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Investing in real estate is a tricky business as there are pros and cons involved. While it is possible to make a lot of money in real estate it is also possible to lose it all. The biggest disadvantage with investing in real estate is that there are no guarantees. 

Many times in nice areas to live real estate will not go down. But this is not the case everywhere. The real estate market fluctuates and while it can go up and you can profit from it can also drop where you will lose money and the real estate will not be worth as much as it was when you bought it.  

A good thing about investing in real estate is that the payment you make every month is fixed. There are no landlords to deal with and you do not need to worry about coming up with the rent, which can change. The mortgage company you use can also be lenient when you are going to repay your loan.  

It may be the case that your taxes go up. But this can be a good thing as your property may be increasing in value. You will also have various tax benefits if you own your own home. There are many things such as home repairs, mortgage interests, and taxes, which you can write off.  

One of the better things about investing in real estate is that you can enjoy your investment. This is unlike other investments such as stocks or bonds. You can decorate your home, fix it up, and do pretty much anything you want with your investment. By doing things like these you can also increase the value of your home.  

One of the bad things about real estate investment is that the property can be foreclosed on. If you can’t afford the property it can be taken from you. You can avoid this by budgeting properly and keeping a close eye on your mortgage statement. You also will have to deal with lenders and banks, which can get tiring.  

Owning a home is never easy. This is one of the major drawbacks to investing in real estate. You have to maintain the home, pay the bills on time, and worry about your investment. Owning property is not easy but it can be one of the most profitable as well as enjoyable investments.

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On September 18^th, the Federal Reserve finally did what many of us have been waiting and hoping for: They lowered interest rates. An article in the New York Times reported that two different rates have been cut by half a percent each: The overnight lending rate, which has more of an effect on home buyers, is now 4.75 percent. The other rate cut allows banks to get emergency loans at a reduced rate, as well: 5.25 percent.

The rate cut, which is the first in four years, reflects widespread concern regarding the slump in the housing market. Although recent studies of the Denver Metro real estate market have shown that more expensive homes are not as affected by the slump, many people are still concerned about the possibility of a recession. This threat of an impending recession most certainly fueled the Federal Reserve’s decision to cut interest rates, despite the concerns that the move would encourage inflation.

Unfortunately, the New York Times article predicts that the rate cut will not be as much of a boon for buyers as you might think. The nationwide increase in foreclosures has many people concerned about current lending practices, which in turn has lenders nervous about federal intervention and restrictions. As a result, many lenders have recently returned to more conservative practices.

This doesn’t mean that the rate cut was a pointless move, of course. For many homebuyers, the Federal Reserve’s decision will facilitate the lower interest rates – and, ultimately, more manageable monthly payments – that will enable them to get into (or refinance) the house of their dreams.

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Undoubtedly, within the last few years, we’ve all heard radio or television commercials beckoning us to refinance, refinance, refinance.  Almost to the speed of a used car advertisement.  When interest rates started plummeting around seven years ago, many of us jumped on the bandwagon and gave our favorite local mortgage broker a call to cash in.  To be fair, the majority of us enjoyed a monthly windfall by taking advantage of those lower rates.  However, with new housing stagnant and the economy waffling, it would seem that today this phenomenon is beyond its prime.  Or is it?  Certainly, there are a few stragglers with 10% or greater interest rates from years ago that have finally wised up, but what about the rest? 

Perhaps some of the consumer confusion about refinancing today hovers around closing costs.  Call me crazy, but it seems like more and more companies are claiming “no closing costs” whatsoever.  Is this deal too good to be true?  Are we succumbing to some other hidden fee or cost when we agree to one of these deals?  More often than not, the answer to these common questions is yes.   Most trustworthy mortgage brokers will tell you that there is really no such thing as zero closing costs.  If you think about the different parties involved in a refinance, this conclusion makes sense.  For example, who will be paying the lender (bank employees), the title company, the appraiser, or the mortgage broker for their services when all is said and done?  Clearly, they won’t be working for free!  Simply put, if you’re not paying these fees at closing with a check, you’ll absorb them through a higher interest rate or a larger loan amount.

Believe it or not, there is a happy ending to this story.  If you spend a little time shopping around and educating yourself on some of the different costs, you may be able to locate a few good deals.  They might not be “phenomenal”, but at least you’ll have the assurance that you’ve found the best option to suit your particular needs.  If the thought of comparing good faith estimates is more than “light reading” for you, take your time and find a mortgage broker you can trust to explain the options.  If you have trouble finding someone reputable, talk to your realtor; they will certainly be able to point you in the right direction!   

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Winter is on its way!

In the residential market there was 23,229 active listings, a 2.59% increase from last month, and 0.33% decrease from last year.  With summer coming to an end the market is showing signs of slowing, with only 4,185 under contract, almost an 11% decrease from July.  The average days on market increased 2% to 92 days, while the average sold price increased to $329,783.

 

In the condominium market we can really see things starting to slow.  Properties under contract fell to only 1,140 a 9% decrease from last month and a 4% decrease from last year.  There were only 1,067 sales, with the average sales price falling 5% to $182,741.

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