Put Money to Work & buy your Home Now

Galaxy Tower Long Beach
photo: Amir Zee, 2013  

Look around you. Your parent, family members and friends all made money by buying real estate.

Simply, real estate is a good investment. Especially when is your primary resident. Here are some of the benefits:

• Interest deduction: Did you know you can deduct the interest you paid on your mortgage from your income. Therefore you pay less taxes. 

• Force Saving:In another word you are investing and saving the same time.

• Leverage: With just 10% down ($40,000) to purchase a home value at $400,000. And annual ROR (Rate of Return) of let’s say 5% is equal $20,000. Leverage is doing more with less. Please note as old saying says; timing is everything.The real estate market has been corrected and 2013 is beginning of appreciation cycle.

• Capital gain relief: if your primary home appreciate “single $250,000 and couple $500,000 “you will not pay any capital gain. Anything over this amount you will pay capital gain. How much? Depend on your tax bracket and other factors. Anywhere from 15% to 30% approximately.

 The ROR (rate of return) of real estate from 1978 till 2010 is 9.1% according to Clarion Partner September 2011 Report. When looking at a more recent period, 2001-2010 which includes both boom and bust periods.  The real estate delivered strong annualized returns of 7.4%, which is higher than stock returns (1.4% for the S&P 500 Index) and bond returns (5.8% for the Barclays Capital Bond Index).

If you decide to buy a home, Please work with professional real estate agent as the process and paper works is tremendously challenging. 

Six years after the sub-prime mortgage meltdown, What Now?

Tamarindo, Costa Rica by Amir Zee

Six years after the sub-prime mortgage meltdown, banks remain tight even with solid borrowers.

First-time buyers and self-employed borrowers must jump through especially complex hoops. Lenders say their cautions stems in part from uncertainty over a tougher new regulatory environment, along with unrelenting demands from government-sponsored mortgage buyers that the banks repurchase soured loans. Salaried professionals with credit scores in the high 700s have the best shot at being approved for a mortgage loan in this environment, along with borrowers who have never missed a payment and want to refinance.  

However, even these borrowers may face stiff documentation demands, including having to explain any bank deposit other than a regular paycheck.