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ASA bans Cash Converters advert

An ad for payday lender and high street pawnbroker Cash Converters has been banned for encouraging “frivolous” spending on summer holidays, barbeques and entertaining children.

The direct mailing said: “Summer time and the living is easy. We wish it was – summer holidays, kids to entertain, new BBQ to buy, the list never ends! At Cash Converters we are here to help.

“We have all sorts of ways of raising that bit of extra money that could go a long way towards helping you out, and who knows, maybe even go towards a ‘Kiss Me Quick’ hat for the beach!”

One recipient complained that the ad was irresponsible because the references to summer holidays, “kids to entertain”, a barbeque and hat encouraged frivolous spending.

Cash Converters said the mailing included a risk warning, adding that it would not lend money to someone who did not have the ability to pay it back.

It said its customers did not always have access to other areas of mainstream credit and that summer holidays could be an expensive time, particularly if unexpected bills arose.

Upholding the complaint, the ASA said any loan or advance should be taken only after careful consideration and that marketers should take care to advertise those products responsibly.

It said: “We considered that summer holidays, entertaining the children, buying a new barbeque and a ‘Kiss Me Quick’ hat for the beach were all purchases that were unlikely to be considered essential purchases, and that the references to them suggested that taking out a loan or other type of cash advance for them was something that could be approached lightly.

“We considered that, by suggesting that loans or other types of cash advance could be used to fund non-essential purchases, the ad encouraged frivolous spending.”

It ruled that the ad must not appear again in its current form, adding: “We told Cash Converters to ensure that their future advertising was prepared with a sense of responsibility to consumers and to society.”

[…]

Millennials Choose Cash — And Why That's Not So Great

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Some two out of five Millennials—39%—prefer cash as the long-term investment for money they don’t need for at least 10 years, according to a new Bankrate.com report, roughly three times the number who chose the stock market. That’s a perilous pick, considering that cash will actually lose value over time due to inflation, while the S&P 500 has gained 17% in the last 12 months.

“What we are seeing is that Millennials actually get the importance of saving,” says Greg McBride, senior vice president and chief analyst at Bankrate. “They’re just not willing to take risks with it, particularly with regard to long-term savings.”

One thing that may explain the lean toward greenbacks is that Millennials came of age during tumultuous financial times. “When you look at the events of the last 10 to 15 years, with the financial crisis and the tech bust, young adults had a front row seat for one or both of those events,” McBride says. “Even if it didn’t impact them directly, they saw the impact it had on their parents and other family members and friends.”

Millenials prefer cash for long-term savings. (Photo credit: 401(K) 2013)

That’s certainly the case for Alisha Nicole Washington, 22, who recently graduated from Vanderbilt University and started work for an advertising firm in Atlanta. “I prefer to keep my savings in cash,” she says. “Growing up, it seemed like that was the forefront of every media outlet—how poorly the market was doing. The images and reports definitely left a lasting impression.”

Watching the stock market tank and their parents struggle has left many Millennials with a poor appetite for risk—which is ironic, since they’re the age group with the most ability to be risky. Since Millennials have decades to go until retirement, they have plenty of time to recover from market dips. “Even with something as severe as the financial crisis, if you just hung in there and continued contributing throughout, you not only recovered your losses, but you came out well ahead,” McBride says. “That’s not a perspective that someone who’s only been investing for a couple of years necessarily has.”

Among other things, student loan debt may be hampering Millennials’ ability to think long-term. The average student loan debt now tops $29,000 per student, according to the Project on Student Debt, and many are borrowing two and three times that amount. Jenna Kusmierek, 30, manages to fund her Roth IRA in full each year, but the rest of her cash goes to her student loans. “I plan to proceed this way for the next 10 years until my $140,000 student loan bill is paid off,” says Kusmierek, who lives in Denver.

Then there’s convenience. For Jason Fisher, the 27-year-old co-founder of Waterway Financial Group in Myrtle Beach, SC, having quick access to his funds trumps saving money in a retirement account. “The reduced accessibility to cash is not attractive,” says Fisher. “Often, an investment for our age group tends to be much shorter term anyway. I think children, first homes, and other bigger purchases make having cash on hand more feasible.”

