Carnival of Personal Finance #118

September 18, 2007 by TFB

It's been a while since I last participated in the Carnival of Personal Finance, because I've been quite busy with work. This week's carnival, Carnival of Personal Finance #118 is hosted by Golbguru of Money, Matter, and More Musings. My entry was How To Buy Life Insurance. I'm a regular reader of Golbguru's blog. He always produces interesting charts. I want to know what tool he uses. As usual, the carnival is long. It'll take me all week to go through all the entries. At a quick glance, here are some of the topics which I'd like to comment on.

Sales Tactics Revealed – Win the War Over Your Paycheck at Money Smart Life. The start of a four-part series on sales tactics. Good info for the consumers. Sales and marketing is the heart of business. The economy needs spending consumers. If consumer spending is weak, the economy will be weak. We won't have good jobs. Our investments won't do well. We have to be careful what we wish for.

Open Letter to the Bank of America at An English Major's Money. This is about the $3 ATM fee charged to non-customers by Bank of America. Guess what, they are Bank of America's ATMs. They invested in those real estate for their branches and ATMs for their own customers. If you are not their customer, they get to charge whatever they want. The fee is disclosed up front before the withdrawal happens. If someone doesn't like the fee, they can back out and not use their ATM. For people who can't find their own bank's ATMs but see plenty of Bank of America ATMs, they will have to question their own bank why they didn't establish as many branches like Bank of America did.

FHA Mortgages – New Hope For Prospective Homeowners at Salt Lake Real Estate Blog. I don't quite understand FHA loans. If an FHA loan turns out to be significantly cheaper than the best available conventional loan, what does FHA know about the borrower that the market doesn't? If the FHA loan is cheaper because FHA isn't making a profit on its loans while the private lenders must make a profit, why won't everyone get an FHA loan then?

Do Not Confuse Houses with Housing: Housing Myths Part 5 at Home Finance Freedom. I agree with this article. Housing is consumption. Living in a house you own is consumption. Consumption isn't necessarily bad, but you have to call it what it is. I own a house. I never thought it was an investment. I'm consuming my purchase every day since I bought it.

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One Comment on Carnival of Personal Finance #118

  1. Salt Lake Mortgage Guy on September 18, 2007 | permalink
    2.  

    To answer your question about why everybody doesn't get an FHA loan.

    1. FHA loans are profitable to the lenders that make them.

    2. FHA loans are guaranteed to the lender. That's perhaps the biggest advantage to making them. These loans are highly insured to 20% of the loan value. The borrower pays the insurance, which can raise the upfront cost of the loan. Because of the low interest rates, over time, these loans are a bargain for the consumer.

    3. FHA does have pretty narrow requirements for qualification. Bad credit has to be in the past. Income must be verified. Payment ratios are lower than some subprime loans. There are restrictions on appraisals. The biggest drawback currently is the loan amount FHA will go to. Congress is looking at raising loan amounts this week.

    I hope this helps. Feel free to leave a comment on my post if you have further questions.

    Nigel

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