Nobel Finance Sydney – Money Matters Newsfeed

1. Get a habit Speaking of habits, saving isn’t the only one you should be fostering. “Getting together a budget or money plan is the best way to get into the habit of living within your means,” say Sheila Freeman and Helene Richards, co-authors of Money Management for Women (UNSW Press).
2. Deal with the ‘credit monster ‘While it may make you feel better, binning your credit or store card statement without opening it is a recipe for disaster. “Aim to pay off the cards,” say Freeman and Richards. “Hit the ones with the higher interest first and always make more than the minimum repayment.” It wouldn’t hurt to take a look at your spending habits at the same time — earning your first decent pay cheques can bring out the shopaholic in all of us, but stopping for a moment to ask yourself if you really need that 75th handbag might make a difference to your bank balance.

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By Allison Tait

At this stage of life, a mortgage seems like a life sentence and retirement is for really old people. So what should you be doing with your money? Here’s your “to do” list for the decade.

1. Aim to learn something “One of the best things you can do at this stage of life is to look to improve your financial literacy,” says Matthew Walker, director of Sydney’s WLM Financial Services Pty Ltd. “Read books, take a course, search the Internet or talk to people with experience.”
2. Think about tomorrow So you’re scrabbling to buy your lunch today, let alone the rent at the end of the week? While the big ticket tomorrow items such as a mortgage, superannuation and all that other grown-up stuff might seem a long way off, the truth is that it’s never too early to set up some shorter term goals. Saving for a car or a holiday is a great way to fast-track a sense of achievement — and it sets up an invaluable habit. Walker suggests putting aside 10 percent of what you earn as a start.

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By Steven Gillman

If you are buying your first home, there are people who will help you get into all types of trouble. Well, mostly it is one type of trouble: financial. Here are some examples.

Watch Out For Real Estate Agents

You might think that real estate agents would love first-time home buyers, since they can influence them and make a sale more easily. In reality, though, many people are very hesitant to make a decision when they buy their first home. It will be the single biggest purchase they have made in their lives, after all, so they want to take their time and see a lot of houses. Meanwhile, the agent just wants a sale.

Don’t be pushed to make a fast decision. It may be true that a particular house is “not going to last long,” or it may just be something an agent says. Either way, their are other homes, and you need time to get a feel for what is available and at what prices. This education is crucial, and comes primarily from looking at a lot of homes.

The agent is not necessarily looking out for your best interest, by the way. Unless you hired him to represent you, he works for the seller and is even obligated to pass on any relevant comments you make, like “we can go higher on the offer if necessary.” Keep quiet, and remember that the agent is a sales person, whose primary concern is to sell something.

Watch Out For Mortgage Lenders

When you are buying you first home, you are also buying your first mortgage loan. Lenders will be so helpful. For example, they will help you afford a loan that is too large by offering you a variable-rate loan with a low teaser rate. Of course they won’t help the hundreds of thousands of families that are now facing foreclosure because those payments went up when the teaser rate period was over.

Variable rate, interest only, and even reverse-amortization loans (where you owe more each year) have all been “helpfully” pushed on first-time buyers who are trying to buy more than they can afford. You are told that buying a home is the best thing you can do. Sometimes this is true, but it never is if you can’t hold onto that home. If you really can’t afford a home, a smaller home with a smaller mortgage loan is better – and if you can’t afford that, renting is actually the best thing you can do.

Look at the worst-case scenario when considering a loan. For example, if you are considering a variable rate loan, ask what the payment will be if interest rates go up 5% years later. Will you be able to comfortably afford that? The banker may helpfully point out that the rate is capped at a 2% rise per year, but that just means the day of reckoning is postponed a little. In three years you could be paying almost $6,000 more per year on that $200,000 loan.