Unfortunately, Millennials are the generation that most needs to get aggressive with savings. “Today’s young adults have the biggest retirement savings burden of all time,” McBride says. “Their life expectancies are longer, their healthcare costs are going to be higher, they don’t have the pensions their parents did, and the future of Social Security is more uncertain than it’s been for any of their predecessors.”

In other words, Millennials need a bigger nest egg, and they’re not going to get there with cash in a savings account. “A key part of this is getting people to think long term, getting them to see the power of compounding over those longer periods of time,” McBride says.

Thankfully, not all Millennials are sticking to cash-only savings. “I keep a small emergency fund in cash, but beyond that, I invest everything I can,” says Kali Hawlk, 24, who runs the blog Common Sense Millennial. “The only way I’m going to grow the value of my nest egg is to invest it where it can earn reasonable returns.”

Of course, cash—in an interest-earning savings account—is the best way to save for emergencies and shorter-term needs. But for the long haul, the stock market is the better bet.

Move up http://i.forbesimg.com tMove down 3 Reasons You Need Millennials On Your Team Erika Andersen Contributor The Price Of Doing Business With Generation Y LBS Business Strategy Review Contributor Millenials Must Stop Advertising Their Insecurity And Incompetence Maura Pennington Contributor SAP?Voice: A Multitude Of Myths About Millennials Jonathan Becher SAP […]

Consumer Loan Company Increases Store Count to 145 Locations

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We are happy to help all types of individuals get the financing they need as quickly and easily as possible.

Savannah, GA (PRWEB) June 25, 2014

InstaLoan, a subsidiary of TMX Finance operating 145 brick and mortar locations, has continued its expansion throughout Georgia and Florida. The consumer loan company, which has maintained a steady rate of growth since its inception, has opened nearly 25 locations since the beginning of the year throughout 6 markets including Atlanta, Miami, Orlando, Savannah, Tampa, and West Palm Beach. Individuals living in these areas have an opportunity to get the cash they need through a variety of different loan options, including 1st lien loans, personal loans, and signature loans.

“InstaLoan continues to expand its footprint in response to consumer needs,” said Robert Gomez, Vice President of Operations for InstaLoan. “We are happy to help all types of individuals get the financing they need as quickly and easily as possible.”

InstaLoan stores that have opened this month include the following:

2122 N. Military Trail, West Palm Beach, FL 33409 | (561) 293-2930 1030 W. Sunrise Blvd., Fort Lauderdale, FL 33311 | (954) 703-2911 2808 Skidaway Rd., Savannah, GA 31404 | (912) 721-8998 792 E.G. miles Pkwy., Hinesville, GA 31313 | (912) 368-3733

InstaLoan offers a variety of different types of financial solutions, including 1st lien loans, signature loans, and personal loans. To secure a short-term cash loan, an individual is required to have a government-issued ID and proof of income. Some loan products require a vehicle registered in the applicant’s name or loan documentation for the vehicle. Individuals with good, bad, and no credit can be approved for a short-term cash loan with InstaLoan. Hours of operation are Monday – Friday from 9:00 a.m. to 7:00 p.m. and Saturday from 10:00 a.m. to 4:00 p.m. and our stores can be reached by calling 855-849-LOAN. To learn more about the loan products offered by InstaLoan, visit http://www.instaloan.com.

InstaLoan has 145 locations from which to choose throughout Georgia and Florida, and plans to continue its growth this year. Click http://www.instaloan.com/locations to find a location near you.

About InstaLoan:

Our history: InstaLoan, a subsidiary of TMX Finance, opened its first location in Macon, GA in 2006 under the EquityAuto Loan brand. Since then, the company has grown to over 140 locations in Georgia and Florida.

What we offer: InstaLoan is one of the fastest growing consumer loan companies in the country. InstaLoan offers a variety of short-term lending solutions, including 1st lien loans, signature loans, and personal loans, to individuals with all types of credit profiles. InstaLoan focuses on providing people with the cash they need by working with them to determine the best type of loan for their situation.


