Money Management – Theme Killer http://themekiller.me/ Tue, 18 May 2021 07:14:55 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 http://themekiller.me/wp-content/uploads/2021/04/default.png Money Management – Theme Killer http://themekiller.me/ 32 32 Heidi Cruz campaigns to show the softer side of hubby Ted Cruz http://themekiller.me/heidi-cruz-campaigns-to-show-the-softer-side-of-hubby-ted-cruz/ Wed, 07 Apr 2021 23:15:31 +0000 http://themekiller.me/heidi-cruz-campaigns-to-show-the-softer-side-of-hubby-ted-cruz/ Texas Senator Ted Cruz is known to be one of most hated men in Washington. As he tries to convince voters, his wife Heidi Cruz tries to vouch for his character and show people that he has a softer side. During one of his deemed long In Senate speeches in 2013, Cruz spoke of a […]]]>

Texas Senator Ted Cruz is known to be one of most hated men in Washington. As he tries to convince voters, his wife Heidi Cruz tries to vouch for his character and show people that he has a softer side.

During one of his deemed long In Senate speeches in 2013, Cruz spoke of a time when his wife was going on a business trip and found herself in a car wreck on the way to the airport. He said she got on the plane anyway, not realizing until hours later that she had a concussion and a broken bone.

Cruz said that he had told his wife that he wanted her to call him right away, but that he had expressed his admiration for his strength.

“You know it’s the virtue of marrying strong women who know what they want and are able to take on the world,” said Cruz.

During the election campaign, Cruz also praises his wife’s more traditional virtues.

“She’s a phenomenal mom to our two little daughters, Caroline and Catherine, who are the joys of our lives,” he said. “And she’s my best friend all over the world.”

The Cruzes often mark their team for the campaign stops, like a restaurant in Keokuk, Iowa, in October.

Heidi Cruz told the crowd that she thought the media was “afraid of dying” of her husband – but that she really knew him.

“Ted is incredibly sincere and caring. And I want you to know as his wife, someone who knows him better than anyone, he is also like home, ”she said.

She describes her husband as someone who never forgets an anniversary and enjoys reading stories with their daughters. The couple met while working on the George W. Bush campaign in 2000. Heidi Cruz often says it was “love at first sight”, and that she was drawn to her strong beliefs – in Bible and the Constitution.

“In his late twenties, Ted knew what he believed – and what he believed then and what he did then was exactly the same thing he believes now and does now,” a- she declared.

Behind the scenes, Heidi Cruz has been raising funds for her husband for months. She took time off from investment firm Goldman Sachs to work on the campaign.

This link has been a source of criticism for Ted Cruz, who was elected to the Senate in 2012 as a Tea Party Conservative and critic of the Federal Wall Street bailout.

the intensified examination after discovering that Cruz had used loans from Goldman Sachs and Citibank to finance this campaign. In an interview, Heidi Cruz said she saw no contradiction.

“Ted and I were both against bailouts, but not against Wall Street, nor against any industry,” she said. “We are against government intervention in industries in this economy.”

Given her husband’s reputation for alienating even her Republican colleagues, Heidi Cruz is often asked about her personality. She says it doesn’t matter what the people of Washington think because he’s popular with Conservative voters.

But it’s not just Washington. Some of Cruz’s former classmates, including one college roommate, have come forward for Describe the as “abrasive”, “arrogant” and even “scary”. Heidi Cruz suggests that the problem is with her husband’s criticism.

“We all went to college; we all found our circle of friends and some people we got along with better than others, ”she said. “Ted is outspoken; he’s a principled person. Even as a teenager, he was a person who didn’t look around the room just to be popular. And to people who do, they might find it unpleasant that he stick to guns. “

At campaign stops, voters seem to find Heidi Cruz sympathetic. Algona’s Bobbie Clark in Emmetsburg, Iowa on Friday said she already imagines him as the country’s first lady.

“She’s just alive and vibrant and mean smart.” Clark said. “I mean you should be married to Ted.”

Or maybe, as some supporters have said, be married to Heidi Cruz.

Copyright 2020 NPR. To learn more, visit https://www.npr.org.

HOST SCOTT SIMON:

Senator Ted Cruz is not a quiet guy. He is a fierce debater and a skillful paul (ph) who is often more admired than loved. As he tries to convince voters in Iowa, there is one person trying to show people that he has a softer side – his wife, Heidi Cruz, who spoke to NPR’s Sarah McCammon during the election campaign in Iowa.

