Do You Have a Real Estate Goal this year? Here are a few goals, perhaps you can take something away from our Top 5 Real Estate Goals for 2011:
When it comes to New Year’s Resolutions,most of the financial goals revolve around paying off credit cards and adding to your savings account. But do you have any real estate goals? Many, many fortunes have been made in buying and holding real estate.
Whether you want to buy a new home, save money on your existing Costa Mesa home, or buy an investment property, here are 5 key real estate resolutions to consider setting for 2011 and beyond (plus some pointers on how to fulfill them). Without further ado, here are our Top 5 Real Estate Goals for 2011:
1. Current Costa Mesa Homeowners: Accelerate paying your mortgage off. During the bubble era, many homeowners were comfortable with refinancing their mortgage, so long as they could afford the payment. It was not unusual for homeowners to refi their mortgages every year, pulling cash out for everything from cars to college tuition. Now that we have experienced the true fragility of the Costa Mesa real estate market, many see the value in not having a mortgage forever. Some say it is better to invest your cash, and some prefer to pay off the mortgage. The value of paying off your mortgage sooner is of course that you save thousands and thousands of dollars of interest over the lifetime of the loan.
Two strategies in this area: Take advantage of lower interest rates and refinance your loan into a 15 or 20 year loan product, effectively cutting time off of a longer mortgage. It will probably force you to pay more monthly, but it will shorten your loan. Too much dough for that idea? , then to get your existing home loan paid off sooner – effortlessly: pay half the amount of your monthly mortgage payment every two weeks, rather than the full payment once a month. This results in an extra monthly payment per year, and can pay your mortgage off as much as 6 or 7 years early!
2. Renters: Examine your rent. What does that mean? Figure out, using an online calculator, what the true value of renting vs. home ownership is currently. There can be significant savings by buying a condo or home with existing tax breaks from the government.
3. Sellers: Create urgency to get your home sold. If your home lingered on the market last year, usually something is wrong. Price? Appearance? Necessary repairs? There are not as many buyers as the boom days, and they won’t overlook all the little things anymore. You have to address all three areas and be right on the money so that buyers can “show you the money”!
4. Buyers: Qualify for a mortgage to buy a home. Don’t disqualify yourself out of hand for a mortgage! There are lots of great programs that allow all people (good credit or not) to purchase a home. The fact is, with a 620 credit score and a 3.5 percent down payment (plus closing costs, in some cases), an FHA loan can finance the purchase of your home. Start with the basics – pull your credit reports and check them for errors, then get referrals to a local mortgage broker who can see what you qualify for in a mortgage. If there are issues, they can tell you where you stand, as well as giving you some tasks to boost your score to where you need it to be, if it’s too low. Don’t talk yourself out of looking into this- it is worth the 20 minutes you will spend investigating.
The other big to-do list item in this category is saving up “cash to close” – the money you need for your down payment and closing costs. Usually, rule of thumb is that it will be about 1 1/2% of your purchase price. I suggest setting up a new savings account that you nickname “Home” or whatever keeps you inspired to stockpile your cash there.
5. Invest in Real Estate – At the beginning of this post, I mentioned that wealth is often created by real estate. I have written a past post about how to take advantage of Investment Properties in Costa Mesa that produce monthly cash flow. By all appearances it seems at this writing that we hit our low point in values in 2010. If you can’t afford an investment locally, look at other areas that produce good rental income but have lower prices on homes. There are many areas (Big Bear, Palm Desert, Oceanside) where you can get amazing deals and be cash flow positive on an investment.
Need help on figuring out how to buy a home or investment? Costa Mesa Realtor Colin Delaney can be reached at 714-743-9882 or email me.