Owner builder construction loans have not been immune from the pains within the mortgage industry over the last couple of years. In fact, there have recently been some major changes within the world of owner builder construction financing that are worth examining. It’s time to take stock and fully assess your current options for the new realities of today’s market.

Over the last couple of years, as liquid capital has been evaporating from the pool of mortgage financing around the nation, owner builder construction loans have been morphed and altered dramatically. If you built your own home a few years ago, you probably wouldn’t even recognize the form and structure of the owner builder loan today. Simply put, there’s a new reality for owner builder construction. If you want to build your own home, then you need to understand the options currently available for financing and assess the advantages and disadvantages to determine if being an owner builder is right for you.

The latest change in owner builder financing occurred when MidCountry Bank decided to indefinitely suspend the origination of any new construction loans. MidCountry was one of the last bastions of nationwide lending for owner builders, and this recent shake-up means that you must now look upon this specialized financing in a whole new light.

When nationwide financing was available, guidelines and rates and terms for owner builder loans were more or less uniform from state to state. If you were building your home in Maine, your cousin in Arizona could basically expect to receive the same guidelines to build his house. In addition, nationwide lending meant owner builder programs were much easier to find. In other words, it was much simpler to find a bank that provided loans nationwide than it was to deal with a multitude of local banks that may or may not provide construction lending at all.

The good news, however, is that there are still owner builder loans available around the country. With tightening capital, lenders have been forced to scale back guidelines and increase costs of specialized products.

Nowadays, you may find that the lender requires a small down payment, as opposed to financing every penny of the costs to build, including closing costs in the past. Or, you may find that the requirements to qualify for an owner builder loan have grown stricter. For example, guidelines nowadays will most surely address specific details, such as the sale of the borrower’s current residence or the review of actual bids and estimates.

Despite the tightening of the guidelines, owner builder construction will still provide the same basic benefits that should make the program well worth your time and effort. You will still be able to manage the construction of your new home without having to hire a general contractor. This means you will still earn a large amount of instant sweat equity by cutting out the costs of a GC, and you will still be able to manage the process yourself to ensure the home is built exactly to your own specifications.

Most owner builders will save anywhere from 20% to 35% during construction. If you look at the big picture, these overall savings make owner builder construction still worth your time and effort, despite the increase in financing costs around the country for these specialized loan programs.

So, as much as things have changed, the basics are still the same. If you want to be an owner builder, take a deep breath and always look at the big picture. It helps if you work with someone who knows the financing options and has been through many projects before. Even in today’s financing market, an owner builder construction loan doesn’t have to be overly complicated. But, you will need to understand the current options available.

About the Author

Chris Esposito specializes in owner builder construction loans, providing financing through the Owner Builder 101 program. If you would like to learn more about building your own home without the costs of a GC, visit www.OwnerBuilder101.com, or call (877) 876-3688.

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A financial crisis has happened with regular intervals throughout the last century, it happens again in the year 2008, and probably will happen in the future in much the same way. There is no fundamental differences between such crises in our time and former crises, except perhaps that they occur faster, occur more frequently, but fortunately also heal faster.

THE TYPICAL SITUATION BEFORE THE CRISIS

The crisis often occurs after a long period of economic growth, high employment and high activity. The situation for companies and individuals are typically as follows:

- The economic activity in the whole society is very high after a long period of growth, but is beginning to decline.
- Stocks are traded for historically high quotes after a long period of rise of 300% or more, they have reached an all time high level, but they are beginning to decline again.
- The prizes of real estate properties are also high after a long period of growth, 300% or more, but they also are beginning to decline after an all time high level.
- Companies are often over-established after aggressive investments for borrowed money. The investments have not yet shown profitable, but the companies estimate great profits from the investments because they think the general growth will continue uninterruptedly.
- Also the average individuals have high debts after having invested massively in their homes and in luxury objects. They have some beginning problems with payment on their debts, but think these problems soon will go away with an anticipated further rises of personal income.

THE INITIAL STAGES OF THE CRISIS

The crisis usually has a slowly developing initial face. During this face the situation can reverse and the economy recover without great damages. In this initial period one can observe the following process:

- Steadily more companies realize that their massive investments do not pay back with the expected revenues and they have problems paying on their loans. They abruptly reduce further investments and begin selling off assets.
- Steadily more individuals also realize they have a too great debt to handle with their private income. They reduce their consume and sell off properties and luxury objects.
- Companies are getting steadily less orders, are selling less and have less to do because of reduced consume and investments.
- Earnings of companies and individuals are declining and many are downright loosing money.
- The stock market values are sharply declining, often 20-30%.
- The property prizes are sharply declining, often 20-30%.

