mortgage-loan-uk Blogspot

Lessons For US From European Jobs Model

2011-03-22T12:20:00.000Z

The labour market within Germany fared far better than that in the US through the recent recession and economic turmoil mainly in part due to Germany’s pre recession weakness within this area a recent report confirms. The study found that the EuroZone’s widely implemented practice of reducing working hours through tougher times as opposed to making employees redundant contributed positively and perhaps suggesting the US may well benefit from the practice.

The report also thrust at the heart of the incessant trans-Atlantic debate over who has the best labour model. While the US model allows companies to hire labour more easily than mainland Europe. While the economy expands this is a reliable model however proves exceptionally painful when events turn sour as per the 2009 recession. During the recent crisis the German economy contracted more than America’s but employment in Germany fell badly by around 0.5% compare this to US employment which sank by 5.6%, the largest decline within decades. This gap still shows today irrespective that both economies have grown at a similar pace since the US recession (supposedly) ended in 2009, unemployment in Germany stood at 7.9% in February which is a full 1% behind the US.

In the mid 2000s aided by a surging economy the unemployment rate fell to below 5% in 2006. It was double this in Europe. This portrayed the flexible US model as the better one compounded by Europe’s strict firing rules enforcing reluctance to hire. Post crisis unemployment soared in the US. European politicians sang the praises of their model i.e. fewer hours and les pay to check unemployment, but in Germany’s case it is argued that these facts aren’t the only reasons for better jobs performance.

Most explainations of the stronger jobs performance within Germany was argued to as a consequence of employers’ non confidence in the sustainability of the boom and/or it’s longevity and a reluctance to hire more. The study confirmed that 35% of missing employment decline within Germany was own to this. What also contributed was hours in lieu or flexi time that being working unpaid overtime during rising demand and when demand fell hours were cut by an equal amount of unchanged pay.

Other countries in Europe adopt similar practices to cope with crisis. France has ‘chomage technique’ (technical unemployment) which allowed ski making equipment firm Rossignol to bring a halt to production in February through March 2009 to wind down unsold inventory items. Under a programme also used within Italy workers at Fiat can receive upwards to 80% of pay even if they don’t work for several months, with help from government. Another paper presented also highlights the danger of wide spread long-term American unemployment and confirms how the country can benefit form looking at European ideas.

It was also found that the longer someone remains unemployed the less time they take to search for employment hence it becomes harder to find a new job. The report by Alan Krueger (Princeton economist) and Andreas Mueller (Stockholm University economist) tracked over 6,000 New Jersey workers while they searched for employment within the depths of the recession, Kreuger was a former assistant Treasury secretary for economic policy within the Obama administration and showed that job searching becomes more depressing throughout the course of unemployment.

Most economic models report that the duration spent looking for unemployment should remain constant and/or rise the longer unemployment continues partly in respect of people exhausting jobless benefits. However research finds the opposite as workers who cut the time spent job searching by around a third during the initial 3 month period. The economists put forward most workers may well run out of suitable jobs to go for or get discouraged the longer they seek employment. Continued unemployment brings with it the risk that many out of work may well lose relevant skills while also becomeing discouraged from searching for employment which, in turn, raises the hysteresis along with permanently higher unemployment.

A Bridging Loan Calculator To Assist with Estate Tax Planning

2011-01-02T16:37:00.001Z

A loss in the family might well leave immediate relatives and next of kin in possession of a significant account for inheritance tax as a result of a large estate. The inheritance tax demand can be normally resolved by sale of the property. However if grant of probate should not be available within a reasonable time limit then sale of the deceased property can not proceed. As probate renders the executor the right to sell.

A bridging loancan be utilised in many probate situations with the aforementioned situation in mind. In order to settle the inheritance tax onus of an estate a probate loan, as an alternative term to a bridging loan, can be used. Following this the estate property can then be put up for sale. A bridging loan may also appease the added stress of perhaps paying the estate tax account in instalments.

