Tag: cash flow

Debt-Proof Your Credit Cards with These Tips

Posted on | by Cuselleration

The thought of credit cards oftentimes makes people get nervous. Getting credit card rewards or the sign-up offers and bonuses can be enticing. The worrying part is getting entangled in debt accumulations and the interests that come with the debt.

How about the thought of a solid debt-proofing strategy? If you wish to get credit beyond what you can comfortably afford, then this is what you need. To prepare to debt-proofing your credit, there are three necessary steps you should follow to protect yourself from having your credit card debt and sending the debtor’s interest spiraling. Read these steps below.

1. Starting an emergency/precautionary fund

You can face unexpected situations, either twists or turns. Examples include having medical debt, your car being repaired, losing your job or just any other emergency that begs you to get a loan. It is recommended to create an emergency fund to tap into rather than having to rely on the high-interest credit cards to make up for the expenses that are unexpected.

Most people are shaken and discouraged by the guidelines that require one to have at least three-six months of living expenses. From the Consumer Financial Protection Bureau, even a little starter saving fund can be of benefit to you. For instance, having a saving fund of $450 is quite enough for coverage of common and fundamental emergencies like medical expenses or motor vehicle repair costs.

Emergency funds are always an ongoing gift, stress relieving and reassuring way because it gives you a feeling of not being dependent on somebody for the emergency bill payments. You should consider keeping your funds in a savings account, which will not require to pay monthly account maintenance fees.

2. Maintaining good credit to qualify for low-interest loans

It is rare to find all the expenses being covered by an emergency or precautionary fund. You should always have an option B just in case the first one does not go as expected. The plan B could involve you applying and use the 0% introductory credit card (APR). These cards can help you save some money on the interest charged for a reasonable duration of time. It will require you to have an excellent credit score that is 690 or even higher for you to qualify. Maintaining good credit will entail you being punctual and determined in making all the debt payment on time and only use up to 30% of their credit limits.

Having good credit gives a person a variety of options apart from having the time for a credit card application and waiting upon its arrival when you have an urgency to take care of.

3. When you notice your debt is growing, you need to act fast

It is wise for you to take action as soon as you come to know that the credit card interest is getting started in piling up. The quick steps that you can consider include cutting off extra expenses, having side jobs and getting another credit card (specifically the balance transfer card).
Are you in the market to purchase a home in Rancho Santa Margarita, Coto de Caza, or Mission Viejo? Click here to talk to the Ryan Grant Team today!

When is the Best Time to Buy a Home?

Posted on | by Cuselleration

We all know that the best time to buy or sell their house would be spring. However, this is not necessarily true, it’s just that spring is real estate’s busiest time of the year. Real estate experts and home building technicians note that the emphasis on spring as the best buying season has its good reasons, nevertheless, there are some common enduring misconceptions that have been made about the real estate market.

Many buyers and sellers in real estate should then rethink about the seasons, and consider looking at the best season that will suit their house and area of location. Even though fall and winter are known to offer less inventory, most people who buy homes during this time are serious buyers (buying a house with a purpose). They have a very good reason to relocate. Unlike the spring buyers who might come in large numbers to check out your house, a larger percentage will just be looking. It’s better to deal with two serious buyers in winter who will come with their agents and close a deal within a few days, than to deal with more than 30 looking buyers with a very low chance of actually buying the house. Also, the other hidden advantage with winter is that the low inventory increases the amount of time spent shopping. Buying or selling a house in the spring can be challenging because the real estate spring season sometimes may not coincide with what the calendar is saying.

In the real estate market, January marks the beginning of spring. At this time, everyone seems to have a handful of activities to deal with after the holidays come to an end. The season ends around mid-May. At this time, many people tend to list and sell their homes and this trend continues throughout summer. As you move closer to the end of summer, the listings will begin to tail off. September will be a low month because the graph continues dropping for the subsequent months until you have the lowest listings in December. This doesn’t mean that in December, real estate will experience zero activities, it’s just that the inventory will be low.

Most buyers and sellers in the real estate market should not depend on your agent’s enthusiasm when experienced with a scenario of low inventory and high competition for the buyers. This will turn into a bidding war and only the smartest agent will win.

Having a moving timetable is very helpful. Obtain your own personal real estate schedule that dictates when you prefer to move in or out of the house. Start working backwards using the timetable. Calculate the average time needed from the contract negotiation to the closing a deal, depending on the region (most agents suggest the time span to be around 4 weeks). But to be on the safe side, it can take up to three months.

Look at what builders are offering you with regards to building a new home from scratch. This is very crucial for buyers who would like to move to a newly built house. The one-month time frame might be possible for a buyer who wants to purchase a spec home (quick move-in), a new house that is partially or fully built by the house builder. A longer period of time will be required for home buyers who are designing and constructing a new home from scratch and a have large volume builder. The bigger contractors offer more efficiency and shorter building time, unlike the custom/small builders who take a few more months. The custom house building process can even take many months as both the constructor and buyer look for the best model/design.

