All About No Closing Cost Home Mortgages

Have you seen any of those banners on the Internet, “No Closing Cost” home mortgages? Do you question whether or not they too good to be true? Believe it or not, sometimes they are true. I did one of these a few years back. Usually the deal is that you need to be refinancing your existing home mortgage, so your home mortgage company can roll the costs of the loan into your new home mortgage.

Typically you can qualify for this type of arrangement without closing costs when you are refinancing for less than your house is worth. Bottom line, the lender wants to make sure that there’s some equity in the property, in order to minimize their risk. When the home mortgage company completes this type of loan, they actually get to increase the amount of the loan by a little, which are the closing costs that you aren’t paying. So technically you have closing costs with this type of loan, money just isn’t coming out of your pocket at closing.

Alternatively, your home mortgage company may mean that they are waiving their fees for the closing. Although this would save you money, you still have to pay the appraiser, the closer, etc. So, my recommendation is it’s best to ask if you will have to bring money to the closing for anything.

If you are purchasing a home, a “No Closing Cost” home mortgage may mean something different. It may mean that your home mortgage company waives their fees, but you still have to pay the appraiser, the lawyer, the home mortgage broker. This may mean that you have to bring a few thousand dollars or more to the closing.

These days, it really is not enough to rely on the good faith estimate for your home mortgage. Once you get it, call an attorney who handles home closings. Have the attorney figure their estimate for closing costs. Unless you’re practiced at reading the good faith estimate, you may find that the difference between this estimate and what you actually pay at closing may be $3,000 or more. I have experienced this at closing mostly because of the timing of the home closing. If the closing is at or near the beginning of the month, the prepaids (interest, insurance and taxes) may be much more than if closing were completed at the end of the month.

There are some “No Closing Cost” home mortgages that have everything rolled into them. With these mortgages, the only money you will need is for owner’s title insurance. All lenders require you to buy an insurance policy called Title Insurance for them. That means that if someone sues you claiming that the property is really theirs, the insurance company will have to pay. This policy really just protects the lender. To protect yourself, you need owner’s title insurance. It is very cheap, and now often comes with some identity theft protection. I recommend that you ask about it. Most of the time it cost less than the carpet in one room to protect your investment.

Technically for either definition, the closing isn’t really free. Even if you aren’t paying the home mortgage company, there will always be some other people to be paid. Question is, do you want to pay now or later. In my experience, the closing costs are so little in comparison to a home mortgage that it can make sense to roll them into a home mortgage. So ask if this is possible.

Thanks to advances in technology and changes to banking laws, the cost to get a home mortgage is dropping. Eventually, rates will rise and No Closing Cost home mortgages will go the way of 0% financing for car loans. Take advantage of the great deals while they are around.

Real Estate Auctions – The New Land Rush

On a sunny afternoon in Florida, an energetic crowd gathers on the lawn of a high end luxury estate. A loud and eager banter between an auctioneer, a group of bidders and bidder assistants fills the air. For several minutes the auctioneer asks for the next highest bid and the bidders respond. Suddenly the bidders grow silent. The high bidder holds his breath in anticipation of winning the auction. The auctioneer calls for one more bid. In a loud clear voice which rolls over the audience he says, “Fair warning, last chance” the auctioneer pauses, “SOLD!” And in less than 10 minutes another multimillion dollar estate has changed owners.

Successful real estate auctions like the one above are happening all over North America and the Caribbean. Recently real estate auctions have been on the rise, the increase in popularity is partly driven by growing inventories and fading buyer confidence. Properties that were selling in weeks using traditional methods are now languishing on the market unable to attract buyers even as seller’s lower prices. Many say the real estate boom is over but savvy buyers and sellers are profiting from real estate auctions.

Real Estate Auctions Work in Up or Down Markets.

Regardless of trends or market cycles, real estate auctions provide an open and transparent process for buyers and sellers. Properly conducted real estate auctions attract ready and willing buyers and motivate them to act now.

The auction method removes the “wait and see” attitude which serves to further depress real estate values. Buyers are always concerned about overpaying. Buyers gain confidence with their purchases at real estate auctions because they can see what others are willing to pay.

