The document discusses the process of selecting and financing housing, including evaluating the costs and benefits of renting versus buying. It provides guidelines for determining housing costs, such as spending no more than 25-30% of take-home pay on housing. The document outlines the steps involved in the home buying process, including determining affordability, finding a home, pricing the property, obtaining financing through a mortgage, and closing the purchase transaction. It also describes different housing and financing options.
The document discusses the benefits and common myths around equipment leasing for small businesses. It outlines how leasing can help businesses preserve cash flow, have flexible financing options, and take advantage of tax benefits. The document also provides tips for small businesses to get favorable lease terms such as maintaining good personal credit and establishing a track record through installment loans.
This document provides an overview of the home buying process. It discusses determining your goals and timeline, working with a lender to get pre-approved, finding the right home by searching listings, making an offer and negotiating, getting inspections done and attorney review, and going through the closing process. Key steps include speaking to lenders, getting pre-approved, searching for homes that meet your criteria, making an offer, negotiating, conducting inspections, resolving any issues found, getting final mortgage approval, doing a final walkthrough, signing paperwork at closing, and receiving the keys to your new home.
The document discusses various strategies for dealing with debt, including increasing income, decreasing expenses, contacting creditors, credit counseling, debt consolidation, bankruptcy, and credit card fees and traps. It provides tips on using the PowerPay method to accelerate debt repayment by reallocating payments as debts are paid off. It warns that credit card minimum payments can result in high interest costs over time and paying more than the minimum each month reduces costs.
This document compares and contrasts the advantages and disadvantages of renting versus buying housing. It provides details on the initial and ongoing costs associated with both renting and buying. Some key points include:
- Renting has predictable costs but limited control, while buying provides more freedom and can be an investment but has higher upfront and maintenance costs.
- Initial renting costs include application fees, deposits, and moving expenses. Ongoing costs are monthly rent and renter's insurance.
- Buying requires down payments, inspections, closing fees and moving costs initially. Mortgage payments, property taxes, insurance and maintenance are ongoing costs.
- Careful financial analysis of income versus expenses is needed to determine afford
The document summarizes key topics from a presentation on regulatory compliance given by PolicyWorks LLC. It discusses the impact of the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) and its director Richard Cordray, CFPB priorities including complaints, student loans, credit cards, mortgages, and overdraft fees. It also covers the CFPB's work on ability-to-repay rules, mortgage disclosures, and fair lending laws.
The document defines an investment holding company (IHC) as a company that derives at least 80% of its gross income from holding investments. IHCs treat income like dividends and interest as "unearned income" and can only deduct a fraction of expenses. In contrast, an investment dealing company actively buys and sells investments and treats income as normal business income with full deduction of expenses. The document provides examples of computing an IHC's permitted expense fraction and determining IHC status based on the 80% income criterion.
The document discusses itemized deductions for individuals, including medical expenses, taxes, interest expenses, and qualified residence interest. It provides examples to illustrate how these deductions are calculated and applied. It also summarizes how these deductions would apply to the specific scenario of John and Susan Williamson purchasing their first home, as presented in an earlier example.
The document discusses the benefits and common myths around equipment leasing for small businesses. It outlines how leasing can help businesses preserve cash flow, have flexible financing options, and take advantage of tax benefits. The document also provides tips for small businesses to get favorable lease terms such as maintaining good personal credit and establishing a track record through installment loans.
This document provides an overview of the home buying process. It discusses determining your goals and timeline, working with a lender to get pre-approved, finding the right home by searching listings, making an offer and negotiating, getting inspections done and attorney review, and going through the closing process. Key steps include speaking to lenders, getting pre-approved, searching for homes that meet your criteria, making an offer, negotiating, conducting inspections, resolving any issues found, getting final mortgage approval, doing a final walkthrough, signing paperwork at closing, and receiving the keys to your new home.
The document discusses various strategies for dealing with debt, including increasing income, decreasing expenses, contacting creditors, credit counseling, debt consolidation, bankruptcy, and credit card fees and traps. It provides tips on using the PowerPay method to accelerate debt repayment by reallocating payments as debts are paid off. It warns that credit card minimum payments can result in high interest costs over time and paying more than the minimum each month reduces costs.
This document compares and contrasts the advantages and disadvantages of renting versus buying housing. It provides details on the initial and ongoing costs associated with both renting and buying. Some key points include:
- Renting has predictable costs but limited control, while buying provides more freedom and can be an investment but has higher upfront and maintenance costs.
- Initial renting costs include application fees, deposits, and moving expenses. Ongoing costs are monthly rent and renter's insurance.
- Buying requires down payments, inspections, closing fees and moving costs initially. Mortgage payments, property taxes, insurance and maintenance are ongoing costs.
- Careful financial analysis of income versus expenses is needed to determine afford
The document summarizes key topics from a presentation on regulatory compliance given by PolicyWorks LLC. It discusses the impact of the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) and its director Richard Cordray, CFPB priorities including complaints, student loans, credit cards, mortgages, and overdraft fees. It also covers the CFPB's work on ability-to-repay rules, mortgage disclosures, and fair lending laws.
The document defines an investment holding company (IHC) as a company that derives at least 80% of its gross income from holding investments. IHCs treat income like dividends and interest as "unearned income" and can only deduct a fraction of expenses. In contrast, an investment dealing company actively buys and sells investments and treats income as normal business income with full deduction of expenses. The document provides examples of computing an IHC's permitted expense fraction and determining IHC status based on the 80% income criterion.
