Wednesday, November 21, 2012

How Does Leverage and Debt Impact Returns on Residential Real Estate?

As a speculative investment, residential real estate has the potential to make or lose vast sums of money due to the impact of financial leverage (debt). Houses are typically leveraged at 80% of their value. During the Great Housing Bubble, this leverage was often provided at 100% by various lenders.

Leverage is a powerful ally when prices increase, but leverage works just as strongly against the speculator when prices decrease. For example, if a house is leveraged 80% and it increases in value 5% in one year, the return to the investor is actually 25% due to the 5 times multiplier created by leverage.

With the effect of leverage, speculation on housing can far exceed any competing investment strategy. However, the inverse is also true. If a house is leveraged 80% and it decreases in value 5% in one year, the loss to the investor is 25% of her downpayment, not just the 5% the house declined in value. Leverage magnifies both the return and the risk of any speculative venture.

One of the worst mistakes lenders made during the Great Housing Bubble was to allow 100% financing and negative amortization loans. This was a boon for speculators because it allowed them to participate in the market without any of their own capital and it allowed them to hold the speculative assets with a minimal debt service expense. Plus, there was the implicit idea that they would simply default if the deal did not go in their favor (which of course many did).

Combine these facts with the near elimination of loan underwriting standards allowing anyone to participate, and the conditions were perfect for rampant speculation, a wild increase in prices and so much speculative demand that many new and existing home purchases would remain vacant.

Leverage is a tool. It magnifies the return on investment in both directions. When prices are steadily rising, people want to use as much debt as possible to obtain the asset in question. When prices drop, heavily leveraged speculators get completely wiped out.

Monday, November 19, 2012

Are Payday Loans Addictive?

While payday loans can act as a savior in immediate financial needs, they can be compulsive too. These are useful as they are easily accessible when one is low on cash in between the paydays. And you can acquire small amounts of money without any paperwork and hassles. Nevertheless, these loans can be obsessive. The part, which is compulsive, is not possession of money but act of acquiring it.

Being compulsive with habit of borrowing is horrible and without preparedness to pay it back, you can be trapped in greater complications and debts. This in turn will persuade you to borrow the money again, fuelling your loan addiction. Compulsions are not easy things to break, they can over power the lifestyle, and you will find yourself creating justifications and excuses for it, no matter devastating it is. You experience buzz or jolt due to such obsession and you end up losing the view of proceeding or coming out of it. Possessing the compulsion of money advances can lead you to stack of trouble. It can attract greater debt, which will trap you in the vicious circle of borrowing.

Lure of immediate cash is enough for propelling individuals straight to different sites offering such an opportunity. Many people assume that by applying payday loans, they are getting good deals, cash for their purchases as compared to use of credit card that charges high interest rates. Like most of Janes and Joes who easily get addicted to any activity, they really are not able to recognize the big stumbling block, waiting for them in near future.

If you are struck in one such situation then you should start by understanding more money that you borrow through payday loan, you are also losing higher finances that are being charged by payday loan companies. One of the best ways for assisting yourself is making a budget and sticking to it. Prepare an efficient financial plan for yourself so that you do not end up taking payday loans for every small monetary disaster that comes your way.

Doing all the above mentioned things would surely help you to understand that you can live in the lieu of the payday loan lender and this is will make you feel better and comprehend that you can manage from your work in between the paychecks too. It is easy to get obsessed to payday loans but it takes a lot to come out of it. For what we think as the best solution for the moment exacerbate existing financial problem too. So you need to very careful while taking the cash day loans.

If you think that you are well equipped for facing penalties posed by overnight cash advances, think again. This hook, reel scheme and cast if reason why the payday loans are considered to be an addiction. Immediate cash is enticing but the inability to pay it back within in the specific time span can invite a lot of trouble for you. So next time you apply for payday loans, ask yourself if you really need it.

Thursday, November 15, 2012

Use Interactive Map to Improve Website Navigation and Search Function

A clickable interactive map can significantly improve your website's navigation and make online presentation a lot more easier.

In the past, webmasters use HTML and Java Scripts to create image maps. Which is difficult for most users and the function is limited.

With the increasing popularity of Flash, today's webmaster can take advantage of interactive map software to easily create an interactive map, and fully maximize the usefulness of clickable image maps, with mouseover tooltips, hint boxes and many other features.

Image maps are used all over the web. Because of the restriction of JPG and HTML, most image maps are strictly utilitarian, i.e. just several images, buttons or lines of text, each linked to a different page or URL. To create image maps, you would need to know how to use a graphic software, HTML coding, and also javascript knowledge.

With the popularity of Flash, more and more webmasters start to create interactive flash maps which comes with a lot more features, such as mouseover tool tips, text boxes, hints, dynamic displaying of routes, lines, clickable points, icons, landmarks, etc.

