| How to Bottom Fish in Florida Real Estate Market (real estate)
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How to Bottom Fish in Florida Real Estate Market
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New Real Estate Purchase Secrets
As the real estate market swings away from sellers, buyers are in position to makes financially advantageous purchases. This is no more so the case than with builders.
For the last five years or so, people selling properties in the real estate market have made out like bandits. Demand was so high, they could ask what they wanted and often get it. Buyers were so worried about missing out... Read real estate article
Profiting from Hard Money Lenders When Flipping Houses
Hard Money is an interesting financial animal. It's history is colorful to say the least. Born by the need for rehabbers to get access to funds when a property is in disrepair and which no bank would lend on, it has grown to a multi-billion dollar industry.
The early lenders were ex-real estate investors who had made a few dollars in real estate and then became lenders in their local ar... Read real estate article
How to Bottom Fish in Florida Real Estate Market
After many years of spectacular growth, Florida property, like the rest of America, has seen a recent decline. High interest rates have taken their toll but less well recognised, 2005's above average hurricane season has been a major factor in the Florida story. Obtaining property insurance in Florida is difficult. Most insurance companies won't take the risk, and so home owners have to obtain cover from the insurer of last resort - government subsidised "Citizens Insurance". This has caused premiums to soar (by Florida standards) to approximately 1%. A $500,000 house, insured for $350,000 to exclude the plot value, would be about $3500 annually, with a 2% excess for hurricane damage claims. There is much political activity to resolve the issue and Congressman Jim Davis has promised to slash these rates by at least 40%. However, for many homeowners it is already too late and they have been forced to put their homes on the market or are having their homes foreclosed on. This increased inventory, in a market that is already full and has few buyers, is resulting in falling prices.
There is opportunity in crisis and UK and other international buyers are moving in. They realise the greenhouse effect or the risk of terrorism or disaster of one sort or another applies virtually everywhere. Weathermen are predicting 30 years of instability worldwide, and even in Britain the Environment Agency is issuing flood warnings all across the UK so the risk in Florida has to be put into perspective. In reality the 2006 Hurricane Season, which was billed to be even busier than 2005, was uneventful.
Unlike Louisiana, Florida is above sea level which reduces the damage caused by a hurricane. Added to that, a hurricane is one of the few natural disasters that can be both anticipated and action taken to avert much of the effect. Floridians are used to shuttering their homes and either sitting it out or moving away from a direct storm. Even if the hoped for insurance premium reductions do not take effect, at 1% insurance is still a viable protection and more than compensated for by the huge savings in the price of Florida real-estate. The sunshine State has a lot to offer, 75 million visitors each year flock to its 1500 miles of beaches, its 1200 golf courses, its theme parks and myriad of other attractions. 350,000 people each year move to make Florida their home, many of them British, keen to live in a better climate and a vibrant English speaking community.
Daniel and Judith did exactly that. They moved their family from London to Tampa and for $500,000 (approx £266,000) their home has four large bedrooms and an office, three and a half bathrooms, room for a pool table, and a garden with a private swimming pool. They live on a tree-lined boulevard with community spirited neighbours, fine schools for their two children and plenty of leisure activities, parks and other amenities. Both hold real estate licences and a mortgage license and are in a unique position to monitor the market and see the tremendous values that now abound. They have bought several properties themselves and have helped many clients find the right property to suit them. As Daniel says "where else could you find the value of property we now have in Florida, in a country that has historically proven to be politically and financially stable with tremendous growth potential?"
For those British trying to get to the US permanently there is currently a 2 year backlog for visa applications. Many are choosing to apply for E2 business visas. By buying a business they can usually get a visa much more quickly. A buyer of any business over 150,000 pounds is almost certain to get one. Many business brokers have a wide choice of suitable business opportunities from motels to tea rooms.
