The Credit Cycle & Mortgage Performance

Deputy Chief Economist of Core Logic, Sam Khater is a commonly quoted for his analysis of real estate and mortgage markets. Although real estate loans have been the exception to loan trends showing deterioration over the past few years, a recent shift has begin to occur for mortgage loans.

Khater has analyzed vintage performance, the first 10 months of a yearly loan performance cycle, since 2010. Khater has found an important trend in the 2010 - 2016 data. The 2016 was the first year that the delinquency rate after 10 months was higher than the year before. Though economic growth continued through 2015, he predicts that affordability cracks are beginning to show with a modest worsening of 0.17 percent in the 2016 vintage.

Even though the decline is slight, it is important to start tracking this trend as historically a decline in mortgage performance indicates a downward trend in the overall economy. When the economy is declining, lenders start tightening their belts until the credit cycle bottoms out and the economy begins to improve again. Although it is now a seller's market, this is definitely something to be aware of if you are planning on buying a home in the near future. Head caution to not only higher prices but also credit cycle and mortgage delinquency trends.

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Building Your Social Media Marketing: Learn From the Experts

Looking to build your social media following? The buzz about how to drive and sustain your social media marketing can seem like a daunting task and can lead one to ask, “How do I get started?” Take advice from 3 social superstars: Tai Lopez, Grant Cardone, and Mr JWW.

Getting Started

When marketing, use the PVP formula: Product, virality, and paid. You must start with an quality product, then you promote virality by catching the attention of your audience through your quirky and controversial voice, last when your product has started to go viral further the success through paid boosting.

Also, be sure to post frequently through a variety of social media channels: Facebook, Twitter, Instagram, YouTube. It is vital that you are passionate about the content you are posting!

Saving Time

Social Media is a not a big secret. It’s easy to follow what is working for others who are successful. Learn and adapt your strategies from successful examples. Once you’ve figured out your strategy, be sure to delegate this task to trusted individuals.

Biggest Mistakes

Do not underestimate the power of social media. Go big, fast, and hard right from the start. However, it is important to learn the tone, personality, and needs for each platform. Another big tip is that authenticity is a critical factor. If you actively participate and engage in social media long enough (not just pushing a product,) people get to know you and begin to feel like a part of your life.

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Individual Healthcare Savings Accounts

Increased healthcare costs and out of pocket healthcare expenses have caused a real challenge in the recent years, so knowing how to have your money work for you is highly advisable. With a high deductible insurance plan, individual Healthcare Savings Accounts (HSA) can be started as a great way to benefit on tax free savings. Benefits include tax deductible annual contributions, tax free withdrawals for healthcare expenses, and growth on investment interest that is also tax free.

Before the age of 65,the HSAs can be used only for insurance deductibles and qualified medical purchases, vision, and dental, and after this age funds can be used on non-medical related assets including real estate and real estate notes.

Annual 2017 contributions are $3,400 for individuals and $6,750 for families; catch up contributions can also be made over the age of 55. If you've not yet started your HSA, consider this as a strong investment strategy in the upcoming year.

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Investing for Retirement

Starting early for retirement investing is always the best approach for saving. However, it's not too late to begin at any age; take advantage of compound interest immediately. Note that once you build a baseline amount to suit your comfort, say seven years worth of deposits to an IRA, you can stop making payments and let compounding interest do the work for you. As a rule of thumb, investing approximately 10% of your pre-tax earnings is sufficient. For late comers, ensure you meet this mark but also be careful not to take too take too much risk to compensate for lost time.

Being tax efficient is the best approach for saving money. Many employers offer 401k investment opportunities with a certain percentage of company match. If this is an option for you, enroll in this program since the income you contribute is not taxable. Another benefit of this program is that low interest loans can be taken out when needed.

It is also important to invest in riskier types of investment depending on your age and comfort level. Stocks currently maintain returns on dividends residing in the fields of pharmaceuticals and energy demand. Investing in stocks may not always be your best bet, but risk-free investments typically do not keep pace with the rate of inflation. Real estate and other commodities and assets are great alternatives, especially at an older age.

For the full article on how to avoid missteps when investing, click: Read More

Reverse Mortgage Foreclosures

Know the HUD Guidelines 24 CFR 206.125

One must be 62+ to qualify for a reverse mortgage. When these homes go into foreclosure, there are special guidelines that must be met to purchase the property. Here are a few:

• 60 day close of escrow
• "As Is" condition at time of closing
• Buyer must activate utilities for inspection
• 10% down on cash offers
• Homepath financing not available
• No electronic signatures

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Investor Due Diligence for Maximum Proft

To take correct actions in maximizing ROI on a real estate investment, follow these 4 guidelines:

1. Market Analysis - Ensure that you are taking advantage of all available market data.
2. Title - Ensure a thorough title search is processed. DIY title searches are possible.
3. Condition - Always plan for hidden repairs. Be diligent on property walkthrough.
4. Seller - Knowing the motivation for the seller is key to making a sound offer.

Using strategy to gather and analyze date prior to making an offer takes time but will be well worth it upon the sale of your investment.

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Energy Efficient Mortgages

Whether purchasing green energy products or retrofitting an existing home, it important to ask yourself 3 very important questions.

1. Does the energy improvement encumber the resale value of the home?

2. How long will it take to recapture the initial investment and show true savings?

3. What would the improvement bring in real dollars as sold to a likely buyer?

It generally makes sense to invest in energy improvements if you plan to stay in the home for a long while, but financial considerations are a must. If the purchase rolled into the mortgage, consider whether the loan  is assumable. Also, consider loan amounts to home equity before purchasing.

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