Investing in Real Estate

Is Your Home Still a Good Investment?

Posted May 15, 2009 by Bernz

Earlier in the decade, it seemed like the old adage of “your home is your best investment” was a solid piece of financial advice. Housing prices across the country, especially in coastal areas, were booming. Homeowners who had purchased their homes ten to twenty years previously were making great profits on the sale of their homes.

homeownership21

And then along came the housing crisis of 2008/2009. As the mortgage market tightened up, houses sat empty waiting for buyers who never came. People found it difficult to refinance their mortgages to access the built-up equity in their homes. Instead of moving up to larger homes, many chose to fix up the ones they had. Housing prices dropped like a stone with an oversupply on the market and not enough buyers.

If the value of your home is part of your long term retirement plan, this new reality must be factored in as it may be here to stay for years to come. If your home drops in value to what you paid for it or less, does it make sense as an investment tool? Yes and no. (more…)

Popularity: 36% [?]

Technorati Tags: , ,

If you enjoyed this post, make sure you subscribe to my RSS feed!

Tags: , ,
Posted in Financial Education, Investing Strategies, Investing in Real Estate | No Comments »

Financial Literacy- Does It Still Work?

Posted March 30, 2009 by Bernz

Financial literacy means being savvy with your cash flows and understanding your financial transactions in order to make better decisions that will protect and increase your wealth. Many feel that financial literacy is no longer useful or relevant in the face of our current economic meltdown. They feel that, no matter what consumers know or do, they will be hurt in this recession.

financialiqHowever, financial literacy is more important than ever. Understanding your financial position and how to navigate through tough economic times will give you a leg up in ensuring your financial security.

The people who will survive and thrive in today’s economy are those who have a handle on their personal finances. They know what they own and what they owe and they know where the cash is coming from and going. Every dollar that comes in has a name- meaning they know exactly where it is going.

(more…)

Popularity: 94% [?]

Technorati Tags: , , , , , ,

If you enjoyed this post, make sure you subscribe to my RSS feed!

Tags: , , , , , ,
Posted in 401k, Debt, Estate Planning, Financial Education, Financial Goals, IRA, Index Funds, Investing Basics, Investing Strategies, Investing in Real Estate, Life Insurance, Loans, Mutual Funds, Retirement Planning, Roth IRA, Saving Money, Saving for College, Simple IRA, Stock Market Investing, Tax Reduction, Traditional IRA, Wealth Building | No Comments »

Valuing Your Home: Lost Home Equity Can Bite You

Posted March 11, 2009 by Bernz

It’s hard to go a single day without hearing or seeing a headline shouting about the mortgage crisis. High foreclosure rates and tighter lending practices are causing the inventory of houses for sale to increase and the number of sold houses to decrease. This has created a drop in average housing prices as the supply outstrips the demand.

valueingyourhomeWhat does that mean to you though if you have no intention of selling your house tomorrow? It can mean plenty and can even land you into financial hot water. When the average sales price declines in a neighborhood, the decreased value is also attributed to the occupied houses in the area. If, for example, housing prices come down 20% this year in your community, it means that your house is worth 20% less.

The main party that will care about that is your mortgage company. They have loaned you the money to purchase the house of the basis of its value at the time of the loan. Now that the value has decreased, the loan-to-value ratio has gone up which means the mortgage company is taking on more risk than they had initially intended. The value of your home may now be even less than the balance of your mortgage. This is called “being upside down” on your mortgage. If the mortgage company had to take your house back and sell it, they would be out of pocket for the shortfall.

(more…)

Popularity: 38% [?]

Technorati Tags: , , , , , ,

If you enjoyed this post, make sure you subscribe to my RSS feed!

Tags: , , , , , ,
Posted in 401k, Financial Education, Investing in Real Estate | 1 Comment »

Refinancing Your House in the Economic Storm

Posted February 13, 2009 by Bernz

The only potential bright spot in today’s crumbling economy is the continuing decline of interest rates. Not so great for investors but good news for borrowers. Mortgage rates are at historic lows and now may be a great time to refinance to a lower rate. There are some considerations to keep in mind before approaching your bank about your mortgage.

refinancefeature1. Know your credit score. One of the first things a bank or mortgage company will do when you approach them for refinancing is to find out your credit score. It makes sense for you to do it first so that you can clean up any errors or inconsistencies and be able to explain any derogatory items on your report.
2. Calculate the costs of refinancing. There are many costs to setting up a new mortgage and there may be a penalty charged by your bank or mortgage company for ending your existing mortgage early.
3. Calculate the time frame you have to work with. This is the last piece of information you need to determine whether refinancing makes sense for you.

(more…)

Popularity: 20% [?]

Technorati Tags: , , , , ,

If you enjoyed this post, make sure you subscribe to my RSS feed!

Tags: , , , , ,
Posted in Financial Education, Investing Strategies, Investing in Real Estate | 1 Comment »

« go back — keep looking »