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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