Hond Financial

Posts Tagged ‘interest rates’

Mr. Kessler asks an important question:?”

Since we are printing up all of the money that doesn’t exist, most economist agree that the threat of hyper inflation is coming down the road and either we head it off now or get eaten by it later.  Interest Rates vs. Hyper Inflation

Kessler begins thinking about how the Federal Reserve might go about heading off inflation as the economy begins to recover:

But how? Doing the opposite of what it is doing now.  Raising interest rates in the answer. There are some bad debt out there that should never have been there such as the debt left by AIG and Bear Stearns. By removing all the backstops it put in for the commercial paper and other markets to keep them functioning. Will this change the economy speed? You can bet on it. This is a tightrope act. Getting all that toothpaste back into the tube will require the skills of a surgeon and the moxie of a middle linebacker, and someone deaf, dumb, and blind to congressional meddling. Keep in mind that we are treading on uncharted ground now.  What is a Mortgage Planner?

How this is emplimented is going to to vital to the future of the mortgage business and mortgage rates. Something like this will most likely be very difficult to implement well. When there are interest rates at 10% or higher, who really wins?

As the Federal Reserve meets for FOMC this week the question of inflation is beginning to re-enter the discussion.

Federal v. State Banking Powers

Here is another issue that may have strategic impact on the future structure of the mortgage industry: “Can the US Treasury Shield National Banks from New York State Law?”

Four years ago, Eliot Spitzer, then the New York attorney general, asked several national banks to explain why they were disproportionately charging blacks and Hispanics high interest rates.

Instead of an answer, he got a lawsuit. The banks, and the Treasury Department agency that regulates them, persuaded federal courts to bar the state attorney general from enforcing New York antidiscrimination laws.  Mortgage Interest Rates

On Monday, the U.S. New York will be heard by the Supreme Court. If the state wins, it would mark a break with decades of precedent that mostly favors the powers of the federal government and open a new era for 50 state regulators to play a bigger role.

A shift like this, although unlikely based on past Federal judicial precedence would dramatically shift the structure of banking.

More than likely the largest single factor that affects demand for the pound is the economic health of the United Kingdom or how the market is expecting the United Kingdom economy to fare in the future.

Sterling is what is known as a free floating currency, so its exchange rate or its price in relation to another currency is determined purely by supply and demand. Simply put, the more the pound is in demand internationally then the stronger its exchange rate is.

Investors are apt to move finances away from weakening economies. The worsening of expectations for the UK economy during 2008 goes a long way to make clear sterling’s sharp decline.

Strength of the pound and its effects on the exchange rate. A higher interest rate will mean you will get a far better return on bonds and other Government securities and therefore this in turn tends to attract financial capital from abroad. If currency markets expect the United Kingdom base rate to fall, then the pound as a knock on effect will tend to weaken.

A currency is likely to weaken in order to correct a big trade deficit, which is unsustainable in the long-run, thus making exports cheaper and imports much more expensive.

One of the effects for most families is an increase in the cost of travelling abroad. As a pound buys less of a foreign currency, hotels abroad, goods and services will become much costlier.

This will mean imported goods to the United Kingdom in turn will become more expensive to consumers and to businesses that import raw materials or components as part of their production process. Meanwhile exporters who price their goods in sterling will benefit as their goods will become cheaper in overseas markets

You have a very busy life. There are so many things you need to keep track of. Picking up your kids from school, going grocery shopping, paying your bills on time, getting enough exercise, are just a few examples of the complexities of life. How then are you supposed to do all that AND stay up-to-date with every aspect of your finances?

MyFico Score Watch helps you do just that by giving you one central and automated place to keep track of you FICO scores and your credit reports.
Score Watch Benefits:

• Score Watch automatically keeps track of your credit report on a daily basis and your FICO score weekly.
• Has the ability to alert you via email or even SMS when there is an unexpected change to your credit that would negatively affect your FICO score.
• You can set a target score you want to reach and MyFICO Score Watch will alert you when you’ve reached it. It will also alert you when you qualify for better interest rates
• Your membership with MyFico Score Watch® entitles you to two credit reports from Equifax yearly that you can review and save for future reference or to dispute incorrect data.

Why is it so important to keep track of your FICO Score?

Your FICO Score is how money lending agency like mortgage bankers and credit card companies rate you. Your FICO score is made up of a lot of different statistics and the score plays a major part on the interest rates you can qualify for. If your score raises you should be entitles to a better rate and if your score drops you many get penalized.

How is your FICO Score Calculated?

There are many different things your FICO score is made up of and that My Fico Score Watch® monitors but a few of the most influential ones are:

• Payment history for any previous debt
• Amounts owed on current loans and credit cards
• Length of credit history
• New credit received
• Types of Credit Used

With all these factors it’s clear that you need help keeping up with all this information. Wouldn’t it be nice if you could just put all this reporting and tracking on autopilot? Well now you can with MyFico Score Watch®!

by Trent Goldenblum

Earlier this month the Prime Minister, Gordon Brown, and the Chancellor of the Exchequer, Alistair Darling, announced that the base interest rate was being cut by 0.5% in a bid to try and boost the economy, ease financial tension in households, and restore consumer confidence. The base rate cut was announced one day ahead of the schedules Monetary Policy Committee meeting, where interest rates are usually set

Most people assume that if the Bank of England cuts the base rate then lenders will also cut their borrowing rates by the same amount, but whilst this may have been true once it seems that it is no longer the case. In fact, a number of industry officials have expressed concern that there seems to be no connection between base rate movement and interest rate movement from lenders any longer, which could make things very difficult for borrowers

Following the announcement of the rate cut a number of mortgage lenders said that they would be passing on the half point cut to borrowers, and this means that some borrowers and remortgagers may be able to benefit from lower repayments. However, a large number of lenders have failed to pass on all of the rate cut, and some have not passed on any of the rate cut, so there are those that will not see their mortgage repayments falls as a result of the cut

A number of factors will determine whether or not lenders will cut interests rates. The consumer’s chances of getting a lower rate of interest will depend on factors such as whether the lender decides to pass on the rate cut, whether the borrower is an existing borrower or a new borrower, and whether the finance that you have has a fixed or variable rate. With fixed rate loans and mortgages you will not see any benefit of the rate cut because the interest rate remains static no matter what

It is best to take matters into your own hands if you want to save money on your borrowing costs following the base rate cut. As an existing borrower you can shop around and look for more competitive rates on loans, mortgages, and credit cards, and as a new borrower you can compare different financial products from a range of lenders in order to find the most competitive deal and get the most affordable repayments.

If you already have a mortgage and want to see if you can get a better rate of interest following the base rate cut in order to save yourself money you can compare different providers with a view to switching your mortgage to a better deal. However, do remember that there can be high arrangement fees and charges applied by the new lender, and this should be taken into account.