I’ve learned that most people prefer to learn by looking at something, versus just reading about it.  It makes it easier for us to understand the more complicated things.  Because of this, I created a visual graph to compare renting vs owning a home.

I tend to show my clients the long term benefits of owning vs renting, because most renters think short term.  I know I did when I was younger and renting.

Below is a link to a graph were you can visually compare renting vs owning, but you need to know the specifics of what I’m comparing.  Keep in mind, I used more conservative numbers, mostly because most of my clients are in Wisconsin, but in other parts of the country I know rent is much higher than what I’m using below.

Here are the specifics of what I’m using:

• I’m using a current rent payment of $1000.  On a conservative approach, I didn’t assume any future rent increases.
• I used a savings account balance of $10,000 that the renter has and the percent they are receiving in this account is 5%.
• The purchase price of the home is $200,000 and a 5% down payment with a conventional mortgage is $10,000.  Exactly what the renter has saved.
• I used the example of a FHA mortgage, because it has a lower down payment of 3.5%.

I want you to look at my most important tip that most renters don’t know when it comes to the long term benefits of owning vs renting.

Tip:  The rent graph (red) under “Net Worth In 15 Years” shows your what your current investment would be if you didn’t add anymore to the 10k savings, earning a 5% return.  I also set the property appreciation at 0%.  Most investors would agree to move your money to the one that pays you a higher return, even if it takes a bit longer.

Here is the link to the graphs.  http://mcedge.tv/16azqh

Also, the graphs under “Rent vs Principal Paid In 2 Years” is a realistic situation, because many renters will continue renting over the next couple of years.

I hope this helps bring light to renting vs owning, because I do receive lots of positive feedback that looking at graphs help renters understand the rent vs own answer in the long run.

UK property market is down; if you catch the signals you would realize that the market will remain slow for next few months, if not years. Here are some facts that forecast the quake is not over.

1] Number of approved mortgages is at historic low; this will surely have an effect on the property market. The market is likely to face stagnation.

2] Buyers are confused on whether they should go with fixed or tracker mortgage; tracker seems to be profitable for the time being but there is no guarantee how long it will remain low.

3] Unemployment problem is not 100% solved. This is a factor directly related to the rise and fall of the property market.

4] Repossession rate is still significantly high; many homes are vacant, many homeowners are struggling to find a buyer even when they are ready to sell it for a price way below the market value. Many homeowners are finding it beneficial to work with quick home buyers under such circumstances.

5] First time buyers have taken a step back and not much active.

6] Though average wage of females looks good, it will take few more months, if not years, for average wage of males to come to the level where it was before the credit crunch.

7] Interest rate is stable but the base rate is about to rise in order to check inflation.

8] The economists at Halifax and Nationwide have anticipated a further 2% fall of house prices all over the country. Source: remortgage.com

9] Tenant demand is rising but BTL investors are still dormant except few.

10] Fuel price is again on the rising side of the graph which means price of all essential commodities will go high.

All these are stopping the property market to get out of the stagnation. Troubled homeowners who are trying to sell houses fast to stop repossession are finding it difficult to get a buyer. This is like an end-less loop – the market itself is hindering its progress! It is really difficult to forecast when the things will start to look up.

——-

This is a guest post by Melissa Rogers.

Author Bio:

Melissa Rogers is a financial writer. She writes articles for Compare Home Buyers blog and many other portals. You can follow her on twitter @rogersmelissa42

Not exactly credit advice or mortgage advice, but thought I’d share the funniest Master Card commercial.

Don’t forget to follow on Facebook: 

http://www.facebook.com/pages/edit/?id=93166950918#!/pages/Milwaukee-WI/Mortgage-Advice-Credit-Advice/93166950918

Guest post by Eric at FxWork.net

There are numerable risks an investor should consider when trading in FOREX, especially when transactions are prone to immediate and sudden rate changes. So what are the factors involved in such risks and is it worth trading despite them?

