Find our listings on hundreds of websites plus magazines such as Homes&Land, Dream Homes, Distinctive Homes and more. Call for details and see what we can do for you.
Looking up Home Values in Orange County California
You may be selling a Orange County Home, refinancing, or investigating the Orange County Real Estate market, whatever your intentions you need information that is accurate and on the money. There are several websites out there that can computer generate you a estimate of value like the graph below from Zillow but is the information correct?. If you read the fine print on Zillow.com they state that the Zestimate can be off by as much as 40%
A Local Realtor® is best for home values
I get many calls from clients that use Zillow as their main source for information. Don’t get me wrong I think Zillow is a great source for general information but you just can’t beat the good ole Local Raltor® for accuracy.
Here is an example of a typical call form a client or potential buying client that I get on a regular basis.
Buyer: Hi Brett I found this listing on your website LagunaAgent.com. It’s for sale at $645,000. I really like it and would like to make an offer but but I think it is way over priced. Zillow says its only worth $532,000 The photos look like it has amazing views.
Me: OK let me pull that home up and compare the asking price to comparable surrounding properties. Give me a few minutes while I pull some comps.
Buyer: OK
Me: OK Mr. Buyer I have done some research and there have been 3 comparable sales in the area over the last three months including one that is in the same tract. One had foundation problems so it sold for a lot less than the others. I think the value may be a little less but the Zillow estimate is way off unfortunately.
Buyer: Ok so what do you think the value is?
Me: Well without physically visiting the home I can only give you a very close estimate. The model match inside the subject Tract sold for $575,000. According to the agents comments it had a foundation crack running through the kitchen which caused a slab leak and it was sold as is. I would say this homes value is closer to $610,000 to $615,000. If you like we can make an appointment to see this one and I will also show you some others near by to compare.
Computers are smart at calculations but not desirability
You see, Zillow like many other websites is computer generated from other sales in the area. There are several factors that a computer can’t analyze such as Location, Condition, or if any of the homes were fully remodeled last year with over $100,000 spent. The list goes on and on.
One thing Zillow is very good at is over all “average home values” For example below is a Live graph of the average home values in Laguna Niguel. Today is 3/15/2010 and looks like since the first quarter of 09 we have been off the bottom and heading in a good direction.
If you are thinking of selling a home to up or down size now is the best time. Why? OK If you wait for the market to recover fully and the prices to go back up, your new home will be more expensive as well. The new home you are going to buy is heading up in the same direction. Buying at a lower price means less property taxes and saving you money.
If you are just selling and not buying I would recommend the opposite only if you can hold on to it and continue to make any mortgage payments. The reason is if you have equity you will have capital gains tax. If you must sell and would like some ideas on this issue you may like to read a recent post on how to avoid paying capital gains tax
Currently serving South Orange County and the following cities:
Aliso Viejo, Costa Mesa, Corona Del Mar, Dana Point, Irvine, Ladera Ranch, Laguna Beach, Laguna Hills, Laguna Niguel, Lake Forest, Mission Viejo, Newport Beach, Newport Coast, Rancho Santa Margarita, San Clemente, San Juan Capistrano. South Orange county.
Get the true value of your home for free
If you would like me to do a free market analysis on your home to find today’s accurate market value, please fill out the form below. I will send it to you asap. Thanks
Realtors® Volunteering in our communities. Free Loan modification assistance.
Statistics have shown us that less than 7% of all loan modifications filed have been successful. That’s not to good considering all the stimulus that the banks have received.
Our goal is to guide you though the whole loan mod procedure and help you get into that 7% category.
Below are a few facts we have experienced that can make the difference between a loan modification denial and approval.
Loan Mod Qualification:
No matter how hard you try or how well you present your request, If your debit to income ratio (DTI) dose not meet the requirements you are wasting your time and sanity with loan modification.The banks are required by certain government guidelines such as the California Civ Code Section 2923.5 to assess the borrower’s financial situation and explore options for the borrower to avoid foreclosure.
