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02/21/04insurance #

Joe Andrade



Hi Guys...although I am new to this group I thought I would put my 2 cents in. Cash value life insurance policies are a bad deal for most people. Most people would do better with a 30 yr. term policy that is guaranteed renewable to another term policy. You are correct that mortgage insurance is a bad idea. Term is cheaper and will allow most people to buy the proper amount necessary instead of being able to only buy what they can afford. You must go only with a reputable company however. Many have undesirable provisions such as only being renewable to a whole life policy. Remember the purpose of life insurance is to protect against a financial loss, NOT PRODUCE A PROFIT. Angelo is right - to see a financial advisor is very important. Try to get a referral from a friend, neighbor, co-worker, etc. first. Then interview them to see if they are a match for you. Best of luck. Joe

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02/20/04New Member here - there is a lot of good advice on this board #

Ryan Fisher


Hello,

I am new to this board. I have been in the mortgage industry for 2 years, a homeowner for 4 and just starting to get into RE investing. There is a lot of good advice from other members on this board.

As Ben mentioned, there are many other products and many ways to get into a house outside of big bank financing. Insurance is also a great help to your situation.

There are programs out there which offer interest only financing or even programs with payments starting at 1.25%. You need to understand, however, the power behind these options and how they work. They are designed to create cash flow for you. This cash flow is there to help your overall financial picture, not to allow you to go get that BMW you always wanted because the mortgage frees up over *$500/mo compared to a 30-year fixed. (*possible savings, actual savings can be more or less depending on rates and loan amounts) This means you need to use it to pay down high interest consumer debt, ie cars and credit cards, use it to pay down a second mortgage if you acquired one also or use the money to invest. See your financial advisor, they can work with you to help get the best return at your comfort level.

Also, as Ben mentioned, do your homework. There are other ways to buy properties without using bank financing. Consider a lease-option or owner financing. Both are great ways to get into your first house. I'm always available if you have any questions about buying your first home, second home, refinancing or where to find other resources to learn. Good luck and happy house hunting.

Ryan Fisher

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02/19/04New member with incredible home owner service save up to $100,000 on your current mortgage. #

Clarence Phelps


Hey everyone,

I'm new to ryze. Check out my member page and let me know if I can be of service to you.

CJ Phelps

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02/18/04FEAR is THE WEALTH KILLER #

John Chang


Hi everyone! In about a month I will be harvesting my 1st real estate investment. It's been a 8 year road, but it has been very rewarding.

When I first came upon the daunting decision to buy my house, I faced many of the same fears shared by anyone doing anything that they've never done before - never mind buying something many times what little salary I received from the Navy at that time.

Things like: How am I going to make the payments if my employment situation changes? What if I needed to move? etc.

Here are some of the simple lessons that I learned..

1) "Buy real estate to wait; don't wait to buy real estate" Time really is the key to success here; when I bought my house, Southern California was still suffering from post-aerospace blues. Even if I bought in the height of the booming 80's market, I would've made the SAME profit. It just would've taken longer. You just have to plan for the worse & expect the best, as the saying goes.

2) "Get the cheapest house in the nicest neighborhood that you can afford." When the rest of the premium houses go up & make their slight gains, you will be pulled along & slingshoted ahead in Return on Investment (ROI).

3) "Unless you can do it all yourself, hire a *good* property manager." Even though I moved around to different duty stations for a few years with the Navy, (until I got out a couple of years ago,) my house stayed rented & I never got a late night call from my tenants. No toilets to fix! THAT'S PEACE OF MIND!

Believe it or not, I even bought this San Diego home with no money down. Yes, those late night informercials aren't total BS! :) In fact, I even got $500 back at closing! :)

Finally, my main lesson here is that no other investment gives you the POWER OF LEVERAGE. If you buy stocks, $1 gets you $1. Even with risky margin investing, it's only slightly better.

With real estate you can get $9 working for your $1. THAT'S POWER!

If you're interested in more details, please contact me directly. I am currently moving forward into other markets around the country for the ROI that I see coming in the next 8-10 yrs.

Best regards & happy house hunting!
John

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02/18/04re: Short Term Financing #

Angelo Cerase




> Ben Maxwell wrote:
>
>Take the time to learn about alternative programs, there is a lot of options out there.



Thanks for the great info Ben. Too many people just think that the large banks are the only way to go. I like to recommend a mortgage broker that I know that specializes in the cases that the banks don't like to touch. Even if their credit is prestine, I feel that everyone should see a mortgage broker first (and probably last).

