This powerful app can turn renters into homeowners! How you can qualify and the financial trap you MUST be aware of

Dear Readers,

Things really are starting to heat up now as the 18.6-year Real Estate Cycle turns.

I feel strongly that my job for you is to write about all the latest and greatest news concerning just how and why the cycle continues to track like clockwork.

Once again, some news recently broke that aligns with that mission statement.

You need to look at this.

Both to understand what the news is, and the significance of it within the context of the cycle.

Now, it’s none of my business of course, but if you are currently a renter then this news should come as a very welcome surprise.

Because it could potentially change your financial wellbeing!

Plus lay down yet another early marker for where 2024 is heading.

Let’s find out now what it is.

It contends to be a leader in the “why didn’t someone think of this way before now?” sweepstakes.

I mentioned recent news that had been announced, well here it is below.

Zillow would be a household name for United States residents; however, it may be less so if you lived elsewhere.

Zillow is one of the dominant residential real estate technology companies. They assist home buyers and renters alike to find suitable homes for their budget. The represent a true end-to-end experience when it comes to every aspect of real estate in the US.

Naturally, this means they are landlords to thousands and thousands of US based renters.

It also means, being a technology company, it has data on over 100 million homes in the US.

And it uses that same data to produce property reports and quotes for customers.

And for renters who chose to download the free Zillow phone app, a rare and extremely important window of opportunity has now opened.

Here are the details.

Currently, there is a significant gap in credit reporting in the US, where renters spend hundreds of billions of dollars on rent each year, but the payments aren’t reported to credit bureaus.

Under Zillow’s new rent reporting feature, renters who use the platform to pay their rent can opt in for free and when rent is paid on-time Zillow will automatically report the payments to Experian, a major credit bureau.

To explain, Experian is a London based credit reporting agency.

For the first time, the simple expediency of having your monthly rental deposit clear will see the Zillow mobile app report this to Experian, who can use their approved credit rating algorithms to formalize a renter’s credit history.

It really is an idea whose time is well overdue.

Plus, it speaks the level of innovation that is now prevalent in this space.

However, we aren’t here to solely critique good ideas.

It’s the natural next step in this evolution of credit reporting that should be of prime importance for you.

When you transition from a renter to a homeowner, almost everyone will do so via securing a mortgage to facilitate the purchase of a new home.

As part of the process, you’ll be asked to prove your ability to service the monthly loan payments. Banks generally provide you with a balance sheet where you detail all your income and expenses.

Heres the thing. You add the monthly rent payments you make in the expense column, right? The bank then doesn’t provide that figure to a credit rating agency to determine your creditworthiness.

Instead, your ability to service a credit card, student, and personal loans and the like determine your credit score. And in a society today where credit is the money you and I use every day, that credit score is fundamentally vital to what type of life you can lead.

So, for a renter, these regular payments simply don’t add up to much more than providing a roof over their heads.

The Consumer Financial Protection Bureau data indicates about 26 million Americans are what’s known as “credit invisible”, which means they lack a history with major credit bureaus.

It’s this cohort that Zillow is now attempting to corner.

And it makes a lot of business sense too. For instance, rents everywhere simply continue to rise higher. Eventually it becomes cheaper to buy. This is a key tenet of following the turning of the real estate cycle.

This results in many people paying more in rent than they would an equivalent mortgage. Yet only the mortgage payer has this recorded against their credit score.

Reporting on-time rent payments can help renters build or enhance their credit history, an important step in accessing broader financial opportunities.

Higher credit scores can potentially lead to easier loan approvals as well as better rates for home purchases, credit cards, future rentals and more, with the impact varying based on the credit scoring model that lenders use.

So, a true win-win situation for all involved?

It’s here that knowing your timing is just so critical to what happens next.

I admit that by the end of the year you’ll arguably be sick of reading this. Nonetheless it is the truth.

The 2nd more speculative half of the current 18.6-year Real Estate Cycle has started. Which means that something truly big is beginning to happen.

Viewed through the lens of the real estate cycle, what Zillow has proposed here should not be at all surprising.

So, you should not be shocked that this trend is now gaining serious steam. Below is an article from US mortgage provider Fannie Mae.

This article highlights two partners of Fannie Mae, U.S Bank, and Esusu. And how have they empowered their renters? From the above article.

Through our Multifamily Positive Rent Payment pilot and the positive rent payment history enhancement in our automated underwriting system, Desktop Underwriter® (DU®), we’ve made it possible to use on-time rent payments to help renters build credit and help first-time homebuyers qualify for a home loan.

Here’s your evidence of just how big the trend is now getting. But to what end?

It’s simply another form of blatant credit creation. Everyone involved in this business has one goal; to make it easier for you to get into debt today than it was this time last year.

Particularly if that debt is secured against the best of all collateral, a home.

As I write this, competition in the mortgage lending space is really heating up. Should history be repeated, we can now wait for regulators to begin to unwind many of the most onerous laws that inhibit credit creation.

History shows us this is coming. In fact, in some places it’s already happening.

This innovation to turn renters into mortgagees, albeit indirectly, proves to me that almost no-one has truly understood just how big the coming avalanche in debt will be.

This simply pours further fuel onto the flames of speculative and uninhibited credit creation.

And therein lies the key at the heart of this debate, time.

There is a very good reason why such an innovation like this has appeared now. Ergo, should you partake in it, it’s quite possible that by the time you build up a big enough credit score to secure a loan the land market may be about to peak.

Which means you’ll take on a huge debt at the worst possible time!

As I stated earlier, there are 26 million people in the US alone who may qualify for their first ever mortgage using this product.

That’s millions of people, perhaps like yourself, getting their chance to take that fabled leap onto the property ladder. Or, taking on the biggest debt of their lives at precisely the wrong time.

This “could” be exactly what many people have been looking for, but you also must know when it’s the correct time to be so indebted too.

Today is the day you lock in that timing, by becoming our latest Boom Bust Bulletin (BBB) member.

I will work hard to bring you, every month, all the key turning points and news associated with the turning of the 18.6-year Real Estate Cycle. The BBB is designed to guide you and give you knowledge of the timing of the economy only those who truly study the land market can possess.

The real contradiction at play here is this. Over the next few years, you’ll never find credit more easily obtainable in your life.

And yet, you and your family will never be more exposed to financial Armageddon too. Get this wrong, you may not live long enough to recover.

It’s that serious! So sure, use this Zillow app to help you get onto the property ladder if it suits you. Or go visit your nearest Fannie Mae office.

But do it with a clear and concise mindset of knowing just how long you have before you need to really unwind that debt too.

That’s the incredible advantage those who know the timing of the real estate cycle possess.

Make it your own.