Finance and Marketing

Archive for the ‘Debt Consolidation’ Category

Most people are aware of the widespread problems with the residential housing market in the US over the last two years. At a time when homeowners are facing strikingly high unemployment rates and a struggling economy, falling home values further limit their options by making it difficult, if not impossible, to restructure their finances and reduce monthly costs.

In addition to falling home values, increasingly strict approval guidelines for home financing products and a drastic decrease in home financing options make it especially difficult to find solutions to a strained budget. Homeowners who turn to their home equity to consolidate debt, and even those who simply wish to lower their interest rate or monthly mortgage payments, are finding that most of the home financing options available are too restrictive to meet their needs.

Perhaps the most limiting change in the world of home financing is how much equity lenders will allow homeowners to access. As recently as spring of 2008, homeowners could borrow up to 125% of the value of their homes without paying a dime of mortgage insurance. This meant that an individual whose home was worth $200,000 could borrow up to $250,000 against their home and still be exempt from monthly mortgage insurance premiums.

Today, it is a challenge to finance more than 90% of a home’s value and anyone who wishes to borrow more than 80% can expect high interest and mortgage insurance costs. This is despite the fact that mortgage rates, in general, are still quite low.

For many, this is a difficult concept to understand. Put simply: today’s market offers historically low interest rates, but banks use interest rates to compensate for risk – the more risk, the higher the rate. So, especially in light of today’s tougher approval guidelines, these super low rates are typically only available to individuals with high credit scores who are borrowing a relatively small percentage of their home’s value. Unfortunately, as a result of today’s economy and the struggling housing market, few people meet these criteria.

If you are struggling with your unsecured debts – if you’re carrying an unmanageable level of debt that you can’t afford to repay within a reasonable period of time, but that you can commit to making regular reduced payments towards – you may be wondering… ‘Could an IVA (Individual Voluntary Arrangement) help?’
How does an IVA work?
Before entering an IVA, you will need to discuss your situation with an expert debt adviser. If they are certain that an IVA is the best solution to your debt problems, you’ll work with an Insolvency Practitioner (IP) to draw up an IVA proposal, which will be given to your creditors so they can see how you and your IP believe the IVA could work.

Your creditors will be given the chance to vote on the terms set out in the proposal. In order for the IVA to begin, voting creditors who ‘own’ (between them) 75% or more of your debt would have to agree to the terms.
What happens then?
If the IVA is approved by enough creditors, it will become legally binding. You will begin making regular reduced monthly payments to your IP, who will subsequently share this money amongst your lenders according to how much money you owe them (known as a ‘pro rata’ payment).

The payments you make will usually last for a total of five years, after which any outstanding unsecured debt will be written off, leaving you legally debt free (assuming you’ve fulfilled your side of the agreement).
IVAs – do they have any downsides?
As with any debt solution, an IVA does have its downsides. For example:

1. Entering an IVA will be recorded on your credit report, and will stay there for six years. This will affect the cost and/or availability of credit for that time.
2. If you’re a homeowner, you may be required to release a portion of equity from your property half way through the final year of the IVA. This will be used to repay more of your debt.

Please bear in mind that you should always speak to a professional debt adviser to discuss your situation and explore any possible alternatives before committing to any debt solution. It may be that a different debt solution, such as debt management, is more suitable for you.

Having a big debt and not being able to pay it properly is such a huge and complicated problem. Aside from financial burden, it can also cause moral dilemma and emotional stress. Of course, no one would want to get caught up with such a great mess. However, there are just some instances that we cannot control and result to unpleasant instances. But still, there are some solutions that we can get to solve the situation bravely and confidently.

The key to solve issues regarding some debts is not to hesitate in asking for a debt help. There are many people who can lend their hands when needed. The only thing that one has to think about is who that right person is. In cases like this, one can always ask his friends or family members regarding some solutions. As long as that friend or family member has a clear mind and proper knowledge, he will surely be able to help. On the other hand, one may also seek the services of some professional people or organizations whose expertise are debt solution matters. Above anyone else, the debtor can rest be assured that they can really take care of the matter properly. With their knowledge and expertise, it would not be hard for you anymore to settle debt problems anymore.

The thing that we should just do is to look for that certain help. Aside from worrying about the situation, moving and looking for a solution is the best move to take.

FOREX 101 – The What, Where and How of FOREX Trading

FOREX is a term that means Foreign Exchange market. It is an international market in which currencies are bought and sold. The Forex market that is utilized today began in the 1970’s. That was the era when free exchange rates and floating currencies were started. The price of one currency against another was solely based on supply and demand.

FOREX is a unique market because it is one of the few markets that has very few qualifications and that is free of outside controls and it cannot be manipulated. One of the reasons that the FOREX market is safe from manipulation is it’s size. The FOREX market is the largest liquid financial market in the world. Trades reach between 1 to 1.5 trillon US dollars per day. With the size and speed of transactions it is nearly impossible for a single investor to affect the price of a major currency. Since there are always willing buyers and sellers and with the liquidity of the market, traders are able to open and close positions within a few seconds.

FOREX trading attracts a great variety of investors. Participants in the market invest in diverse ways. Some are long term hedge investors while others are in and out of short term positions. The FOREX market has constant small fluctuations in currency prices which attracts investors with a broad range of investment strategies.

So how does FOREX trading work? Unlike the NYSE, foreign currencies are not centralized on an exchange and take place all over the world via telecommunications. Trading takes place 24 hours a day from Sunday afternoon until Friday afternoon. There are dealers who will quote all major currencies in almost every time zone throughout the world. Once the investor decides which currency he or she would like to purchase he or she does so via one of these dealers. Using a method called marginal trading investors can speculate on currency prices by getting a credit line with as little as $500.00 and greatly increase their potential gains or losses.FOREX trading is an interesting and exciting way to make money from investing. Click here to receive your free guide to FOREX investing to gain all the knowledge you need to become a successful investor.