By securing bridging loan facilities on a different or existing premises the tax bill can be settled. The retained, or rolled up interest as it is often called, may be used to offset any monthly premiums. Once the residence is realised the bridging loan finance can then be concluded. All estates and legacies that include assets over £325k have a likely tax liability. The Chancellor of The Excheqeur will maintain the estate tax limit (the level at which you’ll need to pay inheritance tax) at £325k until 2014. The estate tax payable over the nil rate band is currently 40 percent.

The laws that govern and dictate estate tax (Inheritance Tax Act 1984) are very perplexing and may well appear daunting to the layman, the executor's are required to settle estate tax due to HMRC (The Inland Revenue) within six months after date of death. Frequently for most individuals, the most important and essential aspects of Inheritance Tax concern mitigating the tax due to a minimum and to ensure it is disclosed to the Inland Revenue. Further to settling any estate tax due and payable in the prescribed time constraints.

Besides the constraints exacted on determining inheritance tax and whether or not there is a need for bridging loan funding to fulfil the estate's demands. What can also compound the issue is how complicated the estate is. This can involve deposits with the bank or building society as well as any current accounts, the deceased residential estate coupled with contents. Any stocks held along with privately operated businesses (irrespective of their trading status), the shares held and whether any tax relief is claimable. Also to consider is any disbursements in the seven years that preceded death such as care and maintenance of the deceased. Any gifts and whether any land owned was agricultural or business or no more than private.

Unequivocal requests for modest amounts of itemised chattels and money may well be dealt with immediately on grant of probate. In relation to distribution and disposal of the estate in it's entirety, the executor is not barred. This also takes in inclusion of residue. However it is encouraged that any distribution of the aforesaid is left until such time as all issues and inheritancetax with HMRC have been discharged.

Is Sterling due a tumble against the Euro

2010-12-15T12:18:00.001Z

At the height of the eurozone crisis and for those that sought safety sterling proved a popular buy. However now that Ireland has been bailed out and it's waters quelled the need for safe haven has lessened somewhat.

Take the following stats: Euro/Sterling downtrend as at October 25th stood at 89.41 p, compare this to 83.43 p on December 13th and the scenario now seems vulnerable to reversal as the underperformance and fragility of the UK housing sector remains the focus coupled with stability and strength returning to the Euro zone.

Economic uncertainty and minimal approvals for mortgages have seen asking prices fall 3% for property within England and Wales. Rightmove also forecast bigger falls in 2011. Sterling is likely to come under further pressure if the RICS housing survey confirms the negatives put forward by Rightmove.

Euro has also seen the green shoots of recovery by it's greater trading volumes.

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Forex Euro Short as Irish Debt Woes Prevail

2010-11-23T08:25:00.001Z

The preceding week's movement on price proved somewhat indecisive as global equities along with the US Dollar (USD), the yardstick for opposite sides of the risk argument saw Friday with little change. The price action was indeed erratic amidst conflicting influences, Ireland's debt woes lurched towards resolution while Bernanke was in combative defense of QE while the news further being offset by China's intimations of cooling inflation (with it economic growth), and to raise reserve ratios by 50bps by month end.

Looking further from recent headlines, the balance of those forces driving price action is likely to manifest in renewed risk averson. Subsequent to the Central Bank's delivering what had previously been factored in at the start of the month some of the more riskier assets had retraced. Fed QE expectations also began to show some clarity which left advances less the impetus. Therefore a deeper correction

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2010-11-16T21:07:00.002Z

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Spyfu and your competition

2010-11-14T09:05:00.001Z

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Currency Trading

2010-11-14T00:51:00.004Z

You don't need massive investment, office space, staff, warehouse storage or stock. All you need is to grasp the basic fundamentals of the mechanics of an online business and your must have success tool in your armoury to Forex trading..........

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Bank Propoganda Leaves The SME Business Still in Turmoil

2010-11-13T13:12:00.003Z

Subsequent to the big banks advising of over £15bn in total profits the chancellor was approached and it seems they were candid in together agreeing a need to funding to viable companies. However, they have not disputed that they are at fault.

The six biggest banks within the UK have set up a think tank, as a result of government disquiet of a negative funding attitude, to help in addressing the credit drought. The chairman of HSBC communicated to George Osborne to clarify what action they were taking. There were to be four main areas to examine: The demand for funding and the price of lending: Alternative methods to support businesses through trade finance; government-endorsed strategies for business lending; assisting banks to procure finance through securitisation.

