When is the wrong time to Lease purchase a home

Written By: Jaime Osborn - Mar• 08•14

what-is-a-rent-to-own-image-with-textSince My company sponsors a credit program, I wanted to take a few posts to talk about lease purchasing a home. I think the topic is pretty important in the Memphis area since Lease purchasing a home seems to be so popular here. First let me explain to you that lease purchasing a home is merely glorified renting up until the time in which you actually purchase the home. Sometimes the terms of a lease purchased home are slightly better than what you can get renting the home, but both situations almost always end up with the same result……. with the buyer / renter moving out with nothing to show for it.
The city of Memphis has almost double the average percentage of non owner occupied properties than most major metro areas. This gives the perfect environment for investors to lease purchase a home to someone who really has no hopes of actually buying the home. Since the major difference between lease purchasing and buying a home really entails a large non refundable down payment given at the beginning of the lease instead of a security deposit which is given back at the end of the lease (the property being in the same conditions as it was at move in of course) this actually allows the investors to make a larger profit with often times less risk. This is a practice that is seen all over town, and in all price ranges. From fifty thousand dollar properties to half million dollar homes, you can always find some investor ready to lease purchase a home instead of rent it out.
Since the title of this post is, when is the wrong time, I’ll focus on that. The answer to that questions is almost always. There are only a few good reasons to lease purchase a home. The wrong reasons are abundant. The number one time when it is a bad idea to lease purchase is “when you want to buy a house but don’t want to wait to do it the right way.” no-credit-check-bannerThis is usually the reason most people lease purchase a house. They have the down payment now and even though they know it would be better to wait, and get their credit in order,they want it now, not a year from now or six months from now, but NOW. This is just the worst way to buy a home, and almost always ends up with the buyer losing the down payment.
The second worst time to lease purchase a home is when you are under a time limit to be out of your current place and you can’t find exactly what your looking for in a rental so you just decide that buying a home would be better than renting anyway. Right? Then you make a hasty decision and choose a home that isn’t right for you. but it’s yours (or so you think) Then when the time comes to actually purchase the home, you are happy to give up your down payment and move on to something better suited for you, which is what you should have done in the first place anyway.
As you can tell I’m not a big fan of lease purchasing a home as a buyer/renter….. Of course for an investor this is great, you get a renter that will gladly give you a few thousand bucks as a non refundable down payment and as an added bonus they act like the house is actual theirs and take significantly better care of it than a normal renter does. In fact the only down side that you get as an investor is that you normally have to accept someone as a renter that has worse credit than average, but the extra money you get to keep as a down payment usually makes up for the added risk of that.
Oh I almost forgot the worst part about making the decision to lease purchase a home. That is the fact that most of the homes are over priced, and there is such a short supply of available homes.
All in all Lease purchasing a home is almost always a terrible idea, although in a few situations in can be good and I’ll discuss that in my next post.

remember if you are in the market for homes for sale in the Memphis area click on the contact me page and let’s connect to see how I can help you!

How to buy a house in just 15 easy steps!

Written By: Jaime Osborn - Feb• 27•14

I came across this infographic from our good friends over at www.marketleader.com, found it hilarious, and thought it was worth sharing enjoy….

How to Buy a House – As Told by Real Estate Memes

Now buying a home in the Memphis area, isn’t always this easy. But, if you would like some help when searching for Memphis area homes to buy, you can always feel free to contact me. Especially if you are a first time home buyer!!!!

Great info from another guest author!

Written By: Jaime Osborn - Feb• 22•14

Know How Your New Home Works

It happens more than you think. The new home buyer is so excited about their new house that they forget to make sure they are familiar with how everything works. Unfortunately, their best resource, the previous owners, are usually long gone and never to be heard from again. We are usually very vigilant when purchasing a new home, but for some reason many of us forgo asking some basic questions like “How does that fancy furnace thermostat work?” or “How does this security system work?”

ranch house
I knew a couple that discovered this the hard way when they bought a cute cottage some years ago. They fell in love with the place and knew this was the house for them. It was on a septic system, something they knew nothing about, nor even where it was located on the property. Years later when they went to sell the house they realized that the septic system was only rated for a two bedroom house. They had added a third bedroom while they lived in it and could only sell it as a two bedroom and disclose the size of the septic system. It turned out alright for them, but knowing this ahead of time would have alleviated a lot of stress.

