Real Estate Investing: How toFind Great Deals

INSIDE:

Investing In a VacationHome?.............................2

Pros & Cons of Using Your Savings....................2

First-time Home Buyer?Avoid These 3 CommonMistakes..........................3

Major Keys to Understanding When It’s Time to RefinanceYour Mortgage.................4

When deciding to go into realestate investing, undevel-oped lots can have great po-

tential. Purchasing a plot of land can beone of the best investments to make. Alandowner has great (but not unlimited)freedom in how to develop their plot,and land never expires so its potentialis essentially infinite. That said, buyingundeveloped or vacant land can berisky business, so read on to find tipson purchasing a plot.

Do Your Homework: Before You GetOnto The LandBefore anything else happens, figureout your priorities. Decide what youwant the land for, what amenities andwhat location you want, what you'relooking for in terms of neighbors or

local government, and, of course, knowyour budget. More specific questions willarise around taxes, fees and permits forbuilding and available utilities/water access– but, first, just start with your ideal landplot and work backwards (and into reality)from there.

Do Your Due Diligence: On The Land It-selfOnce you find a plot that fits your needs onpaper, get out onto it. Walk the land with aneye on the topography (any unexpectedhills or valleys? Is the groundsolid/fertile/arable, depending on what youneed?), neighboring properties, size andshape of the plot, and any other element thatthe walk brings to your senses (smell andhearing as well as sight). Ideally, do thiswalk in the fall, so there is no foliage hiding

Call Equity SmartRealty at 718-596-3234 for a FREEconsultation.

your view of the property and what'saround it.

Don't Despair: It's Costly, But There AreDeals Out ThereRemember that developing the land willincur costs too. Budget for as many fore-seeable costs as you can, including: a landsurvey, well/utility installation, legal fees,land-clearing, landscaping and road con-struction. That said there are places you canlook at for deals on the initial land pur-

chase, including property lots for sale(which are cheaper the farther they arefrom major cities, road access and al-ready-connected utilities) or bank-owned plots. For those, you can talkto your real estate agent about askinglocal banks for lists of their foreclosedproperties, which tend to be cheaperas banks look to sell them off.

Don't Be Afraid to Ask: ReachingOut to ExpertsFinally, talk to people. Ask localsabout the neighborhood, previous usesof the land and potential surprises(like calm paths that turn into snow-mobile trails in the winter). Connectwith professionals in the local healthdepartment, zoning and building de-partments, accountancy and otherareas of development for in-depth an-swers to your municipal questions.

But remember: while you will needto talk with many professionals inyour due diligence, let your local realestate agent be your first point of con-tact.

A good place to start is Equity SmartRealty. Call us at 855-768-8845.n

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If you've been perusing the real estatemarket with the hope of purchasing ahome, you may be aware that the often-

touted amount you should put down is 20percent. However, there are good things andbad things involved in investing so muchmoney into your new home. If you're won-dering how to decide on your down pay-ment amount, here are some things toconsider before putting in 20 percent.

No Rainy Day FundIt might seem like the best option is to putdown as much as you can, and use up yoursavings if needed, but putting all of yourmoney into your home can be a mistake.While you may not foresee any financial is-sues arising in the next few years as youpay down your mortgage, not having anyextra money can put you in a vulnerable po-sition if the market shifts or other life issuesappear. Investing in a home is a goodchoice, but you may want to protect someof your other assets.

Lowering Your Monthly PaymentWhile putting down the full 20 percent canseem like a huge chunk of change, it can bea boon for your monthly finances in thesense that your monthly mortgage paymentwill be automatically reduced. While this is

a good thing and can make your monthlyamount more manageable, it's important toremember that your monthly paymentsshould be affordable and you shouldn't bestretching for an extra house because youcan. Make sure you're buying a home youcan afford, with or without 20 percent.

Avoiding Mortgage InsurancePutting less than 20 percent may seem likea good decision if you're ready to buy ahome and don't quite have the moneysaved, but putting less down can actuallyincrease the cost of your home overall. Be-

cause you'll have to pay mortgage insuranceif you put down less, this will add to yourmonthly payment and will be money thatyou can't get back. If you're ready to diveinto the market, you may want to move for-ward, but it can also be a better investmentto wait and save a bit more.Twenty percent is often the magic number

when it comes to a down payment, but thereare pros and cons associated with puttingthis much money down. If you're currentlyon the market for a new home, you maywant to contact us at 855-768-8845 formore information.n

Pros and Cons of Using Your Savingsto Make Your Full 20 Percent Down Payment

Investing In a VacationHome?With approximately one million

people having purchased vaca-tion homes in the last year, this

type of residence is gaining popularity forthose who are interested in a home in abeach setting or a vacation hot spot. How-ever, while a second home can seem like agreat purchase and solid investment oppor-tunity, there are different requirements thatgo into this type of purchase. If you're con-sidering a vacation home, you may want tobe aware of the following financial factors.

