Why Does a Lender Want to Know My Race?

As you apply for a mortgage and complete the application no doubt after a while you’ll notice you’ve answered quite a few questions. A lot of questions, actually from who you are to where you live to how much money you make… in all, there are a few hundred sections in the application that need to be reviewed and completed where needed.

The obvious questions address identifying you and the subject property. The lender will want your full name, where you’ve lived for the past two years and your social security number to help legally identify you. The subject property will have not just the property address but the legal description of the property as well. The title report will also identify the address and legal description of the property along with the buyers, sellers and any current and previous lien holders.

Toward the end of the application is an area simply title “Declarations” and is a section to be completed by the borrower and the co borrower. These questions ask you to declare whether or not you’ve defaulted on any government debt, declared bankruptcy or been involved in a foreclosure, among others.

And neatly tucked away at the very end of the loan application are questions that ask you if you’re male or female and your ethnicity and race. There’s a box to be checked asking if you’re Hispanic or Latino or Not Hispanic or Latino. Just beneath those boxes address your race wanting to know if you’re an American Indian/Alaska Native, Asian, Black or African American, Native Hawaiian or Other Pacific Islander or White. Finally, the last box asks if you’re female or male.

These questions have nothing to do with your ability to get approve for the loan. Nor do minorities get preferntial treatment and females don’t get lower rates than males. At least they’re not supposed to. This section about ethnicity and race is reported to the federal government and used to track discriminatory lending practices. That’s all.

If you feel uncomfortable about providing such information, there’s an “opt out” box that you can check. However, your loan officer is still required to complete the section if the loan application was taken face to face or you provided a photo ID with your application. If lenders don’t report such information the government can’t track down the bad guys who discriminate.

Money Money Money

What is a High Risk Unsecured Personal Loan: A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient is called an unsecured loan. No property, interest or security is used as collateral in either a guarantee or a pledge. It is called high risk because unsecured transactions are the most risky for the lending or selling party and least risky for the borrowing or buying party. Lenders or sellers are provided no compensation for default of payment or failed delivery of goods or services.

With this type of loan, you are not risking any of your personal property. The only thing that you are giving the lender is your signature. This loan is called a signature loan or an unsecured credit line. The lender is greatly at risk with this type of loan and the interest rate you will pay can be very high. In most cases, you are better to give the lender something as collateral. Be prepared to pay 10-40% interest or higher depending on which State you live in and in what kind of credit situation you are in.

Get a break down or schedule from the lender of what exactly the loan will cost you over the term of the agreement. If the lender has to give your file to a collections agency, most of these agencies charge 30% of what they collect. If they take you to small claims court, there is a fee and time for the lender to do this as well. Lenders manage their risk very well. Have a copy of your credit score and be prepared to explain yourself to the company you are working with for financing.

High interest loans are recommended only if you know you can get out of them quickly. High interest payments will set you back faster than anything else and make your credit worse in the future.

Why Do You Need a High Risk Unsecured Personal Loan: Money money money…! It’s not always funny! While you can have all the fun of the world with it at times money can land you in abysmal distress if you are not careful dealing with it. There is no end to the needs that you need money for. When someone said necessity is the mother of invention it was not probably felt in what proportions human needs could grow. It was not also probably visualized in what huge magnitude rarities would convert into luxuries and luxuries would convert into necessities. Less than twenty years back a cell phone was a rarity that very soon became a luxury with exorbitant costs even to answer a call and now in some countries the number of cell phones exceed the total population!

So you need money as much as we all do. And the consumerist market gives you ample ways of utilizing money. If your pay packet does not suffice they give you credit cards in any number you want. They give you huge credit limits that hardly compare with your salary or monthly income. They want you to overspend knowing fully well that you will gleefully oblige. So that they can give you an array of personal loans with discounted flat rates of interest or interest with reducing balances. You need these loans to clear off growing credit card balances. With your pay packet compromised to compulsory monthly installments you cannot still be wary of your ‘necessary’ purchases. So cleared credit cards’ balances start growing all over again. You also feel the needs for home and car loans too. You start missing out on mandatory payments. Distress begins. You look for a much bigger loan to take care of all others and finally hit the abyss. Depending on the types of situations you could be in poor bad or near bankruptcy credit rating. All the sunshine offers will evaporate by now.

But the understanding market knows exactly what you want. You want high risk unsecured personal loans as you will have no guarantee to offer and whatever real assets you may or may not be having you will never like to mortgage them at the earliest.

The Options Available: If the market can diligently lead you to a debt trap it has to have the wherewithal to rescue you from the same. Be it the American or European or Asian markets there are scores of financial agencies specializing in the type of financing you want. They do not care what type of credit rating or score you have and some of them are willing to give you $1000 to $10,000 overnight. They also oblige you by negotiating with your creditors to streamline the payment schedule. This is indeed good news for people who really need this.

