The economic climate of the country is not in a good state; since global recession hit the market the property market started experiencing a downturn. This initiated a lot of problems; and the situation started turning more grave each passing day.

As the recession began rolling in people started losing jobs and failed to pay their mortgage. As a result thousands of homes were repossessed by the lenders and sold at cheap rate at property auctions. Moreover, a lot of homeowners tried to sell house fast to avoid repossession. This pushed property prices down the slope.

Despite of low property price people took a back and refrained from buying properties; there were several reasons behind this, major two reasons were:

• It was difficult to get mortgage
• The employment market was still unstable

However, things have started changing. Lenders are offering easy mortgage products. The building societies are also coming up with cheap fixed rate mortgage products. This is definitely a good sign.

Meanwhile cash buyers have come up as a strong force in the property market. Cash buyers are property investors; they buy properties for instant cash. Homeowners who need quick sale find cash buyers as the most useful channel of selling property fast.

Even when estate agents cannot help you sell a house fast, cash property buyers can help you sell the house really quick in a hassle-free way. The process is so simple, that few banks started selling repossessed houses to the cash buyers.

It’s true that property market will not remain gloomy forever. Things will improve and people would regain their buying ability. But cash buyers will always be there to help distressed homeowners sell their houses fast and get rid of financial difficulties.

Buying a house is a major financial decision that must be viewed from many perspectives to determine if the timing is right, if the investment is prudent, and if the Buyer is financially capable of fulfilling his potentially long-term obligations. Assuming the Buyer is qualified, the investment decision then hinges upon the condition of the market and whether the property under consideration can easily be resold at a profit in a reasonable period of time.

Buying a house is a lifetime dream, but home equity is also an important long-term consideration in anyone’s personal financial plan. For the average American family, the equity in their home represents nearly thirty-three percent of their personal net worth later in life. That asset value will gain in importance as college educations for children come and go and retirement approaches. The long-term resale value for a home depends on a variety of factors, many specific to the individual property under consideration. The time-honored phrase of “location, location, location” drives home this key point, but there are a set of market factors that affect the investment decision that cannot be overlooked as well. Here is a quick review of these items:

• The Economy: If the economy is healthy, then there will be a considerable supply of buyers willing to buy or trade up in the market. Prices typically will rise under these conditions. One of the problems contributing to today’s real estate market sluggishness is that average disposable income has actually declined over the past decade. Home values generally rise in tandem with disposable income. Until this metric improves, demand will continue to be weak and many consumers will not be able to meet their current obligations. However, as the Dollar weakens, foreign investors may abound. For example, the “AUD/USD” and “NZD USD” currency pairs have appreciated nearly 30% over the past five years, such that properties in our market may appear cheap to Australians and New Zealanders;

• Interest Rates: One benefit of a weak economy is the prevalence of low interest rates. Mortgages at reasonable rates can be found for the creditworthy, whether fixed or adjusting. The timing is now for this factor, but as the economy improves, inflation may become an issue. Our central bank will then consider raising rates to quell price appreciation. The impact of higher rates is typically to reduce home values or lower the value of home that a buyer can afford;

• Government Policy: Congress is presently reviewing the budget and determining how to deal with our nation’s massive deficit and public debt. There remain many issues dealing with mortgage-backed securities and assets held on the balance sheets of banks, but consideration is also being given to modifying the interest rate deduction for home mortgages. Changing these rules would make owning a home that much tougher and force many more homes onto the open market for resale;

• Inventory of Homes for Sale: There are close to nine months of homes to be sold on the real estate market today. The “shadow inventory”, those homes that are in or should be in foreclosure by banks, represents another year of homes that could flood the market and cause another severe reduction in present home values. New home starts are the lowest in history, due to lack of demand and construction financing.

Another real estate “selling” season is quickly approaching, and agents and sellers are combining their efforts to achieve success. Buyers should remain cautious. It is still a Buyer’s market, regardless of the urgency that an agent may suggest.

The real estate market is pretty slow and stable in the last few months but it has definitely caught a lot of attention in the media. While the national markets are making big news, sellers should focus more on local trends.

The nationwide real estate market does not have a major significant role in the real estate industry. It is a discussion by the communities usually based on averages. However, in unique circumstances, the averages are entirely different.