Angelo

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02/17/04Since we're speaking of insurance for homeowners...... #

Angelo Cerase


Hello,

While we're already speaking about insurance for homeowners, I'd like to mention something. Many homeowners purchase life insurance (either though their lender or, ideally, their financial advisor) in order to cover the remaining mortgage on their home (and a little extra at least). This is a good idea, but, it's not a complete solution.

In North America, 3% of mortgage foreclosures are due to a death in the family. HOwever 47% of mortgage foreclosures are due to a family member contracting a critical illness such as cancer, stroke, heart disease, or other similar illnesses.

Think of the people you know. Chances are that there are a few people who have or had a critical illness. In addition to the very serious health consequences, think about the financial consequences that your friend or relative faced. If someone walked up to them and gave them a (tax-free) cheque for $150,000 or $250,000, or more, would that have relieved a lot of the financial stress that they were facing? Would that have allowed them to focus on getting better, rather than focusing on rushing back to work to pay their mortgage and other bills?

That is exactly what Critical Illness Insurance does. It allows a person who is going through a life-changing illness the ability to focus on getting better, by giving them a large, tax-free, lump sum of money with which they can do whatever they want.


Angelo

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02/17/04re: re: re: Mortgage Insurance Vs Life Insurance (Permanent or Term) #

Angelo Cerase


Hi Micheal,

Thanks for the reply, I agree that having a choice between whole life, universal life, or term life insurance is very important. However I'd like to point out one thing. You said that one advantage of the bank's mortgage insurance is that the mortgage is paid off. Well, with your own person insurance your beneficiary will ideally have more than enough to cover your mortgage, IF that is what they want to do. What if there are more pressing issues? What if they want to use the money to start a business for example, or pay for some other relative's surgery in the US? The point is that with an insurance policy that you own and control (compared to the bank being in control) your beneficiaries can do whatever they want with the money. THEY are in contol, not the bank.


Angelo


> Michael Keong wrote:
>
>Angelo ,
>
>I agree with you that a Permanent Life insurance or Universal Life Insurance takes precedence over mortgage insurance. The only added benefit that a mortgage insurance has is that the family you leave behind for an untimely death would not be burdened with a mortgage.The property becomes free and clear.
>
>
>Michael.

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02/17/04Short Term Financing #

Ben Maxwell


I first want to Introduce myself, My name is Ben Maxwell, and I am fairly new to Ryze. My background is in Residential Developement. I currently am a Real Estate Investor and a Mortgage Broker.

As I was reading through some of the posts on this site, I realized that many people in this business of Home ownership don't realize some of the very different and hard to find financing that is not advertised to the average consumer or talked about in wide circles.

Do yourself a favor and do some homework. There are many short term financing programs available with lower interest rates, interest only payments, fix and flip finaning, six month, nine month loans done by many different types of lenders. I am not strictly talking about hard money lenders, because they often will require big down payments, but more specialized lenders.

As a broker and an investor, I work with two such specialty lenders here in Denver. It really creates a flexability in what you can do. Interest only options can help a first time buyer ease into larger payments over a six month or one year time period. No, you aren't paying on principal, but really, you aren't going to pay off any substantial principal in that first six month or one year time anyway. I just did one loan where a guy was able to buy a second home for 125,000 with a payment under $400 per month.

Take the time to learn about alternative programs, there is a lot of options out there.

Ben Maxwell

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02/16/04re: re: Mortgage Insurance Vs Life Insurance (Term) #

Michael Keong



Angelo ,

I agree with you that a Permanent Life insurance or Universal Life Insurance takes precedence over mortgage insurance. The only added benefit that a mortgage insurance has is that the family you leave behind for an untimely death would not be burdened with a mortgage.The property becomes free and clear.


Michael.





> Angelo Cerase wrote:
> Hi Cheryl,
>
>I am glad you brought up the point of having your own insurance compared to the bank's mortgage insurance.
>

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02/16/04re: Mortgage Insurance Vs Life Insurance (Term) #

Angelo Cerase


Hi Cheryl,

I am glad you brought up the point of having your own insurance compared to the bank's mortgage insurance.

For the most part, people love their family member more than they love the bank, but still many people insist on having the bank of their beneficiary of their insurance policy.

However, as important as having your own life insurance policy (compared to one the bank owns) is, it is even more important now to have your own critical illness insurance policy, since many banks are bundling that with their mortgage insurance.

When a person is stricken with a serious illness, many things pop into their mind, but somehow wanting to make sure the mortgage is completely paid off is not at the top of the list. But that is the only thing that a bank's policy can help with.

