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LRC Homebuying Edition - Day 17: Compliance

LRC Homebuying Edition - Day 17: Compliance

New to the Live Richer Challenge: Homebuying Edition? Learn more about it HERE.

Need to catch up? Click on the link where you left off and then come back!

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.

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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.

Your Task

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.

For this task, start looking consistently at Zillow.com, Realtor.com, or Trulia. Get familiar with the pricing for your area and how long the homes are staying on the market.

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:

 Today I learned what compliance means of the 5 C’s of Credit! Day 17: #LiveRicherChallenge Click To Tweet

Live richer,

Tiffany

You can reach out to me here:

Twitter: @thebudgetnista

Instagram: @thebudgetnista

Facebook: The Budgetnista

Private Forum: Dream Catchers : LIVE RICHER

Want to work through the Live Richer Challenge: Homebuying Edition in a workbook? It's part of a bestselling series!

Click the link below and get your copy.


P.S. If you haven't already... Get your Challenge Freebies from our Live Richer Challenge: Homebuying Edition coauthor, Netiva Heard. Click the pic below if you'd like to learn more about Netiva's services. You'll receive a discount! Just let her know you're a Dream Catcher.


P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.

P.P.P.S. Don’t forget to get your free Live Richer Challenge: Homebuying Edition Starter Kit. Download it HERE.

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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 Lisa. I feel protective of you and your financial journey.

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Tiffany “The Budgetnista” Aliche is quickly becoming America's favorite, personal financial educator. The Budgetnista is also an Amazon #1 best selling author (The One Week Budget and Live Richer Challenge), sought-after speaker and teacher of financial empowerment.
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