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Filling Out Equity Applications

Nov 10

Posted by admin in Loans

Once you find the home or else decide to take out an equity loan to re-mortgage your home, you will need to go through the process of filling out an application. After you have submitted the application to the lender, you will receive a denial or acceptance letter shortly. If you are applying for an equity loan at the local bank, then the lender will often fill out the application, while asking you questions.

Once the lender decides you are a candidate for a equity loan, the lender will require you to sign a “purchase contract.” During the process of the application, the lender will run a credit check to make sure you do not have defaults, judgments, or other negative credits on your report.

The lender will also verify that your source of income is correct. Furthermore, the lender will search for any “liabilities” to determine if you can repay the loan. The lenders, once accepting your application, will then have you sign the “purchase contract,” and then you will start the process of buying the home. You will need an to fullfil an up-front deposit so forth to close the deal.

The contract will cover details about the deposits, the price of the home, interest, “proposed closing date” and so forth. You will be expected to attend an “interview” and at this meeting; you will also sign papers, negotiate prices, and pay money if applicable. Most lenders require that the homebuyer sign and complete a “Uniform Residential Loan Application” during the interview. The app will cost you upfront fees possibly, and these fees will include valuation costs, arrangement costs, and so forth. Finally, if you are searching for an equity loan, make sure you know what you are getting into before signing an agreement; if you do not read the fine print and actually understand the stipulations of a given contract, you may find yourself in more debt at the end of the process.

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Vanishing Funds

Sep 20

Posted by admin in Finance, Stocks Mutual Funds

No, not the money you have in your brokerage account, but mutual funds. This year so far more than 600 mutual funds have vanished. Where did they go and what happened to the money in those funds that belongs to the investors? The mutual funds were either liquidated or merged out of existence.

Not to worry. Investors did not lose any money, but there could be tax consequences. If the mutual fund is in a tax-sheltered plan of some kind it won\’t make any difference as far as taxes go; however, if the investor is not in a tax shelter he will be responsible for the capital gains taxes, if any. When a fund manager liquidates a stock for a profit within the portfolio the profit must be declared and a capital gain distribution sent to all investors in the fund.

The situation is different if there is a merger. The stocks within the fund are absorbed into the surviving fund and may or may not be sold depending on the investment philosophy of the fund manager. For the investor who wants to be invested in a particular type of fund this may deviate from his personal goals.

The big and famous funds don\’t merge or liquidate, but in fund families such as Fidelity, Liberty, Janus, etc. they have been known to merge their weak funds into stronger ones. The prime reason being that the fund is not making any money and is unable to attract new investors. Usually the fund is taken into one that has a similar portfolio and this helps a fund family as it buries the losers and shores up their overall track record. It does reduce overall expenses and works to the advantage of the investor. You must be aware that sometimes money is moved from one non-performing fund to another. You have to find this out for yourself.

One good thing about the liquidation of a poor performer is that it forces the investor to move his money from a bad situation to (hopefully) a better one.

This year is not going to be a banner year for the majority of mutual funds. It should force many investors to take a closer look at what these fund managers have done with their money. At this time it might be a good idea to evaluate what your funds have done for you lately. If over the past few years they have not outperformed the S

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Stops

Sep 20

Posted by admin in Finance, Stocks Mutual Funds

Think about this one. Has your broker EVER recommended that you place a stop-loss order on a stock after you have bought it? Ninety-nine percent of the brokers never think about helping you protect your capital. In fact these brokers are not taught this very important technique. The brokerage companies don\’t realize that by helping you get out of a poor position it gives them more of your money to trade again to make them even more commissions which is all they really care about.

You see, they don\’t want to recommend stops because if you sell out you might take your money out and that\’s a no-no. Or worse yet, you might blame the broker because the stock went up after you were out and now you are mad. Let me draw on my 30 years of experience as a trader and let you in on a little secret. Three weeks to 6 weeks after you have been stopped out of any position that individual issue is going to be lower than where you sold it in about 75 to 80% of the time. When you are at the gaming table you must go with the odds.

I hear your protests. \”But I\’m not a gambler, I\’m a long term investor\” No, you\’re not. You are just as much of a speculator as the day trader; the only difference of the time frame. To make a substantial return on your investment you must keep you funds working with profitable stocks or mutual funds all the time. You cannot afford to buy something and have it drop in price and then wait months or years for it to come back \”even\”. It is not \”even\” because you have lost the investment power of your cash by not being in some other stock that is going up NOW not some nebulous time in the future.

