A Simple Means of Financing - Bad Credit New Auto Loans

By Roman Pearce

Having bad credit doesn’t mean that the person can’t procure funds from the financial market for buying his desired new automobile? Rather, he can also avail loan for purchasing his new automobile despite of his bad credit score. This financial support is provided by the financial market by means of bad credit new auto loans.

Bad credit new auto loans assist the borrower in purchasing a new automobile with out any hassles. In order to know about bad credit new auto loans in a better way, let’s discuss its features:

• Bad credit new auto loans are especially targeted to such borrowers who have being denied for finance in the financial market just of the reason for their bad credit score.

• It assists the borrower in becoming an automobile owner without any hurdles.

• It carries competitive rates but is higher than other initial new auto loans in the financial market.

• In bad credit new auto loans, the credit score of the borrower doesn’t matter.

• Like, other initial loans in the market bad credit new auto loans can be availed in two ways – secured bad credit new auto loans and unsecured bad credit new auto loans.

• Secured form is meant for those borrowers who have asset to place it as collateral against the loan amount. It is also seen that more is the equity in the collateral placed, better and low rates are offered to the borrower. And, along that it also carries a risk on the asset which only arises when the borrower misses any repayments. Otherwise it is safe mode to procure finance from the market. Here, collateral can be house, land, valuable bank papers and sometimes an automobile itself is kept as collateral against the loan amount.

• On the other hand, unsecured form is being designed to meet the needs of all the tenants and also those asset holders who are not ready to place collateral against the loan amount. It carries comparatively high rates but is competitive in the market. The reason of its popularity in the market is that it doesn’t carry risk on the asset.

• There are two types of interest rate which are being offered in the bad credit new auto loan. They are fixed rate of interest and flexible rate of interest. Fixed rate of interest is that type, which do not fluctuate with the market forces or any other factors. On the other hand, in flexible rate of interest, the rate fluctuates with a change in the market forces and various other external factors.

These are some of the points which the person is needed to know, while availing bad credit new auto loans.

Roman Pearce is solving several issues involved in auto loans through his articles. An MSc in Economics & Finance from the Warwick Business School is proof enough of the knowledge that he possesses in the field of finance. For further information of Auto loans, Bad credit new auto loans, Auto financing, New auto loans, Used auto loans, Bad credit auto financing, Luxury auto loans visit http://www.universalautoloans.com

Mortgage funds carrying too much risk

MORTGAGES are not only causing property buyers pain but investors in mortgage securities are also under the hammer.

According to a new report by Managed Investment Assessments, most mortgage funds which are available to the public carry too much risk.

Of the 50 mortgage funds included in its research, 70 per cent did not meet MIA's risk-for-return standards.

Only 15 funds offered an acceptable match between the risk being taken and the return being offered, according to the report.

Most of the highest risk mortgage funds were involved with property developments, construction debt, high loan-to-value ratios or mezzanine debt.

The returns being offered by these products were typically 55 to 70 per cent above the 12 month cash rate, the report said. However, in 23 out of 25 funds this was still not enough to compensate for the high risk involved.

MIA director Kate Gymer said investors in the funds also needed to consider the overall outlook for the property market.

"We remain long overdue for a correction in property values and we have retained our view from last year that this is likely to occur towards or at the end of this decade," Ms Gymer said.

"As with the previous property downturns over the past 150 years, it is expected that this one will occur in the aftermath of a fall in the stock markets of the major western economies."

This means that mortgage fund managers have ample time to plan for a general decline in property asset values, she said.

The research follows the latest ratings for Australian residential mortgaged-backed securities by Standard & Poors.

Although S&P found good news overall, with the number of arrears for prime mortgages falling slightly in the past month, there was an increase in arrears for sub-prime mortgages.

Sub-prime loans are characterised as being to people who would not qualify for a loan from one of the traditional lenders, loans that do not have mortgage insurance and loans to people with a poor credit history.

Because the borrower is considered sub prime, lenders charge a higher interest rate to make up for possible default on the loan.

The number of late payments being received for sub-prime mortgage-backed securities increased to 11.53 per cent, the third monthly rise in a row.

The uncertainty surrounding mortgage investments also comes amid bad news contained in the latest housing affordability statistics released by the Real Estate Institute of Australia and Deposit Power.

Housing affordability - or unaffordability - has turned in its worst result for more than 25 years with the exception only of the property slump in 1989-1990.

The increasing strain on household budgets to keep up repayments is also adding to concern about the attractiveness of mortgaged-backed investments and funds.

Australian households now need more than a third of their total combined income, 33.8 per cent, to meet repayments for the average home loan.

This latest REIA affordability survey was also taken before the last official interest rate rise,

Article source http://www.news.com.au