titleCommercial Mortgage Brokers - The Difference Between Mediocrity and Excellence/titlepOf course theres a lot that goes into being a successful commercial mortgage broker like marketing, contacts, sales skills, technical knowledge of the industry, market knowledge, bank contacts, proper administration set up, etc so Im not trying to over simplify the issue; but in general why are there commercial mortgage brokers that make seven figures incomes and many that cant break $100,000 per year?/ppThe most important component to this, I believe, is the quality of the deals that the commercial mortgage broker DECIDES to work on. For many this may seem a little contrary to their fundamental sales outlook that operate under a more reactive basis and work on any or all loans that cross their desk. Perhaps theyre not that busy and work on weaker loan requests. But successful commercial mortgage brokers are empowered./ppExcellent commercial mortgage brokers are extremely careful and selective on which borrowers and which deals they will work on. If they dont like the deal they wont work on it. If they dont think they will get multiple transaction out of the borrower theyll be less interested in working with that borrower. If they feel a borrower is just shopping them they walk or convince the borrower to take them seriously. Again, for whatever reason, they will pass on the loan request and invest their time into deals that are not only doable but will serve their long term goals./ppOne component to this is being excellent at screening loan requests. Whats happening here is the commercial mortgage broker is trying to determine, before they put a lot of time into the deal, if they can close it and how competitive they will be with their existing contacts. Think of it like trying to predict the future. Of course if the commercial mortgage broker doesnt think they can close it, or wont be that competitive, they wont work on it. Again this is all about protecting their time./ppIs it a fundable deal? They know, without having to put weeks into shopping banks, where to place the loan. They determine within a half hour if they like the deal or to walk from it. They know how to review borrowers tax returns and financials as this is what underwriting is going to look at when they consider the loan request. Questions like: Whats the Net Operating Income? Can we hit the required Debt Coverage Ratios? How are the business trends, etc? Have to be answered satisfactorily./ppWe see many newer commercial mortgage brokers that submit loan requests that have no chance of closing because the cash flow is underwater. If the broker knew how to review tax returns they wouldnt have bothered to work on the file from the beginning! (We wrote a training manual on how to prescreen commercial mortgages, available on our website)/ppCan I get multiple deals from this borrower and are the loans fat? The ideal client is one that purchases or refinances multiple loan per year and will have some loyalty. Will they sign my exclusive broker fee agreement? Rather than spending your time prospecting, youre submitting packages and negotiating deals. Rather than sending mailers to commercial real estate brokers, youre reviewing term sheets and scheduling closings./ppAgain theres a lot that goes into being an excellent commercial mortgage broker but one of the biggest factors is how the broker chooses to spend his time and which deals he chooses to work on, or to run from./ppJeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan. He has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc. Products starting at $4.95! Check it out a target=_new href=http://www.cfa-commercial.com/commercial-mortgage-training.htmlcommercial loan training/a or a target=_new href=http://www.cfa-commercial.com/broker-training.htmlcommercial mortgage training/a/pbrbr

titleLoans For Unemployed - Genial Finance Helps to Cater to Your Needs/titlepThere is no second opinion about the state of your financial affairs, if you are an unemployed. The state of unemployment is pretty frustrating, as you are not in a position to realize your dreams and needs. You cannot even think of obtaining external finances, the reason being lack of a stable income source. So, in order to assist you, lenders have taken initiatives by designing a special financial scheme in the form of loans for unemployed./ppThese loans are crafted to provide financial assistance, so as to help you meet the various needs without facing too many hassles and obstacles. You can use the loans for varied number of purposes such as renovation of home, meeting wedding expenses, paying off old debts, pursuing higher education, purchasing a new car and other miscellaneous activities./ppYou can source the loans in the form of secured and unsecured loans. The classification allows you a distinct advantage as to avail the loans on the basis of your need and financial requirement. Secured form of the loans are known to offer a bigger amount, but to avail the loans, you have to pledge one of your asset as collateral. Under the provision of the loans, you can borrow amount anywhere in the range of £5000-£75000 for a period of 5- 25 years at a comparatively low interest rate./ppOn the other hand, unsecured forms of the loans are preferable if you are looking for a smaller amount. You get to avail the loans without pledging any collateral, which means your asset is not under any risk. Besides, those who are staying as tenants and are non homeowners can also apply for the loans without any constraint. Under these loans, a limited amount in the range of £1000-£25000 is approved for a period of 1- 10 years. Interest rate is considerably high but thats due to its unsecured nature./ppIf you want instant accessibility to loans for unemployed, then prefer to apply online. Online application of the loans not only results in its quick approval but also assist you to get the best low rate deals. Before straightaway signing any deal, it would be optimal to keep your repaying ability in mind. This way, you will find it easy to repay the borrowed amount./ppRave Blackburn is a well known author and has been writing content for Loans For The Unemployed. His content is worth reading as it gives you an insight about different aspects of a target=_new href=http://www.loansfortheunemployed.com/loans for unemployed/a, unemployed tenant loans, unsecured loans for unemployed, unemployed loans online. For more information visit a target=_new href=http://www.loansfortheunemployed.com/http://www.loansfortheunemployed.com//a/pbrbr

Bad credit personal loans are much easier to get today than ever. For many people they are the only way to get their credit back on the right track and get their monthly payments reduced. To get the right personal loan for you when you have bad credit, it is very important to apply to many lenders at one time. This will give you as many possible offers to look at when deciding what is best for you and your budget. These loans are very popular for those people looking to make home improvements, pay off old debt, pay off medical expenses, or just about any other reason one can think of. One of the better advantages about smaller bad credit personal loans is that you can easily rebuild your credit by paying it off quickly.