SARAH MCCAMMON, BYLINE: Heidi Cruz is a successful businesswoman with an MBA from Harvard. And her husband, Ted Cruz, is clearly proud of it. During one of his long speeches in the Senate in 2013, Cruz told a story about a time when his wife was going on a business trip.

(SOUND PRESENTATION OF THE ARCHIVED RECORDING)

TED CRUZ: My wife, Heidi, was taking a car to the airport and the car got hit.

MCCAMMON: Anyway, she got on the plane, not realizing until a few hours later that she had a concussion and a broken bone.

(SOUND PRESENTATION OF THE ARCHIVED RECORDING)

TED CRUZ: I certainly urged if this happens to my wife again, honey, please let me know when it happens and not 12-14 hours later. But, you know, it’s the virtue of marrying strong women who know what they want and are able to take on the world.

MCCAMMON: On the campaign trail, the Texas senator also touts his wife’s more traditional virtues and talks about how grateful he is to her for marrying her.

(SOUND PRESENTATION OF THE ARCHIVED RECORDING)

TED CRUZ: She’s a phenomenal mom to our two little daughters, Caroline and Catherine, who are the joys of our lives. She has exceptionally poor eyesight.

(TO LAUGH)

MCCAMMON: Cruz’s team often tagged during campaign stops, such as a restaurant in Keokuk, Iowa, in October. Heidi Cruz told the crowd that she thought the media was afraid of her husband, but that she really knew him.

(SOUND PRESENTATION OF THE ARCHIVED RECORDING)

HEIDI CRUZ: Ted is incredibly sincere and caring. And I want you to know as his wife, someone who knows him better than anyone, he’s like that at home too.

MCCAMMON: She describes him as someone who never forgets a birthday and enjoys reading stories with their daughters. The couple met while working on the George W. Bush campaign in 2000. Heidi Cruz often says it was love at first sight and that she was drawn to her strong belief in the Bible and the Constitution. .

HEIDI CRUZ: In his late twenties, Ted knew what he believed and what he believed in and what he was doing then is exactly the same thing he believes now and does now.

(APPLAUSE)

MCCAMMON: Behind the scenes, Heidi Cruz has been actively fundraising for her husband for months. She took time off from investment firm Goldman Sachs to work on the campaign. This link has been a source of criticism for Ted Cruz, who was elected to the Senate in 2012 as a Tea Party Conservative and critic of the Federal Wall Street bailout. The scrutiny intensified after IT discovered that Cruz had used loans from Goldman Sachs and Citibank to fund this campaign. In an interview, Heidi Cruz said she saw no contradiction.

HEIDI CRUZ: Ted and I were both against bailouts, but not against Wall Street, nor against any industry. We are against government intervention in industries of this economy.

MCCAMMON: Given Ted Cruz’s reputation for alienating even his fellow Republicans, Heidi Cruz is often asked about her husband’s personality. And she says it doesn’t matter what the people of Washington think because he’s popular with Tory voters. But it’s not just Washington. Some of Cruz’s former classmates, including a college roommate, have come forward to describe him as abrasive, arrogant, and even scary. Heidi Cruz suggests that the problem is with her husband’s criticism.

HEIDI CRUZ: We all went to college. We all found our circle of friends and some people we got along with better than others. Even as a teenager, he was a person who didn’t look around the room just to be popular. And to the people who do, they might find it unpleasant that he’s going to stick to his guns.

MCCAMMON: At campaign stops, voters seem to find Heidi Cruz sympathetic. In Emmetsburg, Iowa, yesterday Bobbie Clark said she already imagines him as the country’s first lady.

BOBBIE CLARK: She’s just alive and vibrant and mean smart (laughs). I mean, you should be married to Ted.

MCCAMMON: Or maybe, some supporters have said, be married to Heidi. Sarah McCammon, NPR News. Transcript provided by NPR, Copyright NPR.

]]>
ZAIM Credit Systems PLC Secures Additional Debt Financing To Expand Loan Portfolio http://themekiller.me/zaim-credit-systems-plc-secures-additional-debt-financing-to-expand-loan-portfolio/ Wed, 07 Apr 2021 23:15:31 +0000 http://themekiller.me/zaim-credit-systems-plc-secures-additional-debt-financing-to-expand-loan-portfolio/ The company said part of the £ 0.5million loan deal will be earmarked for “certain potentially high impact business development activities”. ZAIM Credit Systems PLC () said its subsidiary Zaim Express LLC has entered into a loan agreement for an additional 50 million Russian rubles (£ 0.5 million) with a term of 1.5 years and […]]]>

The company said part of the £ 0.5million loan deal will be earmarked for “certain potentially high impact business development activities”.

