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What if My Lender Goes Out of Business?

It can be a worry with a lot of companies and even banks going out of business, that this might happen to your lender. It may not be too much of a problem though.

Although it seems that banks go out of business a lot, they actually do not. Some banks are supported by the Bank of England and will never go out of business, so if want to be completely sure then use these. They are HSBC, Barclays and Nat West. However, they do not always have the best mortgage deals, so it can be a good idea to be more flexible.

If your lender does go out of business it will not be too complicated for you. What normally happens is that parts of the business will be sold off and it is likely that you will end up being passed to a different bank. If you had savings in the financial institution, then it could mean that you might lose some of them. However, when you have borrowed money, this will not happen. Therefore you will just have to start paying the new owner instead of the old one.

After a while you may find that they change the terms on your mortgage. They may change the fees or the interest rate. You may then decide to move elsewhere, if you have not already decided to do so. Remortgaging is usually quite simple, assuming that you have a good credit record and always make your mortgage payments. Just have a look and see whether there are some better deal on the market and move to a new lender. It normally just requires a form to be filled in and maybe a few telephone calls.

So it is not really something you should worry about. If you have a reason to be concerned about your lender, then you should be able to move your mortgage then and there unless you are tied in to a fixed rate deal. So just make sure you do not get yourself tied in, if you have this sort of concern. There are many types of mortgages and most do not tie you in. Even the ones that do tie you in, sometimes have an option of being able to leave if you pay a sum of money and so you should not worry too much. Just make sure you know the terms of your mortgage before you sign up and you should have no need to worry.

When Is It Time to Refinance Your Home?

By Kurt

You may look to refinance your home when interest rates drop to gain access to extra cash from your home equity to reduce debt. In a market with falling home prices most people are looking to reduce their monthly payments or increase the rate at which they can pay off their mortgage.

Refinancing can be a positive strategy move based on your individual situation but it might be less expensive to stay with your current mortgage.

Here are some things to think about if you are contemplating refinancing:

• Interest Rate. Use an online mortgage calculator to determine what interest rate you would need (be sure to account for all the costs of refinancing) to strike a beneficial arrangement.

• Staying or Moving? If you are planning on staying in your current home for a short period of time it may not make sense to refinance. It will usually take some time to reach a break-even point with your existing mortgage.

• Savings. It is important to ensure that you have adequate savings for emergency funds and retirement so refinancing to pay off your mortgage quicker may restrict how much you can put away. Take into consideration the benefits of saving versus paying off your mortgage in a shorter time period.

• Debt. Consider what other debts you have before deciding when to refinance your home. Paying down any existing high-interest debt will save you more in interest than reducing your interest rate on your mortgage.

• Credit Score. Your credit score plays a key part in qualifying to refinance your mortgage. Be sure that you have a high enough credit score prior to starting the process to refinance.

In certain situations, refinancing can provide you with the right solution; however it is not always the prudent step in all cases. Be sure to evaluate your circumstances and understand the consequences and impacts of refinancing. A little research ahead of time can help you make the right decision on when to refinance your home.

Paying Back Loans in the Recession

By Kurt

When times are hard, like they are for many in this recession, it can be difficult to imagine how you could even consider paying back your loans and getting out of debt. However, there might be things that you can do even if you feel that you have no spare money.

– Stop getting in to more debt – it is very important to start off by not building up even more debts. Consider the ways that you get in to debt, whether they are credit cards, overdrafts, loans of whatever. You need to stop using these methods of paying for things so that you do not continue to get in to debt. It is no good paying off your overdraft if you build up debt on your credit card and so you need to firstly manage just using your income and nothing more.

– Assess your debts – this can be the scariest part of the process as you have to find out exactly how many debts you have. This includes everything from loans to mortgages, money you owe friends to credit cards. Look it all up and write it all down. You may find that it is not as bad as you imagined or that it is worse. However, doing it, is the first step in being able to pay back what you owe and have that freedom that you will have dreamt off.

– Spend less money – telling someone to spend less money could seem silly. Many people feel that there is not a way that they can reduce the amount of money that they are spending. However, it is worth considering whether you really are spending the minimum amount. Consider every purchase that you make and whether it is something that you really need at the moment. You may be able to delay that purchase until you are clear of debt or you may not really need it at all.

– Repay the dearest loan – it can be best to take a look at the loans that you have and pay back the one that is costing you the most money, first. If you pay any spare money that you have in to that loan, then the costs of it will go down. It will become easier and easier to pay more back because you will be paying out less in the cost of it and eventually you will pay it all back and be able to work on the next one.