Only If You Have To: As we have said earlier you should go for high risk unsecured personal loans if you have no other options due to the very high rates of interest charged. You go for it only if you are sure of coming out of it easily and definitely not at the risk of going bankrupt. As a more practical alternative you should concentrate on improving your credit rating by streamlining your repayment schedule, curtailing your instincts for overspending and by trying to make the extra buck through extra work. There is a direct relationship between your credit score and the rate of interest charged on loans. The more the credit score the less is the interest rate.

Make your money work for your benefit only.

Asia Is Abundant In Traditional Vases

If traditional vases are a thing you collect then taking a trip to Asia is an superb concept. The United States has traditional vases that only date back a few hundred years. Incredibly past vases may be found in Europe and Russia but the extremely ancient vases can usually be uncovered in China and Japan. The antiquities sellers in Asia are plentiful and are quite happy for westerners to arrive browse in their shops. Quite a few have web sites so you can view their wares quickly from the comfort of one’s house. But to genuinely get a feel from the facts of an old-fashioned vase you must visit and see it in man or woman. Traditional Chinese vases are quite famous mainly because they arrive in the different dynasties. Each dynasty has its own motif and artwork and collecting these old-fashioned vases can be a precious and stunning experience.

Just before traveling to Asia choose on which parts on the countries you wish to check out. The artwork on the traditional vases in Japan varies on the north to the south. In China you’ll need to be sure you can visit the particular dealer before you decide to make the trip. Be certain they are open the months that you wish to travel and understand some of their customs before you go. It’s often wise should you don’t know the language to have an interpreter.

Even though most Asian sellers can speak English, if they see a Western face they know they can raise the price of their item. This really is where a local comes in handy to support translate and perhaps work the bargain for you. Investigation your dealers in advance and be sure they have credentials from the field so that that you are acquiring the real factor. Browsing in some market locations can also be enjoyable in searching for traditional vases, but once again ensure you’ve an interpreter with you when you locate a treasure.

It is not as very much fun whenever you uncover out later that 350 men and women have the exact same piece or that you just ended up paying 3 times the amount for the piece then it was truly really worth. But browsing these shops and seeing these traditional Asian vases in particular person is very the experience. The artwork and hand particulars and colors on the pieces are exquisite and worth the encounter. Most Asian antique vases are very pricey so if your hobby is collecting old-fashioned vases be sure and pad your wallet before you make your excursion to China. Chances are very good that if you are producing an extended trip to China or Japan for antique vases, funds is possibly the last of one’s worries.

Why Do Rich Get Richer While Poor Get Poorer?

Singapore just celebrated its 42nd birthday. One concern raised by Singapore’s Prime Minister is the widening income gap between the Rich and the Poor.

If you look around, you may realize that there is a trend that the Rich Get Richer while the Poor Get Poorer. Why?

Actually Singapore is currently having one of its best golden years in history, with opportunities abound, it is possible for someone who is not rich to become Rich. Can someone who is not rich become Rich? Yes, it is possible. One of the secrets why the Rich get Richer is that the Rich understand and use Other People’s Money (Financial Leverage).

How can you use Other People’s Money (OPM) to become Rich? One possible way is to use good debt wisely.

The Good Debt that almost everyone has access to is a Housing Loan.

P.S. please avoid all bad debt. My definition of bad debt is any debt that you incur which you do not have a chance of making more money than the interest you pay is bad debt.

What is my definition of Good Debt? Good Debt is any debt whereby it is possible to get a higher return than the interest you pay on the Loan.

If you really think about it, Housing Loan is the CHEAPEST Loan anyone can ever get. Currently in Singapore, Housing Loan interest rate is 3% to 4%, while Car Loan is about 6%, Renovation Loan 8% and Credit Card 24%!

Actually, if one seriously think about it, it is very difficult for people to FAIL to beat Housing Loan interest rates. Why? Imagine even if you know nothing about investing. Just putting money into Endowment savings plans gives you annual returns of about 4% over a 20 years period.

What about investing during crisis? Typically, a crisis comes by every few years and at least once in 12 years. During the last Asian crisis in 1998, DBS’s share price was only $5, if someone only invest during a crisis when share prices are depressed, it is almost definite that the returns he earns will beat the interest rates charged on Housing Loans. Today, this person can easily sell off DBS’s shares at over $20 (or 400% returns over 10 years or annual COMPOUNDED returns of 14.86%.

Let me show you an example:

A person has a $200,000 loan with 20 year loan period. Assuming he pays 4.5% interest on Housing Loan, total interest paid over 20 years is ONLY S$105,515.