ZAIM Credit Systems PLC () said its subsidiary Zaim Express LLC has entered into a loan agreement for an additional 50 million Russian rubles (£ 0.5 million) with a term of 1.5 years and a rate of 15% annual interest payable monthly.

The fintech company, which focuses on providing financing to consumers underserved by traditional lenders, said the funds will be used to increase its portfolio of active loans by funding its online operations, while a smaller part will be reserved for certain potentially high-impact business developments. Activities.

READ: Zaim Credit increases online lending by 250% in last quarter of 2020

ZAIM said that with interest rates structurally higher in Russia than in Western Europe, the 15% annual interest rate is considered “reasonable” for an unsecured loan portfolio facility and the equivalent monthly rate. of approximately 1.2% for this additional loan agreement “compared favorable” to the current returns generated by its lending activities and is expected to have a “significant impact” on its financial performance at a critical time.

The company also said it ended 2020 with a “strong performance” which continued through 2021.

“We are pleased to see that our business, especially its online segment, is growing beyond our expectations. As such, we have found that we have had to restrict the supply of loans to new clients – this additional facility will help us fund some of that additional demand. We are pleased with the support from our existing banking provider, which adds further validation to our business model, ”said Siro Cicconi, CEO of ZAIM, in a statement.

ZAIM shares were flat at 3.8 pence when first traded on Tuesday.

]]>
CBI registers DHFL on fake accounts created in PMAY http://themekiller.me/cbi-registers-dhfl-on-fake-accounts-created-in-pmay/ Wed, 07 Apr 2021 23:15:31 +0000 http://themekiller.me/cbi-registers-dhfl-on-fake-accounts-created-in-pmay/ The Central Bureau of Investigation (CBI) has filed a complaint against Dewan Housing Finance Corporation Ltd (DHFL), its developers Kapil Wadhawan and Dheeraj Wadhawan, and unknown officials for siphoning off several thousand crore rupees on behalf of the Pradhan Mantri Awas Yojana (PMAY) by setting up fake home loan accounts and claiming an interest subsidy. […]]]>

The Central Bureau of Investigation (CBI) has filed a complaint against Dewan Housing Finance Corporation Ltd (DHFL), its developers Kapil Wadhawan and Dheeraj Wadhawan, and unknown officials for siphoning off several thousand crore rupees on behalf of the Pradhan Mantri Awas Yojana (PMAY) by setting up fake home loan accounts and claiming an interest subsidy.

The agency alleged that the DHFL, already facing multiple investigations from various agencies, created 260,000 fake mortgage accounts under the PMAY for loans totaling 14,046 crore, which he routed 11,755.75 crore to “several shell companies known as Bandra Book Firms”.

DHFL subsequently requested an interest subsidy of 1,887 crore from the Center on loans disbursed under PMAY.

PMAY, managed by the Ministry of Housing, was launched in October 2015. Loans are provided under the program to economically weaker sections for the purchase of land and construction of houses, housing development under the slum development programs and the purchase of housing from public and private housing companies. The loans are eligible for a credit related interest subsidy, which ranges from 3% to 6.5% per annum.

The maximum loan amount eligible under the program is 24 lakh. The subsidy is payable in advance with a ceiling of 230,156 to 267,280 according to the category in which the borrower belongs. The subsidy is claimed by the financing institutions from the National Housing Bank, which is reimbursed by the Center.

According to the First Information Report (FIR) recorded by CBI on March 15, DHFL was one of the housing finance companies that had been granted loans under the PMAY. The company, during a call with institutional investors, claimed that until December 2018, it had handled 88,651 cases under PMAY for which it had received 539.40 crore interest subsidy and must receive an interest subsidy of 1,347.80 crore from the Indian government, according to CBI.

A forensic audit by Grant Thornton (GT) found that DHFL developers had opened a fictitious Bandra branch of DHFL, where fake home loan accounts of those borrowers, who had paid off their home loans earlier, were created in the database.

