Wednesday, December 26, 2012

Renting vs. buying: When is it better to buy a house?

Near the end of 2012, economists observed that the housing sector has been showing clear signs of recovery. Builders have started construction on the most houses and apartments since 2008 and more people have been encouraged to return to the real estate market as buyers and sellers.

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Given this optimistic outlook, the home loan specialists at Network Capital Funding Corporation have observed that many consumers who are currently renting an apartment were already considering buying their own home. There are pros and cons to both renting and to owning one’s own home, but are the record mortgage lows and the recovery of the housing sector enough reasons to go from renter to owner?

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Considering that a house is by no means a small purchase, buying one may not always be a good idea. In many areas, the cost of owning a home – with taxes, interest, insurance, and other fees – is significantly greater than the cost of renting. Undoubtedly, though, people do consider buying a house as part of their long-term goals as owning one can give them stability and freedom.

A good time to buy a house is, of course, when it costs less than to rent. To find the right timing, consumers can find two similar houses, one for sale and one for rent, and divide the asking price by the annual rent to get the price-to-rent ratio.

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According to this article by David Leonhardt on the New York Times: “A rent ratio above 20 means that the monthly costs of ownership will exceed the cost of renting,” so it is better to buy when the rent ratio is closer to 10. Other factors still come into play, such as the buyers’ financial stability, but finding the rent ratio is a good way to know if housing is overpriced in the area.

For more information about the housing industry, visit

Thursday, December 6, 2012

Post-disaster relief: Suspensions of mortgage payments

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Post-disaster federal assistance may not be enough to cover USD50 billion in losses from the inter-state havoc wrought by hurricane Sandy. Restructuring does not involve only infrastructure, but also financial obligations entered into by homeowners in the northeastern area of the United States as they pick up from the rubble caused by flood, fire, and winds.

The housing bubble that refuses to re-inflate itself had already engendered an army of defaulting borrowers. The subprime mortgage crisis was another disaster that provoked Federal response, no less than from the Federal Reserve headed by Ben Bernanke, which thereon prohibited extending higher-priced loans to borrowers with insufficient ability to pay.

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It’s safe to assume that the actions of lending institutions post-crisis err on the side of strengthening credit lines. A disaster like hurricane Sandy, however, was an unforeseen blow to what may have otherwise been good loans. Borrowers who at another point may have had clean loan records need to take on extra financing schemes for rebuilding and repairs. That should take money away from some pre-existing loans. While mortgage brokers like USA Mortgage, Network Capital Funding Corporation, and America's Home Loans, have made refinancing schemes accessible to their clients, exceptional cases such as disasters call for more generous balms to the brunt of loan payments.

In this news item, Fannie Mae and Freddie Mac announced that it would provide assistance to borrowers affected by hurricane Sandy. It sounds like a bailout but that’s hardly the case --- these aren’t defaulting borrowers and they are merely granted respite through loan extensions. In any case, Fannie and Freddie have wisely eased up loan repayments by opening the avenues for help. A phone call from affected borrowers will qualify them for post-disaster loan relief.

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For more information on mortgages, visit this website.

The best cities in America for buying houses

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Forbes knows its housing markets down to price listings for the friendliest brick-and-mortar investments, and interest rates on mortgages. Its list of ideal cities for setting up house includes San Jose, California, Washington D.C., and Tucson, Arizona, among others.

But what’s not stated on the list is the volume of housing demand in these areas. Obviously, realtors have cornered these markets down to the hedges, while middle class first-time home buyers are still trying to separate the pork from the fat. Well-marketed towns and suburbs are well into the dreams of every home buyer, but they don’t lend themselves well to mortgage feasibilities.

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Working with mortgage brokers should precede putting the tacks on to the city map. For instance, firms like Network Capital Funding Corporation are built to channel the resources of clients into the best mortgages. The most helpful arrangements are not necessarily located where the manicured lawns are, or where Facebook was first founded.

Affordability, naturally, is key. This factor, however, is not always measured in real terms. A huge part of adding value to home purchase is time bought to pay off loans. For mid-income families, the city to be is where the least financial strains could be managed. While working with mortgage brokers, clients could hash through a list of affordable cities. In this regard, Yahoo casts its own alternative starrers, listing indices such as median income and median home prices.

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For more real estate news, check out this website.

Monday, November 12, 2012

Reblog: Is the Stigma of Ditching Your Underwater Mortgage Fading?

