Know Your Mortgage Fees, and You’ll Never Pay Too Much for Your Loan

If you buy new windows, you’ll not only pay for the windows, you will also pay an installation fee. When you purchase a car, you pay tax, title, assumption fee, etc. Just about every major purchase comes with extra costs or fees, and home loans are no different. Most people think they don’t have to pay costs on a loan, because they are paying interest on the loan (they figure this is their fee – a premium on the money). A mortgage, however, does not come free.

While some are mandatory, others are not. Follow these guidelines, and you’ll never pay too much for your purchase mortgage or refinance loan.
The origination fee — The fee that bothers people the most is the origination fee, or what some mortgage people call a broker fee. This is often confused with points, but should not be. Points are something completely different. The origination or broker fee is what you pay the loan officer to originate or create and complete your home loan, whether it’s a purchase or a refinance. All mortgage people charge them, whether they work for a mortgage brokerage or for a bank.

Remember, if you’re told there is not a broker or origination fee, chances are you’re paying a higher interest rate, and this is how they’re making this fee. The origination fee is the primary way mortgage brokers make money. The company gets the entire fee, and your broker or loan officer gets a percentage of that fee – somewhere between 30 and 65 percent.

So, if your mortgage broker charges you two percent on a $100,000 loan, this is $2,000 for his company or bank and up to $1,300 for him. You may think this is an outrageous amount of money, especially considering that this is just one of the costs you have to pay, in order to complete you loan. It might be, and then again, it might not. It depends on what type of loan you get, how much work is involved in closing it, and the quality of the service you get. Here are a few guidelines on what you should be willing to pay in origination or broker fees.

Bad credit’s effect — If you are a sub prime borrower, or someone with credit problems, expect to pay more – up to $3,000 or $4,000. Remember, sub prime, or non-conforming, borrowers have some type of baggage that makes them difficult to get approved, which is a huge part of the mortgage professional’s job. They may, for example, have a recent bankruptcy or foreclosure on their record, or a civil or criminal judgement, tax liens on the property, or very little equity in their home. These are problems that good mortgage professionals can get around, but it takes a lot of time and effort.

I once helped an elderly gentleman on a fixed income refinance his home, and he had 14 liens against his home, all of which had to be satisfied, before his mortgage could be paid off, and he could get a new loan. I had three weeks, and probably 25 hours of time, just clearing these liens. One of them was a defaulted car loan on a car he didn’t even have. He owed $3,000, hadn’t made a payment in three years, and the bank was still after him. I had to negotiate with the collection agent from that bank, and get them to take $1,800 to satisfy the loan, which I would work into his new mortgage. After many telephone conversations and some very hard selling, they agreed, and I wound up getting it done.

Now, I would have normally charged a minimum of $2,500 (over five percent of the loan amount, in this case) for this type of work, but there was not enough equity in the house to get that much origination in the loan. I actually did it for less than $1,000 ($500 of which was mine), just because I wanted to help this man, who needed the cash he was going to get from the new loan to put a new roof on his dilapidated house. This is just one example of when it’s acceptable to pay more in origination fee, even though this man didn’t have to do so.

Conversely, let’s assume you’re refinancing your home in a
perfect scenario. You have perfect credit, lots of equity in your home, plenty of cash reserves, and the paperwork is very easy. The loan officer says he can complete your loan in two weeks, most of which will be consumed by the work of other people, such as title agents and an appraiser. This origination should not be much more than one percent of the loan amount and even smaller, if the loan amount is over $150,000. This is a loan that mortgage people refer to as “A Paper.” It is very easy to close, and takes very little work, so the loan officer can make his money on volume, by doing lots of these types of loans. I always charged $1,500 or less for an A Paper loan.

So, begin learning your closing costs by finding out what the origination fee is (remember, most of the time it’s negotiable). One to two percent of the loan amount is acceptable, unless extraordinary circumstances exist.

Your Home Won’t Sell Unless the Price is Right

What’s in a number? Everything, when it comes to successfully marketing your home. Nothing could be more critical than asking the right price. Set the price too high, and you’ll get a bad rap from buyers and experienced buyer-brokers who can see through your inflated listing. Be sure to listen carefully to your agent’s advice, and consider getting an independent appraisal for the most objective assessment of your home’s market value. And if you’re still not sure, consider the novel approach of setting a price range instead of a specific number.

