Over the last 12 to 18 months the banking world has been turned upside down by the global financial crisis. As a rule, banks obtain the money from a variety of sources and then lend that money to their customers at a higher rate than what they have paid for it. This is how a bank makes money.
A large part of the bank's resources comes from their deposit accounts. Things like everyday transaction accounts, term deposits and other investment accounts. They also borrow money from the Reserve Bank, and they have access to money from other banks, both at home and around the world.
As a rule of thumb, it is the cost of money from the Reserve Bank that determines how much a bank will charge its customers. This is because, in normal times, the Reserve Bank sets the interest rate after examining the state of the Australian and world economies and using its power to set the rate of interest as a method for controlling things like the growth of the economy and internal demand for credit. This rate has been an acceptable average for banks to use as a benchmark.
As the global financial crisis began to unfurl, the usual benchmarks flew out the window. No longer could banks use the reserve bank rate as their acceptable average. Instead they were forced to look at the internal costs they were incurring when borrowing money from other banks around the world. This international swap rate, as it is called, rose considerably, making that source of funding virtually untenable.
As the credit dried up, the amount of money the bank would lend similarly contracted. It was at this point that banks began to use different ways to determine the interest rate at which they could lend to borrowers. This accounts for the fact that each bank now lends at different rates for different home loans right across the board.
As a sense of calm gradually filters through the financial markets around the world, we can expect a return to the good old days. Until then, banks will continue to change the interest rates to match their internal costing, and not simply rely upon the Reserve Bank price of money.
There have been many criticisms in the press especially where banks have raised the interest rates by higher amounts than the reserve bank has set.
This is a brief explanation for why that has happened, and it is as good a reason as any to be careful when choosing which bank can give you the best deal on your home loan.
Richard J Gardner operates the Australian Bank Branches Directory which lists the location of all bank branches. Find the right bank branch and the best banking deals on home loans, credit cards and business lending at http://www.bankbranches.com.au
Article Source: http://www.EzineArticles.com/?expert=Richard_J_Gardner
Wednesday, June 23, 2010
Tuesday, June 22, 2010
The Things You Have To Know About Benchmark Lendings
The term 'Benchmark lending' sounds rather new and not very familiar,but when you check out a searchengine,you'll see that the keywords are 'interest rates' and 'banking'. High paying keywords,...not to forget!
In the US the benchmark rate is set by the Federal Reserve which is the interest rate the banks pay when they borrow money. As you might know,banks have a certain amount of money on reserve, but when they need more,they have to borrow money over a very short term (that can be very short,like one night!).
That explains why the term is so valuable.
Banks and mortgage companies seek out people who might need a loan. Banking makes it's money on loans, it's just a valuable business to be a part of when there are lots of customers.
Benchmark Lending Group
BLG is a direct mortgage lender, enabling you to quickly secure a new home mortgage or refinance your existing one. They offer a broad range of mortgages that ensures they can provide you with a solution that is specifically tailored to your needs.
They offer:
- 10, 15, 20 and 30 Year Fixed Rate Loans:
The monthly payments and rates for these traditional loans stay the same during the entire loan term. And If principal reduction payments are made, your term will be reduced.
- Fixed for 7 Years (30/7)
The 30/7 loan is great for people who want the security that a fixed-rate loan offers but who are also attracted to the lower interest rates of an adjustable rate loan. The 30/7 loan has a 30-year term and a low fixed rate for seven years. At the end of the fixed-rate term, you have the option to convert to a fixed rate for the remaining 23 years, based on interest rates at the time of conversion.
Choose this type of loan:
o If you intend to keep your home for longer than 10 years
o If long-term stability is more important than payment amount
o If you do not anticipate using your home equity during the term of the loan.