Reasons For Applying

The most common reason people apply for one of these loans is to consolidate their bills. It is very easy to get behind on credit card payments. This causes many to not be able to pay their credit cards off or at all and still keep up with monthly expenses. Bad credit can happen to anyone for any reason, death or injury to a family member, divorce, losing a job - these all can cause payments to fall behind. They are designed for people in these types of situations to help them pay off all their debt at once and have a lower monthly payment instead of many higher monthly payments.

Bad credit personal loans are perfect for those who are looking into home improvements. It is always wise to invest in your home’s equity over time. This will improve not only your house’s appearance but what it worth as well. Many homeowners will look to use one of these loans to do one or two renovations at a time. This allows for smaller amounts to be taken out and shorter repayment time. Once bad credit personal loans are paid off in fun the borrower’s credit rating can go up. This type of loan can be taken at 125% of your homes current equity, which can be very helpful for big renovations or emergency repairs or remodeling.

Another top reason for taking out bad credit loans is for medical expenses. There are many medical conditions or emergencies that insurance just will not or cannot cover. Taking out a bad credit loan to pay off these medical bills allows the borrower to make monthly payments. Often pre-existing conditions may not be covered under new insurance plans, nor are many infertility treatments. Bad credit personal loans can help people pay for these expenses without worry by using the value of their home as collateral.

No matter what the reasons people have for taking out one of these loans, they are extremely helpful for many reasons. It can help many get the things in life they otherwise could not afford up front with a low monthly payment.

Paul Rogers writes general finance and loan articles for the Loans UK Online website at http://www.loansukonline.co.uk

Tip 1 - If you currently have any debt on your credit cards then it is important that you clear this as soon as possible. Although credit cards are a convenient way for you to purchase those items that you want if you can’t pay off the balance on your card each month the debt will soon mount up. If you do find yourself in such a situation consider taking out a small low cost loan to pay off the balance on your cards and doing this could save you £100s each year.

Tip 2 - When it comes to buying yourself something essential like a second car or some furniture for your home why not consider using the local classifieds in the newspapers where you live or if they have their online. Generally you may find yourself saving yourself a considerable sum on the same items if you were to visit your local car dealer or furniture store.

Tip3 - As we all know the cost of the utilities for our homes has increased substantially over the last year or so. However, if you spend a little time online you may be able to find yourself a new supplier who offers the same as your current one at a much more competitive rate. Often doing the research online you may find that you are able to change over to the new supplier quickly and easily as well and they will then take care of the rest of the formalities.

Tip 4 - When you go shopping for the weekly or monthly food don’t go when you are hungry and take a prepared list with you. This way you are actually going to prevent yourself from picking up those items which are not essential and which you like the look of. Certainly you will not only be looking after yourself but also your wallet as well.

Tip 5 - Although you may not realize it but there are plenty of things you have at home which you don’t need or don’t use and which could be making you money. So spend some time going through your cupboards at home and see what you have got and what you don’t need. Then either put them up for sale on an auction site like eBay or in your newspapers local classifieds.

Tip 6 - When you need to get new insurance for your home, car or travel then don’t go with your current insurer but shop around instead. The quickest and easiest way for comparing the prices quoted for different kinds of insurance including that of life insurance is by going online. You may well find that you are able to save yourself quite a tidy sum.

Tip 7 - When it comes to your holiday arrangements try and book yours as early as possible as this can save you quite a considerable sum each year. Also rather than booking through a travel agency instead try and make all the arrangements yourself. There are hundreds of websites that can help you to book all your travel arrangements at one time and still help you to make considerable savings on each part.

Tip 8 - If you can rather than arranging for a professional to come in and fix a minor problem in your home try and tackle the situation yourself first. There are plenty of colleges close to where you live who offer short courses in dealing with minor emergencies in the home so why not sign up for one of these.

Tip 9 - Although it may seem difficult try and put a little money aside each month to cover any emergencies that arise or to help pay off your mortgage a little more quickly. So rather than going out drinking every weekend with your mates spend it at home and use that money towards other essentials you need including paying off your credit card.

Tip 10 - It is important that you learn to say no once in a while. Although that new bag may look great or that weekend away looks tempting if you can’t afford to pay cash for it then don’t buy it.

Above we have offered 10 tips for saving your money, as long as you keep these in mind then you shouldn’t find yourself in a situation where debt has taken over your life.

About Adflyer

Adflyer is a free classified site where you can search for a new pet, find new furniture or sell your car. Browse through property, ways to make money and holidays aboard. This is the place for free classified advertising in the UK. Find bargains for sale in your local area and advertise free.

Buy and Sell - Adflyer

There isn’t a successful, money-making company on earth that doesn’t produce and work within a budget. They do it not only because they must but also because budgets are the building blocks of financial management.