This article on reveals the changing attitudes of consumers in the real estate market:

A good five years after the subprime mortgage crisis and housing bubble collapse, more Americans are deciding that it’s okay to just walk away. In a new survey, roughly a third of respondents said it was socially acceptable to strategically default on a mortgage.

In a survey conducted by JZ Analytics for ID Analytics, 32% of more than 1,000 respondents said they “believe homeowners should be able to strategically default on their mortgages without any consequences.” Although the annual study hadn’t asked this question in previous years, other research about attitudes around strategic defaults indicate that this number is probably quite a bit higher than in the past. In a research paper published in 2011 titled “The Determinants of Attitudes towards Strategic Default on Mortgages,” researchers found that 82% of respondents in a series of surveys taken between 2008 and 2010 think it’s “morally wrong to engage in a strategic default.”

In 2009, Georgetown University professor of business ethics George Brenkert told the Wall Street Journal that homeowners have a moral responsibility to remain committed to their mortgage. Today, there’s obviously still a social stigma to walking away from an underwater home, given that the other two-thirds of respondents didn’t find it acceptable. In addition to shame and guilt, people also have to face a sense of loss, since most of us are emotionally attached to our homes. There are practical considerations, too: the stress of being hounded by collectors, the knowledge that you’re torching your credit, and the possibility — depending on the state — of being sued by the lender to make up the shortfall.

There’s also community pressure to avoid foreclosure: Defaults hurt nearby property values. A 2010 study by the Cleveland Fed found “foreclosure-related sales have prices about 27 percent lower than comparable properties… each foreclosure lowered the selling price of other (nonforeclosure) properties within a radius of about 260 feet by nearly 1 percent.”

Despite all this, attitudes have clearly changed. As the subprime meltdown mushroomed and letting a home go into foreclosure became more common, the idea that only deadbeats default has been fading. The ID Analytics survey found that 17% of Americans know someone who has strategically defaulted on a mortgage.

What’s more, many people now recognize that companies are often able to declare bankruptcy and either shed or restructure their debts without long-term consequences. In a 2009 paper that explored the question of why more people don’t just hand the keys back to their lender, University of Arizona professor Brent White called the idea that companies can default but ordinary people shouldn’t “norm assymetry.” He writes:

Unlike lenders who seek to maximize profits irrespective of concerns of morality or social responsibility, individual homeowners are encouraged to behave in accordance with social and moral norms requiring that individuals keep promises and honor financial obligations.

This attitude faded, however, as it became increasingly clear that lenders were complicit in the excesses that led to the mortgage crisis. “Some of the survey respondents feel homeowners should be able to strategically default on mortgages because they believe the mortgage market has been a scam for many years, built on false promises that took advantage of people,” ID Analytics says in a statement about its survey.

Indeed, noted the authors of the “Determinants of Attitudes” paper, anger at financial institutions seems to have sped this change of attitude:

    “We find that people who are angrier about the current economic situation are more willing to express their willingness to default, as are people who trust banks less. Similarly, people who want to regulate executive compensations and the financial sectors are more likely to declare their willingness to walk away.

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Thursday, October 25, 2012

Network Capital Funding Corporation: Running business for homeowners

Recently, the Orange County Business Journal and Best Companies Group recognized Network Capital Funding Corporation for its reliability and efficiency.

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The former bookmarks the Best Places to Work in Orange County, among which places the direct home lender Network Capital. The recognition may be seen by the company as a heavyweight nod to its netted organizational output since the beginning. But with or without it, it would seem that the lending firm will just keep at its daily grind of doing business for clients.  

The operation
The Network Capital brand of loan process meshes the impersonality of technology and the consumer insight of its loan specialists. The home loan delivery platform bundles the software ingenuity of Oracle, Redhat, Microsoft, and Cisco in an electronic solution to closing documents. Through this, clients can carry out related paperwork anywhere in the country.

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Prior to closing, Network Capital Funding Corporation works like a sophisticated assembly line, lining up customers for a home loan, and personalizing their purchase by mixing the right elements in a deal. That transaction ends if, and only if, mortgages and such bear the stamp on the lendee’s end of agreement, a heavier nod to the enterprise.

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Network Capital Funding Corporation has been chosen as one of the best places to work with because its employers exude a sense of ownership of their clients’ business and their employer’s operations. Employee fact-checks and customer feedback are also valid metrics exposing a well-oiled lending machine.  

Visit for more information on the company’s products and services.