Single Family Homes - The No Risk Investment! - Part 15 PROPERTY INSPECTION
Please use this form to inspect property before moving in. Upon move-
out manager will use your completed form for his inspection to determine if you are
entitled to the return of all or a portion of your security deposit. Make note of any
damage, stains, burns or other deficiencies in, on or around the property. Check
walls, floors, windows, screens, light fixtures, sinks, toilets, cabinets,
tub/shower, etc. This completed form must be returned to manager/owner no later
than three days after Rental Agreement date of occupancy.
MASTER BEDROOM
MASTER BATH
BEDROOM #
2
BEDROOM #
3
BEDROOM #
4
BATHROOM #
2
BATHROOM #
3
LIVING ROOM
DINNING ROOM
FAMILY ROOM
KITCHEN
GARAGE
OUTSIDE OF HOUSE
OTHER
______________________ Date _____ ______________________Date _____
Renter Signature Renter Signature
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
===========================================================
Rental Application for
(address)________________________________________
Name______________________ Phone_______________ Work
Phone_____________
_
Social Driver's Date of
Security No.______________ Lic. No._______________ Birth_______________
_
Present
Address________________________________________________________
_
How long at this
address?______ Rent $______ Reason for moving_____________________
_
Owner/Manager___________________________________
Phone__________________
Previous
Address________________________________________________________
How long at this address?______ Rent $______ Reason for moving___________
Owner/Manager___________________________________
Phone__________________
Name and relationship of every person to live with you, even if only temporarily
(include ages of minors):
Any pets?_______ Describe_____________________________
_
Waterbed?______
_
Present Occupation_____________ Employer_____________________
_
Phone___________
_
How long with this employer?___________
_
Supervisor______________________ Phone___________
_
Previous Occupation_____________ Employer_____________________
_
Phone___________
_
How long with this employer?___________
_
Supervisor______________________ Phone___________
_
Current Gross Income Per Month (before deductions) $___________________
_
List sources of income (other than present employment listed above)
Savings
Account: Bank______________ Branch______________ Acct.
No._____________
_
Checking
Account: Bank______________ Branch______________ Acct.
No._____________
_
Major Credit
Card__________________ Acct. No._____________________
_
Expires_________
_
Credit
Reference_____________ Acct. No._________ Bal. Owed______ Mo.
Pmt._____
_
Credit
Reference_____________ Acct. No._________ Bal. Owed______ Mo.
Pmt._____
_
Have you:
ever filed bankruptcy?_________ ever been evicted?_________ or ever been
convicted of a felony?______ Explain any "yes" answers on back.
Vehicle(s)
Make(s)____________ Model(s)________ Year(s)________ License(s)________
_
Personal Reference________________ Address____________________
_
Phone___________
_
Contact in Emergency________________ Address____________________
_
Phone___________
_
I declare that the statements above are true and correct. I authorize verification of
my references and credit as they relate to my tenancy AND to future rent
collections.
Date_______________
_
Signed____________________________________________
_
Verified:
SSN____DL/ID____CurTen____Prev____Credit___Inc___Refs___By___
_
(The application above is from Leigh Robinson’s Web page www.landlording.com )
=========================================================
APPLICATION DEPOSIT RECEIPT
This deposit of $______________ is refundable upon the following conditions:
1. Prospective tenant is not approved.
2. If approved it may be applied to rent.
If the applicant cancels after landlord/manager has taken the time, expense and
trouble to check credit, deposit is NOT refunded.
Applicant ____________________________________
Rental Manager _______________________________
Refund of application deposit will be mailed within five days of the date of
application if applicant is not accepted as renter. Refunded deposit in no way
indicates that applicant is not qualified as renter
================================================
Instead of running a credit check with a local reporting service you may
want to try using the Internet. Go to infotel.net and you will find that among the
services they offer is a "Tenant Report". If you have suspicions about an applicant
you might even check criminal-records.com. Just to spice things up lets end this
chapter with a horror story. It is a good reminder that you should always do a little
checking on prospective tenants. All con men seem like "nice enough guys".
Good Internet sites for landlords can be found at:
www.Ezlandlording.com
www.MrLandlord.com
10-14
Eleven
Financing Prowess
Let it not be said that trying to get the best possible financing can’t be a
daunting task. But you know what? A little knowledge can go a long way in
improving your ability to make something good out of what one might otherwise
consider an overwhelming situation.
What we are talking about here are numbers. Numbers will tell you
powerful things if you will only learn what to listen for. Better yet, it is important
to understand what you want to hear from numbers. That way you will be able to
create the dialog that you most want to have with numbers. What I mean is that if
you know what you are looking for you have a path to follow. You will recognize
a good situation when it appears. Simply put; if you know what you can afford
you will have a point of reference. Anything less than that falls below that which
has the potential to a good deal.
Let’s face it, when you purchase something using credit, you must be able to
carry that debt comfortably. Considering we must make monthly payments when
financing, monthly payments become the denominator. Yes, we’re all accustomed
to hearing about and thinking about “monthly payments”. That is, after all, the
end result. What we are proposing you do is look at the path leading up to how
your monthly payment is established.
Once you begin looking at the scenario from the viewpoint of how you can
choose the numbers that most greatly benefit your monetary objective, you begin
to take control.
When looking for financing you’re going to be working with a lender of
some kind. There are different choices regarding lenders that you must be aware
of. This is the first step in creating the path to favorable numbers. If you were to
go to your local bank for a loan without doing some research first, you would be
reducing your opportunities.
