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181 |
Five Big Mistakes Newbie Investors Make By William Bronchick, JD
Five Big Mistakes Newbie Investors Make
By William Bronchick, JD
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182 |
Five Tips for Finding Great Real Estate Deals By Dwan Bent-Twyford
Five Tips for Finding Great Real Estate Deals
By Dwan Bent-Twyford
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183 |
Five Tips for Successful Negotiating By David Finkel
Five Tips for Successful Negotiating
By David Finkel
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184 |
Five Ways to Profit from Every Meeting with a Seller By David Finkel
Five Ways to Profit from Every Meeting with a Seller
By David Finkel
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185 |
Flipping Properties for Profit
Flipping Properties for Profit
By William Bronchick, J.D. and Robert Dahlstrom
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186 |
Foreclosure Investing: The Risks and Rewards
Foreclosure Investing: The Risks and Rewards
By Todd Beitler
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187 |
Foreign Currency Mortgages – the advantages and disadvantages
Foreign Currency Mortgages – the advantages and disadvantages
Written by Michael Challiner
The vast majority of mortgage borrowers get their mortgage from a
mainstream UK lender, paying in pounds sterling and following the Bank of
England base interest rate. But there are alternatives…
The UK’s domestic interest rates are quite low, especially in comparison
with recent years, however interest rates are in fact a lot lower in the
Eurozone, Switzerland, America and Japan. You have the option of borrowing
the money you need for your house purchase in Euros, US dollars, Swiss
Francs or Yen, securing the debt on your house and taking advantage of the
lower interest rates.
This illustration of 3 month money market interest rates demonstrate the
differences between UK interest rates and those around the world:
Japanese Yen 0.12%
Switzerland 1.03%
Eurozone 2.46%
US $ 4.48%
Sterling £ 4.64%
(Source: 3 month Money Market Rates, Financial Times, 9/12/05)
You won’t get as good a deal as the money market rates illustrated
suggest, because you will have to pay a premium for borrowing in an
overseas currency – however, if interest rates stay as they are now, the
potential is still there to make huge interest rate savings.
So if the rates are so good, why are only 1% of UK householder mortgages
taken out in overseas currencies? The reason is: there are extra risks.
Interest rates - they could go against historical trends and increase,
narrowing the gap between UK rates and the rates for the overseas currency
in which the mortgage was taken out. This would mean a reduced saving in
interest and it could even turn your saving into a deficit, and cost even
more than a standard UK mortgage.
Exchange rates – the biggest risk lies here. If you have borrowed in Swiss
Francs for example, you have to repay the loan in Swiss Francs. If the
Swiss Franc/Sterling exchange rates could be frozen together then it
wouldn’t be a problem, but of course that’s never going to happen.
If Sterling strengthened against the Swiss Franc, then your risk has paid
off. You would have to convert less Sterling back into Swiss Francs to
repay the loan than the Sterling value of the capital you borrowed in the
first place. An interest rate saving and pay back less than you borrowed,
that’s the ideal scenario.
But if Sterling falls against the Swiss Franc you get the worst-case
scenario, and you will end up repaying more money than you borrowed. So in
this context, you’ll be taking out an overseas mortgage rests on the hope
that Sterling will not fall against the currency you borrowed.
Essentially, you will have converted your mortgage into a currency
speculation, securing your most expensive possession, your home, against
it! There’s big savings to be made - but it’s a big gamble.
You will also need to provide a lot of cash up front, to get a foreign
currency mortgage you will need a deposit of at least 20% for your house
purchase.
There is another way. You can link your pounds sterling mortgage to a
foreign interest rate. You’ll avoid the exchange rate gamble, but you will
still be gambling on the assumption that overseas interest rates will stay
at a lower rate than the UK’s domestic interest rates. These types of
mortgage typically tie you in for 5 years, and if you want to pay it off
early or switch mortgages, you will have to pay a large penalty. However,
the mortgage can often be transferred to another property. Some people
find this type of mortgage represents an acceptable risk, especially if
the mortgage is linked to the Swiss Franc interest rate. Interest rates in
Switzerland have remained below 1% for the last four years. Similarly, the
Eurozone interest rate has not moved in five years.
Whatever you decide, it’s always a gamble, and you must think long and
hard before making a decision, ideally seeking independent financial
advice. In the long run, it’s you who will either be the winner, or the
loser.
Michael writes for Brokers Online ( http://www.life-assurance-bureau.co.uk/)
who offer life insurance and mortgages
http://www.life-assurance-bureau.co.uk/mortgages/ ).
View their website at: http://www.life-assurance-bureau.co.uk/mortgages/
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188 |
Forget Location, Timing Key To Real Estate Investing
Forget Location, Timing Key To Real Estate Investing
Source: M. Anthony Carr - January 17, 2003
I remember in the spring of 1998, sitting at an awards ceremony
for one of the nation's largest independent real estate companies
when the president/founder of the company predicted...
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189 |
Four Tips to Be a Real Estate Paper Pro By John D. Behle
Four Tips to Be a Real Estate Paper Pro
By John D. Behle
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190 |
Four Ways to Profit from Mobile Home Parks
Four Ways to Profit from Mobile Home Parks
By Ernest Tew
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191 |
Frequently Asked "Short Sale" Questions
Frequently Asked "Short Sale" Questions
By Dwan Bent-Twyford
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192 |
Future Sellers Don't Have To Miss Out on Refi Boom
Future Sellers Don't Have To Miss Out on Refi Boom
Source: Henry Savage - August 21, 2002
Question: I am in the military and will be
transferred across the country in three years.
We will certainly be selling our home at that
time and I'm wondering if refinancing makes
sense if we are going to hold the loan for
only three years...
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193 |
Get on the Same Page with the Seller
Get on the Same Page with the Seller
By Joe Kaiser
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194 |
Get Out of Your Comfort Zone: Make BIG Money
Get Out of Your Comfort Zone: Make BIG Money
By Ron LeGrand
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195 |
"Get Profitable Now!"
"Get Profitable Now!"
by Bernice Ross, Ph.D., MCC, and Byron Van Arsdale, MCC
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196 |
Get Tenants to Stay for at Least Three Years
Get Tenants to Stay for at Least Three Years
By Jeffrey Taylor
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197 |
Get the Property for Less: The Contractor Factor
Get the Property for Less: The Contractor Factor
By Joe Kaiser
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198 |
Getting the House Ready to Sell
Getting the House Ready to Sell
Source: RealEstateABC.com - 2002
Disconnect Your Emotions. Make Your House "Anonymous".
The First Step - Removing Clutter. Fixing Up the House
Interior.
Fixing Up Outside the House...
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199 |
Giving Property As a Gift Requires Creative Tax and Financial Planning
Giving Property As a Gift Requires Creative Tax and Financial Planning
Source: Benny L. Kass - September 16, 2002
Q. I own property in the District which is my
principal residence, and I also own a condominium
in Virginia. My son, his wife and their baby live
and rent my unit in Virginia...
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200 |
Glossary of Common Terms Used in Loans and Lending
Glossary of Common Terms Used in Loans and Lending
By Ed Wachsman
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