This is a rather extreme example, but it shows the importance of knowing the systems in your house and being aware of how they all operate. As a homebuyer, if you are serious about a house, ask for a list of all the appliances, systems or amenities and make sure you are familiar with how they operate. As a home seller, it is a good idea to have this information readily available to potential buyers and be willing to show them how everything operates.

If possible, ask the seller to leave you any paperwork relating to the house. But don’t simply rely on what the paperwork says, be sure to know how the following systems and amenities operate in the home you are thinking of buying.

Heating and cooling systems—Although these systems may seem basic, make sure you are familiar with the way the thermostat operates and where the filter is located. Some systems have filters located in various locations so be sure to ask. Some even have a specific sort of filter or certain MERV ratings in order to operate at their best.

Security systems—Not all homes will have these installed but if they do make sure you are familiar with how it operates and what other services come with it. Realize the benefits of having a security system and make full use of the system. Security systems are notorious for being underutilized even by the original owners.

hot tubPool and hot tub—If your new house has a pool and/or hot tub make sure you know how to keep them maintained or find out who has been taking care of the maintenance. Again, have the owner show you how things work or the specifics on who maintains it. Both require the right chemical balance to keep them healthy and safe. In a hot tub especially, a chemical imbalance can quickly lead to problems.

Wiring—Does your new home have a dedicated circuit for office equipment like computers and copiers? How about pre-installed wiring for an entertainment system? Be sure to ask about outdoor wiring you might not be aware of and especially where it runs so any future garden projects won’t shock you.

This is just a sample of all the possible systems you should familiarize yourself with when buying a home. As more uses for technology find their way into the home, more homebuyers will find they need help in learning how to take advantage of these systems. So make sure you are familiar with everything in your new house before you totally lose track of the previous owner.

Lukas Nicholson
has been in the home security field for over ten years and enjoys writing on security and personal safety topics for homeowners.

Where Can You Get a Mortgage with No Money Down

Written By: Jaime Osborn - Feb• 20•14

Where Can You Get a Mortgage with No Money Down?

Author: RealtyPin

February 03, 2014

jaime-osborn-memphis-real-estatemortgage-with-no-money-down

Right before the housing bubble burst, Americans were enjoying low- and even no-down payment mortgages — meaning they could get into a new home without spending much money at all. But during the housing crisis, it became virtually impossible to find these types of loan opportunities.

Now that the housing market is recovering, many people are getting their wish — and getting into a new home little or no money down. So, how can you do the same?

Just find out if one of these options is right for you:

1. FHA loans

The Federal Housing Administration (FHA) is a government agency that was originally created to provide housing for low-income families. As a result, FHA loans are available to home buyers with little money down. The only problem? The opportunity is only available to a specific group of people!

Even if you’re one of the people who can qualify for a FHA mortgage with no money down, you’ll have to pay more in interest and other fees.

How much more?

For every $100,000 borrowed, you’ll likely pay an extra $1,250 each year — or just over $100 each month. So, before you sign on the dotted line, make sure you can afford the extra fees!

2. Private mortgages

It is possible to receive a loan with no down payment through private mortgage companies — like at your local bank. However, it’s much more common these days to get a mortgage for little money down — like 5%.

Even though you’ll wind up putting some money down, you’ll likely spend less each month than you would through the FHA. So, crunch the numbers and see which one saves you more money in the end!

3. The Department of Agriculture

If you are a first-time buyer, you can receive a mortgage through the Department of Agriculture and not have to pay a down payment. These types of loans aren’t just for people who want to live on a farm and have crops or livestock, and many of the areas these loans cover aren’t even rural!

To find out if your target area qualifies, check out the maps on the Department of Agriculture’s website. Many people are surprised to find that these maps include certain suburbs that look and feel anything but rural!

While the Department of Agriculture’s program was created for first-time buyers, there are ways to get these loans if you’re not a first-time buyer. In most cases, though, you have to meet certain income requirements in order to qualify.

4. Veterans’ Affairs loans

If you are a military veteran, in the Reserves or the National Guard, Veterans Affairs (VA) offers mortgages for no money down, but you’ll have to pay a funding fee to take advantage of them. Luckily, this fee can typically be added into the cost of the loan — as opposed to having to pay the entire fee upfront. Usually, the fee is less than 3.3%, but the specific amount you’ll have to pay depends on whether you served in the regular military, reserves, or national guard — as well as whether or not this if your first loan through the VA.

