My New Blog

Are Interest Rates Going Bizerk???

By: Nino Brown (asknino@asnffinancial.com)

Adjustable mortgages have there place. I have one, my first two years I enjoyed a 3-4% rate. However, for the last 4 years I have seen it double causing me a little discomfort. But now for the next 2-4 years I will see my mortgage get cut in half saving me thousands. At the end of the day, people need to hold themselves responsible for the “investment” choices they make. Yes, a mortgage is an investment. You must have the understanding that with an ARM you can save tons of money now, but you have the potential to loose thousands if rates rise. So what philosophy should you take when getting a mortgage? Below are a couple:

1) Can you afford an ARM if rates start to rise:

This is the most important question. Do not get an ARM if you are living on a fixed income or if you do not expect your salary to increase over the next couple of years. When I first bought my home I knew that my salary would increase substantially every year, therefore, I could afford my mortgage if rates increase. Please be realistic with yourself, if you are a school teacher an ARM may not be suited for you!

2) How long do you expect to own your home:

If you expect to be in your home a short time (first time homebuyers), then you should consider an ARM. If rates are currently low, take advantage of the cheaper monthly payment because you plan to sell and buy a new home within 3-5years. Therefore, when rates adjust upward you will not be affected because you plan to sell your home; thus, the adjustable rate mortgage will be paid off.

Simply put ARMs have their place in many individuals financial portfolio. They are a key investment and cash management tool that can enable you to free up some necessary cash to start other endeavors.

Buyers Market????

By: Nino Brown (asknino@asnffinancial.com)

Is it really a buyers market? Clients ask me this question frequently. They wonder with interest rates rising, banks failing and flexible mortgage programs disappearing; how can anyone get a mortgage? Well, that is precisely it; not just anyone can get a mortgage! The lack of qualified borrowers has caused the real estate market to take its first decline in values in over 40 years. Now add in the record number of real estate foreclosures; this has enabled qualified borrowers to pick up quality properties in every state at substantial discounts. Please note, that this is not just limited to residential properties. Smart investors should look at mixed –use and commercial properties as possible investment strategies. These properties can be picked up at the largest discount because even fewer qualified borrowers exist in this market thus further driving down values. Also remember that mixed-use and commercial properties also demand a higher cap rate meaning that they generate higher returns on investments than residential properties.

3 things to do to get started:

1) Don’t be scared: There is a difference between being scared and being cautious. Always be cautious, but if you are scared, you will continuously miss out on opportunities.

2) Be prepared! Have your game plan set before you get started. From contract negotiation to loan execution; have all your ducks in a row!

3) Get some leads. You can find leads by calling your local banks and hard money lenders and negotiate short sales with them before the properties get to foreclosure. Also meet some investors; many of these investors are strapped with properties they can not sell.

Ask Nino??? – send questions to asknino@asnffinanical.com

Mr. Brown, I am a sophomore in college and I would like to get started in the real estate business. How should I get started? – Eric Patowski, University of Miami