Ever wondered why some sectors do well and others don’t? Economies move through stages of business cycle. Therefore, choosing the right sector or devising a strategy to rotate sectors and invest in sectors that are expected to perform well at a particular time is critical. Continue reading →

Due to increased US-government loan rates, students are opting to work full time. Increased student loan is leading to a steep use of credit cards and personal loans. Though a large percentage of the population in the US is indebted, reports suggest that the UK consumers remain the most indebted in the world. A PwC study reveals the amount of loans held by UK consumers is likely to increase by 3% next year, which translates to about 50,000 Pounds. This significant increase in debt levels is likely to have profound effects on future borrowing and consumption patterns of the society.

Loan type

In the USA, student loans serve as a form of financial aid that must be repaid, in contrast to other forms of financial aid such as scholarships and grants. Student loans tend to impact the US higher education pursuits. In several countries, specifically in Asia, student education is subsidized to make it affordable using the central exchequer. The US student loans come in 2 forms, Federal loans and Private loans, which include non-profit and institutional loans. Borrowers have 10 years to repay the total amount of the loan.

Tighter loan processing

The US student loan programs have been criticized for not amending their interest rates according to the risk factors and academic majors chosen by the students. It impacts educational success and loan repaying ability. In a recently quoted news article, the US consumer financial watchdog started providing security to borrowers. This agency will also travel to various sites to ensure that student loan servicers treat borrowers (students) fairly and comply with federal consumer laws. However, without financial aid from the Federal Government or lenders, numerous students at least in the US would struggle to acquire a degree.

Source:http://www.theguardian.com/money/2013/nov/25/student-borrowing-rise-unsecured-debt

Traditionally men managed the household finances, although there is no convincing answer to ‘why men?’ Wouldn’t a women’s patience automatically make her a better and calculated investor? Should the aggressive men choose risky investments for better returns? These questions have no right answer, except that this topic is alive as evidenced by the societal changes. Discussions welcome. Continue reading →

In an era where many young people do not give much thought to saving for the future, the low yields for savings deposits in recent times did not provide the much needed motivation either. However, latest reports suggest that the rates for savings deposits seem to be turning around, this time for the better. Continue reading →

The holiday season is predicted to be one which can bring cheers as the economy is seen turning around. Continue reading →

According to data released by the Mortgage Bankers Association for the week ending November 15th, it appears that the US home loan applications have fallen for three weeks in a row. The drop is estimated at 2.3 percent after adjustment for an ensuing holiday and includes both refinancing as well as loans for purchase of new homes. The total decline over the three week period is estimated at 6.7 percent. These declines have come after several weeks of gains and have raised concerns about the future sales.

Central Bank scaling back

It appears that the economic uncertainty may be one of the reasons for this decline. However, based on recent reports, it appears to be related to the speculations around when the central bank would decide to start reducing its ongoing purchase of treasuries and mortgage backed securities. As the economic and job related data have shown some strength in recent months, sometimes even overwhelmingly exceeding expectations, the current thinking is that the scaling down of the asset purchase program by the central bank may happen much sooner than sometime next year as was thought earlier.

Home Buyers left in a dilemma

If that expectation turns into reality, then, the housing market may witness a weakening demand which in turn could lead to reversal of the gains that were made in the recent past. For those of us looking to purchase a home, the best option for now would be to wait and watch where the economy heads before taking any decision.

Source: http://finance.yahoo.com/news/u-mortgage-applications-fall-latest-120000358.html

With the spring property season, the lenders are trying to attract people with discounts. The level of discounts has been increased according to Fawzi Jreige, mortgage broker. The lenders are very aggressive to catch customers and are even ready to go beyond their publicly announced discount rate. Continue reading →

The CBI has warned the Chancellor that the job of rebuilding the economy is only half done and it calls for a reformation in the business rates in the autumn statement. CBI informed that the Chancellor must cap the inflation linked increase in the business rate at 2pc. Continue reading →

With the increase in life expectancy, investors are worried about outliving their retirement assets. One of the ways to reduce the anxiety is to invest in insured annuities. It is a combination of life annuity contract and life insurance policy, purchased at the same time. The cash flow for the insurance premium and taxes are generated by the annuity. Continue reading →

Investors reaped rich dividends from Isa

Isa savings were launched in 1999 to protect cash, from tax. Many people have made hundreds of thousand Pounds in Isa. However, ministers have considered controlling the benefits. The amount that can be held in tax-free Isa is considered to be capped in radical measures.

In the initial period of Isa, savers can put 7000 Pounds per years with 3000 Pounds in cash in Isa. The current limit for 2013-2014 tax year, is 11,520, half in investments and half in cash. In the last financial year, 15 million Isa were opened with an average deposition of 3,900 Pounds, per account. Continue reading →