Luxury Homebuyers – Here is the Good News and the Bad News

Luxury home buyers have discovered this year that securing mortgage financing for a million dollar home is not as easy as in the past. The deterioration in the credit markets have made it increasingly difficult for buyers to obtain mortgage financing for high priced homes. Nevertheless, the markets have improved throughout the year, with rates and rate spreads falling and more lenders entering the market. Nonetheless, rising rates could make today the final window of opportunity to purchase a home at an attractive price point, and with attractive financing.A jumbo mortgage loan is a home loan in excess of the “conforming loan” limit; a limit is set by the Office of Federal Housing Enterprise Oversight (OFHEO), the regulator for both FNMA (Fannie Mae) and FHLMC (Freddie Mac). The current conforming loans limit is $417,000 ($625,000 in Alaska, Guam, Hawaii, and the U.S. Virgin Islands). The secondary market for jumbo loans, however, is limited primarily to mortgage lenders themselves who are backed by lines of credit provided by investment and commercial banks as well as large insurance companies. Because there is less of a secondary market for these larger loans, they tend to be somewhat more difficult to find and priced higher than conforming loans. This rate differential has ranged from.25% to 1.5% depending on the market environment.Over the past several years, as the credit markets became increasingly loose, jumbo loans gained popularity. Many jumbo loans were made to investors and to other borrowers using “stated income” programs, now often referred to as “liar loans”, which required little in terms of income and asset verification. As the credit markets tightened, so did the underwriting of jumbo loans. Full documentation is now mandatory and jumbo loan applicants must demonstrate credit scores of at least 720. In addition, jumbo applicants must not show any 30-day mortgage or rental payment delinquency in the prior 12 months.Three additional factors have created further disparities between conventional and jumbo loan underwriting. These are the required reserves, maximum loan to value, and debt to income ratios. Jumbo loans require that liquid assets equaling 12 months’ reserves reside in the borrower’s financial portfolio with three months’ of bank statements confirming the assets mandated. Conventional borrowers are normally required to prove only 2 months of liquid reserves. Traditional loans can be obtained for up to 95% of the value of the home whereas many lenders cap jumbo loans at a 75-85% loan-to-value. Lastly, the maximum debt to income ratio allowed for a conventional loan is 43% whereas a jumbo loan applicant must only demonstrate a maximum of 40% total combined debt.In addition to increasingly stringent underwriting standards, the market for securitized jumbo mortgage pools has virtually disappeared. Consequently, so did the loans. No more than a year ago, it was difficult to find any fixed rate jumbo financing in the mortgage marketplace. Most borrowers had to settle for adjustable rate loans in the hopes that they would be able to refinance in the future. Furthermore, the number of lenders in the jumbo market also declined, leading to increasingly higher rates.The good news is that, today, there are more lenders in the jumbo loan marketplace. 30-year fixed rate financing is available from select lenders and rate spreads on jumbo mortgage loans have declined relative to conforming loans. In December, 2008, we were seeing spreads on a 30-year fixed rate mortgage of almost 2%. Today, these same spreads are down to less than 1%.In addition, as interest rates have fallen, rates on jumbo mortgage have declined. Notice that both rates and spreads have started to increase modestly.This is likely the best time in recent memory and in the near future, to finance a new luxury home or to refinance your current jumbo mortgage. The low rates are due to the government adding liquidity to the market, primarily through Fed mortgage backed security purchases. Rates would be significantly higher had we not had this intervention. The announcement that this practice will be discontinued in the first quarter of 2010, coupled with the likelihood of higher rates due to the falling dollar and dramatically increased government spending, make it likely that we will see higher rates next year. For luxury home sellers this creates a motivation to sell soon despite a relatively weak housing market. It also creates a window of opportunity for buyers to secure financing that may be at the most attractive rate levels we will see for the next decade.In conclusion, we believe that there is positive news for buyers considering rates have moderated and more programs are available in the jumbo space than there were a year ago. Existing borrowers can also take advantage of the changing market by refinancing their adjustable rate loans to fixed rates. While underwriting is indeed more stringent, financing is still available for qualified buyers. The outlook for the future may not be quite as attractive as an increasing rate environment will force many buyers to a lower price point, and a contracting economy leads more potential buyers to re-trench rather than buy that new home. The bottom line: acting now is likely your best strategy if you are a buyer or a seller of a luxury home.

