Mortgage Broker Modesto California

Depreciation of Real Estate - Depreciation of Real Estate is the loss of value of an asset or building over time due to wear and tear, physical deterioration and overall age of the asset or building. Depreciation can typically only be applied to the building and not to the land, since land does not wear out over time.

Property can also depreciate due to neglect or just ordinary wear and tear. An example of this would be if you had a leak in your plumbing and you did not do anything about it (or maybe knew nothing about it), only to find that the entire inside of the home was covered in black mold. This could cause your home to lose value or to depreciate in value. This would be considered physical depreciation. Another form of depreciation is functional depreciation. An example of this would be having an outdated house in an area of all newer homes that only has 1 bathroom with a shower and no tub and all the other homes have 2+ bathrooms with shower and tub.

Depreciation is also typically treated as an expense and figured as a line item on an income statement.

Residential property as depreciated over a 27 year period, while commercial properties can be depreciated over various different terms.

Recission - Recission involved in a mortgage transaction is a right the borrower has. It is the right established by law that gives a homeowner the opportunity to cancel a mortgage contract within three days after it has been signed, if the mortgage is secured by the borrowers primary home.

The right of recission was implemented to have you, the customer's best interest in mind. If you are thinking about doing a cash out refinance and will need the money by a certain date, then you should plan accordingly.

The right of recission does not exist on refinances of non-owner occupied properties.

The right of recission does not exist in a purchase transaction. If you are purchasing a home, the transaction will fund the same day as the closing.

Chapter 7 BK - Often times people are so far in debt that they can never repay their debt. At this point the best solution may be to file a Chapter 7 Bankruptcy. A Chapter 7 is very detrimental to your credit rating, but you are typically out of Bankruptcy in 6 months and you dont have to repay any debt. However the disadvantage is that this will show up on your credit report for 10 years from the date of filing your BK. With creditors starting to tighten their credit requirements, and you will be limited to certain types financing.

Although Chapter 7 bankruptcy will severely damage your credit rating, you need to determine what's worse - killing your credit with constant late payments and high debt, or by filing chapter 7 bankruptcy and getting rid of your debt.

Many consumers can still obtain home loans after a chapter 7 discharge.

Chapter 7 bankruptcy isn't intended to let you rack up debt and then get out of it without having to repay anything. It is there as an option to give you a fresh start. Unfortunately, many people don't see it that way, and get trapped in the cycle of racking up debt and then filing for bankruptcy. However, you can only file once every 7 years, so be sure that if this is your only option, you use it as a stepping stone to move on to a better financial future.

Income Property - Real estate developed or bought for the purposes of generating income. American Fidelity Mortgage specializes in helping investors determine if an investment is a viable one for their situation. Call us today at (866)-429-REFI ext 707 for an informative consultation.

The capitilazation rate is an important figure when determining whether to buy an income property. The higher the Capitilization rate, the more profitable the purchase should be.

Income property is property that is either bought to fix up and sell for a profit or property that is bought to rent out to a renter to generate income and grow equity through real estate. Real estate investing can be very prosperous however you need to make sure that you do your research and buy properties that will allow you to maximize your investment.

The capitalization rate of income property is basically the return on the sales price. Higher is best and is calculated by dividing the Net Operating Income or NOI by the sales price.