How to get a Mortgage, getting a mortgage is easy…

If you want to get a mortgage the process is fairly simple, it’s a big undertaking for certain but that doesn’t mean that everything surrounding it is overly complex. A mortgage is a security backed loan, this means that there is some actual asset that a lender has a lien on (lien: this term means ‘ownership of’ so if a lender has a lein on your property in the form of a mortgage then they own the property ahead of you owning it until you pay them off) and its generally called ‘the security’ or just the ‘property’.

The biggest concern for any bank or building society when considering a mortgage is the clients ability to pay back the loan, this is sometimes referred to as ‘repayment capacity’, or if you want the hardcore underwriting terminology its the ‘debt service ratio’ and its normally a calculation that decides numerically if a person has the ability to service a loan obligation. There are different ways of doing this, some banks use a multiplier, for instance: you can borrow four times your …

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Sovereign Wealth Funds to the Rescue

Sovereign Wealth Funds were a topic of this blog last year and they are coming to general attention again. A Sovereign Wealth Fund or SWF are (for the most part) the surplus money that developing countries have, sometimes this is due (like in the middle east) to oil revenues, other times (like China) its from industrial output, but in any case it is a fund which is owned and controlled by a countries government, some people are quite sceptical of them claiming that they can interfere with markets on different levels even as far as being the cause of geopolitical risk .

Since last year many of the banks that should have gone out of business are still treading water thanks to these funds, they have been the healing salve to the wounds of the sub prime mortgage fiasco. Citibank and Merrill Lynch were both saved by SWF’s. (China and Abu Dhabi). Maybe this is a signal that capitalism is working but for some countries such as France they are an unwelcome guest, Sarkozy recently promised to protect France from …

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Things can only get better

Don’t be too unhappy, because although January was the worst stock market since the January of 1990, the S&P was down by 6.1% and the MSCI world index said goodbye to 7.7% of its value, markets in India and China are down (at one stage India actually had to suspend trading on their market), despite all of these things the good news is that bad times don’t last forever.

Market commentators sometimes remind me of psycho ex-girlfriends who just can’t let go, (if you want to see one of the old Internet comic phenomenons type ‘psycho ex-girlfriend into your search engine) they are the type where by the time they realise whats happened its like the whole world is falling and its never going to get any better, they’ll NEVER love anybody again! Keep the faith.

Around the world the reaction was indeed just that, a reaction, it was reactive to results and not pro-active. The fed held an emergency meeting and slashed 75 basis points off rates and then at a regular meeting they cut another 50 basis points. …

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Yipee! lets blow 44 Billion!… or should we say Yahoo?

Do you Yahoo? Statistically the answer is probably no, you don’t, but in a world of decreased market penetration for every search engine (other than the Ubersearcher Google) the megalith companies like Microsoft -who’s MSN (I won’t even ask ‘do you MSN’) is even lower on the scale – are looking for ways to corner a portion of the Internet search engine market, initially they thought that the success of Internet explorer over Netscape navigator was a big deal, in hindsight it wasn’t, ask people the difference between Mozilla and IE7 and expect a blank stare, except from the closet online gamers whom I seem to be meeting more and more recently.

Google came from nowhere and used a simple approach, they have an interface that could only have been dreamt up by Mac or …well…. Google, and it was a huge success. I lived in Chicago the first time I heard of Google, it was around the year 1999 or 2000 and I recall there was another search engine called ‘snap’ or something that also impressed me, anyways, these …

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The Second Line of Dominoes.

2007 saw virtually every financial sector face decline. My own holding in Irish Lifes ‘BankScope’ took a pounding worthy of the national Football team.

One thing you won’t hear many analysts talking about is what the knock on effects may be and where the next disaster may strike, because like many things, money has a knock on effect on other areas, in the same way that expensive oil makes chocolate bars more expensive (It is more in transportations costs to get the chocolate to the shops etc. so at some time there will be a degree of cost push inflation).

So today I will try to consider other areas that may suffer, and some of them are as follows: Automobiles, luxury goods, building materials, and heavy machinery. Naturally there will be some rationale behind this. So I’ll start.