Are you in the market to purchase a home in Rancho Santa Margarita, Coto de Caza, or Mission Viejo? Click here to talk to the Ryan Grant Team today!

4 Easy Ways to Buy Your Orange County Home Fast

Posted on | by Cuselleration

The real estate market has become extra competitive. You can wait for years before a potential buyer comes your way. However, there are some skilled steps you can follow that will hasten the home buying process.

1. Have a team of real estate experts
Having a team of reliable experts who are well aware of the real estate environment you are house hunting should be the first thing to do. Your team should have experience and be very updated with the current real estate trends in the region.

Your team should consist of: a mortgage banker, real estate attorney, and a real estate broker. It will be best if your team had previously worked together on similar projects. The board of the team is you, the others are just your executives.

Your agent should have enough connections that will be useful to your house hunting process. He will be aware of all the properties that will soon be available for sale in the market before the properties are made public. If you build a very good relationship with your agent, he/she will always keep you updated on the best properties in your area of interest.

2. Make sure you have a home loan ready that is pre approved
We all know that buying a home will involve a lot of paperwork with the longest part being the mortgage approval. Some of the legal documents you will need are: 1099s, debt information statements, gift letters, W-2s, and bank statements. To save time and a last minute headache, start gathering all these papers early enough and have them checked and confirmed for pre approval. Make sure your loan officer gives you a pre approval letter way before you begin hunting for a new house. With your pre approval letter, you can show the seller that you are indeed a serious buyer and able to financially afford buying the house.

3. Make high inventory areas your first house hunting zones
Everyone has a wish list when it comes to moving to a new hometown. Some common factors include easy transportation and access to social amenities like shopping centers and move theaters. The other factor to consider is high-inventory regions.

Research shows that homes located in low-inventory areas tend to slow the whole home buying process. Look at the surrounding region in your preferred area that match the same criteria you are looking for. With an area that is less economically prosperous, you will get a stronger offer with a possible discount. Avoid looking at properties that don’t meet your criteria.

4. Sell your current before you purchase a new house
A contingency sale is one of the most common ways of slowing down a possible purchase. Most buyers who are in fast-moving real estate markets aren’t ready to handle any form of contingency sale.

If you want to have a faster successful house hunting process, it’s good to first unload your current home. Make sure the amount of your equity in the bank is ample enough and the closing date of your house is flexible. This means you will have to look for storage facilities where you can store up your stuff for a few weeks or months. Early packing will prove to be very useful at this point.

Are you in the market to purchase a home in Mission Viejo, Rancho Santa Margarita or Coto de Caza? Click here to talk to the Ryan Grant Team today!

APR vs. Interest Rate

Posted on | by Cuselleration

When applying for a mortgage, most people have heard two terminologies being used. Annual percentage rate (APR) is the total sum of loan you will be paying when you finally finish paying the mortgage. It is relatively different from the interest rate. The Interest rate (IR) is the daily cost you will be paying based on the existing balance on your mortgagee. For first time buyers, the terms will be new, and it’s good to understand the terms.

Mortgage interest rate?

This is the daily expense you will be incurring based on your loan and is usually expressed in a percentage rate. It’s calculated per day/per diem figure. Each month you are supposed to pay back a fraction of the amount you had borrowed together with the monthly accrued interest. The amortization formula will be used by your lender to come up with a payment schedule, which will show your mortgage interest on the loan and the principal.

The determinants of mortgage interest rate

The mortgage interest rates tend to fluctuate just like all the other financial variables. The mortgage interest rates can change daily depending on the trends and changes affecting the housing market.

Below are vital factors that affect the mortgage interest rates:

Borrower’s credit score

Lenders will use your credit score to determine your reliability when it comes to making timely payment of the loan. The credit score is just an official summary of your credit transactions. Customers who have higher credit scores get lower interest rates on their mortgage loans.

The principal amount and the down payment

Having a substantial down payment for your home will make lenders want give you a better interest rate since they assume that less risk is involved. A low down payment will require you to get a private mortgage insurance coverage. Also, when it comes to the loan type or prevailing circumstance, the closing costs and the mortgage insurance can be added to your mortgage loan.

Your home location

The location of the home will determine the interest rates, prime areas tend to have different standards compared regions that are not favored in the real estate industry. The location of your home can lower or raise the interest rates of your home.

What is a Mortgage APR?

APR involves a comprehensive measure of the expenses you will incur when borrowing money and is typically expressed in a percentage just like the interest rates. It will determine the total amount of money you will pay the lender annually for the entire time the loan is still active.

What determines my Mortgage APR?

The APR includes the mortgage interest rates, original mortgage fees, discounts points and additional expenses that are associated with getting the loan. A higher APR means higher monthly payments over the loan term.

Points To Note

When lenders market APRs, most of them provide rates the “ideal” market conditions like excellent credit scores by borrowers, spotless documentation, etc. Therefore depending on a borrower’s circumstances, the APR will be adjusted accordingly. The rates will go higher.

Are you in the market to purchase a home in Rancho Santa Margarita, Coto de Caza, or Mission Viejo? Click here to talk to the Ryan Grant Team today!