The document discusses itemized deductions for individuals, including medical expenses, taxes, interest expenses, and qualified residence interest. It provides examples to illustrate how these deductions are calculated and applied. It also summarizes how these deductions would apply to the specific scenario of John and Susan Williamson purchasing their first home, as presented in an earlier example.
The document outlines the 5 main steps in the mortgage process: 1) pre-approval to determine a buyer's price range, 2) shopping for a home, 3) submitting a mortgage application including documents on income, assets, credit, and the property, 4) removing subjects from the offer, and 5) the legal process of signing documents. It then provides details on qualifying for a mortgage, the different types of mortgages available, associated costs of buying a home, and the role of a mortgage consultant in helping navigate the process.
Academy Mortgage provides a 10-step guide for first-time homebuyers to purchase a home. The steps include: 1) pre-qualification to determine affordability; 2) home search with a real estate agent; 3) formal loan application and product selection; 4) home inspection and appraisal; 5) underwriter review; 6) final loan approval; 7) closing where documents are signed; 8) funding by the lender; 9) close of escrow; and 10) confirmation of recording. Academy is dedicated to helping first-time buyers achieve sustainable homeownership through the entire process.
Investing in Residential & Multi-Family Real Estate (Series: Real Estate Inve...Financial Poise
Apartment buildings and other residential and multi-family housing can provide a stable income to an investor. This Financial Poise webinar discusses some of the pros and cons of being a landlord. It provides a basic overview about how to find and assess opportunities, obtain financing, negotiate a deal, and manage a multi-family investment. The accounting, tax, and legal aspects of being a landlord are part of the discussion.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/investing-in-residential-multi-family-real-estate-2020/
This document outlines the steps for buying a new home. It discusses:
1) Getting pre-approved for a mortgage to understand how much you can borrow. This involves pulling your credit report and documenting your income, debts, and assets.
2) Hiring a real estate agent who can help you find properties, make offers, negotiate contracts, and guide you through the entire home buying process.
3) Hiring an inspector to thoroughly inspect the home and provide a report on its condition before closing.
The document provides details on each of these steps and concludes by discussing getting final loan and insurance approvals, preparing for closing, and completing the closing process to become a homeowner.
This document provides information about navigating changes in the mortgage industry. It discusses how stated income loans are no longer allowed and self-employed borrowers need 24 months of income documentation. It also notes that credit scores are more important in determining rates now. New regulations have eliminated negative amortization loans and appraisals must now be ordered through an automated system. The document provides an overview of refinancing options and available loan products like FHA, VA, jumbo, and renovation loans. It also answers common questions about qualifying after foreclosure or bankruptcy.
This document provides information about the homebuying process from a mortgage lender called Get A Rate Home Loans. It includes sections on understanding their loan process, documents needed for pre-approval, tips for homebuyers, and definitions of common real estate terms. The document is intended to educate potential homebuyers on working with this lender.
First Time Home Buyer Class Sacramento CaliforniaHomeBoom.com
Learn about first time home buyer programs to purchase real estate. First time home buyer loan programs are our there to help you buy your first home. Down payment assistance and special government programs can help with closing costs. HomeBoom.com is a great place to search for the perfect house.
The mortgage process involves several key steps:
1. Getting pre-approved for a mortgage to determine how much you can borrow and protect the interest rate for up to 120 days.
2. Shopping for a home with your pre-approved mortgage amount.
3. Submitting a mortgage application including documents like pay stubs, bank statements, and information about the property.
4. Having conditions like an appraisal met before finalizing the mortgage.
5. Signing legal documents to transfer title and finalize the mortgage.
The document discusses several key laws regulating real estate closings:
1) RESPA requires advance disclosure of settlement costs and prohibits kickbacks.
2) TILA mandates disclosures for loans, including interest rates and costs. It provides a 3-day right of rescission.
3) HOEPA and other laws target protections for subprime borrowers and prohibit predatory practices like loan flipping.
4) Disclosure forms must be properly completed under RESPA and TILA at various stages of the closing process.
Brian Moran outlines the 5 key steps to home ownership: 1) Get pre-approved for a mortgage, 2) Hire a REALTOR® like himself to assist with the process, 3) Hire a home inspector to inspect the prospective home, 4) Make a formal mortgage application, and 5) Get ready for the closing. He provides details on each step, emphasizing the importance of getting pre-approved, hiring a knowledgeable REALTOR®, and being prepared for the closing.
Laurus title Group - Power Point - Introlaurustitle
The document provides an overview of the short sale process for homeowners who are delinquent on their loan or need to give up their home. It describes remedies for delinquency such as repayment plans, loan modifications, and partial claims. It defines a short sale as a situation where the home sells for less than what is owed. The document outlines eligibility requirements for short sales and why lenders may accept them. It discusses the challenges of getting approval from all lien holders and provides details on the documentation needed to process a short sale request, such as financial documents, statements, and authorization to release information.
This chapter discusses factors to consider when making housing decisions, including evaluating options like renting, buying, or building a home. It covers the home buying process, financing options, costs of purchasing a home, refinancing, and developing a strategy for selling a home. The document provides guidance on analyzing costs and benefits of different housing choices and implementing the steps to purchase, finance, and sell a property.