– Repay the smallest loan – some people find that they feel more motivated when they pay back a loan in full and therefore target the smallest loan first. This is a more expensive way to pay back money, but it can be well worth it, if you feel that it will give you the motivation that you need.

– Reward Yourself – it is important to make sure that you reward yourself every so often. Being as frugal as you can and paying back loans, can be very rewarding for some people. However, if you are used to spending lots of money and never thinking about how much you are spending, you may find it very difficult to get used to spending less. Therefore it can be worth treating yourself every so often to something that you have cut back on but really miss. This might be a coffee out, a take-away or a new piece of clothing. However, do keep it as a treat as you will appreciate it more and you will not overspend and get out of your new habits of paying off debt.

Catch the Binary Options Movement For Major Profits

By Kurt

Causing a storm in the forex world is binary options (Binäre optionen), one of the latest crazes in online trading. By trading commodities, currencies or indices anyone is now able to make a healthy profit using the right trading strategies. While early adopters were skeptic of this new innovation at first, digital options trading has shown that it will stick around for a long time to come.

Not sure if you can handle a binary option deal or not? Ask yourself this: do I want to trade smarter, using the market to my advantage? Do I want to also have better control over when I trade and how I trade? If the answer to both questions is yes, you can definitely handle binary options.

Getting into this field of trading doesn’t take nearly as long as you might think. The premise is pretty straightforward. The option can either go up in the timeframe you specify, or it can go down in that same timeframe. If it goes down, you’re not out more money than what you put down anyway. If it goes up, you know exactly how much money you’re going to make. Having better control over how much you stand to gain is something that traders have desired for a very long time. What you must do from this point is make sure that you’re taking action. In other words, you need to jump in on all of the great binary options action that’s out there. [Read more…]

Controlling holiday spending

By Kurt

The holidays are a time when people can easily get into financial troubles. You want to give the best gifts you can to the people you love. Sometimes your desires outweigh your finances. Lots of people rely on credit cards to make ends meet during the holidays. Sadly, that can create a lot of troubles for people. Here are some questions to ask yourself before you buy another gift on your credit card:

Is last year paid for yet?

Some people are still paying for last year’s gift as the time comes to start buying again this year. If you haven’t paid for last year, don’t buy on credit this year. Stick to cash instead.

What’s your budget?

You have to know how much you can realistically afford to spend before you head out to the stores. Look over your finances and set a realistic budget with some flexibility built into it. Once you have the budget, stick to it.

Have a plan?

Before you head out to go shopping, spend the time to figure out what you are going to buy, where you will get it and what it will cost. Set up a route you will follow and stick to it. This is the easiest way to stick to a budget and stay out of trouble.

Forgotten anything?

As you set up a holiday budget, be sure to include everything. That doesn’t just mean gifts, but wrapping papers, food for guests, travel and costs for decorating. Include everything so that your spending doesn’t get out of line. Have someone close to you check over the list before you start. Often they will come up with something that you have forgotten. [Read more…]

Brown wants FSA to investigate Goldman Sachs

By Kurt

British Prime Minister Gordon Brown said on Sunday he wanted Financial Services Authority (FSA) – – Britain’s financial watchdog — to investigate Goldman Sachs after it was charged with fraud by U.S. regulators. Meanwhile, the UK Financial Services Authority did not make any comment on Brown’s speech on Sunday. The U.S. Securities and Exchange Commission on Friday charged Wall Street investment giant Goldman Sachs with “defrauding investors” over subprime mortgage securities, which were largely blamed for the worst financial crisis since the Great Depression. The government agency, which is responsible for regulating the financial markets in the country, alleged that Goldman Sachs failed to disclose crucial information to investors of its securities that a major hedge fund had bet against the securities.

Royal Bank of Scotland, the part-nationalised UK bank that lost $840 million in an allegedly fraudulent investment created by Goldman Sachs, will await the outcome of US investigations before deciding whether to pursue its own legal action. RBS will see if the Securities and Exchange Commission is likely to be successful in the civil suit it has launched against Goldman. In the suit, it accuses the investment bank of securities fraud relating to a complex derivatives deal linked to subprime mortgages. RBS lost money on the deal through its ownership of ABN, the Dutch bank it bought at the height of the credit bubble in 2007, which had acted as a guarantor for ACA, the main counterparty in the deal.

City bankers saw near unprecedented income growth over the past decade, with the highest paid receiving nearly a third of the UK’s total wage bill, according to recent research. The study, which cited bankers’ bonuses and pay at the top end of financial services as a driving force behind Britain’s rising pay inequality, found financial services professionals took home an additional £12 billion a year by the end of the ten year period.