Individuals, however, are different. The U.S. Department of Commerce found in 2006 that the average American household spent more money than it took in by about 1 percent. Not only is this unsustainable for individuals, but it’s probably a good indicator that most Americans either refuse or don’t know how to stick to a personal budget.

Americans may not like budgets because they’re like diets: they both require discipline, and neither works if not followed. But both are tools that are necessary for a healthier lifestyle, whether financially or physically. If a diet tells you what you can eat, a budget tells you what you can spend.

So what is involved in creating and sticking to a simple, personal budget? It might be easier to think of a budget as a spending plan. Basically, that’s what it is. Rather than seeing the restrictions of a budget, see what a spending plan can allow you provide for yourself or your family. It’s as simple as keeping track of and paying attention to what comes in and what goes out.

A good first step in producing a workable personal budget is to start with your bills. It’s imperative to find out where your money is going. Everyone has fixed expenses like mortgage payments or rent; transportation expenses like car payments, gasoline or public transit passes; utilities, food, insurance, etc. Beyond those fixed expenses, it’s good to keep receipts and determine how much other money you’re regularly spending.

After your fixed expenses have been categorized, it’s a good idea to plan for variable expenses like birthdays and holidays, clothing, vacations and entertainment along with tracking expenses daily. If you find that you don’t have enough money at month’s end to cover all the expenses, these variable costs are the first ones that need to be cut.

When you are finished with your expenses, move on to your income. Your income should always exceed your expenses. If not, you must choose between increasing your income or decreasing your expenses. Asking for a raise, finding a more lucrative job or taking a second job are good ideas to increase income. Alternatively, cutting expenses may be easier. That $3 cup of coffee every morning, if eliminated, could save $60 a month.

Ideally, if you make more money than you regularly spend, you should be saving some each month, part of which should go into an emergency or rainy-day fund, typically at least three months’ worth of expenses. The emergency fund, best kept in a savings account, will give you much more flexibility if you should happen to lose your job or experience unexpected expenses.

Just like Fortune 500 companies, individuals must understand how much money is coming in and how much is going out; otherwise, neither stands a chance of achieving crucial financial goals. You won’t have to worry about living off your credit cards or dodging phone calls from creditors. Through budgeting, learning and accepting limitations on your own income and spending habits, you can take control of your financial future.

Today is the perfect time to find out more about tracking daily expenses. Visit us at http://www.everlife.com

A scalper is a person who attempts to make money by holding a position for a very short period. Scalpers normally are not those persons who want to invest in market and wait for a long time to get the profit from their investments. What they are actually doing in business like this is a sort of gambling. They aim to make a lot from a small investment and the element of risk will normally be higher in these types of deals when compared to that of a normal business. Horse racing is known as the best business place for the scalpers to play with.

Scalpers are now commonly seen in stock exchanges and international money market where foreign currencies are traded by the financial institutions like banks and individuals.

An attempt to be a scalper in international money market may not be as easy as you do scalping works at a stock exchange. A person attempting to earn a lot within a short span of time or within hours at a stock exchange will have to get the space and opportunity to be at the office of the trade centre and observe the changes. Lack of a common platform in forex trade makes it difficult for a forex scalper to perform well in this field.

If you want to be a successful forex scalper you will have to be an expert in understanding incidents that may lead to forex market fluctuations. To understand the market fluctuations, you must get a good training in trade forex.

If you want to be good forex scalper, you will have to do same day trading. It will enable you to understand the pulses of the money market. It will work the best when the market moves slowly. Normally the people who expect immediate profits from their tiny investments will not dare to play with the big sharks in the market. They may enter and exit from the market in lightening speed. To do so you should be in a position to feel the changes and act accordingly. If you stay there a moment you may lose your money.

A forex scalper should have an account that would allow him to trade with multiple currencies. Normally a person who acts as a forex scalper should have the ability to take a firm decision for each day. It will help him to enter into a number of transactions a single day.

To get your complimentary Forex Trading Systems course, or for my personal Forex Trading advice, visit my website by clicking the links.

Much of modern life centres on the notion of ‘living for today’ and not worrying too much about what tomorrow may bring. And to an extent, this attitude is based on sound principals given that much of what the future holds is completely out with our control anyway.

But it’s for this very same reason that it’s equally unwise to live purely for the moment. Many people across the country are paying the price for living beyond their means and reaching a level of debt that, years later, is still affecting them.

Indeed, excluding mortgages, the average British household is now in debt to the tune of over £9000, and whilst they may be able manage this level of debt and meet their monthly payment requirements, unexpected rises in interest rates or bills could spell trouble for those without savings to fall back on.

It is actually far easier to manage savings accounts than it once was, and for the most part they are also a lot less rigid than they once were too. For shorter-term savings it’s now possible to open up a simple online savings account that offers 24-hour access with unlimited access to your money. Not only that, it’s now easier than ever to transfer money into the savings account from other accounts.

A popular means of ensuring a little bit is saved every month is to set-up a standing order between a current account and a savings account, timed so that the transaction goes through to coincide with pay-day. This way, saving becomes an automatic process and little effort - or will power - is needed to make those savings grow.