This document discusses housing finance and home loans. It covers the basics of home loans including the different types of loans, features, and application process. It also discusses interest rates, explaining the difference between fixed and floating rates. Finally, it provides an overview of the approval process for construction projects seeking an approval from a financial institution under the APF process, outlining the required documents.
Call 912-303-5065 to learn how to earn passive double digit rates of return by investing in short term deeds of trust (mortgages) secured by undervalued real estate assets with a trusted partner with a strong track record of success
This document discusses various types of commercial real estate loans, including construction loans, land development loans, and loans for income-generating commercial properties. It provides details on:
- The loan application process and documentation requirements, including operating statements, balance sheets, tax returns, and property evaluations.
- How construction loans are disbursed based on completion of stages of construction and ensuring costs are paid.
- Additional risks associated with lending for land purchases, development projects, and speculative residential construction versus contracted builds.
- The role of takeout commitments in protecting construction lenders for residential property loans.
Best Known as a real estate agent, Boris Gantsevich assists clients to achieve real estate desires. He delivers important knowledge to clients about real estate market and properties. Whether you are buying or selling he guides his clients through the process.
Sharon 2013 first home buyer presentation sharon andrewsSharon Andrews
The document is a presentation for first-time homebuyers that covers:
1) Choosing the right mortgage program that fits one's budget, lifestyle, and goals;
2) The benefits of buying a home over renting such as building equity; and
3) A three-step process for beginning the home buying process including getting pre-approved, choosing experts for a "home team", and learning about the process.
The document provides information about a Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, which allows senior homeowners to convert home equity into tax-free cash without having to make monthly mortgage payments or repay the loan until they permanently move out of the home. Key details include how the loan amount is calculated based on home value, interest rates, flexible payment options, qualifications, and the application process.
This document provides an overview of investing in REO (real estate owned) properties. It discusses the foreclosure process, challenges of buying bulk REOs, and an opportunity to purchase 10 properties at a time for $20,000 each with turnkey support services included. The support services would handle listing, qualifying buyers, sales contracts, and collecting payments, ensuring properties are resold within 90 days. The investment aims to generate high returns of 20%+ through cash flow from land contract payments over time.
This document lists what is known and not known in corporate finance. It is established that net present value, risk and return, efficient capital markets, MM's irrelevance propositions, and agency theory are well understood. However, there are still questions around what determines project risk and present value, whether risk and return concepts are incomplete, exceptions to efficient market theory, and if management should be considered a liability. Additionally, full explanations of capital structure, payout policy controversies, merger waves, liquidity value, and causes of financial crises remain elusive.
This document discusses various strategies that companies can use to manage and hedge risks, such as market risk, interest rate risk, and currency risk. It provides examples of how companies can use options, futures contracts, forwards contracts, and swaps to hedge against risks from fluctuations in prices, interest rates, and exchange rates. The key strategies discussed are increasing flexibility, purchasing insurance policies, and making investments in derivatives like options, futures, forwards and swaps to offset risks from changes in underlying prices, rates or currencies.
The document outlines the 5 main steps in the mortgage process: 1) pre-approval to determine a buyer's price range, 2) shopping for a home, 3) submitting a mortgage application including documents on income, assets, credit, and the property, 4) removing subjects from the offer, and 5) the legal process of signing documents. It then provides details on qualifying for a mortgage, the different types of mortgages available, associated costs of buying a home, and the role of a mortgage consultant in helping navigate the process.
Academy Mortgage provides a 10-step guide for first-time homebuyers to purchase a home. The steps include: 1) pre-qualification to determine affordability; 2) home search with a real estate agent; 3) formal loan application and product selection; 4) home inspection and appraisal; 5) underwriter review; 6) final loan approval; 7) closing where documents are signed; 8) funding by the lender; 9) close of escrow; and 10) confirmation of recording. Academy is dedicated to helping first-time buyers achieve sustainable homeownership through the entire process.
Investing in Residential & Multi-Family Real Estate (Series: Real Estate Inve...Financial Poise
Apartment buildings and other residential and multi-family housing can provide a stable income to an investor. This Financial Poise webinar discusses some of the pros and cons of being a landlord. It provides a basic overview about how to find and assess opportunities, obtain financing, negotiate a deal, and manage a multi-family investment. The accounting, tax, and legal aspects of being a landlord are part of the discussion.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/investing-in-residential-multi-family-real-estate-2020/
This document outlines the steps for buying a new home. It discusses:
1) Getting pre-approved for a mortgage to understand how much you can borrow. This involves pulling your credit report and documenting your income, debts, and assets.
2) Hiring a real estate agent who can help you find properties, make offers, negotiate contracts, and guide you through the entire home buying process.
3) Hiring an inspector to thoroughly inspect the home and provide a report on its condition before closing.
The document provides details on each of these steps and concludes by discussing getting final loan and insurance approvals, preparing for closing, and completing the closing process to become a homeowner.
This document provides information about navigating changes in the mortgage industry. It discusses how stated income loans are no longer allowed and self-employed borrowers need 24 months of income documentation. It also notes that credit scores are more important in determining rates now. New regulations have eliminated negative amortization loans and appraisals must now be ordered through an automated system. The document provides an overview of refinancing options and available loan products like FHA, VA, jumbo, and renovation loans. It also answers common questions about qualifying after foreclosure or bankruptcy.