[…]

The Risks of Taking a 401(k) Loan

Most 401(k) plans allow participants to take a loan from their account, and many workers do. An average of 13,000 401(k) participants take a loan each month for a median of about $4,600, according to an analysis of 900,000 401(k) participants by the University of Pennsylvania’s Pension Research Council. About 10 percent of borrowers default on their 401(k) loans, typically due to an unanticipated job change. These loans are also subject to limits, fees and penalties. Here’s what to watch out for when taking out a 401(k) loan:

[See: 10 401(k) Facts Everyone Should Know.]

Borrower limits. Participants in 401(k) plans are eligible to borrow up to 50 percent of their vested account balance (up to $50,000 if their plan permits loans). That means you’ll need to have at least $100,000 in the plan to borrow $50,000. If your account balance is $40,000, the most you can borrow is $20,000. And the loan amount may be further reduced if you took another 401(k) loan in the past year.

Short repayment period. Typically, loans from 401(k) accounts must be repaid within five years. However, if the loan is used to purchase a home, the repayment period can be extended. Regular loan repayments must be made at least quarterly over the period of the loan. However, repayments can be suspended for employees performing military service. Payments can also be delayed during a leave of absence of up to a year, but higher payments or a lump sum will be due upon your return and the original five-year term of the loan still applies.

Penalties for missed payments. A loan that is not paid back in regular payments within five years is treated as a distribution from the plan. This means the entire outstanding balance of the loan becomes subject to income tax. For workers under age 59½, a 10 percent early withdrawal penalty will also be applied to the loan balance. Missed loan payments can often be prevented by having the money automatically withheld from your paycheck.

[See: 10 Trendy 401(k) Plan Perks.]

Leaving your job. If you lose your job or find a new job at another company, the outstanding loan balance may become due. If you are unable to repay the loan, the loan becomes a distribution and taxes and penalties may be applied to it. “You may have another opportunity you want to go to, and your loan may limit that activity,” says Eric Toya, a certified financial planner and director of wealth management at Navigoe in Redondo Beach, California. “Or you may lose your job, and then not only have you lost your job, but this loan turned into a withdrawal that you owe a whole bunch of taxes on.” Another way to avoid the tax consequences if you have the cash is to deposit the outstanding loan balance in an individual retirement account or other retirement plan within 60 days.

The opportunity cost. When you take a loan from your retirement account, you miss market gains you could have benefited from if you left your money in the account. “If you have a $100,000 401(k) and you borrow $25,000, you basically have $75,000 participating in the market,” Toya says. “If the market goes up 10 percent, then you are gaining $7,500 versus $10,000. If the market goes down, you could say you saved money, but then when the market goes down, it is generally a great time to be adding money to the portfolio. And that is generally not happening when people are taking 401(k) loans.”

Loan expenses. The interest you pay back to yourself isn’t the only cost of a 401(k) loan. Participants in 401(k)s who take out loans must often pay origination, administration and maintenance fees.

Double taxation. Traditional 401(k) contributions are made with pretax dollars, and the money is not taxed until you withdraw it from the account. But loan repayments of both principal and interest are made with after-tax dollars. “This results in double taxation of the interest piece, since when you retire, you’ll need to pay tax on the full benefit from the plan, a portion of which is due to this after-tax interest you paid for the loan,” says Olivia Mitchell, director of the Boettner Center on Pensions and Retirement Research at the University of Pennsylvania’s Wharton School and co-author of the Pension Research Council report. “In most cases, the opportunity cost of plan borrowing plus the double taxation of the interest from a plan loan will still be less than, say, borrowing on a credit card or payday loan.”

[Read: 10 Ways to Reduce Taxes on Your Retirement Savings.]

Less retirement savings. A 401(k) loan ultimately reduces the amount of money you will have in retirement. “The need to borrow from a 401(k) plan is usually a symptom of a deeper problem with a person’s financial situation,” says Michael Garber, a certified financial planner for Michael Garber Financial Planning in Sunnyvale, California. “Before considering taking a 401(k) loan, take a look in the mirror and see if there are changes you can make first to better enable living within your means.”