Bank dividends throughout Europe are at their lowest level on record as recovering financial institutions retain earnings to increase capital. According to city banking sources the average dividend yield among European banks is now 1.9 percent, with over a quarter of the continent’s top 50 banks paying no dividend. Regulators have been pressuring banks not to resume or increase payments while details of new capital requirements remain unclear. Some banks have cut dividends despite making a profit, with British bank Barclays cutting its dividend from 11.5 pence to 2.5 pence despite profits of £11.6 billion last year.

Shares in Royal Bank of Scotland closed up 2.1 pence at 50.4 pence on Monday, 0.2 pence above the 50.2 pence average price paid when the Government invested £45.5 billion pounds. The current price represents a £180 million profit for British taxpayers. Shares in Lloyds Banking Group rose 0.72 pence to 65.42 pence, leaving the taxpayer £2.26 billion in the red on the Government’s 41 percent investment.

Some of the UK’s poorest northern and peripheral regions have seen a growth in business and investment, narrowing the gap with the south as an attractive place to do business, according to a recent survey. The survey showed that the highest increase in rankings since 1997 for the UK’s periphery. Northwest England was the star performer in the index, rising from eighth to fourth place among the UK’s 12 regions. [Read more…]

U.K. property prices set to extend their recovery

By Kurt

According to information from the Centre for Economics and Business Research (CEBR) property prices in the UK are due to rise in 2010 driven by low borrowing costs and the shortage of homes. Property values are due to rise by five percent and mortgage costs will cheapen as the Bank of England retains a its record low 0.5 percent key interest rate. CEBR have reduced their property price forecast from 6 percent after the tax on home purchases rose and cold weather damped demand for property. Average mortgage interest rates are expected to drop by around one percent by the start of 2011.

US based billionaire investor Warren Buffett, has backed Bank of England Governor Mervyn Jones previous comments by stating that said he doesn’t envy the winner of the UK general election, who will be faced with the need to make “politically very unpopular” decisions to cut the deficit. Speaking after the annual shareholder meeting of Berkshire Hathaway before a crowd of 40,000 , Mr Buffett warned the next occupant of No 10 to fear the bond market, which could turn against the UK if public spending is not brought back into balance over the long term.

Buffet’s comments regarding the UK’s current financial plight echoes previous statements made about growing government debt across the Western world. The debt has been incurred as a result of the economic stimulus measures put in place to prevent a much worse recession after the financial panic of 2008.

It has been reported that the collective wealth of the UKs 1,000 richest people increased by 30 per cent in 2009, largely due to the efforts of London-based steel magnate Lakshmi Mittal. Claiming the top spot for the sixth consecutive year Mittal seen his fortune double from £10,800 million to £22,450 million in the wake of the recovery of the steel industry worldwide.

Chelsea owner Roman Abramovich remains second on the list, whilst adding a mere £400 million to his stack of £7,400 million.

The Duke of Westminster, retains his place as the wealthiest UK born member of the list saw his mainly property based fortune increase to £6,750 million.

According to a recent survey, most of the UK’s small companies feel that the current tax system it too complex, and would like to see it simplified,

Two thousand small and medium sized UK enterprises (SMEs) took part in the survey that found that 77% participating feel that the current system is preventing them from taking advantage of tax benefits and breaks, while

60% were found to be unaware what entitlements they may be suitable for.

While many experts see SMEs as the engine for economic recovery and a key battleground in the upcoming election, many small businesses find the complexity of the tax system frustrating, with almost three quarters with the impression that the tax system was actually acting as a barrier for start-ups. [Read more…]

The benefits and disadvantages of short term loans

By Kurt

Many people turn to short term loans in times of trouble, and it’s certainly clear to see why. There are many great benefits to getting short-term loans, and it has helped many working people to get out of difficulty during the month. Here are some of the main advantages and disadvantages of these type of loans.

Advantages

One of the main advantages of payday loans is that it doesn’t matter how good or bad your credit rating is. This is what makes short-term loans such a great idea for people who aren’t able to get other types of loans, such as a bank loan or credit card. Since there are no credit checks when you apply, it becomes completely irrelevant.

Another benefit is that you don’t have to pay it back until your next payday. You can borrow money until payday and then pay it back when you get your pay check. This makes it easy for the borrower, since you don’t have to worry about making any repayments until the money is actually in your bank account.

People often apply for payday loans because of the speed at which the money is usually deposited into your bank account. Many people report receiving the money within 24 hours, and sometimes, it can take a matter of minutes.

