New York Real Estate

If you are looking to buy a new home or property, mortgages are in the forefront of your mind. Mortgages are long-term loans, usually from a bank or a mortgage broker. Mortgages are repaid over long periods of time, because these loans are for very large sums of money. There are many kinds of mortgages available to buyers, each with its own risks and benefits.

Fixed-rate mortgages are most common. These mortgages keep the same interest rate over the course of the loan, and monthly payments stay the same. The normal period to pay off these mortgages is 15 or 30 years. These mortgages are particularly affordable when buyers can lock in to low interest rates.

Adjustable-rate mortgages usually start with lower interest rates than fixed-rate loans. This appeals to buyers during the initial loan period. However, these rates may rise over time, and buyers may end up paying more on these mortgages than originally anticipated. Typical adjustable-rate mortgages include 3/1, 5/1, 7/1, and 10/1, and they have fixed rates for the first three, five, seven, or 10 years, respectively. After that, the mortgages’ interest rates adjust annually.

Adjustable-rate mortgages do come with caps. This prevents the adjusted interest rates from going too high. Research the caps before deciding on these types of mortgages.

Another popular form of adjustable-rate mortgages is the interest-only loan. For a certain period of time, borrowers pay only the interest on these mortgages. After that time, the interest is adjusted. However, during the interest-only period, buyers can pay down some of the principal on these mortgages as well. Normally, interest-only mortgages have initial low rates.

Any of these mortgages has its risks. Here are a few examples. Some borrowers are unable to afford fixed-rate mortgages, particularly during time periods when interest rates are high. Adjustable-rate mortgages may experience significant rises in interest rates over the life of the loan. This can startle borrowers, as payments increase sharply. These factors are important to consider when you are shopping for mortgages.

If you don’t plan to keep the new property for a long time, adjustable-rate mortgages might be your best bet, since you might sell before the rates go up. On the other hand, if you hope to keep the property long-term, fixed-rate mortgages might make more sense.

A banker or broker can help you decide which mortgages are best for you depending on your needs and financial situation.

By: Jeff Lakie

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As we speak Residential Property, financial institutions, stock markets and bank’s interest rates are offering very poor returns & even poorer security for investors. Currently Commercial Property is offering the best returns to investors and also offering the most security for investors.

This is a general guide to Commercial Property in New Zealand for would be investors.

Firstly if you are looking to invest in Commercial Property it is important to identify what your investment goals are. These may range from short term capital gains by buying and selling to long term cash cow investment and even negative investments that are deliberate tax deductible. Once you have established what your goals are you can then determine the type of commercial property you should pursue.

The age old adages of high risk = high return and low risk = low return are simplistic ways to differentiate between the types of commercial property investments available. That being if you are looking for a long term investment with capital growth you will most likely look at low risk investments such as properties with banks, petrol stations and other similar solid tenants. However if you are looking for short term capital gains most buyers will look to either purchase a property at a sharp price for resale, add – value to a property for resale or acquire a vacant property with the intent to tenant it for resale as well as other capital gains vehicles.

Once you have identified what type of investment you wish to pursue the next step is to identify what areas you wish to invest in. I recommend that investors should predominantly invest in areas they are familiar with (so that they can readily view the property and are also able to readily assess the local market), however if investors have valuable and reliable investment advice to call upon then this rule need not apply. However be wary of individuals touting themselves as commercial property experts, whilst many may claim they are the majority without doubt are not.

Next is how you plan / strategise to purchase the property. If you are looking to secure any property at a sharp price never underestimate the power of an unconditional offer. An unconditional offer can be compared to flashing a briefcase of money in front of the vendor and more often than not tempts an owner into accepting a previously unacceptable price.

Once you have purchased a property it is important that you have a clear plan and goals that you wish to achieve. As Commercial Property is generally a business investment it is important to treat it as such, ie if the numbers stack up then a vendor should seriously consider selling and reinvesting that capital in another project. Never underestimate the value of making a smaller gain right now and reinvesting the money into another project.

A clear exit strategy is a central element for business decisions in general and no more so than in Commercial Property. Too often Commercial Property vendors think with their emotions rather than with their heads in their decision making. Commercial Property is a business investment and I cannot stress the importance of seriously considering offers if they stack up.

In summary Commercial Property is at present one of, if not the best investment vehicle available in New Zealand. My best advice for would be investors is to align yourself with an individual experienced / knowledgeable in Commercial Property. The value of having one trusted agent / broker or adviser will be immeasurable over the long term. Repeat business will also ensure that you also get offered the best properties first.

By: Benjamin Jones

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