Michael Petruccelli asks; What are some of the benefits of having a rental apartment in your home? (part1)

Michael Petruccelli says; Income: In-law units typically rent a bit below other apartments on the market but can still cover much of the mortgage. With some homeowners/landlords it has covered their entire mortgage by renting out the lower half of their house.

Michael Petruccelli asks; What are some of the benefits of having a rental apartment in your home? (part2)

Michael Petruccelli says;  a)Child care: Also known as an “au pair apartment,” it can be rented in exchange for baby-sitting services. b) Health care:  The same applies to nursing care, an increasingly popular option given the high costs of health care facilities combined with an aging population.

Michael Petruccelli asks; What are some of the benefits of having a rental apartment in your home? (part3)

Michael Petruccelli says;  a) Maintenance: Develop a rent deduction for hours worked and you've got an on-site helper. b)  House- and pet-sitting: Even in strict cash-rental arrangements, homeowners say they appreciate having a reliable person to call on to watch their house and animals.

Michael Petruccelli asks;Should you rent out the extra space/room or basement in your home?

Michael Petruccelli says; Reactions to this type of rental can vary widely by community, it has for the most part risen above its undeserved reputation as the neighborhood bad seed, and will only grow more popular as suburban baby boomers age.

Michael Petruccelli asks; What are some of the assets of renting your in-law apartment, guest cottage, converted basement or carriage house?

Michael Petruccelli says; When you install a rental unit, you're setting up a sort of social shock-absorber system, so when families need it, they can use it. Especially divorced single parents, elderly couples, young & even new home buyers, how are they to afford and maintain their houses? Accessory apartments can be the answer.

Michael Petruccelli asks;Should you rent out the extra space/room or basement in your home?

Michael Petruccelli says; Reactions to this type of rental can vary widely by community, it has for the most part risen above its undeserved reputation as the neighborhood bad seed, and will only grow more popular as suburban baby boomers age.

Michael Petruccelli asks; What is a payment change date?

Michael Petruccelli says; The date when a new monthly payment amount takes effect on an adjustable-rate mortgage (ARM) or a graduated-payment mortgage (GPM). Generally, the payment change date occurs in the month immediately after the interest rate adjustment date.

Michael Petruccelli asks; What is a periodic payment cap?

Michael Petruccelli says; For an adjustable-rate mortgage where the interest rate and the minimum payment amount fluctuate independently of one another, this is a limit on the amount that payments can increase or decrease during any one adjustment period.

Michael Petruccelli asks; What is a periodic rate cap?

Michael Petruccelli says; For an adjustable-rate mortgage, a limit on the amount that the interest rate can increase or decrease during any one adjustment period, regardless of how high or low the index might be.

Michael Petruccelli asks; What is personal property?

Michael Petruccelli says; Any property that is not real property.

Michael Petruccelli says; What is PITI?

Michael Petruccelli says; This stands for principal, interest, taxes and insurance. If you have an "impounded" loan, then your monthly payment to the lender includes all of these and probably includes mortgage insurance as well. If you do not have an impounded account, then the lender still calculates this amount and uses it as part of determining your debt-to-income ratio.

Michael Petruccelli says; What is PITI reserves?

Michael Petruccelli says; A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.

Michael Petruccelli asks; What is planned unit development (PUD)?

Michael Petruccelli says; A type of ownership where individuals actually own the building or unit they live in, but common areas are owned jointly with the other members of the development or association. Contrast with condominium, where an individual actually owns the airspace of his unit, but the buildings and common areas are owned jointly with the others in the development or association.

Michael Petruccelli asks; What is a power of attorney?

Michael Petruccelli says; A legal document that authorizes another person to act on one's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.

Michael Petruccelli asks; What is a point?

Michael Petruccelli says; A point is 1 percent of the amount of the mortgage.

Michael Petruccelli asks; What is a prepayment penalty?

Michael Petruccelli says; A fee that may be charged to a borrower who pays off a loan before it is due.

Michael Petruccelli asks; What is a prepayment?

Michael Petruccelli says; Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner's decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized.

Michael Petruccelli asks; What is a pre-approval?

Michael Petruccelli says; A loosely used term which is generally taken to mean that a borrower has completed a loan application and provided debt, income, and savings documentation which an underwriter has reviewed and approved. A pre-approval is usually done at a certain loan amount and making assumptions about what the interest rate will actually be at the time the loan is actually made, as well as estimates for the amount that will be paid for property taxes, insurance and others. A pre-approval applies only to the borrower. Once a property is chosen, it must also meet the underwriting guidelines of the lender. Contrast with pre-qualification.

Michael Petruccelli asks; What is Premium Credits?

Michael Petruccelli says; A credit included in the premium computation that recognizes a reduction in hazard, which makes the account a better risk.

Michael Petruccelli asks; What is a Premium?

