Monday, September 17, 2012

Home Loans With Bad Credit: The Mortgage Choice For Bad Credit Borrowers

It is understandable that many believe low credit scores effectively ensure dreams of buying your own home are binned. It seems illogical any mortgage provider would entrust the task of repaying hundreds of thousands of dollars to anyone with a poor credit history. But actually, it is possible to get home loans with bad credit.

The biggest problem is not the particular credit rating an applicant has, but the ability to repay each month and the debt-to-income ratio that dictates what is affordable. These are the issues to worry about, before factoring in fast mortgage approval and other apparent advantages.

But how can a bad credit borrower qualify for a home loan? And what are the typical terms that they need to accept? And depending on who they secure it from, are these the best mortgages available for the savings and flexibility they can enjoy.

Qualifying for a Home Loan

The criteria required to get a home loan with bad credit is not a million miles from those necessary to secure a mortgage with excellent credit. The basic requirements are to be over 18, have a full-time job and be a US citizen (or legal long-term resident).

Without meeting these criteria, applicants have no chance of securing approval at all. The second stage of the process involves the assessment of income and employment status, and most importantly, how much money is available to commit to repayments. These determine whether fast mortgage approval can be secured or not.

Of course, fast approval is not overnight. Normally, a home loan is processed over 90 days, so fast is considered anywhere between 30 and 60 days. If everything is in order, and clearly displayed, then mortgage providers may give the green light in that time.

Terms to Accept

Having a less-than-perfect credit score means the terms of any loan are not going to be ideal. So, when seeking a home loan with bad credit scores to your name, expect higher interest rates and less flexible repayment schedules. Unfortunately, this is detrimental to the affordability of the mortgage.

However, there are choices. Interest rates come as fixed or variable, and the combination of both can help to make the deal more affordable. And, while it may not be especially fast, mortgage approval can at least be very likely when the loan term is longer, thus reducing the size of the monthly repayments.

The debt-to-income ratio is the key, with its 40:60 rate meaning only 40% of available income can be committed to repaying the home loan. So, even with ,000 excess income to hand, the repayments can be no more than 0 per month. Lowering existing debts and increasing credit scores can improve the ratio.

Advantages to Look Forward To

So why bother improving scores and clearing debts in advance of taking on a huge debt? Well, anyone who has ever wanted to own their own home can answer that question. Securing a home loan with bad credit is not easy, so any opportunity to help make it possible to buy affordably is worth seizing.

These mortgages were introduced to allow bad credit borrowers buy their homes, but also to ensure the property market did not collapse completely. So, there are advantages to be enjoyed, even if fast mortgage approval is a matter of 60 days.

If nothing else, adhering to the repayment schedule causes considerable improvement to credit scores, thus helping the borrower towards a financial recovery. So, a home loan, even if the terms are not ideal, can be worth the commitment in the long run.

Friday, September 14, 2012

Payday Loans Today - Congregate Trivial Desires With No Pesters

In order to uphold the existence and budget the daily expenditures, the candidates may be in requirement of some need of funds. So, if you have undergone through the same phase of life, then, you can opt for payday loans today wherein you can congregate your trivial desires with no pesters.

These schemes are therefore intended to suit the smallest and biggest of matters within 24 hours by making funds accessible in amount of time to the candidates. Therefore, with this scheme, the borrowers can settle their short term requests like hospital bills, traveling bills, for paying your holiday bills, telephone bills, garage bills, storage bills, for the payment of credit card dues and many more.

3 months Payday loans today compromises of some basic requirements wherein the borrowers should be above the age of 18 years, the borrowers should hold a stable account in the bank, the borrowers should be a UK citizen and last but not the least the borrowers must also be working on a regular basis with a fixed salary.

Payday loans today can be acquired by appalling creditors as well. In fact, these services are also unbolt individuals tormented from various credit tags like arrears, late payments, defaults, missed payments, and so forth.

There are no paperworks involved in payday loans today and therefore this finance can be applied by the source of online technique as well. All you need to do is the just fill the online form and present it to the lender, the lender will then deposit the amounts after checking the form. These amounts are transferred within 24 hours of conceding the relevance form.

The amount that could be financed to the account of the recipient is generally more than 80 but less than 1,500. Hence, it is also necessary for you to pay back the amounts along with the interest.