Stops are easy to figure. Don\’t ask your broker; he probably doesn\’t know. Very simply you might place a 10% stop below the low of the previous 2 weeks and keep moving it up every Monday morning. Let\’s take a look at what might have happened in this recent crazy tech market. Microsoft went to $119 and as of this Friday, May 26 was $61; WorldCom went to $64, now $37; Palm $165, now $21; E-trade $72, now $15; Ask Jeeves $190, now $20; Red Hat $151, now $17 and there are plenty more like this. Many are 80% lower and it is doubtful we will see new highs in our lifetime. If you owned any of these last year and did not have a stop sell you are hurting today.

And if you did get stopped out and it went to a new high you could buy it back again placing the same kind of stop. Using this method to sell is letting the market tell you when to get out and not guessing that this is the high. You don\’t know. Neither do I. Let the price action tell you. This is what the professionals do.

You must learn how to use stops or you will never make real money in the market.

Al Thomas\’ book, \”If It Doesn\’t Go Up, Don\’t Buy
It!\” has helped thousands of people make money
and keep their profits with his simple 2-step
method. Read the first chapter at
http://www.mutualfundmagic.com
and discover why he\’s the man that Wall Street
does not want you to know.

Copyright 2005

Writen By : Al Thomas

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Tell Me What To Do

Sep 20

Posted by admin in Finance, Stocks Mutual Funds

Because almost everyone has been baffled by Wall Street baloney they have accepted the conventional wisdom that every investor needs a stock broker or financial planner if they are going to invest in the stock market.

That would be true if brokers and planners were trained to not only pick stocks, but also protect the investors? money. Neither is true. That seems like a pretty horrific statement. I know because I used to own a brokerage firm and have hired 300 brokers. Only 1% or 2% of them knew what they were doing and consequently lost money for their clients. That probably applies to so-called financial planners because they all went to the same non-school.

Yes, I said they received no training which is true in almost 99% of the individuals. What little ?advice? they received was based on false and untrue premises. The Buy and Hold philosophy is the biggest lie of Wall Street. No broker is taught an exit strategy ? how and when to sell. Protection of customers? money should be number one on their list; however, brokerage companies do not want you to sell . They would rather have you go broke. (Of course, they don?t say that.) The investor is quoted the Ibbotson study. Unfortunately, the quote only shares one half of the study and the part about why Buy and Hold does not work is never given.

Wall Street has told you that you are too dumb to pick your own investments and that you need a broker to help you decipher the intricate maze that leads to financial freedom. Too bad most brokers haven?t learned or the 7 trillion dollars in losses that occurred from 2000 would not have happened.

Not only have liars and thieves been uncovered in Enron and World Com, but now we find that the fund managers of great bastions of ?safe? investing in mutual funds have also been stealing from their shareholders. Yes, late trading is theft and has been misnamed market timing. This also leads me to realize that the SEC has not been doing their job of protecting the small investor.

With all this corruption you, the investors, are more confused than ever. What do I do now? Where should I put my money? You need ?expert? advice and I must say to you that you will not get it from a broker. Advice from a broker is a eulogy for your money. No, now is the time for you to take charge of your own investment portfolio. Could you have done any worse in the past 3 years than letting a ?professional? handle your money?

There are many places you can seek advice, but none of them are on Wall Street. The library and the Internet are both great sources of information. Find someone who does not fit the Wall Street pattern. Several someones. And start your financial education.

Go look in the mirror and say, ?Tell me what to do?.

Al Thomas\’ book, \”If It Doesn\’t Go Up, Don\’t Buy
It!\” has helped thousands of people make money
and keep their profits with his simple 2-step
method. Read the first chapter at
http://www.mutualfundmagic.com
and discover why he\’s the man that Wall Street
does not want you to know.

Copyright 2005

Writen By : Al Thomas

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Competition Commission Set To Ban PPI

Jun 18

Posted by admin in Credit, Loans

Over the last few years the financial world has suffered some heavy losses due to the economic downturn. And at the point where banks and other financial institutions thought they had hit rock bottom, the majority of the UK population that had been misold Payment Protection Insurance (PPI) began to realise that they could claim their cash back.

Payment protection is insurance designed to cover the cost of any loan you may have taken out in the event you cannot make the repayments, due to illness or injury. The idea in itself is a good one, as if you fall ill and cannot work then for example you are safe in the knowledge your mortgage would be paid by the PPI you have.

