So what do you do for a living? If you are like most of us, you probably work for a living, taking home a monthly pay check and employ but someone else.  It seems that it is safer to work for a big company as it is supposed to be more stable - or so it seems.But you are a small one in a big corporation, which can be taken out easily when the company faces problem.

Well, this is the reality and the rich will always get richer and the poor get poorer.  Now, how will you feel if you do have a passive income with very minimal effort?You cannot retire base on that, but you can buy your family many nice dinners everyone.

Firstly, let’s see the perks of a passive residual income.To kick off, you can actually work for yourself.A great perk as you will never get fired.And secondly, there are many well paid jobs that can be done online.You can always sell your own or other people product or simply just make a commission from the sale.And all of these are working round the clock for you.Isn't that great?And this is the true meaning of passive income.  And there are many who went on to build websites and try to earn passive profit.  They go through an affiliate program and combine it with their own online sites.There are no limits to the possiblities.

Start benefiting from such as setting your own schedule, working the amount of hours you choose to, spending more time with family, working from the home, not being able to get fired and greater profits from the time you invest.Why are you hesitating still to make that residual income?  Go ahead now and start with Best Online Survey Profit

Source: Clock

With the increased volatility in the US Stock markets over the past few weeks, now may be a good time to take a look at what happened in the 1987 market crash.

Between October 14 and October 19, 1987, major indexes in the United States dropped 30 percent or more. On October 19, 1987, a date that subsequently became known as Black Monday, the Dow Jones Industrial Average plummeted 508 points, losing 22.6% of its total value, while the S&P 500 dropped 20.4%, falling from 282.7 to 225.06.

The 1987 crash put an end to the five-year bull market that had seen the Dow rise from 776 points in August 1982 to a high of 2,722.42 points in August 1987. Unlike what happened in 1929, however, the market rallied immediately after the crash, posting a record one-day gain of 102.27 the very next day and 186.64 points on Thursday October 22. It took only two years for the Dow to recover completely; by September of 1989, the market had regained all of the value it had lost in the ‘87 crash.

Many feared that the crash would trigger a recession. Instead, the fallout from the crash turned out to be surprisingly small. This phenomenon was due, in part, to the intervention of the Federal Reserve. The worst economic losses occurred on Wall Street itself, where 15,000 jobs were lost in the financial industry.

A number of explanations have been offered as to the cause of the crash, although none may be said to have been the sole determinant. Among these are computer trading and derivative securities, illiquidity, trade and budget deficits, and overvaluation. Below are some of the leading theories of what happened.

DERIVATIVE TRADING

The initial blame for the ‘87 crash focused on the relationship between stock markets, index options and futures markets. In the former, investors buy actual shares of stock; in the latter they are only purchasing rights to buy or sell stocks at particular prices. Thus options and futures are known as derivatives, because their value derives from changes in stock prices even though no actual shares are owned. The Presidential Task Force on Market Mechanisms, which was appointed to investigate the causes of the crash, concluded that the failure of stock markets and derivatives markets to operate in sync was the major factor behind the crash.

COMPUTER TRADING

Many analysts blame the use of computer trading (also known as program trading) by large institutional firms. In program trading, computers were programmed to automatically order large stock trades when certain market trends prevailed. With a large decline in the market, analysts believe that program trading caused more selling. However, studies show that during the 1987 U.S. crash, other stock markets which did not use program trading also crashed, some with losses even more severe than the U.S. market.

3: ILLIQUIDITY

On Black Monday, trading mechanisms were not able to deal with such a large flow of sell orders. Many stocks listed on the New York Stock Exchange were not traded until late in the morning on October 19 because the specialists could not find enough buyers to purchase the amount of stocks that sellers wanted to get rid of at certain prices. As a result, trading was terminated in many listed stocks. This insufficient liquidity may have had a significant effect on the size of the price drop, since investors had overestimated the amount of liquidity. However, negative news to investors about the liquidity of stock, option and futures markets cannot explain why so many people decided to sell stock at the same time.