You can read more about it on the BenchmarkLendingsBlog
BenchmarkLendingsBlog
Article Source: http://www.EzineArticles.com/?expert=Jamie_De_D
More Resources on Benchmark Lending
HOMESIDE LENDING, INC.: Labor Productivity Benchmarks and International Gap Analysis (Labor Productivity Series)
HOMESIDE LENDING, INC.: International Competitive Benchmarks and Financial Gap Analysis (Financial Performance Series)
Fair Lending Examination Procedures Guide
Mortgage Lending Compliance Manual: Federal & State Guidelin
Residential Mortgage Lending: Principles and Practices
Subprime Consumer Lending
Commercial Lending Basics
Worldwide Directory Securities Lending & Repo
Real Estate Lending Compliance
Subprime Consumer Lending (Frank J. Fabozzi Series)
Credit Risk Assessment: The New Lending System for Borrowers, Lenders, and Investors
In the US the benchmark rate is set by the Federal Reserve which is the interest rate the banks pay when they borrow money. As you might know,banks have a certain amount of money on reserve, but when they need more,they have to borrow money over a very short term (that can be very short,like one night!).
That explains why the term is so valuable.
Banks and mortgage companies seek out people who might need a loan. Banking makes it's money on loans, it's just a valuable business to be a part of when there are lots of customers.
Benchmark Lending Group
BLG is a direct mortgage lender, enabling you to quickly secure a new home mortgage or refinance your existing one. They offer a broad range of mortgages that ensures they can provide you with a solution that is specifically tailored to your needs.
They offer:
- 10, 15, 20 and 30 Year Fixed Rate Loans:
The monthly payments and rates for these traditional loans stay the same during the entire loan term. And If principal reduction payments are made, your term will be reduced.
- Fixed for 7 Years (30/7)
The 30/7 loan is great for people who want the security that a fixed-rate loan offers but who are also attracted to the lower interest rates of an adjustable rate loan. The 30/7 loan has a 30-year term and a low fixed rate for seven years. At the end of the fixed-rate term, you have the option to convert to a fixed rate for the remaining 23 years, based on interest rates at the time of conversion.
Choose this type of loan:
o If you intend to keep your home for longer than 10 years
o If long-term stability is more important than payment amount
o If you do not anticipate using your home equity during the term of the loan.
You can read more about it on the BenchmarkLendingsBlog
BenchmarkLendingsBlog
Article Source: http://www.EzineArticles.com/?expert=Jamie_De_D
More Resources on Benchmark Lending
HOMESIDE LENDING, INC.: Labor Productivity Benchmarks and International Gap Analysis (Labor Productivity Series)
HOMESIDE LENDING, INC.: International Competitive Benchmarks and Financial Gap Analysis (Financial Performance Series)
Fair Lending Examination Procedures Guide
Mortgage Lending Compliance Manual: Federal & State Guidelin
Residential Mortgage Lending: Principles and Practices
Subprime Consumer Lending
Commercial Lending Basics
Worldwide Directory Securities Lending & Repo
Real Estate Lending Compliance
Subprime Consumer Lending (Frank J. Fabozzi Series)
Credit Risk Assessment: The New Lending System for Borrowers, Lenders, and Investors
Monday, June 21, 2010
Why a Freedom Loan From Benchmark Lending is the Most Popular
When you think of mortgages that enable thousands of people to acquire homes every year, you are thinking of the Benchmark Lending group which has provided much needed finances to get new homes or refinance the existing homes to many families for over ten years. They offer tailor made mortgages to suit the needs of customers ensuring that you can afford it. They make this happen by considering the cash flow of every customer. They also consider the repayment period, investment opportunities and your equity plans. The Benchmark lending group was founded by Barney Aldridge in 1995 as a primary mortgage lending bank and it continues to grow. Customers can expect no hassles and there are no middlemen. The headquarters are located in Northern California and their culture is to provide a good service with dedication and passion.
