The “two steps forward, one step back” economic news continued last week. On Friday rates went up, and nervous brokers locked in early. We had Ben Bernanke saying that there are signs that the economy is improving, or at least leveling out. And if to prove it, Existing Home Sales were up over 7% to a 2-yr high. But heck, at some price point, wouldn’t the Home Sales number look great? In this number, the median price fell 15%, aided by foreclosure numbers, government credits for first-time buyers, and relatively low rates. There is still over a 9 month supply of inventory.
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But then we had the MBAA come out with a survey showing that the percentage of residential mortgages either in foreclosure or with at least one payment past due hit 13.16% in the second quarter, the highest percentage ever recorded. What’s a mother to do? And this number doesn’t even include mortgages in the foreclosure process! According to the MBAA, in Florida (home of humidity and palmetto bugs), 22.8% of mortgages outstanding were delinquent at least one payment or in foreclosure. “Other poor performing states include Nevada, where 21.3% of mortgages were delinquent or in foreclosure, Arizona, where 16.3% were delinquent or in foreclosure, and Michigan, where 15.3% were delinquent or in foreclosure.”
We also had our usual Friday afternoon seizing of banks, this time the FDIC garnered the third largest this year: Guaranty Bank. Guaranty is estimated to cost the FDIC, and taxpayers, $3 billion. Option ARM’s made up almost a third of Guaranty’s single family mortgage portfolio, along with $1.2 billion of loans to homebuilders in California. In an interesting note, BBVA Compass, a U.S. subsidiary of Spanish bank Banco Bilbao Vizcaya Argentaria, agreed to assume all of Guaranty’s deposits and will buy $12 billion of its assets, the first time an overseas-based bank has bought a failed U.S. bank this year. Three other banks failed: CapitalSouth Bank (AL), First Coweta (GA…and I doubt if this bank was named by an Italian dairyman in the winter), and ebank (GA).
Unfortunately for rates, the Home Sales number, combined with a little rally in equities, pushed rates higher. Mortgages were worse by .5 in price, and the 10-yr Treasury worsened by over a point. This morning the 10-yr is up to 3.59% and mortgages are worse by another.250. This week the U.S. will sell $42B of two-year notes, $39B 5-yr notes and $28B of 7yr notes starting tomorrow. On top of the auction, today we have some numbers from the Chicago Fed, tomorrow the usually grim S&P/Case-Shiller Home Price Index, along with Consumer Confidence, Wednesday Durable goods, Thursday Jobless Claims and GDP, and then on Friday Personal Income.
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Fannie Mae “retired” their “HomeStyle Construction-to-Permanent (HomeStyle CtoP)” product. They’re giving lenders lots of advance notice: the final purchase date of HomeStyle CtoP loans is November 30. Fannie tells us that “after this date, construction phase servicing of HomeStyle CtoP loans will continue as prescribed in Section B5-2.3 of the Selling Guide until all construction is completed and all loans have converted to the permanent, fully amortizing phase.”
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Mortgage rates may vary depending on the type of loan and the duration of the loan. A mortgage loan is basically taken against a property. In case you own a property you can keep the house as collateral and avail a loan to help you in times of financial crisis. Though a property with a good value can guarantee you a good mortgage loan, rates of the loan are often dependent on various factors like your credit ratings, personal assurance, etc.
It is common practice to apply for a mortgage loan when buying a property; in which a lien on the property is given to the lender as collateral for the loan. Though a property with good value can guarantee you a good mortgage loan, the rate (interest rate) applied on the loan is often dependent on various other factors like your credit ratings, personal assurance, etc.
In the case of ‘fixed mortgage rates’, the monthly payments and the principal as well as the interest rate do not change throughout the entire tenure of the loan. As long as the borrower is in a fixed rate mortgage, the interest rate remains the same. The advantages of this type of mortgage rate are that a record of the exact amount of payments can be kept by the borrower; and an increase in market interest rates will not affect the borrower’s payments.
There are numerous mortgage companies which offer refinance that involves obtaining a new mortgage loan on a property that is already owned – and that is often to replace existing loans against the property. It is a good time to refinance when the mortgage rates are low.
One of the major benefits involving refinancing is the fact that it can save the monthly payment of an existing loan. Lock-in rates are another very interesting schemes these companies offer.
