Your Loft and Elections

20 Nov 2015 · by Virtual Results PubSub

Your House and ElectionsWith the national elections ramping up, many voters already have voter fatigue (also called voter apathy). That is, we’re already so tired of hearing about the elections that we don’t bother to vote at all. In fact, voter apathy is quite high in the United States: Somewhere between a third to a half of eligible voters do not vote in national elections and even fewer vote in local elections.

But, “the likelihood that a Loftowner will vote in a local election is 65%, compared to 54% for renters” and they are 3% more likely to vote in national elections than renters.

Here’s why not voting is a bad idea:

Local elections can affect the marketability of your Loft

The value of your Loft is determined by a variety of factors, one of which is the rating of the local schools and another is the infrastructure of the community (the age and condition of the bridges, roads, drainage, street lights and other municipal projects). When a municipal bond issue comes up for vote, the outcome can affect both your bottom line through property and sales taxes, and the community desirability via new roads, better schools and protection from flooding (for example).

National elections can affect Loft prices

The affect on Loft sales prices is not because of the specific outcome of the elections, but because consumers become more nervous about the economy during election years. When larger blocks of Homeowners vote, they are placing their trust in the economy and the expectation that Loft values will rise.

Direct effect on property taxes

Some propositions have direct effect on your property taxes and the sharing or distribution of municipal expenses. For instance, in an upcoming election in Texas, directly changes the amount that a Homeowner is able to exempt from property taxes (the Homestead exemption) and makes that change a constitutional amendment … meaning that it takes another vote of the State’s entire electorate to change it. You might think that this would raise marketability to non-child families and lower marketability to families with children, but proponents believe that instead, it will increase Loft values across the board, thereby increasing tax revenue to schools.

One aspect of participating in local elections is that the Homeowner gets to know what is important to other people in their community. Being part of a community is one of the benefits of Loft ownership. Connecting with your neighbors to improve your schools, streets and bridges can bring a sense of civic pride and camaraderie to your neighborhood.




When Interest Rates Go Up

13 Nov 2015 · by Virtual Results PubSub

When Interest Rates Go UpThe Feds have been pretty indecisive about moving interest rates up, but the down-low is that they plan to make the move upwards in December.

No matter where you are in the market, whether you’re buying or selling, or just saving up a downpayment, interest rates can inversely affect your transactions.

Here are some ways to prepare for a potential rate hike:

Buyers

Get Pre-Approved – If you’re in the market for a Loft now, DO NOT HESITATE … get pre-approved by your lender. Different from “Pre-Qualified” (which just means that you have the potential to be approved if there are no hidden skeletons in your credit closed), a pre-approval means that a lender has investigated your background and credit history and is willing to loan you money. At the end of the pre-approval process, the lender will give you a Pre-Approval Letter indicating the amount they are willing to loan you and the most likely interest rate in current conditions.

What this does for you – Having a pre-approval letter means that you know what price Loft you can afford. It allows you to shop for Lofts at that price or lower. It also gives you bargaining power with an anxious seller. He may be willing to reduce his price for a sure thing rather than wait for a better offer and miss his chance.

When you have a pre-approval letter, your real estate agent knows you are serious about buying now and might be able to negotiate some extras for you in the transaction, too.

If you wait for interest rates to go up, you may have to settle for less Loft for the same payments.

Sellers

Require Pre-Approval to Accept an Offer – After you go through all the effort to negotiate and meet the requests and demands of the buyer, you don’t want the transaction to fall through just because the buyer couldn’t get financing. Many real estate professionals will advise you not to accept an offer, or even entertain one, without a pre-approval. The challenge for sellers is that once you accept an offer, you can’t reject it in favor of a better offer that might come along. It just makes sense to protect yourself from offers falling through from lack of funding.

Not Great for Current Sales– Prepare yourself for the rate hike by knowing how much you can adjust your asking price to compensate for a higher rate. Discuss these variables with your real estate professional and have a plan of action in place.

