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With the increase of foreclosures throughout the nation, one may wonder if homeownership is for everyone. The housing boom brought in a slew of different loan programs geared to getting as many people into homes. With loan programs like 80/20’s, interest-only, pick-a-pay, and 1% neg-ams, record-breaking numbers of buyers basked in the glory of homeownership. This is where Velgenklere is going to help you in understanding the dynamics of buying a home. With the help of the important facts that you learn there, you can decide if buying a house is the best decision for you or not.
The American Dream was made into a reality for many buyers by the creative financing programs brought about by well-intentioned lenders who lowered their lending guidelines to accommodate the average buyer. Conventional down payments were waived lower FICO scores were accepted among other criteria. However, with foreclosures in San Bernardino up 198 percent compared to last year’s stats, the industry is now discovering that sometimes instant gratification is not always the best option in the long run.
Perhaps lenders should have remained steadfast rewarding only buyers with FICOS above 700 and requiring buyers to save up reserves? It is easy to point the blame at the Banks, but the truth is that lenders are not wholly at fault for the rise in foreclosures. If we examine who the other players are, then we can also ask, “who ultimately signs the loan docs and commits themselves to the mortgage?” Obviously, the buyers! It’s the human condition of wanting “MORE” than what one can handle. Instead of diligently, saving and putting away reserves for a rainy day as a ‘life preserver’ for the fateful day when current funds may not be enough to pay the household expenses. The dreamers opted for the 100% financing, interest-only and adjustable loans to get themselves into their dream home and those on the borders of foreclosure are all waking up to hard reality.
Nothing is wrong with dreaming. But we need to prepare to work hard if we want to live big
As a California Realtor, I prepare my buyers with what to expect, credit tips and potential roadblocks, during the purchase transaction. Often times they come to me excited about a home they saw in the newspaper or a billboard put up by a builder. My duty is to bring them to the level of reality and assist them with realizing the facts associated with engaging in that particular transaction. If their desired price range is too high for the budget, finding the right home within their means may delay the sale up to 6 months to even a year; however, in the end, my buyers are strong and prepared when they finally do take on a mortgage to a Home Asset. My hope is to lessen any feelings of being overwhelmed when the mortgage due date arrives.
Homeownership: is it for everyone? It can be, if the buyer works for it….by properly building up their credit history, saving up the funds to put in as a down payment, and saving enough money in the bank as reserves to sustain them through the everyday expenses of homeownership. Homeownership is a responsibility that can be embraced by those ready to take on the challenge.