Do not mislead by the term 'interactive map'. An interactive map can be any image with clickable areas with special pin-points. For example, you can create an interactive floor plan, an organization chart, or even a calendar with clickable points and areas, and display additional notes on mouse over to make it a lot easier for your visitors to find specific information using just a few clicks.

An interactive image map can greatly improve the navigation and functionality of your website. For example, you can create a local area map and embed into your website, so to make it easier for your customers to know where your headquarter and branch offices are located. You can indicate specific routes that customers should take in order to locate your place of business. You can also pin important landmarks on your interactive map for quick reference. The interactive flash map therefore can serve as your virtual locator -- your customers will have an easier time to find information about your company and products.

If you are selling real estate, then your website might have a property search function. Once you finished your website, you can add an interactive map to serve as a search tool. For example, you can generate a map for the properties that are listed for sale by your company in different states or counties in the United States. All your visitors need to do is click on their desired state or county of your property map, and then see the list of properties as search results.

You can also use this interactive flash map to provide further details about the area, such as schools, parks, building, etc. These interactive functions can attract property buyers so you can generate more sales leads for your company.

If you need to provide information on your website related to different countries of the world, you can create a interactive world countries map use a map software such as iMapBuilder. Use different color settings to differentiate continents, countries, or states. Users of your website will have an easier time identifying different areas in the world map with related information

Creating interactive maps requires skills and programming efforts. Even if you are a flash expert, you might not want to draw all the maps by hand, and then code all the actionscripts. A professional map building software such as iMapBuilder can be a valuable assistant to make the task a lot easier.

With available map softwares, you can use ready made map templates, or import common image files (such as JPG or GIF image) into the software, then add the elements, such as clickable dots, icons, mouseover tooltips, set different colors for countries, states and regions, etc. All it requires is few mouse clicks and you will find it fun to use.

Interactive map can be used for many purpose. Discover a world filled with possibilities and convert your old static image maps into interactive flash maps!

Wednesday, November 7, 2012

Bank Term Deposit And Its Advantages

A bank term deposit refers to the depositing of a certain sum of money at a bank where the depositor is able to earn an interest on a monthly basis or whenever the term matures. The term is fixed as well as the rate of interest that is paid unless the investor negotiates with the bank for getting the interest on a monthly basis.

This is one way that many people are able to earn an income for themselves by investing their money. When money is deposited for a period of time it can only be withdrawn at the end of the term agreed upon by the bank and the depositor. The guaranteed return at a fairly high interest rate is the attraction here. This is an effective way of locking away savings so that it will not be spent unnecessarily.

Another advantage apart from earning an interest on the term deposit is the ability of the depositor to secure a loan against the fixed deposit. This way the depositor can even finance a small business as the interest rate that is charged for such a loam is only slightly higher than what the depositor would be earning from the initial deposit.

Saturday, November 3, 2012

Bad Credit Can't Stop You From Going To College, For Free.

If you are here then obviously you have wondered why the phrase "credit" has been used so much. What we're going to do next is to go over some of these credit basic to work in getting you more comfortable with it.

To put it simply, you credit is a trace of your actions. Maintaining good credit is achieved simply by keeping your bills paid on time. It might seem that simple, but it really isn't.

The rationality that credit is important is if you are looking for a credit card, low interest loan, or getting a low interest rate for any of these, your credit rating will prescribe if you do get approved and what you're interest rate level will be set at. Credit problems can keep you from getting any kind of loan with a decent interest rate.

The other thing you'll hear about is your credit score. This is the number that is assigned to your credit history. They look at your spending habits and how well you've made your payments on time. Your credit score ranges from 300 to 850 where most are looking for a score of 660 and higher.

Just so you have an idea, here are some factors that determine your credit score:

1. How have you used your credit? If you have more than one credit card and they are maxed out or close to the max, you are more of a risk.

2. What is the length of your credit history? If you're 18, you will pose a greater risk than a person that is 40 years old.

3. How many times you have applied for credit? Every time you apply, it gets recorded. Apply often and it will greatly impact your credit.

4. The different types of credit you have. There are different types of risks than others.

Now you have a few basics, you should be wondering what is next. To get started, you will need an actual copy of your credit record. The three credit reporting agencies are TransUnion, Experian, and Equifax. The Fair Credit Reporting Act (FCRA) requires each of these institutions to provide you with a free copy every 12 months by request.

This is your first step. Contact each of these companies and have your credit report sent to you so you can see where you stand.

What to do to dispute your credit report

By mail is the best recommendation by the FTC to dispute something on your credit report. They are going to want to see validation of your dispute so be sure and gather all of these things up. If a late payment is reported that you know isn't correct, attach a copy of something like a online receipt or statement that shows differently. When you do this, there is no way you can be denied. Many people insist that the reporting agencies believe them but it never really works out for them that way.