“A total of 2.6 lakh fake and fictitious home loan accounts were created in the non-existent Bandra branch between 2007 and 2019 for a total loan amount of 14,046 crore, of which 11,755.79 crore was deposited / piped to several shell companies known as Bandra Book Firms, ”CBI said in the FIR citing the forensic audit report.

The scammed financial company has been under the control of the Reserve Bank of India via an administrator since November 2019, after its multiple irregularities were exposed.

The CBI and the Directorate of Enforcement (ED) filed charges against DHFL promoters last year for Rana Kapoor’s 600 crore bribe after Yes Bank investment 3,700 crore short-term DHFL debentures between April and June 2018.

The agencies claimed that the DHFL never reimbursed the 3700 crore.

To subscribe to Mint newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story! Stay connected and informed with Mint. Download our app now !!

]]>
Chain O ‘Lakes boat dealers see high demand, supply shortage as pandemic purchasing continues http://themekiller.me/chain-o-lakes-boat-dealers-see-high-demand-supply-shortage-as-pandemic-purchasing-continues/ Wed, 07 Apr 2021 23:15:30 +0000 http://themekiller.me/chain-o-lakes-boat-dealers-see-high-demand-supply-shortage-as-pandemic-purchasing-continues/ Boat merchants in and near Lake and McHenry counties had a huge year in 2020, with people refraining from travel and rushing to outdoor activities as the COVID-19 pandemic limited entertainment options. Even as public health restrictions eased in northern Illinois in the first months of 2021, the surge in interest in buying boats has […]]]>

Boat merchants in and near Lake and McHenry counties had a huge year in 2020, with people refraining from travel and rushing to outdoor activities as the COVID-19 pandemic limited entertainment options.

Even as public health restrictions eased in northern Illinois in the first months of 2021, the surge in interest in buying boats has not abated, chiefs said. local businesses.

In fact, this year could end up being even better for boat sales on Chain O ‘Lakes,’ they said.

“What we are seeing so far are almost higher numbers than last year. So far, from what we are seeing, the season is going fantastic,” said Patrick Short, owner of the Five Star Boat Center and Marina at Fox Lake.

But those looking to get a new vessel to use this summer may already be unlucky, as area dealers see back orders for popular models pushing delivery dates back until fall, especially for larger ones. boats.

Boat showrooms in the area were unable to restock quickly enough to meet demand as manufacturers struggled to secure enough parts to build more boats, dealers said. local.

“Our manufacturers are struggling to keep up with the coming volume,” Short said.

Due to the shortage of supply, manufacturers raised their prices and subsequently the profit margin per unit tightened a little more than normal at Fox Lake Harbor, but overall the bottom line increases with increasing sales volume, co-owner Warren Dit Moulis.

“We’ve been here since 1952. We’ve never run out of boats before – until now,” said Moulis.

It’s not just the new boats that are absorbed almost instantly once they hit the market. Used boats are leaving dealerships just as quickly.

“Used boats, we normally have 75 in stock. We currently have three. Used boats are also very hard to find,” Moulis said on Thursday.

Gordy’s Marine, a boat dealer with multiple locations in northern Illinois and Wisconsin including Fox Lake, also tried to get customers to resell their used boats to the dealer to help meet demand, said Jim Kelsey, a sales rep for Gordy.

“We have some great customers who have multiple boats, they’ve been willing to drop one and order a new one for fall or next season,” Kelsey said.

The increase in demand has been driven by people new to boating wanting to try it out and experienced boat owners willing to upgrade or supplement their fleets, local dealers have said.

Another difference between the boating industry during the pandemic and years past is the greater number of cash purchases that local dealerships were dealing with recently. People are choosing to forgo financing their boats more often this year and instead buy the boats properly.

Kelsey also said that customers who still use loans to buy boats are also making larger down payments than usual, and he attributed this, in part, to cuts in vacation and travel budgets in the midst of the pandemic.

“We find that they are willing to invest more money to get a slightly better interest rate or something,” he said.

Gordy’s Marine has also felt a greater desire to join his yacht club, which gives people access to boats they can use for a monthly fee without outright owning them, Kelsey said.

“A lot of families are realizing how accessible it really is, even with inventory shortages and all that. There are more ways to try boating and get in the water between rentals, yacht clubs and property, ”Kelsey said.

Short, the owner of the Five Star Boats Center, said he expects strong demand for boats to persist until next year, given the current pace of vessel manufacturing.

