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THE FOUNDATION STONE:

For most people, home-ownership would be the largest single investment of their lifetime. A home should be part of your investment portfolio. If properly managed, home ownership can be one of the most efficient means of building wealth. A house not only has tax advantages, it is one of the rare consumer items that can actually appreciate in value over time. To learn more about home-ownership and wealth creation, visit FANNIE MAE.

Other associated costs of ownership could also lead to insolvency. Some professionals suggest that before putting money into a long-term investment, consumers ought to consider buying a home. A client ones said that it is even written in the bible that you should “possess the land”. Maybe you could start by utilizing the FINANCIAL CALCULATORS provided in this portal to explore how much it would cost you to achieve this so-called biblical goal.
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There are no foolproof strategies, but some of the salient questions to address are:

  • Where Do I Start? To create wealth with real estate start modestly and smartly. Don’t buy what you can’t afford, that could put a strain on your budget. Don’t expect your first home to fulfill all your aspirations of wealth creation; so don’t wait until you can afford that choice property before buying your first home.

    Look for both positive and negative sides of the deal such as the neighborhood, location, physical structure etc. Don’t stick too hard with the paradigm of “good house in a bad location” or a “bad house in a good location”, if the price is right go for it and also ensure that you feel comfortable with the choice. Seek advice, ask questions, be sensible and be realistic.
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  • How Much Can I Put Down? -- The beauty of creating wealth through home ownership is the ability to leverage your down-payment (paying only a fraction of the cost) to acquire the property, live in the property and reap tax benefits and the full capital appreciation of the property. Thanks to government agency (Federal Housing Authority - FHA and Veterans Administration - VA) sponsored programs, down payments can be as low as 3% for first time buyers, while 100% financing is becoming very popular in some markets.

    All that is good news for the consumer. Some professionals would advice that you put as low down payment as possible, especially if there are other investment options available at your disposal. Typically less than 20% down payment could result to paying Private Mortgage Insurance or PMI, however some creative financing options like 80-10-10, where the buyer can put down 10%, borrow 80% and take out a home equity loan for 10% can eliminate paying the PMI.
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  • What Loan Option Should I Choose? -- Finding the right home loan is a crucial part of getting the best “bang for your buck”. Historically, the most popular choice had been the 15 or 30 years fixed mortgages, in recent years the adjustable and interest only mortgages have been growing in popularity, so much so that even the Federal Reserve Board chairman Alan Greenspan in one of his remarks said that if an average borrower had resorted to interest-only mortgage in the early 1990s, he/she would have saved remarkably in interest payments by the beginning of 2000s.

    Some professionals disagree, but your choice of mortgage option depends on your objective and financial situation – how long you want to live in the home (homeowners in America move within 7 years on the average), how much you can afford and your credit rating. Adjustable rate mortgages (ARM) could allow you build additional equity and lower your monthly payment compared to traditional 30 or 15 years fixed mortgages. A smart way to build equity on your home is to pre-pay your mortgage, pay bi-monthly, or make a small extra payment each month, - it all adds up.
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  • Staying Put Or Moving On -- Building wealth through home ownership takes time. Let us say for the sake of argument that a homeowner accumulates $50,000 in equity on a $250,000 property over 5-7 years, through paying-down the mortgage and appreciation in value of the property; (from 1972 to 2002 home value grew by 6,42% on the average which outstripped inflation by 1,28% - growth rate is much higher in some regions), the owner has an option of using the equity to acquire a larger residential property (trading up), putting the money in an investment property or diversifying into other investments.

    Let your long-term objective be your best guide as to what you must do. Whatever be the case, your $50,000 equity would amount to a 10% down payment on a $500,000 property which could help grow your wealth further, all thanks to that first bold step you took couple of years ago.
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  • Buying For Investment Purposes -- Becoming a landlord through acquiring an investment property could be serious business for the average investor. You must review your financial situation and consider some worst-case scenarios, such as your ability to continue making two mortgage payments if your property becomes vacant. While trading up on housing could be a means of creating wealth, profiting from the quick sale of a property is not guaranteed.
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  • Find Out Home Value Online
    Getting an overview of home value, be it for residential or investment real estate is very crucial to developing a plan. You can visit HomeValueHunt plug in some information and receive real time online home valuation. The real estate valuation report could be useful for a multitude of purposes - For New Home Buyers, Existing Home Owner, Real Estate Agent, Appraiser, Insurance Company, or Lender.

    The media is rife with advertisements on quite profit schemes through acquiring foreclosed properties for less than nothing. With proper homework and some luck these offers could mean a dream come-through for some investors, but most of this adverts should be taken with a grain of salt. It is even more difficult for beginning investors. Property could be a good investment over time, but you can’t buy and sell it like stocks or any other merchandise - patience they say is a hunter’s virtue but would serve you well if you truly want to build wealth through property acquisition.
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    To check out current mortgage rates click on Mortgages. Real Estate news headlines are updated frequently and brought to you courtesy of Bankrate.com.

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    REAL ESTATE SERVICES:
  • ForeclosureNet.com -- Nationwide Foreclosure Listings!
  • Foreclosure Free Seach -- Foreclosure Deals.
  • HomeGain.com -- Save on REALTOR® Fees.
  • RealtyTrac.com -- Homes for Half Price
  • ServiceMagic.com -- Find Agents for Home Valuation
  • Carleton Sheets -- Real Estate Investment Tool-Kit!
  • MonsterMoving.com -- Moving? Get FREE Quotes!
  • Full Spectrum Lending -- Bad Credit? Refinance your home to Get Cash.

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