Automobiles: They are inadvertantly tied to the same financial markets that the banks are tied to, the cost of funds has risen and because of the increased risk on car lending (even though it is a secured asset) will play a role …

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the Dead Cat Bounce of 2008

There is an expression called a ‘Dead Cat Bounce’ and it is where a market or stock take a fall and then as people see it going down they believe it then represents value and buy in causing a temporary upswing, There is a moderate rise in the price followed by a spectacular fall. This is the ‘bounce’ but alas, if the cat is dead it continues shortly there after to fall. It comes from the reasoning that ‘even a dead cat will bounce if it falls from a great height’. Good school playground reasoning I suppose!

Is this what we are witnessing in the rally? I think that given all of the recessionary indicators present that it may be the lesser of the two evils to let a recession come in and run its course, the average recession is about a year, the average boom is about 5 years.

there is a belief out there that recessions are the ultimate evil, I can tell you that they are not, George Bush is …

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Investment Ideas for 2008

If you are the type of investor who doesn’t get scared when there is a bit of a storm then there are some opportunities in 2008, an important thing to remember is that when money is lost there is an equal gain somewhere else, almost like that rule in physics, matter cannot be created or destroyed only turned from one form into another, for the sake of our example, money can change from one persons hand into another persons hand (unlike matter it can be created, the Fed,ECB, & BOE have proven that much in the last few weeks!).

Here are some of my picks:

1. Property: Even in a market where prices are falling there are deals to be found, the debt burden is going to push some people out and they may become motivated sellers, this means you can purchase well below the market value. Distressed debt and Vulture buying are not for the feint of heart but I absolutely guarantee that right now the billionaires of the late teens in real estate in the USA are the …

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‘Clearance sale, prices 20% off!’, not in shops, on property….

Last week Capel Construction made news when they made a massive reduction in asking price on properties in D15, now more developers are jumping on board both the Albany Group and Abbey Group have reduced asking prices by up to 25% in an effort to get buyers back into the market, I’m sure there is a shortage of smug estate agents ‘taking orders’ for these homes, I think the market is truly at a point where they will have to ‘sell’ these units if they want to shift them. Prices in Holywell (the place where Baiba Saulite was shot) are now at 2005 levels,

The method clearly works as Capel sold 56 units once they dropped the price, so perhaps there is demand out there but its from a public so worried about price falls that they will only purchase if there are considerable reductions in asking price. Personally I don’t believe that some of these prices even represent true value, how will the 56 purchasers feel if the prices get reduced yet again to attract more buyers? They would …

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'Clearance sale, prices 20% off!', not in shops, on property….

Last week Capel Construction made news when they made a massive reduction in asking price on properties in D15, now more developers are jumping on board both the Albany Group and Abbey Group have reduced asking prices by up to 25% in an effort to get buyers back into the market, I’m sure there is a shortage of smug estate agents ‘taking orders’ for these homes, I think the market is truly at a point where they will have to ‘sell’ these units if they want to shift them. Prices in Holywell (the place where Baiba Saulite was shot) are now at 2005 levels,

The method clearly works as Capel sold 56 units once they dropped the price, so perhaps there is demand out there but its from a public so worried about price falls that they will only purchase if there are considerable reductions in asking price. Personally I don’t believe that some of these prices even represent true value, how will the 56 purchasers feel if the prices get reduced yet again to attract more buyers? They would …

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Lynn, he’ll make you go Hungry in Hungary

Michael Lynn hit the press again as new allegations and issues arose in Hungary where a development owned by him has ceased construction and there are fears that many innocent parties in Ireland have lost huge amounts of personal savings, some of which is probably SSIA’s.

I wrote in a previous article that if he had any sense he would sell off foreign assets or the companies behind them and keep liquid only those out of European jurisdiction, I think the guy must read my blog, he’s been doing all of it exactly as its written. On November 30th he sold the company to a Cypriot business.

This could be a way of ensuring that his foreign empire is not touched because if the Cyprus business is owned/operated by a friend then he could still maintain effective control without ever having to be in Hungary or anywhere else, the conversation would be along the lines of ‘if you help me you get 40% of the profit, just tell the cops to get stuffed and sell the units asap’.

There is …

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