THE FURTHER STAGES LEADING TO A FULL-BLOWN CRISIS

At some time there can be a critical turning point leading into the development of a full blown crisis that it is impossible to recover from in an easy way. This turning point occurs when a certain percentage, for example 10%, of individuals and companies realize that they do not have enough income to handle their debt, and that sell-off of properties and stocks will not nullify the debt. The full-blown crisis has these properties:

- The activity and earnings of companies are abruptly declining.
- Many companies experience massive losses.
- The number of companies and individuals with debt trouble is abruptly rising.
- The number of bankruptcies is abruptly rising.
- The unemployment level rises abruptly.
- Banks get into serious squeeze due to customers unable to pay on their debts and due to the decline in the value of properties serving as security for the loans.
- The troubled banks have to rise the interest rates by many percent to counteract the losses. But this act only increases the problems for other banks, individuals and companies and accelerates the crisis.
- A high percentage of the banks get unfunctional and bankrupt
- Now there will be massive sell-offs of properties and stocks. The sell-offs are exerted by individuals trying to free themselves from some of their debts and by banks trying to stop losses on loans.
- The stock market cracks down by an new 50% or more driven by the massive sell-offs.
- The real estate market also cracks down a new 50% or more due to massive sell-offs, but usually somewhat slower than the stock market.

THE CHARACTERISTICS OF AN ULTIMATE CRISIS

The ultimate stage of the crisis is seldom reached, because the governments will at some point take control of the financial systems and secure a minimum functionality.

In the ultimate crisis the production of goods and services in the society has fallen 30% or more and continue to fall. Investments or building activities have totally halted. There is mass unemployment, 30% or more.

The financial system has nearly totally collapsed, and is only able to support the daily payment for food, energy and other necessities. The production facilities and organizations of the society have fallen apart 30% or more due to lack of maintenance, which means that the society is not able to recover in a short time.

THE END OF THE CRISIS

Before the crisis can end, all sell-offs to pay back on loans must be fulfilled. Then every actor in the society has to accept their losses. Debts that actors are not able to pay back must in some way be nullified. Then all the pieces remaining of the former companies must be fixed together again into new functional units. Then the society can slowly rebuild its strength.

THE CAUSES OF THE CRISIS

An important cause of the crisis are over-optimistic companies and individuals during the foregoing period of economic growth. They tend to believe that the general growth will continue forever without interrupting periods of economic decline. They also tend to overestimate themselves and think they will be a winner in the competition against other companies or persons, not a looser, not an average performer, but the winner.

This optimism, which is a general human property, make all actors borrow massive amounts of capital and invest them in homes, luxury objects and expansion of their business. This expansive behaviour tend to accelerate for quite a long time untill in meets the wall.

Another cause are executives in banking companies tempted to lend out as much money as possible to the borrowers, regardless of the consequences for the bank and the borrowers, because this behaviour gives the executives an enormous short term personal gain.

HOW TO AVOID FINANCIAL CRISES

Future crises can only be prevented by hindering financial institution lending out more money to anyone that the borrowers can pay back in a comfortable way. This can only be done by governmental regulations that set clear criteria that must be fulfilled when a certain amount of money is lent out.

Also banks must be forbidden to establish employment contracts for their executives that reward them directly for the amount of mortgages they establish.

About the Author

Knut Holt is an internet marketer and consultant focusing at technical, health and scientific items. To find items like car equipment, remote control models, airsoft guns, chemistry sets, electronic kits and components, microscopes, binoculars, night vision instruments, music instruments, computers, PDAs and more: —

http://www.mydeltapi.com

For health advices, body products, fitness products and products to treat diseases, please visit:

http://www.panteraconsulting.com

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Here is a wonderfully pain-free and easy to implement debt management plan that anybody can utilize to eliminate credit card debt and start to put some money away.

If your bills have been increasing and your monthly obligations are getting out of hand, you’re not alone. Debt is mushrooming at a surprising velocity, and a growing portion of people find their balances growing larger and larger. However, the good news is you actually are able to cut back on your debt and even resume stocking away some savings by following some exceedingly simple strategies.

Credit card debt can rapidly escalate. The key to accomplishing debt relief is to end this spiral and begin to pay off your debt. The following are three methods to do exactly that.