This document provides information about the homebuying process from a mortgage lender called Get A Rate Home Loans. It includes sections on understanding their loan process, documents needed for pre-approval, tips for homebuyers, and definitions of common real estate terms. The document is intended to educate potential homebuyers on working with this lender.
First Time Home Buyer Class Sacramento CaliforniaHomeBoom.com
Learn about first time home buyer programs to purchase real estate. First time home buyer loan programs are our there to help you buy your first home. Down payment assistance and special government programs can help with closing costs. HomeBoom.com is a great place to search for the perfect house.
The mortgage process involves several key steps:
1. Getting pre-approved for a mortgage to determine how much you can borrow and protect the interest rate for up to 120 days.
2. Shopping for a home with your pre-approved mortgage amount.
3. Submitting a mortgage application including documents like pay stubs, bank statements, and information about the property.
4. Having conditions like an appraisal met before finalizing the mortgage.
5. Signing legal documents to transfer title and finalize the mortgage.
The document discusses several key laws regulating real estate closings:
1) RESPA requires advance disclosure of settlement costs and prohibits kickbacks.
2) TILA mandates disclosures for loans, including interest rates and costs. It provides a 3-day right of rescission.
3) HOEPA and other laws target protections for subprime borrowers and prohibit predatory practices like loan flipping.
4) Disclosure forms must be properly completed under RESPA and TILA at various stages of the closing process.
Brian Moran outlines the 5 key steps to home ownership: 1) Get pre-approved for a mortgage, 2) Hire a REALTOR® like himself to assist with the process, 3) Hire a home inspector to inspect the prospective home, 4) Make a formal mortgage application, and 5) Get ready for the closing. He provides details on each step, emphasizing the importance of getting pre-approved, hiring a knowledgeable REALTOR®, and being prepared for the closing.
Laurus title Group - Power Point - Introlaurustitle
The document provides an overview of the short sale process for homeowners who are delinquent on their loan or need to give up their home. It describes remedies for delinquency such as repayment plans, loan modifications, and partial claims. It defines a short sale as a situation where the home sells for less than what is owed. The document outlines eligibility requirements for short sales and why lenders may accept them. It discusses the challenges of getting approval from all lien holders and provides details on the documentation needed to process a short sale request, such as financial documents, statements, and authorization to release information.
This chapter discusses factors to consider when making housing decisions, including evaluating options like renting, buying, or building a home. It covers the home buying process, financing options, costs of purchasing a home, refinancing, and developing a strategy for selling a home. The document provides guidance on analyzing costs and benefits of different housing choices and implementing the steps to purchase, finance, and sell a property.
This document discusses housing finance and home loans. It covers the basics of home loans including the different types of loans, features, and application process. It also discusses interest rates, explaining the difference between fixed and floating rates. Finally, it provides an overview of the approval process for construction projects seeking an approval from a financial institution under the APF process, outlining the required documents.
Call 912-303-5065 to learn how to earn passive double digit rates of return by investing in short term deeds of trust (mortgages) secured by undervalued real estate assets with a trusted partner with a strong track record of success
This document discusses various types of commercial real estate loans, including construction loans, land development loans, and loans for income-generating commercial properties. It provides details on:
- The loan application process and documentation requirements, including operating statements, balance sheets, tax returns, and property evaluations.
- How construction loans are disbursed based on completion of stages of construction and ensuring costs are paid.
- Additional risks associated with lending for land purchases, development projects, and speculative residential construction versus contracted builds.
- The role of takeout commitments in protecting construction lenders for residential property loans.
Best Known as a real estate agent, Boris Gantsevich assists clients to achieve real estate desires. He delivers important knowledge to clients about real estate market and properties. Whether you are buying or selling he guides his clients through the process.
Sharon 2013 first home buyer presentation sharon andrewsSharon Andrews
The document is a presentation for first-time homebuyers that covers:
1) Choosing the right mortgage program that fits one's budget, lifestyle, and goals;
2) The benefits of buying a home over renting such as building equity; and
3) A three-step process for beginning the home buying process including getting pre-approved, choosing experts for a "home team", and learning about the process.
The document provides information about a Home Equity Conversion Mortgage (HECM), also known as a reverse mortgage, which allows senior homeowners to convert home equity into tax-free cash without having to make monthly mortgage payments or repay the loan until they permanently move out of the home. Key details include how the loan amount is calculated based on home value, interest rates, flexible payment options, qualifications, and the application process.
This document provides an overview of investing in REO (real estate owned) properties. It discusses the foreclosure process, challenges of buying bulk REOs, and an opportunity to purchase 10 properties at a time for $20,000 each with turnkey support services included. The support services would handle listing, qualifying buyers, sales contracts, and collecting payments, ensuring properties are resold within 90 days. The investment aims to generate high returns of 20%+ through cash flow from land contract payments over time.
This document lists what is known and not known in corporate finance. It is established that net present value, risk and return, efficient capital markets, MM's irrelevance propositions, and agency theory are well understood. However, there are still questions around what determines project risk and present value, whether risk and return concepts are incomplete, exceptions to efficient market theory, and if management should be considered a liability. Additionally, full explanations of capital structure, payout policy controversies, merger waves, liquidity value, and causes of financial crises remain elusive.
