close

2019

Trading

Benefits Of Trading In Currency Market In India

Investment has become pretty popular in today’s world. People invest their money in mutual funds, stocks, and bonds to raise capital that requires one to opt for a Demat account. Lately, there’s a new investment instrument that has gained massive popularity in India – Currency Trading.

Often referred to as Foreign Exchange or Forex, Currency trading refers to the process of buying and selling currencies in the Forex marketplace to earn profits. With more than $5 trillion being traded daily, the currency trading market is undoubtedly the biggest global marketplace and offers quick growth projections. One can trade in currencies that are benchmarked against INR like USD, Euro, UK Pound, and Japanese Yen. But first, let us analyse the benefits of Currency trading in India.

Benefits:

  • Hedging:

Hedging is a way of reducing your losses in the light of unexpected movement in the price of currency pairs. For instance, if you have a payment to make in USD and you think that USD-INR is going to depreciate, you can hedge your forex exposure by purchasing USD-INR and that will fix your payout rate. Hedging can be done through simple hedging (place trade to buy a currency pair and place another trade to sell the same), complex hedging (has a different approach than simple hedging because of restrictions from trader), multi-currency pair (you make a hedge using two different currency pairs), and forex option (agree to conduct an exchange at a particular price in future.)

  • Speculation:

Currency prices, even though unstable, are somehow predictable. Besides, short term movement of markets can be speculated to some extent. Here the speculators buy a currency when price is weak and trade the same currency when it has a great value.

  • Arbitrage:

This is the strategy of exploiting the price disparity in the forex marketplace to earn profits. The trader here takes advantage of the inefficiencies in the exchange rate in different markets, which happens for a short period. You can buy the currency at a lower price and then sell it at a higher price to earn profits.

  • Leverage:

In currency trading, you can get much higher leverage as compared to stocks. Leverage involves borrowing money, in this case from a broker, to invest in the currency market. This is possible only if intraday trading is involved. You trade more money than what you have, and pay only a margin price of traded value and therefore get pretty high leverage.

Currency trading is a great mode of earning profits. There are a plethora of reasons you should be investing your money in the currency market. The forex marketplace is open round the clock and is comparatively hassle-free. Demat account opening is not a necessity to trade-in the currency market. The online process of forex is commission-free and superbly quick. Even though the process can be risky, but if executed wisely, can be highly rewarding. Gather adequate knowledge about the market and its traits before trading your money.

read more
Trading

How to do the multiple time frame analysis

Multiple time frame analysis is one of the most effective ways to find great trades. The rookie traders rely on the indicators readings to filter the false signals. Even after learning the proper use indicators, it’s really hard to assess the quality of the trade setups. If you manage to learn multiple time frame analysis, it won’t take much time to develop your skills like the professional traders. Based on this technique you can easily find good trades at any market condition. Though the system is extremely profitable, very few traders know the perfect way to do multiple time frame analysis. Today, we are going to teach you the proper way to do multiple time frame analysis.

Learn the technical analysis

Before you focus on multiple time frame analysis, you have to learn technical analysis. Technical analysis allows you to find the best possible trades at any market condition with an extreme level of precision. Though there are many trading techniques, you need to rely on a simple strategy. Learn the use of Fibonacci retracement tools, trend line, etc. to find the best possible trades. When you do the technical analysis, you have to understand the importance of higher time frame signals. The lower time frame always generates messy signals and it became nearly impossible to make a consistent profit. But if you stick to the higher time frame, you will get quality trades.

Using a different time frame

Studying different time frame in your online trading platform is known as multiple time frame analysis. The new traders execute high-quality trades based on multiple time frame analysis and make a decent living out of trading. When you study a different time frame, you need to give more priority to the higher time frame trade signals. At times you might find buy signals in the daily time frame and sell signals in the 1-hour time frame. This is where you need to stay in the sidelines. If you study three different time frames, you must get the same signals. Unless you get the same signals, the chances are very high that you will lose money from that particular trade.

Blend the fundamental data

Before you execute the trade based on multiple time frame analysis, you need to blend the fundamental data to increases your win rate. Those who ignore the high impact news are most likely to lose a big portion of their investment. Being a new trader in the Forex market, you have to understand the fact, trading is all about precision. To find the best possible trades, you must use the technical and fundamental data at the same time. Make sure you do the technical analysis based on multiple time frame analysis. Once you come to a decision, analyze the news factors and see whether it merges with your technical decision.

Dealing with the risk factors

Though multiple time frame analysis is a great way to secure big profits in the Forex market, you still have to lose trades regularly. Losing trades are inevitable and you can’t become a profitable trader without doing the proper market analysis. Unless you work hard and prepare yourself for the worst-case scenario, you will never have a business mindset. The professional businessman in Singapore know the proper way to embrace the loss. Train your mind so that you can deal with the losing trades without any stress. Never try to make big profits from this market by increasing the risk factors. