interest rates

Why Does Securities Lending Make Sense?

If you are you looking for easy financing
that can be used for any purpose . . .

Securities Lending Provides Quick & Easy Capital

What is it that you want to accomplish? Whether you want to purchase real estate, buy a new car, RV or luxury yacht, pursue personal or business investment opportunities, exercise employee stock options, or meet other business or personal financial goals, consider securities lending.

Securities lending (also known as stock loans) are used by forward-thinking investors who want to retain the future ownership of their assets as well as leverage the present value of their securities for immediate cash needs.

Securities lending offers non-recourse / non-purpose loans based upon the value of actively trading securities you already own. This lending program provides you with an extension of credit based on eligible securities that you pledge as collateral.

By borrowing against your assets rather than selling them, you can keep your investment strategy on track and defer any capital gains taxes that might result from selling securities to meet your financing needs.

Stock loans have NO personal liability – they are a non-recourse loan secured by your securities. If the borrower defaults, he/she keeps all the loan proceeds and the lender’s only recourse is to keep the pledged collateral.

Stock loans are non-recourse – the borrower’s financial liability is limited to the collateral pledged for the loan. Borrower has the right to walk away from the loan (with no adverse credit reporting) if the value of his securities falls below 80% of the loan amount.

Stock loans are quick & easy – simple straight-forward paperwork, with no fine print. Just your stocks acting as collateral for your loan.

Use the cash for any worthwhile purpose! Buy a home, buy a business, RE investment property, pay-off a mortgage – use it for virtually anything you desire.

PROGRAM HIGHLIGHTS –

• Simple & Quick – NO Credit Check / NO Income Verification
NO Upfront Fees / NO Closing Costs / NO Personal Guarantee

• Loans are “Non-Purpose” – loan can be used for virtually anything borrower wants to accomplish (personal or business)

• Loans are “Non-Recourse” – giving the borrower the opportunity to simply “walk away” if the collateral falls below a set floor amount

• High Loan-to-Values – up to 80% LTV (depending upon security); which is much higher than banks and brokerage companies can offer

• Loans are Interest Only – principal payment at maturity; otherwise loans can be refinanced or extended

• Low Fixed Interest Rates – usually between 2% to 4%

• Loan Term – minimum of 3 yrs; also 5 yr / 7 yr / 10 yrs

• Quick Funded – usually within 5 to 7 business days

• Borrower Maintains Beneficial Ownership – borrower keeps all upside market appreciation. In addition, borrower receives credit against their interest payment for all dividends or interest on bonds. An added benefit is that the lender is responsible for taxes on the dividends during the loan term. It is a loan (not a constructive sale) per section 1058 of the Internal Revenue Code.

• This is NOT a Margin Account Loan – A securities based loan is not a “margin account loan”. These loans have significant advantages over conventional margin loans. See ICON’s website for detailed information.

Authored by - Randall Farr, Managing Director – ICON Commercial Lending, Inc

Contact Randall Farr at 866-956-5554, ext 115

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(Note: Borrowing with securities as collateral involves certain risks, including the possibility that you may need to deposit additional securities and/or cash in the account to meet a maintenance call and that securities in the account may be sold to meet the maintenance call. Proper management of your account and a thorough understanding of the conditions that may affect your investments will assist you in effectively using the margin lending program.)

Loan Repayment – Financial Planning When it Comes to Getting a Bank Loan

Approaching a bank for a loan can be beneficial especially when you need capital to invest in a worthwhile project.

Unless you have the capability of paying back, getting a loan can prove to be quite a financial disaster. Therefore, before acquiring a loan, make sure you have the required income to be able to repay the loan.

It is prudent to plan before taking a loan. For example, taking a loan to invest in the stock market can prove to be quite trick considering that trading in stocks is speculative. Though in business you need to take risks, it is also advisable to mitigate those risks.

When going for a loan, it is imperative to also consider the interest rates and whether your monthly income can afford to service the same. In addition, take into consideration the additional cost or penalties incurred in late payments or even early loan repayment.

Take a scenario where you are planning to buy a car that your income cannot afford to mange. I would urge you to reconsider and halt taking that loan, since it can easily drive you into serious debts. I am not discouraging you from getting a car loan, but what would be the point if you are unable to repay the loan? Realize that a car is a liability and its value depreciates with time.

Taking a loan to invest in an asset like building a rental house is advisable, since with such an investment you can have a steady cash flow to help you repay the loan. With a house you can also be sure its value will appreciate with time.

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Adverse Credit Is No Barrier for An Adverse Credit Loan

There is an increasing range of borrowers who have a pile-up of debts and to complicate the matter they are labeled as dangerous credit also. Which means relief from debts becomes every one the added a tough task.

These individuals need to not loose heart anymore. Unhealthy credit debt consolidation loans are notably created suitable for them keeping their money background in consideration. On taking unhealthy credit debt consolidation loans, the borrowers can revitalize their credit history. The loan is on the market trouble free and on easier terms plus conditions provided borrowers make sure of its key aspects.

Bad credit happens to a borrower when he fails to clear loans on time plus need to face cases of payment default or County Court Judgments. This is reflected in the credit score of the borrowers. A bad credit score on FICCO scale is 580 or below in a very scale starting from three hundred to 850. Credit score of 720 plus higher than is taken into account as safe plus sound for giving loan.

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Thus, before you ask for bad credit debt consolidation loans, you had best check your credit score. If it looks on negative territory, make some enhancements in it. Have your credit report made error free by an expert.

Pay off those easy debts to enhance your credit score. The enhancements not only increase your credit score but more than which impresses the lenders that you simply are serious towards clearing debts. Don’t forget a better credit score can be useful in availing the loan at best terms and conditions.

Debt consolidation is each one about bringing your assorted loans taken from other lenders beneath one lender so which a new loan obtained at a lower interest rate may be employed in clearing debts of higher interest rates immediately. Unhealthy credit debt consolidation loans are available in secured plus unsecured options.

To go on secured unhealthy credit debt consolidation loans, borrowers ought to supply collateral in the shape of any property such as home, vehicle, jewelry etc to supply loan security to the lender. With the loan well secured, lenders don’t take serious note of unhealthy credit plus even ready to offer bigger amount of loan depending upon the bigger equity during the collateral. When secured, the loan may be availed at lower interest rate. The compensation term also can be longer to the relief of the borrowers.

In cases of no collateral offered or taking unsecured dangerous credit debt consolidation loans, the borrowers ought to satisfy the lender with proof of their sound income supply and good financial position. If the borrowers fail to provide the proof then the loan amount can be smaller and interest rate additionally may be higher. To these individuals lenders give a shorter compensation term.

But, if borrowers search for an appropriate loan package and compare the available lower interest rates, they can take a cheaper loan as regarding their budget. Thus, it is suggested to apply on-line for unhealthy credit debt consolidation loans.

If arranged properly unhealthy credit debt consolidation loans enable you to regain monetary health.

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Understanding Student Loan Consolidation

In today’s current economy, where the whole world is reeling under a huge economic crisis, paying off multiple student loans can prove to be really difficult.

Apart from the fact that you need to remember the monthly repayment dates for all your student loans, keeping a track of the varying interest rates and paying off huge sums of money each month can surely disturb your monthly budget.

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Therefore, if you are looking for an option that is far simpler and can assist you in lowering your monthly repayments, you can go ahead and consolidate student loans. Yes, by consolidating your student loans you end up making life much easier for you.

Here are some key features of student loan consolidation:

To begin with, instead of paying simultaneous monthly payments, each with a different date, you simply need to make a single monthly payment.
After you consolidate student loans, you are presented with a fixed interest rate that is capped at 8.25 percent, which is much lower than the interest rate of your student loans.
The monthly payment, if you consolidate student loans, becomes pretty less than the total of your individual student loan monthly payments.
The repayment period can increase, if you consolidate student loans. Therefore, instead of paying off all your loans within 10 years, you can consolidate them and extend the loan repayment period to 12, 15, 20, and even 30 years.
You can pay off your single consolidated loan electronically. Most lending companies even offer you 0.25 percent off on the interest rate, if you pay your monthly installments electronically.
You do not need to pay any processing fees to consolidate student loans. The whole process is free of cost, which is yet another advantage for you.

Students as well as parents who borrowed the money can consolidate student loans. However, students and their parents cannot combine their individual loans for consolidation. This is because only loans from a single borrower can be consolidated.

You have the option to consolidate student loans with any lender. This provides with the facility to look for lenders that offer the lowest interest rates and other benefits.

With such great features, it is not surprising that more and more students opt to consolidate student loans. This makes life relatively easier for them and allows them to concentrate on their job and career.

By getting to consolidate student loans, you know how much exactly you need to shell out each month. In addition, the single monthly payment, which can be paid electronically or through direct debit from your bank, relieves you from remembering the monthly loan repayment date.

A lower monthly repayment option is one feature that most students look out for while repaying their student loan. This is because most fresh graduates need to be contended with a low monthly salary that can increase only through performance and experience.

In such a situation lower monthly repayments are really welcome to such graduates. This and the above mentioned features, is exactly the reason why student loan consolidation is gaining such prominence.

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9 Tips to Save Money – Personal Finance Basics

There are many easy ways for you to save money when it comes to personal finance basics. Some are slightly more time consuming than others but in the end it is well worth the time it might take. If you only follow one or 2 of the following tips you can save hundreds of dollars each year.

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1. REQUEST FREE SAMPLES

There are plenty of websites that give free samples for everyday items. Sometimes the huge companies like K-Mart or Petsmart have great opportunities for you and I to get free items. These products often include skin lotions and personal hygiene products to pet food or bathroom products. One other option is to visit a manufacturer’s website to find those free samples on newly released products. If you need something, type ‘free sample’ into Google before you go to the store to purchase that product. This is the beginning of mastering personal finance basics.

2. CHANGE CREDIT CARD SPENDING AND HABITS:

Credit cards can be great but also dangerous. With those high interest rates and monthly fees, credit cards might end up costing you a lot more in the future than you expected.

Things to keep in mind:

- always use cash unless it’s for a major purchase

- always make sure you can afford the item before you use a credit card

- be sure you can pay the balance of your credit card

3. AVOID IMPULSE BUYS:

We all know what it’s like to push a shopping cart through the aisles of the grocery store and the moment we get to the check out we’ve picked up double the amount we planned to buy. Always, always, always make a shopping list, go by it and never purchase anything that’s not on your list. This goes for any type of shopping including clothes, books or entertainment. Retail outlets are mapped out specifically for those impulse buys with candy racks and gum within easy reach. Make your list, check it twice, and follow it.

4. SHOP THE SALE RACK:

This is another personal finance basics rule but keep in mind this isn’t necessarily an impulse buy. You have your list and know that you need a pair of pants and a shirt check the sale display before you shop. It’s pretty likely you will locate that said item on sale and pay far less than the regular price. Grocery stores work the same way. They usually over order products and sometimes run unadvertised specials on overstock items. Just be sure that item is on your list.

5. SAVE YOUR HARD EARNED MONEY:

This is sometimes the most difficult thing to do when money is tight, but it is the most critical step to take. According to the book ‘The Wealthy Barber’ you should save ten per cent of the money you make every week. That may not seem like a lot but it does add up very fast and if wisely invested it will assist your retirement plans in the future.

6. SAVE YOUR CHANGE:

This might seem a little strange but this simple tip may surprise you. Why? Because it’s just like found cash. After you come home from any store put any loose change into a jar. Each month or every few months count up the change, roll it up and deposit it into your bank account or reward yourself to a well deserved night out. These are the personal finance basics you learned when you were very young.