If you absolutely need the money, you could compare the fees and interest rate on a 401(k) loan with loans from other financial institutions you qualify for. Borrowing from your 401(k) will certainly hurt your retirement account’s growth and reduce the amount of money you have at retirement, but the terms might be better than other higher-cost forms of debt, assuming you can hold onto your job until the loan is paid off. “Most people cannot borrow at interest rates as low as they can usually get from their 401(k) plans,” Mitchell says. “Of course, if the borrower ends up not repaying the loan due to job termination and then pays a fine, the full cost can be much higher.”

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google+ or email her at ebrandon@usnews.com.

FinanceLoans […]

How to beat out all-cash home buyers

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By Daniel Goldstein

The rise of all-cash deals in places like Miami has made it difficult for high-end home buyers planning to use a mortgage. In response, many of these borrowers are turning to lenders able to close loans quickly or offer a range of financing options.

In Miami-Dade County, for example, 62% of all closed residential real-estate sales in 2013 had no mortgage, says the Miami Association of Realtors. For homes priced $800,000 and above in Miami-Dade, all-cash sales accounted for 58% of the total sales in that price range. The all-cash share in that range was 27% in 2008.

Alexia Fodere for The Wall Street Journal

Nationally, 31% of residential real-estate sales were cash-only in 2013, according to the National Association of Realtors.

Ram Selvaraju had to compete against an all-cash buyer when he set his sights on a four-bedroom Spanish colonial-style home in Coral Gables, Fla. Mr. Selvaraju, 35 years old, is a biotech analyst at a New York investment firm; he owns other vacation and rental properties in South Florida and Europe. He planned to rent the home in Coral Gables after buying it.

Mr. Selvaraju decided to make an offer after two reductions left the price at $618,000, but an all-cash offer above that price was submitted before he secured financing for his bid.

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Instead of applying for a jumbo loan, which he feared would take too long and have too high an interest rate, Mr. Selvaraju found a nonjumbo loan from a Florida lender for $417,000; a New York bank lent him an additional $130,000 on a home-equity line of credit from his primary home in New Jersey. After the competing all-cash offer fell through, he bought the home in April for $630,000, using his offer that combined a down payment and the two loans. “I wound up paying a lot lower interest rate on a shorter-term loan, than had I gone with a jumbo loan,” he said.

Mr. Selvaraju’s experience in the Miami market is typical for South Florida, says Dan Hechtkopf, a real-estate agent in Miami Beach. Cash deals, especially for condos, are the norm, and it’s harder and harder for even well-qualified jumbo borrowers, he says. “A lot of buyers play this old-school, low-bid game, but here it doesn’t work,” Mr. Hechtkopf said. “Somebody’s just going to come in and pay cash.”

Keith Bedford for The Wall Street Journal Ram Selvaraju

David and Michelle Hendler, both lawyers in Miami, lost out on a townhome to an all-cash buyer in August. Mr. Hendler, 32, said he and his wife later secured a jumbo loan, but chose to put down 35%—the typical amount is 20%—to land another house in the same Miami Beach development. “It’s a serious all-cash market and that makes it tough for a lot of people,” he said.

Miami led U.S. markets in all-cash deals in 2013, followed by Las Vegas and New York, according to data compiled by RealtyTrac, an Irvine, Calif., real-estate research firm.

Mike McPartland, North American managing director for investment finance at Citi Private Bank, says the move toward cash deals is a holdover from the 2008 real-estate and stock-market bust. “There’s still a lot of thinking out there that if all hell breaks loose, nothing can happen to my house and family because I paid cash,” he said.

Moreover, Mr. McPartland said that many condos in vacation spots like Miami and Las Vegas are still in litigation or foreclosure, and big banks may not want the hassle of financing a condo.

Many of his clients, he says, are opting to liquidate assets and pay cash for properties, and then get a mortgage a few months later to recoup their assets by investing again. “Can you find an investment that will outperform a loan of 3.5%? The odds are pretty good.”

And even buyers who need to finance a home purchase aren’t out of luck, says Angela Hernandez, a mortgage officer with FirstBank Florida in Miami, which made $200 million in mortgage loans last year.