As the boating industry has been bolstered by the public health crisis, local dealers have recognized that their recent economic fortunes coincided with a heavy toll for many others who have taken not only jobs but also lives.

“COVID-19 has helped us, and you hate to say that with so many people who are suffering,” Moulis said.

]]> 2020 ends with 3.4 million loans in arrears http://themekiller.me/2020-ends-with-3-4-million-loans-in-arrears/ Wed, 07 Apr 2021 23:15:30 +0000 http://themekiller.me/2020-ends-with-3-4-million-loans-in-arrears/ The final delinquency tally for December is underway, with data showing that at the end of the year 1.54 million more overdue mortgages and 1.7 million more overdue mortgages were reported from early 2020, according to a report by Black Knight. With nearly 2 million more overdue loans in the pipeline, or about 3.4 million […]]]>

The final delinquency tally for December is underway, with data showing that at the end of the year 1.54 million more overdue mortgages and 1.7 million more overdue mortgages were reported from early 2020, according to a report by Black Knight. With nearly 2 million more overdue loans in the pipeline, or about 3.4 million total loans at the end of December.

Overall, the data analytics company estimates a more than 250% increase in default 90-day activity year over year.

Despite this massive jump from previous years, the national delinquency rate managed to show a slight improvement in December – falling for the seventh consecutive month to 6.08%, and the lowest level since April.

Serious defaults also fell to 2.15 million from 2.19 million the previous month, but remained an imminent reminder of the challenges facing the market in 2021, Black Knight said.

Meanwhile, federal policy on tolerances and moratoriums on foreclosures have pushed housing starts and sales to record levels. Year-over-year housing starts fell 67% in 2020, and with just 40,000 completions, the year also saw a 70% drop in foreclosure sales from 2019.

However, Andy Walden, director of market research at Black Knight, said there is still a lot of unknowns when it comes to the cascading policies homeowners are currently protecting themselves with.

In President Biden’s On January 14, the American Rescue Plan proposed an extension of the federal moratorium on evictions until September 30. On the first day of his tenure, Wednesday, Biden signed an executive order that would push the moratorium. at least March 30, and Thursday, the Department of Housing and Urban Development confirmed extension.

“This is something that will have to be sorted out at some point. The advantage of having foreclosure moratoriums extend beyond forbearance protections is that there are 2.7 million homeowners in forborne right now and there are a huge unknown in the percentage of those owners who are able to return to performance, ”said Walden.

By making these foreclosure protections extend beyond forbearance, Walden noted that it will be easier to track and understand the data coming from these forbearance expirations – whether it is of loans going through various waterfalls, how many are back on track, how many need to be changed and so on.

“More data aligns with more policy decisions,” Walden said.

The end of tolerance is not yet in sight. the FHFA has not currently set an end date for its COVID-19 temporary abstention policy, and the FHA announced on December 21 that he was extend its deadline for single-family borrowers to apply for initial forbearance until February 28.

Biden’s bailout includes an extension of initial forbearance requests until September 30, but the proposed extension has yet to be passed.

]]>
A plan to pay off student loans for Connecticut College graduates who stay in the state http://themekiller.me/a-plan-to-pay-off-student-loans-for-connecticut-college-graduates-who-stay-in-the-state/ Wed, 07 Apr 2021 23:15:30 +0000 http://themekiller.me/a-plan-to-pay-off-student-loans-for-connecticut-college-graduates-who-stay-in-the-state/ Helping college graduates pay off student loans could be a response to Connecticut’s slowing population loss and rising state tax revenues, according to State Senator Kevin Witkos, R-Canton, Member rank of the committee for the promotion of higher education and employment of the legislature. . “We have continually invested in the brick and mortar of […]]]>

Helping college graduates pay off student loans could be a response to Connecticut’s slowing population loss and rising state tax revenues, according to State Senator Kevin Witkos, R-Canton, Member rank of the committee for the promotion of higher education and employment of the legislature. .

“We have continually invested in the brick and mortar of our state institutions, it is time we supported the brains and bodies of the people who use buildings,” Witkos said in an interview with CT Examiner.

The legislation, called “Learn-Work-Pay,” would help any Connecticut resident who attends one of the state’s public universities and then stays in Connecticut after graduation to pay off their student loans. During the ten years following graduation, the state would agree to pay an increasing share of the amount borrowed, starting at 10 percent and ending at 90 percent.

“By then, graduates will be living in our state for ten years, contributing to the tax base and likely staying in the state to raise their families for years,” Witkos said.