This document discusses various strategies that companies can use to manage and hedge risks, such as market risk, interest rate risk, and currency risk. It provides examples of how companies can use options, futures contracts, forwards contracts, and swaps to hedge against risks from fluctuations in prices, interest rates, and exchange rates. The key strategies discussed are increasing flexibility, purchasing insurance policies, and making investments in derivatives like options, futures, forwards and swaps to offset risks from changes in underlying prices, rates or currencies.
This document discusses various types of options and their payoff structures. It explores call options, which give the right to buy an asset, and put options, which give the right to sell an asset. It provides examples of how option values are calculated based on the underlying asset price and exercise price. The key concepts covered include the payoff limits and profits for option buyers and sellers. Hedging strategies using options are also briefly discussed.
This document discusses international finance concepts including exchange rates, forward rates, purchasing power parity, interest rate parity, and exchange rate risk. It provides examples and explanations of these topics. For instance, it explains that if the yen spot price is 108.173 yen per dollar and the 1-year forward rate is 111.715 yen per dollar, then the dollar is selling at a 3.27% premium relative to the yen. It also works through examples of calculating forward rates and converting cash flows between currencies.
This document discusses various types of mergers and reasons for mergers. It covers horizontal mergers between competitors, vertical mergers between companies in different production stages, and conglomerate mergers between unrelated companies. Sensible reasons for mergers include achieving economies of scale, combining complementary resources, and using surplus funds. Dubious reasons include diversification and the "bootstrap game" where a high P/E company acquires a low P/E company to temporarily boost earnings per share. The document also examines evaluating mergers based on whether there is an overall economic gain.
This document discusses strategies for managing a firm's working capital, including accounts receivable, inventory, and cash. It covers establishing credit policies, analyzing customer creditworthiness, collecting accounts receivable, managing inventory levels, and investing idle cash. The goal is to minimize costs associated with carrying accounts receivable, inventory, and cash while maintaining sufficient liquidity to operate the business.
This document discusses short-term financial planning strategies. It examines how firms develop short-term financial plans to manage current assets and liabilities. Various strategies are presented, including relaxed, middle-of-the-road, and restrictive policies. Key aspects of short-term planning addressed include working capital, cash budgeting, sources of short-term financing such as bank loans and commercial paper. Ratios and examples are provided to illustrate short-term planning concepts.
This document discusses long-term financial planning. It explains that long-term planning focuses on goals, investments, financing needs, dividend policies and debt ratios. Percentage of sales models are introduced, where sales forecasts drive most other variables. Planning models can explore alternative strategies but do not determine the best plan or whether growth creates shareholder value. External financing may be needed if growth exceeds the internal growth rate, which is the maximum sustainable without new funds.
This document discusses a firm's payout policy and the two main ways firms pay cash to shareholders: cash dividends and share repurchases. It analyzes the options of paying dividends versus repurchasing shares and how each affects shareholder wealth. The document also discusses Modigliani and Miller's dividend irrelevance proposition that under perfect markets, dividend policy does not impact firm value.
This document discusses capital structure and debt policy. It summarizes Modigliani-Miller's proposition that the value of a firm is unaffected by its capital structure if certain assumptions hold. It then analyzes how debt affects earnings per share, risk and return, taxes, costs of financial distress, and a firm's weighted average cost of capital. The trade-off theory and pecking order theory are introduced to explain corporate financing choices.
Young firms often require venture capital to finance growth. Venture capital provides entrepreneurs with financing to grow their firms and obtain staged financing. Firms issue securities like stocks to further finance their growth. When firms need more capital than private investors can provide, they can conduct an initial public offering (IPO) to sell stocks to the public for the first time. The issuance of securities through public offerings or private placements is a complex process that involves underwriters, registration with regulatory agencies, and costs for the company.
This document provides an overview of the different sources of corporate financing, including internally generated funds, equity issues, and debt issues. It defines key terms related to equity such as common stock, preferred stock, treasury stock, authorized shares, issued shares, and outstanding shares. It also discusses the characteristics of different types of debt such as secured vs. unsecured debt, callable bonds, and convertible securities. The document uses examples to illustrate equity terminology and scenarios involving debt conversions.
- The weighted-average cost of capital (WACC) is used to calculate the required rate of return for a firm's projects and value the entire firm. It is a weighted average of the costs of the firm's various sources of financing.
- To calculate the WACC, you first calculate the market values of the firm's debt and equity securities. You then determine the required rates of return for each security. Finally, you take a weighted average of the after-tax costs.
- The WACC represents the minimum return the firm must earn overall on new projects that have average risk. It provides the basis for net present value analysis and valuation of the entire firm.
This document discusses concepts related to measuring market risk and the Capital Asset Pricing Model (CAPM). It provides examples to illustrate how to calculate beta and the market risk premium. It also discusses limitations of CAPM and alternative models. The key points are:
1) Beta measures the sensitivity of a stock's returns to changes in the market and is used to estimate the expected return under CAPM.
2) CAPM holds that the expected return is equal to the risk-free rate plus the product of beta and the market risk premium.
3) Empirical tests have found mixed support for CAPM and alternative models like the Fama-French three-factor model may better explain returns.
This chapter discusses risk and return, and their relationship to the cost of capital. It defines different types of returns, such as dividend yield and capital gain yield, and provides an example calculation. The chapter then discusses measuring risk through variance and standard deviation, and how diversification can help reduce overall portfolio risk by spreading investments across different asset classes. The key relationship discussed is that higher expected returns generally correspond to higher risks.