“I’ve closed jumbo loans in seven days,” said Ms. Hernandez. Successful borrowers often employ strategies like Mr. Selvaraju’s, using a combination of second mortgages, home-equity lines of credit, and quick closings to beat all-cash buyers. “There are always options, so long as you go to the right lender,” she said.

Here are tips for borrowers in markets that reward cash.

Be patient: Some all-cash buyers and their offers can appear and disappear, especially if the buyer is overseas. Your financing-contingent offer still might have a shot, especially if you’re willing to put down a large down payment.

Flexibility is an advantage: Sometimes a line of credit on another investment property, or a home-equity line of credit, can help make your offer look even better. It may not be all-cash, but more-cash is better than less-cash.

Know the market: Work with your real-estate agent and loan officer to find sellers that are open to accepting bids with financing.

[…]

Car Title Loan Company Offers More Than 90 Locations Throughout VA

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Our newest locations are open and ready to assist the residents of Winchester and Woodbridge with all of their title lending needs.

Woodbridge, VA (PRWEB) June 06, 2014

TitleMax, one of the nation’s largest and most reputable car title loan companies, recently opened its 93rd store in Virginia. Two of these locations just opened since the beginning of June with a total of 11 thus far into the year. Individuals may contact the newest stores at the following:

1041 Berryville Avenue, Winchester, VA 22601 | (540) 771-5890 14120 Jefferson Davis Hwy, Woodbridge, VA 22191 | (703) 494-1916

Since opening its first Virginia location in September 2008, TitleMax is committed to expanding its footprint and services throughout the state offering short-term cash in cities including Alexandria, Chesapeake, Falls Church, Newport News, Richmond, and Virginia Beach, among others. Residents throughout the state can visit any of these locations for all of their car title loan needs. To find a TitleMax closest to you, click Title Loans Stores.

TitleMax offers individuals with little, no, or even bad credit the opportunity to get a cash loan up to $10,000 based on collateral, not credit history. Store hours are Monday-Friday from 9:00 a.m. to 7:00 p.m. and Saturday from 10:00 a.m. to 4:00 p.m.

“Our newest locations are open and ready to assist the residents of Winchester and Woodbridge with all of their title lending needs,” said Otto Bielss, Senior Vice President of Operations for TMX Finance. “TitleMax offers quick, cash title loans while providing superior customer service.”

About Car Title Loans

A car title loan is a fast way for credit-challenged individuals to secure the short-term cash they need. To get a TitleMax car title loan in Virginia, an individual must have a clear, or lien-free, car title and a government-issued ID. With these items an individual can obtain a loan up to $10,000, while still maintaining the use of their vehicle. No insurance is required, there are no credit checks and most loans can be completed in as little as 30 minutes.

About TitleMax

TitleMax, a subsidiary of TMX Finance, provides financial products to people without access to traditional credit alternatives. TitleMax has been a trusted consumer lender for over 14 years, helping hundreds of thousands of people in getting cash when they need it. Since its inception in 1998, TitleMax has grown to over 1,350 stores, spanning 16 states and provides car title loans to over 2,500 people each day.

Please visit http://www.titlemax.com for more information on car title loans and how TitleMax can be of service.


[…]

Nationwide, all-cash deals change the game in real estate

A growing number of home buyers are bringing an unusual tactic to the negotiating table: an all-cash offer.

Cash purchases traditionally make up about a quarter of home sales, but they’ve soared to about 40 percent nationwide, according to the research firm CoreLogic.

And more of these buyers are individuals, not the institutional investors who plunged into the housing market when it collapsed, then pulled back when home prices rose.

Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.

“It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics. “The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”

Tatyana Baytler, a real estate agent at Lagert Real Estate in Rockville, Md., said foreign buyers tend to offer cash in part because they’re wealthy, but also because they have not lived in the country and built the credit history needed to secure a mortgage.

“Every fourth client I have now is an all-cash purchaser,” said Baytler, a Russian speaker. “I had a client from Russia in February who purchased a house in Washington, D.C., for $850,000 all cash. They want to leave [Russia] because of political unrest.”