Tap the Equity in Your Home with These 5 Reverse Mortgage Tips

Posted on | by Cuselleration

If you’re in your sixties and own your home, chances are you have heard about reverse mortgages. Reverse mortgages allow you to tap the equity in your property. But they have risks and could be costly. Here are five tips you should consider:

1. Weighing your options

Whether you need money to pay bills or could use some extra cash, a reverse mortgage should be your last resort. Other options include selling your home and downsizing or renting. You can also take out a home equity loan or line of credit. If credit cards are the issue, you can consider consolidating that debt. If paying real estate taxes or house maintenance costs are the problem, look into local government assistance programs that could help. You have a lot of options. So ask your state agency on aging about lower-cost, less risky ways to fulfill your needs.

2. Understanding the costs, fees and risks

Even though you will not be making any interest payments as long as you live in your home, your interest rate matters. If you choose to move, you will have to pay back the reverse mortgage plus compounded interest. The same thing is true if you have to leave your home for more than twelve months. You should ask about all costs and fees which includes any prepayment penalties.

3. Recognizing the full impact of your decision

The income or lump sum you receive can affect your eligibility or your spouse’s eligibility for a variety of state and federal benefits. This includes Medicaid. It may not have the same home-equity protection that would otherwise apply if you have a health emergency and need to enter a nursing home that you can only pay for by liquidating assets.

4. Getting independent advice

Reverse mortgages are known to be complicated transactions. The federal government requires borrowers to meet with HUD-approved counselors prior to getting a federally guaranteed loan. You will need to confirm that any counselor recommended by your lender is truly independent. You could do this by asking whether he or she receives any funding from the lender or the mortgage industry.

While many loans are federally guaranteed, most lenders offer proprietary loans that are not. Even if you are applying for a proprietary loan, it is a good idea to get advice from a trusted financial adviser who has no interest in either the reverse mortgage or any investment you plan to make with the proceeds. Prior to agreeing to a reverse mortgage, you should consult with legal and tax professionals who know the consequences of reverse mortgages for residents of your state and who are not connected in any other way to the transaction or the lender.

5. Being skeptical of reverse mortgages

Be very skeptical if someone urges you to get a reverse mortgage to make an investment or buy an insurance product or a security. You should particularly do this if they are promising high returns. They are encouraging you to speculate with your home equity. You might need for more critical purposes down the road. If you cannot afford to get a low return or the loss of your home, you should not be investing with your home equity funds.

Are you in the market to purchase a home in Rancho Santa Margarita, Coto de Caza, or Mission Viejo? Click here to talk to the Ryan Grant Team today!

3 Secrets to Investing in Real Estate

Posted on | by Cuselleration

Real estate is most likely missing from your investment portfolio. From many investment advisors not wanting to tell you advice for investments they do not earn a commission on, to the horror stories of becoming a landlord and dealing with stopped up toilets and irritated tenants, investing in real estate oftentimes gets pushed to the side. Even though at the same time, all of us know real estate’s cash generating potential and we instinctively want a piece of it.

You must be ardent in your desire to add real estate to your portfolio because no one else will tell you it is a good idea. To capture the unique tax advantages afforded in real estate, you should learn how to evaluate a real estate transaction yourself and must decide which type of real estate investment matches your personality and how you would invest. When you conclude real estate meets your need for reliable cash flow with the opportunity for appreciation, you should invest in it.

1. Defeat your allies

In many cases, your trusted and paid advisors such as your wealth manager, broker or tax accountant may suggest you avoid real estate in your portfolio altogether. They usually give the same tired reasons that it is too management intensive. Those could be valid arguments based on your specific situation, but that’s not the real reason they want you to avoid real estate.

Stockbrokers do not get paid for you to invest in real estate. There is nothing in it for them, unless they want you to buy a high-cost non-traded REIT, but now you will know their true motivation. You need to do your own research to decide if the potential cash flow from real estate is right for you.

2. Grade school arithmetic

Real estate is a numbers game, but you might be surprised to know that you learned all of the skills necessary in grade school. To decide whether or not to go with a potential investment, you will only need a few key formulas and nothing will be more difficult than long division. Once you have mastered these concepts, you will have the numerical tools to effectively underwrite real estate investments.

3. Use a taxable account

Why try to avoid taxes by investing through an 401k or IRA when the government brings tax advantages to real estate? The cash flow that you receive may not be entirely what the IRS considers taxable income especially in the early years of a real estate investment. Non-cash items like depreciation and amortization will serve to dramatically reduce your taxable income but have no impact on your cash flow. Taxable losses can be wasted in an 401k or IRA but have great value in your taxed account.

Real estate needs to be a part of a diversified investment portfolio when it comes to retirement in particular. You will take ownership of your investment future by equipping yourself with the proper tools to evaluate transactions and the self-awareness to seek out real estate investments when others tell you not to.

Do you have questions about investing in real estate? Click here to contact our partners at the Ryan Grant Team today! And if you’re ready to start searching homes let us know!