Terrific for Future Sales – If you plan to sell your Loft in the future, the rate increases will be in your favor because Loft prices will begin to rise and you can ask more for your property than you can today. The Feds resist raising rates until they think the overall economy is improving.

Savers

Good News – Higher interest rates are good news for savers because over time the compounded interest will give you more money for that down-payment. Just make sure to keep investing in your savings plan because rate hikes typically signify that prices in all areas of the economy will rise, so you’ll need a bigger downpayment for the same Loft.




Keeping It In Balance: Knowing Your Credit-to-Debt Ratio

5 Nov 2015 · by Virtual Results PubSub

Keeping It In Balance: Knowing Your Credit-to-Debt RatioMany potential new Loft buyers find themselves unable to secure a loan, confined to a smaller Loft ? or at least to a smaller loan ? because they don’t understand the ins and outs of their credit score.

First of all, your FICO (Fair Isaac Corporation) credit score does not tell you how much you can afford, how much you have saved for a downpayment, how well you budget or the balance of any of your bank accounts.

What it does tell you (and your lender) is how you handled credit over time. Although the algorithm FICO uses to determine your score is a closely-guarded industry secret, the primary factors negatively affecting your credit score are late payments and your debt-to-credit ratio.

You know what to do about late payments. Pay. On. Time.

If you have late payments in your payment history, the best thing you can do about them is to not have any more late payments. The older the late payments are, the more your on-time payments can offset them.

Debt-to-Credit Ratio

Your debt-to-credit ratio is entirely different. You are in control of this aspect of your credit score, so you need to know what it’s all about.

On your credit report you’ll see a category called “amounts owed” that, rather than actually reflecting the amount of money you owe, speaks to the relationship between how much you owe to the total of your available credit. That is, the credit limit of your credit cards. Also called your credit utilization, your debt-to-credit ratio can raise or lower your FICO credit score.

That means that — all other things being equal — while both you and your twin brother may OWE $2000 on credit cards, your brother’s credit score could be lower or higher than yours based on the ratio between what you owe and the amount you have available.

Say you have a credit card with $5000 available credit and you owe $2000 on that card. You are using two-fifths of the available credit or a .40 ratio (40% utilization). Your twin has a card with $3500 available credit. He also owes $2000. He has utilized four-sevenths or .57 ration (57% utilization) so his credit score will be lower than yours even though you both owe $2000.

The higher the ratio of utilization, the greater the possibility of a red flag on your credit report that you may be overextended financially. Although your twin may well be able to afford the payments he has, should an emergency occur, he do not have as much margin available and could slip into difficulty in meeting financial obligations.

The amounts owed category also reflects:

  • how many accounts you have open,
  • how recently they were opened,
  • how many of those have maxed out balances,
  • other loans you may have (such as a car payment), and
  • the relationship of how much you currently owe to the original amount.

What’s the goal amount?

Most financial planners suggest keeping your utilization no higher than 30% at any given time among all your credit accounts.

There are a couple things you can do about your ratio:

  • Do not close old accounts.

When you’re trying to reduce your debt-to-credit ratio, you may be tempted to close old accounts that you have paid down to zero. If you do, however, that credit is no longer counted in the “available” category. In the scenario above, say that the $2000 you owe is spread between two credit cards: card one with a limit of $1000 at 100% utilization ($1000) and one with a limit of $4000 at 25% utilization ($1000). If you paid off the $1000 limit card brining that credit card to zero, but leaving it open, would give you a credit ratio of .20 (or 20%). If you close the account, your available credit drops to $4000 so your utilization bumps up to 25% or a debt-to-credit ratio of .25.

  • Pay down as much as you can

When you are seeking a mortgage, do more than just pay the minimums. Try to pay as much down on your credit accounts as possible, as soon as possible ahead of applying for a mortgage loan.

  • Be careful opening new accounts

It might seem logical to open more credit accounts to increase your available credit and lower the ratio, but another factor in your FICO score is how recent new accounts are relative to your loan application. Since the exact impact this can have on your score is not available, err on the side of caution.


×