Of course, for those looking more towards the long-term, an individual savings account (ISA) is probably the answer here, as they generally attract much higher levels of interest. Limited to one ISA per person per year, it is possible to deposit anything up to £3,600 and pay no tax on any interest received. And, similar to the ordinary internet-only savings account, an ISA can be managed entirely online meaning there is no need to wait in lengthy bank queues to deposit or withdraw funds.

Furthermore, opening a bank saving account is as easy as completing an online application and then visiting a local branch with identification. And the great thing about many savings accounts is that they can be opened with as little as one pound, meaning there can be little excuse not to be putting away at least something every month.

So, many people choose to live beyond their means by getting into debt and not fully considering their future financial predicament. But by saving just a little bit each week or month, it’s surprising how easy it is to build a small reserve of money for those rainy days. Living for today is great to a certain extent, but just be sure to keep one eye on tomorrow, too!

Disclaimer:

This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.

Andrew Regan writes on behalf of a digital marketing agency. He hopes you enjoyed his article, but urges you to seek further understanding of its topics before making any decisions based on its content.

The latest in Forex news can be established when you have gained some experience in the forex trading market. You would never appreciate something if you didn’t know how it worked and had some obstacles to overcome with it. So is the same for this market. The more experience you gain, the better equipped you are to dominate it! A trader can get down in the dumps and lose a lot of money in this business before they actually learn the lessons required to become a success. If you are a beginner in forex trading or about to start forex trading, I would highly suggest you look into a proven forex trading robot. These will usually put fast money in your pocket and they will teach you a lot about the forex market.

The most important thing you must understand in this playing field is that it is the broker who serves as the middleman. This involves the business of holding your money, trading money on your behalf and then sending you back any profits made; if you make any! You can only possibly be as good as your broker is as there are many sleazy, con-artist brokers out there. Most just flat out lie to you to your face. The Internet is such a free market. It is hard to distinguish between a professional, legitimate website and one that was made in someone’s bedroom that often times can look the same. It is critical that you do research. You can do this by using Google as your tool for solving the mysteries of online scams. With some proper research with great tools available online you can get the latest and most up to date Forex news available. Discussion forums offer great advice from such brokers. They will usually give you the good, the bad and the really ugly side of Forex trading. After doing some research you will be a lot more able to make educated decisions when it comes to this market. The way to avoid dealing with a forex broker would be to purchase a forex software robot. All you need to do is put a capital into the system and then the software gets to work and start making profits.

Do you want the very best forex software? Well I have some good news for you, I bought and tested the top 7 forex software’s and put a review of the top 2 on my website: ForexTradingReview.Info I made over 900 dollars a day with one of the softwares listed on that site. Just Imagine if you purchase a couple of profitable softwares!

You have to be very careful when purchasing a software though. Some of the software’s just sit around and never make you any money. If you want to make thousands every week with forex I suggest you take a look at the website: Forex Trading Review

Just 8 months ago it was a term that hardly anybody had heard of, or used, now, we turn on the radio, TV or pick up any paper and there it is …. Right in our face… ‘Credit Crunch’. In fact it has become so common in its use, it is now difficult to understand just what it means to business and the individual. Of course, we understand that those with a dubious credit rating, who therefore represent a high risk for a funder, now have no chance of obtaining finance in today’s market, but what about those with no debt or well controlled and managed debt, a good credit history, a solid job or business with decent accounts? Just how will the ‘credit crunch’ affect them? The answer, surprisingly, is very hard.

Credit ratings for the individual are assessed on a points system from 0-1000
Although these ratings do differ this is a guide on the scores and what they mean. Under 400 v.poor: 400 to 600 poor: 600 to 700 average: 700 to 750 above average: 750 to 800 good: above 800 is First Rate.

Businesses also get a ‘roughing up’ by funders today. Even if your company has excellent accounts for the last 3 years but one of the directors has less than a v.good personal credit rating you are likely to get refused Prime funding. Today, not only has the company accounts got to show enough profits but the directors, all of them, have to be squeaky clean.

No matter where or who you deal with, if you want ANY form of funding, you will be “Credit Searched” as the very first hurdle. Any one who tells you differently is simply lying to you or giving you very bad advice. If you pass this first hurdle the chances are that the potential funder will ‘drill down’ through your personal finance files and then may request further information. This is a relatively new requirement by most funders, created due to the funders need to minimize losses from possible defaults.

In this article I am going to deal with the two major purchases that you are ever likely to make in your life, Property and Vehicles. We will see how the lenders attitude has changed and just how that will affect those of us who, historically, have never had a problem obtaining funding.
I don’t think I need to explain how funding for property works but many people don’t give any thought to how vehicle purchases are funded. Take vehicle leasing, it is the fastest growing method of owning a new vehicle. You see an advert for a vehicle you like with a monthly amount you know you can afford. In order for you to have your vehicle delivered, there is a complicated process that very few customers ever give any thought to.

A good broker will first run a Credit score search on you. This is so that he can offer the very best advice to you and put your proposal to the most likely funder for you. Assuming your credit search is ok; the broker locates and negotiates the lowest price for your chosen vehicle with a registered ‘main dealer’ to ensure you get the best deal. Next, the broker has to find a funder who is willing to purchase outright your chosen vehicle from the dealer, but before the funder will consider this he wants to know what sort of a risk the customer will be. The broker needs to be one jump ahead hear to protect your interests because if he doesn’t skilfully match YOU to a lenders criteria then you will be rejected and each rejection may affect the way the next funder views your application.