Lately the banks have been treating these government requirement as more of a necessary chore than a service to cover their tracts during the foreclosure process. Unfortunately the banks are in the lending industry not the loan mod business. They simply don’t have the time or the patience to qualify the hundreds of requests.
The first step you need to take is to see if you qualify. As part of our voluntary service, we have a pre-qualification formula to calculate your odds on being approved or declined on a loan modification request.
Give us a call and we will gladly run your numbers for you.
How to file for a Loan Modification:
OK so your numbers show you have a chance for a loan mod what now and how can we help?
There are several factors that can help you fit into the 7% category. It is important to understand their are absolutely no guarantees for a successful loan modification, but these are a few tips that will help.
About Organization.
Being organized with all necessary documentation is the first and most important step. We have no control over who will be reviewing your file but we can assure, when they get it they will have all they need neatly filed in a easy to navigate package.
Think of your package as a website. If you are looking for information on the web, even though you know the info is on there somewhere, if you have to click click click to find what you are after, chances are you will get frustrated and click away to the next site.
The banks are extremely busy shuffling though hundreds of files per day and you only get one chance to make an impression to make it to the next step. If your file does end up on the back burner it is almost certain that your file will get lost never to be seen again.
We have clear instructions and a DVD on how to correctly file your loan mod for submitting to the bank, available on request.
Who to talk to about Loan Modification:
If you don’t know or request the correct department when you call the bank, you will more than likely be forward to the collection department. The collection departments job is not to help you lower your payments. Their job is to squeeze and squeeze, pick you up by the ankles and shake you until all you pennies fall out. Forgive my bluntness but that is putting it politely.
You need to talk to the Loss Mitigation Department. The Loss Mitigators job is to assess the beneficiary’s losses and determine the best solution based on each file. If you are calling the bank to follow up on your file, be sure to speak with the correct department.
Determine if you are being treated fairly
If you feel you are not getting fair attention it is time to get out the big guns. The banks are required to follow strict procedures and they can get into a lot of trouble and get big fines if they are not following them per the rules. Along with the instructions we will give you is a list of your legal rights. We also have all the forms you will need to file a complaint and to get their full attention.
Be a polite pest
Most of us are polite but sometime it has the opposite effect that you expect when dealing with this situation. You will need to keep following up on your file for status updates to get results. Remember the squeaky wheel will always get the oil when it becomes annoying enough.
As Realtors® We are always happy to help our communities. If you would like some assistance for you loan modification or other options we will be happy to lend advise.
Brett Dalbeth
Newman Realty
888-399-4844
Currently serving South Orange County and the following cities:
Aliso Viejo, Costa Mesa, Corona Del Mar, Dana Point, Irvine, Ladera Ranch, Laguna Beach, Laguna Hills, Laguna Niguel, Lake Forest, Mission Viejo, Newport Beach, Newport Coast, Rancho Santa Margarita, San Clemente, San Juan Capistrano. South Orange county.
If you have been thinking of selling your highly appreciated Real Estate or a business to cash out or reinvest, one of your main concerns is Capital Gains Tax. That’s right, Uncle Sam wants a big piece of that cookie you spent a good part of your life baking.
In the end it doesn’t really matter how much you made, it’s how much you kept.
If you are anything like myself I know you will agree, we all work too hard to just through our hard earned investment dollars into Uncle Sam’s spending bucket when its finally time to enjoy it or invest in other products. When you get to this bridge and you are a little skeptical about crossing it, their is an option that you can use to avoid defer the capital gain tax over a period of time, even beyond your life time and on to your heirs. Sound good? read on.
Deferred Sales Trust™:
My Good friend Royce Running at Cristal Cove Wealth Management in Irvine invited me out to lunch the other day to explain some of their products. What got my attention was their Deferred Sales Trust (DST™). The DST™ is now a new tool I have added to my tool belt to offer our clients that want to sell their highly appreciated Real Estate.
The Way Out:
DTS™ is a perfectly legal way to defer your real estate capital gains tax and reduce your over all tax burden. For those of us that have highly appreciated assets such as homes, Commercial Real Estate, and businesses, are often reluctant to sell assets because of the capital gains tax and depreciation recapture costs associated with the sale.
