Before Renting Or Leasing

Ten Things You Must Do Before Renting Or Leasing A Property :Lisa Jefferson : EzineArticles.com
Foreclosures are at an all time high, homeowners, landlords and investors are losing their properties all over the country. If you are thinking about Renting or Lease Purchasing a Property, make sure you read all of the information provided in this document.
Sadly to say, I have received calls from several families that were victimized and taken advantage of by their landlords. I felt it was necessary to write 10 Things You must do before renting or leasing a property in order to educate tenants about things they can do to protect the well being of their family and to prevent them from being a victim of foreclosure.
Protect yourself and keep from being thrown out on the streets by asking these questions prior to signing a lease or rental agreement.
1. How long has the house been vacant?
• If the house has been vacant for a long period it is very possible that the landlord could be distressed and must get your first/last month rent and security deposit to catch up on the mortgage that may be past due.
2. Are you currently behind on your mortgage payments?
• This is a direct question that sometimes catch the landlords off guard, but in order to protect yourself and to keep you from being victimized, ASK the Question!! If the landlord becomes defensive, that is a red flag and you may want to move on to the next property.
3. May I see your most recent mortgage statement?
• This is another question that will tell the story. In many cases, landlords who are professional and have no intention of taken your hard earned money will not have a problem producing this document. When looking at the mortgage statement, make sure there are no past due amounts owed.
4. May we do a conference call with your mortgage company in order for me to hear that your payments are current?
• If for some reason the landlord does not have a copy of the mortgage statement, a three way conference call is the next best thing. Before you sign the lease purchase or rental agreement, have the landlord simply call the mortgage company so that you can hear the customer service representative say, "there are no past due payments on the account".
5. Are the taxes current on the property?
• Not only does properties get foreclosed on because of non payment for the mortgage , non payment of property taxes can also cause a property to be foreclosed on. Ask the landlord about the property taxes to ensure that this is not an issue.
6. Are you facing foreclosure?
• This is a straight forward question that deserves a simple YES or NO!
7. Do you have a first and second mortgage on the property?
• If there is a first and second mortgage on the property, in many cases there will be two different payments made to two different mortgage companies. If the first mortgage is behind and the second mortgage is not. There is a chance that the first mortgage lien holder could foreclose because of non payment and the second lien holder be okay.
8. Will you have a problem if I paid the mortgage company directly?
• This creates 100% protection for you. I have witnessed on many occasions that although the tenant paid their landlord rent on time every month, the landlord took the tenants' money and did not pay the mortgage, therefore creating a foreclosure situation that caused the tenant to be thrown out of the property.
9. Is it possible to have my lease or rental payment withdrawn from my account by the mortgage company?
• This creates another safety blanket for you. This will ensure that your payments are being made on time every month to the mortgage company and it will create a sense of security for you and your family.
10. Do you hold a real estate license?
• As a license real estate salesperson, there are laws and rules that we must abide by as outlined by the Board of Realtors and the Real Estate Commission. If you are a victim or have been victimized and your landlord have a real estate license, I encourage you to file a complaint with the Real Estate Commissioner or the Local Board of Realtors.

Guide to Know the Loan Terms

Listed below is a useful guide to loan terms. It is a list of definitions of loan terms that may or may not be familiar to you.
Accrue
Process in which interest accumulates on a borrower’s loan.
Amortization
A repayment method in which the amount you borrow is repaid gradually though regular monthly payments of principal and interest over the term of the loan.
Annual Percentage Rate (APR)
The APR shows the cost of a loan expressed as a yearly interest rate, including the interest and other fees associated with the loan.
Application
First step in the official loan process to gather and record information about the potential borrower.
Borrower
Person who has been approved to receive a loan and is then obligated to repay it.
Capitalization
Adding unpaid accrued interest to the principal balance. Capitalizing interest increases the principal amount of the loan and the total cost of the loan.
Collateral
Property pledged as security for a loan to ensure repayment of a loan.
Credit Agencies/Credit Bureaus
Organizations that collect individual consumer credit information and provide credit reports to potential lenders.
Credit History
History of an individual’s debt repayment. For most types of loans, lenders use this information to gauge a potential borrower’s ability to repay a loan.
Credit Rating
Grade assigned to denote the net worth and credit standing of an individual or a business.
Credit Report
Record that lists all past and present debts and the timeliness of their repayment and documents an individual’s credit history.
Debt
Amount owed to another that must be repaid.
Default
Failure to repay a loan according to the terms of the loan.
Delinquency
Failure of a borrower to make a timely payment on a loan.
Interest
Fee charged for the use of money.
Interest Rate
The amount of interest charged on a loan, usually expressed as a percentage.
Lender
Entity that provides loan funds to the borrower. Depending on the type of loan, the lender may be a bank or other financial institution.
Loan
Money borrowed from a lending institution, usually repaid with interest.
Loan Applicant
Party applying to the lender for a loan.
Note
Binding legal document you sign when you get a loan. It lists the conditions under which you’re borrowing and the terms under which you agree to pay back the loan (also called a promissory note or a mortgage note).
Payment
Periodic (usually monthly) instalments paid to a lender to be applied toward repaying your loan.
Principal
Loan amount borrowed from a lender, not including interest or additional fees.
Repayment
Process of paying back borrowed money.
Term
Time limit within which a loan must be repaid.
Variable Interest Rate
Interest rate that changes periodically in relation to an index. Payments may increase or decrease accordingly.