Michael Petruccelli says;  The amount of money a policyholder pays for insurance protection. The amount is deemed necessary to pay current losses, to set aside reserves for anticipated losses, and to pay expenses and taxes necessary to operate the company during the time period for which the policies are in force. Premiums allow the company to generate a reasonable profit that reinforces future solvency and contributes to the company's growth. In the case of a reciprocal insurer, the premiums allow the company to offer insurance to new applicants without the need for additional capital contributions.

Michael Petruccelli asks; What is a Policy Term?

Michael Petruccelli says;  The length of time for which a policy is written.

Michael Petruccelli asks; What is pre-qualification?

Michael Petruccelli says; This usually refers to the loan officer's written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.

Michael Petruccelli asks; What is a principal balance?

 Michael Petruccelli says; The outstanding balance of principal on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.

Michael Petruccelli asks; What is principal, interest, taxes, and insurance (PITI)

Michael Petruccelli says; The four components of a monthly mortgage payment on impounded loans. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage

Michael Petruccelli asks; What is private mortgage insurance (MI)?

Michael Petruccelli says; Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require MI for a loan with a loan-to-value (LTV) percentage in excess of 80 percent.

Michael Petruccelli asks; How long does it typically take to find your new home or vacation home?

Michael Petruccelli says; In 2010, the typical Florida buyer viewed 15 homes and searched for 12 weeks, according to Florida Realtors. But in my experience the search can take as little as 2 weeks or easily stretch beyond three months for some in the market.

Michael Petruccelli asks; What are some of the things you as a Realtor can you do to help these buyers on there journey?

Michael Petruccelli says; One of the things you can do is, read what they read, search the internet as a buyer. See what they see. Forewarned is forearmed. Which is funny because that is exactly what the buyer thinks they are doing. This way you have the some of the same information as they have, the good, the bad & the ugly. Enabling you, so that you can appropriately dispel any misconceptions they have from this onslaught of mixed information.

Michael Petruccelli asks; Why won't old real estate sales methods won't work today?

Michael Petruccelli says; The real estate market may be rebounding. Homeownership is still the American dream. And yet an Increasingly number of those in the market for a home tell agents they're "just looking" or downplay their interest, says this longtime real estate coach, during a recent program at Plumlee Gulf Beach Realty. Buyers try to camouflage themselves. Approximately 89 percent of homebuyers use the Internet to do a preliminary search for their homes, according to the Florida Association of Realtors' 2010 Profile of Home Buyers and Sellers. They turn to online listings to browse, read reports to gauge the right time and place to buy, and arm themselves with information before they speak with any sales agent. It all calls for a change in strategy. In this market, the traditional (sales) methods, I'm finding, doesn't work as well. The buyers are much more educated than they were in the past. But there lies another problem. What they read on the internet may not be current or accurate information and may not apply to their situation. Hence misleading them and giving them a false sense of confidence. There's too much talk in the industry,about going "back to basics" and practicing age-old sales techniques. It's important to alter the approach during a time when foreclosures and short sales have made the landscape more complicated, and cash buyers who've heard of "steals" in Florida may have unreasonable expectations. The buyers have changed, the times have changed and the market has changed, yet some real estate agents are taught to do things the way they did 35 years ago. It's insane.

Michael Petruccelli asks; What is Planned Unit Development (PUD)?

Michael Petruccelli says: A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.

Michael Petruccelli asks; What is a public auction?

Michael Petruccelli says: A meeting in an announced public location to sell property to repay a mortgage that is in default.

Michael Petruccelli asks; What is a promissory note?

Michael Petruccelli says: A written promise to repay a specified amount over a specified period of time.

Michael Petruccelli asks; What is a purchase money transaction?

Michael Petruccelli says; The acquisition of property through the payment of money or its equivalent.

Michael Petruccelli asks; What is a purchase agreement?

Michael Petruccelli says; A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.

Michael Petruccelli asks; What are qualifying ratios?

Michael Petruccelli says; Calculations that are used in determining whether a borrower can qualify for a mortgage. There are two ratios. The "top" or "front" ratio is a calculation of the borrower's monthly housing costs (principle, taxes, insurance, mortgage insurance, homeowner’s association fees) as a percentage of monthly income. The "back" or "bottom" ratio includes housing costs as will as all other monthly debt.

Michael Petruccelli asks; What is a rate lock?

Michael Petruccelli says; A commitment issued by a lender to a borrower or other mortgage originator guaranteeing a specified interest rate for a specified period of time at a specific cost.

Michael Petruccelli asks; What is a quitclaim deed?

Michael Petruccelli says; A deed that transfers without warranty whatever interest or title a grantor may have at the time the conveyance is made.

Michael Petruccelli asks; Are you doing all you can to protect your identity? (part 4)

Michael Petruccelli says; Credit Card & Social Security Number monitoring. This is a key element in protecting yourself. Monitoring cyberspace for stolen information.