So, why Florida? According to Daniel the housing market has bottomed and cannot fall much further. Developers across the State are offering all sorts of attractive inducements to shift their stocks of new homes. "As is so often the case feast has turned to famine but these things are usually overdone. In my experience now is the time for the bottom fishers to cast their lines. For about $300,000 we can find many very nice homes that can be rented to provide a break-even or small positive cash flow based on a 75% mortgage at current US rates. And if that wasn't appealing enough, British buyers stand to enjoy the added buying power of Sterling's strength as it appreciates against the dollar".
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Secrets About Fannie Mae - VA Loan - Freddie Mac - FHA Mortgage - Jumbo Mortgage
The two most frequently used types of mortgages are the FHA (Federal Housing Administration) Mortgage and the VA (Veterans Administration) Loan . Because the FHA mortgage and VA mortgage are guaranteed by the government, they usually feature lower mortgage refinancing rates and mortgage fees than other mortgages. Details about the most common kinds of mortgages, including the FHA mortgage and VA mortgage, follow.
Conventional Fannie Mae mortgage
Fannie Mae is a Fortune 20, shareholder-owned company with a public-spirited mission: to tear down barriers, lower costs, and increase home ownership. Fannie Mae is the nations largest source of funds for home mortgages. Before approving you, Fannie Mae looks at several of factors including credit ratings, debt you owe, and work history. Mortgages that are sanctioned via Fannie Mae should qualify for a better rate.
Freddie Mac
Freddie Mac is the common name for the Federal Home Loan Mortgage Corporation. The 2006 maximum loan amount for both Fannie Mae Mortgage and Freddie Mac company is $417,000. Freddie Mac does not issue mortgages directly, they buy mortgages from lenders and resell them as securities in the secondary mortgage market. Before approving you, Freddie Mac looks at a number of different components including credit scores, debt ratio, and employment history. Like Fannie Mae, Mortgages that are approved via Freddie Mac should get a better rate.
FHA Mortgage
An FHA mortgage (Federal Housing Administration) has some advantages over conventional mortgages. Since FHA Mortgages are guaranteed by the government, they typically have easier prerequisites, lower down-payment requisites, and they are assumable mortgages. The maximum mortgage amount for an FHA mortgage (single-family) varies depending on the city where you live. You can contact a mortgage expert for these maximum amounts for your specific city. Government mortgages (including the FHA mortgage) make up 20 percent of home mortgages in the U.S.
VA Loan
A VA (Veterans Administration) mortgage carries several of the same benefits as an FHA residential mortgage. However, to qualify for this mortgage, you must be a qualifying veteran, the unmarried widow of a veteran, a Public Health Service Officer, or an active-duty serviceman. The maximum mortgage amount for a VA-guaranteed mortgage is $417,000. However, if you can make a large payment, you may qualify for $450,000. This is called a "Jumbo" loan. . No down payment is required for most mortgages below $417,000. A mortgage specialist can help you with more information.
Non-Conforming mortgages
Jumbo mortgage
A jumbo mortgage is a mortgage with a loan amount above conventional loan limits. Jumbo mortgages apply when agency (FNMA and FHLMC) limits don't cover the full loan amount. Fannie Mae (FNMA) and Freddie Mac (FHLMC) are large agencies that acquire the bulk of home mortgages in the U.S. They set a limit on the maximum dollar value of any mortgage they will purchase from an single lender. As of 2006, the limit is $417,000, or $625,500 in Alaska, Hawaii and the U.S. Virgin Islands. This leaves a portion of the market to look elsewhere for placement. Other large investors, such as banks, step in to fill the need with maximum mortgage amounts going to the $1 million or $2 million range. The average rate are typically greater than normal for conforming mortgages, and vary depending on property types and mortgage amount.
Bad Credit mortgage
If you've had credit troubles before lenders consider you a higher risk borrower. In such cases, the credit determination includes things beyond credit scores and your credit history, often including job, earnings, assets and other factors as considerations.
A mortgage company can help you find the best rate from various lenders for Freddie Mac Mortgage as well as Fannie Mae mortgages. They can help you learn if you are eligible for other governemt backed loans.
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How to Bottom Fish in Florida Real Estate Market
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