Watch Out For Family And Friends

The best intentions of friends and family can get you into trouble. When you are buying your first home you will get advice. Sometimes it will be good advice. Other times it will be a friend trying to get you to move to his neighborhood – the one you can’t afford. Family too can push you to buy before you are ready, or spend too much. They don’t always know what is best for you, so do your own thinking, buy what YOU need, and buy a home you can afford.

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By: V. Wheatley

The traditional method of buying a home is putting 20% down, after qualifying for a mortgage from a reputable financial institution. It also includes meeting the bill of a perfect to premium credit rating.

The traditional method works great for those who have all the requirements to fulfill their dreams of home ownership.

But, what happens if you’ve hurt your credit rating as a result of divorce, medical bills or slow payment?

Does it mean you are destined to life as a renter?

It doesn’t have to be that way if you are aware of how one can Rent To Own a home and rebuild their credit at the same time.

The Rent To Own option also doesn’t require a whooping 20% down, perfect or premium credit rating or a stamp of approval from a banking institution.

So, what does Rent To Own require and why would someone consider the option to Rent To Own to become a homeowner?

What Rent To Own requires:

1. Is that you want to own a home … over being a renter?

2. You are capable of paying your monthly payment on time every month. This is a critical step as it allows one to season the loan in their name.

It’s important that you understand the importance of seasoning the loan with you as the payer of that loan month after month.

So, what exactly is seasoning a loan?

Seasoning is an important step because what it provides is that through one’s monthly payments on the home they will be contracting to purchase through Rent To Own, they make those monthly payments in their name, which is termed Seasoning The Loan… At the same time, a professional Mortgage Broker is guiding them along the path to ensure that they fully qualify for a loan within 12-24 months based on their making timely monthly payments on the home, while living in the home with a contract with the Option To Purchase the home within the 12-24 months, or whatever terms are agreed upon by the seller and buyer.

It is important that you understand that you will have the option to purchase the home within the 12-24 months or agreed upon time frame.

This means that one can change their mind and decide not to purchase the home (choose not to Exercise The Option), within the 12-24 months and choose to move out and move on with their life.

Who would consider Rent To Own as a path to home ownership?

1. Someone who has found out they have to relocate because their job has transferred. (A Rent To Own offers someone who has to relocate the option to move into a home with a limited amount of money, known as option consideration money, which will be applied to the sale price of the home if the buyer decides to exercise their option to purchase and close on the home in the next, normally 12-24 months.)

2. Another situation that would benefit from a Rent To Own as a path to home ownership is a person or couple who want to purchase a home but haven’t managed to save up the 20% down required by a banking institution.

This person or persons may have very little credit or a slightly unfavorable credit rating, which would prevent them from immediately qualifying for a bank institution home loan.

3. The Rent To Own path can also be a path for someone who has gone through a bankruptcy. Yes, it is possible to acquire a home through the Rent To Own path if you’ve gone through a bankruptcy.

The Rent To Own path to home ownership is as implied, meaning you have the right to exercise your option to purchase the home at the agreed upon price within the time frame agreed upon… but you don’t have to exercise your option to purchase the home.

It is equally important to know the terminology of Rent To Own, also known as Lease Option, Lease Option To Purchase, Lease Option To Buy and in some situations (OWC) Owner Will Carry…

There are also words and phrases that signal the opportunity of a Rent To Own … Words, such as: No Bank Qualifying; No Credit Qualifying; Rent Credit; Creative Financing, etc.

So … what a Rent To Own offers is a path to home ownership over a lifetime as a renter.

There are many other Rent To Own arrangements to home ownership, which are agreed upon by the parties entering into the Rent To Own agreement.

Rent To Own is far from a one size fits all and opens up an array of creative terms and conditions that satisfy both the Seller and the Buyer. (And that Rent To Own Buyer can be you.)

Article Source: http://www.realestateinvestmentarticles.net

Ven Wheatley is a San Francisco Bay Area Real Estate Investor offering creative solutions to home ownership. www.bayareahomeownership.com

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