Daily Archives: September 8, 2008

Banks, Checking & Savings, Credit Cards, Financial, Financial Management, Financial Services, Financial Solutions, Loans, Money

Debt Management Company Gregory Pennington Say The Recent Report On Student Credit Card Debt Reflects The Growing Problem Of Student Debt In The UK

Responding to a report suggesting that 37% of students rely on credit cards as an additional source of finance, debt management company Gregory Pennington (GregoryPennington.com) commented that this echoes the growing problem of student debt in the UK.

The report from Halifax building society follows an NUS (National Union of Students) poll suggesting the average student is likely to leave university with debts of £17,500.

A spokesperson for Gregory Pennington said: “It’s worrying that so many students are choosing credit cards as an option for extending their finances, although on the other hand, it has to be accepted that fast-rising costs of living may play a part.

“Credit cards typically should only be used for emergency purchases, or other purchases that can be repaid quickly. Most credit cards carry a high interest rate, so failing to repay on time means those debts grow far more quickly than other forms of credit.

“Students typically only have a very low income, with disposable income often minimal – so the temptation to make purchases on credit cards is probably best avoided. Repaying credit card debts could prove difficult on such a low income, and the high interest means that the debt can grow very quickly.”

The Gregory Pennington spokesperson said that credit card debts make up a small part of what is a much wider problem with student debt in the UK.

“Ever since the Government stopped paying for tuition fees, many would-be students have had a choice to make: become a student and land up in debt, or go straight into work.

“Student loan debts are not necessarily the problem, since they allow repayments in small amounts over a long period of time. The real issue is the pressing need for students to raise extra finances on top of their student loans, which often takes place through overdrafts and other forms of credit.

“But when money is tight in the first place, many students find these ‘extra’ debts impossible to pay off on time. The problem only gets worse if it is left until graduation – many graduates can find their income reduced for several years because they are repaying the debts they incurred on top of their student loans.”

The Gregory Pennington spokesperson went on to say that students are best advised to avoid additional credit wherever possible. “Student loans should cover all costs, since that is what they are designed to do. If not, many banks offer student accounts with interest-free overdrafts, which is good in the short term, but remember that this will have to be repaid once you have graduated, so we advise students to consider how they plan to do that.

“Credit cards should be seen as a last resort for students, unless they are absolutely positive they can pay back the balance each month. If that doesn’t happen, there’s a very real risk of getting into unmanageable debt, and it can happen more quickly than you might think.”

The spokesperson also urged anyone who is concerned that they may struggle to repay their debts to seek expert debt advice as soon as possible. “Even if your qualifications get you a good salary, graduate debt can still be a burden,” she said. “The longer they are left, the bigger they are likely to grow, so it’s essential to put a stop to that as soon as possible.

“Some debt solutions are only available if you have a steady income, but if you’re in trouble, it’s still worth getting in touch with a debt adviser for some valuable, free advice on managing your debts. Once you graduate and go into work, though, you should get back in touch to discuss whether any alternative options are more appropriate.

“For smaller debts, a debt management plan is a good way of coming to an agreement with your creditors on how best to repay your debts. For multiple debts, a debt consolidation loan can reduce your monthly payments and simplify your finances – but bear in mind you are likely to repay the debt over a longer period of time.

“There are also debt solutions available for more serious debts, such as an IVA (Individual Voluntary Arrangement) for debts of around £15,000 or higher. If you’re unsure, contact a debt adviser for more information.”

Via EPR Network
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Financial, Financial Management, Financial Services, Financial Solutions, Investment, Money, Personal Finance, Profits

The Importance Of Location, A Factor That Every Would-Be Homebuyer Should Consider Carefully, Says Financial Solutions Company Thinkmoney.Com

Commenting on recent figures from the Council of Mortgage Lenders (CML), financial solutions company ThinkMoney.com reminds potential homebuyers of the need to think twice about the location of their proposed purchase.

In Q2 2008, there was an 18% quarterly increase in ‘loans for house purchase’ (mortgages) in Scotland – a year-on-year decrease of 34%. These figures were significantly more robust than the Q2 figures for the UK as a whole: a 5% quarterly increase and a year-on-year decrease of 46%.

