The Come-Back of the Down payment

With the real estate market offering up some record-breaking deals around the country, it is a proven fact the down payment is making its supreme come-back. Those have been tucking away small amounts of cash in their savings accounts, investment accounts, or even under their mattresses, are obtaining the best of the best in the real estate deals market.

Why are those with cash to spare, able to get better deals? With the recent bend in the stability of the real estate market, banks, finance companies, etc. are being quite particular with whom they choose to lend finances to. Perfect credit isn’t a saving grace for investors or families anymore, nor is a healthy employment record. Although these are all great traits to have when applying for a home loan, finance companies are now using the phrase made popular by movie, Jerry McGuire show me the money!

What type of money or funds are finance companies looking for? Cash for a down payment, or proof of down payment cash to get pre-approved. Companies in the past have allowed for smaller down payments on new houses or build sites; anywhere from ten to twenty percent. If you, as an investor, or a family home buyer want to get pre-approval fast, lenders will be looking for at least twenty percent down.

With the cuts in price on most real estate right now (whether you are considering Nacogdoches real estate or homes in Maine), twenty percent may not even be that much to come up with. Although, if you have it, or more, you have a great chance of buying your dream home on the cheap.

This extra money up front makes the lender feel as if their investment in you, is somewhat protected. Now, those other factors such as, steady employment history for at least two years, steady checking/savings account history and good credit, will also help in association with this down payment amount. But in the end, lenders want to know that if anything goes sour with your payments in a year or two, that they can be somewhat protected.

How long is this ‘down payment come-back’ predicted to exist? Some researchers and market analysis teams have determined that their predictions fall somewhere between six months and a year. This also means that this is how long the researchers are predictin 소액결제현금화 g the drop in housing costs to remain. So, truly, even as it may be a buyer’s market for those who can “show lenders the money”, for those who can, real estate and new home construction deals of a lifetime, await you.

A healthy cash flow is the aim of all business people. It is the key for the growth and continued existence of business. Cash flow is the movement of income and expenditure within the business. Poor cash flow has caused many businesses to fold. Even successful business would collapse if a healthy cash flow is not maintained. To ensure that the business will maintain a healthy cash flow, one should be aware of the dangers that would cause such problem.

For novice businessmen, financing institutions are heaven sent and the solution to their financing problems. Borrowing from them would naturally augment the meager funds of these new start-ups. What they do not realize is that borrowing would cost money in the form of interest rate. Big debts would naturally mean big interest rates. Big interest rates due to over financing have caused the failure of many businesses. Secured loans would put your properties and assets at risk if you fail to make the necessary payments.

Cash flow can consequently be affected by too many creditors and too many debtors in the sense that debtors who failed to pay on the agreed time. Especially if the money owed is sizeable would make a dent on the funds of the business. In the same manner, failing to pay your creditors because your debtors failed to pay you on time would mean high interest charges and would distort your credit standing.

Over trading is another cause of cash flow problems. Over trading is mostly practiced by small business where customers are allowed to buy on credit. This lessens the cash flow since cash will be paid only on the agreed time. The need to borrow more money to supplement the existing funds is enhanced. Borrowing to add to the funds is practiced by most businessmen with the notion that interest on the borrowed money will be covered by the profits. This is also a way to keep the business “alive”. Your ability to pay these debts depends on whether your debtors will pay you on time. Businesses that failed to make payment on time will face the consequence of closure.

Over investing, just like over trading could cause a negative cash flow. Businesses that have ample funds might be tempted to purchase non-priority assets. This can of course lead to business failure since cash on hand that should be available to finance daily operation and any unexpected expenditure is tied up with the purchased asset. As an alternative, assets such as machineries and buildings could be leased to have more available funds on hand.

Buying and storing excessive stock could be disadvantageous to the business. Money is tied up with the stock especially if it is not sold quickly. The storage cost would add to the expenses. Demand for the product should be taken into consideration. Change in demand would leave you with unsold inventory.

Debts by the creditor and debts to the creditor are both vital factors that cause a negative cash flow. Cash flow problems have been known to cause business failure. A smart businessman would understand the consequences of a poor cash flow to his business and would ensure that his business will not be burdened by excessive debts that could eventually cause its failure.

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