More pressing matters can be anything from getting the fastest care possible (costs money), to taking time off work (long-term disability may not cover the person's leave of abscence) to going on a dream vacation now that they realize life is too short. You are right in saying that a bank's coverage will not cover that. Their own critical illness insurance policy will pay them a large, tax-free, lump sum of money when they need it the most.

People who buy a house instead of renting do it to build up an asset. Paying the bank's insurance does nothing to build up an asset for them in the long run, whereas a permanent life insurance policy (and a critical illness insurance policy with a cash value) does.

With most term policies, the homeowner has the chance to convert it to a permanent one, that does not expire, without medical evidence. This will help the homeowner build up their assets as well. Too many north americans only have their home as an asset, having a paid-up permanent life policy that they can withdraw money from, tax-free, can only help them out. Think of the paid-up permanent policy like a paid up house, and taking out a loan against it, similar to a reverse mortgage. It can greatly increase a person's retirement income, without having to pay excess taxes.

Thanks again for bringing this up! Not enough people know about the disadvantages of the bank's mortgage insurance. Getting your own personal life insurance policy (whether term or permanent) and your own critical illness policy is the best way to go.


Angelo

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02/16/04re: re: First-time Buyer Fears #

Teddy Towncrier


Jo.

If you find a great deal and the down payment is a struggle for you; Consider taking in a partner with the funds for a DP.

You may have to give away part of the equity but 85% of a property with nothing down is better than missing out.

Another idea is to find a "don't wanter" or some-one who is in difficulty.

Bringing the payments up to date may be cheaper than finding the funds for a DP and you may be quickly capturing substantial equity.

The numbers may have to be properly crunched but it can be worth the effort even if it takes a year.

Stand your ground and don't let the lender's staff jerk you around.

Best to all.

Teddy.

Teddy. ~~><###@>

互户互户互户互户互户互户互
A business without a Towncrier is a tombstone to indifferance
互户互户互户互户互户互户互




> Jo Miller wrote: (Snipped)
>I'm scared to death of buying a home. And, I'm not sure what that's all about. I guess I've rented so long. And, I think the payment scares the h... out of me. I pay almost $2000 a month toward someone else's mortgage. I know how stupid it is, but at these prices, I can't come up with the down payment. And, when I could afford in my area, I thought the prices were inflated. Little did I know that it hadn't even begun!
>
>That's my fear ... not being able to make the payments, not being able to afford my own repairs and not being able to come up with the down is just a reality at the moment. However, I plan to change that and started today!
>

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02/15/04Introduction of Ken & remarks about Mortgages #

RG Aspinwall


Greetings All,

Let me start by thanking Allan Todd for the invitation to join this network. I really appreciate it.

Also, we live in the state of Georgia. If you need a business agent to assist with a project, I will be glad to assist you.

I am an up and coming person in the RE industry. I am currently involved in the mortgatge business and have been training to migrate into RE investing, tax liens, mortgage purchasing and flips. Today, I wanted to give you a heads up about the mortgage industry and how you can turn the tables to your favor.

[1] Don't Let Yourself Get Overwhelmed

I still remember the first time I shopped for a mortgage. I asked my realtor. She gave me a few names. I shopped the rates and got hooked by the "lock the rate" threat/plea.

Sometimes we do these things because we don't know any better and we feel threatened by fear of loss. First, rate shopping should never be the sole deciding factor about getting a mortgage. There are other things that need to be locked, if you plan to make a good decision for yourself.

[2] Take a Look at the Mortgage Universe

My first impressions were wrong. I felt like mortgages were pretty standard. It seemed like there were only three flavors of a mortgage. Of course, there might be a dozen or so brokers in town and that's it.

That wasn't it. There is a whole Universe of mortgages and companies. There are more than three flavors. There are numerous major players.

[3] Don't Be Overwhelmed By the Many Choices Either

One reason that I joined my company is in how we can treat the customer to a great experience without all the stress. Yes, we can reduce stress and I do remember feeling the stress. Part of that feeling was the feeling that I was running blind in getting that mortgage. It's great to help position a customer in front of many good choices. It gives the customer much more control and a lot less stress.

[4] I Didn't Know About All the Potential Choices

Our people approach the client with the facilities to take away most of the stress. For instance, we take down some preliminary information from them, chunk it into our database and let the technology find matches to customer preference. Yes, those questions are aall about your own preferences and the list that comes back usually returns at least six or more good options for you to choose from.

Do you see how that's different? Our database has hundreds of mortgage products in the files. Our software rummages around in those files and this spares you from having to pound the pavement in search of a mortgage. Yes, in the time that it takes to contact one broker, you can shop the entire mortgage univere.