In the last census, Connecticut was one of 10 states to lose population in the previous decade.

In a previous effort, in 2019, the legislature attempted to get more young people to stay in the state by offering a tax credit for graduates of higher education institutions and private vocational schools within the state. But Witkos said tax credits just don’t resonate the same with college graduates as hard dollars.

Unlike tax credits, the Learn-Work-Pay program would directly tackle the issue of student debt and provide graduates with a real incentive, Witkos said.

“The driving force behind the bill is to keep people in Connecticut, but we hope to alleviate the debt problem that many young people are facing,” Witkos said.

The bill already enjoys strong bipartisan support, but faces a challenge from private colleges and universities pushing to be included.

“Private and independent schools ask, ‘Why are they excluded?’ But it’s not a question of exclusion, it’s a question of success, ”said Witkos. “We can’t bite more than we can chew, so we should start slowly with the schools the state pays for. We can always extend it to higher degrees and private schools later. ”

The program would be financed by a general fund credit. The Office of Tax Analysis is currently evaluating the cost.

]]>
Student loan forgiveness may come with a state tax bomb http://themekiller.me/student-loan-forgiveness-may-come-with-a-state-tax-bomb/ Wed, 07 Apr 2021 23:15:30 +0000 http://themekiller.me/student-loan-forgiveness-may-come-with-a-state-tax-bomb/ Although the American Rescue Plan Act of 2021 changed the federal tax treatment of the student loan forgiveness until December 31, 2025, making it tax-free, the student loan forgiveness may be taxable in up to 19 states. . The student loan forgiveness is tax-free on federal income tax returns until December 31, 2025, but … […]]]>

Although the American Rescue Plan Act of 2021 changed the federal tax treatment of the student loan forgiveness until December 31, 2025, making it tax-free, the student loan forgiveness may be taxable in up to 19 states. .

According to a review of state tax rules posted on the College Investor website, Student loan forgiveness tax-free in 31 states. This includes 11 states with no income tax and 20 states that automatically comply with changes to the Internal Revenue Code of 1986.

The student loan forgiveness may be taxable in the remaining 19 states. Some of these states comply with federal tax rules, using the federal definition of adjusted gross income (AGI) or taxable income, but only on a specific date. Others use their own definition of income. All of these states will need to pass laws to exclude student loan debt forgiveness from income.

Otherwise, the debt cancellation is treated as income for the borrower. It is as if someone is providing the borrower with money to pay off their debt.

These states already have a patchwork of laws that tax certain types of student loan forgiveness. For example, Pennsylvania taxes the public service loan rebate and the teacher loan rebate. Virginia excludes disability leave from income, but only for veterans. Virginia’s income exclusion for bereavement leave only applies to federal student loans, not private student loans or parent loans.

The rules for each state are also a bit hazy. Typically, states start with the federal definition of income, but change it through a long list of additions and subtractions. But the treatment of the forgiveness of student loans is not entirely clear. None of the states provide a list of taxable loan forgiveness types and those that are not. Even the state revenue code does not always provide clarity.

]]>
The three year old bomb under that house you just bought http://themekiller.me/the-three-year-old-bomb-under-that-house-you-just-bought/ Wed, 07 Apr 2021 23:15:30 +0000 http://themekiller.me/the-three-year-old-bomb-under-that-house-you-just-bought/ As we know, the Reserve Bank pandemic discount sale is having a wild effect on the housing market, but what is less known is that it is a bomb that will explode in three years. In addition to cutting the cash rate to 0.1 percent, the RBA is providing virtually unlimited three-year funding to banks, […]]]>

As we know, the Reserve Bank pandemic discount sale is having a wild effect on the housing market, but what is less known is that it is a bomb that will explode in three years.

In addition to cutting the cash rate to 0.1 percent, the RBA is providing virtually unlimited three-year funding to banks, also at 0.1 percent. This is called the “Term Finance Facility” (TFF).

The TFF is due to end in June, but JobKeeper’s end on Sunday could see it extended if, as expected, 150,000 people lose their jobs on Monday.

The RBA says it is trying to produce a tight labor market, but the government is shrinking it.

Right now the banks are using a lot of money for three years at almost zero interest.

The only challenge is to get the money out as quickly as possible and make a profit over three years.

As a result, three-year fixed mortgage rates have collapsed, which is the main driver of the current spike in house prices.

