With a presidential election that ended in a never-before seen way, it is almost impossible to focus on the underlying issues. However, the outcome of these issues represent state by state decisions that will ultimately affect thousands of Americans. Payday loan initiatives appear quite frequently on election ballots due to their strong controversial nature. Although debates and proposals have been given and displayed time and time again to help people understand the importance of the payday loan industry in America, it remains a negative part of our society.
What is the controversy? Simply put, payday loans are illegal in 15 states nationwide and it seems that many more states are following suit. While the majority of people say it is just another money hungry industry looking to trick consumers into paying unnecessary amounts of money, some people have come to understand the purpose of the lending business. Regrettably, the opposing side is composed of people who do not need and have never used the system and more unfortunately still, they are the vast majority of people who actually vote on these issues. Because most payday loan institutions are centered in low-income areas of the country, many view them as illegitimate businesses. The truth is they are there because they are needed. Most low-income consumers depend on payday loans to pay off their pending bills or simply to make ends meet on a day-to-day basis.
Arizona has become the most recent state to take charge against the payday loan industry. With annual percentage rates on loans reaching over 400%, many felt the need to step in. The truth is, the rate makes it profitable to the lender and affordable to the consumer. Problems arose only when the loans were used inappropriately. Many consumers misunderstood or did not follow the necessary steps to make an efficient and problem-free transaction. People who were opposed to the industry made the argument that their late-fees were unreasonable, when they are really the same as any other sort of loan, either from a bank or a credit union.
Since payday loans in Arizona face extermination in 2010, supporters of the industry took an opportunity to fight against this in the 2008 presidential election. Proposition 200, as it was called, offered a reasonable alternative. It included a substantial APR cut from $17.50 to $15 for every $100 borrowed. There would be repayment plans available and would eliminate roll-over charges if payments were not made on time. Lastly, it would only allow consumers to take out one loan at a time. While the plea was reasonable, the bill did not pass. 40.50% voted for it while 59.50% defeated it. Arizona’s payday loan industry faces extermination in 2010.
Over the past few years, Ohio has seen a rise in the payday loan industry, with institutions appearing in every corner of the state capital. Earlier this year however, it became the most recent state to pass a law regarding payday loans. The law (or Issue 5) put a 28% cap on percentage rates which, up to that point, had reached about 391%. The law also limited the amount of loans to four per year and capped payday loan institutions in relativity to Cleveland’s population. Although the initiative was said to be made with the intention to regulate the percentile rates, it has only made it impossible for the payday loan industry to exist. With a 28% limit, there is no room for profit and because of that payday loans have slowly diminished from the state of Ohio and over 6,000 people have been left without a job.
Ohioans for Financial Freedom, a payday loan representative group centered in Cleveland, Ohio, made it a priority to change the law. They spent over 16 million dollars and acquired 279,174 signatures to re-install Issue 5 on the 2008 presidential ballot. Their goal was to get enough voters against the proposition and therefore re-instate the 391% APR and unlimited access to payday loans every year. Alas, it did not pass. 64.55% of voters approved the issue, while only 35.45% defeated it. Without a doubt, the payday loan industry will not be around for much longer in the state of Ohio.
There is a general misunderstanding about the payday loan industry. Truthfully, the majority of state legislators prefer the regulation rather than the elimination of payday loans. Their argument is that if a profitable yet reasonable agreement can be made between the industry and the rest of the country, it can be a valuable part of our society.
Building homes in Phoenix, Arizona is a very different process than purchasing a home already constructed. When you buy a finished home, even if it’s a home under construction by a developer, you don’t have to worry about special financing. But managing your own construction is a little different.
There are some fabulous lots available for homes in Phoenix, Arizona. For homeowners that want to build a custom home, the mountains and desert vistas offer an amazing backdrop for a custom, luxury home. But custom homes require a little advanced financial planning.
Building a home requires slightly different financing. Most people finance their building process with a construction loan. These loans have milestones that must be met before some of the funds are available. Usually, these funds are kept by the lender until each step of the building process is completed.
While building a custom home is one of the most exciting steps in home ownership, it requires advanced planning. Most of the planning concerns how you are going to meet the financial expenses needed to complete the home. When you are building your custom home, there are different expenses to consider.
* You may need money for a down payment on the land and you need funds for the closing costs of the loan.
* You may need money for loan payments and taxes.
* You may need funds for an architect, for the house plans, for permits and licenses.
* You may need to continue to pay your mortgage payments or rent and homeowner’s fees.
* You may need additional funds for material upgrades. All too often you’ll find better flooring, appliances, or unique kitchen cabinets – all of which require cash up front to place into your new home.
* You will need to plan for project cost overruns. Even the most thorough home budget won’t eliminate project overruns. You should plan for your project to be at least 10% to 25% over budget, at a minimum.
It’s possible to build your dream home, especially when it’s in a remarkable environment like Phoenix, Arizona. But it does require a little planning and probably a little savings or money in the bank. Once you’ve finished planning and begin the construction process, you’ll have a home that is just as unique as you and your family. Imagine how you’ll feel when your house is done. All that planning and saving will pay off when you are living in your dream home in Phoenix, Arizona.
Gary Ogami has over 13 years experience working in the financial services industry. He has worked with hundreds of individuals and families to find mortgage options that work for them.
He prides himself on making the mortgage process as easy as possible for his clients and is very passionate about helping them save money and develop a strong financial foundation.