U.S. TRADE AND BUDGET DEFICITS

Another important trigger in the market crash was the announcement of a large U.S. trade deficit on October 14, which led then Treasury Secretary James Baker to suggest the need for a fall in the dollar on foreign exchange markets. The fear of a lower dollar led foreigners to pull out of dollar-denominated assets, causing a sharp rise in interest rates.

One theory is that the large trade and budget deficits during the third quarter of ‘87 might have led investors into thinking that these deficits would cause a fall of the U.S. stocks compared with foreign securities (this was the largest U.S. trade deficit since 1960). However, if the large U.S. budget deficit was the cause, why did stock markets in other countries crash as well - as unexpected changes in the trade deficit were bad news for one country, it would be good news for its trading partner.

5: INVESTING IN BONDS AS AN ATTRACTIVE ALTERNATIVE

Long-term bond yields that had started 1987 at 7.6% climbed to approximately 10% during the summer before the crash. This offered a lucrative alternative to stocks for investors looking for yield and who wanted to get out of the stock market.

6: OVERVALUATION

The majority of analysts agree that stock prices were overvalued in September 1987. The Price/Earning ratio and was too high Historically, the P/E ratio is about 15 to 1; in October 1987 the P/E for the S&P 500 had risen to about 20 to 1. Does that imply that overvaluation caused the 1987 Crash? While these ratios were at historically high levels, similar Price/Earning values had been seen for most of the 1960-72 period. Since no crash happened during that period, we can assume that overvaluation does not trigger a crash every time.

Comparing today’s market, with the 1987 crash, show that there are not many similarities. Bonds are not at attractive levels, stocks are not overvalued and computer trading has evolved significantly over the past 20 years. Emotional fear is in the market. Once the fear subsides, it will be back to business as usual.

Source: Investing

1. Let’s say that you are trying to refinance your mortgage. It does not matter if it is because you are trying to refinance from a adjustable rate mortgage to a 30 year fixed rate mortgage or if you are just looking to take cash out of the equity of your home. Every single mortgage company in the United States is probably going to be following almost identical underwriting guidelines.

2. One of the main guidelines is that all mortgage lenders must do an appraisal on the home. There was a time during the refinance boom that sometimes you could get away without having to do an appraisal. The only times you could do this was when you were doing a “rate/term refinance” or doing a second mortgage like a home equity loan. A “rate/term refinance” is one where you just change the terms of the loan, i.e, change from a 30 year fixed to a 15 year fixed or redo a loan with a higher interest rate to a lower interest rate. What the mortgage banker would do is take your application and put a value into the desktop underwriting (DU) system, wait a minute for the approval and if it came back with a “Property Inspection Waiver” you could do the loan without having to do the appraisal. This was a nice feature because it saved the client $300-$400 off the closing costs because an appraisal was not needed and the loan would close in half the normal time. The property inspection waiver could only be done if no cash was being taken out of the home. If you were doing the second mortgage some mortgage companies had this program called an “Automated Valuation Model” or “AVM.” All that they did was put your addredd into this program, the program would look at recently sold homes, take those values and shoot a number back. If the number made the second mortgage work you could do the second mortgage only without having to do an appraisal.

3. The one thing that the mortgage company has no control over is what the appraisal comes in at. It is what it is. Calling a client back to tell them that their house is not worth what they thought it is might be the worst part about being a mortgage banker or mortgage broker. First thing is that they know that you are going to say something like “I just put in new French doors,” or “The granite counter tops are only two years old.” Trust me, I’ve heard all of the stories. The one I heard all the time was that “we just put in a $20k in ground pool.” Most people do not know that having a pool de-values your home unless you live in Arizona or Florida. The other one is that now the mortgage company cannot close this loan which results in wasted time and a lost commission.