John Denninger, a business owner in New York, didn’t want to plunk down that kind of cash when he bought a vacation home not far from West Palm Beach, Fla. But he didn’t want a mortgage, either, now that he has paid off the loan on his primary residence.

“I’ve invested wisely all my life and I have a pretty good job, so paying cash for a condominium didn’t seem like a stretch,” said Denninger, 55, who bought the condo three years ago for $70,000 and sank an additional $30,000 into upgrades. “I use it quite a bit now, and I never, ever rent it. I keep it to myself.”

The potential yield from rents is what attracted investors to the housing sector once the market hit bottom in late 2011. In areas where home prices plunged, investors began snapping up foreclosures and other deeply discounted properties, betting they could rent them for a tidy profit. The buying frenzy helped clear the excess supply of homes on the market and boost prices. It also frustrated first-time buyers who could not compete because their offers included financing contingencies, appraisals and inspections.

That still happens, said Richard Bridges, a real estate agent at ERA Blue Diamond Realty in Woodbridge, Va. Two weeks ago, Bridges listed a condominium in Woodbridge for a client. Four offers immediately rolled in, all at or above the $160,000 asking price. One was from an investor.

“My client took the cash offer, even though it was lower than the others, to ensure it would close quickly and without problems,” Bridges said.

But with prices on the rise and the foreclosure supply shrinking, investors are starting to retrench. Rental income does not necessarily go up when housing values rise. The largest institutional investors, some of whom bid on hundreds of homes a day, purchased about $400 million worth of homes a month in the first three months of the year, down from $520 million in the same period a year ago, according to a Morgan Stanley report.

Blackstone Group, which has invested $8.6 billion to buy 45,000 homes in the past two years, scaled back its purchases by about 70 percent since last summer, the company said in a statement. It now buys $30 million to $40 million worth of homes a week.

“Since the supply of distressed properties has thinned out, we expected the all-cash sales would be falling, but that’s not the case,” said Lawrence Yun, chief economist of the National Association of Realtors, which recently released a survey showing the share of investors has dropped from 24 percent in 2012 to 19 percent last year and the first quarter of this year. “It implies that there’s plenty of cash sloshing around.”

Yun says seniors who have a lot of equity in their homes are probably helping sustain the all-cash market. CoreLogic data show that the share of cash sales remains high among non-distressed properties, which are not popular among investors.

“It’s truly a national phenomenon,” said Sam Khater, CoreLogic’s deputy chief economist. “The share of cash sales is higher than normal in many parts of the country that never had a housing bust, like the rural heartland states of Oklahoma or Missouri.”

Fran Kormann, a real estate agent who specializes in selling homes at the Potomac Green senior community in Ashburn, Va., said every transaction she has handled recently has been a cash deal, perhaps because she is working with an older demographic than usual, buyers who are 65 or older and have accumulated more savings than clients in their 50s.

“I thought the all-cash deals would have stopped because the prices went up to $600,000, but they didn’t,” said Kormann, an agent with Keller Williams Realty. “I just sold a property to a lady in Boston who is coming here to be near her family. She’s paying all cash, and she’s keeping the home in Boston and renting it out.”

But all-cash deals do not necessarily mean all cash, even if they’re registered that way in the public record. Buyers sometimes tap into alternate forms of financing that count as cash, which is what Lori Pearce did to purchase a condominium in downtown Seattle.

Pearce, a retiree, already owns a more spacious condo nearby that she’s selling. She said she’s borrowing against her stock holdings to finance the purchase of the new condo, and she will pay off the loan with the proceeds of the sale from the old unit.

Since the start-up she joined went public in the mid-1990s, Pearce said she has never taken out a mortgage to finance a home, including a place in Hawaii where she spends part of the year.

Her real estate agent, Kirk Russell of John L. Scott Real Estate, said it’s rare that buyers have all the cash they need on hand. Instead, they leverage their assets to buy second homes for themselves or starter homes for their children, who may not have the credit scores or down payment needed to qualify for a loan.

“If you don’t have to get a loan, then don’t get one,” Pearce said. “But this must be incredibly hard for most buyers.”

[…]

Cash deals transform housing market

A growing number of homebuyers are bringing an unusual tactic to the negotiating table: an all-cash offer.