DTS™ is a legal method, combining several sections in the tax code, which allow the seller of the property to defer the capital gains taxes over a period of time. The The DTS™ is a little different to the common 1031 Exchange which limits the seller to reinvest into other real estate of a greater value within a certain amount of time. DTS™ allows the seller to roll the equity into other investments such as stocks or CD’s or a business on their own watch.
What is Capital Gains Tax?
Capital gain is profit we are taxed on when we sell an asset. The capital gain is calculated by subtracting what you paid from the net sales price. The current rate for an asset owned for one year or longer is 15% for federal taxes. Most states charge 5-10% on top of that and California has one of the highest rates at 9.3% That’s A total of 25%. If depreciation was deducted on the asset the cost basis is lowered by that amount, thus increasing the Capital gain even more.
How Does Deferred Sales Trust™ Work?
I’m going to leave it to Royce explain all the nuts and bolts in detail as it is quite in depth and I’m a Realtor not a tax expert but here is a short description of how it works.
Basically to get the ball rolling the property owner (Grantor) transfers the property into a Trust set up by Royce. The Trust pays the Grantor for the property in the form of a “Installment contract”. It is strictly a private arrangement between the Trust and the Grantor.
The payments can be made immediately or over some period of months or years. The Trust then sells the property to a third party “the buyer” with the help of Brett Dalbeth (Your Realtor).
There are Zero taxes to the Trust on the sale since the Trust purchased’ the property for the same price it sold it for to a third party. The Grantor is not taxed because they have not yet received cash from the sale.
The Proceeds from the sale will be safely earning interest from other investments of your choice including Stocks, Securities, CD’s, Real Estate, or even a new or existing business. The Grantor may also choose to receive a steady income deferring over a period of time which is transferable to the beneficiary or heirs.
The goal is to keep your once Uncle Sam’s portion in the Trust for as long as possible working for who deserves it most. You!
Now if that wasn’t exciting enough how about if I tell you, part of the payments received is tax free return on basis, and the other part is return on gain which is taxed at the capital gains rate mentioned above.
There are so many other benefits to the DTS™ but I will leave it up to Royce to go into detail. I just know most people like to make smart decisions when it comes to their net worth and what will be left to their heirs.
For more details please give me a call I would be happy to fill you in on this great tool and how you can take full advantage of your own hard earned money.
You have heard about NOD, Read about it, do you know how close you are to it?
Ok so you’ve missed a few mortgage payments or you’re about to. When will the notice of default (NOD) arrive, what is coming next? We help people in these situations every day. Read below and feel free to contact us if you need some advice or help.
First let’s take a few steps back, identify the problem and see if we can avoid the dreaded NOD. Like any problem solving issue you should identify the source and correct the problem from there if possible.
Take Action:
1. First off let’s start with the obvious. If your hardship is income related, have you explored all your avenues to generate additional income or business. Are you able to change jobs or get a pay rise. How about a second job. Can you cut back on expenses?.
2. You may have been expecting your mortgage interest rate to adjust out of your budget for some time or it already has. Talk to a lender, can you refinance at a lower fixed rate?
3. If the above has failed, notify your lender right away. Ask them if they have a solution for your situation. Listen to what they say or recommend but do your homework before taking the bait. Don’t take their word for it without doing some research because they have been known to lead consumers down the path of to no return. Remember the banks have two basic rolls Lending money and Debit collecting. If you don’t understand what they have to offer ask a Realtor or your attorney.
4. If your lenders offer is not making sense, talk to a reputable licensed full time Realtor. Realtors are in the trenches with these situations every day. First ask the Realtor a few questions to get a feel for their confidence level in working with situation like yours. If you feel comfortable with this Realtor make an appointment and bring all your financial documentation with you. Your Realtor should be patient with you, listen to your needs and then spell out all your options.