Poor brokers, and there are a lot of them, are like cheap salespeople. They will tell you what you want to hear, make promises they have no hope of keeping, just in order to reel you in and tie you down. They don’t care if you get rejected and that it may affect future applications. They will blindly submit applications for you without credit searching in the vague hope you might go through. In short, they won’t tell you the truth about your true position in today’s difficult market and gradually the truth dawns on you but by then the damage to your credibility may have been done.

A good broker will be Data Protection registered and able to perform a credit search, before he makes an application to a funder on your behalf. A basic credit search does not affect your record and assesses your chances of being accepted by a particular funder, because the broker is in a unique position and will know what their particular criteria currently are. The broker will determine if YOU fit their criteria maximizing the chances of acceptance first time. If you have anything in your credit record that the funder may challenge, the broker will ask you about this and if he submits to that funder then he will add a note of explanation which greatly increases your chances of acceptance. If they feel you will not match any of the ‘Prime Lenders’ criteria (and since the criteria have been significantly raised due to the credit crunch, more than 66% of applicants will not now meet that criteria) the broker should not try to make an application but should tell you the very thing you don’t want to hear! “I think we ought to make a sub prime application for you because of ‘xyz’.” Of course, many uneducated customers refuse this advice since the vehicle of their choice may cost an extra few quid per month with a sub prime lender and so insist on making the prime application, which inevitably, will be rejected. Remember the broker wants you accepted so he will give you the best advice he can to make this happen. A good broker knows his market. He only gets paid if he is able to get you what you want, so working against him is not in your best interest.

Typically, at this stage a customer may remember another advert for the same car that was cheaper than is now being proposed by the broker but if you ‘jump ship’ now the likelihood of you getting your vehicle (at any cost) diminishes with every credit application from a sub standard broker. By performing a credit search for you at the very outset, the broker is doing you a huge favor by preventing you making a funding application that he knows will fail and ultimately may affect your ability to secure your new vehicle. Those requiring funding in today’s tough market conditions have to realize that funders are no longer falling over themselves to do business with you. There are far more wanting their services and so little funding to go round.

Let me put you in the position of the funder for a moment:

You and a group of friends all have money to lend but it is very limited. Your friends are broadly split into two groups those that will lend only to very low risk applicants (prime lender) and those who will take a slightly larger risk at an additional 3% interest per annum. (sub prime lender - pretend you are one of these lenders) A central data base is kept, where all applications for funding and the outcome of those applications are recorded along with any payment record of similar such funding going back years. You can all access this data but you have no need to unless you receive an application.

An application is received by one of your ‘Prime’ colleagues from a broker to lease a car for an applicant; we’ll call him “JOE”. Under the data protection act you are not aware of this at this time because the application has not been made to you. The car Joe wants costs £10,000 to buy from the dealer. The lender needs to know what sort of risk Joe is so looks at his credit record. He finds that despite a basic good credit score and sound record there has been one or two late payments by a few days over the last 12 months on a store card and he decides that he doesn’t wish to lend to this client because he has other applicants which have an unblemished record, so he won’t entertain Joe.

The broker reports back to Joe and tells him funding was refused by the Prime lender and recommends an application to a sub prime lender. Joe refuses to take the advice because he doesn’t want to pay the extra monthly amount and insists on another application to another prime lender. This is made and again, is rejected for the same reasons. Joe has seen another advert from another broker and decides to switch brokers and starts again (of course he is not going to tell the second broker he’s been rejected twice already!) and Joe repeats the same mistakes again. Finally Joe agrees to pay the £25 extra to get his vehicle and to be put forward to a sub prime lender.

You, as that sub prime lender, receive the application from Joe’s broker along with another customer, Bill who is also making a similar application. You have enough money available this month to lend to only one of them. Which one? You look through both credit records both are similar, both have a couple of late payments, Bill has one missed mortgage payment 8 months ago but this has subsequently been ’satisfied’ and a note accompanies the application and his recent credit history looks good. Joe’s application however, shows 4 very recent funding rejections. You don’t know if the rejections are from prime or sub prime lenders or what they are for, you just know that 4 of your colleagues don’t consider him a good risk despite his credit score being ok. Anyhow, perhaps there is something going on in Joe’s very recent history which is dubious. Why should you take the risk or spend time looking for reasons to justify lending to Joe when Bill already meets all your criteria?

Bill gets the funding and his car. If only Joe had taken the brokers advice or had not changed brokers, chasing a deal that he was never going to get in today’s tough market! It would have been him in that new car. 12 months ago lenders would have been falling over themselves to lend to Joe, now due to market changes and Joe’s stubborn streak, he is unlikely to get funding anywhere for his new car and the more times he tries, the worst it gets!
This is the reality of today’s market for those even with good credit.

