AltaireCon

Archive for October, 2011

There are many different lenders out there, but look at the packages, and you likely will come across 2 main types. Those that are fixed rate mortgages, and those that are adjustable rate mortgages. Let us discover more here!

So, you want financing to buy a home? There are many options, and luckily, it can result in you owning your own piece of real estate!

To get financing, you will need a mortgage in most cases, and you can find them! The 2 main options that you will find are fixed rate mortgages, and those that are adjustable rate mortgages.

They both have benefits, but knowing which is best, is really down to the state of the economy, at the time you get the financing, and your personal preferences.

The fixed versions are great, because they provide you with a fixed amount you need to pay. This means that you actually can go through and pay on a monthly basis, while knowing that is the fixed amount throughout the term.

The other option of adjustable, is great because it changes, based on the national base interest. This makes it potentially better, especially if you get financing when things are high, then they go down, you will still benefit.

With fixed versions, you would not benefit. So, it is really only better to get fixed versions, when the state of the economy is just recovering.

As you can see, this all depends on your views of the economy over the long term. Trust your instincts.

All your financial needs of starting a business or for wedding can be looked by your home. Your home is not only a place where you reside but can also be used for getting huge finance to fulfill your dreams. Home equity loans are loans that are granted on equity of the home.

Home equity loans are secured loans that allow you to avail loan against the equity of your home. The collateral placed for availing loan is the home equity. The term “equity” is defined as the amount of funds you have invested to own your home or to improve it.

The various purposes for which home equity loans can be availed are for debt consolidation, home repairs and improvements, medical bills etc. The loan amount that can be availed under a home equity loans depend upon the borrower’s repayment ability, credit history, income status etc. The interest rate charged under home equity loans is low and the repayment tenure for home equity loans is up to 25 years. Since the repayment tenure is large the loan amount can be repaid in small easy monthly installments.

Home equity loans are granted in two ways fixed rate loans and adjustable interest rate loans. In fixed rate loans the borrower gets the whole loan amount needed in one go. The loan amount applied for is obtained as lump sum whereas in adjustable rate loans you are given a line of credit and can avail loan up to that credit limit.

Home equity loans can be availed by borrowers with bad credit history also. Any credit score below 600 is considered as bad credit by lenders. The various reasons for bad credit history are CCJs, IVAs, bankruptcy, arrears etc. Bad credit borrowers can avail home equity loans at flexible terms of repayment and comparatively interest rates.

Home equity loans are granted against the equity or value of the borrower’s home so all the borrowers irrespective of the credit history can avail home equity loans.

Buying a used car directly from an owner will get you a much better deal than you would get from a car dealership. This is especially true in cases where the car owner and the car history are well known to the buyer. It eliminates the possibility of hidden surprises. On the whole, private auto loans have a lot in common with other methods of car financing. However there are also certain differences that can be important when deciding to purchase a car.

Higher Rates For Used Cars

When it comes to used cars, the rates for person-to-person or private auto loans invariably prove to be higher than those for a new car. To take an example, rates for private party sale auto loans from online auto loan lenders will usually be about two points higher compared to what is charged for traditional new auto loans and about one and a half points higher than the interest rate being charged for used car loans for vehicles purchased from dealerships. Moreover, the rates will fluctuate according to your credit history and other aspects concerning your loan application while new car loans from dealerships usually have fixed rates providing you qualify for them.

Repayment Schedules

Loan term may be less than that of a new car. The standard duration for financing a new car can be up to seventy-two months. In the case of private auto loans, it may not be possible to finance a vehicle for the same time period. Usually lenders are ready to finance private auto loans for up to forty-eight months, though there may be exceptions. However, auto loan financing should be done for as short a period of time as you can possibly afford. This is to ensure that you don’t end up in a situation where you owe more on the car than its value (upside down car loan) and to minimize the amount of interests you are required to pay.

Down Payments and Fees

With many lenders a down payment may not be required for person-to-person auto loans. Despite not being required, it is better to put money down. Doing this will reduce your chances of overpaying for your car loan in the future. Taxes, title and registration have to be paid separately when you purchase a new car from a dealership. The dealer normally combines taxes, title and registration fees into the loan amount. For private auto loans, the lender will not allow you to finance the fees and will require you to pay for them out of your pocket.

Title Transferring

On purchasing a new vehicle, the title is put in your name almost immediately. When it comes to person-to-person or private auto loans, it could take longer. The owner of the car you are buying from may still owe money on the car and it could take a week or longer for completing the payoff process. His lender needs to receive the payoff amount before he transfers the title to the car owner and then it can be turned over to you. The duration of this process is mainly based on the location of the lender. For a local bank, this process should not take more than a few days. However if the lender happens to be in another state, it could take much longer for the transfer to be done.

To briefly sum it up, private auto loans make a good option if you are a creditworthy borrower. However if your credit happens to be less than perfect, it may be better to turn to your local dealership as the best source for an auto loan.

In the process to acquire a car, it is taken for granted that you have gotten requirements. There is a need for cash which would be needed to buy the car. On the other hand, if you do not have the ready cash, then you must have access to a loan facility. Okay, to get auto loans today, what would you be required to do?