OK by now you should have a pretty good idea if you can avoid the notice of default. If you have exhausted all the above and still no dice it’s time to get serious and roll your sleeves up. Your Realtor if a good one should have given you all your options and some great advice. Some advice he/she may have given you as first options before recommending Short sale is the following:
Forbearance:
Forbearance is an agreement your lender may offer you to help get you back on your feet. This type of agreement is only temporary. Don’t be fooled by your lender that this is a permanent solution. This may work for you if you expect to increase your income before the term of the Forbearance expires. If you need a permanent lower payment this is not in your best interest even though your lender writes it in a way to confuse you.
Loan Modification:
Loan Modification is an option that may or may not work for you. The success is slim but with a little guidance on how to correctly file a request, there may be a small chance. Don’t rely on your lender. Most lenders simply don’t put the effort into helping you as it is complicated and time consuming. I highly recommend reading this post about Loan Modification and taking advantage of the Loan mod Kit. The kit has full instructions and pre-printed forms to help you file for the best possible professional results.
Foreclosure:
Foreclosure should only be a last resort. A foreclosure can ruin your credit and put the brakes on your life for the next ten years. If you have played your card right you can avoid foreclosure altogether by selling your home as a short sale.
Short Sale:
Short sale is the best way out at this point. By selling your home short of what is owed and having the lender forgive the debit, you can save your credit from further damage and recover much sooner.
Now you know where you stand:
OK It has been a disappointing route, all the above has failed, you have missed some payments and the lenders collection department has started sending threatening letters, including some titled “notice of default”. If you are only one or two months late don’t be alarmed. The official notice of default (NOD) can only be issued after the third month of delinquency. It is important to understand what a NOD looks like when it arrives. This is a real Notice of Default Sample The name and file numbers have been blacked out to protect our clients identity. A Notice of Default is a public recorded instrument.
Notice Of Default:
The Notice of Default arrived now what? By now if you have decided to do a short sale, you should have been in touch with a Realtor that specializes in Short sales. The experienced Short sale Realtor should have gathered all your required documentation (The Short Sale Package) and listed your home for sale. Time is of the essence at this point. In order to stop foreclosure you need an offer to submit along with a complete correctly file short sale package.
Short Sale Transaction:
Your Realtor may or may not have a short sale coordinator but in my opinion it is necessary as short sale transactions need special attention. From here on out your Realtor should keep on top of the sale and make sure the lenders don’t drop the ball. If all goes well the bank will accept the offer and close the deal. Be patient, Short sales can be a long painful process. We have had Short sale approvals in as little as two weeks and as long as 9 months. It all really depends on your lenders loss mitigation department and the Realtor processing your sale.
What to expect after NOD:
Once the lender files a notice of default, it is common to have your mail box jam packed with junk mail from companies offing you all kinds of services. Be careful, These companies sit watching the NOD’s filed each day and target the distressed home owners. But you are lucky, you have already done your homework and looked at your options. There are many people taking advantage of distressed homeowners making false claims that they can save your home. Many of these companies are just after that upfront fee then they will kick you to the curb out of pocket. Don’t go there you will regret it.
For more information or free advice feel free to call our toll free number 888-399-4844
Our company specializes in helping homeowners understand their options when it comes to mortgages, and buying or selling Real Estate. What ever your Real Estate related situation or intentions, we have a full range of solutions for you. Some of today’s most popular are noted below.
Refinancing:
Many mortgages have reset to a higher interest rates and that is one of the main causes for homeowners to miss their payments as they start to struggle to make ends meet. Some of the last fixed rates are yet to reset and it’s just a ticking time bomb waiting to happen for many. Now is a good time to check your mortgage note and prepare for any upcoming adjustments before they occur. We are Realtors® and the mortgage and lending industry is the lifeline of our business so having a trustworthy lender to refer to our clients to is only good for business. If you would like us to review your current mortgage situation and put you in the best possible position for the future we would be honored to help.