MOVING THE GOAL POSTS: In the past, lenders would have lent a mortgage to those with a score in the range of the top end of “poor” credit rating and funding, for example, for car leasing, if they had a “good” credit rating. In today’s ‘Credit Crunch’ market those same people would have to have a “good” and “excellent” scores respectively to get exactly the same consideration. Many of those, who would have flown through finance 6 months ago for vehicle leasing, would now be rejected by the Prime funders. As a result, many people feel offended and insulted when they are told they have been rejected for ‘prime lending’ when they know that their credit rating is “good”. The problem is that GOOD is no longer acceptable to a lender specializing in the ‘Prime’ market. All is not lost however! There are still a few ’sub prime’ lenders who will provide funding so you can get that vehicle for business or pleasure, providing your credit history is reasonably clear and you are prepared to pay a little extra each month in repayments AND…. Take good guidance from your broker.

As a result, out of every 5 that would have passed a finance check for Prime funding 12 months ago, only 2 of those will do so today. The remainder will need to go to the sub prime lenders and even they are only lending to those who would have passed as ‘prime’ 12 months ago. It is equivalent to an exam pass mark being 65% one day and then the pass mark is raised to 85% the next day! Your abilities haven’t changed but the bar has been raised all the same, many more will now be unable to reach that pass level.

To understand things better, here are some facts and then explanations of how the changes, in the money lending market place, will affect those of us with good, excellent and even first rate credit scores.

8 months ago 60% of those who applied for vehicle funding passed credit checks with a Prime lender. Today only 20% pass credit checks with those same prime lenders.

12 months ago there were more than 300 mortgage products in the UK available to a home buyer; today this has been cut to around 90. Deals are not such good value and the lender has little to no competition so they dictate who they lend to, using much tighter criteria and higher interest rates.

A typical mortgage 12 months ago would be for 95% of the property value. This is called “Loan to Value” or LTV for short. Today the LTV is typically reduced to just 75% or 80%. This means that even if property prices fall 4% (as they have over the last 9 months in most areas of England, but much more in Ireland, Scotland & Wales bringing the average price drop for the UK as a whole to 8%.) the lender faces next to no exposure to risk since the property would have to fall 20% or more before it became a worry.

Financiers earn profits only when they lend their money. Over the last 6 months mortgage lenders have lent 33% less funds than they did for the same period last year. Funding other than for mortgage purposes for things like vehicle leasing etc is down by whopping 66% Yet they are still all under pressure to maintain profits for their share-holders. How can they achieve this? A three pronged attack!

1) Excluding risk. They reject 60% + of those they would have previously given funding to and only pick those with the very cleanest records.

2) Reducing the amount loaned. Meaning that higher deposits or up front payments are needed. Since only those with the very highest credit can comply, this tactic goes hand in hand with tactic 1 and also helps cut the risk.

3) Make more profit from each funding case. Mortgage application fees have seen increases in the last 6 months of between 400% & 600% and we all know what has happened to interest rates. Prior to the credit crunch only those with less than “good” credit (sub prime borrowers) would have their loans loaded in this way, but now, even “Prime Borrowers” are treated this way and the reason is simply because the lenders are trying to maintain profits while only lending out a fraction of what they did 12 months ago.

Banking is global. The largest banks control the worlds’ finances. The banks are centred on 3 major countries, the UK, China and USA. When one makes an error of judgment in one country, everybody suffers.

There are 3 basic types of lending (or borrowing, depending on which side of the fence you happen to be)

1) Secured - This is where the loan is totally secured against a real, cash convertible asset, such as property. If you default, the lender recoups his money by seizing and selling your asset. A mortgage is a typical example, but you may take out a loan to buy a car for example or machinery to further you business and the lender may insist on securing that loan on property. Property (real estate) is king! Even in today’s market of so called ‘falling house prices’ Lenders prefer bricks and mortar or land, to any other asset. Why? Because despite recent months where overvalued property has dropped marginally in value, the ‘core’ value of property is solid and safe. History has shown us that the property market always increases and appreciates over the mid to long term (7yrs plus). It’s as “safe as houses”.

2) Unsecured / Indemnified - This is where the loan is made for a specific purpose, for goods which do not appreciate over time but depreciate in value with use. A vehicle for example. The item in question remains yours to use as your own but the ‘title’ belongs to the lender, just like your mortgaged home. If anything goes wrong they take back the goods, sell them for their used value and recoup some of their capital outlay. But what about the depreciation you ask? How does that get paid? This is included in your monthly repayments in one of two ways.

Let’s take a vehicle for example;

a) You may choose to buy it on some form of finance. You would be required to put down a deposit (often 20% or more) and the remainder would be paid to the car provider direct from the lender under an agreement you sign. Under the agreement the lender remains the ‘title holder’ of the vehicle until the last payment is made despite the vehicle being registered in your name. If you fail to meet your monthly commitments you lose your car and any ‘equity’ you may have in it in the form of any deposit you have put down to secure the initial deal.

b) By far the most cost effective (both tax efficient and for cash flow) is to Lease your vehicle. This requires an extremely small deposit (often equal to just 3 to 6 months normal payments) and a monthly payment by DD which covers the depreciation on the vehicle over whatever period you choose to keep it (usually 2yrs to 3 yrs) and a profit margin for the funder. Leasing is the fastest growing way of obtaining a new vehicle. The advantages include; better tax efficiency. Top vehicle discounts negotiated by your broker. No hassle or dealing with salespeople from car dealerships. Care free vehicle running which usually includes automatic road fund licensing by the funder so that the vehicle never runs out of tax and you don’t even have to do any paperwork to renew it. And, massive advantages to your cash flow by not using your own capital for large deposits now required by HP deals etc. Leaving your cash free to spend elsewhere. At the end of the lease period the vehicle is collected and you don’t have to try and sell it or worry about advertising it or the price you might get for it before you can get your next new vehicle replacement. It is ‘peace of mind’ motoring that individuals, small businesses and fleet users are turning to in increasing numbers.

