Archive for February, 2011
Are Unsecured Loans Really Better?
by: Devora Witts
One wonders if all the benefits unsecured loans provide really make up for its drawbacks. In this article we analyze both pros and cons of Unsecured Loans and explain why in some situations unsecured loans are the best choice. As with most things what may be useful for some people can be useless for others and what is disposable for some people can sometimes be essential for others. This is also true as regards to loans. Unsecured loans can sometimes be helpful and sometimes they are the only choice some people have to get finance. Any Purpose? When financial institutions want to promote unsecured loans they usually claim that you can use an unsecured loan for any purpose. The truth is that there are secured loans that can also be used for any purpose. A home equity loan does not have a specific use and the money you get can be used for whatever you want. Thus the “any purpose” benefit does not seem to be such an advantage.
No Collateral The other common claim is that since unsecured loans do not require collateral the risk of repossession does not exist. This is actually true but what they forget to state is that the lender is still entitled to take legal actions to recover what he has lent. Collateral is only a guarantee it gives the lender several rights over the asset in case there are more creditors willing to recover their money. All the other debtor’s assets will be sold before in order to pay other debts. Loan Amounts It is a common belief that one can borrow more money with a secured loan than with an unsecured loan. This is only true in some cases. With a secured loan one can borrow as much money as the asset’s value can guarantee. However if someone has a good credit score and many assets all of this would be “guaranteeing” any loan he might request and thus he can get a higher amount by applying for an unsecured loan. This is especially true when it comes to unsecured business loans. All the above is also applicable to loan’s length. Loan lenght is also determined by the risk involved for the lender and someone with many assets and good credit even if he does not offer an asset as collateral is a low risk prospect.
Tenants And NonHomeowners As stated at the beginning of this article unsecured loans are sometimes the only choice some people have in order to get finance. Tenants and Nonhomeowners can not offer an asset as collateral and thus have no other choice but to apply for an unsecured loan. Due to the highly competitive nature of the unsecured loan market the interest rate charged for unsecured loans has been decreasing over the years and at the present time unsecured loans’ interest rate does not differ much from secured loans’ rate. So it is not strange that many homeowners are opting for unsecured loans and holding back to their properties in case they need to request a secured loan in an emergency situation.
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About the writer: The loan king
Why You Should Get An Investor To Buy Your Foreclosure Home
In some cases when people have lost their homes to foreclosure they have decided to let an investor to buy their home. The reason they have done this is that is may give them a chance to stay living in their home under an agreement where they make a monthly payment to the investor. Many investors are keen to do this because not only do they get themselves a profitable property but they also don’t need to worry about finding somebody to live there.
People who are lucky enough to get an investor to purchase their home have a good chance of being able to stay in their home even after foreclosure. Investors in foreclosure homes are usually quite knowledgeable about what is involved and it could even be useful to contact them to see if they can give you some helpful information.
Anything you can do to remain living in your home even after foreclosure is going to be beneficial to you because you get to stay living in the same place as you had already planned to. There are still a few other avenues to explore though that might make it possible to prevent the mortgage company from foreclosing your home.
For some people just the reassurance that they have other options other than to give up and resign themselves to foreclosure can be a great comfort. If you are able to take the initiative and be proactive about things from the start you may find that you will get the chance to discuss your finances with the mortgage company and work out a way of keeping your home safe from the threat of foreclosure.
Another important thing to be aware of is that you could consider taking out a loan to help you get caught up on your missed mortgage payments. This would definitely get the mortgage company off your back since you would be resuming your monthly payments. When considering a loan though always make sure that you research everything about it fully because you do not want to end up in a worse financial position than you already are.
The threat of foreclosure is of course something very serious but just remember that it isn’t the end of the world and there is no need to panic. If instead you take the time to find out a little more about your options then you will be in a position where you are aware what can be done to prevent it.
About the writer: To find out how to stop home foreclosure check out http://www.stopbankforeclosurenow.org
What Is Real Estate Investment Trust
Investing in income property can be a great way to increase your capital. But for many people investing in real estate especially commercial and industrial real estate is just out of reach from the financial point of view. But what if you could join forces with other small investors and large investments in commercial real estate in the group? With Real Estate Investment Trust you can do it!
REIT means Real Estate Investment Trust and is sometimes referred to as real estate holdings. Real estate investment trust is a companie that owns and manages a portfolio of real estate and mortgages. Anyone can buy shares of the REIT. Real estate investment trust offers the benefits of real estate without the headaches or expense of the landlord. Said another way the investor has the benefits of real estate ownership with no management role in the toilets and tenants.
Real Estate Investment Trust of certain types offers great benefits of liquidity and diversity. In contrast to the actual ownership of real estate these measures can be quickly and easily sold. And because you invest in a portfolio of real estate rather than one building it comes with less financial risk.
Real Estate Investment Trust was created in the sixties when Congress decided that small investors should also be able to invest in largescale incomegenerating properties. It was found to be the best way to make it a model of investment in other sectors the purchase of shares.
The company must distribute at least ninety percent of their taxable income to shareholders each year as a Real Estate Investment Trust. Most Real Estate Investment Trust pays out one hundred percent of their taxable income in dividend distributions. To maintain its status as a passthrough entity Real Estate Investment Trust dividends are paid to shareholders annually.
From 1880 to the 1930′s a similar provision in place which allows investors to avoid double taxation paying taxes as private and business were convinced because they do not pay income tax if the income is distributed to beneficiaries. It was abolished in the nineteen thirties when the passive investments are taxed at the corporate level as well as part of the profit tax. Real estate investment trust supporters were not able to change the law to overturn the decision within thirty years. Due to high demand for real estate funds President Eisenhower signed the nineteen sixty Real Estate Investment Trust as a REIT tax passthrough entities.
The company must comply with all other requirements to qualify as a real estate investment trust and to win passage of a person. They should:
1. Be structured as corporation business trust or similar association
2. Be managed by a board of directors or trustees
3. Offer fully transferable stock shares
4. Have at least one hundred shareholders
5. Pay dividends of at least ninety percent of the REIT’s taxable income
6. Have no more than fifty percent of its shares held by five or fewer individuals during the last half of each taxable year
7. Hold at least seventy five percent of total investment assets in real estate
8. Have no more than twenty percent of its assets consist of stocks in taxable real estate investment trust subsidiaries
9. Derive at least seventy five percent of gross income from rents or mortgage interest
At least ninety five percent of a real estate investment trust gross income must come from financial investments in other words it must pass the ninety fivepercent income test. These include rents dividends interest and capital gains. In addition at least seventy five percent of its income must come from certain real estate sources the seventy five percent income test including rents from real property gains from the sale or other disposition of real property and income and gain derived from foreclosure of property.
This article was written by Robert Shumake CEO of Inheritance Capital Group LLC and founder of http://reitbuyer.com/ an online service for people who wish to invest in real estate without the headaches and liability exposure that go with being a landlord. Visit Roberts website to learn more about Real Estate Investment Trust.
About the writer: Robert Shumakes mission is to inform the public about mortgage fraud and real estate scams and to provide tips on how to avoid being a victim. Sometimes people will commit identity theft to obtain a housing loan sell someone elses house or take over someone elses property; says Shumake. It is my goal to inform the public on how to protect themselves from being victims of this crime.;