Why You Should Be Honest on Your Mortgage Application

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The only exception to this rule is if you are refinancing using a government loan, as in this case it might not be necessary to provide any income documentation. This all seems pretty clear-cut, but an article in aol.com points out there are a few different circumstances where people may decide to omit their income from their mortgage application.Your income is an important part of your mortgage loan application, and lenders do require specific documentation before deciding to fund you. This includes income tax returns for the past two years, or two years’ worth of corporate tax returns if you are self-employed.

If you are a self-employed borrower then you’ll definitely need to show two years of tax returns which include corporate returns if applicable. Nowadays federal lending requirements don’t allow lenders to choose which income years to use when deciding if you qualify for a mortgage. This means if you had one poor year followed by one exceptionally good year, then they cannot simply ignore the bad year as they will need to take a 24 month average of your income. If you have not disclosed income this also might raise red flags to a lender. They are going to want to know why you are trying to hide income so it’s far better to come clean as this will enable you to get a mortgage.

All cash deposits to your bank account that aren’t part of your normal income must be included and fully documented if you intend to apply for government financing. If you have taken on an additional job in order to save more money, then you’ll need to explain where these additional funds came from. If you are applying for a conventional loan then your lender must be able to source and document any cash deposits that are more than 20% of your monthly income.

If you have a joint application for a mortgage then it’s worth considering which of you has the stronger chance of qualifying. Conventional mortgage lenders are able to take just one borrower’s financial information into account, but it is different for government loans where the debt of one borrower can negatively impact the primary borrower.

The bottom line is that mortgage lenders are looking for borrowers who are able to support mortgage payments. Most will want the mortgage payment and other debt to account for no more than 43% of your income, although occasionally this figure may go as high as 55%.

Is Real Estate The Right Business For You?

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No matter what your politics, you must be aware of the ever-growing pile of regulations that confront anyone who wants to start a new business.

I knew a smart entrepreneur who once wanted to start a small business printing pricing books for contractors using a database and laser printers.He was in a large city in a state on the east coast, and thought it would be easy to get rolling, as he only needed to rent a few hundred square feet in a building dedicated to rental offices, and use two desks, a computer, and a couple of off-the-shelf laser printers.

Starting a business can be simple or very difficult depending on the business.

In jumping through the business licensing hoops at the county level, our entrepreneur found that they wanted plans of the building and a full report of all activities of those using the office. This was in spite of the fact that this building had been housing small business offices as rentals for many years. Then because he used the words “printing books,” he was tasked to report the chemical composition of the inks he would be using in printing and their possible hazards and remediation he would be doing. He finally managed to convince them that laser printer cartridges were safe and presented no hazard. Even so, his business license fee was hundreds of dollars each year because that’s what “printing businesses” pay.

The point of this little story is that these type of hurdles, valid concerns or not, jump up in the path of just about any new business that requires lease space, warehousing, employees, personal contact, food preparation, or customer traffic. A real estate investment business can, and most do, start at the kitchen table, requires no employees, and has no customer traffic. It’s the perfect business for the sole entrepreneur wanting to do something profitable without a lot of bureaucracy, licenses, and special insurance costs in the way.

A quote attributed to Albert Einstein defined insanity as “doing the same thing over and over again and expecting different results.” Of course that’s not the clinical definition, but it certainly pegs the reason so many people who want to change their financial futures are unsuccessful. Though they want to increase their income and build a retirement nest egg, they can’t seem to get out of their current rut. They are almost always confronted early on with the question from friends and relatives: “Are you insane? You can lose a lot of money in real estate; just look at the crash in 2007!” Or “Remember when Uncle Harold lost his rear on that piece of land he bought back in 1987?”.

If they let these questions and comments into their head, they’re going to keep going to work every day, getting the same paycheck, and they’re never going to take that step toward financial security. They keep doing the same things over and over again, but they just keep hoping that the results will change at some point. If they ignore the doubt and fear and concentrate on the reasons real estate investment is almost the perfect new business, they can get out of their rut.

Real estate is flexible in terms of strategies and time and money requirements.

Learning the right way to invest in real estate, and adapting the many ways in which profits are earned, there is little risk and start-up costs are almost nothing. Whether it’s locating deals for others for a fee, wholesaling, flipping houses, or rental property investing, there will be one or more strategies perfect for just about everyone.

All I’m selling here is the idea that many people can improve your financial future, and do so without a lot of money and time invested on the front end. It’s not for everyone, but it could be for you. You won’t be jumping through bureaucratic hoops for an office space, nor will you need a real estate license. All you need is the desire and a commitment to be sane. Insanity is going out tomorrow and doing what you did today and yesterday, but expecting different financial results.

Thoughts on Real Estate Investing

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Whether you’re a seasoned professional or a novice investor there are fundamentals that you should always be paying attention to when investing in real estate. The fundamentals for beginners may be second nature to experienced investors but they aren’t to the beginner. The beginner needs to keep these in mind every step in the process of making his or her first purchase and sale.

