What Is Mortgage vs. Real Estate?

Real Estate is everything that mortgage needs, although Mortgage and Real estate relate to each other like peanut butter and jelly, In this article, I will give you a quick Mortgage101 and run down on how real estate transactions work.

What is Mortgage?

For the majority of people that buy real estate, the need for a mortgage in order to finance the cost of the property is essential for making real estate ownership a reality. If you have opted to buy a home, apartment, or other property you will probably need to take out a mortgage.

While a mortgage is usually considered to be a loan by many people, it is, in reality, a lien on the property. When the bank maintains a mortgage on a property, it means that the bank can reclaim ownership of the property if the buyer does not make loan payments on time.

A mortgage works in a similar fashion to a car loan. Taking out a mortgage means that the amount loaned out is secured by the property itself. Mortgages also have to be paid in monthly installments so that the principal and interest are covered.

Mortgage loans are typically calculated so that the principle and interest payments are spaced out over a set period of time. The terms are typically between 10 to 30 years for the average mortgage and last until the entire principal has been paid off.

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A mortgage is typically the largest debt that any homeowner will ever have. Before applying for a mortgage, you should have a good idea of what is involved in the application process so that you can be sure that you will be approved. In addition, understanding the terms of a mortgage before you sign a contract is important so that you will know whether or not you can really afford it.

Qualifying for a Mortgage

If you want to be approved for a mortgage, there are a number of criteria that need to be met in order to qualify. The first important point is to make sure that your credit score is good to excellent. At a minimum, you need a credit score of 680 or better.

Some of the other factors that will help you to become qualified include:

* A front-end ratio of 28 percent
* A back-end ratio of 36 percent
* Being employed at the same job for at least two years
* Verification of your earnings and employment
* Thorough documentation of your financial situation
* An appraisal performed by a professional
* Private mortgage insurance (applies in some cases, especially when the amount of the down payment is low).

Mortgage Types

There are several different options when it comes to the type of loan that you want on your property. In addition, only certain types of loans are available to specific individuals. The three main types of mortgages are conventional loans, VA loans, and FHA loans.

Conventional Loans: Conventional loans are offered by private lenders, typically banks. You can not obtain a conventional mortgage from the government. In addition, these types of loans often have strict requirements that mean that you must have good credit. In addition, you must have cash available to cover the down payment, which can be up to 20 percent of the value of the mortgage in order to get approved.

FHA Loans: FHA loans are offered by the Federal Housing Administration. These loans are given out by the government. FHA loans are designed for individuals that can not afford to make a substantial down payment or have other credit issues.

VA Loans: VA loans are guaranteed by the U.S. Department of Veterans Affairs. These loans are only available to military personnel that incisively on duty or are veterans. There are also some qualifications that must be met in order to obtain these loans.

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Real Estate Debt

While mortgages can be helpful for obtaining homeownership, occasionally homeowners run into financial problems.

These problems can be caused by issues such as unsecured debt, credit card debt, loss of employment or other problems. If you have a mortgage, there are options for helping you to pay your mortgage while getting your debt problems under control.

Mortgage Refinancing

Mortgage interest rates have reached the lowest levels in some time. If you want to find some money for paying your other bills, refinancing your mortgage to a lower rate could help. It is important to understand that refinancing does come with fees and it may also extend the length of your mortgage.

Cash-out Refinancing

Cash-out refinancing is available to homeowners that have a significant amount of equity in the property.

After a cash-out refinance you will have cash that you can use to pay other debts. A pitfall of this method is that unsecured debts are now tied to your property and you have compromised the equity in your home.

Home Equity Loans

Home equity loans or second mortgages can be used to pay off other debts. You are eligible if you have equity in your property. You will receive a lump sum of money at a fixed-rate.

Real estate transactions encompass both the buying and selling of property. In order to perform such transactions, decisions must be made regarding the home’s value, the current status of the local real estate market and what terms for buying or selling would be best.

What is Real Estate?

Here Are Some Real Estate Types

Real estate comes in three main types which are resident, investment and residential. Residential real estate refers to the individual properties that are owned for residential purposes. It is the most common form of real estate in the United States.

Commercial real estate refers to properties that are used primarily for business purposes. Investment real estate refers to real estate that the owner buys in order to earn income. The investor is not looking to live or use the property personally. Rather, the property is leased out to another individual, which can help generate income for the property owner.