4. Even if you are dealing with a nation wide mortgage lender like a Countrywide, Chase, Bank of America, or Quicken Loans the mortgage company is going to call an appraiser from your local area. The operations team of all mortgage companies have a database of appraisers to choose from and they hire one to schedule the appraisal with you. Mortgage companies do not have a in house appraiser that they fly out to value your home and then fly them back in. I could not imagine how costly that would be or how it would even work. I remember days at Quicken where the company as a whole would get over 2,000 new loan applications in the door from around the country. The labor cost would be huge.

5. Who knows your area best than an appraiser from your local area. They probably live within a couple miles of you and know what neighborhoods are best and all of the extra little factors that determine what your house is worth.

6. After the appraiser is done going through your house and taking pictures of comparables (comps) in the area they go back to their office and start adding and subtracting things you have in your house. They add up things of value like an extra bathroom, more square footage, new cabinets, fireplace, etc. After that they start subtracting value based on what the other homes in the area have that yours does not. Take for instance a garage. If yours does not have it then its a major value deduction. The one factor that really determines the value is what the most recent sales prices where of homes in your area. The appraiser will try to find homes that have sold within the last 6 months because those will tell what the market is saying what homes are worth that are similar to yours.

7. When its all said and done, the numbers are added up and a value is written done and the appraisal is faxed back to the mortgage company. The appraisal team is notified and the value is put back into the desktop underwriting system to see if an “approval” is still granted by whoever insures the mortgage, like a Fannie Mae for instance. If the system still says its approved, then you proceed with the mortgage and close the loan. If it comes back with an error (it usually says “Refer”) then you need to see whats not getting the approval. If its the appraisal coming in too low than there is nothing that can be done.

8. This is where you need to see if your mortgage banker can move some numbers around. Maybe you can take out less cash to get an approval. Then you need to see if the loan still makes sense for what you are trying to do. Maybe there are other factors not getting you the approval now because of your debt to income (DTI) ratio or your credit score is low or you do not have enough assets in the bank.

9. The one thing that the desktop underwriting system really likes is a low loan to value. Approvals are easy to get if you have a LTV under 80% and sometimes up to 90% depending on your credit score. Anything higher than those numbers and you are not going to find any help anywhere. This is mainly due to the credit markets tightening. The days of loans up to 100% LTV are basically gone and if your appraisal comes back at over 90% its not because the mortgage company wanted you to spend $350 to do an appraisal that was not going to come through and then deny you on the loan. Its because that is what your house is worth. The mortgage companies are in the business to close loans, not to deny you on a loan.

10. There are times when you can get a second opinion done. In the mortgage business they call it a “value appeal.” This is when there are things that the appraiser just flat out missed. It happens, they are people and people make mistakes. I have seen it where the difference of $3k in value of the home can kill a deal. If the home owner can find more recent comps or can show a reason for the bump in the value then the mortgage lender can take those and give the appraisal back to have the appraiser re-certify it. Sometimes, they will give the value increase and sometimes they will not. It sounds kind of shady (because it is). I can probably picture some conversations between a mortgage brokers and a appraiser saying that they will never use them again if they do not make the value a certain number. I know that happened because it has been in every major newspaper for the past two years. Any credible lender will not let this happen because they have too much riding on it. So if your appraisal comes in low you have two options. You can pay $350 for another appraisal from a different company. I only saw this work once over a two year period. I had a client that lived in Vail, Colorado and the mortgage company I worked at sent a appraiser from Denver, Colorado which is about 100 miles away. The appraisal came in very low and my client told me that we needed to use an appraiser from Vail. We ate the cost (only time this happened) and ordered an appraiser from Vail. Appraisal came in $100k more than the first one. Weird, but it worked. Second option is just to accept that your house is not worth what it was during the years of the refi boom of 2002-2006 and eat that $350 you spent on the appraisal. From all accounts, regardless of where you live, your house has probably gone down in value by 20% from 2006-2008. Don’t feel bad, its not your fault, its not the mortgage companies fault, its the markets fault.