1. Ask to Have Your Credit Card Interest Rate Lowered

If your credit card interest rate is far too high, communicate with your credit card bank and request for them to lower it. Odds are, you could find a lesser rate at another bank, and your creditor knows this. So call their bluff. Let them know you are able to get or have been offered a lower rate, and request for them to match that rate. If they won’t, all you have lost is a phone call. But if your request is fair (don’t ask them to lower your rate to %5), there is a wonderful likelihood they will reduce your rate.

2. Don’t ever Pay a Credit Card Past-due Charge

Late fees have been going up very quickly recently, and grace periods have been becoming shorter and shorter. Make sure you always pay at least your bare minimum payment by the deadline. If you are absolutely not prepared to pay even that amount, then call your credit card bank and advise them. You might be able to buy yourself a bit of time. If you are late with even one payment by only one day, there is a very good likelihood the company will raise your interest rate, often by 50% or more. Over time, this can can multiply to charges far more significant than the 30 or 40 dollar late fine. If you do skip a payment, then don’t forget to contact your credit card company as soon as possible afterward. Quite a few creditors will void the charge if you ask them to, especially if you have a worthy excuse (like you were ill or out of town). But no matter what you do, convince them to get rid of the late penalty, for this will likely spare you from having your interest rate raised and maybe save you a lot of cash or more.

3. Obtain a New Credit Card

If your credit card bank refuses to reduce your rate, just look for a lower rate credit card and switch your balance. There are many credit card banks around glad to balance transfers. What’s more, even if you have made some tardy payments, thus causing your rates to go up, the chances are your credit evaluated hasn’t been changed. Banks typically tell credit bureaus when checks are substantially delinquent (by like 30-60 days). If your credit rating stays unaffected, there should be nothing at all stopping you from finding a card with a lower rate and saving a lot of cash by doing so. If you utilize one or all of these methods, make sure you utilize any money you save to reduce the balance on your cards. Eliminate as much of your balance as you are able to, and in very little time, you will be free from the hardship of credit card debt.

About the Author

Scott Russell is a writer, consultant, and editor of Debtconquest, where you can find a great Debt management plan, a guide to Credit card debt elimination and information on do-it-yourself debt negotiation.

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Personal grants offered by US Government contains variety of programs that have been particularly designed in order to meet all the requirements of different people.

There are several reasons which people find themselves in some kind of financial crisis and it is encouraging to know that financial help is available to these people to solve their difficult situation.

These grants can either be for a long term or a short term emergency situation. Presently, there are more than 5,000 private organizational programs that offer such grants to people. US Government also offer personal grants that have been designed especially for those who are disabled, senior citizens and veterans who are in need.

Preface research shows that every possible requirement is being covered in some method through these different kinds of programs which are available. You can see that there are several types of programs however just to offer you some inspiration below are some of the different types of programs which you can avail.

Real estate taxes, extracurricular activities, school supplies, summer camp, fuel, academic tutoring, clothing, car purchase for disabled, groceries, medical bills, home purchase, great living expenses, child care, legal services, public transportation, utility bills, home repair, mortgage payments, rent and housing assistance are some of the programs available.

These personal grants are certainly available to those who actually are in need of some kin of financial help. These usually cover those people who also work part time however earns not enough money to cover their regular expenditures and also those who are ill.

In fact US citizens are allowed to avail free personal grants that can usually range from 5,000 dollars up to 450,000 dollars.

There are several grant programs for particular minority groups, underemployed, unemployed and religious faiths as well. Private foundations and trusts offer more than 17 billion dollars in a year as personal grants.

By the way, these private foundations have to offer 5 percent of funds every year for maintaining their status of tax exempts.

Sadly, it has been seen that most of the people in US are not aware of these programs. Every year billions of dollars of free grants are being distributed by the American Government and even by private foundations.

Unfortunately, there are several people who are uncomfortable in applying for personal grants misguidedly assuming that it is the main sign of failure. Many people under this kind of misunderstanding feel that there are lots of red tape included.

These people require understanding that these personal grants are obtained by those people who have hard times or temporarily fallen into some kind of financial crisis.

In order to find more information about these grants you can get grant directories which are available on the net. To apply for these grants you have to fill an online application form where you have to provide personal information.

Any US resident or citizen can apply for or can receive these grants provided by private foundations and US Government accordingly.