Real Estate Benefits and Drawbacks

Since real estate transactions are taking place in an ever-changing market, there are some risks associated with owning real estate. These risks include:

* The potential for a decline in property values due to changing market conditions
* Potential liability for any problems that occur on the property
* Risk of going into debt due to mortgages

Although these drawbacks are significant, this has not stopped people from investing in real estate. When things do go well, owning real estate can result in significant financial rewards. Some of the benefits of owning real estate include:

* Short term profits realized upon selling the real estate in a market upswing
* The potential to take out additional loans for other needs while using the owned real estate property as collateral
* The diversification of an investment portfolio

source: usa.inquirer.net

Nuns hit back in battle with Katy Perry over convent

LOS ANGELES—A pair of nuns locked in a legal battle with singer Katy Perry over the purchase of a former convent claim in newly filed court papers that an incorrect translation of a Vatican decree was used to convince a judge to clear the sale of the property.

According to court documents filed this week on behalf of Sister Rita Callanan and Sister Catherine Rose Holzman, the decree, when properly translated, states that the Vatican was still examining the sisters’ claim that they control the prized property in Los Angeles.

They allege that the Archdiocese of Los Angeles had not submitted that information to a judge who earlier this month annulled a separate sale of the former convent by the nuns to a restaurant owner.

The Sisters of the Immaculate Heart of Mary have sought to prevent the archdiocese from selling the complex to Perry for $14.5 million on grounds that they control the property and as such can decide on the buyer.

“Just hours after the court announced its (April 13) decision, (the nuns) learned for the first time that the (archdiocese) actually knew, at least three weeks before the decision, that proceedings remained in (Rome), but failed to inform the court of that crucial fact,” according to the court papers filed this week.

However the archdiocese dismissed the sisters’ claim and said in a statement that the three other remaining members of the order were not in agreement with the two nuns or their decision to sell the property to restaurateur Dana Hollister for $15.5 million.

“As the court ruling stated, the Hollister transaction was not valid,” the statement said. “This was always our concern with the Hollister transaction that basically took possession of the sisters’ property for just $44,000 and a contingent promissory note, without any guarantee that the sisters would ever receive any additional payment of the offer they received.”

A hearing in the case is scheduled June 20.

Perry, who grew up as a born-again Christian but is known for her support of gay rights and sultry songs such as “Teenage Dream,” has visited the nuns and sung for them in a fruitless bid at persuasion.

The Sisters of the Immaculate Heart was once a thriving order but only five sisters remain.

They moved out of the convent several years ago and have struggled to maintain the property.

Proceeds from the sale of the convent would go toward the nuns’ upkeep.

source: entertainment.inquirer.net

KimYe Moves Out of Kris Jenners’ Home, Finally Settle in $11M Mansion

When you are really invested in creating a good life for your family, you’ve got to make some big decisions. For Kanye and Kim, it’s recently about the need to finally leave Kris Jenner’s abode and move into their $11-million mansion.

The move comes after months of waiting on the completion of the renovations in the Bel-Air property. “When we bought our Bel-Air house, we didn’t have a baby, we weren’t even  pregnant. After you have a baby, you realize that you need so many other  things and a different kind of space. So being in the city is a different life. We wanted to be away and have more privacy,” says Kim about the house when they first acquired it.

And now that Saint West has joined in the picture, we’re sure that the Wests will find space and privacy in a home that boasts of 900 square feet and includes a hair and makeup salon (You need a place for Kim’s glam team, right?), gym, two pools, a bowling alley, and a movie theather.

The house is Kim and Kanye’s first of two houses in California as they also purchased another estate in Hidden Hills. With a price tag of $20 million, the house is much closer to Kris’ home but is also still undergoing some renovations. That mansion, on the other hand, has two spas, two swimming pools, and a vineyard along with large custom wardrobe rooms. Maybe something to live in if ever the Wests decide to have a third child?

People]

Photos courtesy of Zillow

source: preen.inquirer.net

Katherine Jackson Could Lose Millions In Perks

The plot to turn Katherine Jackson against the Michael Jackson Estate has backfired in the most ironic of ways ... because the money grab could end up costing Katherine millions in perks.

When Katherine was appointed guardian of Paris, Prince and Blanket, the Executors gave an allowance of $60,000 per month for the care of the children ... that's $720,000 a year.  Less than a year later the judge increased the 60k to 70k, and that would make the yearly take $840,000.

The judge is now in position to strip Katherine of guardianship altogether.  If that happens, the executors will almost certainly petition the court to funnel the money in TJ's direction, since he would be caring for the children.

Katherine never had control of the money for the kids, but she enjoys a lot of the perks the kids get, and that goes away if she loses guardianship.  She would still, of course, retain the allowance he personally receives from the Estate.

Short story ... Randy, Jermaine, Janet and Rebbie set out to turn Katherine against the estate so she could get more money during her lifetime -- money she could dole out to them -- but the plot may have actually screwed Katherine.

When she realizes what hit her, mama's gonna be pissed.

source: tmz.com