While in the States lending has declined at it's fastest pace on record. This has raised apprehension that the Fed may well have been premature in retreating from the emergency stimulus. Lending decreased by over $100bn (£63.8bn) since early 2010 declining at a rate of 16pc annually, further it was advised that $740bn of bank credit has simply evaporated, a record 10pc decline.

The UK banks though have responded by emphasizing that demand for borrowing from SME's was subdued and fell by as much as 25pc and that, strangely, in times of prudence customers were settling their borrowing faster than new ones were awarded. In August 2010, the Bank of England confirmed, lenders lent more money to businesses than was repaid for the first time in a six month period. However indicators suggest that maintaining this improved pattern may not be enduring. The figure advanced in August was £300million, the first positive since February.

Niche funders continued though to have an appetite for development finance funding and will treat proposals for both greenfield and brownfield development positively and with a genuine willingness to lend. While the larger high street lenders retract from the market and effect ever punitive criteria. Niche lenders will also consider both a pre sold and pre let speculative basis.

Within the correct circumstances 100pc of total development and development costings are available along with alternative rolled up interest during the construction phase. This means no development loan repayments or interest due until completion of development and/or sold or refinanced.

Many consumers, politicians and those attempting to procure mortgage finance have expressed disappointment at the high street lenders and see them as adding to their pot post the huge losses from the recession.

Bank of England figures confirm funding to non-financial entities declined by £7.7bn in June 2010 while lending to manufacturing also declined by £2.4bn. These figures make somewhat alarming reading and suggest that the banking industry is still some way from healthy funding patterns.

The decline in lending is not being reconciled by an expansion in capital issuance such as commercial paper and bonds, via private firms. These, too, falling back by £3.9bn. The NIESR (National Institute of Economic and Social Research) also put forward that 'real' property prices, taking into account inflation, will have collapsed to 2003 levels by 2015. Though the more hard nosed may well see this as mere tinkering and blinkered conjecture by one more Quango in a period where positivity is the key factor moving forward.

Forex Online

2010-11-13T12:38:00.002Z

Sterling trading close to 6 month low against the Euro Last Thursday, however it continued to take advantage of an underlying dollar weakness. Sterling has slumped to a record low against the AUD (Australian Dollar) and further struggled to staunch the losses against a number of currencies, all this amidst speculation of a potential double dip and further quantitative easing to possibly cement recovery.

Data released prior confirmed that house prices had stalled compounded by a fall in consumer

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2010-11-13T08:01:00.002Z

It is essential, when starting out, that you grasp the basics of the market, knowledge is Power. The main influence on forex are world events and global news. Should a statement be released on European interest rates this may well cause a flurry of activity. Most traders new to the market may well react indiscriminately to these news events and close positions. The best trading opportunities will arise when the market calms. Potential within the forex trading markets is volatility not

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Why Knowledge To Action?

2010-11-12T11:48:00.002Z

Knowledge to Action offer an "award winning" (Business Britain Magazine) Trader's University Course. They have received the award for "#1 Trader Coaching Company" from the Business Britain Magazine. With interest Business Britain Magazine also 'awarded' another accolade to a competing course (Win Investing) of "Best Investment Trading Course". Curious to find out more about the credibility of Business Britain Magazine we visited their website only to find their account suspended i.e. no web

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Currency Trading Systems and Risk Avoidance

2010-10-07T12:58:00.001Z

There is an abundance and prevalence of so called experts offering their 'valued' opinion on forex trading software, trading tips and the psychology of online forex trading. Extensive research has spawned numerous books and very vocal calls to action in relation to seminars and the associated discipline required for trading.

Is trading as complex as we've been led to understand or is this a loaded disguise saddled with a hidden agenda. The essential rule as it is with spread betting is discipline. Every online currency trader should foster and secure their own rules within their trading ethos and adhere to those rules firmly. This will augment the ability to trade efficiently. However there are devils perched on either shoulder called excess and impatience countered by a tormenting fear that rears it's head at the most inappropriate moments while keeping a lid on greed takes discipline.