Certain risks involved in Forex trading would be greatly affected by factors such as a company’s basic purposes, an organization’s mechanism and reason for achievement, a company’s management which would strongly define its success or downfall, and the presence of a company’s resources, and luck. It is understood that the Forex market stands independent from other comparable markets for the main reason that it is outside the boundaries of exchange. Due to the development of communication facilities, banks or operation houses are able to trade directly and do not need any special organization like stock exchange. Such a market has grown and developed at a quick pace worldwide, and is therefore, difficult, if not almost impossible to curtail.

Apart from the fact that there is hardly any regulation procedure in the Forex market for any single country, we can therefore surmise that such a market’s broker is not required to possess any license or certification. The market is not an adjusted one despite the various potential problems that it can hold for a trader. Such qualities such as trust and honesty are essential in the continuous running of operations, and yet there are a potential number of risks, there are always ways in order for one to curb the risk of unnecessary financial exposure.

The Forex investor must at least know the basics of technical analysis. He or she should be able to understand and interpret financial charts and its movements. It is certainly one way of being less risky when it comes to one’s investment as even those traders who are experienced are still unable to absolutely predict the market’s behavior. Certain tools such as “stop-loss orders”, which contain guides on how one can exit his position if the price of a currency has reached a particular point, are one of the obvious and common techniques to minimize one’s investment risk.

Although certain risks are definitely present when trading in the Forex market, one should not be put off by them. Despite the risky factors involved, numerable companies from western countries like those of Europe and North America still participate in the Forex trade business, having it as their primary source of income. In fact, it is still known and indicated as one of the most fair and open trade investment opportunities one can find globally!

Guest post by Eric at FxWork.net

The forex market, also known as the FX market, foreign exchange, or currency trading, is the biggest market today. It’s turnover ranges from 1 trillion dollars to 2.5 trillion dollars daily. Let’s get an overview of the basics of this promising business.

Like every other market out there, the forex market is also involved in trade. Though other markets would trade goods, produce, and others the forex market is concerned with trading currencies of different countries. Gold and silver is sometimes traded as well.

Various institutions and individuals take part in the trade. In the forex market entities such as corporations, banks, institutional investors, hedge funds, other financial institutions and even private individuals get involved with the trade. Not every individual is really suited to participate in trading. Companies often give private individuals disclaimers and warnings so that such persons don’t jump the gun and begin trading without prior advice.

Before undertaking any transaction in the forex market, a trader should evaluate his or her financial situation carefully. There are instances certain transactions are not appropriate given an individuals experience and financial standing. Remember that in any business you must not invest money you are not ready to lose.

For beginners it is always basic to consult with your forex dealer or the trading platform you would like to make a deal with. Selecting a good broker, forex dealer, or trading platform is necessary so one may optimally handle trading and activity monitoring. These help maximize profits and minimize loss.

In forex trading, currencies are traded in currency pairs. An example is the US dollar to the Euro (i.e. USD/EUR). A trader earns from fluctuations in the currency exchange market. The obvious principle therefore is to buy low and then sell when high. You would not have to buy or purchase real currency. You get to purchase contracts for amount and exchange rate of your quoted currency pair.

Since the forex market is very volatile it also entails risks. Changes in the currency exchange can move drastically in your favor and at times against you. You may be earning in a moment and then profits may begin to fall the next. But your loss is limited only up to your margin, which is your initial investment. You never lose money beyond this initial investment.

Though we can indeed say that the forex market is not really easily influenced by any external factor, the risks and the sources of those risks are real enough that one should consider and monitor possible entities or conditions that may influence price movements. Since this market is very liquid traders can open and close positions instantly.

Before engaging in the rough and tumble of the forex market it is advisable to seek advice from a broker. Some institutions even have one-on-one basic training sessions before you begin trading. It is always important to understand the basics of a business before engaging in it. With sound advice and a good understanding of the forex market one may begin trading.

Just wanted to take a moment to remind readers that you can find additional mortgage advice at mortgageadviceforums.com

I’m not paid or anything to advertise for them.  I personally think it’s a great place to get genuine mortgage advice.  Bruce Brown is always fast to answer everyone’s questions.  I’m a registered member as well and I try to take the time to help with questions and advice.