Applying for the loans can also be very simple, and it’s usually just an online form which you are required to fill in. This normally takes no longer than five minutes, making it ideal for anyone who has a busy schedule and a job or family life to attend to.

Disadvantages

The main disadvantage of payday loans is that the interest rates can often be rather hefty, which is why many people choose not to rely on these loans very often. Although you’re only borrowing them for a few weeks (or a few days), you can still accumulate large amounts of interest, and if you’re late in making the repayment, this amount can increase even further.

Finally, failing to repay the loan can affect your credit rating in a bad way. This means that if your credit score is already very poor, it could get even worse, making it more difficult to get bank loans and credit cards in the future and thus making your financial situation even worse. However, paying the loan back on time will ensure that your credit rating doesn’t get worse, and it might even get better.

Fears of the Greek malady spreading to the UK grow

By Kurt

Financial analysts fear that Britain could be among the countries that could follow Greece into a financial crisis. The uncertainty comes after Dominique Strauss-Kahn’s head of the International Monetary Fund (IMF) warned of economic “contagion” spreading across Europe.

The IMF urged politicians to finalise a bail-out for the debt-laden Mediterranean country, saying that every day lost in resolving the problems risked spreading the impact “far away”.

Strauss-Kahn’s comments came amid growing evidence of Europe’s mounting fiscal problems after Spain’s debt was downgraded following in the footsteps of Portugal as well as Greece.

Late Thursday Germany was holding out for more economic reforms from Greece before agreeing to an unprecedented multi-billion euro bail-out plan.

UK house prices increased by 1% month-on-month in April, according to the latest house price index.

Property experts pointed out that April’s figures did receive an additional boost from the fact that April was one of the weaker months of 2009. However with property values beginning to increase from May last year, it will be difficult to maintain this rate of growth in the coming months.

On the commercial property front, it appears that the appeal of London’s robust shopping demand continues attract the leading for international retail chains to the city. A recent survey has revealed how 58 percent of international retail brands have opened outlets not just in London but throughout the UK, spurred by strong consumer demand.

Preliminary assessments have revealed that the European air transport sector swallowed as much as €2.5 billion in losses from disruption caused by Iceland’s volcanic eruption. The loss assessment conducted by the European Commission could well be the model that an industry bailout will be based on. Some of the airlines affected have argued that flawed computer models used by member states were partially responsible for grounding planes, even when the airlines insisted that was safe for them to resume their services. A spokesman for the UK Department for Transport stated that while the “UK cannot unilaterally provide new aid to affected companies it continues “to explore options” with the Commission. Meanwhile, budget airline EasyJet have cautioned that governments should be prevented from providing aid to “ailing national carriers” who might use the financial damage caused by the volcanic disruption as a pretext for a bailout. [Read more…]

Big business finds a way to dodge income tax on dividends

By Kurt

Recent research has show that close to 50 million pounds was paid out shareholders in the form of dividends, in many cases just a few days before the end of the tax year on April 6. Experts believe that many UK companies are employing this tactic as a means to help some of their big-income employees who are also shareholders to avoid the rise in the rate of income tax. If this is the case, it could cost the Treasury as much as £85 million pounds. Analysts estimate that the main “offenders” are directors in small to medium sized companies who want to minimise the effect of the soon to be effective 50 percent tax rate, due to their greater flexibility over returns.

A rise in UK retail sales, albeit a minor one has been reported for March by the Office for National Statistics (ONS) According to the ONS, retail sales volumes during the month grew by 0.4% from February, which is less than the 0.6% analysts had expected. Sales improved in February after a very poor January, report with retail sales being hard hit by the icy weather.

Overall, sales volumes during the first quarter of 2010 were reported to be down 1.7% from the equivalent quarter of last year.

Royal Bank of Scotland (RBS) has announced a series of proposals to toughen performance targets in its executive pay scheme. The announcement from RBS chairman Philip Hampton signals a key trigger point for RBS’s long-term incentive plan, which is to be revised upwards. Under the existing incentive plan bank executives gain a significant proportion of performance-linked rewards when the bank’s share price hits 50 pence. RBS shares are currently well over the fifty pence mark.

HSBC are reports to be on the look out for bankers to help them direct any industry-wide bank levy into government-sponsored venture capital agencies. The bank has toured Europe seeking support from colleagues in the industry for their plan to alter the terms of the ongoing debate about bank regulation. HSBC proposals include varying the capital buffers banks are required to hold, dependant on economic conditions. The bank’s argument is that banks need to hold higher capital in good times to absorb losses when conditions decline. [Read more…]

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