For example, the real estate market in Stockton, California is a complete nightmare. Most of the houses are either in foreclosure or distressed. This has been the worst scenario ever. That being said, does it represent a national trend?

There is nothing in the national trends in the real estate market. This is perhaps the worst real estate market since a long time. The market in Jacksonville is perhaps strong. Sales are happening. Hence they might agree to the national trends.

Every real estate market is a self contained local phenomenon. There is a small market inside every big market. For example, homes in San Diego are worth $500,000 range. There are more expensive homes in the range of $800,000 that are also getting sold and still carrying their value. Basically, homes above that price range are actually making good profits. In other words, we are discussing about two markets in the same geographical area but divided by price.

If you are a homeowner, these examples will teach you a lot of things. National and state trends do not make too much difference. You need to focus more on the market in your neighborhood. See how fast homes near your area are selling. Is the home value rising or dropping down? These are numbers that will help you in understanding the market value in real estate, not what is happening in just one area like Stockton!

Home owners can get the loans at the cheapest interest rates against their residential property. These loan plans can often generate more loan amount at lower interest rates.

You can get such a type of loan if you are willing to pledge your property as security to the bank. This will assure them that in case if you fail to repay the loan in time, they can take away your home to recover the cost of the loan. Hence before deciding, it is important that you ensure that you will be able to afford the loan and comfortably make the repayment.

You will find lenders who will sanction the full amount of equity present in your residential property as the loan amount. If you opt for a secured loan for a longer period, the installments will be much smaller and affordable, but the only disadvantage is the quantum of interest will become larger. Your number of repayments will be more in number in comparison to what you have had if the loan is for a shorter time period. You have to make a choice according to your needs and requirements, and choose the right kind of lender that caters to your requisites. You can use these kinds of loans for various purposes like home improvement, wedding, holiday or even for debt consolidation. They are largely preferred over unsecured loans because of the lower interest rates.

Interest rates vary with different kinds of secured loans. If the rate of interest of the loan plan is fixed, you will have steady monthly payments and you will be benefited when there is an unexpected rise in the interest rate in future. On the other hand, if the interest rate is variable and keeps on changing according to the market trend, you will benefit when the rates have gone down by having lower repayments. You can also opt to refinance the loan if you have taken the loan at a fixed rate and the market is going downward.

Another advantage of the secured loans is that you can tackle a bad credit situation. A borrower with a bad credit history has to make a little more extra efforts, by doing some more documentation for getting the loan. Such people have to pay higher interest rates on the secured loan than someone whose scores are good. Chose your loan plan from the variety of options available online. Take free online quotes and decide the best deal in your situation. Know other details like the rates of interests – fixed or variable, repayment period, down payment etc. there are many lenders who are ready to offer these kinds of loans to the freshly employed or self employed people. However the common practice is to offer loans to those people who have been in receipt of regular income for the last two years.

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Every year thousands of people make big purchases on their homes. These new homes come equipped with all the latest amenities like granite counters, new appliances, the fresh smell of paint and new carpet. Borrowers are very excited to move to their new furnished home. It’s that home for which they have worked so hard to own. Later, facts start coming after the second year of their living on that home. The property tax comes due. Follow this simple illustration below. I and my wife together purchased a home for $200,000 in July of 2007.

Since the home was new, the taxes were on the land only since it’s an unimproved property. The tax was calculated by the cost of the land times three percent or $35,000 x 3% making the total $1050 per year or eighty-seven dollars per month. Everything is going fine until the taxes hit in the month of November 2008. Now, the new taxes will be calculated on the basis of improved property times three percent or $200,000 x 3% making the total new tax bill $6000 dollars per year or $500 dollars per month. Based on the old escrow account, I would have saved eighty-seven dollars per month times twelve months in the year. I accumulated $1050.00 but owe $6000. I am almost 5000.00 short in the escrow account. In case, I can’t come up with that money, the mortgage company will gladly pay it for me.

Now, since the mortgage company has paid my taxes, they will increase the mortgage payments by $500.00 per month to recoup the money they paid the taxes with and adjust the payment by $413.00 dollars per month to set the new escrow account up correctly. At the end, I realize that my mortgage payments have jumped up by almost $1000. I may not be in a situation to afford the new payment. The bank will foreclose the property and I will have to move to another apartment. My credit is ruined and the dream is turned over to a hard terrible reality.