When you need to apply for a loan, the company assures you that the process is easy and, you do not have to worry about complications. You will have a loan officer guide you through the whole process briefing you on all vital issues on credit until you have a satisfactory end. At Benchmark lending group, the management consists of people who have mastered the industry and proved that they can deliver what it takes to progress the business. It consists of the President who is the Chief Executive officer. His name is Jason Ehrlicher and he began as a loan officer in the company and years have seen him become capable and able to lead owing to his rich experience and dedication to the company since it began.
The others in the management team include the Director of Human Resources, Vice President of Sales and the Sales Manager. The first kind of loan they offer is the Fixed Rate Loan where the rate does not change and one can get a loan to repay in 10, 15, 20 and 30 years. People who go for such a loan must be planning to keep their house for more than 10 years and, for those who do not plan to use their home equity for the period of the loan. The other kind of mortgage the Benchmark Lending group offer is the adjustable rate mortgage. This loan is for people who plan to keep their house for up to 10 years or less. The duration for this kind of mortgage is usually 3, 5, 7 and 10 years.
A freedom loan from Benchmark Lending is the most popular because it is an adjustable loan that enables you to choose from 4 different payment methods according to your convenience every month. The loan is tailor made for people who do not have a regular or stable cash flow and for people who want to make other investments. Another loan suitable for people with fluctuating incomes is the Better Half loan and, it will help people with unstable monthly income realize their dream of owning a home. There are very many other options to choose from and, you can even apply online on their site. There are other resources that you will find very helpful. Before you take any mortgage, it is good to consider your income and your flexibility and ability to repay given the many options of repayments. Get a good system that will help you realize your dream for a good home.
Peter Gitundu Creates Interesting And Thought Provoking Content on Finance. For More Information On How To Manage Loans, Read More Of His Articles Here MANAGE STUDENT LOANS If You Enjoyed This Article, Make Sure You SUBSCRIBE TO MY RSS FEED!
Article Source: http://www.EzineArticles.com/?expert=Peter_Gitundu
When you need to apply for a loan, the company assures you that the process is easy and, you do not have to worry about complications. You will have a loan officer guide you through the whole process briefing you on all vital issues on credit until you have a satisfactory end. At Benchmark lending group, the management consists of people who have mastered the industry and proved that they can deliver what it takes to progress the business. It consists of the President who is the Chief Executive officer. His name is Jason Ehrlicher and he began as a loan officer in the company and years have seen him become capable and able to lead owing to his rich experience and dedication to the company since it began.
The others in the management team include the Director of Human Resources, Vice President of Sales and the Sales Manager. The first kind of loan they offer is the Fixed Rate Loan where the rate does not change and one can get a loan to repay in 10, 15, 20 and 30 years. People who go for such a loan must be planning to keep their house for more than 10 years and, for those who do not plan to use their home equity for the period of the loan. The other kind of mortgage the Benchmark Lending group offer is the adjustable rate mortgage. This loan is for people who plan to keep their house for up to 10 years or less. The duration for this kind of mortgage is usually 3, 5, 7 and 10 years.
A freedom loan from Benchmark Lending is the most popular because it is an adjustable loan that enables you to choose from 4 different payment methods according to your convenience every month. The loan is tailor made for people who do not have a regular or stable cash flow and for people who want to make other investments. Another loan suitable for people with fluctuating incomes is the Better Half loan and, it will help people with unstable monthly income realize their dream of owning a home. There are very many other options to choose from and, you can even apply online on their site. There are other resources that you will find very helpful. Before you take any mortgage, it is good to consider your income and your flexibility and ability to repay given the many options of repayments. Get a good system that will help you realize your dream for a good home.
Peter Gitundu Creates Interesting And Thought Provoking Content on Finance. For More Information On How To Manage Loans, Read More Of His Articles Here MANAGE STUDENT LOANS If You Enjoyed This Article, Make Sure You SUBSCRIBE TO MY RSS FEED!
Article Source: http://www.EzineArticles.com/?expert=Peter_Gitundu
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