Wednesday, September 12, 2012

Canadian Gift Card Swap

Canadians now have a way to turn their unwanted gift cards into cash. For years millions of dollars of these plastic cards have been lost, stolen or expired. The lost cards have been created a huge windfall for the stores that issues them and never end up having to part with any merchandise or refunds for unused cards. While several websites in the US that buy and sell gift cards have been around for years, none of them have provided an outlet for Canadian consumers. There are currently a couple ways to get cash for your cards but until recently there have not been any services that offer the same simplicity and ease American sites have offered. In this article we will examine the top three Canadian gift card swap techniques.

Canadians can and always have been able to sell their cards on ebay Canada. Although it is not dedicated purely to gift certificates the auction website provides a relatively easy way to sell a card. I say relatively easy because if you have not already signed up for an account it can be a pain to learn how to use the website. It is not simple for newbie's and you may need to make a couple purchases first to build up your ebay street credit. This credit or trust ranking is called feedback on ebay and people will rarely bid on an auction if the sell has low feedback.

Another way you can sell your cards is by using local classified or online classifieds websites. Although many people do use these services as a card swap they can be time consuming. Not only do you need to wait for someone to reply to the ad you post but you will also need to meet up with them to exchange the card for cash. If you place the ad in a small community your are unlikely to get any replies, however if you live in a larger community and place an ad you are likely to get a response but a new problem will emerge. If you are selling your gift card in Toronto and live in downtown Toronto and someone in Oakville or one of the other suburbs wants to buy your card than you might have to drive half an hour just to meet up and do the exchange. This can turn the relatively easy process of selling your card on a classifieds site into a huge hassle.

A new Canadian solution has surfaced that will let you swap your cards for cash. A new gift card trading site that originally began as a gift cardswap quickly evolved into an easy to use service that gives you cash for your cards. All you have to do is submit some details about you card, send it in and within 24hrs of your card being verified you will receive payment online (cheques are available by request). Why use a gift card swap when you can instantly turn your card into cash? In this day and age who has the time to wait for a buyer to appear and then hope your escrow payment is released? The simplicity of this server is what makes it so great you simply exchange your unwanted cards for cold hard cash.

With retailers no longer offering cash back for their cards it was only a matter of time before a secondary industry sprang up to service this issues for consumers. Luckily Canadians now have a variety of viable options for turning there card into cash. These services will only become more common until retailers step up and take some responsibility for the value on the cards they issue.

Monday, September 10, 2012

Using Debit Spreads To Increase Profits And Reduce Volatility

A debit spread is a useful tool to have in your options trading arsenal for a couple of reasons. It substantially reduces the volatility in a trade, while still retaining a substantial potential reward. When compared to something like a credit spread, where you could end up risking or for every that you take in, or say a straight call or put where you can end up earning many times your money for every dollar you risk, but have to deal with extreme ups and downs, the debit spread lies someplace in between these two strategies.

Credit Spreads
A credit spread can be a useful tool because it can provide a consistent and predictable income, by selling out of the money spreads. However the obvious problem with this lies in the fact that in doing so you are risking many more times the amount of money you hope to gain. In other words one loss on an out of the money credit spread can easily wipe out the profits from three or four trades. The advantage in these however is that with each passing day the time value decays, which works in your favor so that the stock doesn't actually have to go any place in order for you to make any money.

Buying puts and calls outright is the most common strategy for most investors. While this has the distinct advantage of leverage and the ability to earn many more times than the amount invested it does come with a price. Huge swings back and forth and extreme volatility. One day you're up the next day your down. Your timing has to be spot on much of the time or a winning trade can quickly turn into a losing one. In a trending market these are the best (forgive the pun) option, but in a sideways market it feels like you're on a roller coaster. It can be doubly frustrating when a stock moves in your favor, but the option does not due to time value decay or because it was overpriced based off of its implied volatility to begin with.

Debit Spreads
So that brings us to the debit spread. Although it lacks the staid slow moving consistent profits that the time decay from credit spreads can bring, it does have the advantage that you can profit many more times than the amount risked without the ups and downs from just buying puts and calls.

To create a debit spread is simple. Let's take a look at the exchange traded fund (EFT) on the Nasdaq (QQQQ) as an example-
Let's say that it's the beginning of February and we are Bearish on QQQQ, so decide to purchase the June At The Money Puts. The ETF is trading at .00 so we purchase the .00 June Put for .80.
We then sell the June Put for .45 giving us a total debit of .35 (2.80-.45). So our maximum loss here is what we paid for the spread .35. If at the end of options expiration the ETF has fallen to a price of .00 or less we would have realized our maximum gain of .65 (High strike price-low strike price) (Debit) or (.00-.00) -(2.35) =.65. So our maximum possible gain is almost 3 times our maximum possible gain here.