Cash purchases traditionally make up about a quarter of home sales, but they’ve soared to about 40 percent nationwide, according to the research firm CoreLogic.

And more of these buyers are individuals, not the institutional investors who plunged into the housing market when it collapsed, then pulled back when home prices rose.

Wealthy people, foreigners and retirees are transforming markets across the United States with these all-cash deals, helping make up for an alarming shortage of first-time buyers who are struggling to save for a down payment or qualify for a loan, a cause of grave concern about the long-term health of the market and its prospects for a true recovery.

“It’s the investor and the wealthy individual that’s keeping the market alive,” said Mark Zandi, chief economist at Moody’s Analytics. “The wealthy buyers in particular are fully engaged now. The stock market is up and times are good for them.”

Tatyana Baytler, a real estate agent at Lagert Real Estate in Rockville, Md., said foreign buyers tend to offer cash in part because they’re wealthy, but also because they have not lived in the country and built the credit history needed to secure a mortgage.

“Every fourth client I have now is an all-cash purchaser,” said Ms. Baytler, a Russian speaker. “I had a client from Russia in February who purchased a house in Washington, D.C., for $850,000 all cash. They want to leave [Russia] because of political unrest.”

John Denninger, a business owner in New York, didn’t want to plunk down that kind of cash when he bought a vacation home not far from West Palm Beach, Fla. But he didn’t want a mortgage, either, now that he has paid off the loan on his primary residence.

“I’ve invested wisely all my life and I have a pretty good job, so paying cash for a condominium didn’t seem like a stretch,” said Mr. Denninger, 55, who bought the condo three years ago for $70,000 and sank an additional $30,000 into upgrades. “I use it quite a bit now, and I never, ever rent it. I keep it to myself.”

The potential yield from rents is what attracted investors to the housing sector once the market hit bottom in late 2011. In areas where home prices plunged, investors began snapping up foreclosures and other deeply discounted properties, betting they could rent them for a tidy profit. The buying frenzy helped clear the excess supply of homes on the market and boost prices. It also frustrated first-time buyers who could not compete because their offers included financing contingencies, appraisals and inspections.

That still happens, said Richard Bridges, a real estate agent at ERA Blue Diamond Realty in Woodbridge, Va. Two weeks ago, Mr. Bridges listed a condominium in Woodbridge for a client. Four offers immediately rolled in, all at or above the $160,000 asking price. One was from an investor.

“My client took the cash offer, even though it was lower than the others, to ensure it would close quickly and without problems,” Mr. Bridges said.

But with prices on the rise and the foreclosure supply shrinking, investors are starting to retrench. Rental income does not necessarily go up when housing values rise. The largest institutional investors, some of whom bid on hundreds of homes a day, purchased about $400 million worth of homes a month in the first three months of the year, down from $520 million in the same period a year ago, according to a Morgan Stanley report.

Blackstone Group, which has invested $8.6 billion to buy 45,000 homes in the past two years, scaled back its purchases by about 70 percent since last summer, the company said in a statement. It now buys $30 million to $40 million worth of homes a week.

“It’s truly a national phenomenon,” said Sam Khater, CoreLogic’s deputy chief economist. “The share of cash sales is higher than normal in many parts of the country that never had a housing bust, like the rural heartland states of Oklahoma or Missouri.”

But all-cash deals do not necessarily mean all cash, even if they’re registered that way in the public record. Buyers sometimes tap into alternate forms of financing that count as cash, which is what Lori Pearce did to purchase a condominium in downtown Seattle.

Ms. Pearce, a retiree, already owns a more spacious condo nearby that she’s selling. She said she’s borrowing against her stock holdings to finance the purchase of the new condo, and she will pay off the loan with the proceeds of the sale from the old unit.

“If you don’t have to get a loan, then don’t get one,” Ms. Pearce said. “But this must be incredibly hard for most buyers.”

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Cash Sales Still Make Up Large Portion Of Homes Sold

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Cash Sales Still Make Up Large Portion Of Homes Sold

Peoples Home Equity shares news from a recent Corelogic report regarding cash sales.