There are several things that affect the rates of mortgage loans. These include the current market prices, the standing interest rates, present situation of the real estate market, and the overall financial environment at that time among other things. Mortgage refinancing is when you apply for another loan to pay off a first mortgage loan that was secured on your home.
Other things that you can adjust in mortgage refinancing are the term of your mortgage loan and the adjustability of the rates. If you initially had a longer term mortgage loan, you can choose to shorten that term and in turn save more money on interest.
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Discover Information About new england banks that offer reverse mortgages and reverse mortgages – pros & cons. This sheet contains different loan products offered by the lender. Put simply, FHA is willing to insure a reverse mortgage for the appraised value of the home up to the maximum claim limit. Therefore, if a home is appraised by an FHA approved appraiser at $400,000, the Maximum Claim Amount will be $400,000.
Once a senior homeowner 62 years or older learns the general features of a reverse mortgage, they usually want to find out how much the loan can offer in proceeds. This can be done in several ways: by looking up a reverse mortgage proceeds calculator on websites (not always an accurate indicator); by talking to various lenders by phone; or by face to face appointment with a loan officer who brings actual figures to the senior for their review. Currently, only government insured Home Equity Conversion Mortgages known as HECMs are widely available.
Examples include property tax deferral (PTD) mortgages and deferred payment loans (DPLs). In a regular mortgage, the property holder pays the bank monthly payments. These loans help homeowners meet some immediate cash requirements while residing in their own home.
The major categories of reverse mortgages include federally insured reverse mortgages, single-purpose reverse mortgages, and proprietary reverse mortgages. However, these long-term mortgage plans must be selected with utmost care. But in a reverse mortgage, the lender makes payments to the homeowner.
A single-purpose reverse mortgage, the lowest-cost type of reverse mortgages to attain, can only be used for one specified purpose. Each type has different advantages and disadvantages that need to be measured while applying for a reverse mortgage. People generally utilize reverse loans to complement retirement funds, upgrade houses, take vacations, pay off other debts, or even prevent foreclosures.
Unfortunately, this struggling economy doesn’t change the fact that seniors still living at home need repairs and modifications to accommodate their changing lives. Their 2-story home is paid in full and is worth about $150,000, Jim and Sue did not want to move at the time. On average, a stair lift costs $2500.
After making a few changes in their home, Sue and her children could feel comfortable leaving Jim at home for short periods of time-long enough to do grocery shopping or run errands. Some seniors are unaware of the options available to them, so they end up living a life of financial stress and burden. Savings accounts are shrinking, monthly income is minimal and living expenses, Long Term Care and home owning expenses are increasing.
Once the senior qualifies for a reverse mortgage, they can begin evaluating what should be installed in their home to make it easier to move around. Savings accounts are shrinking, monthly income is minimal and living expenses, Long Term Care and home owning expenses are increasing. Home modifications and repairs were their first priorities.
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Georgia, like many other states, has its fair share of manufactured housing. According to the Atlanta Journal-Constitution, “Federal and state regulators have put as many as one-third of Georgia’s 300 banks under intensified monitoring and recovery plans, mostly strict enforcement orders a step or two short of seizure, according to banking experts. A majority of these 90 to 100 banks, these experts say, are operating under “cease and desist” orders that require them to complete tough turnaround plans within strict deadlines.” Georgia already leads the nation in total bank failures, having had 21 in the last year. The story states that most of the enforcement actions are not publicly disclosed, so a firm number of affected banks can’t be determined: the state regulators don’t disclose their cease-and-desist orders whereas Federal regulators, who do disclose their actions.
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How is giving the money to banks working out? Many argue “not so well”. The injections have made the banks richer and less likely to become go bankrupt, but it doesn’t force them to lend money out. Heck, they may want to use the money to cover the bad loans they either already have on their books or may have in the future. Government directives go to Fannie and Freddie, who in turn offer to buy the loans. Then, of course, it is up to the investors to decide whether or not to offer the program.
Renting isn’t so bad, right? In an interesting quote from Rep. Barney Frank, chairman of the House Financial Services Committee, he said, “I’ve always said the American dream should be a home – not homeownership.” Supposedly the current administration is doing away with George W. Bush’s “ownership society’’ and instead plans to pump $4.25 billion of economic stimulus money into creating tens of thousands of federally subsidized rental units in American cities. In other words, the government will get behind the construction of low-rise rental apartment buildings and town houses, as well as the purchase of foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates. Apparently the Obama White House has acknowledged that not everyone can or should own a home.
