The Anna Maria Island Sun Newspaper

Vol. 14 No. 4 - November 20, 2013

REAL ESTATE

Explore creative financing options

You know the old expression, "There is more than one way to skin a cat," used when you want to make the point that there is always more than one way to get something accomplished. Financing real estate doesn’t always have to be done in the conventional way; you would be surprised at the options.

Having parents is a wonderful thing, not only for the red fire engine and Barbie dolls on Christmas morning, but they also come in handy for first time homeowners. With real estate prices and interest rates both on the move up, first time buyers are faced with either purchasing less expensive homes or adding more cash into the pot. Parents can help close the gap for first time buyers by gifting money to their children.

Financial experts recommend that it is best to gift funds rather than loan the funds if you want to help out the kids. Lenders view a loan as another financial burden that affects a borrower’s ability to make monthly payments, possibly disqualifying them from financing. A gift on the other hand is acceptable for a down payment as long as the homeowners provide generally at least 5 percent of the loan amount. In addition gift money will be recognized by lenders only on a primary residence.

In 2012, the percentage of first time home buyers who received a gift from family or friends towards the purchase of their home was 24 percent, up from 22 percent in 2009.

It’s also not uncommon for sellers to hold the mortgage for buyers for a specified number of years at an agreed-upon interest rate. This practice is more popular when sellers are having a tough time selling as an inducement to buyers. With the market improving and a shortage of homes for sale it will be harder to find homeowners who want to do this but there could still be hard to sell properties available that would lend themselves to this kind of financing.

Wealthy buyers always have more options when buying real estate and one of the creative methods that has emerged in recent years are loans secured with high value assets like art, investment accounts, even private jets and gold bars. These loans can be approved in as little as 30 days and do not require a home appraisal, which frequently trips up real estate transactions. However, these types of loans will require reappraisals annually on the collateral and investment portfolios are subject to market losses that may require the lender to add assets into the account.

Finally, many affluent borrowers are opting for interest-only mortgages which got a lot of low end buyers in trouble during the financial crisis. High-end borrowers can save 30 percent to 40 percent on monthly mortgage payments on jumbo loans if they qualify for interest-only mortgages. Some financial institutions are reporting that interest-only jumbo loans are making up 15 percent to 20 percent of the market. These loans are especially popular with buyers who plan on owning the property for less than 10 years since interest-only payments are usually permitted only for the first 10 years of the loan.

So, there you have it, if you want to get creative financing, the best thing to do is have parents with money or own a Picasso. For the rest of us, looking outside the box for financing is worth the effort and you don’t need to abuse a poor cat.

Real Estate Transactions
Real estate transfers as of May 2013
Sponsored by Alan Galletto Island Real Estate

Sold Date | List Price | Sold Price | Address | Provision | Property Style

Anna Maria

09/06/2013 499,900 465,000 830 North Shore Dr 1467 3 Br/2 Ba SFR
09/20/2013 529,000 490,000 313 Magnolia Ave 1424 73x114 2 Br/2.5 Ba SFR
09/20/2013 799,900 750,000 115 Willow Ave 2140 50x110 3 Br/3 Ba SFR
09/20/2013 750,000 750,000 300 Shore Dr 1680 4 Br/2 Ba SFR
09/23/2013 875,000 800,000 511 South Dr # A 2742 158x130 5 Br/3 Ba SFR
09/23/2013 430,000 445,000 511 Spring Ave 1093 52x145 2 Br/2 Ba SFR
09/24/2013 634,900 600,000 113 Pelican Dr 1008 91x100 2 Br/2 Ba SFR
09/24/2013 720,000 677,500 771 Jacaranda Rd 1586 52x98 3 Br/2 Ba SFR 09/25/2013 594,0 00 540,000 215 Palm Ave 1040 52x110 3 Br/2 Ba SFR 09/06/2013 369,900 360,000 812 Jacaranda Rd 61x108 Vac.
09/20/2013 1,835,000 1,865,000 207 - 215 Magnolia Ave 260x110 Vac.
09/26/2013 500,000 500,000 207 Magnolia 52x110 Vac.
09/26/2013 500,000 500,000 Magnolia 52x110 Vac.

Bradenton Beach

09/20/2013 434,900 405,000 2113 Avenue C 1280 50x100 3 Br/1 Ba SFR
09/05/2013 290,000 265,000 2302 Avenue B 2145 50x100 3 Br/2 Ba SFR, Short Sale
09/06/2013 395,000 380,000 1325 Gulf N Dr # 166 1392 2 Br/2 Ba Condo
09/06/2013 799,999 799,000 2309 Avenue C # Both 3326 6 Br/4 Ba Villa
09/06/2013 799,999 800,000 2309 Avenue C # Both 3326 102x108 Inc.
09/23/2013 269,900 280,000 102 1st N St 2447 50x106 Inc., Bank Owned

Holmes Beach

09/06/2013 475,000 405,000 415 Bay Palms Dr 1746 80x100 3 Br/2 Ba SFR
09/12/2013 2,174,000 1,900,000 534 70th St 3511 109 x 119 4 Br/4.5 Ba SFR
09/12/2013 625,000 575,000 207 69th St # B 1200 70x110 3 Br/2 Ba SFR
09/13/2013 450,000 355,000 6818 Palm Dr # A,B 2042 3 Br/2.5 Ba SFR
09/20/2013 519,000 495,000 4110 6th Ave 1500 3 Br/3 Ba SFR
09/20/2013 1,695,000 1,350,000 204 66th St 3400 29x105 6 Br/5.5 Ba SFR
09/26/2013 2,499,000 2,170,000 103 49th St 2431 113x150 3 Br/2.5 Ba SFR
09/26/2013 649,500 615,000 300 67th St 1450 50 x 100 3 Br/2 Ba SFR
09/30/2013 579,000 552,500 215 66th St 1114 54x105 3 Br/2 Ba SFR
09/30/2013 449,000 438,000 231 64th St 1206 3 Br/2 Ba SFR
09/30/2013 719,000 650,000 5605 Carissa St # South 1500 76x117 3 Br/2 Ba SFR
09/02/2013 249,000 225,000 3601 East Bay Dr # 202 1035 2 Br/2 Ba Condo
09/18/2013 1,000,000 1,000,000 6006 Gulf Dr # 201 2010 3 Br/2 Ba Condo
09/20/2013 325,000 300,000 6200 Flotilla Dr # 261 1426 2 Br/2 Ba Condo
09/30/2013 379,900 379,900 6005 Gulf Dr # 219 1011 2 Br/2 Ba Condo
09/30/2013 529,900 500,000 7000 Gulf Dr # 107 1259 2 Br/2 Ba Condo
09/30/2013 317,500 307,500 5808 Gulf Dr # 104 1198 2 Br/2 Ba Condo
09/30/2013 374,900 360,000 3311 Gulf Dr # 1 1331 2 Br/2 Ba Condo
09/23/2013 279,000 265,000 3100 Gulf Dr # 5 884 2 Br/2 Ba TH
09/17/2013 299,900 287,500 426 63rd St 1216 2 Br/2 Ba 1/2 Dup., Bank Owned
09/25/2013 475,000 425,000 6504 Marina Dr # A 1791 104x100 Inc.

Source: Manatee County Property Appraiser’s Office


AMISUN ~ The Island's Award-Winning Newspaper