Articles from May 2016



US jobless claims drop

We are just a few hours away from the spring Bank holiday and today is expected to be a quiet day.

We are just a few hours away from the spring Bank holiday and today is expected to be a quiet day.

The main piece of news out today will be the second estimate of US growth in the first three months of the year which is scheduled at 1.30pm GMT.

The first estimate was disappointing and showed growth slowing to an annual rate of just 0.4% and with the latest sets of data; economists believe the figure could be revised up. Jobless claims dropped to 268K from 278K, durable goods orders rose 3.4% and pending home sales increased 5.1%.

We learned from Fed President Powell that a rate hike may be appropriate fairly soon. Powell said “Depending on the incoming data and the evolving risks, another rate increase may be appropriate fairly soon”.

Many analysts agreed that Powell didn’t show any sense of great urgency to move at the June meeting and he stated that he had not made his mind up yet. He sounded cautious when he added “I can imagine the upcoming Brexit vote as presenting a factor in favour of caution about raising rates in June”.

Investors encouraged by stronger German data

No major Eurozone economic reports were released yesterday but investors were encouraged by stronger German data. Everybody seems to agree the ECB will leave interest rates unchanged but improvements in Germany and France could persuade the Central Bank to wait and see the effect of the current stimulus before deciding on the next step.

UK GDP figures released yesterday

Over in the UK, GDP figures were released yesterday and came in line at 0.4% on a quarterly basis but were slightly weaker on an annualised basis as they came in at 2.0% versus a market expectation for a 2.1% reading. Brexit is weighing on the economy as the underlying data showed weakness. Exports were down and business investment was disappointing.

The only bright spot was provided by government spending and consumer spending, which helped to offset the decline. The housing market is also showing signs of a slowdown as data from BBA Mortgage approvals showed a low at 40.8K against 45K in the previous month. This seems to indicate that the Brexit might be a drag on the housing market.

As mentioned earlier, the economic calendar is light today. In Europe business and consumer confidence surveys are due out in Italy, consumer confidence in France and retail sales in Spain.

The main focus will be in the US with Q1 GDP growth scheduled for release with analysts expecting a 0.4% upward revision. Later in the afternoon Fed Chair Yellen will also be interviewed at a Harvard event. The US and UK markets will remain closed on Monday.

Hawkish FED triggers repricing of interest rates

FED minutes released yesterday sparked a considerable move in the currency market, as the hawkish Fed triggered a sudden, and sharp, repricing of interest rates.

FED minutes released yesterday sparked a considerable move in the currency market, as the hawkish Fed triggered a sudden, and sharp, repricing of interest rates

The minutes demonstrated a committee determined to continue in their tight monetary policy, with most Fed officials signalling a June hike likely, if the economy warrants it.

The Fed’s Federal Open Market Committee (FOMC) judged that “…if incoming data were consistent with economic growth picking up in the second quarter, labour market conditions continuing to strengthen and inflation making progress towards the FOMC’s two per cent objective then it likely would be appropriate”.

It will be interesting to monitor if the Fed will be able to follow through with their plan, especially as the next rate meeting is scheduled ahead of the UK’s EU referendum, an outcome of which is still in balance.

Remain vote tops opinion poll

There was major focus on Sterling, as it rose sharply both against the euro and the US dollar, after an opinion poll released by Ipsos MORI for the Evening Standard revealed a large lead for the remain camp.

Ipsos MORI reported that 55% of the public are planning to vote to stay in Europe in June’s referendum, with just 37% backing Brexit. In Europe, the main focus yesterday was Eurozone inflation figures, which remained unchanged in April and with the YoY rate of consumer price index growth falling -0.2%.

Data to come

Looking at today’s calendar, this morning the market will receive Q1 employment figures from France, but the real focus for the euro will be the last European Central Bank minutes meeting.

Over to the UK, and April retail sales data is scheduled for release, with the market expecting sales to rebound. In the afternoon, as the North American market opens, the Philly Fed’s manufacturing survey will be closely watched, especially considering the weakness in the NY Fed survey earlier this week.

Initial jobless claims numbers are also scheduled for release, and the market will also have the opportunity to find out more about the Fed plans, with Vice-President Fischer and Dudley both scheduled for comments today.

Second charge secured loans by Wise Money

The improving economic climate and general house price increases have led to an increase in of second charge secured loans following their virtual disappearance after the financial crisis of 2008.

The changing face of second charge secured loans

The changing face of second charge secured loans

Traditionally, second charge secured loans were seen as a last chance saloon product.  Rates were much higher than mortgages and redemption penalties were fairly hefty.  But as rates started to drop off in 2006, the pandemic of self-certification of income led in part to the financial crisis of 2008 and a £6 billion a year secured loans industry quickly became a £150 million industry, a trickle of its former self.

Today however, the market is once again robust with packagers and lenders are back in full swing, albeit at a much more sensible £1 billion a year. Interest rates (starting at 4.55%) are much lower than ever, redemption penalties are extremely low and coupled with no set-up fees for the vast majority of secured loans, they are a very attractive solution in a variety of circumstances.

Second charge secured loans can be used for any legal purpose but are mainly used for:

  • home improvements
  • consolidation of credit cards, store cards and unsecured loans
  • purchasing vehicles
  • paying for a wedding/honeymoon
  • injecting cash into businesses
  • paying for school fees
  • paying tax bills
  • cosmetic surgery

How do second charge secured loans work?

As the name suggests, a second charge secured loans works very much in the same way as a first charge mortgage in that it is a sum of money lent out, secured against UK residential or investment property via a second charge behind the first charge registered by the main mortgage lender.

How much can be borrowed?

For a loan secured on a residential property, the minimum loan size for a second charge secured loans is just £5,000 and we arrange loans all the way up to £2.5 million.

For buy to let properties, we can arrange loans up to £500,000 but should the requirement be there, we would be able to refer the loan amount if more than this was required.

How long can a loan be taken out for?

Typically a loan is lent out between 3 and 25 years.  There are some lenders who offer 30 year terms.

The term of a loan is dependent on several factors, depending on the purpose of the loan.

The second charge secured loans process

Although not set in stone, the process with most packagers is fairly simple:

You provide your basic enquiry details (loan amount, purpose, term and contact) by telephone, email or sourcing system.

Once the client is happy with the deal, a mutually convenient time is agreed upon for a document courier to collect signatures and evidences.

Following receipt of client’s signed documents and evidences at the packager’s office, references and valuations are organised.  Case is re-checked for compliance.

With references and valuation received, the case is packaged and once a final compliance check is completed, case is sent to lender for final packaging and offer.

Once the offer has been made, it is sent out to the client by post and/or email to you.  You then have a 7 day reflection period in which to think about and return the signed offer and in doing so accepting the terms therein.

Interested? Then please call Keely McKay Wise Money’s Second Charge Secured Loans Advisor on 02921 670418 for a free, confidential, no obligation chat. NOW.