The problem with PPI is that the majority of people ’sold’ PPI where never actually told they were being sold it. And if they were told, they were miss-lead into thinking it was something different. So, thousands of the UK population where forking out money for an insurance package that they either did not need, they did not want or ask for, or an insurance package that was of no use to them and would never pay out in the event of a claim.

This type of insurance has become a lucrative one for the banks. Estimations show that PPI generates 4 billion pounds per annum for financial institutions. However, we now have a situation where thousands of people are paying their cash into a scheme that is of no use to them whatsoever.

Recently the Competition Commission has stated that it will no longer allow the sale of PPI products alongside the sale of other financial products such as loans, credit cards and mortgages. And on top of that millions of PPI customers are claiming back money they have unnecessarily paid out, to the tune of 177 million in the first 11 months of 2009.

This decision that the Competition Commission has made now means that financial institutions will no longer be able to sell PPI insurance products to their customers when selling a loan or other product.

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Don’t Fall For A Lending Scam

Jun 6

Posted by admin in Loans

It seems as if you can’t trust anyone. Believe me — if it sounds too good to be true, it is. Especially when it comes to money.

Don’t be fooled by the idea that only the elderly, the young and the desperate are targeted by scams. Everyone can be a target. If you are vulnerable, you are especially at risk. If you fall for a scam, you could lose a lot of money, your credit history and even your home.

What is your best defence? Education. You need to know what scams are out there. You need to know how the lending of money works, so if you see something out of the usual, you know to ask questions. You need to ask those questions about everything.

I recently heard of a homeowner who was offered $100,000 more for his home than he was asking. Upon closing, he was to turn the $100,000 over to the buyer. That way, he got his home sold at the full asking price, while the buyer had money for “improvements and moving costs.” This sounds good, but it is often a scam. And by taking the buyer up on it, the seller becomes involved and can be criminally held accountable.

Many lenders offer equity loans to homeowners who can’t afford them. This is called equity stipping. If you don’t have anything but equity in your home, abusive lenders could try to get you to pad your income using a home loan. They count on you not affording the payments. The lender then waits for you to default on the home and they foreclose. You lose your home.

Never agree to a loan you know you can’t afford. If something sounds like the easy way out, you need to look again. Make sure that you have an attorney that you trust read over everything you are offered. Don’t sign anything without concurring with someone you trust. Don’t ever allow yourself to be pressured into signing anything.

In fact, don’t ever give out your personal information to anyone who contacts you. You should only give your information to reputable businesses that you are sure of. Be aware of lenders who come to you. After all, your bank doesn’t try to give you money. Be wary of anyone who does this.

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Brown Will Force Expense Scandal MPs To Pay Back Legal Aid

Apr 22

Posted by admin in Loans

The expenses scandal was a horrific PR blow to the government and it has been dragged out by three remaining MPs who refuse to pay back their false claims. They first attempted to use parliamentary immunity, which failed, and now they are now facing court. They plan to use legal aid paid for by the tax payer to defend themselves, a move that was condemned by Prime Minister Gordon Brown who declared they will have to pay back the costs.

Critics have considered it as a move by Brown to be seen to take a harsh stance against expenses fraud in the lead up to the general election, but some legal critics have commented that there is no reason why anyone should not receive legal aid and have it paid for by the state.

60,000 was reportedly stolen by the MPs through false mortgage applications, rent claims and service invoices. But the cost of the prosecution will far exceed that figure, at the expense of the taxpayer the price of preparing their defence is likely to run into six figures even without the cost of the prosecution. There is further risk of the MPs having the case thrown out the Supreme Court which could send the cost even higher.

“The government has now introduced reforms to enable means-tested legal aid although they were unable to implement them in time for the MP’s cases” Justice Secretary Jack Straw explained. Brown argued that now the law has changed and although these changes will not take affect until June, he believes it is just cause for the MPs to pay back the money.

Scotland Yard claim the investigation has so far cost them over 500,000 and the overall cost of the case has been estimated to surpass 3million. The MPs will begin trials on May 27th at Southwark Crown Court in London where a spokesman has confirmed that the MPs were granted an application for legal aid. Using the legal aid, the MPs have hired high priced lawyers costing hundreds of pounds an hour but if found guilty, they could face up to seven years in prison for stealing taxpayer’s money.

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