Money can be made in any type of real estate market but it takes different strategies that change on a regular basis. There are two basic investment strategies. One is to buy and hold as rentals and the other buy and flip as quickly as possible. Within those two basic strategies are many other options. Today, one of the better buy and hold strategies is the lease option where you hold for a few years but have a plan to sell to the renter at a future date. For those wanting to flip houses, being able to owner finance them (even using other people’s money) is a great strategy. Both of these strategies are working well today because of the tough lending qualifications and because so many people have damaged credit scores coming out of the recession.

Real Estate Investing for Beginners

First and foremost, have an exist strategy. Never buy a house just because you can get it at a good discount. Know exactly what you are going to do with it once you own it. It’s also preferable to have a plan “B” and a plan “C”. Once you have an exit strategy, join an investment club if you haven’t already. Decide on a couple of experienced members that you trust and possibly use the exit strategy you’ve decided on. Invite them to lunch. Explain your strategy to them and ask them to punch as many holes in it as they can. Use the information you learn to improve your plan.

Expert advice for beginners is invaluable. An example of a big mistake one beginner was advised not to make involved a double lot. The beginner had found a double lot at a deep discount in a lower to middle income subdivision. He saw a huge opportunity to buy the lot and then go through the permit process to subdivide it with the intention of more than doubling his investment by selling two individual lots at retail. When he discussed his plan with an expert, the expert suggested that before making the purchase he first look into his ability to subdivide the property. When the beginner did, he learned that it could not be subdivided because of a wildlife habitat issue. The only use the property was suitable for was building a small mansion in the middle of low-end neighborhood. Obviously not a good investment strategy.

Real Estate Investing for the Experienced

If you’re at the top of your game, the best thing you can do to stay there is remain humble. Lack of humility is the biggest problem any businessperson can cause for them self. People simply don’t like doing business with someone that is arrogant. The best deals won’t be made available to you. When you do find a decent deal, negotiations won’t go in your favor when you portray yourself as always coming out on top. Stay humble and you’ll do much better.

Being humble includes offering your experience and knowledge to beginners and others less experienced than yourself. Don’t think of them as competitors and blow off their requests for help. There are plenty of deals for everyone. Occasionally, taking the time to thoroughly think through the strategic basics will also help keep you at the top of your game.

GTA resale market to be strong in 2015

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Opportunities for investors in the GTA will abound in 2015, as more homeowners in the area will list their houses for sale, creating a more balanced market, according to experts. Speaking at CMHC’s Toronto Housing Outlook Conference yesterday, senior market analyst Dana Senagama said the GTA’s sales-to-listings ratio will be 55 per cent, though some markets will deviate. For instance, the Durham region, which includes Ajax, Oshawa and Whitby, will see a sales-to-listings ratio of around 75 per cent. Senagama also highlighted more good news for investors: a strong demand for rental units. She pointed particularly to growing long-term investor activity around rental condominiums. “If you’re making the decision to invest, you need to look at the rate of return,” she said. “Thus, look at cap rate, which has between four and 4.5 per cent in the last five years.” It may be that investors are more motivated by capital gains, she added, since there is a stronger price appreciation (around 20 per cent) for new condos. “We’re seeing around a quarter of the total condo universe rented out by investors.” Looking more widely across Ontario, Ted Tsiakopoulos, regional economist at CMHC, said the province’s rental market will continue to tighten – great news if you’re an investor. “Nothing here suggests to me that prices are going to fall, that you should be rushing out to sell your real estate,” he said. Residential real estate assets in the province have been historically stable, he added. Bob Dugan, CMHC’s chief economist shared a Canada-wide outlook during the conference, forecasting slower growth in housing prices in 2015 and 2016. He added: “Price growth will drop below 2% in 2015 and 2016. Where we end up in that range depends on what happens with the economy.”

Minimizing Real Estate Investing Risk

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There are many real estate investing business models. Deciding on the one that is right for you determines the level risk you are willing to take with your investment money. Most investors decide between becoming a landlord or rehabbing and flipping middle-income houses. What few people consider is owner financing lower income houses. There’s more money to be made and lower risk with this real estate investing model.

Valuing Owner Financed Houses

Here’s where the big difference begins with owner-financed houses. The selling value of the house is NOT determined by comparables or assessed vale or an appraisal. The sales value of an owner financed home is closely associated with the dominate rents of the neighborhood. What’s important is that you find the right neighborhood to invest in. These are working class neighborhoods where people mostly live paycheck to paycheck but some manage to save a little for emergencies or towards a down payment on a house. These people might have $4,000 in the bank.