Having a good credit is the first factor. This is one thing can that can be very helpful despite the kind of loan you are interested in. Banks and other financial institutions feel a lot better doing business with people with a good credit score.

In all your financial transactions, make sure you have no outstandings as it does not speak well of you. If you do not make your payment when they are due, any lender you approach for loans would see outstanding payments on your record and would be very interested in knowing why you have outstandings. Since your would be lenders are very much concerned about their loans being repaid, any sign indicating a likelihood of it not being repaid is not to your advantage.

Your lender may be interested in knowing if you have any form of insurance. Even after getting a loan without an insurance coverage, you would still be required by your lender to get the car fully insured.

Having a steady source of income or proof of employment is a major requirement for applying for auto loans. Without a proof of employment or a good source of income, a lender would not be confident to grant you a loan as they can not ascertain your ability to repay.

Do not be discouraged if you feel after reading so far that there is no hope for you in your current financial situation. You can access an auto loan if only you know how. The truth about this is that if you are serious, you can get an auto loan within the next 24 hours if you apply to online auto loan lenders.

Get instant auto loans now if you really are serious about it.

The market that helps short term borrowers find the lenders or vice versa is known as the money market (similar to the other financial markets, however “short term” is the key word that distinguishes money market from other financial markets). Borrowers go to the money markets when they are in need of short term loans and the lenders provide them with the required financing. However, both borrowers and lenders do not trade in cash. Securities which are traded in money markets are called money market instruments.

Following are some of the most commonly used money market instruments.

Commercial Papers:

Normally banks and financial institutions issue commercial paper, which is a promissory note that entitles note holder to get the face amount on a fixed date. Usually commercial papers are issued for short terms and their maturity period ranges from 1 to 270 days. The only guarantee you have when purchasing commercial paper (to get the promised amount or at least the amount you’ve invested) is issued by the bank or corporation itself, which is why they are known as unsecured promissory notes. Because of the high risk involved, issuing companies offer higher interest rates to investors.

Treasury Bills:

Very similar to commercial papers, however treasury bills come with the guarantee of the treasury department of United States, making them an investment with very little risk. The maturity periods often extends to one year (starting from 4 weeks) with no payments preceding the maturity date. These bills are divided into two categories known as marketable and non-marketable securities. You can buy directly from treasurydirect.gov or from brokers.

Certificate of Deposit:

The investors deposit some amount into banks or financial institution and get a certificate known as Certificate of Deposit. Interest rate is fixed (the bigger the amount, the higher the interest rate will be) and a fixed maturity period as well. You cannot take out your money before the fixed date, in case you really need to withdraw; you’ll have to pay a penalty.

Banker’s Acceptance:

Banker’s Acceptance is basically a draft accepted and signed by some well known bank. The acceptance by that particular bank makes it an instrument used in money market as it carries very little risk. Once a time draft is approved (accepted) by some bank, the drawee can sell it in secondary market in case he/she is in need of immediate cash (of course at a price lesser than its face value). It is very similar to US Treasury bill; however the guarantee comes from some reputed bank instead of US government.

The Indian Economy is growing and the possible role of mobile money in the same may not be overstated. The author of The March of Mobile Money, Sam Pitroda, is an advisor to the PM on infrastructure and innovation. The main reason why he feels so passionately about his idea of digital wallet – the banks haven’t been able to reach the bottom of the pyramid yet. He firmly believes his idea will help reach the banks to these inaccessible markets.

Everyone Has Financial Needs

Quite naturally, the banks have only focused on those sections of the market which have large savings (rich people), and the more money banks get access to, the more they make. As a natural corollary, they are not interested in people who don’t have much money. At the same time, even those sections, which are considered as unbankable markets, have real world financial needs.

Every New Customer Costs Money

The situation right now is the banks have large costs for customer acquisition due to their brick and mortar structure. They never knew there was any other way they could exist. Even when the process of computerization was introduced in the process, it was done first at the back end, because that was the place where all the money flow was happening. The next place where the computer came was the teller, or the front end. ATMs also were set up, but that also cost them (the banks) money.

Will Brick and Mortar Be History Soon?

Through all this, expenses kept going up, though the picture is expected to change abruptly with the arrival of mobile phones – which act as powerful computers most of the time. Sam Pitroda believes the next generation of banks would not be based on a brick and mortar structure, they would just require a central server somewhere and trust among the customers.

The Time for Micro-Transactions Has Come

The distribution can be done just through the PCO, where the customers would be able to deposit and withdraw the money. The people who make transactions through these new channels will not have large needs, rather their transactions would be small, thus giving rise to micro-transactions. In one single stroke, the banks would reach the bottom of the pyramid as well.

Regulatory Hurdles Have To Be Resolved

It’s not that the situation is not without complications, as there are likely regulatory issues arising out of it. People (both regulators and users) are still not very sure the system will take off in India. According to Sam Pitroda, there are solutions in sight. Sam Pitroda clarifies the mobile operators will have to realize the banks will still be banks and that they would continue to be mobile operators. Only the process of information is being transferred to the mobile phones, the money still remains with the bank. Even if the money is transferred, it still remains in a bank, though may be a different one.