“The issues in the mortgage market are affecting the whole of the UK,” said a spokesperson for ThinkMoney.com, “but the availability of mortgages does vary greatly from country to country. Prices are, of course, a key factor in determining whether people can get on – or move up – the property ladder: in May 2008, the average house price in Scotland was £167,126, according to the Department of Communities and Local Government, while the average UK house price was around 30% higher, at £218,151.

“What these figures highlight is the sheer scale of the price variations in different parts of the UK – but there’s no need to move country to benefit from this, as the price of two similar properties a few miles apart can easily vary by tens of thousands of pounds. Any would-be buyer would be well advised to broaden their search to include nearby areas: unless there’s a significant difference in terms of amenities, a lower price could more than compensate for any minor compromise they have to make.”

At a time like this, when prices have dropped substantially, a slightly more flexible approach to house-hunting can really work in a buyer’s favour – especially if they’re a would-be landlord and therefore less likely to be ‘tied’ to a certain area. “Lower prices always give homebuyers a chance to buy a better property and / or put down a larger deposit, but in today’s mortgage market, a lower price can be particularly attractive.”

Since deposits are measured in terms of percentages, a sum that counts as a 23% deposit on one house could easily account for 26% of the value of another. In some cases, this could give access to a significantly lower rate of interest; in others, it could make the difference between being offered a mortgage and being refused.

While mortgage providers have always reserved the best deals for people with larger deposits, the disparity is particularly noticeable in today’s mortgage market, with the bulk of the recent rate cuts benefiting people with larger deposits far more than those with less to lay down.

Finally, when house prices are dropping, no would-be homeowner should buy property without weighing up the odds of losing money on it, and comparing this with the money they’d spend if they continued to rent. “This isn’t a straightforward equation. Even though homeowners face the possibility of negative equity (carrying a mortgage that’s larger than the value of the property), they also know that house prices are bound to recover sooner or later – but any money spent on rent is gone for good.”

Via EPR Network
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Financial, Financial Management, Financial Services, Financial Solutions, Insurance, Investment, IRA, Personal Finance

Eqlibrium Investments Now Offers Trust Deeds For Clients

A trust deed, or also known as a deed of trust, is a document used to secure debt on a home acting as a mortgage. A trust deed is recorded as a lien on real property. However, although a deed of trust acts like a mortgage, there are differences between a mortgage and a deed of trust.

A trust deed is used as security for a loan on real property, and the specifics regarding the loan are written in a promissory note. A deed of trust is then documented at the county recorder’s office to legally notify the world that the property in question has now been pledged to secure a loan.

There are three parties involved in a trust deed. The Beneficiary which is the investor/lender/note holder, the Trustor which is the borrower and the Trustee which is a third party selected by the investor who has the legal power to act on the investors behalf and holds the title until the note has been paid. The deed of trust recorded against the borrower’s property title is what secures the lenders investment.

When making an investment in a deed of trust, the Trustor makes the property transfer, in trust, to the Trustee (independent third party). The Trustee then holds the conditional title on the behalf of the beneficiary (investor/lender/note holder), and then either of the following takes place: The trust deed will be returned to the borrower once they satisfy all of the terms and conditions that were outlined in the promissory note. The property will be put up for sale should the borrower default – also known as foreclosure. “In many cases, if the borrower defaults there is actually more profit in the investment,” said Louis Pugliese, President of EQlibrium Investments. “A good management company will pass along most, if not all, of this additional return to the investor.”

A few of the benefits of trust deed investing are high returns, a consistent cash flow, and capital preservation while owning an investment that is secured by real property. “Trust deeds offer a great way to earn a higher rate of return and still be secured by an asset to minimize risk,” Pugliese said.

Investors who invest in trust deeds typically make a 12 to 18% return, paid out monthly, with a minimum investment of just $50,000 and relatively low risk. As a result, they are able to enhance their lifestyle significantly without threat to their principal, or build a large nest egg, safely, in a relatively short period of time. Pugliese adds: “Most investors do not realize that they can also use their 401K and IRA’s to invest, earning them much higher returns.” Investing in a trust deed is simple. All you need is knowledge of your personal financial situation and investment account records.

Via EPR Network
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