The national median mortgage payment is $1,687 a month — nearly double the median rent payment of $868 a month. Yet people are often told that buying property is one of the strongest investments they can make. What is the best option? “Good Morning America’s” real estate contributor Barbara Corcoran says it depends on your needs. She’s the founder of The Corcoran Group, a major New York real estate agency, and she’s outlined some of the pros and cons that come along with both renting and buying. She’s also outlined other things you should know about foreclosures and mortgage rates.

Mortgage payments exploded during the real estate boom, but rents haven’t kept pace, often running half as much as what homeowners pay. Home prices recently rose to skyscraping heights in cities like New York, San Francisco, Los Angeles and Washington. Rents have not gone up as much. For a family making the U.S. median income of $46,913, owning the median-price home of $224,739 would eat up 51 percent of its income. Renting would require just 25 percent. By renting, you gain the flexibility of a lease and freedom from home repairs. You can also invest more money in stocks, bonds, and other assets that could appreciate faster than real estate over the next couple of years. (more…)

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Don’t buy if you can’t stay put. If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner. Start by shoring up your credit. Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

When picking a mortgage, you usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate. If you stay in the house for a long time — say five to seven years or more — it’s usually a better deal to take the points. The lower interest rate will save you more in the long run. Getting your mortgage pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history. (more…)

search for : buying and selling a home, mortgage, your mortgage pre-approved

The Commercial Leading Indicator for Brokerage Activity,* a leading indicator for the commercial real estate market, shows an improvement in commercial sectors will continue into 2007, according to the National Association of Realtors®. During the second quarter, the Commercial Leading Indicator for Brokerage Activity was at an index of 119.4, up 0.4 percent from a reading of 118.9 in the first quarter. The index is 2.5 percent above the second quarter of 2005 when it stood at 116.5. The second quarter index was the fifth straight quarter of growth.

The indicator suggests a 2.5 percent increase in leasing and sales activity for commercial real estate practitioners in the fourth quarter in comparison with the same period in 2005. he 13 series in the index include industrial production, the REIT (real estate investment trust) price index, NCREIF (National Council of Real Estate Investment Fiduciaries) total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service. (more…)

search for : commercial real estate, temporary help, retail trade, wholesale trade, unemployment insurance, manufacturers’ durable goods, wholesale merchant sales, retail sales and food service

The Commercial Leading Indicator for Brokerage Activity,* a leading indicator for the commercial real estate market, shows an improvement in commercial sectors will continue into 2007, according to the National Association of Realtors®. During the second quarter, the Commercial Leading Indicator for Brokerage Activity was at an index of 119.4, up 0.4 percent from a reading of 118.9 in the first quarter. The index is 2.5 percent above the second quarter of 2005 when it stood at 116.5. The second quarter index was the fifth straight quarter of growth.

The indicator suggests a 2.5 percent increase in leasing and sales activity for commercial real estate practitioners in the fourth quarter in comparison with the same period in 2005. he 13 series in the index include industrial production, the REIT (real estate investment trust) price index, NCREIF (National Council of Real Estate Investment Fiduciaries) total return, personal income minus transfer payments, jobs in financial activities, jobs in professional business service, jobs in temporary help, jobs in retail trade, jobs in wholesale trade, initial claims for unemployment insurance, manufacturers’ durable goods shipment, wholesale merchant sales, and retail sales and food service. (more…)

search for : commercial real estate, temporary help, retail trade, wholesale trade, unemployment insurance, manufacturers’ durable goods, wholesale merchant sales, retail sales and food service

Last year, I wrote an article advising borrowers on how to determine whether refinancing an adjustable-rate mortgage (ARM) into a fixed-rate mortgage (FRM) was advantageous. On recently rereading that article, I winced with the realization that I had made the problem more complicated than it had to be. Since the question continues to confront many borrowers, this article attempts to make amends.

Most borrowers know the ARM rate they are currently paying and when the rate will adjust, but few know the fully indexed rate. This is the most current value of the interest-rate index used by the ARM, plus the margin. The index used and the margin are both shown in the note, while the current value of the index is easily available online. Go to mortgage-x.com it has them all. The importance of the FIR is that it is the best available predictor of how your ARM rate will change. At the next adjustment date, the new ARM rate will reset to equal the index value at that time, plus the margin. [Note: usually there is a limit on the size of a rate change — this “rate adjustment cap” can also be found in the note — but in today’s market the limit is seldom relevant]. If the index stays unchanged between now and then, the ARM rate at the next adjustment will be today’s FIR. (more…)

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Real estate investors are more likely to hit a few singles and doubles than home runs. Even so, the profit potential can be significant, especially on lower-priced houses. Foreclosures can often be picked up at 20 percent or 30 percent below fair market value while houses in this lower range can net the investor $10,000 to $20,000. Most investors are satisfied with a 15 percent to 20 percent net profit, but it is not unheard of for someone to double their money under the right circumstances.

“Once I write a contract on a house, if the title goes through cleanly, in four or five days we can have title work done and the house paid for,” Dan Reedy, who owns Missouri Real Estate Exchange said. “I have actually bought a house on a Monday and paid for it on a Friday. The average is about 10 business days.” In the current market, lower-priced houses appear to be in greater demand. “The $100,000-and-under houses are what are moving now,” Dan Reedy said. “Six months or a year ago, the average market time was probably 60 days. Right now, it’s 90 to 110 days. It has jumped up by 20 to 30 days just in the last quarter.” Olson sees the same trend. “I’m now gearing more toward the lower end because of the way the market is going,” he said. “There are so many higher-end homes out there that they have flooded the market. The lower end is where the first-time homebuyers are.” (more…)

search for : Real estate investors, Foreclosures, lower-priced house, first-time homebuyer

Using small gadgets called Powerline adapters, you can route your Internet connection around your house over your regular electrical power lines, the ones already in your walls. It really works, it’s fast and it doesn’t disrupt your electrical system. Even better, it requires zero technical skill. You just plug one of the adapters into a standard electrical outlet near the place where your Internet connection enters your home.

I’ve been testing one of Netgear’s newest models, the XE104, which costs $100 per adapter, and I can heartily recommend it. It couldn’t be simpler or more effective. In my tests, the XE104 gave me wicked-fast connections. I tried plugging Windows and Macintosh laptops directly into the adapters in rooms where my wireless signal was weakest. I also tried plugging a Wi-Fi wireless access point into an XE104 adapter and picking up the connection wirelessly on the laptops. (An access point is a wireless gadget that takes a wired Internet connection and propagates it through the air.) (more…)

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