Archive for the ‘Investing in Real Estate’ Category
Is Mortgage Insurance Worth the Cost?
Posted November 11, 2009 by Bernz
When applying for a mortgage for your home or vacation home, it is likely that your bank or mortgage company will bring up the issue of mortgage insurance. In fact, they may even require that you take out a mortgage insurance policy. Mortgage is often explained by those who sell it as inexpensive insurance that will pay off the mortgage in the event of your death. That would free up your spouse’s remaining financial assets and reduce the burden on him or her.
But is mortgage insurance really worth the cost? In order to make that assessment, it’s important to understand what it really is. Mortgage insurance is a form of life insurance. Unlike life insurance, however, whose proceeds can be used for any purpose, mortgage insurance only pays down the balance left outstanding on the mortgage at the time of death. There is no flexibility to use the proceeds for any other financial obligations.
A mortgage may be one of your largest financial debts and would likely be paid off with the proceeds of a life insurance policy anyway. There are a few differences between life insurance and mortgage insurance that make the former a better choice for insuring your mortgage. (more…)
Popularity: 42% [?]
If you enjoyed this post, make sure you subscribe to my RSS feed!
Posted in Investing in Real Estate, Mortgage Insurance | 1 Comment »
Is Now the Right Time to Buy a House?
Posted November 2, 2009 by Bernz
The roller coaster ride that was the real estate market in the United States for the past year continues unabated in spite of federal efforts to bring some stability to the markets. Foreclosures across the country continue to rise and housing prices continue to fall. Mortgage rates are at historic lows, and that, coupled with low prices, is enticing many house seekers to consider dipping a toe back in the water.
But is now a good time to buy a first home or to upgrade from your existing one? The answer is “it depends”. It may be a very long time before real estate once again becomes a solid investment strategy. The days of steady housing price increases we have seen over the last decade may even be over forever.
It’s important to separate out your investment goals from your need for shelter. The latter you will need no matter what form it takes: a house, an apartment or even a tent in the woods. Evaluating whether buying a house meets your need for shelter is a simple task of comparing it to the alternatives. How does the monthly mortgage payment compare to rental payments you would have to make on a leased property? What happens to rates when you have to renew the mortgage? What is the condition of the house (i.e. could it result in thousands of dollars in repairs)? What other expenses would you incur that you wouldn’t have to with renting? (more…)
Popularity: 39% [?]
If you enjoyed this post, make sure you subscribe to my RSS feed!
Posted in Investing in Real Estate | No Comments »
Emergency Fund: How Much Do You Really Need?
Posted June 23, 2009 by Bernz
Keeping an emergency fund available for unforeseen crises is a financial planning tip that is widely quoted. Any number of situations could come up where you may need to dip into this short term savings fund, such as loss of job (a more likely occurrence with the current economic situation), emergency medical expenses, or home repairs.
But how big does this emergency fund really need to be? Some financial planners suggest three months salary is a good general rule. If you would ask Suze Orman, (yes I do watch her show especially the “Can You Afford It” segment) she will say 6-8 months or even one year if you can afford is more advantageous. However, the right answer for you will depend on your circumstances and the risks that you are trying to cover. Some of the risks that people put aside savings for can be covered less expensively with insurance.
Take home repair for example. If your air conditioner or furnace were to quit for good, the expense of buying a new one might damage your current cash flow. (more…)
Popularity: 100% [?]
If you enjoyed this post, make sure you subscribe to my RSS feed!
Tags: emergency fund, Saving Money
Posted in Financial Education, Financial Goals, Frugality, Investing in Real Estate, Retirement Planning, Saving Money, Wealth Building | 2 Comments »
The Double-Edged Sword of Mortgage Relief
Posted June 5, 2009 by Bernz
The financial news on television and in the newspapers is full of hopeful rhetoric on the help that is coming from the Federal government to assist homeowners who are struggling to save themselves from foreclosure. The purpose of the intervention, called the Homeowner Affordability and Stabilization Plan, is to keep people in their homes and stabilize the mortgage and real estate crisis that is affecting all investment markets.
This is good news for some homeowners but contains some risk for others. One way the programs tries to make home ownership affordable is to allow refinancing for homeowners who are current on their mortgages but do not have enough equity in their homes for a conventional refinance. This plan only applies to those who have their mortgages through Fannie Mae and Freddie Mac, so only a small fraction of at-risk homeowners will be able to take advantage of this plan.
The second part of the plan is for mortgage servicers to allow modification of the terms of the mortgage to ensure that homeowners can stay current on their payments. This is done mainly through interest rate reductions that are partially financed by the government. Each bank has some discretion as to how to manage these loan modification plans, but most require proof that the current mortgage terms are unaffordable to the homeowner. (more…)
Popularity: 44% [?]
If you enjoyed this post, make sure you subscribe to my RSS feed!
Tags: mortgage, real estate investing
Posted in Financial Education, Investing Strategies, Investing in Real Estate | No Comments »
Get Updates via Email
Let's Connect
-
Advertisement
-
Recent Posts
-
Recent Comments