If he has $200,000 Cash/CPF and use this money to earn 3.5% interest rate, in 20 years, total interest he earns would be S$168,453.20!!!

Because most people forget that Housing Loan interest is calculated on Reducing Balance Basis while your savings Compounds (interest is added on interest)! I have to reiterate that from my observation the reason why many people end up retiring with a fully-paid house and little Cash/CPF are:

1. they commit to buy TOO big a house (more than they can afford).

2. they keep using their Cash to reduce/pay off their Housing Loan whenever they have excess cash on hand.

They would get ahead financially if they instead FOCUS on making their Cash/CPF work harder for them. By doing so, it’s possible for an average Middle Class Singaporean to accumulate S$1 million dollars by age 40.

Anyone who has excess Cash now I would advise you against using the money to reduce your Housing Loan outstanding. In my opinion, the next Global Financial Crisis can be 3 months to 2 years away and when the crisis comes, you would then realise it is very easy to make 50% to 200% returns on your capital. I’ve already shown you actual record of share prices in the previous Asian crisis to prove that it had happened before. The only question you need to ask yourself is when a crisis comes, will you have cash to invest then? You can move up from middle class to become Rich in the next crisis if you keep your excess cash instead of use it to reduce your loans now.

Copyright (c) 2007 Dennis Ng

Why Do Rich Get Richer While Poor Get Poorer?

Singapore just celebrated its 42nd birthday. One concern raised by Singapore’s Prime Minister is the widening income gap between the Rich and the Poor.

If you look around, you may realize that there is a trend that the Rich Get Richer while the Poor Get Poorer. Why?

Actually Singapore is currently having one of its best golden years in history, with opportunities abound, it is possible for someone who is not rich to become Rich. Can someone who is not rich become Rich? Yes, it is possible. One of the secrets why the Rich get Richer is that the Rich understand and use Other People’s Money (Financial Leverage).

How can you use Other People’s Money (OPM) to become Rich? One possible way is to use good debt wisely.

The Good Debt that almost everyone has access to is a Housing Loan.

P.S. please avoid all bad debt. My definition of bad debt is any debt that you incur which you do not have a chance of making more money than the interest you pay is bad debt.

What is my definition of Good Debt? Good Debt is any debt whereby it is possible to get a higher return than the interest you pay on the Loan.

If you really think about it, Housing Loan is the CHEAPEST Loan anyone can ever get. Currently in Singapore, Housing Loan interest rate is 3% to 4%, while Car Loan is about 6%, Renovation Loan 8% and Credit Card 24%!

Actually, if one seriously think about it, it is very difficult for people to FAIL to beat Housing Loan interest rates. Why? Imagine even if you know nothing about investing. Just putting money into Endowment savings plans gives you annual returns of about 4% over a 20 years period.

What about investing during crisis? Typically, a crisis comes by every few years and at least once in 12 years. During the last Asian crisis in 1998, DBS’s share price was only $5, if someone only invest during a crisis when share prices are depressed, it is almost definite that the returns he earns will beat the interest rates charged on Housing Loans. Today, this person can easily sell off DBS’s shares at over $20 (or 400% returns over 10 years or annual COMPOUNDED returns of 14.86%.

Let me show you an example:

A person has a $200,000 loan with 20 year loan period. Assuming he pays 4.5% interest on Housing Loan, total interest paid over 20 years is ONLY S$105,515.

If he has $200,000 Cash/CPF and use this money to earn 3.5% interest rate, in 20 years, total interest he earns would be S$168,453.20!!!

Because most people forget that Housing Loan interest is calculated on Reducing Balance Basis while your savings Compounds (interest is added on interest)! I have to reiterate that from my observation the reason why many people end up retiring with a fully-paid house and little Cash/CPF are:

1. they commit to buy TOO big a house (more than they can afford).

2. they keep using their Cash to reduce/pay off their Housing Loan whenever they have excess cash on hand.

They would get ahead financially if they instead FOCUS on making their Cash/CPF work harder for them. By doing so, it’s possible for an average Middle Class Singaporean to accumulate S$1 million dollars by age 40.

Anyone who has excess Cash now I would advise you against using the money to reduce your Housing Loan outstanding. In my opinion, the next Global Financial Crisis can be 3 months to 2 years away and when the crisis comes, you would then realise it is very easy to make 50% to 200% returns on your capital. I’ve already shown you actual record of share prices in the previous Asian crisis to prove that it had happened before. The only question you need to ask yourself is when a crisis comes, will you have cash to invest then? You can move up from middle class to become Rich in the next crisis if you keep your excess cash instead of use it to reduce your loans now.

Copyright (c) 2007 Dennis Ng