Record rates

In just over 10 years, the three-year average fixed rate has fallen from 1.5 percent above the average variable rate to 1.5 percent below.

The share of new fixed mortgage loans rose from 5% to 35%, a far record.

This means that in three years a huge housing debt will be refinanced, either at the current variable rate or at a new fixed rate.

This is also when the RBA says interest rates will be increased afterwards. Indeed, the RBA removed the pin from a slow grenade.

For now, however, these are happy days.

While total housing debt has increased from 120% to 140% of disposable income over the past 10 years, repayments have halved from 10% to 5% of income.

But the aggregate statistics, which are now a few months old, don’t quite reflect what is happening with auctions across the country after the latest round of fixed mortgage rate cuts by banks.

A three-year fixed rate mortgage now costs 1.89% interest from Westpac, the lowest of the big banks. Smaller, more aggressive banks charge even less.

This means that a family with a total after-tax income of $ 100,000 per year, or $ 8,333 per month, can afford a mortgage of $ 700,000 while keeping repayments at 30% of take-home pay, as recommended. .

Ten years ago, when the average three-year fixed rate mortgage was 7%. 100, the same couple could only borrow $ 350,000.

In other words, their purchasing power has doubled in a decade.

What is a house worth?

For most people without a solid inheritance, the only way to build wealth, or financial security at all, is to buy a home, so it’s the super second home first, as Tim Wilson recommends, the federal deputy for Goldstein.

But what should you pay for a house? Well, it’s both imprecise and liberating.

Super funds value the assets they buy using proven and reliable arithmetic: you estimate future cash flows – profit for a business or lease a commercial property – and calculate the present value of that.

A simplified way to do this is to take that year’s profit or rent and pay a certain multiple of it, depending on its security or rapid growth.

The long-term average in the sharing market is around 15 times the profit for the current year, although it is higher than that at the moment, and it is around 20 to 25 times for commercial real estate. .

But the house in which you are going to raise a family? The only arithmetic available to value this asset is what you can afford, so it’s what everyone else is using.

In other words: residential property is fully valued based on mortgage payments versus after-tax income.

Investors also use this method because they plan to sell to someone who will be living there, so the same valuation method applies.

This means that the value of residential housing is simply the inverse of interest rates, nothing more, and now that interest rates are microscopic, their converse can be gigantic.

On Thursday we find out what happened with house prices in March and loans in February. It is likely to be big.

In February, the national average price rose 2.1 percent; it could be double in March. In January, home loans increased 10.5% in a month and 44% in a year to a record high of $ 29 billion. It will likely be even higher in February.

And somewhere between a third and a half of those loans will need to be refinanced in three years, around the time the RBA says it will raise interest rates.

Tick, tick, tick …

Alan Kohler writes for The new daily twice a week. He is editor-in-chief of Eureka Report and financial presenter on ABC News

]]>
Reserve Bank of Australia leaves interest rates on hold for April 2021, borrowers expect early hike http://themekiller.me/reserve-bank-of-australia-leaves-interest-rates-on-hold-for-april-2021-borrowers-expect-early-hike/ Wed, 07 Apr 2021 23:15:30 +0000 http://themekiller.me/reserve-bank-of-australia-leaves-interest-rates-on-hold-for-april-2021-borrowers-expect-early-hike/ Why a time bomb is spinning for a million home borrowers despite promises that interest rates will stay the same until 2024 Reserve Bank of Australia again suspended interest rates at 0.1% Gov. Philip Lowe said RBA would monitor ‘rising house prices’ Canstar survey shows Australians expect interest rates to rise before 2024 Over a […]]]>

Why a time bomb is spinning for a million home borrowers despite promises that interest rates will stay the same until 2024

  • Reserve Bank of Australia again suspended interest rates at 0.1%
  • Gov. Philip Lowe said RBA would monitor ‘rising house prices’
  • Canstar survey shows Australians expect interest rates to rise before 2024
  • Over a million home borrowers have never faced rising interest rates

Historically low interest rates are a time bomb for a million home borrowers, as mortgage costs will rise well before 2024.

The Reserve Bank of Australia left the cash rate on hold at an all-time high of 0.1% on Tuesday, but Governor Philip Lowe acknowledged the rapid rise in house prices was a concern.

“Given the environment of rising house prices and low interest rates, the bank will carefully monitor trends in mortgage lending and it is important that lending standards are maintained,” he said. declared.