The Down Payment AmountIf you currently have a primary residence,you may be aware that you don't need toput down 20 percent or even 10 percent inorder to make a home purchase, but thingsare different when it comes to a vacationhome. Because you will be taking on an ad-ditional mortgage, there is greater risk in-volved, and this means you will likely haveto put in at least 10 percent. Because of this,many home buyers utilize the equity theyhave in their first home to make up thedown payment.

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First-time Home Buyer? Avoid These 3 Common Mistakes Deciding to purchase a home will be

one of the biggest investment deci-sions you'll make in your life, but

it can be confusing for the first-time homebuyer to know all the ins and outs of buyinga home. If you're wondering what thingsfirst-time buyers often forget about beforepurchasing a home, here are three importantthings that you'll want to keep in mind.

Ignoring Their Credit HistoryIf you have a high debt load or you haven'tbeen making your minimum payments, itcan be pretty frightening to consider look-ing at your credit report, but it's very impor-tant to do this before applying for amortgage. A lender will be taking a look atyour credit history and reviewing it care-fully before approving your application, soit's important for you to be aware of whatyour credit history says about you and howit might impact your mortgage.

Buying Too Much Home It's easier than you might think to beswayed into purchasing your dream home,but it's necessary to keep a cool head andmake an informed decision so that yourhome investment can be financially benefi-cial for you. The amount you should bepaying for a home on a monthly basis will

leave you with enough that you can pay forthe necessities, any existing debts and anyextras while still having wiggle room incase of emergency. While you may want tospend a little more, this can end up being amistake if things don't go as planned.

Forgetting The DocumentationThis may be among the easiest of steps, butnot having the appropriate documentationcan push back your home purchase, so en-sure you have all the necessary paperworkfor when you need it. Beyond the Verifica-tion of Rent you'll need from your previouslandlord, it's also important to make sure

that you have liquid assets – not just invest-ments and Registered Retirement SavingsPlans (RRSPs) – as this will prove to thelender that you can handle a financial hur-dle in the event that it arises.

There are so many things involved in ob-taining a mortgage that it can be easy to for-get some very important aspects ofapproval. By being aware of your credit his-tory and keeping your payment price withinyour means, you'll be well on your way toa sound purchase. If you're currently look-ing at homes, you may want to contact oneof our mortgage professionals for more in-formation.n

HOME OWNERSHIP 3

About The Credit ScoreMost people that have a credit score ofmore than 500 have the ability to use amortgage product and purchase a home, butif you're buying a second property, you'llneed a higher credit score in order to facil-itate the purchase. Because there is morerisk involved, lenders will want to makesure you're a good bet.

The Income RequiredSince you've been through the mortgageprocess for your first home, you're proba-bly aware that you debt-to-income (DTI)ratio needs to be a certain amount in orderto qualify for a mortgage. While your DTIfor a primary residence may be a little bithigher since it's your only payment, thisratio will be lower for your vacation homesince it's higher risk. This means you'll re-quire a slightly higher income than for yourprimary residence in order to get ap-provedn.

Vacation Home...continued from page 2

As a homeowner, you may haveheard the term refinancing withoutbeing aware of exactly what it

means, but there are a lot of pros and consassociated with what it can do for your fi-nancial situation. While getting a differentnew loan for your mortgage can be a goodfinancial decision in certain situations, hereare some things you should consider beforeyou decide that this is the right choice foryou.

Getting a Lower RateOne of the main reasons that refinancingcan be a popular option for many home-owners is that it can provide the opportunityfor considerable money savings. Since youwill be acquiring a new loan with a lowerinterest rate, this will be an opportunity toreduce your monthly payments, increaseyour equity at a faster rate and invest theextra funds into something else. While alower rate can definitely mean money sav-ings, it's important to consult with a mort-gage professional so you're aware of anyassociated fees and can make a decisionthat will be financially beneficial.

Consolidating Your DebtIt is often the case that people will chooseto refinance their mortgage with a lower-in-

terest rate in the hopes of paying off thedebt they've accumulated, but with the costof refinancing this is not necessarily thebest financial decision. While consolidatingdebt can be great if you go into it with abudget that you plan on sticking too, ifyou're leaning too much on the idea of alower interest rate meaning instant savings,it may be a good idea to take a look at thenumbers.

Investing In Your HomeFor many people, refinancing their mort-gage is a good opportunity to renovate theirhome and increase its value. However,while renovating your home can be a goodidea for resale, there are many home reno-vations that will not necessarily increase thevalue of your home and make up for theamount you've invested. If you're makingforward-thinking renovations, refinancingis one thing, but ensure you've seriouslyconsidered what will add value.

There can be a number of financial benefitswhen it comes to refinancing your mort-gage, but it's important to work out yourtentative budget and crunch the numbersbefore you make a final decision. If you'recurrently looking into re-financing yourhome and are curious about what it entails,you may want contact Equity Smart Realtyat 855-768-8845 for a mortgage profes-sional referral..n

The Major Keys to Understanding When It's Timeto Refinance Your Mortgage

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