This document provides an overview of capital budgeting techniques for project analysis, including sensitivity analysis, scenario analysis, break-even analysis, operating leverage, and real options. It includes examples demonstrating how to perform sensitivity analysis by changing variables like sales and fixed costs, scenario analysis by introducing competition, and calculating break-even points and degree of operating leverage. The document emphasizes that these techniques help analyze the robustness of projects and value the flexibility provided by real options.
This document discusses criteria for properly identifying and calculating cash flows for valuation using discounted cash flow analysis. It emphasizes that cash flows, not accounting income, should be used. An example compares NPV using cash flows versus accounting income to show the difference. The document also discusses factors like incremental cash flows, sunk costs, opportunity costs, working capital, inflation, and methods for calculating total cash flow from capital investments, working capital, and operations.
This chapter discusses various capital budgeting techniques used to evaluate investment projects, including net present value (NPV), internal rate of return (IRR), payback period, and profitability index. It provides examples of calculating and applying each method, and highlights potential pitfalls in using some techniques like IRR. Financial calculators and Excel can be used to calculate metrics like NPV and IRR.
This document discusses various topics related to equity valuation and stock markets, including the dividend discount model for valuing stocks, primary and secondary markets, common terminology such as market capitalization and P/E ratio, and different approaches to analyzing stocks like fundamental analysis and the efficient market hypothesis. Key valuation techniques introduced are the dividend discount model under different growth scenarios as well as valuing the present value of growth opportunities.
This document provides an overview of key concepts for valuing and analyzing bonds, including:
- Bond basics like face value, coupon, and coupon rate
- How to calculate the price of a bond using principles of present value
- How bond prices change with interest rates
- Methods for calculating bond yields like current yield and yield to maturity
- The relationship between interest rates and inflation and how this affects real returns
- The risks of default and how bonds are categorized based on their default risk.
Tired of chasing down expiring contracts and drowning in paperwork? Mastering contract management can significantly enhance your business efficiency and productivity. This guide unveils expert secrets to streamline your contract management process. Learn how to save time, minimize risk, and achieve effortless contract management.
Unlocking WhatsApp Marketing with HubSpot: Integrating Messaging into Your Ma...Niswey
50 million companies worldwide leverage WhatsApp as a key marketing channel. You may have considered adding it to your marketing mix, or probably already driving impressive conversions with WhatsApp.
But wait. What happens when you fully integrate your WhatsApp campaigns with HubSpot?
That's exactly what we explored in this session.
We take a look at everything that you need to know in order to deploy effective WhatsApp marketing strategies, and integrate it with your buyer journey in HubSpot. From technical requirements to innovative campaign strategies, to advanced campaign reporting - we discuss all that and more, to leverage WhatsApp for maximum impact. Check out more details about the event here https://events.hubspot.com/events/details/hubspot-new-delhi-presents-unlocking-whatsapp-marketing-with-hubspot-integrating-messaging-into-your-marketing-strategy/
Profiles of Iconic Fashion Personalities.pdfTTop Threads
The fashion industry is dynamic and ever-changing, continuously sculpted by trailblazing visionaries who challenge norms and redefine beauty. This document delves into the profiles of some of the most iconic fashion personalities whose impact has left a lasting impression on the industry. From timeless designers to modern-day influencers, each individual has uniquely woven their thread into the rich fabric of fashion history, contributing to its ongoing evolution.
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[To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
This PowerPoint compilation offers a comprehensive overview of 20 leading innovation management frameworks and methodologies, selected for their broad applicability across various industries and organizational contexts. These frameworks are valuable resources for a wide range of users, including business professionals, educators, and consultants.
Each framework is presented with visually engaging diagrams and templates, ensuring the content is both informative and appealing. While this compilation is thorough, please note that the slides are intended as supplementary resources and may not be sufficient for standalone instructional purposes.
This compilation is ideal for anyone looking to enhance their understanding of innovation management and drive meaningful change within their organization. Whether you aim to improve product development processes, enhance customer experiences, or drive digital transformation, these frameworks offer valuable insights and tools to help you achieve your goals.
INCLUDED FRAMEWORKS/MODELS:
1. Stanford’s Design Thinking
2. IDEO’s Human-Centered Design
3. Strategyzer’s Business Model Innovation
4. Lean Startup Methodology
5. Agile Innovation Framework
6. Doblin’s Ten Types of Innovation
7. McKinsey’s Three Horizons of Growth
8. Customer Journey Map
9. Christensen’s Disruptive Innovation Theory
10. Blue Ocean Strategy
11. Strategyn’s Jobs-To-Be-Done (JTBD) Framework with Job Map
12. Design Sprint Framework
13. The Double Diamond
14. Lean Six Sigma DMAIC
15. TRIZ Problem-Solving Framework
16. Edward de Bono’s Six Thinking Hats
17. Stage-Gate Model
18. Toyota’s Six Steps of Kaizen
19. Microsoft’s Digital Transformation Framework
20. Design for Six Sigma (DFSS)
To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations
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Chapter 7
1. 7 Selecting and Financing
Housing
Evaluating Renting and Buying Alternatives
• Your lifestyle and your choice of housing
– How you spend your time and money
– Every buying decision = lifestyle statement
• Personal preferences vs. financial factors
• Traditional financial guidelines:
– Spend no more than 25-30% of take-home pay on
housing, or
– No more than 2 1/2 times your annual income
– More difficult to do in inexpensive urban areas 7-1
2. Choice should be based on:
– Lifestyle (do you like or want to do maintenance tasks?)