How OOH Media Has Topped the Chart in Contemporary Advertising

Advertising is a common practice of brand promotion widely adopted by brand owners and advertisers to popularise their brand image. Advertising is of various types and means. Depending upon the tools used, advertising is classified as television ads, radio ads, print ads, outdoor ads, internet ads, mobile ads etc. In this article, let us exclusively discuss about the significances of OOH advertising and how it leverages robust business for various brand owners.OOH Advertising plays a significant role in contemporary brand advertising by topping the chart of advertising mediums. The launch of various rich tools and applications, the ready availability of brand message for customers when they move out of home to work, shop or whine away, the changing consumer behaviorism all these create more opportunities for outdoor advertisers to launch unique promotion campaigns for their brands.How OOH media leverage robust business for brand owners?Its time to say bye to television & print ads and switch to OOH media for brand advertising. Ensuring effective brand communication to brand owners, OOH media has leveraged robust business for a wide range of brand owners and advertisers. Though OOH Advertising is the oldest means of brand promotion, the pendulum of brand advertising opportunity still swings towards OOH ads. Small and big advertisers both invest in this means of advertising to promote their brand business in the market place.Why OOH ads have to pass the crucial creative test?An OOH Advertising campaign has the potential to provide proven brand communication solution. However, any OOH ad has to pass the supreme creative test before it finally gets live through a particular OOH media. Outdoor ads stand out from other modes of advertising because of its originality and creativity. With technological tools and applications, OOH Advertising is presently creating a huge upsurge in brand promotion activities.How OOH Advertising emerged as the ultimate means of brand advertising?Some marketers consider OOH advertising as an afterthought means which is precisely true. Television ads were considered as dull adaptations from radio and print ads and that was how television advertising became an effective means of brand promotion. However, in today’s world, people do not have much time to watch television or read newspapers to stay informed about what is new in brand advertising. Print ads take 10 minutes to comprehend the brand message while people usually reach home late (post office) and usually don’t have time to switch on the television to watch ads. Such hectic lifestyles of people further encourage outdoor advertisers to indulge in more OOH advertising campaigns so that their customers stay informed about various brand messages through OOH ads.Do OOH ads assure successful brand message?Yes with no ifs and buts. However, as mentioned earlier, OOH ads have to pass the supreme creative test in order to provide the targeted impact on the customers. The creative stream in any OOH ad should keep flowing so that customers find it alluring and pay attention to the brand message.

Small Business Loans For Bad Credit – Know This Before You Get A Small Business Loan

There was a time when business owners could simply walk into a bank and get a loan for the business based on their working relationship with the bank and loan officer. With today’s turbulent economy, those times are over, and banks are not willing to expend poor credit business loans. Today’s loans are issued primarily based on the credit score of the business owner, which can make it frustrating to search for a loan to expand or improve your business. Rather than turning to your local bank to find small business loans for bad credit, there are some other alternatives to help you to understand how to get a small business loan with bad credit.In some cases, local business owners can find small business loans for bad credit by speaking to a smaller, local bank and asking them to consider factors other than the owner’s credit score. Many people don’t realize that their business also has a credit score, which is based on the same factors as a personal credit score- your business credit cards and other unsecured debts, payment history for bills, and the outstanding balance on any loans your company has. If your business has a good credit rating, you may be able to obtain a loan even if your own credit rating is lower.Online specialty lenders sometimes offer small business loans for bad credit. Some of these lenders actually search for businesses that need money. Many of these lenders offer loans that have high initial interest rates, with the provision that the interest rate will be lowered as the business owner demonstrates the ability to make on-time payments. If you are confident in your business’ ability to pay back the loan, this type of loan can be ideal for your business.An alternative to poor credit business loans is available to business owners who own their own home. In many cases, you can take out either a home equity loan or offer your home as collateral for a secured loan. For those business owners who are confident in their ability to pay back the amount borrowed, using a home as collateral toward bad credit business loans can be a way to get a lower rate and better loan terms.When you are looking for a more flexible way to get money for your business to make purchases and pay small bills, you may want to consider looking for poor credit business credit cards. There are lenders who are willing to offer credit cards to businesses in lieu of small credit business loans, and by using small business credit cards for bad credit, you can help to build up the credit score of your company. If you need money to make small purchases, such as office equipment, fuel, or supplies, applying for poor credit business credit cards can offer you far more flexibility than poor credit business loans.Finding the money you need to make your business work may not be as intimidating as you think. Using the resources of lenders who are willing to extend small business start up loans for bad credit, can not only help you stay afloat in a difficult economy, they can help your business grow. Don’t let worries about bad credit keep you from applying for commercial loans.However, do keep in mind that when you are looking for Small Business Loans For Bad Credit, you have to look at all the alternatives and compare the interest rates of different loans to ensure that you are getting the best deal possible. Often times, you will get the best rates for loans that are secured by some form of collateral.