will
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Post by will on Feb 3, 2017 12:06:12 GMT
If you were going to throw 50k at one loan that's currently available for a 3% bonus, which one would you risk it on? I've decided to take a gamble!
I'm temped by L*** i* L***** S* A****
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stub8535
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Post by stub8535 on Feb 3, 2017 12:34:25 GMT
Depends on whether you want to sell it down over loan term or hold to term. No poster on here can advise to influence how someone who wants to, and hopefully can afford to live without it if all goes belly up, gamble for an extra 3%.
If you are selling down then look for a loan that goes quickly on pm and not one that hangs around.
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will
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Post by will on Feb 3, 2017 12:43:37 GMT
Depends on whether you want to sell it down over loan term or hold to term. No poster on here can advise to influence how someone who wants to, and hopefully can afford to live without it if all goes belly up, gamble for an extra 3%. If you are selling down then look for a loan that goes quickly on pm and not one that hangs around. I didn't think the bonus was paid of the loan wasn't held for term?
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sqh
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Post by sqh on Feb 3, 2017 15:00:35 GMT
If you were going to throw 50k at one loan that's currently available for a 3% bonus, which one would you risk it on? I've decided to take a gamble! I'm temped by L*** i* L***** S* A**** L*** i* L***** S* A**** looks like a good choice. You could go 25k on F***** 4th Tranche and 25k on NI Props and get the same effective rate. The F***** project is well advanced and will should be completed by the Spring. NI Props is not filling fast so, we might yet get Cash Back or a rate rise. I suspect the lethargy is due to several other NI loans being overdue. You only get the bonus when you hold to term.
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stub8535
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Post by stub8535 on Feb 3, 2017 21:45:28 GMT
will you get the bonus on what you sell at the point of sale in accrued interest payable by the buyer. The remainder carries on earning the original bonus. i am open to correction.
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sqh
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Post by sqh on Feb 3, 2017 23:03:49 GMT
will you get the bonus on what you sell at the point of sale in accrued interest payable by the buyer. The remainder carries on earning the original bonus. i am open to correction. You don't get the bonus on what you sell at the point of sale in accrued interest payable by the buyer. You only get a bonus on the parts you hold to term. If you sell a loan that has a bonus attached then the bonus is lost. It is only lost on the part sold. If you try to sell a loan part that has a bonus, you get this warning message: Please note: you have a bonus associated with this investment. This bonus is only paid at the end of your loan on the remainder of this investment
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mikes1531
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Post by mikes1531 on Feb 4, 2017 0:06:23 GMT
I didn't think the bonus was paid of the loan wasn't held for term? : It looks like you understand the situation, but in case you -- or anyone else -- want a fuller explanation of how it works, FS have a good description on their 'Secondary Market' page within the 'Investing with us' pages. See the 'How Secondary Market transactions are reflected in your account" section. (It's about halfway down the page, just above the Taxation section.)
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stub8535
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Post by stub8535 on Feb 4, 2017 4:35:14 GMT
Thanks sqh and mikes1531 I had not realised that the word nominal means only at none bonus rate. Shows me that I need to read ALL the blurb and question everything.
I take it that accrued means that interest from the date of placing the bid, and not the go live date, which has been considerably later in some cases. Please confirm.
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micky
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Post by micky on Feb 4, 2017 10:59:58 GMT
I'm surprised that the L******** Hotel hasn't t been mentioned. Am I missing something?
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mikes1531
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Post by mikes1531 on Feb 4, 2017 16:33:21 GMT
I take it that accrued means that interest from the date of placing the bid, and not the go live date, which has been considerably later in some cases. Please confirm. : If you're referring to setting the price of parts on the SM, AFAIK that's correct. That's one of the reasons why identically-sized parts of the same loan on the SM at the same discount rate can have different prices and different estimated returns. (There's also another problem causing small pricing inconsistencies. These have been brought to FS's attention, and they are working on a solution.)
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stub8535
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Post by stub8535 on Feb 4, 2017 17:31:49 GMT
I have suggested that, in order not to penalise early pm bidders on the sm, that fs pay the accrued at the point the loan fills. All that then accrues waiting for drawdown is then the same. Just got the "I will put it forwards at the next review meeting" message back.
What do forumites think?
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SteveT
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Post by SteveT on Feb 4, 2017 17:52:11 GMT
It would obviously be better for lenders, but it would then be FS paying us the money, not the borrowers (as per Instant Returns on Ablrate)
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mikes1531
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Post by mikes1531 on Feb 4, 2017 18:55:56 GMT
It would obviously be better for lenders, but it would then be FS paying us the money, not the borrowers (as per Instant Returns on Ablrate) : But isn't that what's happening now? I wouldn't have thought that borrowers start accruing interest to FS before a loan is 'activated'. Do you? I suppose FS might have an agreement with borrowers that says they have to pay pre-activation interest. That would mean FS would end up paying it only if a loan failed to proceed and be activated. If the interest does come from the borrower, it might come via a reduced drawdown amount upon activation, at which point FS effectively have collected it in advance, and therefore would be in a position to pass it along to investors at that time. It's obviously a bit more awkward if borrowers pay the pre-activation interest but not until they renew the loan or redeem the security. Or, I suppose, if FS have to sell the security in order to repay their investors. Even in those cases, FS could make a note of which investors are due pre-activation interest, and defer paying that until the loan is closed out.
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SteveT
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Post by SteveT on Feb 4, 2017 20:35:32 GMT
Ultimately everything is paid for by borrowers (including FS profit) but, if pre-activation interest were paid by FS to lenders at the point a loan is activated (many months before the borrower pays FS a penny) then it clearly would put the credit risk for onto FS.
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bg
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Post by bg on Feb 4, 2017 21:47:37 GMT
Ultimately everything is paid for by borrowers (including FS profit) but, if pre-activation interest were paid by FS to lenders at the point a loan is activated (many months before the borrower pays FS a penny) then it clearly would put the credit risk for onto FS. I think they already have that credit risk though. If a loan doesn't fill or gets pulled for whatever reason then FS always pay lenders interest from bid date out of their own coffers (or at least have done so far). Also, I'm not sure it's so much of a risk. Do borrowers really get 100% of the loan amount. I would have thought a percentage of it gets retained by FS for upfront fees?
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