Prosperous trading, whether it be within trading futures, CFD's or fap-turbo is more psychological than methodical. It was once told that trading presents the clearest picture to your own personal psychology.

A trading method overcomes angst and greed while providing the relative luxury of discipline. While trading on back tested data displaces a large aspect of risk and greed this is constantly wrestled and unified with the well worn adage of risk versus reward, best expressed as comparing potential fluctuations with potential benefits.

Knowing that markets have to move justifies our approach and awareness of the markets and the way we approach our trades. Fear is discarded by the knowledge that the market must move coupled with a trading strategy.

Trading a strategy underpins forex and provides the rationale. Those beliefs and myths put forward in relation to 'predicting' market flux is no more than that, ideas and myths. Traders that make steady and significant gains are traders with a time tested strategy, this is no more than what any professional would adopt should they wish to prosper in any chosen sector.

Should paper trading and demo accounts be construed, by the hard nosed, as the sirens endeavouring to lure us on to the rocks. While it is extensively affirmed that this is the essential beginning of the learning curve some might view it as a false optimism and confidence. In an idyll perhaps we would find some common ground as the leap from the fun pool into the 50 metre pool can be absolute when real money is committed,

As soon as we indulge our 'real' money sanity can leave us and the aforementioned human traits kick in. We now have to take liability for our actions which can be uncomfortable. Unsuccessful traders see their losses as just that while winning traders see loss as learning.

Successful traders all share the habit of back-testing factored into their regimen. Backtesting divides winning and prosperous traders from those who are driven by myths, prediction, fear, greed and impetuosity. Back testing also allows us to become more composed in our approach to trading. You will see your trading strategy examined in so many different market environments which will also encourage confidence.

Know your own strengths and weaknesses as ego, stubbornness, opinionated ideas and the failure to admit to lapses is a deep seated characteristic of losing traders. They are unwilling to extract themselves and look on or see into themselves. They neither have a mastery of their emotions or understand what truly makes them tick.

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Mortgage Mis-Selling

2009-04-28T19:49:00.005Z

After 20 years since the first mis-selling scandal involving pensions, the mis-selling within financial services rages on unabated. More widely defined as "To sell misleadingly, fraudulently, or in violation of laws or regulations is a more to the point, matter of fact definition".

Consumers now have two options, complaints that can be referred to the FOS apply only to events taking place after April 6 2007. Secondly, if your loan agreement is dated prior to this date certain loan agreements can be examined to determine whether they are enforceable.

The most recent precedent has been Mortgage mis-selling, mortgage mis-selling. A housing association tenant, who had been repossessed, had the valuable promise of a rent fixed for life. However, a mortgage adviser persuaded him to buy the property and failed to consider what would happen when the discounted mortgage rate ended. The Mortgage Code of Business along with The Financial Services act is there to protect consumers.

Mortgage mis-selling, albeit recent, could well be the tip of a very big iceberg. The inherent facets of regulated mortgages will no doubt prompt an all encompassing review of self certification and seemingly the more vulnerable council right to buy and sub prime borrowers. Council right to buy tenants have always been heavily canvassed.

What relentlessly drives and underpins twenty years of consumer complaints and recourse is greed, commission structures, incentives and a dysfunctional duty to shareholders. A firm must pay due regard to the needs and aspirations of its customers, and communicate information to them in a way which is clear, fair and not misleading. However what seems to be overlooked is the regard to the principle that consumers should start taking some responsibility for their own decisions.

HMOs and Licensing (Houses of multiple occupation

2005-11-09T17:08:00.001Z

Where more than two people occupy a property but don’t form a single household, usually because they are not related, the property will now be classified by the government as an HMO.

In England and Wales with effect from “late autumn” (the exact date is still to be decided), private landlords with HMOs of three or more stories AND with five or more tenants will have to get a license. These impose tough standards on fire and electrical safety, the number of people in occupation and even the kind of person who can be a landlord.

Local authorities can also “selectively extend” licensing in part of their area to ALL properties (not just HMOs) if they think there is a need, say, if a local problem with antisocial behaviour exists or they think the standard of housing justifies it.