When market demand is high and inventories low, real estate auctions can deliver selling prices well above what a willing seller would have accepted in a negotiated private treaty sale. In good selling climates many property owners using traditional real estate methods; negotiating with one buyer at a time, leave thousands of dollars of equity on the table. During up markets real estate auctions are the best way to establish top market price.

Evaluating Your Real Estate for Auction

Not every property or seller for that matter makes a good candidate for auction. First of all sellers must be ready to sell now and for the current market value. Also a real estate auction will not fix problems caused by a downturn in market value of your property, if you owe more than a willing buyer will pay, be prepared to come to closing with your check book.

Properties that do well in real estate auctions have a high uniqueness factor. Ask your self, “What makes my property different from most others?” Maybe you own a resort property or high end luxury home, commercial properties and land do very well at auction. Real estate auctions thrive on uniqueness. If your property is like everyone else’s, the best thing you can do is offer the most competitive price.

Most importantly sellers must be reasonable about setting a minimum bid. A seller must look at the lowest, most current comps and price below that to generate the interest and urgency necessary for a successful real estate auction. Once the auction begins and qualified bidders start competing against one another you can watch the selling price increase.

Locate a Qualified Real Estate Auctioneer

Start by checking with the National Auctioneers Association, the best real estate auctioneers belong to this organization. These real estate auctioneers are well trained and adhere to a standard of practice and a code of ethics. Many attend the annual International Auctioneers Conference where the latest techniques and innovations in the real estate auction industry are presented.

Find out if the company you are interviewing is a full time real estate auction firm. Many real estate agents are getting auction licenses yet have no experience with the auction method of marketing. Conducting a successful real estate auction is nothing like (private treaty) traditional real estate sales. Go with a real estate auction pro.

You’re probably better of with an auction house that specializes in real estate auctions. There are many qualified auctioneers who have generations of experience selling personal property; furniture, dishes, lawn equipment and the occasional rare painting. Selling real estate at auction is a complex matter that should only be attempted by full time experienced real estate auction professionals.

Commissions and fees may vary, sellers must pay all marketing expenses up front and buyers typically pay 10% of the sales price to the auctioneer of which a share goes to participating real estate agents.

Types of Real Estate Auctions

Auctions are effective because they create a seller’s market. Professionally conducted real estate auctions create urgency, a reason to buy today and competition for the property. Terms and conditions of sale are established ahead of the auction. Real estate auctions will follow one of these three approaches:

Absolute Auction

The property is sold to the highest bidder regardless of price- using this process often returns the highest sale price.

Minimum Bid Auction

Seller agrees to sell at or above a published minimum bid price – this method is useful for internet auctions.

Seller Confirmation or Reserve Auction

With a reserve auction, the seller “reserves” the right to accept or decline any bids usually within 48 hours of the auction. Reserve auctions are used when there is a lien on the property from a lender or a court ordered sale with a minimum selling price.

Home Business – 13,500,000 Home based Business in USA Alone

The idea of starting a home business seems a bit defeatist. In a society when people equate success with big corporation, starting a home based business does not seemed to be something to be proud of. Home business seems to be the domain of people that can not make it in the corporate world. However, the statistics I am going to give will prove this common perception is wrong.If you do a research with the Small Business Administration (SBA), immediately you will see that a lot of people are doing business at small scale level. The statistics says there are 27 millions businesses in the USA today, and out of this huge number, about 26,9 million are small businesses. So, it is 99,7 percent. Here is the definition for small business. The government defines small business as businesses with less than 500 employees. And of these 26,9 million of small businesses, about 13,5 million (52 percent) are actually home based businesses. This statistics is eye opening. Actually, a lot of people are doing business from their home.Home business, or now popularly known as home based business, is not for people that “can not make it”. But, for various reasons, people choose to start and operate a business from their homes.There are many reasons for starting a home based business. To start off, you become your own boss. It is very liberating not to work under the pressure of someone else and not to keep the 9.00 5.00 office hour. Secondly, you can start a business selling something you are good at. Thirdly, financially, if managed well, is very rewarding. And fourthly, you get to spend more time with the family.Home business is a worthy option to consider for anyone desiring independence and financial reward. There are already 13,500,000 people in the USA alone taking this steps. You might want to join them by having a home based business started soon.