Homeowners are beginning to feel the impact of the financial crunch as they watch their home values steadily decrease. The recent 2pc decrease is disheartening, but the even larger falls prior to this are even more concerning with prices dropping almost 6pc.
The problem is that homeowners have had to stretch their budgets to be in a position to afford the over-priced homes. Combine this with the serious financial crunch and the result is a worried group of homeowners barely meeting their excessive mortgage payments for homes rapidly losing value. A good number of British, among others, seem to think house prices inevitably rise each year by 10-20pc but are now being hit with the reality that this is no guarantee.
In fact, a closer look at the numbers question why this delusional belief has been in place as long as it has. GDP and earnings rise an average two to three pc per year, a good starting point for the increase in the value of most money which is possibly four to six pc per year. The question then is why homeowners have held to the belief that home values will increase by ten to twenty pc annually.
With mortgages becoming more readily available, homeowners jumped on board and purchased homes in excess of what they either need or their budgets could comfortably handle. The options now are narrowing to foreclosure, selling or somehow finding the extra income needed to make the mortgage payments until the economy turns around. What does a homeowner do when selling is not an option and he or she wants to avoid foreclosure? Well, a second job is the next best solution as many have found.
Thanks to the internet today, supplementing the main household income has taken on a whole new direction providing individuals the opportunity to earn extra income using their own computers. One such opportunity is gaming, which has quickly become one of the most popular online industries. Imagine earning returns of up to twelve percent per month. Former trader Rajeev Shah explains in his book Sports-Arbitrage – How to Place Riskless Bets and Create Tax-Free Investments how sports arbitrage trading occurs when bookmakers’ prices on the same events overlap so that it is possible to bet in a manner that guarantees a return more than the total outlay. He discusses the strategy and software called ArbAlarm in far more detail in his book. For homeowners seeking a risk-free way to supplement their income, this is one way that may pay off and help keep their home from foreclosure. Perhaps even better is that the profits are tax free, as the UK Government recently announced.
Sports arbitrage trading certainly heightens its appeal in the current declining economy negatively affected by the large flow of mortgage money into the market. Realistically, it is important to keep in mind that inflation does not have a time limit and there is no guarantee that house prices will suddenly “bounce back.” Cash once thought to be available as equity in homes is no longer available. Extra money must be found elsewhere to counteract the upcoming rise of negative equity and the best way to do this is to simply bring more money into the household budget. Plan ahead, start using the internet to your benefit and get on board the fast growing industry of internet gaming!
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