However, it is important to understand that these funds are provided to those people who are in need of financial help whether they have a bad credit or have a declared bankruptcy status.

About the Author

Charles Bretz has been associated with Government Grants as an advisor and consultant. To find out more on how to receive Free Government Grants visit Government Grants USA. Click Here

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Be prepared for sharp increases in tuition at colleges across the country starting next year and for the trend to last for years!

The cost of higher education is one of the most significant costs that families face. Without a plan, Out Of Pocket Savings (OOPS) can be reduced faster than for any other expenditure and have a devastating affect on long-term financial vitality or even viability.

College Tuition set to increase

The American Council on Education, made up of university presidents, and The College Board, a non-profit association, are both warning of higher tuition costs in the future. Current reports show about 6 percent increases in recent years for both Private and Public colleges.

And current reported increases do NOT take into account the significant changes that the current economic downturn and credit crisis are causing! The impact on colleges will probably force them to increase tuition and pass on other costs to students and parents.

Family Net Worth

Family Net Worth is the total value of assets minus total of liabilities; that is, net worth for the whole family, including all family members. For most of family life, it is the same as the parent’s net worth because young children do not usually have any assets, or liabilities.

That starts to change as college gets closer because older children may have income, savings, and loans or debts. Certainly during and after college there can be a dramatically different outlook for Family Net Worth because of the significant costs of college tuition and other related costs.

Net worth is a good indicator of overall financial health. Family net worth can be an excellent indicator not only of a the ability for a family to financially handle significant events, such costs of higher education, but also of how healthy they will be after college.

College Funding Sources are Falling

There are several broad categories of external funds that families can use to pay for college. Each of these has a major factor that is already pushing the supply of those funds down or very likely will reduce the supply in the near future.

- Grants and Federal Aid: potentially lower due to economic pressure on state governments
- Loans: dramatically lower due to credit crisis
- Aid from Colleges: lower due to lower revenue
- Private Scholarships: lower due to down economy and lower business profits

College tuition keeps rising faster than inflation and therefore the need for external funds increases. Families need external funds more than ever to pay for increasing costs.

Increased Demand and Decreased Supply

So the Demand will likely be higher for these same funding sources and the Supply will likely be lower. The competition for grants, scholarships, and other forms of aid will increase among students and college bound families.

Families that develop a plan to pay for college, and implement it, fare significantly better than families that have no plan at all. The reason for this is simple - many aspects of college financial planning take time. Competing for financial aid and scholarship money takes time, preparation, and expertise.

Impact on Family Net Worth

The impact of the current trends in tuition costs and the underlying causes is additional strain on current and future costs, and more importantly, current and future Net Worth. More money may need to come from savings and other assets to pay for higher education as the other sources of funds become harder to get.

Inadequate planning and preparation usually means fewer external funding options, which means using internal funds.

- Savings
- Retirement
- Home Equity
- Extended Family Assets

These are all assets, the very things that make up Family Net Worth. Using these sources almost always means Reduced Family Net Worth, and that is directionally incorrect. It is family net worth that is the critical factor in long term financial health.

Plan for Success

One comforting piece of news is that political support for higher education is strong in both parties so the outlook is for financial aid from government sources to at least maintain and possibly grow.

The key is to be able to get your SHARE of the financial aid that is available. Plan to succeed, plan to start early, plan to get the help you need, plan to protect your Family Net Worth.

Include these items in your plan:
- Get educated about the process of financial aid
- Evaluation of all sources of funding
- Reallocate assets to maximize financial aid
- Understand which assets get counted in college evaluations
- Forecast Family Net Worth before, during, and after college costs
- Define parent and child financial roles that work for your family

As many as 80% of the families we work with don’t know how they are going to pay for college. The very fact that some families take the time to develop a plan is a key to their success in being able to pay for a college education and keep their head above water through the college years and after.

Families should evaluate their strategy to pay for college costs and ensure that they are well positioned to obtain available financial aid. Family Net Worth can be a valuable tool to help develop a plan and also to compare several different plans for shooting the financial rapids of college costs.

It may be even more important to recognize the financial challenges for family members after the college experience. The college graduate needs to be financially stable in order to start their independent life successfully. The parents must be financially healthy enough to make it to retirement and well beyond.

About the Author

Michael Wilson is a Personal Financial Strategist with Smart Money For Life. He guides individuals to realize long-term financial health and growth. See programs and strategies to help meet your financial goals at Smart Money For Life. Visit his blog at Family Financial Values.

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