Expert: Connie Wildasinn-Broker,GRI,Realtor® - 8/7/2010

Question
I checked in one bank and the interest rate is 8% and supposedly that's low according to a lot of people including the bank people.Anyway, you advised me to check in other companies and even a credit union that we have in our city. However, won't that keep lowering my credit score? And the escrow and homeowners' insurance will be added to the payment. Is that good or should I just wait to have enough money for a downpayment for an investment? I really would appreciate it if you could lend me your expertise here. There is that house that I still like with a big lot and good area but is well-overpriced in comparison to the others that have sold in that area. And then there's a new one with many of the things we were looking for(nice 3/2/1 with a good piece of the resaca and is in a very nice neighborhood.) And what resonates in my mind is your advice of never buy an overmarket value property. Well,this is well- underpriced as it is a home where a divorce is taking place. All of the homes are 10 to 20 thousand dollars over in value. And the house is selling for $10  under its market value.It is very well-taken care of and is in a cul-de-sac which is a big plus. Any advice? This house is not so close to convenient places as the other one.What I like about the other one is that it has a very,very big lot and is so centrally located and is so close to schools, stores, convenience stores, etc. The taxes are low too as opposed to the other house whose taxes are double the amount of this house.  Please, please give me some advice.

Answer
Hi Ester... you have a number of question here ... so ...

1. on the loan 'home equity' get the best rate you can with the lowest fees and best pay off options...  take  your credit report with you as you shop... don't allow different lender to run your credit until you commit...then they will insist you have the credit run via their systems... nothing you can do about that...

2. on using that money to buy investments... keep in mind then that you are buying 100% ... be sure the rents make the payments... all inclusive... mortgage, tax, ins, Gardner and any utilities you must carry...

3. I stand my don't buy over priced... but since I am in Calif... I don't have the weird tax issue that I see around the country... crunch your numbers... be sure it works...

4. keep in mind... people live in both areas... so there are tenants for both area... big lot doesn't sell everyone... more amenities do...find something you can offer that perhaps most landlords don't... in my area... dogs (pets) most rentals do not allow... I do and never are wanting for tenants...

Good luck....