3) Unsecured - Typically credit and store cards. This money is lent at ‘high risk’ as a default means that recovery of the loan may not be possible. Therefore you get charged very high fees. Credit card providers will lure you with 0% transfers and the like for a fixed period, knowing that in excess of 95% of those that join those schemes will be unable to pay off their debt in the ‘fixed offer period’, the loan reverts to high interest rates, usually around 16% to 25% p.a. the lender makes his profit - and then some! The interest rates are high because the ‘good’ payers have to pay for the defaulters!

SO HOW IS THE MONTHLY AMOUNT WORKED OUT FOR VEHICLE LEASING?

The monthly amount you will be asked to pay for your vehicle is broadly made up of four things.

1) The total depreciation of the vehicle for the mileage and period it is leased divided by the number of months. Different makes and models depreciate at different rates. So in simple terms if your car cost £10,000 and at the end of say a 36 month term is has completed 30,000 miles it will be worth £5,500 then you will experienced a £4,500 drop in value (depreciation) / 36 = £125 p.m. Therefore the ability for your broker to have good contacts with car main dealer groups is essential to being able to negotiate you the lowest price. If a cars retail price is £12,000 and he manages to negotiate a price of say £10,000 (based upon the level of business the broker places) then clearly he has wiped off £2000 of depreciation that you would otherwise have to pay for.

2) The broker’s payment for his work in brining the customer, the car dealer and the funder together, is built into the price. Usually around £5 to £15 per month

3) The profit the funder makes is in the form of interest or ‘return on investment’ (ROI). Prime Rates usually offer slightly better interest rates and therefore slightly lower monthly payments. They also usually require only 3 months deposit payment. A Sub Prime rate, will offer a slightly higher rate of interest to reflect the ‘added risk’ and usually up to 6 months deposit. As a guide, the difference between a ‘Prime Deal’ and a ‘Sub Prime’ may be between £5 & £25 p.m.

4) Up front deposit. This is usually equal to 3 months payments for Prime deals and up to 6 months for Sub Prime and includes your first monthly payment.

Therefore the formula is: depreciation (spread over the lease period) + Brokers Commission (paid by the funder) + Interest on the vehicle cost (spread over the lease period) which equals your regular monthly payment. + initial deposit and first monthly payment. All this is worked out by the broker and put into a proposal for both you and the funder.

WILL MY BUSINESS SURVIVE THE CREDIT CRUNCH?
That largely depends on how far ahead you can plan and take actions now, to bring about those plans, rather than reacting too late. What this latest round of ‘economic problems’ is bound to unleash is a long term ‘clearing out’ of businesses who have no vision, little planning or idea of where they are heading. In effect, it should clear out the weak, the clueless & the cowboys! This will, eventually be to the advantage of those who have planned, have taken action and who ultimately survive. Those that come out the other end will be stronger, better equipped and more profitable with far less competition. So what tips should you consider?

Work out realistically what business you can reasonably expect to win over the next 12 months, 24 months & 36 months respectively. What cash flow or Capital will you need to achieve this? Where is this cash or capital going to come from? What will finance cost and how can I factor that cost into my product/service? The banks and lenders already realize and accept that they will be doing up to 30% less business over the coming years so they have put in place plans to earn almost as much profit from the remaining 70% of the customers as they did 12 months ago with many more customers. Can you put in place a similar plan of action? Remember, unless your business is one which your customers cannot do without, an increase in prices must be accompanied by an increase in ‘customer value’ so think of ways of providing ‘added customer value’ to your service that will cost you nothing but a bit of organization and ingenuity.

If you need vehicles to operate your business you will need to be able to fix those costs and reduce capital outlay, the best way of doing that is to lease and reserve what capital you have. Get rid of old vehicles that cost a hidden fortune on maintenance, breakdowns, fuel efficiency, security etc. All these are ‘unknown costs’ and could put you out of business in a single stroke! I know a business that spent over £17,700 on unforeseen repairs and maintenance on three old vehicles in a single year, he replaced those with 3 new leased vehicles which cost him only £1100 per month for all 3 - with KNOWN costs. The fact is that you can budget and plan with known costs but unknown costs can be the killer.

Plan your tax affairs in advance with your accountant.

How can you cut overheads to maintain profits? Monitor the effectiveness of everything you spend on advertising and promotion, if it is not cost efficient, drop it. Attention to detail. Duncan Bannatyne (of Dragons Den fame) once ordered his staff not to order paper clips because they were unnecessary as they received more in than the sent out….. Attention to detail!
A crisis market is no time to get into a price war, instead, increase your perceived value to allow you to raise prices, not drop them, separate yourself for your competition or you may die the death of a thousands discounts before you even know you are dead!

To sum up:
If you have had no problem obtaining credit or passing finance in the past, then 3 out of 5 of you won’t now be able to get funding from a ‘prime lender’, have one stab at passing as a Prime application, then realistically get what you need via sub prime.

