Chill Insurance to offer personal loans from new unit

Chill Insurance, Ireland’s largest insurance broker, is to begin offering personal loans of up to EUR50,000 in the Republic in a move that is expected to create 50 jobs over the next 12 months.

Branded as Chill Money, the service was launched online on Thursday, and will offer amounts from EUR3,000 to EUR50,000 to be repaid over one to five years. Leitrim-based AvantCard will act as the lender and servicer for the loans.

Annual interest rates will range from 8.9 per cent up to 12.9 per cent depending on the size of the loan.

“We believe Chill Money will shake up the personal finance sector in Ireland as we once again champion user-experience, accessibility and speed,” said Chill Money general manager Fergal Lynch.

“Consumer confidence is on the rise so people want to borrow again to fund purchases such as cars, home improvements or special events like weddings. There will be a strong demand for Chill Money as people move away from long queues and lengthy applications by phone or in person. Our commitment to customers is that we will be nothing like a bank”.

According to Chill Money, the process will be conducted online with customers able to establish in less than four minutes if they qualify for a loan. Successful applicants will see funds lodged into their bank account within 24 hours or one working day.

To qualify for a loan a customer must be over 18, a resident in the Republic and have a net monthly income of at least EUR1,450 per month paid into their bank account.

The online application process involves uploading documents to assist verification of customer details. This includes a utility bill, a copy of a driver’s licence or passport and three recent monthly bank statements.

AvantCard is a specialist consumer finance business, providing credit card and personal loans in the Republic. It has evolved from the same Irish business established by MBNA Europe Bank Ltd in March 1997. MBNA was first established in Dublin, followed by the opening of a purpose-built operational facility in Carrick-on-Shannon.

SoFi raises a whopping $500 million to go global

Launched in 2011, SoFi started with student loans for high earners who have the potential to earn a lot in the future. When it distributes or refinances loans, SoFi looks at career experience and education along with more traditional indicators of financial health.

Since then, the tech startup has aimed to become a full financial services company. It offers mortgages, personal loans, parent loans, investment services and life insurance.

“We’ve seen tremendous growth at SoFi because we know what people expect from their financial partner: they want speed, transparency, and alignment with their interests,” SoFi CEO Mike Cagney said in a statement. “We’re the only personal finance company focused not just on people’s money, but their careers and relationships as well. We know this opportunity doesn’t just exist in the United States, and look forward to bringing the SoFi approach to finance to more people around the world.

SoFi distributed $8 billion in loans in 2016, up from $5 billion the year before. That money went to 225,000 members.

Buying vs Renting a Home: What the Math Says

A simple way to understand that huge difference is to think of buying a home as a forced savings plan. Buying a home with a 30-year fixed-rate mortgage means that every month you are adding some portion of the mortgage payment to a savings account (your house) that is growing at least at the rate of inflation and usually even more than that.

A 2013 report from the Harvard Joint Center on Housing Studies makes the point:

While studies simulating the financial returns to owning and renting find that renting is often more likely to be beneficial, in practice renters rarely accumulate any wealth. In no small part this seems traceable to the difficulties households face in trying to save absent either a clear goal or an automatic savings mechanism.

What are the downsides to homeownership? Well, as we learned during the recent meltdown in the housing market, what goes up can very well come down, and with very bad effects. The housing crisis, however, was the worst economic event since the Great Depression of the 1930s, so we can take some comfort from that.

Buying a house also limits a person’s or family’s mobility. As homeownership rises, unemployment rates tend to begin moving higher within five years, at least partly due to homeowners who are unwilling to sell up and move.

Then there are the other costs of homeownership: property taxes, homeowners insurance and maintenance, to name the most obvious. A renter does not have to pay for a new roof or a new furnace while a homeowner does. And these things aren’t cheap.

The rent versus buy decision depends mostly on personal goals. As a creator of wealth, homeownership ranks at the top for most Americans. By the time we reach 65 years of age, about 80% of us will own a home, compared with less than 40% of Americans under the age of 35. That’s how needs and priorities change.

VA Home Loan: Buying A House With A Non-Veteran

VA Home Loan: Buying A House With A Non-Veteran
Joint VA Home Loan:Non-Eligible Co-Borrowers

Special rules apply when co-borrowers who are not married take out a VA home loan.