One positive view is that cash sales for resold homes are 17% which is nearly what they used to be before 2008

Chicago, IL (PRWEB) May 13, 2014

As home sales data gets announced it’s important for prospective customers to know how much the market is split between financing and cash transactions. Peoples Home Equity found out on Tuesday May 13th from a Corelogic article that cash sales “made up 40.2 percent of total home sales in February 2014.” However, the number is declining which is positive for home buyers and constructive for the housing market.

Cash transactions peaked in January 2011 at 46.2% emphasizes how much the market still has to improve since cash transactions remain high at 40.2% as of February 2014. The good news is that cash sales among new construction and resold homes are declining to levels they were 10 years ago. The percentage of cash sales for resold homes in 2004 was roughly 28% whereas now it is 40.2% down from above 46.2% in 2011. One positive view is that cash sales for resold homes are 17% which is nearly what they used to be before 2008, this bodes well for the resold home market. Unfortunately, for REO sales cash transactions dominate at 58.5%

Looking at individual states, Florida had the highest percentage of cash sales at 59.8% while Alabama (55.3%) and West Virginia (52%) followed close behind. When looking at metropolitan areas, “Detroit-Livonia-Dearborn, Mich. had the highest share of cash sales at 68.1 percent, followed by Cape Coral-Fort Myers, Fla. (64.5 percent), West Palm Beach-Boca Raton-Delray Beach, Fla. (64.3 percent), Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (63.8 percent) and Miami-Miami Beach-Kendall, Fla. (62.8 percent).” Peoples Home Equity found this information useful and hopes it readers may find some value in data. Peoples Home Equity has lending branches located in Michigan, if interested in securing a lower rate mortgage in the area, consider speaking with a Peoples Home Equity loan officer today at: 262-563-4026


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InstaLoan Experiences Continued Growth

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We aim to help as many people as we can with getting the financing they need, while making the entire process as convenient as possible.

Savannah, GA (PRWEB) March 11, 2014

InstaLoan, a subsidiary of TMX Finance, has continued its steady rate of growth now offering 130 store locations across Georgia and Florida. As one of the country’s fastest growing consumer finance companies, InstaLoan has plans to continue its expansion throughout the course of 2014. Since the beginning of the year, InstaLoan has opened more than ten locations in various markets, including Atlanta, Orlando, and Tampa. Additional locations are planned for Albany, Atlanta, Miami, Orlando, Tallahassee, Tampa, and West Palm Beach. Individuals in these areas will have the opportunity to get the cash they need through a variety of different loan options including: 1st lien loans, personal loans, and signature loans.

“Our steady rate of growth is a positive indicator that InstaLoan offers a much needed service,” said Linda McDonald, Vice President of Operations for InstaLoan. “We aim to help as many people as we can with getting the financing they need, while making the entire process as convenient as possible.”

InstaLoan offers a variety of different types of financial solutions, including: 1st lien loans, signature loans, and personal loans. To secure a short-term cash loan, an individual must have a government-issued ID and proof of income. Some loan products require a vehicle registered in the applicant’s name or loan documentation for the vehicle. Individuals with good, bad, and no credit can be approved for a short-term cash loan with InstaLoan. Hours of operation are Monday – Friday from 9:00 a.m. to 7:00 p.m. and Saturday from 10:00 a.m. to 4:00 p.m. and our stores can be reached by calling 855-849-LOAN. To learn more about the loan products offered by InstaLoan, click here.

InstaLoan has 130 locations throughout Georgia and Florida and plans to continue its growth this year. Click http://www.instaloan.com/store-locator/ to find a location near you.

About InstaLoan

Our history: InstaLoan, a subsidiary of TMX Finance, opened its first location in Macon, GA in 2006 under the EquityAuto Loan brand. Since then the company has grown to over 120 locations in Georgia and Florida.

What we offer: InstaLoan is one of the fastest growing consumer loan companies in the country. InstaLoan offers a variety of short-term lending solutions, including: 1st lien loans, signature loans, and personal loans, to individuals with all types of credit profiles. InstaLoan focuses on providing people with the cash they need by working with them to determine the best type of loan for their situation.


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