Each local authority will set its own license fee. Landlords who don’t register can be fined up to £20,000 plus having to repay rent received whilst not registered.

However, there is likely to be a 3 month grace period when the scheme starts. With this aditional organisation and 'policing' will this dent the buy to let market? Is there a hidden agenda by the government? i.e. think of the amount of poll tax lost by local authorities within the UK, the power of policing will be shifted towards the local authority!!!

Local authority right to buy

2005-06-30T16:51:00.001Z

From the 18th January 2005, changes to the law will affect Council Tenants' Right to Buy. The changes have been introduced to prevent abuses of the Right to Buy scheme and to try to tackle the shortage of low cost housing in both rural and urban areas. Changes include qualifying period, repayment of discount, the local authorities right of refusal and a time limit to purchase.

The Right to Buy scheme has helped almost 1.6 million council tenants in England buy their own homes. In many cases, it has encouraged more affluent tenants to remain in the neighbourhoods they have lived in for many years, helping create stable, mixed income communities.

The scheme enables local authority secure tenants with at least two years tenancy to buy their homes at a discount price. It is targeted at well-established public tenants, with the discount increasing in rough proportion to the years they have been paying rent.

If eligible you can buy your home by paying the full purchase price at once with a maximum discount ranging from £16,000 to £38,000 for both flats and houses, depending on where you live.

The Right to Buy scheme is open to virtually any secure tenant who can afford to buy, with the exception of homes occupied in connection with their employment and housing specially provided for older people and (in certain cases) disabled people.

Are repayment mortgages fair

2005-06-03T14:55:00.001Z

For many years now consumers within the UK have had the option of Interest only and capital & Interest repayment mortgages (Repayment). The mis-selling of endowments and the subsequent furore and compensation claims have ensured that endowment linked interest only mortgages are no more. Some of the facts about endowment mortgages.

The number of endowment policies in force has declined to 8 million and will continue to fall, there are around 5.5 million people with mortgage endowment policies.

Over 20% of policies are no longer being used to support the repayment of a mortgage.
Each policyholder has, on average, 1.5 mortgage endowment policies.
The average projected shortfall is around £5,500. The FSA estimates that the total shortfall in the UK is £30bn. Discounted for the effects of inflation, this amounts to around £20bn, spread over 15 years.

Sales of endowment mortgages reached their peak in 1988, when they accounted for more than 80% of all new mortgages. Te total number of endowment mortgage policies in force in December 2004 was 8 million. This fall (from nearly 11 million in 2001) reflects the reduction in endowment sales in recent years and the number of policies that are now reaching maturity or being surrendered In 1999, the FSA revised their official projection rates downwards to the current levels of 4%, 6% and 8%.

So what we had was a huge shift to capital and repayment based mortgages i.e. consumers wanted peace of mind that their mortgage would be repaid at the end of the term. The repayment mortgage also very much suited the risk profile of a large percentage of consumers, whereas this was never questioned when endowments were being sold and which proved to be an exceptionally high risk repayment vehicle.

Do we now feel more secure or have we been lulled into a false sense of security. What the consumer over the past few years has been blissfully unaware of is that repayment mortgages are loaded front end with interest i.e. you pay very minimal capital off within the first few years and the majority of your monthly payments is made up of an interest only element. It can therefore be argued that a repayment mortgage is an absurdly expensive interest only mortgage initially. Three points to consider here are:-

1)Prior to FSA regulations (1/11/2004) consumers who moved house every few years were probably given a 25 year term ad infinitum. These consumers have only been treading water when it comes to depleting the capital of their mortgages.

2)Should a repayment mortgage be structured more fairly? Equal amounts of capital and Interst repaid!! the graph should go diagonally from one axis to the other, but it doesn't.

3)Under new FSA regulations it is expected when a broker gives advice and recommendation that if the customers started their mortgage 2 years ago with a 25 year term, then the remortgage term should be 23 years, more ethical and appropriate isn't it.

FSA Regulations have brought mortgage brokers into a new age of accountability and has hopefully ensured that the majority of the bad apples have been squeezed from the bottom of the barrel. Recent estimates have suggested 35%-40% of brokers have left the industry, a cottage industry to boot.