– Financial factors (e.g., affordability, tax deductions, equity)
– Mobility vs. permanence (are you able to “settle down”?)
– Renting = less costly in short run (monthly payment)
– Home ownership =long-term financial
advantages (tax deductions and equity growth over time)
Objective1
Assess Costs and Benefits of
Renting
7-2
3. Renting vs. Buying Housing
Advantages Disadvantages
Easy to move No tax benefits
Fewer responsibilities for maintenance Limitations regarding remodeling
Minimal financial commitment Restrictions regarding pets, etc
Pride of ownership Financial commitment
Financial benefits Higher living expenses than renting
Lifestyle flexibility Limited mobility
Buying
RENTING vs. BUYING
Renting
7-3
4. • Selecting a rental unit
– Apartment or house
• Advantages of renting
– Easier to move
– Fewer maintenance responsibilities
– Minimal financial commitments
• Disadvantages of renting
– No tax benefits
– “Money down the drain” (not building equity)
– Limitations regarding remodeling
– Restrictions regarding pets and other activities
Rental Activities
7-4
5. • Description and address of property
• Name and address of the owner/landlord (lessor)
• Name of tenant (lessee)
• Effective date and length of the lease
• Amount of security deposit
• Amount and due date of rent
• Date and amount for late rent payments
• List of included utilities, appliances, etc.
• Restrictions on certain activities (e.g., pets, remodeling)
• The right to sublet the unit; transfer clause
• Conditions under which landlord may enter unit
Legal Details of a Lease
7-5
7. • Evaluate Home Ownership
– Stability of Residence
• American dream/norm (personalized living location)
– Financial Benefits
• Deduct property taxes, mortgage interest
• Potential increase in value of your home
• Building equity in your home
– Lifestyle Flexibility – Can Express Your Individuality
• Drawbacks of Homeownership
– Financial Uncertainty
• Obtaining money for the down payment
• Obtaining mortgage financing
• Home values could drop; can go “underwater” and lose money
– Limited Mobility
• Can take time to sell your home
– Higher Living Costs (Than Renting)
• Maintenance, repainting, repairs, and home improvements
• Rising real estate taxes
Home Buying Activities
Step 1: Determine Homeownership
Needs
7-7
8. Home Buying Activities
Types of Housing Available
• Single-Family Dwelling
• Multi-Unit Dwelling
– Duplex (two homes)
– Townhouse (2, 4, or 6 units)
• Condominium
– Individual ownership of a unit in a building
– “Condominium” ≠ a type of building structure
– “Condominium” = a legal form of homeownership
• Cooperative Housing
– Units owned by a non-profit organization
– Shareholders purchase stock for right to live in unit in building with multiple units
• Manufactured Homes
– Fully or partially assembled in a factory, and then moved to the housing site
– Prefabricated = components factory-built and assembled at the site
– Mass production under factory conditions keeps costs lower than site-built homes
7-8
9. Home Buying Activities
Types of Housing Available
Mobile Homes
– Type of manufactured home, often <1,000 sq. ft.
– Same basic features as a conventional house
– Safety is debated
– Tend to depreciate in value (like cars)
– Owners must own the land or rent the “pad” on
which mobile home is placed
7-9
10. • Building a Custom Home:
– Does the contractor have needed experience?
– Does contractor have a good working relationship with:
- Architect?
- Suppliers?
- Electricians?
- Plumbers ?
- Carpenters?
– What assurance do you have about quality?
– What are payment arrangements?
– What delays will be considered legitimate?
– Is the contractor licensed and insured?
– Are there any complaints about this contractor?
– Contract should have a time schedule, cost estimates,
description of work, and a payment schedule
Home Buying Activities
Types of Housing Available
7-10
11. Home Buying Activities
Determine What You Can Afford
– Consider both price and quality
– Look at your income, your current living expenses, and
how much you have for a down payment
– Have a loan officer prequalify you
• Front-End Ratio- monthly payment for PITI should not exceed
25% to 29% of gross income
• Back-end Ratio- monthly payment for PITI plus ALL CONSUMER
DEBTS should not exceed 33% to 41% of gross income
– Purchase what you can afford NOW - you can always
move up
– Buy a “fixer-upper” at a lower price ONLY if you have the
time, skills, and money to fix it up
7-11
12. Home Buying Activities
Step 2: Find and Evaluate a Home
• Select a location, location, location
– Be aware of zoning laws
– Assess the school system-if you have children OR not
• Services of real estate agents
– Will show homes that meet your needs, present your
offer, negotiate the price, assist in obtaining financing,
and represent you at the closing
– Commission paid by seller; built into price
– Seller’s agent, Dual agent, or Buyer’s agent
• The Home Inspection
– Conduct a home inspection or hire an inspector
– Mortgage company will require an appraisal
7-12
13. Home Buying Activities
Step 3: Price the Property
• Determine the Home Price
– Price affected by selling prices in the area
– Current demand for housing
– Time home has been on the market
– Owner’s need to sell
– Financing options
– Features and condition of the home
• Negotiate the Purchase Price
– Counteroffers are common
– Earnest money
• Portion of the price deposited as evidence of good faith
