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Real estate loans:
Understanding the concept
 
Real estate loan is what a lot of people use to buy their home. Real estate loans have been instrumental in bringing joy to people by making that unaffordable house affordable. Some real estate investors too make use of real estate loans for buying properties. However, real estate loan is not free money and anyone who buys real estate or plans to buy real estate using real estate loan must understand the concept of real estate loan very clearly.

Real estate loan (also known as mortgage) is the money that you borrow from someone (a financial institution i.e. a mortgage lender) for the purpose of buying a property. The real estate loan generally covers a part of your purchase price and the remaining portion has to be paid by you upfront i.e. as down payment. The amount (i.e. the percentage of total purchase price) that you have to pay as down payment is dependent on a number of factors and you can generally reduce it to even 5% by going for mortgage insurance. FHA and VA loans (i.e. mortgage insurances through FHA and VA) reduce the down payment requirement on real estate loan even further. Whatever you borrow from the mortgage lender as real estate loan needs to be paid back to the mortgage lender over a period of time (and, of course, you will also need to pay appropriate interest on that real estate loan). The tenure of your real estate loan and the prevailing market rate will determine the amount of interest you pay for your real estate loan. Generally, you are required to pay back the real estate loan in the form of monthly instalments which are composed of both interest and principal portions of your real estate loan. Also, there are various types of real estate loans e.g. fixed interest rate loans and adjustable interest rate loans. So depending on what type of real estate loan you have gone for, your monthly payments might either remain constant (fixed rate) for the full tenure of the loan or keep getting adjusted periodically (adjustable rate) on the basis of a financial index. Besides that, some other costs are also associated with real estate loans e.g. there are closing costs, inspection costs, attorney fee etc. Also, in case the property needs some repairs, there will be costs associated with that too. Again, there is stamp duty and other taxes that you need to pay. So, really, you need to understand the concept of real estate loans and the related costs clearly before you actually go for the real estate loan. And understanding these concepts is really not that tough.

 
 
Great Tax Tips For People
Investing In Property

 

Property investments can be enormously lucrative propositions for people who know what they are doing. Part of being savvy about these investments is being able to use taxes to your advantage. Understanding what sort of deductions you qualify for - among other things - can help people all over Australia make more money on their investments.

 

Keep Expense Receipts -

 

Any accountant, mortgage broker or financial advisor will tell you it's very important to keep all receipts for a minimum of five years when dealing with investment properties or any other type of deduction you claim. Doing so can help you in claiming deductions for assets that have declined in value and ensure you have all important and relevant information in the rare instance you may be audited. Some examples of these depreciating assets include stoves, refrigerators, TV sets, hot water systems and various window hangings like curtains and blinds. Having access to original invoices showing the item/s purchase date, you will be able to successfully claim applicable items as deductions.

 

Get A Depreciation Schedule -

 

Although there are many examples of things that cannot be claimed as deductions, certain travel expenses and expenses that have to do with the private usage of the property (even those that can be claimed) are frequently overlooked because investors have not sort the correct advice nor thought of getting a depreciation schedule. The average cost of getting a depreciation schedule is about $500, but it can save you a lot of money down the road. From the moment you begin applying for a Brisbane Home Loan, you should be thinking about getting a depreciation schedule to help you claim certain deductions on time.

 

Know What Sorts Of Things Can't Be Claimed -

 

There are certain costs that cannot be claimed as deductions. By having a good understanding of what can or cannot be claimed may have an incredible impact on your investments. In short, get a good tax adviser and depreciation schedule, keep your expense receipts for at least five years and understand what kinds of costs cannot be claimed as deductions and the best way to know for sure is to always double check with your tax adviser.

 

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Professional Brisbane mortgage brokers can help you develop strategies for maximising your profits from investment properties. Companies like Brisbane Financial Services (http://www.brisbanefinancialservices.com.au ) understand that in terms of taxes, there are things you can do even when applying for Brisbane home loans that can lessen your costs significantly. Savvy investors know how to work with their taxes to decrease the amount they ultimately owe.

   

Source: http://www.submityourarticle.

Permalink: http://www.submityourarticle.com/a.php?a=62340
 
 
 
 
 
How your credit rating
affects your mortgage
Copyright © 2009 Tracey Anderson
 
Your credit rating will be one of the biggest factors that will influence your ability to get a mortgage, and how much interest, fees, and down payment you will be required to provide. In Australia, the agency that collects and reports on your credit information is Baycorp Advantage (http://www.mycreditfile.com.au). Any negative credit information, including defaults, bankruptcies, or judgments, as well as information about how many inquiries have been made against your file, is maintained by this company.
 
 
By law, Baycorp Advantage must provide Australians with a free copy of their credit history. It takes about a week to ten days for you to receive your credit file in the mail. If you need is sooner, Baycorp has an expedited service that will get it to you in 24 to 48 hours, although there is a fee for the expedited report. In New Zealand (http://www.mycreditfile.co.nz), there is a fee involved to obtain a copy of your file in any case.
 
Mortgage lenders tend to be a lot stricter than other lenders. You may be able to get credit cards or a car loan with spotty credit, but it is more difficult to get a mortgage without a clean credit report. It's important to note that even having too many inquiries counts against you, so be frugal in how many times you allow potential creditors to access your file.
 
Although there is negative information about you, positive information is not included. Paying your bills on time will keep negative reports off your credit report, but the fact that you pay on a timely basis is not expressly noted due to Australian and New Zealand privacy laws. Further, negative data can be held for only five years, except for bankruptcies, which are noted for seven years.
 
Your good credit report is a big part of getting a mortgage, and it's a good idea to get a copy of your report before you make any applications. This will give you a chance to correct any inaccuracies that may exist. Also, it gives you a chance to re-adjust your timing. If for example, you have a negative mark that is four years and eleven months old, you may wish to wait a month before making any applications, since once that negative mark turns five years old, it disappears.
 
If you do have some bad marks on your credit, it is still possible to obtain a mortgage from a sub-prime lender, or a lender that offers non-conforming loans. However, the interest rate, fees and points are likely to be higher, and you may be required to put down a larger than normal down payment. When seeking out a non-conforming loan, it is important to beware of predatory lenders. Deposit-taking institutions are regulated by the Australian Prudential Regulation Authority (http://www.apra.gov.au), but there are other lenders who do not fall under the APRA's jurisdiction. One of the main non-conforming lenders in Australia is Liberty Financial (http://www.liberty.com.au).
 
If you do decide to apply for a non-conforming loan, try to find one with reasonable pre-payment terms. You will want to try to improve your credit rating after you get the high interest, non-conforming loan, so that you can switch to a conforming loan later on once your credit has improved. If your non-conforming mortgage does not allow for pre-payment, then you will be stuck with high interest for years, even though your credit may improve over time.
 

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Tracey Anderson is a mortgage broker with 16 years experience in the Australian mortgage industry. To speak to a mortgage broker and get help with finding the right home loan from a wide selection of lenders, visit http://www.mortgagemall.com.au

 

Source: http://www.submityourarticle.com

Permalink: http://www.submityourarticle.com/a.php?a=7328

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