7. BUY IN BULK:

We’ve already talked a lot about shopping but I have another shopping tip that mostly applies to buying grocery’s. Buy everything you can in family packs. If you drink a lot of orange and you see that it is on sale at half price, buy 4 rather than 2 or purchase the full case of water instead of the smaller 12 pack. This may seem easy but many people do not take advantage of bulk buys on every day items.

8. CLIP COUPONS:

I know this may make you feel like your grand parent but this is another great way to save lots of cash. It only takes a few minutes every week and you will probably save hundreds of dollars every year on things you were already going to buy. Go through your local newspaper or check the Internet for some money saving coupons.

9. RECYCLE PLASTIC BAGS:

Not only is this great for the environment but it will put money in your pocket too! Lots of retail outlets are now making you pay as much as 10 cents for plastic bags. Chances are you have about a million of them hidden away in your closest already. Couldn’t you just bring those bags when you go shopping and use them again? Another way to recycle and save money is to use those plastic bags from the store in your garbage under your kitchen sink or in your bathroom. Don’t spend money each month on a pack of kitchen garbage bags when you already have them at home.

These simple tips will save you lots of money and they are simple and might even be fun. It’s always rewarding to know that you are taking the first steps to becoming debt free. If you follow these tips to save money you are one your way to understanding the personal finance basics all of us should know.

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Auctions and Trends in the Market –

Do you tend to buy stocks or real estate when the market is improving? And sell when the market is worsening? If so, join the crowd. This action, of course, creates its own “feedback loop”, also called “price-to-price feedback”. When the feedback stops, markets often turn around, or a speculative bubble bursts. Astute traders include watching stock volumes during trading days, although they must make allowances for things like summer vacations, the day before a 3-day weekend, etc. Why would anyone expect real estate prices to increase, given typical supply and demand activity?

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It is generally accepted that the high-end real estate is feeling the brunt of the credit crisis right now. Given the higher unemployment, the uncertainty about the future of expensive properties, and the loss of a liquid jumbo lending market across the nation, I have yet to see any analysts bullish on properties worth more than $1 million. The “lower” end properties, however, are benefiting from low interest rates, renewed attention from mortgage investors and the US government, and demand for foreclosure sales. Interesting times…

What happened Monday in the markets? Well, after an ugly Friday afternoon, fixed income securities came roaring back with prices improving and rates inching lower. Most investors had intra-day price improvements. Locks and originations are down somewhat, which helps, The Fed was in doing their usual buy-back of securities, and the stock market losing a little steam didn’t hurt bonds either. For mortgage-backed securities, a 4.5% coupon security (which would contain 4.75-5.125% mortgages) is priced at about a .5 discount. But by the time an investor adds their servicing released premium of 1-2 points, suddenly the secondary market is paying .5-1.5 over par for these loans. There is still profit in originations!

We have the 2-yr auction today. Who will pony up to buy a piece of the $42 billion and earn about 1.02% for two years? We’ll see, but many expect it to go well. Ben Bernanke has been nominated by Obama for a second term as Federal Reserve Chief, which is helping to calm markets. We will also have the S&P/Case Shiller Index, and at 7AM PST we’ll have the Consumer Confidence numbers. Mortgage prices are roughly unchanged from Monday afternoon, and the 10-yr is chopping around 3.50%.

As noted above, Bernanke has been nominated for a second term. His nomination for a second four-year term, which would start in late January, requires Senate approval and was endorsed by the head of the Banking Committee, Christopher Dodd. So don’t look for too many surprises during the process.

Do you remember how there was a public opinion period for the HVCC, which passed, and then when HVCC was put in place everyone was upset? Well, apparently the Fed is addressing how mortgage loan officers are paid. Given that a loan originator or mortgage broker is any person who for compensation or other monetary gain arranges, negotiates, or otherwise obtains an extension of consumer credit for another person; you’ll have to check out the website below. I don’t have the attention span to go through the entire document, but it doesn’t look good!

Bank of America has agreed to pay $150 million to settle a lawsuit alleging Merrill Lynch executives mislead investors about the bank’s condition. The suit targeted a number of Merrill Lynch executives and board members, including the former CEO. We all remember that Bank of America formally acquired Merrill Lynch at the start of the year after agreeing to buy the struggling investment bank last fall.