– Contingency clause
• Offer dependent on certain events:
– Obtaining financing
– Sale of current home
7-13
14. • The Finances of Home Buying: The Downpayment and
The Mortgage
Step 4: Obtain Financing
• Determine down payment amount
– Large (> 20%) downpayment makes the process easier
• Mortgage insurance if < 20% down (PMI)
• Automatic PMI termination when equity =>22%
– Required by Homeowners Protection Act
• Feature of a mortgage: LEVERAGE (using other people’s
money; magnifies a home’s gain or loss)
Objective 3
Determine Costs Associated with
Purchasing a Home
7-14
15. • Long-term loan on a specific piece of
property (e.g., primary home or other real estate)
• Usually 10, 15, 20, 25, or 30 years
• Three main phases
1. Complete application and meet with lender to
provide evidence of qualification
2. Lender obtains credit report and verifies
application
3. Mortgage is approved or denied
– Lender commits to make loan for a set period;
check lender’s interest-rate lock-in rules
Home Buying Activities
The Mortgage
7-15
16. • Qualifying for a mortgage includes:
– Income
– Debts
– Credit history (700+ score)
– Down payment amount
– Length of the loan
– Current mortgage rates
• “Points” = prepaid interest as a % of loan amount
– Each point =1% of the loan amount
– Premium paid to obtain a lower mortgage rate
Home Buying Activities
The Mortgage
7-16
17. • Loan for which you qualify will be greater when rates are lower
• Calculating the monthly principal and interest payment:
– Exhibit 7-7 = Mortgage payment factors (page 230)
– Example:
• 30-year, 7%, $223,000 mortgage
• Monthly payment = 223 X $6.65 = $1,482.95
• Payment = Principal repayment + interest
• PITI = payment + taxes + insurance
• Fixed-Rate, Fixed-Payment Mortgage
– Fixed rate, fixed payment, amortized
– 5%, 10% or 20% down
– 15, 20 or 30 years of fixed payments
• Government-Guaranteed Financing Programs
– Veterans Administration (VA)
– Federal Housing Authority (FHA)
– Lower down payment than conventional
Home Buying Activities
The Mortgage
7-17
18. • Adjustable Rate Mortgage (ARM)
– Flexible-rate or variable-rate mortgage
– Interest rate varies over the life of the loan
– Rate cap restricts amount of change in rate
– Payment cap restricts amount of change in payment
• Can result in negative amortization
• Convertible ARM
– Allows conversion to a fixed rate during a certain period
• Balloon Mortgage
– Fixed monthly payments
– Large final payment after 3, 5, or 7 years
• Growing-Equity Mortgage (GEM)
– Payments increase to allow loan to be paid off more quickly
• Interest-Only Mortgage
– Lower payments for the first few years
– Payments go towards interest only
Home Buying Activities
Types of Mortgages
7-18
19. • Shared Appreciation Mortgage (SAM)
– Borrower gets a lower interest rate
– Agrees to share appreciated value of home with the lender
• Second Mortgage
– Home equity loan (fixed payments) or HE Line of credit to tap
– Home = collateral
– Interest may be tax deductible
• Reverse mortgages
– Home equity conversion mortgage
– Provides homeowners who are 62+ with tax-free income based on
home equity; high up-front costs
Mortgage Repayment Strategies
• Refinancing
– Consider costs of refinancing in decision
• Making extra payments
– Reduces payoff time & interest paid
Home Buying Activities
Other Financing Options
7-19
20. • Make arrangements for a walk through
– Last-minute items for negotiation
• Closing
– Meeting including buyer, seller,
lawyers (if any) and sometimes lender
– Document signing
– Last-minute details settled; expense payments
– Closing costs = settlement costs
– Real Estate Settlement Procedures Act
• Requires buyers be given closing costs estimate
before the closing
Home Buying Activities
Step 5: Close the Purchase
Transaction
7-20
21. • Title insurance and search fee
• Attorney’s and appraisers fees
• Property survey
• Pest inspection
• Recording fees
• Transfer taxes
• Credit report
• Lender’s origination fee
• Escrow account for tax and insurance reserve
• Pre-paid interest
• Real estate broker’s commission
• Title Insurance
– Title company defines boundaries of property
– Title search to insure property is free of claims
– Protects against future defects in title
• Deed
– Document that transfers ownership
– Warranty deed guarantees the title is good
• Seller is true owner with right to sell the property
• No outstanding claims against the title
• Escrow Account
– Money deposited with lending institution for payment of taxes and insurance
Home Buying Activities
Closing Costs
7-21
22. Preparing your home
– Repair, repaint, clean, reduce clutter
– When showing home, “Stage It”:
• Turn on lights
• Open draperies
• Bake bread or make coffee for welcoming smell
• “Curb appeal”
– Lawn and landscaping
– Outdoor clutter
– Exterior paint
Objective 4
Develop a Strategy for Selling a
Home
7-22
23. Selling Your Home
• Determining the selling price
– Appraisal = estimate of the current value
• “For Sale by Owner”
– Use a lawyer or title company
– Time consuming for seller
• Listing with a Real Estate Agent
– Consider agent’s knowledge of the
community
– Various services and marketing efforts
– Screens potential buyers 7-23
24. Wrap Up
• Chapter Quiz
• Concept Check 7-1- Rent or Buy?
• Concept Check 7-2- Quality of School for
Childless Home Buyers?
• Concept Check 7-3- Main Sources of
Money for Downpayment? and Type of
Home Financing Action?