Today we had many topics that were discussed based on questions from Students on the Real Estate Graduate Call. We discussed the answers to those questions collectively.
Section 8 Renting:
We talked about that there are pro’s and con’s to buying a investment property with the intent to rent it out using the government Section 8 program. One can talk to the department in your area that governs this program. Usually this is handled at the county government level. They can give you the breakdown of how much rent is paid to you as a owner of a Section 8 approved rental, based on bedroom, bath, and location.
Some of these rents are just as strong as rents collected on the open rental market. The property does have to be up to code safety wise for the Section 8 program. An inspector will approve your rental first from Section 8. Then those individuals that are qualified for the program will be allowed to rent from you.
The big plus is that the monthly rent is almost guaranteed because is is being facilitated by the Section 8 program. Also, if the renter is not abiding by the rules they can be kicked out of the program which would result in them having to pay rents somewhere else at a higher rate that is not supplemented from the Section 8 program.
Look at all aspects of the pro’s and con’s of renting through the Section 8 program.
Another article on mortgages we discussed this week follows.
Mortgages vary depending on each State:
NEW YORK (CNNMoney)
Your credit score isn’t the only thing determining whether or not you get a good rate on your mortgage. Where you live can also have a big impact.
In fact, interest rates can vary dramatically from state-to-state.
And borrowers in Rhode Island are benefiting the most, according to a survey by loan information sites GoBankingRates and RateWatch. Borrowers there paid an average rate of just 3.4% on mortgages in July, about 0.35 percentage points below the national average.
Nebraska’s residents weren’t so lucky: They paid an average of 4.1%, the highest rate in the nation
Over 30 years, that seemingly tiny 0.7 percentage-point difference means that a $200,000, 30-year loan would eventually cost $28,800 more in Nebraska than it would in Rhode Island.
So what gives? On a national level, mortgage rates move in tandem with U.S. bond yields. Yet, several local factors, like property values, competition and risk, can impact rates as well.
In areas where the economy is struggling and fewer people have jobs, lenders need to lower rates in order to attract borrowers. If the economy is booming, then they can afford to bump rates higher.
Borrowers also tend to see lower rates in places where home prices are higher. That’s because lenders incur many fixed, transaction costs. It can be just as expensive to process a $100,000 mortgage as a $300,000 one so lenders make up for that by charging higher rates for the smaller loans.
Risk is also a factor. The lower the average credit score in an area, the higher the rates. Also, states that make it easier to foreclose on delinquent buyers tend to be cheaper, according to James Zussman, a business development associate for RateWatch.
No comments yet.