The reason for this is that a bank often has a very limited amount of loan
programs to offer. They are funding these loans themselves. It pretty much boils
down to “what you see is what you get”. To add insult to injury, you’re may be
dealing with someone who has a limited knowledge of real estate financing except
for the policies of that particular financial institution.
When you are searching for financing you must explore all of you
opportunities. Banks, credit unions, mortgage bankers and mortgage brokers.
Banks and mortgage bankers both loan their own money, although at sometime in
the future they will probably sell your loan to a large mortgage buying company.
Mortgage brokers have access to scores of lenders. They are merely the
middlemen between you and the lender. They can search through 10 to 50
available loan programs to find the one that best suits your needs. An aggressive
mortgage broker may be able to find you a loan when most other sources of real
estate money fail.
Yes, fees can be higher when dealing with a broker. The question is, “Is the
deal worth the extra cost?” If the broker is the only one that can find the funds that
will make your purchase work, then a little extra in costs may be well worth it.
You must work at getting the best real estate loan for your situation.
Organize your needs and call a number of banks, mortgage bankers and brokers.
(In many states licensing is different for mortgage bankers and brokers and they
must identify their type of license in any advertising.) Explain what you need and
ask what the loan will cost in interest, fees, points, closing costs, etc. Then
compare those numbers and choose the one that provides the most value.
We once used a bank to refinance a loan, which we had through a different
lender. It was a good situation because the bank funded their own loans and offered
much lower closing costs than their competitors, while also offering the same low
rate. They capped their closing costs at $1,550.00 while charging no points. For the
most part though I usually deal with a different kind of lender.
Points
One thing that can be a challenge at first is understanding all the different
terminology and fees. Points are also referred to as “loan origination fee”,
“discount” and “buy down”. In some instances you may be required to pay both
points and a loan origination fee. Lenders try to nickel and dime us so they can
make the deal more lucrative for themselves.
In some cases a ‘point” and an “origination fee” can be two different things.
It’s important to understand the difference because with a little bit of knowledge
you can decipher the significance. Always ask for a detailed explanation of all
costs and fees.
From now on, consider a point as prepaid interest. Consider an origination
fee as money to line the lender’s pocket. What’s the difference you’re wondering?
A point lowers the interest rate percentage you are required to pay. For example,
let’s say you were applying for a loan of $100,000. It’s a 30-year, 8% fixed rate
mortgage. If you were to pay a 1% “point” up front, you would be paying 1% of
your loan amount or $1,000. This would lower your percentage rate by about a ¼
% making the rate 7 ¾%, thus lowering your payment.
The significance would only be beneficial if you were to live in your house
for many years. A loan origination fee on the other hand is basically money out the
window with no benefit to you at all. If your loan requires points, ask the
representative if there is an origination fee on top of that. Loan origination fees are
usually around 1%.
We are happy to pay the mortgage broker for his service, but we don’t want
to over pay.
Private Mortgage Insurance (PMI)
Private mortgage insurance (PMI) protects the lender against default on the
loan. It protects the lender in case there’s a default on the mortgage.
When you purchase a property and you use less than a 20% down payment,
private mortgage insurance is required. The purchase price of PMI is usually added
to your monthly payment. On a $100,000 conventional loan, that can be as much as
$60.00 (or more) a month extra you’ll have to pay.
If you are applying for a FHA loan, the monthly amount on a $100,000 loan
is closer to $40.00. The reason for this is the FHA requires a portion of the PMI be
paid up front. They require around 1% up front at the time of purchase. Many
borrowers just add that fee to the amount of their loan. There are pros and cons in
the choices you have when considering PMI.
On a conventional mortgage, once you have 20% equity in the property, you
simply contact the lender and ask them to cancel the PMI. They usually require an
appraisal that you must pay for. Some lenders are very reluctant to give up that
extra monthly payment and you must be very persistent to get the insurance
canceled. Just keep after them! This way your monthly requirement to pay for
PMI will eventually terminated.
You can determine when you’re getting close to a 20% equity position by
following house sales in your neighborhood. You can also go to one of the Internet
sites we have listed in this manual. They can give you a ballpark value figure.
Some also provide a listing of recent sales in your neighborhood.
Once the lender has been contacted, they may have an appraisal done to
determine the amount of equity or just do a simple computer check. Either way,
once 20% equity in the property has been established, you are usually no longer
required to pay monthly mortgage insurance payments. But you must tell the
lender or they will probably continue charging the monthly fee!
Not so with a FHA mortgage. Mortgage insurance can never be terminated
from a FHA mortgage (although there is some talk of changing this). If this is the
case, why would anyone choose such a mortgage you’re wondering? They’re
easier to qualify for. Sometimes the rates are lower. Many people have a hard
enough time qualifying for a loan as it is. With less stringent guidelines, it’s often
the only loan people can qualify for.
The down payment required by FHA is as low as 2.75. On a $100,000
mortgage that’s often going to be less than $4,000 out of pocket up front for a FHA
loan and that includes closing costs!
Another reason is the future expectation of refinancing. Let’s say you
believe interest rates are going to go down in the near future. That could be in a
few months or a few years. FHA adjustable rate mortgages (ARM) can be a very
attractive choice. This document and accompanying materials are designed to provide authoritative information in regard to the subject matter covered in it. It is for illustration purposes only and presented with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. |