More Reasons

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• The Top 10 Reasons Why Your Mortgage Has Made You House Poor
• The Top 10 Reasons Self Employed People Can Not Get Approved On A Mortgage
• The Top 10 Reasons Why I Want Fannie Mae And Freddie Mac To Go Bankrupt

Post from: The Top 10 Reasons

The Top 10 Reasons Why You Should Give Up Trying To Refinance Your Mortgage If The Appraisal Comes In Low

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Source: Appraisal

After the 777 point decline in the stock market and the US on the brink of a recession, will the US stock market be able to provide investors with a year end rally? Yes, if past elections are any indicator.

The Presidential Cycle in past elections has provided a positive return US financial markets. The stock market has risen in the past as elections approach and the sitting administration tries to stimulate the economy. The idea is to have voters with jobs and feeling good about the economy when they go to vote. This will most likely allow that the party in power will stay in power.

From 1942 to 2006 an investor who purchased the Dow Jones Industrials 25 months before each election and sold at the end of November would have been rewarded with a gain.

But past markets have shown this can be a temporary effect. Typically, the two years following an election are often the hardest on the stock market. Stimulus packages need to be paid for and tough economic decisions need to be made.

This may prove to be the case again as a similar pattern emerges today. Currently US leaders are trying to revive our economic markets. Restrictions against short sellers in almost 800 stocks have helped to keep a temporary floor on the stock market. These restrictions have caused much volatility and numerous news stories, but the net effect to the markets have produced a negative or positive impact during the past few weeks.

After a stimulus package is approved and credit becomes available again, the markets may give investors a positive return as we head into the November elections. But the two year cycle may again prove true as the next president will need to figure out how to pay for the stimulus and bailout packages that are currently being proposed.

Source: Investing

A crucial reward of onling banking is the fact that you can construct your account to do payment automactically for some of your bills when they are due. Such payment may include utility bill payment, student loan, mortgage payment, etc. All you have to do is set the frequency of payment and forget about it. The account automatically acts as your financial assistant.

If you have signed up for online banking, then you are aware that most financial transactions can be carried out with it. Not only can you facilitate any financial transaction through online banking, it is very quick, simple and safe. Signing up for online banking is very straightforward and not confusing.

Have you ever heard about the ING Direct Electric orange checking account? This special account now offers interest on online checking accounts. This is something most brick and mortar banks don’t do. If you want interest on your checking account, you’ll have to run an online ING Direct Electric orange checking account.

Smart banking, as they refer to online banking, can help you monitor your accounts from anywhere.  You can monitor the status of your loan, mortgage and other credits in your name by simply using online banking. Using online banking ensure you are again in line with the new and latest technology in the world. Banking smartly will give you that edge over your peers.

The particular bank you use determines the type of services you receive on your account. Many big banks in America now provide a personal kind of online banking facilitated by the use of information technology and mobile phones to customize your banking transactions.

With the advent of online banking, it is now possible to search for banks beyond the shores of your residence country. with this method you will able to recieve benefits of some banking services otherwise not provided in you country of residence.

Internet banking, E-banking, online banking or whatever name you know it as, simple means the traditional and corner way of banking enhanced by the internet. Initially, before banks started associating with the internet, you can only transact at the local branch where you open your account and if you require making transactions from another outlet of the same bank, it may take days or even weeks to confirm depending on the strength of the transaction. Now online banking has developed from being able to run your account in any outlet of the same bank to running it from your home or anywhere and at anytime of the day.

If you run an online account that gives you a line of credit or financial product, you can easily borrow money from it on the internet and make immediate use of it. Totally different than spending unnecessary time on your bank managers office as in the paper work banking. Borrowing money is just few clicks away, thanks to online banking.

For more information about online banking visit Jon Ferriss site.

Source: Checking Account