What does the future hold? It is now July 2008 and I foresee a slight ’softening’ of the criteria of lenders by October 2008 onwards simply because they will be unable to maintain profits unless they lend their money and that means lowering their sights a bit! House prices will stabilize around this time. The government can still pull strings behind the scenes to build confidence back up between the banks moving money between each other again and that will help free up more money for the finance industry.

The situation though is set to be problematic with minimal economic growth until around late 2010. It is possible that we may officially hit a ‘recession’. (Officially 3 consecutive quarters of negative equity growth in the economy) Although, for many, it may feel that we are already in a recession, we can take heart that our financial and economic situation is only 30% as severe as that faced by the USA. Finance is going to continue to be hard to come by and more costly than we have been used to for decades.

We are not in recession, yet! In fact, the economy still retains a small annual growth rate despite the odd quarter being in negative growth. Despite the media’s best efforts to talk us into a recession, (apparently doom and gloom sells!) the economy remains fairly resilient with good ‘mid’ to ‘long’ term prospects. There is one proviso however, if access to finance (especially to developing businesses and individuals) dries up for those looking to ‘buy’ the two biggest purchases of their lives, their property and their vehicle/s or plant, then the economy could be forced into deeper trouble; For a healthy economy to exist, money must freely circulate.

But, we are a long way from that problem yet. Meanwhile, we are just going to have to get used to jumping through more hoops than ever before to get finance and paying more for it. Get used to it, it is the foreseeable future! Cheap finance has gone, if not for good then for a good while!

WHY IS THERE A CREDIT CRUNCH?
Over the last decade credit has been very easy to get. Employment was high, wages high, the economy was booming and everything looked rosy. Mortgage lenders and other funding methods were prepared to lend to just about anyone who had a pulse.

The Major Banks are global players and the basis for providing credit. If one bank committed to providing more funding than they had access to, they would simply cover it by borrowing from another major bank. Banks would lend freely to each other in the UK at a set percentage rate this is known as LIBOR (London Inter-Bank Offered Rate). Due to London’s importance as a global financial centre, LIBOR applies not only to the Pound Sterling, but also to major currencies such as the US Dollar, Swiss Franc, Japanese Yen and Canadian Dollar.

Reality began to hit home around 2006 when banks realized that more and more mortgages were being defaulted on and more and more repossessions were taking place. Nothing to worry about, these major loans were secured on the property; except, that the mortgages loaned in many cases, exceeded the market value of the property and the banks began to experience negative equity. Normally, banks who don’t have the money to make new loans, borrowed it from each other on short term lending using the LIBOR exchange. No one seemed too bothered. Everything tripped along.

We, and other countries will be affected by this knock-on effect but it is, in the main, essentially a USA financial problem because no one thought to regulate and lend sensibly there, we all have to suffer! Thanks President Bush! (that’s irony by the way George, if you are reading this!)

We are a vehicle leasing company based in the UK. http://www.lease2u.co.uk we deal in most methods of car and van leasing. Yes we have something to say, if you don’t agree then tell us, if you do then also tell us.

What is the relationship between the Federal Reserve and banks

Firstly, here is the quote of definition from the Federal Reserve homepage:

“What is the Federal Reserve System?

The Federal Reserve System, often referred to as the Federal Reserve or simply “the Fed,” is the central bank of the United States. It was created by Congress to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role has evolved and expanded.”

What are the Federal Reserve’s responsibilities?

Today, the Federal Reserve’s responsibilities fall into four general areas:

• conducting the nation’s monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices
• supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers
• maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
• providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation’s payments systems

So, Fed is the central bank of United States. Together with other banks, it is so called a ‘banking system’. There are many interactions between the Fed and other private banks. Generally speaking, private banking businesses are run freely as a profitable business while the U.S. government, through the Federal Reserve System, oversees and regulates the activities of the private banks.

The gold standard

Gold standard is a commitment by participating countries to fix the prices of their domestic currencies in terms of a specified amount of gold. National money and other forms of money (bank deposits and notes) were freely converted into gold at the fixed price.

A county under the gold standard would set a price for gold, say $100 an ounce and would buy and sell gold at that price. This effectively sets a value for the currency; in our example $1 would be worth 1/100th of an ounce of gold. Historically, most currencies were based on physical commodities such as gold or silver. However, the gold standard is not currently used by any government, having been replaced completely by fiat money

Fiat money

Almost every country, including the United States, is on a system of fiat money . Unlike gold standard, fiat money do not have any intrinsic value. It is not linked to any physical reserves. It is used only as a medium of exchange. Recall from the beginning of our discussion about money. In fiat money, the value of money is solely set by the supply and demand for money and the supply and demand for other goods and services in the economy. The prices for those goods and services, including gold, are allowed to fluctuate based on market forces. The amount of fiat money does not limited by the available gold resources in the earth. This is also one of the reasons why the gold standard was replaced.

As you can see, fiat money is based solely on the faith of the government. It is not linked to any physical commodity; it will then have risks of becoming worthless due to hyperinflation. If people lose faith in a nation’s paper currency, the money will no longer hold any value.

George C. (http://www.finance-database.com)