Now, the question in your mind that comes first is to have a solution for a situation like this. First, it’s very important that you deal with a reputable mortgage lender. He will give you the time to explain how to set up the escrow account correctly. Anytime, when a new deal is finalized, the lender has the option of working with the borrower and set up the escrow account in such a manner so that you don’t fall into a shortage. They can set it up on the basis of improved or unimproved taxes. It’s always a good decision to have more than sufficient in your escrow account than to run short of the required amount. Before the escrow account shapes up a big problem, it is better to have a solution always ready and it can only happen when you have the required funds available. At the end you must question yourself one thing. Can you afford for a $1000.00 per month jump in your mortgage payment?

In this article we look at one of the most important consumer protection statutes known as Real Estate Settlement Procedures Act or RESPA. This act was passed in 1974.

This act covers loans which are secured with a mortgage on a one-to-four unit family residential property. This covers purchase loans, refinances, equity lines of credit, assumptions & property improvement loans.

• The main aims of RESPA are:

1. Help people become more aware of the settlement services & better shoppers of such services.
2. Some referral fees and kickbacks result in unnecessarily increasing the costs of settlement services. RESPA tries to eliminate such referral fees and kickbacks.

RESPA also requires that at various times borrowers receive disclosures. Some of these disclosures describe the settlement costs, escrow account practices and lender servicing. Certain practices which result in increase in settlement service costs are also prohibited under RESPA.

Regarding settlement services, as per Section 8 of RESPA people are prohibited from accepting or giving anything valuable for referrals of settlement service business in connection with a mortgage loan. In addition to it, a person cannot accept or give any portion of a charge for services not performed.

• Let us now look at the disclosures which are necessary under RESPA:

1. Disclosures when a person applies for a loan.
2. Disclosures before closing/settlement takes place.
3. Disclosures at the time of settlement.
4. Disclosures after settlement.

• Disclosures when a person applies for a loan

When someone applies for a mortgage, a mortgage lender and/or broker is required to provide the applicant:

a) A Good Faith Estimate (GFE) of settlement costs. The GFE lists all the charges a buyer will be paying at the time of settlement. But this GFE is only an estimate and the actual charges can differ.

In case lender wants that the borrower uses a particular settlement provider then such requirement is to be disclosed on Good Faith Estimate.

b) MSDS or Mortgage Servicing Disclosure Statement. This statement discloses to borrower lender’s intention of servicing the mortgage himself or transferring it to some other lender. MSDS also provides information regarding complaint resolutions.

c) A Special Information Booklet that has information regarding various settlement services for consumer. But such booklet is to be provided for purchase transactions only.

If the borrower does not get these while applying, the lender has to mail them to borrower within 3 business days after the loan application is received.

Disclosures before closing/settlement takes place

a) AfBA Disclosure – Affiliated Business Arrangement or AfBA Disclosure is necessary if a settlement service provider refers borrower to a provider with whom he has an ownership or other type of beneficial interest. This disclosure should describe the business arrangement that exists & specify the estimated charges of second provider.

b) HUD-1 Settlement Statement – This is a standard form wherein settlement charges imposed on sellers & borrowers are shown. According to RESPA, borrower can ask to see the statement 1 day before the settlement.

Disclosures at the time of settlement

Initial Escrow Statement – This statement is normally given at the time of settlement but the lender is provided forty five days from settlement to deliver it. It itemizes the insurance premiums, taxes & other charges that will be paid from Escrow Account in the first 12 months of the mortgage loan. It also lists the escrow payment figure & any kind of cushion that may be required.

Disclosures after settlement

a) Annual Escrow Statement (AES) – Once a year, the loan servicer is required to deliver the AES to borrower. This statement describes all the deposits in escrow account & the payments during a 12 month period. It also informs borrower about any surpluses or shortage in the account & provides suggestions to borrower regarding the action that is to be taken.

b) Servicing Transfer Statement – If loan servicer assigns servicing rights for borrower’s loan to some other loan servicer or sells it to some other loan servicer then this statement is required. Normally, loan servicer has to inform borrower fifteen days before the loan transfer takes place. If the borrower makes on time payments to old loan servicer within sixty days of loan transfer, then borrower cannot be penalized. This statement should include name & address of new loan servicer, telephone number & date from which new servicer will start taking payments.