According to a spokesman from the FDIC, BB&T has acquired all of the mortgage warehouse assets from the failed Colonial Bank, except for those associated with Taylor, Bean & Whitaker. BB&T does indeed have its own small warehouse facility, and they are currently evaluating Colonial’s warehouse business. In its statement on the Colonial acquisition, BB&T said it did not acquire any assets relating to TBW, primarily mortgage loans and are currently involved in litigation.
Sometimes companies wonder why a seasoned loan (one that has been on their books for a while, perhaps as much as a few years) would be worth less than a loan that has recently funded. After all, they wonder, hasn’t the borrower been making their payments with no issues? Well, from an investor’s point of view, two things tend to push the price of servicing down. First, if the original lender sells loans, why wasn’t the loan sold in the past? Second, and probably more importantly, how much longer is this loan going to be on the books?
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Unfortunately yesterday (for all of us liking the low rates available), as the stock market improved, the bond market worsened. (This is not always the case, by the way.) Today we’ll get the announcement of 2 year, 5 year and 7 year notes, all of which will be auctioned in the middle of next week. Jobless Claims already came out this morning: claims unexpectedly rose last week by 15,000 to a seasonally adjusted 576,000 in the week ended Aug. 15. The number of people collecting long-term unemployment benefits edged up 2,000 to 6.24 million in the week ended Aug. 8 (that’s a lot of people “on the dole”!), but the four-week moving average declined 2,500 to 6.27 million. For weekly claims, the four-week moving average for new claims climbed 4,250 to 570,000 last week.
Later today the Philly Fed Survey is released. (I think that it is only a rumor that, with Michael Vick coming to play there, Philadelphia’s new City Song is, “Don’t Let Your Dog Out! Woof, Woof”.) In other news, oil prices have moved up again, and Asian stock markets improved. Tomorrow the only news out is Existing Home Sales. With all of that in mind, the 10-yr’s current yield is 3.46%, and both the 5-yr Treasury and mortgages are roughly unchanged.
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Depending on how quickly you want to sell we can complete your sale in as little as 7 days. We will time completion of the sale to suit your personal circumstances and do everything we can to help you.
We pay top ‘market prices’ and we guarantee to beat any offer made by any other ‘fast sale’ company. In fact, as you will see opposite, homeowners have received up to £25,000 more from The Chainbreakers.
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When college is over the student is introduced to the world of working and adult responsibility which includes refinancing student loans. Upwards of 70% of college students graduate with some form of student loans that they are responsible for, and in many cases one student could be responsible for paying back several loans at the same time. Luckily for students there is a grace period between graduation and the time they must begin paying back their student loans of six months and in that six month period they can be making arrangements to make their student loans easier to pay.
Refinancing student loans can make your life easier by lowering your monthly payments, consolidating multiple payments down to just one easy payment, and in some cases a consolidation loan could reduce the cost of owning student loans by having a lower interest rate than the original loans. When considering refinancing student loans it makes sense to write out the situation you are in, and then weigh all of the considerations before you make a final decision.
If you have government backed student loans then the chances are very good that you will qualify for refinancing student loans and reducing your debt. The Stafford loan program offered by the federal government has many different ways of helping students address their debt to make it easier to pay the loans back once graduation is over, and if your student loans are Stafford loans then you will usually qualify for the refinance programs. Refinancing student loans that were private loans can be a little more difficult as the lender may want to see that you have a job before they allow you to refinance. Discuss the situation with your private student loan lender, and then try to determine what your best options would be.
private student loans consolidation
Traditionally you would refinance a student loan because the interest rates at the current time are lower than when you signed up for your loan, and lower interest rates means lower monthly payments and less interest to pay back. You may also be able to get better terms when you refinance which would allow you a longer time to pay the loan back. If you can spread a loan out over a longer period of time, then you can lower your monthly payments and make the debt easier on your monthly budget.
Sometimes the interest rate situation may be reversed, which means that refinancing student loans would raise your interest rates and cost you more money. If you were able to get an excellent deal on terms and an interest rate when you first got your student loans, then refinancing them may cost you more money in the long run and could be a very bad idea. You may also find a consolidation loan that is a better deal that simply refinancing your existing loans. Always look for the best deal possible which means the deal that will lower your interest rates, and make your payback terms easier to handle. In some cases consolidation may be a better move than refinancing.