When the list of matches comes back, you can click on a link and a box drops down and gives the features of the mortgage product. This helps you get orientation and eliminates what could have been very confusing and stressful. You are getting clarity and positioning yourself to make a smart decision for yourself.

Do you know how to harness the power of your mortgage? Our people follow the idea that a mortgage should be included in your financial planning. If you make well planned and well informed choices, you can turn a mortgage to your advantage. So, why not harness the power of your mortgage?

Let me rephrase that. Don't just walk in and do a deal. Take the approach of making your mortgage become your very own power house. This could mean that you will need to study up and understand some new concepts. If I can help you get your hands on some good resource material, please PM me with your request.

Shalom,

Ken Aspinwall
1-706-884-2025

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02/15/04Mortgage Insurance Vs Life Insurance (Term) #

Cheryl Anne Roy


Hi Allan:

Thanks for the invitation to present at your H.O.M.E. seminar.

Mortgage Insurance does not always address home owner's needs because it covers only the mortgage balance owing to the bank. If one of the home-owners covered under the group policy passes away, only the balance on the mortgage is covered, it does not address the needs of most folks who have need coverage for other debts,loans, income replacement of the deceased spouse,education funding for the children, etc. These are only a few of the disadvantages of having mortgage insurance, which we will cover at the seminar. The coverage, cost and advantages of having your own life insurance coverage with us, far outweigh having mortgage insurance with your local bank.

For more information on our Company and what I can do to get people on the right track with affordable term insurance Vs Mortgage Insurance,please visit my website:

www.primerica.com/cherylroy


Cheryl

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02/14/04re: Northern California living #

Angelo Cerase


Hello,

I have a friend who lives around that area, and he told me that the tenents and landlord do not have set rental lease agreements, and therefore the landlord can increase the rent whenever he/she pleases. Perhaps you cannot evict a tenent, however, if my friend is correct, you can 'encourage' the tenent to find living elsewhere by telling him that you will be increasing the rent by a large amount each month.

However, find a friend who is a lawyer to check on what the exact rules are in your area, as I am sure there is a lot that my friend left out in his description.


Angelo

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02/13/04What is an ARM? #

Len Lefkowitz


The following information is provided by LEN LEFKOWITZ, an experienced mortgage consultant in the U.S.A. >>>>>>

With a fixed-rate mortgage, the interest rate stays the same during the life of the loan. But with an adjustable rate mortgage (ARM), the interest rate changes periodically, usually in relation to an index, and payments may go up or down accordingly.

Lender's generally charge lower initial interest rates for ARMs than for fixed-rate mortgages. This makes the ARM easier on your pocketbook at first than a fixed-rate mortgage for the same amount. It also means that you might qualify for a larger loan because lenders sometimes make this decision on the basis of your current income and the first year's payments. Moreover, your ARM could be less expensive over a long period than a fixed-rate mortgage - for example, if interest rates remain steady or move lower. Here in the United States, the prime rate for January 2004 and February 2004 has remained the same at 4%.

Against these advantages, you have to weigh the risk that an increase in interest rates would lead to higher monthly payments in the future. It's a trade-off - you get a lower rate with an ARM in exchange for assuming more risk.

Here are some questions you need to consider:
1. Is my income likely to rise enough to cover higher mortgage payments if interest rates go up?

2. Will I be taking on other sizeable debts, such as a loan for a car or school tuition, in the near future?

3. How long do I plan to own this home? If you plan to sell soon, rising interest rates may not pose the problem they do if you plan to own the house for a long time.

4. Can my payments increase even if interest rates generally do not increase?

HOW CAN YOU REDUCE YOUR RISK?

Besides an overall rate ceiling, most ARMs also have "caps" that protect borrowers from extreme increases in monthly payments. Others allow borrowers to convert an ARM to a fixed-rate mortgage. While these may offer real benefits, they may also cost more, or add special features, such as negative amortization. By law, virtually all ARMs must have an overall "cap". Many have a periodic interest rate "cap".

Periodic "caps" limit the interest rate increase from one adjustment period to the next.

Overall "caps" limit the interest rate increase over the life of the loan.