You should also send your dispute by certified mail and request a return receipt. The credit agency is upheld to investigate your dispute within 30 days unless they deem it without merit. When the investigation is over, the agency has to report back to you the results in writing and if there will be a change or modification to your credit report.

If you get changes made in your favor, there are a couple of options to you that I highly recommend you take advantage of. If anybody requested a copy of your credit report within the last six months, they will report to them any corrections made. If a copy was requested based on your employment, you can request that the corrections be sent to them as well up to two years before.

Repairing your credit report is certainly not a fun task. It's aggravating, tedious, and you need to keep good records. But, in the end, the time and effort are more than worth it by making things so much easier for you.

Friday, October 26, 2012

Could the US Mortgage Crisis Have Been Prevented?

The blows of debt have made us witness the hardest financial times which at the same time introduced us with several debt relief firms and debt consolidation programs. Nevertheless, it made us a victim of certain financially declining processes like foreclosures, bankruptcy and mortgage crisis of course. We have perhaps known all ifs and buts, pros and cons of the recent mortgage crisis but somewhere the information is yet to be gathered completely. The year when it all started in was 2007 when the economy watchers failed to realize the sheer magnitude of the subprime mortgage and the perfect storm of bad events that could soon follow. . First, banks were not as worried about the credit-worthiness of borrowers because they could sell the mortgages on the secondary market. Second, unregulated mortgage brokers made loans to people who weren't qualified. Third, many homeowners took out interest-only loans to get lower monthly payments. As home prices declined and mortgage rates reset at a higher level, these homeowners could neither pay the mortgage nor sell their homes for a profit, and so they defaulted. Fourthly and most importantly, mortgages were repackaged as mortgage backed securities by banks which were further re-packaged by bank technicians into high risk and low risk product bundles. Now, the computer programs were so complicated that no one really understood what exactly was in each product bundle or how much of the bundle had subprime mortgages. When times were good, it didn't matter, and everyone bought the high risk bundles because they gave a higher return. As the housing market declined, however, everyone knew that these products were losing value but, since no one other than the computer programs understood them, the resale value of the products was unclear. By March 2007, it appeared that these hedge fund housing losses could threaten the economy. Throughout the summer, banks became unwilling to lend to each other, afraid that they would receive bad MBS in return. No one knew how much bad debt they had on their books, and no one wanted to admit it. If they did, then their credit rating would be lowered, their stock price would fall, and they would be unable to raise more funds to stay in business. The stock market see-sawed throughout the summer, as market-watchers tried to figure out how bad things were. As a result, the housing market dropped due to this liquidity problem and panic gripped the financial market. However few things could have prevented this mortgage crisis from happening. The first would be regulation of mortgage brokers, who made the bad loans, and hedge funds, which used too much leverage. Secondly, an early recognition of this credibility problem by the federal government could have prevented the situation if the same would have bought the bad loans. To some extent the financial crisis was also caused by the financial innovation that outstripped human intellect. The potential impact of new products, like MBS and derivatives, were not understood even by the technicians who created them. Apart from that even some good regulations could have softened the downturn but the greed for new products could not be avoided.

Tuesday, October 23, 2012

Christmas Loan Bad Credit - Provides Financial Assistance to Bad Credit Holders

Most people are finding difficulty at time of scarcity of money and if Christmas is ahead of it then it leads to get them depressed. With lack of money they cannot be able to arrange everything that is required to celebrate Christians. People who have got bad credit scores are facing much difficulty at time of scarcity as no one will ready to provide them money seeing their meager scores. But today they do not have to bother any more as for them a scheme of Christmas loan bad credit has come up that includes no credit check by which people having bad credit records due to bankruptcy, arrears, delays can be easily improved.

Under this they can get instant help of christmas cash loan at anytime they want it to have .In this one can easily grab money up to 1500 for duration of 30 days. With help of money they can easily buy gifts for their near and dear ones, do shopping of various items for decoration in Christmas. There are various lenders found in market of UK who are there for the help of people by providing money to them to get them out of their financial crisis.

It is short term in nature for which people can use it to solve various needs which are short term in character. Without any submission of collateral against christmas payday loan by applicant to lender they can easily obtain money which provides more comfort and flexibility to apply for this. Procedure include in it is free from any hassle for which it is liked by most. They without disturbing their monthly budget can get all things done and make this occasion memorable one which is unforgettable. In UK this scheme has become very popular among people by which they can get money to get Christmas carnival more enjoyable.

One has to fulfill certain obligation to get money through Christmas loan bad credit which includes applicant should have got permanent citizen ship of UK, should be an adult. It will fetch you money for getting all their stress to get away from them during Christmas when all in mood of enjoyment. In this they get money with easy and comfortable repayment terms and conditions. They also require having a valid bank account by which they will not get any problem in transaction of money. So at times of financial crisis during Christmas people do not have to think much as they can easily get out of it with help of it.