For Wisconsin home loans, it’s that time of the year again when your lender will disburse your property tax payment from your escrow account.  This typically happens in early to mid December.  If you want to use the payment of your property taxes on this years income taxes, make sure your pay your taxes by December 31st.

If your mortgage payment included your property taxes,your lender will be writing a check to either your municipality or you and the municipality.  When you closed on your current mortgage loan, you were given the choice whether or not you wanted the check sent to you or directly to your municipality.  If you are not sure which option you chose, it’s best to call your lender and look into this.  The lender can change where the property tax payment is sent at anytime.

If you not are able to pay your property tax bill by the end of this year, don’t worry, you won’t lose out on the tax benefit.  Any amount that wasn’t paid this year, can be added to the following years taxes.

(side note: I’m not a licensed CPA, please verify all tax deductions with your tax preparer)

Once your property taxes are paid, it will be much easier to refinance your Wisconsin home loan.  The lenders will require a less amount up front for your property tax escrow account.

This is a recent post by a Florida mortgage broker in the Palm Beach county of Florida.  Thought this was interesting to share…

As a mortgage broker in Palm Beach county, I work with a lot of first time homebuyers. The loan process is sometimes scary and intimidating. It really doesn’t need to be that way, however you do need to be prepared to provide certain information so the lender can determine if you can pay the loan back.
A purchase that I am working on is consuming a lot of my time and energy, so I’ve decided to write this “letter” to hopefully educate and inform first time buyers and anyone else who may not be familiar with the mortgage loan process.

Dear Borrower:
As a mortgage broker, I pride myself in getting loans closed as quickly as I can. I’m good at what I do, but I also rely on a team to help me. That team can include an appraiser, a Realtor, a processor, an underwriter and YOU. Everyone on the team relies on the others to do their job correctly.
That’s right – you are part of the team too. And your job is to provide me with the documentation I request in a timely manner. If you do that, you loan is going to close quickly. If not, your file is not going anywhere.
You are wondering why it’s been a month and your loan hasn’t closed…let’s see..what could be the problem? ..
The pay stubs you gave me are from 3 months ago – and we need recent paystubs. It’s taken me 2 weeks to get current pay stubs from you. If I submit your loan with outdated documents, the underwriter is going to put your file at the bottom of the pile.
You told me you had a 401K, so I asked for verification. Another week goes by..OK, I think you get my drift.
You’re upset that I am “asking for so much stuff” that you’re going to have to take time off work.
I am asking you for the things I know the underwriter will require. The underwriter needs to justify approving your loan. If you were loaning someone a few hundred thousand dollars, wouldn’t you want to be assured you would get paid back?
If you are prepared with the documentation you will need , your loan process will go very quickly and smoothly.

Here’s a list of documentation you will need to provide to your mortgage professional:

1 month’s worth of current pay stubs
W2′s for the past 2 years
2 years tax returns – current
2 months of current bank statements..all pages and all accounts.
Current statements for any other assets such as a 401K or mutual fund.
2 years of complete employment history and a phone number for the HR department or a supervisor who can verify your employment.
Letter of explanation for any derogatory items on your credit report. Something very short and to the point, you don’t have to write a novel.

For a purchase, a copy of the sales contract signed by all parties
A copy of your driver’s license and social security card

It seems like a lot, but this is what your mortgage professional needs so they can submit your file to an underwriter for approval. Providing these things with the file makes the underwriter very happy and that means a faster closing for you!

Money management has become very important, since many American households have lost some sort of income.

This website that has become very popular with helping people manage their money for free.

mint.com

Recently they have created an iphone application.  Go here to read about it.

What I think is great about this site having an iphone application is that you have immediate access to your daily money management budgets.  Since the purpose of this site is to manage your daily expenses to help stay on track with budgets, this iphone application is a must for those iphone users that are on there phone constantly throughout the day.

Hope this website helps you with tracking your day to day expenses.  Heck, you may just realize how many StarBucks you drink in a month!

If you liked this post, don’t forget to subscribe to future ones!

I came across an article about what your home value will be in 2012.

It’s some interesting reading and brings positive news to many areas across the nation.  It doesn’t cover all cities across the nation, but most of the major cities.

Business Week:  What Your Home Will Be Worth in 2012