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Post by df on Nov 23, 2017 21:35:49 GMT
Why do you need a PF when you have good asset security, in this case about 3x security?
Sure the rate is low but right now for both personal and wider impending ecconomic reasons my focus is on selecting low risk investments on platforms I trust that have a low likelyhood of default and an even lower likelyhood of capital loss that also pay me above inflation returns (gross). I am sure I am not alone in the view that ROC always beats ROI, something that will be much more important over the next 12-36 months as we negotiate some fairly unpredictable and uncharted waters. As the famous Frank Spencer once said "There are old pilots and there are bold pilots, but there are no old, bold pilots". In these times caution may prove to be the better part of valour I feel. Probably because three other accounts covered by AC's PF are paying higher interest.
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Post by notascooby on Mar 10, 2018 20:01:14 GMT
This is commuter-ville / flat-land. Many people either work in London proper or are employed by H**th*** Airport, As a result this has a very buoyant rental market. The valuation of £1.4M is possibly reasonable for the south end of H**n***w in th Tw**k****m area. This end is right under the flight path. When I worked in an office just down the road, conversation would stop every few minutes. So maybe a little less for the block. The valuation for the rents is entirely possible. For reference, my niece pays £2000 pcm for a 2 bed flat in Crystal Palace. The interest rate seems low to me, but has been discussed above with some justification.
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trouble
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Post by trouble on Mar 11, 2018 11:45:22 GMT
If AC is charging 6%, paying 3.75% to QAA etc, there is a nice safe return in the margin, a bit for AC and a bit for the PF, fairly risk free all round. MLIA isn't needed here, although a lot of MLIA investors will still take a chunk for diversification purposes, some might not even admit it!!!!
This is a sensible deal for AC and some of it's 25,000 lenders
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mikes1531
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Post by mikes1531 on Mar 13, 2018 3:36:47 GMT
If AC is charging 6%, paying 3.75% to QAA etc, there is a nice safe return in the margin, a bit for AC and a bit for the PF, fairly risk free all round. IIRC, in the beginning AC said that about a third of the QAA would be held in cash in order to ensure liquidity. If that's still the case, then having two-thirds invested at 5% wouldn't produce enough interest to pay 3.75% on the whole QAA amount. It would require 75% invested to cover the QAA interest, and that would leave nothing to put toward the PF. There's always the chance that now that AC have experience with how people have been using the QAA/30DAA they may have decided that one-third held in cash is more than they feel is necessary. Reducing that chunk of 'idle' funds would allow them to put more low-rate loans into the fund and/or generate more 'surplus' to put toward the PF -- and eventually to AC's bottom line if the PF is built up far enough. But such a move also would increase the risk that a lot of people trying to exit the QAA/30DAA at once would cause a crisis.
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jlend
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Post by jlend on Mar 13, 2018 7:07:35 GMT
If AC is charging 6%, paying 3.75% to QAA etc, there is a nice safe return in the margin, a bit for AC and a bit for the PF, fairly risk free all round. IIRC, in the beginning AC said that about a third of the QAA would be held in cash in order to ensure liquidity. If that's still the case, then having two-thirds invested at 5% wouldn't produce enough interest to pay 3.75% on the whole QAA amount. It would require 75% invested to cover the QAA interest, and that would leave nothing to put toward the PF. There's always the chance that now that AC have experience with how people have been using the QAA/30DAA they may have decided that one-third held in cash is more than they feel is necessary. Reducing that chunk of 'idle' funds would allow them to put more low-rate loans into the fund and/or generate more 'surplus' to put toward the PF -- and eventually to AC's bottom line if the PF is built up far enough. But such a move also would increase the risk that a lot of people trying to exit the QAA/30DAAat once would cause a crisis. I do wonder if the QAA and 30DAA rates will fall later this year as the difference between these rates and the MLIA and other packaged accounts falls
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tonyr
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Post by tonyr on Mar 13, 2018 14:03:27 GMT
If AC is charging 6%, paying 3.75% to QAA etc, there is a nice safe return in the margin, a bit for AC and a bit for the PF Chris has said on several occasions that all the difference between the MLIA rate and QAA rate goes into the provision fund. AC make no more money on the QAA than on the MLIA.
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trouble
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Post by trouble on Mar 13, 2018 15:24:24 GMT
If AC is charging 6%, paying 3.75% to QAA etc, there is a nice safe return in the margin, a bit for AC and a bit for the PF Chris has said on several occasions that all the difference between the MLIA rate and QAA rate goes into the provision fund. AC make no more money on the QAA than on the MLIA. Loan 576 is paying the MLIA 5, so if AC charging the borrower 6, then AC making 1 and PF making 1.25 on QAA and 0.75 on 30DAA, in other words a bit for AC and a bit for the PF
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