Creating success when investing in real estate...

The title doesn't read, Success when THINKING ABOUT investing in real estate.

There's a reason for that.

On this Sunday's show we will be discussing the secret to success when investing in real estate, and here, I will share the most important item.

TAKE ACTION

That's right, taking action is the first step to becoming a real estate investor and generating success and wealth.

It seems a little silly, I suppose, but I watch too many people sit on the side lines and think, and think, and think, and think some more about an investment they want to make, then before they're done thinking, someone else bought it up and they have to start over.

Easy action steps;
Write an offer!

Every offer can be made with a clause to give you XX amount of days to change your mind. Make the offer to get the wheels in motion. Maybe your offer is the chance to negotiate something special that has stopped you from getting moving in the past. This is your opportunity to learn everything you can about that investment, and then make your final decission.

OK, 10 days later you decide to back out....OKAY. Did you lose? Nope.

Taking action to get the ball rolling. You will be amazed at the amount of real estate investing education you will learn just from taking this first step.

Tune in this Sunday at 6pm on KRLA AM-870 or online at www.StraightTalkRE.com and click show audio to listen. We will uncover the secrets to successful investing.

~ CHUCK

Beware of Interest Rate Advertisers...

All too many times when I'm reading financial news online, I see ads for mortgage loans. What shocks me is the misleading ads that can suck home owners into a bad loan or at best a bait and switch to a poor loan. What's more is these ads appear on trusted financial websites where professionals go to get their information.

How do you know if what is being advertised is real?

I guess you really don't unless you are on this side of the business. Now true, that the rates advertised are obtainable, and more, the payments noted are reachable true payments, what's misleading is the type of loan you will be getting and the cost that you will pay to reach that advertised rate.

It wasn't until recently that I advertised an interest rate, however, only to my existing network of home owners who have requested information from me in the past. Not on my blog site, nor on the internet, nor newspaper do my 'advertised' rates show up.

Here's a sample internet ad I see today:
Refinance and Save $1,000S
$150,000 Mortgage for $483/month. Compare up to 4 free quotes.

So, what's wrong with this ad?

No APR, No Rate, No Cost, No Qualifying guidelines mentioned.

You see, it's law, that you have to note at minimum the APR when advertising a rate or payment. It's not in the above ad.

So, what is this ad trying to sell you?

This is an option arm loan program. You see, if you use a financial calculator, you'll determine that the rate you would have to get to obtain a $483 payment on $150,000 loan is 1%. The option arm has an actual rate made up of a margin + index. Generally the index is the 12 Month Treasury Average currently at 4.788% (adjusts every month). The margin on these loans typically run 2.65% - 3.5%. Add the two together to get the actual interest rate (3.5% + 4.788% = 8.288%).

This ad should read:
Refinance and Save $1,000S
$150,000 Mortgage for $483/month. Compare up to 4 free quotes.
8.288% monthly adjustable rate, payment based on 1% payment rate APR XX.XX%. Your principal loan balance will grow due to negative amortization if you make the payment advertised.

THAT would be a real ad!

Don't be fooled by advertisments. Work with those who have a reputation for doing the right thing, for the customer, every time. That's integrity.

If you get an ad or see an ad and want the real scoop, visit us online at www.StraightTalkRE.com and click the ask an off air question. Give us the details and we'll give you the scoop!

~ CHUCK

Fed Rate Cut, Doesn't Mean Rates Will Be Down

The fed's cut rates again today. Last month when they cut rates, mortgage rates went up, as they generally do when the fed cuts. So, what does the rate cut mean, and why do mortgage loan rates move in the opposite direction?

It's a complete myth that rates tick down when the fed's cut. Here's why...

The fed's rate is the rate at which banks borrower money. Sure cheaper for the bank, so why not cheaper for the home owner? It's important to understand that mortgage interest rates are NOT tied to the indices that the fed's rate is tied to, other than Home Equity Lines of Credit. HELOCS will move when the fed's adjust rates.

30 year fixed mortgages are reactive more closely to the 10 year tresury yield. Which, is not tied to the fed's. It's economic data that makes the mortgage rates move.

For example, yesterday when the fed's cut rates, mortgage rates got worse mid-afternoon, a lot worse for a one day move. As investors sell off Bonds, the price moves down, raising the yield on bonds, therefor, moving the mortgage rates up.

Today, the stock market 'crashed' so to speak. Investors pull out of the stock market and buy into the bond market for 'safety'. As investors buy into the bonds, the price of the bonds move up (supply and demand) and the yields go down. Mortgage rates closely follow.

Investors were nervous about a future non-rate cut in December and fear of inflation.

Tomorrow is a key day, with non-farm payroll numbers being released. If payrolls are off of expectations we could see even lower rates.

If you are in the process of buying or refinancing, I would suggest being prepared to have your broker lock your loan tomorrow, the second the payroll numbers come out if they are better than expected. If the numbers come in worse than expected, hang tight and lock late in the day or next monday.

If you need any help refinancing or purchasing, I can be reached directly at (818) 876-9661 or online at www.StraightTalkRE.com.

~ Chuck