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Day 11: Ways to Save
Day 12: Special Housing Programs
Day 13: Review, Reflect, Relax
Day 14: Weekly Inspiration
Day 15: Your Collateral
Day 16: Mortgage Insurance
WEEK 3: The Home Loan Process
Today’s Easy Financial Task: Start researching the housing market where you want to buy.
How to rock this task:
- Learn the compliance factor of the 5 C’s of Credit
- Do market research in the location where you intend to buy
Another day, another task!
In this task, we’re talking about the last C of the 5 C’s of Credit. Get excited!
We’ve gone through Capacity, Character, Capital, and Collateral. The last C is compliance which is sometimes called conditions.
The Compliance Factor
Compliance has to do with the ‘big picture.’
Compliance is a look beyond your personal financial situation. Lenders check out what’s going on in the housing market to determine whether they want to lend to you and at what cost.
The lender will consider:
Inventory: Inventory is the number of homes for sale. A buyer’s market is when there is a lot of inventory. Buyers have a bit more leeway when negotiating on costs in a buyer’s market because there are more people selling homes than buying.
Lenders may be willing to do what’s necessary to close deals with fewer buyers applying for mortgages. This is a good time to buy a house. You have leverage! In a seller’s market, there are more buyers than there are homes. Competition for homes is tight.
Lenders may be less willing to negotiate because there’s a higher demand for homes and mortgages. The inventory and what the housing market is doing will impact the terms lenders are willing to offer.
Interest rates: Lenders will take a look at the market to determine what your interest rate will be as well. Lenders don’t set random numbers for interest rates. There are indexes and other factors that go into setting rates besides just your credit.
The local housing market: Lenders look at the local housing market to see what homes are selling for and how the home you’re buying compares.
The overall economy: Lenders look at what’s happening with the local economy and how it could impact your financial situation. For example, if the biggest employer in your area is closing up shop, it may impact how much money they’re willing to lend to homebuyers.
Moving on to your task! Your task today is to start doing some research on the housing market in the area where you want to buy.
Here are some questions to think about:
- What’s the pricing in my area?
- Where are interest rates right now?
- What is the inventory looking like?
- Are there a lot of homes available right now or not so much?
You can consult with a realtor to answer these questions. A professional can give you greater insight on how the market is for your locale.
If homes are moving slowly that can be good news for you! Sellers having trouble selling their homes may be willing to offer a deal. That’s it for this task!
Any questions? Leave a comment below. Remember to reach out to your partner(s). Encourage each other throughout the Challenge. Check into the Dream Catchers: LIVE RICHER group as well.
Share what you’ve learned today with your tweeps:
You can reach out to me here:
Facebook: The Budgetnista
Private Forum: Dream Catchers : LIVE RICHER
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P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.
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My Lisa Rule: I have 4 sisters and Lisa is the baby (well she’s not a baby anymore). Of all of my sisters, I’m the most protective of her. Before I share any product or service with you, it must pass my Lisa Rule.
What’s the Lisa Rule? If I would not advise Lisa to use a product or service, I won’t advise you to. YOU are my Lisas. I feel protective of you and your financial journey.