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Small medium enterprises need cash to expand
In almost every country on earth, it is the Small and medium enterprises that are most short of capital. As you know, bank lends very stringently This means if you have built up a good credit history over the years and you have the earning capacity, banks will be very keen to lend you money.
Bigger companies get all the funding
And as companies grow bigger and more reputable, banks are desperate to get into the act.In this case, it is the banks that are begging people to take their corporate loans, enterprise loans, bridging loans, overdraft facilities or standby credit lines.
Bank’s risk control stipulates that if you have good credit standing, they want to lend you money.
SME spends 90% of time raising funds and 10% innovating
Contrast this with SME which are budding entrepreneurs with bright ideas starving for capital. Raising cash alone is extinguishing their passion.If we did not have angel investors in abundance in the USA, we would not have companies such as Apple, Yahoo and many others.
In Singapore, people are very conservative. Singaporeans like to be employees. Not many people understand the pressures faced by the SME bosses.
Banks give me money because my idea is good?
While there are some truths in the concept that people will invest if your business plan is good. New businesses need new paradigm. Therefore some of the bankers may not be the ones who are best equipped to assess the business plan for new business ideas.
How should a Small Medium Enterprise (SME) raise capital?
Traditionally a SME boss can tap onto his family and friends network in order to raise capital to start a business. Other ways that are more traditional are pawnshops.
Can you raise cash through refinancing your property?
How to go about raising cash through Property?
If you own a private property which has substantial equity, you can try to obtain a cash out home loan. We can help you to Compare Singapore home loan or Compare SME loans.
It works like this: -
If your property is worth $800,000
And the outstanding loan is $150,000
Your CPF usage is $150,000
What this means is, you will be able to obtain $800,000 x 0.8 – $150,000 – $150,000 = $340,000
Will this cash out help businesses
A business makes money if it is able to generate returns that are higher than the cost of capital and expenses. And capital is NOT FREE, there is a cost to it.
Home loan “Cash out” are the cheapest form of loans for the business. The rate at which you can borrow could be even cheaper than what the Federal reserve can borrow at. However the credit checks are very strict, many applications may fail if owner do not have a stable income.
In this day and age where the businesses are facing cost pressures, returns are slim. The difference between success and failure is the Cost of capital. For example, Supermarkets make returns of 2% to 6%. This is a very slim margin. Imagine if you are a Supermarket chain owner and you have to borrow at 7% to stock your supermarkets and you make returns of 5%. You will go out of business.
But if your cost of borrowing is 2.5% and your margins are 5%, then you have a chance to stay in business.
Can you get it approved? Most banks will still want to see a stable income. So if you start paying yourself a reasonable salary, after 2 years, banks will likely recognize this salary. Because cash out (Term loans or Equity loans) have stricter criteria.
Good, I am convinced, are there Risks for Equity (CASH out) Home loans?
We are illustrating this as an option which you can consider. We are not advocating this as the only way.
There is huge risks using this option. For businesses incorporated as Private limited, the worst that can happen, your company folds up, but your personal assets are intact and protected from creditors.
If your business case is NOT Sound, the availability of this option may cause you to falsely believe that your business have a chance to succeed if there is capital. The availability of capital will just delay the demise of the company.
On top of that, you could LOSE YOUR pants.
So you have to think twice.
So how do I know if my business case is sound?
How do I know my business structure is set up correctly?
We at Property Buyer – Singapore home loan mortgage consultants are pleased to help you take a look at your business case and discuss it over coffee if we have some spare time. You can call us even if you are not intending on getting a home loan or refinance a home loan to get a cash out.
We are helping SMEs as part of our community support program because we believe in giving so that we can get. There is no cost to you even if you want to talk with us but not do your Home Loan. We can give you a few tips on how to structure your company, how to fund and evaluate your business case and market segments. Since we are not charging you and we have nothing to sell you, if you want to buy us a coffee, we’ll gladly take it. 6100-0608 or 9782-8606 Singapore.
How much to pay yourself for your own company?
If you are the boss of your own SME, how much should you pay yourself? You should try to pay yourself a salary. Banks encourage status quo. Banks do not encourage entrepreneurial people, they see them as risks.
If you can pay yourself a reasonable salary which can be verified over a 2 year period, banks will likely be more keen to lend you money for your home loan. If you have a HDB home, you can sell your HDB and raise cash (if there is equity) and use a 90% home loan for your private property. You can then use the extra cash for your business.
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