How do you know if your asking price is too high? The telltale signs are hard to ignore. If buyers or agents aren’t showing up at your home or if the offers are way below your listing price, then something is awry. Or if your home has been multiple-listed for several weeks to no effect, then it’s probably time to reconsider your asking price. Certainly, your broker should know market conditions in your area and be able to explain why there’s no activity. If not, pick a motivated broker who can get you back on track. Still, chances are good that he or she will say your price is too high.

Better yet, do some research before you list your home. Check the “comparables,” i.e., similar homes that have sold recently in your neighborhood. That way you can make an informed judgement of what your home is worth, based on the real estate market in your area. In addition, consider getting an independent appraisal of your home’s market value from a professional real estate appraiser. FSBOs (for sale by owner) especially need to seek a professional appraiser’s opinion, because they don’t have a broker to provide this information. Knowing what your home is truly worth lets you negotiate with confidence and know exactly what your bottom line price is.

Every seller must arrive at a price and negotiating strategy with their broker that they’re comfortable with. Most decide on a specific number for listing their home. But some brokers are using a range of numbers instead, say $134,900 to $149,900, for example. Prudential real estate calls this “Value Range Marketing.” The idea, according to brokers who use the strategy, is by setting a broad range the listing attracts more buyers who might otherwise be turned off by a single number at the upper end. In setting the range, Prudential agents say they try to factor in the price the seller hopes to get, the market value of the home, plus the price that buyers are probably willing to pay.

Top 7 Uses of Land and How to Best Profit From These Uses

Many people are interested in Real Estate Investment, but believe they need huge loans to start off. This simply isn’t true. Unlike homes, ready to build lots are priced low, than appreciate and sell for more.

1- Investment- Just like people will always need doctors, people will always need land. A doctor cures a person, while land is needed to live on. What does this mean? History has shown that there is always an immense interest in land. Thus, the saying “Don’t Wait to Buy, Buy Now and Wait” applies here.

2- Moving into a new area. For example, if you’ve lived in Los Angeles for many years and are ready to retire, there are many benefits to selling your home, finding a great subdivision elsewhere that suits your needs, and building your own dream house on it. You will save immensely doing this.

3. Incredible Experiences- LakeFront, LakeView, and Golf Course Land is in high demand these days. The reason for this is simply the fact that there are so many fun activities in these areas, leading to higher interest in the subdivision.

4- Buy and Flip- This is a hard, but useful way to make significant money. Simply find somebody interested in a lot your about to sell, and pocket the middle man’s cut.

5- Recreational Land can be used for all types of fun activities. Even though you cannot build a house on recreational land, you can still make all the precautions in the event the land is rezoned. Because recreational land usually sells for less than residential land, having recreational property turned into residential property can be very profitable.

6- Ranch Land- Here you can own a house, among other shelters, while herding animals Ranch Lots are huge and meant to be that way so that the natural life doesn’t disappear.

7- A gift! Yes, thats right, buying land as a gift has grown, and even non-investors like the idea of owning a piece of property in the United States.

Commercial Construction – Efficiency in Business Starts with Energy-Efficient Buildings

Every Dollar Saved is a Dollar Earned as they say. Indeed, it would be hard for any CFO or Accountant to dismiss this notion. Therefore, every increase in efficiency in a business that saves money, is like money in the bank. The Department of Energy, the construction industry and America’s corporate manufacturers are looking for ways to save energy, reduce pollution and keep more of what they make. By doing this it gives an edge to the manufacturing sector so they can compete with foreign competition, while reducing energy costs and pollution.

It is a WIN-WIN for everyone and all the parties involved are doing everything they can to increase productivity workflow, streamline the manufacturing process and reduce costs using advanced clean and green technologies to do just that. In fact, if you think about it, this is exactly what the residential home builders are doing in order to stay in business. They know energy efficient homes are more desirable to the few new-home homebuyers currently in the market. It is a matter of cost control and high-tech innovations that is needed to compete. I believe this recent DOE-Department of Energy press-release speaks to this realization:

Energy Star Commercial Buildings and Plants on the RiseWhile green and efficient homes are drawing considerable interest in the building industry, the number of energy-efficient commercial buildings and manufacturing plants is also growing, with a 25% increase last year in the number of such buildings earning the Energy Star.

In 2007 alone, more than 1,400 commercial buildings and plants earned the Energy Star label, bringing the total to nearly 4,100, with Energy Star buildings located in every state, according to the U.S. Environmental Protection Agency (EPA). Energy Star is a joint program of DOE and the EPA, and commercial buildings that have earned the Energy Star use nearly 40% less energy than average buildings, producing 35% lower carbon dioxide emissions. About 500 of the Energy Star buildings use 50% less energy than average buildings. Energy use in commercial buildings and manufacturing plants accounts for nearly 50% of energy consumption nationwide.