Loan Modification:No charge
If you have lost household income or experiencing a financial hardship in any way, a loan modification is an option that may work for you. Unfortunately the success rate is very low for loan modification but there is a chance and we can advise you how to increase that chance. We can supply you with a instructional DVD and all the forms you need for the best results. Many home owners pay an attorney thousands of dollars to correctly file their loan mod. The truth is there is nothing an attorney can do that you can’t do yourself for free with a little guidance. This is a free service we offer to our communities we service.
Short Sale:No charge
Short sale is the easiest way out for most homeowners that have little or no equity. Short sale is also a better option than foreclosure. Foreclosure can ruin your credit for up to ten years. With a short sale and a little guidance it is possible to restructure your credit to a point where you can qualify for a new loan and purchase again in 3 years or less. We hire full time short sale coordinators that service our listings to assure our clients homes will never be left on the back burner. Any Agent can get a market value offer, but getting your lender to accept it before the foreclosure is the critical part in which we excel.
1031 Exchange:
Many of our clients are repeat investors. When buying and selling real estate for business or investment, there are several tax liabilities you should be aware of. A 1031 exchange is a tool investors use to avoid paying capital gains tax. There are certain restrictions involved while doing a 1031 exchange.
Deferred Sales Trust™:
A Deferred Sales Trust is a legal way for a owner to sell a highly appreciated property, commercial property, investment property, or a business and defer the capital gains taxes due at the time of sale over a period of time, even beyond the seller’s lifetime. This works well for retires or someone wanting to roll their real estate investments into other investments such as stocks or CD’s.
For Sale by Owner:
Some sellers prefer to sell their home on their own for one reason or another. Some reasons may be they don’t have enough equity to pay a full real estate commission or they may just like to try selling on their own before they pursue listing it with a Realtor®. We have many successful marketing platforms other than the MLS including website and magazine advertizing. If a FSBO is willing to pay a buyer’s agent commission ½ the full rate we have an incentive to introduce and represent buyers on their property.
For further details on how we can help you, feel free to give me a call Toll Free 888-399-4844
The lucky 2009 first time home buyers take a piece of the pie. It’s 8/16/09 and to take advantage of this $8,000 free credit, buyers better hurry because time is running out. To claim the credit a buyer must close escrow on or before 12/1/09. Remember the average escrow period is 30 day’s from the accepted offer, If a buyer wants a piece of the pie I would hope they are actively searching for their dream home. If you would like to see what homes are available in our Laguna cities such as Laguna Niguel, Laguna Beach and Laguna Hills Just let us know and you will have a list in no time. We also service all of south Orange County from Newport Beach to San Clemente.
This is what a buyer needs to know about the tax credit.
First time home buyers only.
To qualify a buyer must not have owned a home in the past 3 years from the date of close of escrow.
Tax credit maximum.
The tax credit will be 10 percent of the purchase price up to a maximum of $8,000. If you are buying a home in orange county California you will find it hard not to get the full $8,000.
You must close Escrow in 2009 or you miss out.
The $8,000 tax credit was created to stimulate the housing market in 2009. To qualify you must buy and close Escrow between 1/1/2009 and 12/1/2009
You don’t have to pay the tax credit back.
Unlike the previous tax credit, you do not have to pay it back. However you may be required to pay a portion back if you don’t live in the home as your principal residence for at least 3 years from the purchase date.
The 2009 tax credit is refundable.
The home buyer can claim the credit even if they have little or know income tax to offset.
There is a income restriction.
A single taxpayer can claim the full tax credit as long as their income is under $75,000. A married couple can claim the full tax credit if their income is under 150,000. (Partial tax credits may be claimed for buyers with incomes over the income restriction limits).
As always We are here to help and answer your questions.
There are many questions I get from home owners every day wanting to know more about short sale. Some of the most common are:
“Is short sale the best option for me?”
“Will I owe money after a short sale”
“How will short sale affect my credit?”
“Who can help me with short sale?”
“What’s the difference between short sale and Foreclosure”?
There is a lot of confusion about what benefit a short sale has over foreclosure and why it can take so long to get approval from the bank. Well this should help answer some common questions.
What is short sale?
