Today’s Graduate call allowed us to discuss many areas of changes in the market as we transition into Spring 2014. We discussed insights in to working our own finances better so that we are more financially fit to work investing in Real Estate.
We discussed specifically this week on how being better informed about grocery shopping and how it is one area that has variable’s that if we shop using the right tools we can save more every time.
We talked about how grocery prices of products go in cycles. One of the easiest ways to save is to have a small note book and right down the prices on a particular product you buy each week. Keep doing that every time you go to the grocery store on the same product. You will then see the trend in the different prices offered on that product. Many products have regular retail price, then a little better price, a much better price, and then finally a rock bottom of the cycle price. This is the time to stock up on and buy a lot of that product. The idea is to stock up on the product so that you have enough until the price is at the bottom of the cycle again. This way you are just buying it at the rock bottom price only.
Try this on slowly but eventually work up to the majority of the products you normally buy. This factors in that you have the pantry, refrigerator, or freezer space to do this. Rotate your product so that you are consuming the oldest product 1st. This is one the simplest ways to save for everyone.
We continue to monitor the market. One article is of importance to investors. This is from CNN Money and it reports that some lenders are starting to provide mortgages again to those with sub prime credit. This is important for investors with poor credit and for those providing homes to those with poor credit. It states:
Borrowers with bad credit were shut out of the mortgage market after the housing bubble burst, but now a handful of small lenders are starting to offer subprime loans again.
Once synonymous with toxic, adjustable-rate mortgages — like the “exploding ARMs” that led many homeowners to lose their homes to foreclosure during the housing bust — subprime mortgages are once again being offered to borrowers who pose a higher credit risk, typically those with credit scores that fall below 640.
But this time around, the loans are much more costly. During the housing bubble, lenders were handing out subprime loans with cheap teaser rates and little or no down payments. Now, lenders are charging interest rates of as high as 8% to 10% and requiring borrowers to make down payments of as much as 25%-35%. The premium price is worth it for some borrowers who are trying to build or repair their credit, according to Bill Dallas from Skyline Financial, of Calabasas, Calif. Skyline started offering subprime loans a few months ago under its NewLeaf Lending division.
Among his firm’s subprime mortgage customers: young, first-time homebuyers and former homeowners whose credit was ruined in the housing bust. “They’re just Americans who want to buy homes but can’t,” said Dallas, who used to run First Franklin, a subprime lender that went bust in the mortgage meltdown.
Most of these borrowers have nowhere else to turn. Fannie Mae and Freddie Mac, which back 80% of all U.S. home loans, won’t back loans issued to subprime borrowers. Only the Federal Housing Administration continues to support low-credit score borrowers in the wake of the housing bust. But it has hiked fees and premiums. To help protect borrowers, the Consumer Financial Protection Bureau requires strong consumer protections. The loans cannot carry interest rates that increase after default, or prepayment penalties, for example. And lenders must provide these borrowers with homeownership counseling from a representative approved by the U.S. Department of Housing and Urban Development.
In addition to the small lenders who are issuing subprime loans, Wells Fargo recently lowered the minimum credit score it requires of borrowers to get FHA loans. Wells Fargo is now approving applicants who have scores of between 600 and 640 for FHA loans, which remains well within FHA’s guidelines, according to spokesman Tom Goyda.
Be aware of the market and Happy Investing!
No comments yet.