One final point — if you have the money to pay a larger down payment, you might want to just write the check. A bigger down payment will likely help you get a lower interest rate — meaning you’ll wind up with lower monthly payments.

This article is brought to you exclusively by RealtyPin.com

If you are looking for no down payment loan for a home for sale in the Memphis area, please feel free to contact me, Jaime Osborn, for all your Memphis area real estate needs.

5 year high for Shelby county sales

Written By: Jaime Osborn - Jan• 13•14

Shelby County posted a five-year high in home sales and average sales prices in 2013, according to real estate information company Chandler Reports.

(article by Andrew J. Breig of the Daily News)

The uptick in sales activity and strong pricing increases point to a slow, steady rebound for the industry, which slogged through a five-year slump following the onset of the recession, real estate agents said.

Image19 copy“The housing market continues to recover after a brutal five to six years,” said Doug Collins of Prudential Collins-Maury Inc. “Fortunately, the gains are steady, and I believe sustainable, in 2014.”

The county netted 15,892 homes in 2013, up 6 percent from 14,936 homes sold in 2012, according to Chandler Reports, www.chandlerreports.com.

The average home sales prices in Shelby County jumped 11 percent in 2013 to $138,072, up from $123,870 in 2012, and total sales volume for the year was $2.19 billion, up 19 percent from $1.85 billion in 2012.

According to Chandler Reports, 21 of Shelby County’s 34 ZIP codes experienced an increase in sales in 2013. Home sales reached their peak in August when 1,705 homes were sold with an average price of $139,559. The slowest month for sales in 2013 was February, when 918 homes were sold with average price of $115,363.

Real estate professionals said improved housing market fundamentals finally aligned in 2013 to produce the increase in activity. Attracted by still historically low interest rates, buyers began entering the market again, while homeowners who may have been wanting to sell for a while were drawn in by rising home prices fueled by low inventory.

“Lower inventories create upward pricing pressure, which in turn helps undo the damaged caused since 2008, thereby helping underwater homeowners get back to having an equity position in their homes,” said Collins. “This, in turn, allows more people to be able to sell who may need to due to any number of considerations.”

Collierville’s 38017 ZIP code had the highest number of sales in 2013 with 1,032, according to Chandler Reports. The 38016 Zip code of Cordova North was second, with 973 homes sold. Next was Cordova South’s 38018 Zip code, which netted 896 home sales.

Collierville led the way in sales volume in 2013 at $300.9 million. Eads’ 38028 ZIP code had the highest average sales price at $481,830, followed by Germantown East’s 38139 ZIP code with an average sales price at $400,119.

Bank, or foreclosure, sales plummeted in 2013. There were 3,030 bank sales recorded in 2013, down 21 percent from 3,818 bank sales in 2012. The average sales price of a foreclosed home was $74,243, up 10 percent from $67,497 in 2012.

Collins said he believes the market has finally worked its way through a massive glut of foreclosed homes. As foreclosures continued to mount, the federal government and lenders stepped in and created programs to help people remain in their homes. Those efforts, combined with the sheer number of foreclosure sales that occurred over the last several years, finally started to have an impact on foreclosure inventory.

“We had the financial collapse of 2008 and as a result of that we had an abnormally high number of foreclosures,” Collins said.

“I think we finally just stemmed the tide of foreclosures.”

There were 12,862 nonbank sales in 2013, up 16 percent from 11,118 nonbank sales in 2012.

There were 15,030 existing homes sold in 2013, down 6 percent from 14,140 existing homes sold in 2012. The average sales price for an existing home in 2013 was $130,923 up 12 percent from $116,530 in 2012.

There were 862 new homes sold in 2013, up 8 percent from 796 new homes sold in 2012. The average sales price for a new home in 2013 was $262,721, up 3 percent from $254,262 in 2012.

“The increase in new home sales and the decrease in the number of bank-owned sales is positive for our local market,” said Greg Glosson, president of the Memphis Area Association of Realtors.

Chandler Reports is a division of Memphis Daily News Publishing Co. Inc.