Since the end of last year, the RBA has repeatedly promised to leave them there until at least 2024, with the aim of reducing unemployment and pushing up inflation.

Record interest rates are a time bomb for a million home borrowers, as mortgage costs rise well before 2024. Pictured is an auction in Sydney

House prices are rising everywhere

Sydney: Up 4.3% to $ 1,112,671

Melbourne: Up 2.6% to $ 859,097

Brisbane: Up 2.6% to $ 607,969

Adelaide: Up 1.6% to $ 518,692

Perth: Up 1.8% to $ 527,833

Hobart: Up 3% to $ 584,974

Darwin: Up 1.9% to $ 519,575

Canberra: Up 3.3% to $ 819,707

Source: CoreLogic Home Value Index for March 2021 on Median Home Prices

The Reserve Bank has not raised interest rates since November 2010, over ten years ago.

During that time, 1,005,661 first-time homebuyers bought a house or apartment to live in, RateCity calculated.

RateCity research director Sally Tindall said fixed-rate borrowers were particularly at risk three years from now.

“It’s amazing to think that there are over a million homeowners who have never experienced a cash rate hike,” she said.

“ The problem is that some people who are fighting tooth and nail to enter the real estate market today have not thought about whether they can honor the repayments in three or four years, ” he said. she declared.

“Fixed loans in a rising interest rate market can be a great tool to help people budget – until the music stops.

House prices may fall again, even without a rate hike, with a bank regulator crackdown on investor and interest loans only in 2017, causing a two-year real estate slowdown.

Three of Australia’s big four banks offer fixed mortgage rates below 2%.

Even though the Reserve Bank kept its promises to leave rates on hold for three years, 40% of adults polled by financial comparison group Canstar expected lenders to raise mortgage rates before 2024.

The Reserve Bank of Australia left the cash rate on hold at a record 0.1% on Tuesday, but Governor Philip Lowe acknowledged the rapid rise in house prices was a concern

The Reserve Bank of Australia left the cash rate on hold at a record 0.1% on Tuesday, but Governor Philip Lowe acknowledged the rapid rise in house prices was a concern

A third of respondents expected the Reserve Bank to hike rates before 2024 to slow runaway property price growth, with CoreLogic data from March showing home prices in Australia had jumped at the monthly rate on faster since October 1988.

Steve Mickenbecker, group director of financial services at Canstar, said the Reserve Bank or the Australian Prudential Regulation Authority, the banking regulator, should act sooner to stop a possible house price bubble.

“The pressure will start to rely on the Reserve Bank and financial regulators to step in if we don’t see the real estate market starting to slow down in the coming months,” he said.

The Canstar poll of 980 people found Australians optimistic about the economic recovery from Covid, with 42% predicting sufficient growth by 2024.

Nearly half of Australia expect interest rates to rise before 2024 to stop a house price bubble, a survey shows.  Pictured is a house in Glenelg in Adelaide

Nearly half of Australia expect interest rates to rise before 2024 to stop a house price bubble, a survey shows. Pictured is a house in Glenelg in Adelaide

Publicity

]]>
Illinois Lawmakers Must Support, Not Hurt Small Business http://themekiller.me/illinois-lawmakers-must-support-not-hurt-small-business/ Wed, 07 Apr 2021 23:15:30 +0000 http://themekiller.me/illinois-lawmakers-must-support-not-hurt-small-business/ Local breweries have become a cultural staple in Illinois communities. Their presence and growth can help revitalize neighborhoods and downtowns by attracting new customers who then support other small businesses. For downtown Springfield, that was our hope when we opened Buzz Bomb Brewing in 2018. Unfortunately, the pandemic made that goal impossible as it became […]]]>

Local breweries have become a cultural staple in Illinois communities. Their presence and growth can help revitalize neighborhoods and downtowns by attracting new customers who then support other small businesses. For downtown Springfield, that was our hope when we opened Buzz Bomb Brewing in 2018. Unfortunately, the pandemic made that goal impossible as it became difficult for our small business to simply survive.

Over the past twelve months, our sales have fallen while some costs related to property taxes and customer and employee security have remained stable or increased. These financial strains have become commonplace for the state’s breweries, distilleries and wineries, all of which continue to struggle. While we have been fortunate to receive assistance in the form of Disaster Loans and the Federal Paycheck Protection Program as well as incredible support from the community and other local businesses, it will be a long path to recovery.

]]>