Maximum Profit = (Higher Strike- Lower Strike) - net debit
Maximum Loss = Net Debit
Breakeven for call spreads = lower strike + net premium
Breakeven for put spreads = higher strike - net premium

There are a few things to remember when using debit spreads.

1.Options lose their value fastest from time decay during the last 4 weeks until expiration, so make sure to use options that have at least 3-6 months or more.

2.Always check historical vs. implied volatility. If the implied volatility is low relative to historical volatility then we want to be a buyer of options because they are undervalued. If the implied volatility is high then we want to be a seller of options because they are overvalued.

3.Obviously do your research, a bit of fundamental and technical analysis and have a reason for believing why a stock is going to move up or down.

4.Use good money management. I usually use a mental stop loss and get out of the trade when the spread has lost 40-50% of its value.

Friday, September 7, 2012

Car Finance: Common Mistakes People Make

It is extraordinary the way some people go about sorting out car finance. Compared with getting a new credit card or a bank loan, often people looking to get a car loan or car credit finance behave in a completely different way to normal, and yet there seems to be no reason for it.

It is almost as though car finance was a completely different type of financial agreement or arrangement, and that car loans can be treated in a different way, with different rules. To think this way is often to invite disaster, but what is it that people do which could be done better, what risks are people taking, what other options are available, and what are the benefits, both in the short term, and the longer term?

First of all, let's imagine someone who is about to get a credit card. What do they do first? It is an unlikely scenario that the first thing they do when looking to get a new credit card is to go shopping with a view to finding things that they'll be able to buy with it.

It seems to make little sense to make your first move in getting hold of a credit deal to go looking for ways of spending it, despite this often being the way that people looking for cars on finance or car finance deals do it.

Instead, it would make sense when looking for a credit card to shop around, look at the various options, considering both the short term offers such as low introductory rates and zero rate transfers, and the longer term benefits, such as a lower interest rate, an absence of annual fees or a lower balance transfer rate.

Once you've looked around, and you're sure you have found the best deal for you, you might apply for it. After all, there's little point applying for a credit card on the basis of their zero transfer rate if you have no other balance to transfer - it has to be a finance deal that suits your circumstances and needs as well as your pocket.

For many people the way they approach car finance is to leave behind the common sense practicalities such as budget, interest rates, credit history influences and poor credit implications. Instead, the first thing they often do is head to the car showrooms and dream about what they'll spend it on. This often results in disappointment and embarrassment when they're declined a car loan or car finance, or they find they're unable to be approved for the cheap car finance deals advertised, and are looking at paying a much higher rate of interest because of an adverse credit history.

Instead, it makes a lot more sense to sort out the finance first, before looking for a vehicle to spend it on. Despite the fact that many people don't approach it this way round, the benefits are considerable. In the first place, you're not shopping under a delusion, but instead know that you already have your car finance sorted.

Secondly, you have a clear and definite budget. It's easy to have a ball park figure in your head that's little more than a guess, and have a look around at the showrooms at cars in that price range. But if you sit down and sort out your car finance first you'll be able to make absolutely sure that everything's included, such as any registration costs, licensing and tax costs, insurance, fuel and interest payments, as well as the repayments on the car loan itself.

Once this hurdle has been dealt with you can then enjoy shopping for cars, because rather than guessing, or hoping, you'll know for certain whether you can afford a car or not, and can therefore look more seriously and more confidently at each once that appeals.

If you've been turned down for car finance already because of adverse credit you may have considered guaranteed car finance. If this is so, you may have given up on the idea of being able to sort out your car finance first before shopping, or given up on the idea that you'll be able to choose any car you like from any dealer you like.

Certainly it is true that some car credit finance firms offering guaranteed car finance do restrict you - but fortunately not all. If you approach getting your car loan or car finance sorted straight away, before looking for a car to spend it on, you'll stand a much better chance of getting the car you want, without the embarrassment and disappointment.

Thursday, September 6, 2012

10 Clauses To Consider When Reviewing A Lease

Commercial leases can be extremely complex, but by analyzing certain common clauses, potential tenants can ensure a favorable lease for their organization. Here are 10 key components to evaluate when reviewing a lease.