If you have ANY questions regarding mortgages, re-financing or home purchases, please call toll free in the USA 1-866-346-2536 Ext. 252

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02/10/04re: New to the network...and looking for advice/recommendations #

John Corey


One idea is to look for a mixed use condo building that has retail on the ground level, etc. If you were to buy multiple units you could be close while still being flexible. As time goes on different members of the group might need to move on (assisted living, etc). If you are in a mixed use building there is likely to be some services close that folks would benefit from. If you want to look, I live in such a place in Oregon. As it is a new project you could pick a number of units on the same hall. There must be similar projects in the Bay Area. Not sure of the price points. Things like a elevator, bedrooms on the main level, mass transit are all pluses if you can find them. John > Sarah Wustner wrote: > Hi everyone, >

>My husband and I, along with my parents and my grandmother, are looking to buy a rather unique property in about a year. We'd like to have everyone living on the same property, but in more or less separate units, with some shared space. Properties that fit this bill might be: >

    >
  • A triplex, quadruplex, or, uh, five-unit building. We have other family members also interested in the multi-generational housing concept and with 5 units, we'd have room for everyone, plus one to rent out. >
  • A very large house that had been remodelled to fit this lifestyle. >
>We're in the San Francisco area. The main problem we're finding, so far, is that Berkeley and Oakland (our target cities) both have strict rental laws that make evicting someone difficult. This means we'll have to find a building in which most of the units are already empty, or reconsider our target cities. >

>I guess I am looking for a couple of things: leads on appropriate properties, general advice on buying something unusual like this, and stories from anyone that's lived in this type of arrangement. >

>Thanks! I'm happy to be here. >

>Sarah

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02/10/04Texas investors Read Following: #

Eric Trevino


"LAW AFFECTS HOMEBUILDER-HOMEBUYER CONFLICTS
COLLEGE STATION, Texas (recenter.tamu.edu) A new state law took effect Sept. 1 that introduced sweeping changes for residential builders and the way aggrieved homeowners seek redress for construction defects.
Although the law is in effect, changes will not be immediately implemented. The nine-member Texas Residential Construction Commission charged with overseeing and implementing the law will not be appointed by the governor until Dec. 1. Beginning in March, all Texas builders must register with the commission. They must also register each new home, home repair and home improvement.
If a homeowner has a complaint about the construction of a new home, the following steps must be followed before filing a lawsuit or seeking arbitration.
Contact the builder to remedy the problem.
If not satisfied, contact the Residential Construction Commission, which assigns a third-party inspector to see if the work complies with adopted warranties.
If the inspector finds a defect, he or she makes a recommendation to correct it.
If either party is dissatisfied with the recommendations, the matter may be appealed to a panel of three state inspectors.
If the matter is still unresolved, the owner can take the builder to court or seek arbitration. If the matter goes to court, the presumption is that the prior recommendations by the third-party inspector or state inspectors were correct.
An in-depth explanation of the new law by Judon Fambrough will be in the October issue of Tierra Grande."

-Eric Trevino

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02/08/04New to the network...and looking for advice/recommendations #

Sarah Wustner


Hi everyone,

My husband and I, along with my parents and my grandmother, are looking to buy a rather unique property in about a year. We'd like to have everyone living on the same property, but in more or less separate units, with some shared space. Properties that fit this bill might be:

  • A triplex, quadruplex, or, uh, five-unit building. We have other family members also interested in the multi-generational housing concept and with 5 units, we'd have room for everyone, plus one to rent out.
  • A very large house that had been remodelled to fit this lifestyle.
We're in the San Francisco area. The main problem we're finding, so far, is that Berkeley and Oakland (our target cities) both have strict rental laws that make evicting someone difficult. This means we'll have to find a building in which most of the units are already empty, or reconsider our target cities.

I guess I am looking for a couple of things: leads on appropriate properties, general advice on buying something unusual like this, and stories from anyone that's lived in this type of arrangement.

Thanks! I'm happy to be here.

Sarah

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02/07/04Canadian Government Incentives for Home Buyers #

Allan Todd - Realtor


Saving for a down payment for a home can be a difficult challenge for first-time home buyers. Fortunately, there are a variety of government programs to help you save the funds for your home purchase.

Your real estate professional can help you understand how these government programs work.

The Government of Canada抯 Home Buyers' Plan allows qualified buyers to withdraw a maximum of $20,000 from their RRSPs to purchase or build a house. If your spouse is also eligible, you can each withdraw up to $20,000 towards the down payment, for a total of $40,000.

No income tax is deducted from these funds, as long as they are repaid to the RRSP according to the government's repayment schedule.

For further information, ask your realtor.

Or visit my website at www.allantodd.ca and click on the "Government Incentives" button to down load further information.

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02/06/04Buying a home #

Fernando DiDomenico


Hello Allan and all. Great message board Allan. If anyone would like any information regarding mortgage financing, leave a message on this board and I will try to answer.

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