All co-borrowers dontneed to be VA-eligible. However, only theeligible borrowers portion of the loan gets a VA guaranty. Entitlements are pro-rated when joint borrowers include:

  • the veteran and one or more nonveterans (not spouse)
  • the veteran and one or more veterans (not spouse) who will not be using VA entitlement

When you buya home with a non-veteran spouse, that is not considered a joint loan, and your entitlement is not curtailed.

Click to see todays rates (Mar 2nd, 2017)
How Are The Guaranty And Down PaymentDetermined?

When there are VA-eligible and non-VA-eligible borrowers, the lender must pro-rate the amount of the guaranty. For example:

  • Two borrowers
  • Only one using VA entitlement
  • Purchase price: $400,000
  • Vet’s portion: $200,000
  • Maximum guaranty = 25 percent of $200,000

The lender can choose to accept what amounts to a 12.5 percent guaranty ($50,000 of $400,000). This is unlikely, however — in most cases, the VA lender would require a down payment.

For mostVA home loan borrowers, the 25 percent guaranty limits the lenders exposure to 75 percent of the property value. So foreclosure losses up to 25 percent are covered by the VA.

Lenders funding joint VA mortgages generally want the same protection, so theyll usually require a down payment tomake up any pro-rationof the guaranty.

In this case, the required down payment would probably be 12.5 percent, or $50,000 to give the lender its 25 percent cushion.

Qualifying For The VA-Eligible Buyer

To use your VA entitlement, you must certify that you intend to make the house your primary residence- you can’t just use your entitlement to help a friendbuy a house that you won’t be living in.

You need to meet standard VA underwriting guidelines, which are fairly liberal.The VA states, Veteran’s credit must be satisfactory and veteran’sincome must be sufficient to repay that portion of theloan allocable to the veteran’s interest in the property.

The VA has not established a minimum credit score, although many VA lenders have — often between 620 and 640. The average FICO for approved VA home loans, according to Ellie Mae, is 707.

The non-VA borrower’s income cannot be used to compensate for inadequate income on your part.

Your income should be sufficient to cover your portion of the monthly mortgage payment, property taxes and insurance, plus monthly payments on your accounts like auto loans and credit cards.

Lenders determine this either by applying a maximum debt-to-income (DTI) ratio of 41 percent, or using a residual income formula for your household size and location.

Click to see todays rates (Mar 2nd, 2017)
Qualifying For The Non-Eligible Buyer

Non-eligible co-borrowers do not have to certify that they will reside in the home.

For them, underwriting is slightly different. The non-eligible borrowers credit must also be satisfactory. However, thecombined income of both borrowers can beconsidered in evaluating his or her repayment ability.

In other words:

  • Income strength of the eligible borrowercan offsetincome weakness of the non-eligible borrower.
  • Income strength of the non-eligible buyercannotoffset income weakness of the veteran.

Your lender has to submit your applicationfor prior approval to the VA. Expect your full loan approval to take a little longer because of this, and build that into any offer you make.

What Are Todays VA Mortgage Rates?

Current mortgage rates depend on the type of VA home loan you choose, your strength as a borrower, and how aggressively you shop for your VA mortgage.

Click to see todays rates (Mar 2nd, 2017)

Spokane docs declare $191M bankruptcy

Two Spokane physicians, a husband and wife, have filed a $191 million personal bankruptcy, declaring they may owe money to 8,000 patients, clients and dozens of insurance companies. Dr. Sajid Ravasia, a psychiatrist who works for Providence Sacred Heart Medical Center, and Dr. Debra Ravasia (pictured), a gynecologist, jointly filed a Chapter 7 bankruptcy in federal court on Jan. 18. They list between $500,000 and $1 million in personal assets to be split among the thousands who may assert a claim for up to $191.2 million/Thomas Clouse, SR. More here.

Myth or Truth: 4 Surprising Facts About Personal Loans

Personal loans can help people be financially healthy and responsible.

Fact. Personal loans can be an effective option for those looking to simplify finances, take control of their financial future and save on interest. A personal loan can help borrowers consolidate debt or pay for a one-time big expense such as a wedding or family vacation.

In fact, a recent Discover survey found that more than half of those who have taken a personal loan in the past said they would be interested in taking another one in the future. Personal loans can enable people to improve their financial situations while saving money on interest. Additionally, more than half of those who have used a personal loan in the past grade their overall financial health as excellent or good.