How to Find the Best Agent

Written By: Jaime Osborn - Nov• 27•13

indexAnyone that has ever bought a home can tell you how much work it really is. As this can be a very hectic and stressful process, it is important to surround yourself with people that are going to make your life easier throughout this transition period. The best way to do this is to hire a knowledgeable real estate agent who is professional and courteous. There are countless options out there; the task falls to you however, to pick the one that will help you in the best way.

But how do you decide who is the best match for you and your future home, when each agent makes stronger statements than the last regarding their supremacy within the market? Well, there are a few tips that will aid you in your search for your perfect real estate professional. Start by researching all the options you have and contacting those that seem feasible. Often times, the quickest way to find quality real estate representation is to ask friends and family about professionals that they have worked with in the area and their experiences with them. When you are first meeting a potential agent, try to meet them in a working setting so you can get a feel for the way that they do business. One of the first things you should look for in potential agents is whether or not their background and experience is conducive to your needs. Get a sense of how knowledgeable they are by asking multiple questions, preferably specific to your situation.

Another large indicator of the proficiency of the broker is the esteem in which their colleagues hold them. Peer-selected distinctions are a positive sign for a broker’s credibility. A few more beneficial things to keep in mind when on your search is to take note of the number of properties that any particular agent has closed, make sure that their work is enhanced through use of the internet, and whether or not they specialize in homes like the one you are looking for.

A real estate agent can have all the accolades and distinctions out there, but what really separates great agents from good agents is whether or not they cultivate strong relationships with their clients. The agent-client relationship must be a comfortable one in order for the situation to work out as best as possible. They should also be an agent that is connected with the communities and areas where you are looking to buy a home. Having this intimate insight into the area will be an invaluable asset in helping you decide on your next home. Main things to keep in mind are to take your time and make sure it feels right before continuing with any decisions. With these considerations in mind, you will surely find the perfect fit.

Karin Gage is a broker with Summit Sotheby’s International Realty in Deer Valley, Utah. Karin Gage spent 15 years in the St. Louis, MO real estate market before moving to Utah where she worked for the past 18 years.

What to Keep in Mind when Buying a Vacation Home

Written By: Jaime Osborn - Nov• 15•13

Jaime_Osborn_Memphis_Real_estateBuying a vacation home is very rewarding, yet sometimes stressful experience. The second home market is as tough as any, and having a few tips in mind before you enter that market, can really help guide your search and your decisions.

The first and most fundamental thing to keep in mind is your price range. Before you even begin to look at homes, you should take some time and decide what you can afford and what you are willing to spend. Then when you are actually looking for your future home, you need to be wary of all additional costs that come with the purchase. This includes things like maintenance/restoration costs, taxes, utilities, etc. It is in really exploring the costs associated with purchasing a vacation home, that help you make the best decision for you and your family.

Jaime_Osborn's_Vacation_HomeWhen it comes to picking the piece of property that will fulfill your second home dreams, you should be very weary of timeshares. Timeshares are notoriously difficult to sell and very attractive to scam artists. These properties represent particularly risky investments. You should also focus on finding a home rather than a plot of land on which to build your home. Completely designing and building a home can run up a huge bill, pose many different issues and delays, and in many cases come with more restrictions than freedom.

You should also really know the area of any home that you are considering. Do some research on the town and neighborhood. Make sure this is a place that you will love to visit, throughout all four seasons of the year. It also is a tremendous help to seek the council of a real estate professional with a great deal of knowledge of the area. This step will make your life a lot easier. It can often be appealing to buy a home outside of the country. This is an extremely risky investment as other country’s property laws may be different and less explicit than those here. Maintain your risks by keeping your property purchases state side.

The final thing to keep in mind is that this home should be something that you really enjoy. If this purchase is strictly an investment, then you will never get all that you want to out of it. Since rental vacation homes are not the most lucrative investment, this property should represent something special for you.

Matt Sidford is the founder of Sidford Real Estate in Park City, Utah. Matt has helped hundreds of second home buyers find their dream property in the Park City and Deer Valley markets since 1997.

What Can You Afford When Buying a Home?

