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Post by spareafewcoppersguv on Feb 26, 2016 11:49:09 GMT
Can someone explain the basis for the rates on short term secured property loans? Some A rated loans get 10% on a 12 month interest only loan, some only get 8%. Anyone know why? Thanks...
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fasty
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Post by fasty on Feb 26, 2016 12:17:32 GMT
I believe that FC are applying the higher rates where they suspect that there may be more difficulty filling a loan. It provides an extra incentive for people to bid. Until recently it was common to see cashback offered under these circumstances, but it appears that FC are trying to wean us off cashback for various reasons.
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acky
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Post by acky on Feb 26, 2016 12:31:48 GMT
I believe that FC are applying the higher rates where they suspect that there may be more difficulty filling a loan. It provides an extra incentive for people to bid. Until recently it was common to see cashback offered under these circumstances, but it appears that FC are trying to wean us off cashback for various reasons. I think Fasty has a point, but I'm inclined to think it’s also a matter of negotiation - FC getting whatever rate they think the borrower will bear and give them the business. If it’s just to fill the loan more easily, then it doesn’t seem to be working very well. Yes, a 10% A+ loan will attract a lot of manual bidders (even me, if I’m desperate), but a 10% A loan doesn’t seem to fill much better than an 8% A loan - 20577 Witley (10%) for example is only at 59% after nearly 2 days - it should have 50% Autobodge by now, which implies only 9% manual bidders. Several other 10% A loans have recently needed the second wave of Autobiddy money to fill them. Then there are two 8% A loans which have been up for less than a day and are already at 45%.
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oldgrumpy
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Post by oldgrumpy on Feb 26, 2016 12:38:50 GMT
I believe that FC are applying the higher rates where they suspect that there may be more difficulty filling a loan. It provides an extra incentive for people to bid. Until recently it was common to see cashback offered under these circumstances, but it appears that FC are trying to wean us off cashback for various reasons.
.... in weaning me off.
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fasty
Member of DD Central
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Post by fasty on Feb 26, 2016 13:10:29 GMT
I believe that FC are applying the higher rates where they suspect that there may be more difficulty filling a loan. It provides an extra incentive for people to bid. Until recently it was common to see cashback offered under these circumstances, but it appears that FC are trying to wean us off cashback for various reasons.
.... in weaning me off.
Well, yes. But whereas cashback may be a fun game with tax advantages, buying loan parts with the higher rate instead has the advantage that they are much more marketable on the SM
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oldgrumpy
Member of DD Central
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Post by oldgrumpy on Feb 26, 2016 13:24:12 GMT
Ah, yes Mr fasty , though I was actually meaning my quip to apply in a far wider context ...  |
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Post by spareafewcoppersguv on Feb 26, 2016 13:32:26 GMT
Thanks for your responses guys. All is clear then. It's pretty much an arbitrary random process!  |
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jayjay
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Post by jayjay on Feb 26, 2016 17:07:36 GMT
There used to be a process at FC where they assessed a borrower's credentials and gave their loans a rating. Now that they have fixed rates, they assess the interest rate they think that will get the amount to be borrowed away, and that gives them the appropriate rating.
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adrianc
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Post by adrianc on Feb 26, 2016 17:33:44 GMT
FC has succeeded...
.... in ****ing me off.
Me too.
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trevor
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Post by trevor on Feb 26, 2016 21:11:11 GMT
Me too.
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acky
Posts: 481
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Post by acky on Feb 27, 2016 6:46:54 GMT
Will the last punter turn out the lights please?
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