The best way to increase the number of qualified homebuyers is to lower the screening parameters. It’s a taboo idea but there really is no other viable way to increase home ownership.
In order to accomplish this goal, you have to hedge your risk, as a homeowner or investor, while simultaneously providing a sound, yet flexible opportunity for first-time buyers. I’m not talking about subprime loans. That just postpones the inevitable flood of banking fees.
The best approach is to reduce the fees.
Qualified homebuyers exist not only because of job stability, but because of equity they acquired in their existing home. And they were able to do that because the market was growing. It was a completely different culture when most of the current homeowners bought their first house. Now that the best of times seem to be behind us, we need another approach.
To help young graduates take baby steps towards ownership, let’s get them in the door of a home, instead of an apartment. Let’s let them see how much property taxes are and how much maintenance fees cost. These things should be taught, not stumbled upon.
Then they will learn how to budget their income because of the experience, not because they did everything perfectly or had a 6-figure income. And they can gain experience if we adopt an easier method of entry rather than the current platform. Giving more people the chance to earn equity creates more qualified buyers. Which, in turn, increases everyone’s chance of selling our houses quickly.
Don’t think it’s possible? It is. Let’s do it together.
Research shows that people move every five to seven years. This information indicates a disconnect between the current real estate lending industry and the needs of today’s buyers. People need shorter mortgage payment schedules so they can have a chance to build wealth.
Have you ever thought about why the government needs to step in and FORCE people to buy health insurance? I can tell you that if I have to choose between paying my rent or mortgage and my health insurance bill…well, I’m sure you can guess which one I am paying. To me, this is a clear indicator that the economy is worse than any of us really understand. Losing 1.3 trillion dollars a year is bound to show its effects sooner or later.
Plum Genius feels the only way to truly provide a viable way for homebuyers to have a chance of living a financially free lifestyle is to offer another solution. Shorter mortgages.
It is the 21st century. Why are we still doing it the old way?
Las Vegas is building again. Casinos and houses. With a report from Movoto stating that the Las Vegas real estate inventory increased by 91% year-over-year, it’s not that much of a surprise to local folks.
“They are doing it all over again,” one Henderson, NV resident exclaimed. She is referencing the fact that they are building new homes again, making it difficult for existing residents to sell their property. If they aren’t careful, they will find themselves on the highest foreclosure rate list again if they don’t create enough jobs to match the inventory.
Relying on investors to purchase real estate and then rent out properties to transients isn’t the way to go.
Back in the early 1900′s, around the 20s and 30s, society introduced mortgages as a way to give people a way to buy houses. They thought it wasn’t fair that everyone couldn’t own a home. So they started with 5 and 7-year mortgages. 4 out of 10 people owned a house back then. They put 50% down and paid 50% off in that span.
Over the years, I think around the 40s, they extended the mortgages to make it possible for even more people to buy houses. As of 2012, 56% of people own their own home. However, only 17% of the population own their home free and clear.
We’d like to see the number of people who own their home outright increase. Plum Genius introduces our 7-year mortgages. It’s part of our rent-to-own program. Learn more about it today.
We usually keep posts like this for our News section of our site (plumgenius.com). I had to make a comment though about what Senator Heitkamp told Anderson Cooper last night.
CNN wrote a great article called, “Homeowners ditching brokers.” It was insightful but the Senator hit the nail on the head last night when speaking about the debt ceiling crisis. She said that because Americans are paying now 1/2 of their salary towards the costs of homeowership and leasing, instead of the traditional 1/3, it is affecting the bottom line of a lot of other areas, like healthcare.
It’s getting very expensive for people to maintain a decent lifestyle. Choosing your next home and even choosing the way you sell your home is a big decision. A very costly one. Be sure to consider all options and avenues. Plum Genius works hard to make buying and selling your home as affordable as possible.