The Energy Star buildings include about 1,500 office buildings, 1,300 supermarkets, 820 K-12 schools, and 250 hotels. In addition, more than 185 banks, financial centers, hospitals, courthouses, warehouses, dormitories, and big-box retail buildings have also earned the Energy Star.

More than 35 plants that are manufacturing automobiles, cement, and ethanol have also earned the Energy Star, including for the first time three petroleum refineries in Louisiana and one each in Minnesota, Montana, Ohio, and Texas. In total, these award-winning commercial buildings and manufacturing plants have saved nearly $1.5 billion annually in energy while avoiding 25 billion pounds in carbon dioxide emissions.

What this is telling the American People is the more efficient homes are indeed, on their way. Wouldn’t it be wonderful if everyone lived in an efficient eco-home? Well, that is the DOE, EPA and National Homebuilder’s Associations plan and what a plan indeed. Think on this. Not long ago our Online Think Tank also took a look at ways to modernize manufacturing facilities and give them an energy savings boost. We must consider ways to improve commercial construction and the manufacturing processes inside.

Inexpensive Tips To Increase Value Of Your Home

Did you know that you could drastically increase the value of your home without having to invest heavily in having your home remodeled or refitted? Yes, it’s possible! And you won’t even have to spend as much just to make it happen!

If you are selling your home, getting a good value for it could prove troublesome. But before you throw in the towel and sell your home for a price way below your expectations, you could try doing some inexpensive renovations to increase your home’s value up to 20%. That’s not a bad figure, is it?

Here is a brief walkthrough of the steps you can undertake to make your home worth much more that it is today.

The Kitchen: Bigger is Better

The kitchen is one of the critical areas to address in your efforts to increase your home’s worth. Homebuyers are looking for spacious kitchens that are clean, in good repair and have the necessary furnishings for working.

To make the kitchen look more spacious, try installing lights that will make it look brighter. You could also redo the windows to remove clutter and make it spill in more light. This will have the effect of making the kitchen look bigger. Make sure the floorings and the table tops are in good repair. If it is not beyond your budget you could even replace the current flooring with stone or tile, which is a lot better than linoleum that cracks and tears.

Keep the kitchen in good repair. It doesn’t cost much to have scratches and bumps fixed. If you have busted fixtures or electrical outlets, have them repaired with good materials.

A paint job will do wonders not just for your kitchen but for the whole home. So consider adding a good layer of paint on your home.

The Yard

Simple gardening would do much to make your home more appealing. Keeping the yard in order, and tending to the garden would result more in a yard that would most likely attract buyers.

To stress the significance of a good yard, mature trees will typically add about $1000 to the value of your home. So imagine the impact of a well-tended garden to the value of your home!

The Living Room

Like the kitchen, living rooms must give the impression of space. Some people do so by installing mirrors. However, this technique is also suited to the bedroom. The little repairs – like light bulbs and electrical outlets.

Make sure the living room is airy, a coating of light colored paint, installation of good lamps, and a general cleanliness of the living room will contribute much to this effect.

Bedroom

Like the other rooms, the bedroom has to be particularly spacious, airy and bright. Mirrors are particularly effective at accomplishing this effect. Most five-star hotels have to project an impression of space, and they employ this technique to its full effect.

Make sure the rooms have a sufficient number of electrical outlets. The flexibility this offers will add much to the value of your home.

If you plan to install new surfaces, you might also want to consider using natural materials such as stone, marble, quality wood, and others. Studies have shown that many people react favorably to these materials. They also add a feeling of cleanliness to the rooms.
Make the cabinets and closets as large as possible without making the rooms they are in look cramped, you may have to employ a few illusionary tricks here but the results are astounding.

Bathrooms

Use fluorescent lighting instead of incandescent lighting to provide your bathrooms with a light feel. Installing inexpensive amenities to your bathroom like towel holders, racks, shower curtains, shower fixtures and other will enhance the appearance and appeal of your home.

You can mix, match and experiment with the tips given here. The principle of the whole is that you should make your home look spacious, airy, and light. You should also make sure your home looks different from the other homes in your neighborhood. If you can one up their amenities, then well and good! There are other tricks and illusions you could employ to achieve this – tricks that do not have to be expensive at all! So go ahead give your home a good look and start increasing its value today!