Written By: Jaime Osborn - Nov• 06•13

MortgageCalculator.biz Helps You Figure Out What You Can Afford When Buying a Home.
Buying a home can be an intimidating process – especially for first-time homeowners. Terms like APR, fixed-rate and ARM can all be confusing. It may be difficult knowing where to begin the process – do you contact a mortgage broker first? A realtor? Finally, it can be hard to figure out just how much house you can afford. After all, you don’t just divide the mortgage amount by 30 years’ worth of monthly payments. You also have to pay private mortgage insurance, property taxes and homeowner’s insurance.
The free online calculator at MortgageCalculator.biz can help prospective homebuyers get a clear answer on how much their monthly payments would be based on the criteria they enter, such as the sale price, down payment amount and property tax rate. The calculator computes a mortgage payment based on the value of the home, mortgage loan amount, annual interest rate, years of the loan, real estate taxes, homeowners insurance, private mortgage insurance and closing costs. The monthly payment is broken down by principal and interest and the taxes and insurance. Values are updated as the variables are entered, so buyers can quickly see how criteria will change their monthly payment without having to click “calculate” each time.
ss1

Other Calculators
Multiple financial considerations going into buying a home. MortgageCalculator.biz provides many other calculators to help homebuyers determine how to save the money they need for a down payment, how to create a monthly budget that allows them to save or that includes a mortgage payment, or how to calculate the potential tax benefits of buying a home.
ss2
There are more than two dozen calculators on the site to help homebuyers through every stage of the ownership process. There are also calculators for those who are interested in refinancing, those who want to sell their home, and those who are looking to buy real estate to invest.
Advice for Homebuyers
In addition to the useful calculators to help homebuyers determine their financial needs and responsibilities, MortgageCalculator.biz also offers dozens of articles with advice for homebuyers to help them make the right decision. Homebuyers can find key tips and advice on how to save money for a down payment, how to determine if they can afford to buy a home and what kind of home they can afford, how to improve their credit and much, much more.
Articles explore the cost comparisons of renting a house vs. buying a house. They provide guidance on selecting the right house to fit your finances, as well as your family’s needs. They provide information about the different types of mortgages that may be available to homeowners, such as FHA loans and adjustable-rate mortgages.
Each article helpful article explores a variety of scenarios that may apply to homeowners, specific tips and resources for further research.
The process of buying a home does not need to be confusing or complicated. With the right tools and the right information, much of it offered on MortgageCalculator.biz , homeowners can move through the process with confidence and ease.
Bio: Trey Conway is the main content writer for MortgageCalculator.biz . A website that helps people calculate how much home they can afford. He has been interested in mortgages and creating websites since he graduated from Appalachian State University. You can reach him anytime at his Facebook page

How much home can you really afford

Written By: Jaime Osborn - Sep• 30•13

imagesWhen considering purchasing a home, especially your first home, one of the very first and most important things you need to do is figure out how much you can afford. And no that really isn’t up to the loan originator that you decide to use. The lender and loan originator will almost always tell you that you can afford more than you really can. A lender will let you use almost half of your income towards debt. Which in most people’s situation is way more than they should.
Could you imagine having just paid off your car and credit cards and decide to buy a home and the lender tells you that you could use 45% of your income to pay a monthly mortgage with? what happens to your debt levels if the house needs some work? what happens to your debt levels if you need to buy a new car, want to go on a trip….. Have to buy Christmas presents!!!!
This 45% would also not take into account utilities or gas, it would not take into account the expense for food or clothing. Now I’m not saying that some people could not use their maximum loan size, and be perfectly comfortable paying that monthly note, but most of us would at least some of the time find it difficult to both have a home with a note that is that percentage of their income and also be able to enjoy the lifestyle that they have come to enjoy in the recent past.
Often times people fill out a loan application with me, and ask me what they are pre-approved for. My response it usually what would you like your monthly payment to be. After they provide that number I will go back and see if that monthly figure is good with their current income, If say yes, then we go find a house that is priced so that the monthly payment they are comfortable making is close to that. If not then I tell them why and tell them where the cap should be based on their current income, and what that payment would be. (or an estimate anyway)
debt ballSo, how do you determine what you can afford?
The first thing you should do is use an online mortgage calculator. All you have to do is enter your information and see if you can afford the home you intend to buy. Mortgage calculators ask you to enter the desired price of the home you want to buy and then other determining factors — like the down payment percentage you plan on paying, the length of the loan, interest rate, points, closing costs, and annual property taxes and insurance on the home. Then, with the click of a button, it tells you (roughly) how much the monthly payment on the home would be!
But how do you know if you can truly afford to pay that amount each month? This is the tricky part!
Banks use three formulas to determine your debt-to-income ratio and whether or not they want to lend you money for a home loan.
The first is the borrower’s monthly housing expense, which is the sum of the mortgage payment, property taxes and the home insurance premium. Typically speaking, this cannot exceed 28% of your monthly documentable income!
To illustrate this, let’s assume that your monthly income is $5,000. Using the 28% rule, that means that your monthly housing expense cannot exceed $1,400. If taxes and insurance are $300, your mortgage payment can’t be more than $1,100. Then lender will then take that number, figure in your interest rate and the term/length of the loan, and tell you what price home you can afford.
Another method they often use is called the debt rule, which determines the total housing expense. The total housing expense is the sum of the monthly housing expense and all other debts that you borrower has, including car payments, credit cards, student loans, etc. Typically speaking, this cannot exceed 36% of your income, or else they are likely to deny your loan application.
So, add up all of your monthly payments towards the other debt, figure out the monthly mortgage payment on the home you want to buy, and see if it all adds up to less or more than 36% of your documentable monthly income.
indexFinally, some lenders simply use the down payment rule. These banks have a set down payment percentage that is not negotiable, so if they require a 20% down payment, and you have $20,000, they will only approve you for a $100,000 or less mortgage.
Many lenders will calculate all three of these values and compare them to determine what size loan they are willing to give you, so it’s best if you calculate all three before meeting with them so there aren’t any surprises.
Keep in mind, though, that your credit score and past credit payment history also weigh into the decision, so if you have a bad credit report, it’s likely that they’ll deny you even if you have the income to support your application.
Knowing what you can truly afford (and what you can’t) can save you a lot of headaches and time in the home buying process!