A successful short sale is when the Banks or Lien holders that hold the note against a home that has negative equity agree to sell the home for less than the principal balance on the mortgage. The bank in first position will negotiate with any secondary lenders, other liens or judgments against the property, and the buyer. If an agreement made between all parties and all documents have been filed correctly, a short sale may be possible.
Who qualifies for a short sale?
Any home owner that has negative equity and has or will be experiencing some kind of financial difficulty. A qualified home owner will need to prove to the lender that they are unable to keep up with their mortgage payments. An experienced short sale Realtor can help with qualifying a home owner in need of help at no cost to the home owner.
Who to contact for help?
The first thing a home owner in need can and should do is speak to their lender and ask for their options. If no luck the next step is to contact a Realtor that has experience with short sales. It’s important that the Realtor has experience with short sales or they have a short sale department that coordinates the sale. A Realtor with little or no short sale experience should not take on the task without help from a reputable short sale coordinator. A short sale transaction is more complex and is very time consuming compared to a regular sale. Incomplete files will not be reviewed by the lenders and the lenders do not call and ask for correction. If a file is incomplete and not corrected the home will more than likely go into foreclosure.
Short sale vs. Foreclosure?
It is best to avoid foreclosure by far. If a home go’s into foreclosure the home owner will have much more debit and they will still be responsible to pay it back. Foreclosure has a greater negative impact on credit and will stay with the home owner for much longer than a short sale. With a successful short sale the sellers, lenders and buyers negotiate the sale and the lender relieves the seller from most if not all of the debit.
Why would a Bank accept a short sale and take a loss?
In many cases a distressed home owner gets to a position that they cannot afford to pay their mortgage anymore and they stop paying completely. After the 3rd delinquent month the homeowner will receive a notice of default and that is the point the foreclosure processes clock starts ticking. Once the seller or the sellers Realtor brings a purchase contract to the table, the bank at its own desertion will halt the process while they review the numbers. The bank must then decide the most economical procedure to remove the property from their books with the least amount of expense. A foreclosure is a costly and time consuming procedure and the bank must take into consideration the cost of doing so. Let’s look at it from a banks point of view!
Bank:
The Mortgagee “The home owner” has stopped making payments on our investment! “The mortgage” It is now costing us money daily instead of making us money. OK we have tried to recover the delinquencies with no luck so start the foreclosure procedure as agreed in the loan documents they signed.
Meanwhile the distressed homeowner has seek-ed help from a Realtor. The sellers Realtor has aggressively marketed the property and has procured a buyer. The Realtor has also gathered all the correct document and forms necessary to submit to the bank for review.
Bank:
The Bank now reviews the offer and compares it to the market value of the property. No matter what, nobody in their right mind is going to pay more than market value. The bank has limited options.
Option 1) Foreclose on the property spending thousands of dollars doing so and try to sell at a public auction with no guarantee it will sell at market value. If it doesn’t sell at an Auction hire a Realtor to manage and maintain the property at additional expense.
Option 2) Take the market value or close to market value offer and be done with it.
The bank wants out just like you do at this point and chances are it can be a better situation for both seller buyer and the bank if a successful short sale is negotiated.
As always Contact us for advise we are here to help.
Today here in our three Laguna Cities- Laguna Niguel, Laguna Beach and Laguna Hills there are currently 305 homes advertised on the MLS as Short sales and 29 Bank owned Homes or (REO’s) At least once a week I hear a horror story of a home owner that has been ripped off by a phony foreclosure company. They make out to be a legitimate company but turn out to be nothing more than scam artists stealing thousands of dollars from innocent people. Unfortunately when there is blood in the water the sharks will come out to pray.