Let’s say it’s a typical family with two parents and two children and the parents are in their early 30s. They are renting a two or three bedroom apartment that is costing them $1,050 each month. They have noisy neighbors above them and below them and they have to fight for a decent parking spot when they come home from work every evening. They have the good old American dream of buying a home with a yard, a garage, and a white picket fence. However, in today’s real estate marketplace, these people can’t qualify for a traditional mortgage. Maybe they have a few blemishes on their credit score or more likely they don’t have the 20% to 25% down payment that the banks are requiring. The fact is these peopl

e don’t value the purchase cost of a home according to the appraised value nor comparable sales in the neighborhood. They value the purchase cost compared to what they are getting for their rent money. When you owner finance, you don’t need an appraisal nor do you have to show comparables. All you need is to come to an agreement on the sales price. When you can put these people in their own home for the same cost or less than they are paying in rent, most will jump at the chance.

How a Decent Deal Plays Out Financially

In most cities (especially mid-west cities and towns), there is an abundance of low cost houses that are ideal for owner financing to lower middle class and lower working class homebuyers. How a deal might work is you find a distressed seller needing to close a sale very fast. These are typically all cash sales. You need to have your financing in place before making the offer so that you can close in three days. Your financing is often a private lending source that you have built a relationship with and doesn’t require an appraisal. Today’s market is full of these private lenders.

The reason you don’t need an appraisal is because you’re going to buy the house for less than $25,000 and sell it for $45,000. You need to borrow the $25,000 but it’s secured by the $45,000 note and brings in an interest rate of between 8% and 10%. Why would a buyer pay $45,000 for a house you just bought for $25,000 and pay a high interest rate? It’s all about the cost to rent. Rent is costing the buyer $1,050 each month but buying the house with a whit picket fence is going to cost him or her about $500 per month. That’s based on a $4,000 (9%) down payment, a $41,000 mortgage at 10% and includes the cost of homeowners insurance and property taxes on a 20-year loan. Once you understand the numbers, it becomes clear this is a very lucrative way of investing in real estate. It’s a win-win-win for you as an investor, for the buyer, and for the private lender.

As the investor, you place yourself between the buyer and the lender. You pocket the $4,000 down payment for an instant payday and take 2% of the interest to leave 8% for the lender. Put 10 or 15 of these deals together and you have a passive income stream for the next 20 years without the headaches that come with being a landlord. Once you build up your own capital, you can buy and sell houses without first finding a lender. After you sell the house, you collect the monthly mortgage payment. After the loan is seasoned six months or a year, you can sell these notes on the secondary market (without discounting it) for a payday in the $20,000 range. It takes a different investing mindset but this is a huge opportunity in today’s market.

Solid Guide When It Comes To Interior Design For Rented House

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Are you looking to brighten up a dull room and searching for interior design tips? One great way to help you liven up a room is by painting and giving it a whole new look. The following article will give some helpful information on ways you can go about adding color through paint to help turn a dull room into one that pops. If you have children, you should take them into consideration before planning your interior-design project. For example, you will probably want to stay away from furniture pieces that have extremely sharp corners, as your children can easily harm themselves on them. It would be a waste if you were to purchase's pieces that end up breaking or causing harm to your children. Set a budget for your interior-design project before you start any work. Costs for home-improvement projects can quickly spiral out of control if you don't set a spending limit. While you can be a little flexible, you shouldn't spend more than you can afford. Having a budget can help you be more creative as well. Anyone who is designing a room in their house would be wise to incorporate hang art on the walls. Artwork does a great job of making your room look complete. Just make sure you choose a piece or two that meshes with the current decor of the room you are designing. You will get the right effect by hanging artwork at eye level. Hanging a piece of art too high or too low throws the balance of your room and can even make the room look smaller and more disorganized. Now that you read the article from above, it is very simple to turn an ordinary room into a room that dazzles by adding some color through painting. Stick to the tips presented in this article to help give you some solutions to turning that boring room into a room that nice and relaxing.

Great Resource When It Comes To Interior Design For Rented House

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The economy is starting to pick up more and more, so a lot more people are becoming interested in designing the interior of their homes. If you want to help your home look good, and help the economy get back on its feat then invest time and money into fixing the interior of your home.

Start with a fresh coat of paint. Paint is inexpensive and can make a big change to a room in just a few hours. Go to your local home store and get swatches. Then, come home and imagine what each swatch would look like, and how it would blend with the furniture and other rooms in your home. Choose one and see how different your room looks!

Make creative use of pillows and rugs. These are inexpensive and can change the attitude of a room very quickly. Play with different textures, colors, and prints to see what suits you best. The best thing about pillows and rugs is that you can move them to another room when you want a different look.

Look for innovative ways to add storage and organization to your home. You can use decorative baskets to organize papers and things that tend to invade every room of the house. It is difficult to relax in a home that is disorderly. A well-organized home will give you a sense of peace when you relax after a hard day.

With all that you learned you can help your home look beautiful. Go ahead and see if you have a natural feel for what it's like to design the interior of a home. Remember you do not have to do it all at once, you can work little by little as the year goes on and make a significant change to your home as time progresses.