2Bull Forex Blog

A booming market for buy-to-let and investment property portfolios has created the need for new types of mortgages and investment property loan facilities. Securing finance for buy to let and holiday rental properties classed as an “investment property loan”, has never been easier and many of the main lenders have transformed their lending criteria to support property entrepreneurs.

Historically lenders were reluctant to support property investors unless they had serious investment equity ranging from 25-40% of a given properties value. The latest range of financial offerings, are now more in-line with existing household mortgages where buy to let loans are available for up to 90% of the value of the property. The criteria for lending, depends very much on the anticipated yields for the property and to some degree on solid business plans and logic that reflect capital growth in the investment. With a myriad of product offerings available it maybe difficult for a prospective property investor to determine what constitutes a good offer from a financial institution.

The best investment property lenders will look and consider 6 key elements in their risk assessment. So it is very important that you as the proposer understand clearly and prepare in advance a plan that accurately presents your facts in order to pitch smartly to get the finance you need. 6 key Investment Property Loan points.

Equity available - Know what you have in terms of tangible equity in your home, other investments in assets, and liquidity. Use this valuable information to form the basis of calculating your security to finance the investment plan. This ensures to the lender that you have a sound knowledge of your strategy in investing and you have a good consideration in managing your risk.

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Interest Rate Percentages - It is generally anticipated that the higher the investment deposit the better the mortgage rate. Buy-to-let mortgages rarely attract the discounts that home mortgages attain. However interest rate benefits are gained if you are prepared to put up front 20 - 25% of the loan value. Try and avoid low deposits as the rates for larger deposits will be more attractive both in the short-term overhead reduction and long-term gain.

Current debts - Ideally all outstanding mortgage and loan liabilities or commitments should be understood and declared when requesting the finance. This will determine the maximum loan available to you for your investment project. Ideally this should be considered in advance of any property speculation or viewing of proposed properties. You may also find through this process that it presents an excellent opportunity to consolidate current finance and reduce overheads through the consolidation process.

Current Income or Salary - Lenders will often consider salary and income within the mix of calculating repayments. Multiples of salary are often considered along with the yields or estimated monthly rental incomes from the property portfolio. Important to the property investment will be the current state of the property and whether the property requires investment in refurbishment or modification to enable tenants or renters to occupy.

Tax liability Reduction - You can often save money by offsetting your mortgage payments, maintenance costs and agents fees against rental income. This will ultimately reduce tax liabilities against any profits made in rental and capital growth.

Insure properly - Accidental damage caused by renters or tenants does occur as does general wear and tear. So, make sure that you invest in adequate insurance and don’t let these costly overheads affect your profits. There are specialized landlord and investment property insurers who will cover your property for these eventualities and once again these fees should be tax-deductable.

Summary:

Investing in a property portfolio can be a lucrative venture provided that you are prepared and you understand and manage your risks. Lenders will look for good credible knowledge of the investment and will make assessments based on the six points raised earlier. An ill-conceived plan and approach will unlikely attract the finance desired from leading financial institutions. Alternative sources of finance may be available to you, although you should expect to pay significantly higher costs in terms of interest payments set-up fees and management costs. If the numbers don’t add up in the plan the leading lenders will not support your venture. If this is the case then veer towards prudence and carefully rethink the 6 key steps to a smart loan.

There comes a time in almost every stock trader’s life when they entertain the idea of stock trading for a living.

Many of us look upon the life of a stock trader as one of great flexibility and freedom. We may see ourselves trading from some remote location or even our own private yacht.

Before we embrace the fantasy too much let’s embrace the facts. Stock trading for a living is a business and it should be run like one to be successful. Many of the same rules and levels of preparation which will make you successful in other types of businesses.

When you plan to trade stocks for a living this means that you must make enough profit over and above expenses to cover all of your day-to-day living expenses in everyday life.

Keep in mind that the money you make from stock trading will most likely not come in as regularly as the paycheck you are used to getting every other week. In fact, a successful stock trader may not make a profit for many months. This means the successful stock trader understands the more sporadic nature of profits from his stock trading business and has made the necessary adjustments in lifestyle to adjust to them.

This brings us to our next point…cash reserves. Cash reserves are important for those months when the business does not turn a profit even though the business may be very profitable overall. If you plan on stock trading for a living then having cash reserves is very important.

First you need sufficient working capital for your stock trading business. Second you need money to live on while you are growing your stock trading business.

Even before you concern yourself with working capital and living expenses you should have a proven method for generating a profit in the stock market. If you don’t have this none of the other factors will matter.

By honing your stock trading skills while you have the certain cash flow of your day job you will be able to think and act more objectively. Stock trading while under financial stress rarely if ever leads to anything but a disastrous conclusion.

Take your time, make your plan, and prepare yourself to be successful in stock trading.

To Your Stock Trading Success!

If you are doing forex trading, then you know the importance of a good forex broker. This is especially true if you are just starting out and do not have a lot of experience. A good forex trader will work with you and provide the information and tips you need to make the best trading.

Even though your forex broker will be offering you tips and advice, they do not make the final decision to buy or sell. You do. Therefore it is important you know what you want and make your own decision. It is ok to ask a lot of newbie forex questions to your broker if you are new to forex trading but make your own mind and accept the results.

As you can see, a good forex broker is important as you will be seeking his/her advice and you certainly want someone who’s the best in the forex business. So how do you go about choosing one? Here are some tips to help you.

1. Registered Forex Broker.

It is important that your forex broker is a registered member of a financial institution. Ask for his/her credentials. You want the assurance that he/she will be able to act on your decision and access the funds needed.

Check with the NFA (National Futures Association) if you doubt your forex broker is registered.

2. On-call Broker.

Your forex broker should remain in contact at all times. Whether it be via cell phone, email, instant messaging etc. Your broker should know forex trading is a 24 hour standby job and fluctuations in trading can happen quite quickly. Therefore it is important you can get hold of your forex broker when you need him/her.

3. Experienced Broker.

Before you select a forex broker, ask for his/her references. Call those references and ask them about their opinions on the forex trader. By doing this, you can assert whether the forex broker is experienced and whether he/she is able to execute a trade effectively and successfully.

It would be best to contact more than one references to get an accurate feedback on the forex broker.

4. Cost of Broker

Many people when looking for a forex broker are overly concerned about the cost. Usually more experienced forex brokers as well as those with a good track record of successful trades demand a higher price.

My recommendation is to select a few forex brokers that you are comfortable with, have credentials, have a proven good track record. Once you have done that, then you can talk about cost.

Sometimes the price for a forex broker with the above qualifications can be high, however you need to keep in mind, they can help you make more money in the long run and offset the cost.