| Giving Families Credit Where Credit Is Due
Every year right after Christmas millions of Americans get a little gift from the Internal Revenue Service in their mailbox. It's their 1040 income tax booklet, and every year, sadly, this unsolicited present from the IRS gets a little heftier. This year the growth of the booklet was especially noticeable; instead of a saddle-stitched binding with staples holding a few dozen pages together, the 2006 Federal Income Tax booklet has a glued spine just like the Sears catalog. The difference is that this catalog is ordering something from you. What it's ordering is a record take of more than $1 trillion in individual income tax revenue. Revenue to the U.S. Treasury from individuals was up a whopping 12.6 percent in fiscal year 2006. Did you receive a 12.6 percent salary increase last year? To make matters worse, chances are that the typical American will not be calculating this record tax liability on his or her own.
Bankers fear slump in loan disbursals as rates increase
MUMBAI: Bankers foresee a slowdown in loan disbursements for the near-term largely on account of higher interest rates following the unexpected hikes in the repo rate and cash reserve ratio (CRR) on Friday. The repo rate, the rate at which banks borrow funds from the Reserve Bank of India (RBI), was hiked by 25 basis points to 7.75% on Friday. The 50 basis points hike in the CRR will suck out Rs 15,500 crore from the banking system. These hikes have left banks with no choice but to hike their lending rates. ICICI Bank, YES Bank, UTI Bank and HDFC have already raised their PLR. Others are likely to follow soon. We expect deceleration in credit growth by 3-4% during the year as a result of the CRR and repo rate hikes since the beginning of the year, said Rana Kapoor, chairman and managing director, YES Bank.
The many flavors of mortgage loans
I have heard a lot about stated income loans lately, in connection with the turmoil in the subprime market. I also heard of no income loans. Are these the same thing? What is a stated income loan and who would want one of these loans if they are so risky?
Thanks!
Charissa
Dear Charissa,
The range of loan products available to consumers is shocking. It may help to look at types of loans as flavors of ice cream. The plain, standard staple of all ice cream shops is vanilla. In loan terms, vanilla would be a full documentation loan amortized over thirty years.
Full documentation loans are just that - every bit of information you declare on your loan application will be documented, especially if it has a number attached to it (think income and asset figures).
Fixed-rate dilemma as bank shuns rise
FOR HUNDREDS of thousands of homebuyers across Scotland, the last few months have been full of uncertainty. Will base rates rise further? When might it happen? What will the impact be on mortgage costs? And what should borrowers do next? Despite last week's decision by the Monetary Policy Committee (MPC) to leave rates unchanged for one more month, most experts believe we are set to face a further rise some time this year. In turn, this has left many borrowers asking themselves the same questions once again. Yet while some answers - perhaps it would be better to call them predictions - are reasonably well known, others are less clear. .
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