1) Base rent clauses

Rental rates, the focus of most negotiations, represent the most direct monetary aspect of a lease. Tenants can negotiate for periods of free rent even when a landlord refuses to lower the basic monthly rent which can greatly reduce the average rent rates over a lease term.

2) Space measurement clauses

Your rental rate is also based on the size of your office space, but this measurement depends on treatment of common areas, lobbies and mechanical rooms, to name a few. Useable square feet, what you occupy, must be distinguished from rentable square feet, what you pay.

3) Renewal clauses

Before you move in, you must determine whether you will be able to stay. A renewal clause will ensure you can remain, based on a percentage of fair market value (90 to 100 percent) when your lease expires.

4) Sublease clauses

Often, subletting your space can turn you into a competitor with your landlord. Tenants should avoid agreeing to onerous provisions designed to limit this option. Examples of these limitations include restrictions on subleasing to neighboring tenants and owing the landlord 100 percent of any realized profits.

5) Operating expense clauses

In operating expense clauses, the landlord passes on his cost increases after a tenant first leases the space. They can significantly affect costs, especially for larger tenants, and should be examined closely.

6) Alteration clauses

Tenants should reserve the right to improve their space without an obligation to remove any infrastructure added upon termination of the lease. By doing so, they avoid an unknown liability at the end of the term. These clauses should also provide an equitable way to hire construction crews based on the tenant's choice, even when they are initially suggested by the landlord.

7) Default clauses

In addition to their use in times of financial distress, these clauses can also define certain infractions as tantamount to default. Tenants should examine the conditions carefully and include a suitable method as a remedy to avoid termination.

8) Relocation clauses

The landlord sometimes includes a right to relocate you to another space in the same building, perhaps to make room for a larger tenant. If you must accept this condition, at least make sure any resulting costs will be paid -- such as moving costs, IT/phone cabling and installation, renovation of the new space, stationery, etc. -- and ensure the new space will offer the same functionality, quality and access.

9) Personal guaranty clauses

Landlords may require a personal guaranty clause for payment protection if they are unsatisfied with a tenant's credit. The tenant should ensure the individual signer is protected and off the hook if the organization vacates the premises promptly in case of default (known as a Good Guy Guaranty).

10) Surrender clause

A landlord generally includes this component to ensure the space is returned in a rentable condition. Allowances should be made for normal wear and tear during the course of the lease.

The above list provides a very elementary outline of some typical clauses in commercial real estate office leases. However, the tenant should enlist professional representation during any negotiation such as a real estate lawyer and commercial real estate broker as well as an established architect.

Tenants may also consider renegotiating their lease before its expiration. It is often possible to achieve more favorable terms through revision of the above clauses.
# # #

Sunday, September 2, 2012

Commitment Vs.involvement: In An Egg And Ham Sandwich, The Chicken Is Involved, The Pig Is Committed

A recent article in the St. Petersburg Times by Robert Trigaux reminded me of this grand old saying: "Commitment Vs. Involvement: In An Egg and Ham Sandwich, The Chicken Is Involved But the Pig Is Committed." The article was published on Sunday, April 11, 2010 and it went through the cast of characters that were somehow involved with the market crash and recession starting in late 2007. The majority of the article was based on the testimony a lot of these people recently gave in front of the Congressional committee that was investigating the causes of the economic crash.

A few things struck me as I read the article and looked at the pictures of those listed as involved in the crash. The first thing I noticed, and the most obvious, was that all of these people mentioned in the article were involved in the crisis (the chickens) but none of them want to stand up and commit (The pigs) that their actions or inactions were contributing factors to the disaster:

1) Alan Greenspan, former head of the Federal Reserve Board, did not take responsibility for the crash even though many people think that under his leadership, the Fed kept interest rates way too low for way too long. During the hearings, Greenspan stated that he was right 70% of the time in his Fed decisions. While 70% might be good for an NFL quarterback for a pass completion record, 70% is not good enough when the economic well being of the nation's citizens are on the line.
2) George W. Bush has not taken responsibility for the crash even the seeds of destruction were sowed and allowed to grow during his administration.
3) Barney Frank has not taken responsibility for the crash even though he was the House committee chairman that oversaw the housing market, he did not see the biggest economic crash coming since the Great Depression until it hit him in the face.
4) Chris Dodd has not taken responsibility for the crash even though he was the Senate committee chairman that oversaw the housing market, he did not see the biggest economic crash coming since the Great Depression until it hit him in the face.
5) Henry Paulson has not taken responsibility for the crash even though as Treasury secretary he also did not see the biggest economic crash coming since the Great Depression and when it did hit, he reacted slowly with no apparent strategy for determining which Wall Street firms were to live and which were to die.
6) Bill Clinton has not taken responsibility for the crash even though as President he signed laws that separated commercial banking from investment banking, creating the behavior that led to the crash along with legislation that exempted the dangerous derivative financial products from regulation.
7) Christopher Cox has not taken responsibility for the crash even though as former head of the Securities and Exchange Commission his organization watched on the sidelines as the banking system almost collapsed completely due to shady and risky financial dealings.
8) Richard Fuld has not taken responsibility for the crash even though as CEO of defunct Lehman Brothers Fuld allowed his company get so deeply into risky subprime instruments that its demise was the biggest bankruptcy in U.S. history.
9) Raymond McDaniel has not taken responsibility for the crash even though his company, Moody's, incorrectly or falsely rated the subprime financial instruments as financially sound.
10) Angelo Mozilo has not taken responsibility for the crash even though as CEO of Countrywide Mortgage his company apparently never met a mortgage customer, no matter how uncreditworthy, that his company would not accept.
11) Franklin Raines has not taken responsibility for the crash even though as head of Fannie Mae his big investments in subprime mortgage securities led to a massive taxpayer bailout.
12) David Lereah has not taken responsibility for the crash even though as a former economist of the National Association of Realtors, he never saw the housing collapse coming and his book, "Why The Real Estate Boom Will Not Bust" was published just as the real estate boom went bust.
13) Robert Rubin has not taken responsibility for the crash even though as Citigroup Chairman he claimed he was ignorant of the risks that nearly destroyed one of the biggest banks in the world, indicating he was either a very lousy executive by not knowing how much at risk his company was at or a very lazy executive who never took the time to understand how much at risk his company was at.
14) Charles Prince has not taken responsibility for the crash even though as Citigroup CEO he was just as lousy or lazy as Rubin.
15) The Democrats in Congress have not taken responsibility for the crash even though they ran all of the Congressional committees responsible for the overseeing the housing and banking sectors of the economy and consistently rejected dozens of calls by the Bush administration to put stronger oversight onto Fannie Mae and Freddie Mac. They also rejected a request from John McCain in 2005 to rein in the dangerous lending and security practices of Fannie and Freddie. One reason for this resistance was that these two quasi-government organizations were large campaign contributors to Democratic Senators Dodd, Obama, and Kerry.

So all of these important people were involved (the chickens) in the financial disaster but none of them have committed (the pigs) to taking responsibility for the results, it wasn't their fault. If it was not their fault, then whose fault was it? This was obviously a big deal since the stock markets suffered extensive setbacks, unemployment is nowhere close to recovering, the Federal deficit has skyrocketed in part due to the large bank bailouts, and the housing market is still in the dump. But no one is responsible. In the above list, no one went to jail, no one paid a large fine, no one went bankrupt, many did not lose their jobs, and no one has an answer of why it went so wrong and why no one in a position to acted to avert or at least mitigate the outcome.

Thus, the first conclusion I draw is that this is just another instance of where the government and the people that are currently running it are not effective and the programs they are responsible for do not work. We need to do a ground up housecleaning of the people/politicians and the processes that are no longer effective in running this country.

The second conclusion I draw from he article is a little more subtle. As I look at the politicians running the hearings looking into the the causes for the economic crisis and include the list of people from above, I see that almost all of them are older white males. There are no females involved, very few younger people involved, and Franklin Raines is the only African-American who is prominent in the discussion of fault.

Could it be that this group of politicians and business leaders are not diverse enough to see a crisis developing or are too cozy with each other to want to do anything to avert these kinds of disasters? This brings us to Step 45 in "Love My Country, Loathe My Government," a step we have not talked about often in this blog. This step would require the political class to obey and heed all laws in effect that work to guarantee equal opportunity relative to race and sex. Maybe if we had a little more diversity, fresh blood, and fresh ideas involved in the process of running the country we might get some better results. Heaven knows that the current club of people running the country, both in and out of government, may be stuck in a group think mode, making them incapable of foreseeing the future disasters. Said another way, we need more committed pigs and less involved chickens running the country.