyers need to have a credit check to be eligible for a mortgage.

FICO recently came out with a list of traits that exhibit “high achieving” traits, but how relevant (and obvious, really) can they get with this list?

Available on RealtorMag.com, below is a list of traits from FICO:

• 96 percent have no missed payments on their credit report. For any who have a missed payment, it occurred, on average, about four years ago. (Payment history makes up 35 percent of a person’s credit score.)
• They tend to have a well-established credit history and rarely open up new accounts. On average, the oldest credit account was opened 25 years ago. Overall, according to FICO, these “high achievers” tend to have credit accounts that are at least 11 years old.
• They’re not always debt-free: They average about seven credit cards, including both open and closed accounts, and have an average of four credit cards or loans with balances. One-third of “high achievers” have balances of more than $8,500 on non-mortgage accounts. The remaining two-thirds have total balances of less than $8,500.
• About 1 in 100 have a collection listed on their credit report. What’s more, 1 in 9,000 has experienced tax liens or even a bankruptcy.

Bankruptcy, Credit, first time home buyer, Mortgage

Expecting a child may be one of the most precious and memorable moments for a family. These precious moments require responsible planning, especially for a family just starting out. Shopping for a new car and a comfortable home for a family to grow in is two of the more important investments one can make.

However, there have been many stories of which the process of buying a home is to be a difficult (and unfair) road for many women.

So buying your home at the time when your family is growing seems like a logical investment, right?

Unfortunately, several mortgage companies don’t think so. Expectant mothers have mainly been denied loans for lack of insufficient income on loan applications; as in, maternity leave was not accounted for as solid income.

I know what you’re thinking, and yes, it is illegal to do so. (more…)

Buying your first home, Mortgage, real estate investment, Settlement

Bankruptcy, Foreclosures, Mortgage, Providence, Rhode Island, short sales

For residents in Rhode Island who have lost their homes between Jan. 1, 2008 and Dec. 31, 2011 due to an improper foreclosure process will receive a foreclosure compensation packet in the coming future. (more…)

Foreclosures, Mortgage, Rhode Island, Settlement

We’ve all heard of the old adage “Patience is a virtue”–whether it applies to impatiently waiting in a long grocery line or shopping for your first car. But does this proverb when shopping for your home, or refinancing your mortgage?

In a market where home owners are encouraged to “Strike when the iron is hot,” an article on RealtorMag.com expresses otherwise. With mortgage rates dipping to a new low, millions of Americas are currently rushing to refinance their mortgages and in result, have settled into the first rate they are quoted. Not a smart decision, according to LendingTree, as a 30 year fixed mortgage rate may vary by more than a percentage point.

The same article on RealtorMag.com cites a relevant scenario by MortgageDaily: 

“A consumer with a credit score of 759 and a loan amount of $260,000 might have received quotes from lenders in early August ranging from 3.25 percent to 4.625 percent. By choosing the lowest rate, the borrower would save $214 a month, $2,568 a year, and nearly $74,000 over the life of the loan.”

The latest frenzy to quickly refinance on a 30 year fixed mortgage rate below 4 percent  have left homeowners questioning themselves. A recent survey conducted for Lending Tree by Harris Interactive, surveyed 1,380 homeowners, and found that fewer than half of homeowners shop around to refinance their current mortgages.

So what is the moral of the story? Be a smart shopper and be patient.

Article: “Home Owners Who Shop More Save More”-RealtorMag.com

Mortgage, purchase, real estate investment

Shhhhhh! Best kept secret in the financial industry! Real estate investors, rehab investors, TAKE NOTE! Only 2-3% of the population knows about this financial secret: the Self Directed IRA (SDIRA).

GQ Newsletter, Mortgage, Providence, Rhode Island