In news that surprised no one, Taylor, Bean & Whitaker filed for Chapter 11 bankruptcy protection and said it may liquidate, three weeks after it closed its mortgage lending business. TBW said it plans to operate on a scaled-down basis as it works to recover, restructure and possibly liquidate its assets is not an easy task with more than $1 billion of both assets and liabilities, and between 1,000 and 5,000 creditors.

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Is it Possible to Predict Mortgage Rates?

Mortgage rates can fluctuate rapidly. With these unexpected changes, it can be hard to know exactly when to lock in a rate. Could you have saved money if you waited one more month? Or did you stall too long and miss a window of opportunity? Wouldn’t it be easier if there were a concrete way to predict mortgage rates?

No one can predict mortgage rates precisely, but if you pay attention to a variety of factors, you may begin to notice a trend. Unfortunately, even keeping an eye on the trends in mortgage rates will not tell you exactly when it is the best time to lock in a rate.

While it may be impossible to guarantee that you are locking in the lowest available rate, you can get a good interest rate by paying attention to the market and knowing what to look for.

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In the past, it was much simpler to predict mortgage rates. They would typically follow the interest rates of corporate bonds, but lag behind by anywhere from six months to a year. And while this would not make it possible to determine the exact mortgage rate, it would provide some insight into whether mortgage rates were trending up or down.

This method was very effective when a bank or credit union made a loan and held that loan for the duration of the term. Today, that is not how lending works.

A mortgage is originated at a local bank, but it is then bundled and sold. Because mortgages are now considered investment vehicles, it is important that the interest rates be competitive enough to attract attention from potential investors. The mortgages are pooled into an investment group called mortgage backed securities.

These securities have the same type of appeal as bonds, and the interest rate is typically comparable to that of a ten-year treasury bond. While the interest paid on a mortgage-backed security is higher than that of a ten-year Treasury, they will typically follow the path of the Treasury bond. For example, if interest rates for Treasury bonds drop, expect mortgage rates to drop as well.

Another consideration for predicting mortgage rates is the current rate of inflation. When inflation gets higher, mortgage rates go up too. And conversely, low inflation rates usually mean lower interest rates. There are, however, exceptions to this rule. If the federal government is working to stimulate the economy, mortgage rates may remain artificially low, even as inflation rates increase.

Finally, look at what large, national lenders are doing. Although there is no reason to expect all lenders to follow along with what these large lenders do, they often do. The business section of your local newspaper will probably tell you everything you need to know about what lenders are doing across the nations. Depending on where you live and the economic climate, you may see similar results within days or weeks. While the mortgage rates may not be the same, the trend will be.

While following these basic rules will give you an edge over less informed consumers, there are other factors that will affect your personal mortgage rate. Lenders look at individual borrowers when determining what rate they offer to a customer. A person seeking a mortgage that has exemplary credit, a hefty amount of money to pay for a down payment and some extra cash to pay on points will have a lower mortgage rate than someone who has some blemishes on their credit, little money for their down payment and not enough extra money to pay any points.

It is also important to understand the difference between a fixed rate mortgage and an adjustable rate mortgage. Fixed rate mortgages are typically higher than adjustable rate mortgages. The adjustable rate mortgage may seem like a better deal, but often the adjustable rate mortgage resets at a higher rate than the fixed rate mortgage.

It is important not to waste too much time worrying about mortgage rates. While we all want to save as much money as possible when buying a home, at some point you have to make the commitment to invest the money and close on the loan. While it may seem like a mortgage is a lifetime commitment, in many cases it is possible to refinance a mortgage.

If mortgage rates drop, speak to your lender. Some lenders will expect you to go through the entire lending process again when refinancing, while others will allow you to refinance without a new appraisal, deferring many of the closing costs. If your lender seems unwilling to work with you on this, shop around. You may find a better deal, or you may find that your current lender is more willing to work with you in an effort to keep your loan in house.

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