Basic info...no commercials!
Just to briefly explain how it works.
No commercials????.
In the US, depending on your credit score, you can finance or refinance your home up to as much as 107% of it's APPRAISED value. I stress that point because let's say you purchased the home five years ago for $200,000 At that point you put down 10% and financed $180,000. If that home was in Florida, it probably appreciated an average of 12-26% each year, depending on what part of Florida. By the way, it does not have to be a primary residence to refinance. Let's use 10% conservatively.
$200,000 * 1.10 * 1.10 * 1.10 * 1.10* 1.10 = $322,102.
If initially you took out a 30 year fixed, of the $180,000 you would still owe approximately $176,000. If the house is appraised at the $322,102-$176,000, you have $146,102 in equity that you can use to buy a place down here. That can be a Home Equity Line of Credit (HELOC) based on prime + or Libor, or you can refinance the whole amount of the $322,102.
Quick definition here:HELOC-most programs have you paying interest only on the outstanding balance. Let's say you took that $146,102 as a home equity line of credit. You purchase here and need to put down 20% on a $130,000 condo, or $26,000. You only pay interest on the $26,000/12 for your monthly payment. Three months later, you write a check for another $26,000, so now you pay interest on the $52,000....only the money you really owe yourself, the funds outstanding. If at the end of the year your company pays you a bonus of $ 20,000, and you pay yourself back, you will only pay interest on the $32,000 still outstanding, but, you can write a check now for (146,102-32,000) or $114,102.
What are the advantages besides the obvious of paying 6-10% rather than the 16-36%!
1. There are programs out there with rates that start as low as 1%! Right now for financing and buying properties here, that has been the most popular?.not if financed here!:ermm:
2. You get higher loan to values on your properties and based on appraised values?not if financed here!:ermm:
3. Interest and real estate taxes are deductible on your taxes. If an investment property, you can also deduct the maintenance, and depreciate the property over 18 years?.not if financed here!:ermm:
4. If you rent it out in US dollars here and open an account in US dollars??..:ermm:
5. Endless variety of programs to fit any borrowers needs ( both over the age of 62? Know what a reverse mortgage is?)?.not if financed here!.:ermm:
6. The whole transaction is done in US dollars. You always will k now what that condo cost you!.....not if financed here!:ermm:
This is just a quick run down of some of the reasons and options. Of course each borrower is different, with different financial goals, everything from purchasing land in Samana for investment to shopping centers in Bavaro. A house in Sosua or Cabarette! This country is first growing and Real Estate right now is definitley hot with prices increasing on a monthly basis!
If there is a particular scenario you would like to discuss, please email me. If you prefer, I am located here in the capital.
Hope I stayed within the guidelines! :bored:
JRR :surprised