Loan Modification scams
Talk about scams and the booming scam market the opportunities are huge in the Real Estate Industry. Some of the same predator’s that helped get consumers into this mess are so called Loan Modification Experts now. The only differences is the company name has changed. Whether is a law firm or a so called government agency, distressed home owners need to do their home work first and cross their fingers. It’s a sad case out there and it’s going to take some time before the authorities get a grip on it. Beware of any company that asks for an upfront fee, or guarantees success because there is no guarantees with a Loan Mod. Over the last few years I have seen so called Loan Modification Companies speak to distressed home owners even if they are listed with a Real Estate Agent, and talk them into a phony Loan Mod holding up the listing with no results. After the home owner realizes their mistake and continues to try and sell the property, the bank turns around and forecloses leaving the home owner on the street with a ton of debit.
Big Brother is watching
The FBI has been looking into these cases and so far almost 4,000 cases have been reported. According to the Federal trade commission, these scam artists advertise guarantees and high success rates to mislead consumers about their services. Some charge upfront fees to begin their work on a file and then they move on to their next victim leaving the innocent consumer in the water without an Orr. Some have websites that look like government agencies with government logos etc, don’t be fooled by this, only real government agencies have .gov and anything other than .gov should be thoroughly investigated before contact.
Be safe when asking for help
To be sure you will not be scammed, Speak to a local Realtor. Realtors are licensed by and strictly governed by the Department of Real Estate, (DRE) and the U.S. Department of Urban Development (HUD). These agencies are in place to protect the consumers and licensed Realtors have a fiduciary duty to protect their client and look out for their best interests. A Realtor should not ask you for an upfront fee but if they do check em out on the DRE website to see if they are licensed and the are who they say they are. If you would like more information on this topic or are in need of advice don’t hesitate to contact us. We will point you in the right direction.
Most home owners pay their mortgage payment each month and have no idea they can save tens of thousands of dollars and pay their mortgage off several years earlier just by making a simple adjustment to their payment schedule. My eyes are always open looking for opportunities to make or save some green but this is a biggie and every one should benefit from it. Real Estate in Orange County is some of the most expensive in the States and most people that live here like to find ways to maximizes their investments and capital gains. This is an example of a simple strategy that I use and recommend to my clients here in Orange County California.
Here’s How
Change your monthly payments to automatic Bi-weekly payments.
By changing your payment schedule to biweekly half of your monthly payment is withdrawn every other week. In a years time, 26 biweekly payments will be made. This is equivalent of one additional monthly payment applied to your Principal each year. Not only are you adding one additional payment per year, you are also saving on interest because you are paying down your Principal biweekly rather than monthly.
The diagram below is an example of a typical $300,000 mortgage with a fix interest rate of 6% for 30 years.
The Red demonstrates the traditional monthly payment plan most home owners use. If the home owners on the monthly plan stick to the minimum payments each month it will take 30 years to pay off with no savings.
The purple demonstrates the minimum payment over a 30 year term, but in fact is paid off 5.5 years earlier and saving a ton of cash along the way. If you can afford to add a little extra each month it will be applied directly to the Principal and will help with the compound effect drastically over time cutting and saving even more.
Some of of you will be thinking, (like I did at first) Two withdrawals form my checking account each month will just make my account management that much harder to deal with. This is what I did.
Open a new free checking account.
Calculate what your Bi-weekly payments will be.
Deposit a cash cushion of equal to one bi-monthly payment plus a little more to be safe.
Set up a automatic monthly transfer of equal to two biweekly payments. (if your like me round it off to the next $100.)
Then change your monthly mortgage payments to Bi-weekly. Done!!!
You can now pat yourself on the back and watch your mortgage accelerate to the $0.00 finish line.
As always we are just a ph call away and willing to put you on the right tract.
Real Estate Marketing Specialist/Realtor
With close to 90% of buyers and sellers searching the web these days before they choose a Realtor, it has become more and more important for Real Estate Agents to have web presence. Having Our Real Estate Listings ranking high in search engines is the key to our success. Whether you are buying, selling, leasing or refinancing, Contact us to see what our team can do for you.
Random Testimonials
I was a first time buyer and Brett and I went through a long and painful process with the new appraisal laws that changed half way through Escrow. He was very patient and helpful. He is a good listener and very responsive. I finally got my place :) I will definitely recommend his services to others. Thanks again Brett! Sibel.
Comments on this entry are closed.