How To Create a Study Room For Your Young Scholars

Written By: Jaime Osborn - Sep• 25•13

Creating a productive and inviting study space for your children doesn’t have to be an enormous undertaking. In fact, you could finish creating your kid’s study space in less than a weekend. Consider a few essential suggestions to make sure your study room is as effective and useful as possible for your children so they get the most out of their study time.

Organized Space

room 1Use the study room as a study room. Keep all toys, televisions, music players, and any other distractions out of this space. You want your child to be able to concentrate on what s/he is learning without having attention diverted by other activities. When planning the room or space, maintain a level of privacy for your children, while remaining easy to monitor. Stress the importance of a clutter free and neat space with your children. Kids can’t effectively learn when surrounded by a distracting mess.

Light the Path

2010-09-minimalist-clean-kids-study-room-designVariation in lighting is important depending on the level of attention and energy your children require while studying. Soft lighting is recommended for reading or quiet time while bright, natural light is ideal for projects requiring higher levels of alertness, such as science and math. If more than one child uses the same study room, make sure there is plenty of space for everyone to spread out comfortably. Space also ensures privacy for children that are prone to playing or distracting their siblings or friends.

A Fun Experience

A study room doesn’t have to feel like a home version of your child’s classroom either. Make the space warm and inviting so that your children actually want to spend time in there. Paint a wall or a table with chalkboard paint to decrease the need for scrap paper. Take your children on a shopping trip to pick up some supplies like markers, notebooks, and craft supplies for their new study room. Although you want to make your children’s study space as fun as possible, you still want to maintain a learning environment. Keep parental controls on your children’s computers, allowing you to block their access to non-educational websites during study time.

Keep It Comfortable

green-kids-study-room-and-bedroom-layoutChildren can be disadvantaged when in a classroom setting because they are uncomfortable! Think about those hard plastic or wooden chairs and small, cramped desks. Stock your study space with comfortable, cozy pieces of furniture for your children to use. Instead of chairs, try having your kids sit on exercise balls to help keep them focused. Create different stations in your study space for each area of learning. For example, you could have a music corner to practice instruments, or an arts and crafts area for school projects. Decorate your child’s study space in calming colors like green or blue. Hang motivational posters and colorful art on the walls for a little pizazz.

Studying at home shouldn’t feel like another chore or an extension of the school day for your children. Follow these suggestions, and you’ll have a study room that everyone will enjoy!

Selena Marimba is an entrepreneur who writes articles on business management, finances, organization, budgeting, and NonProfitCollegesOnline.com.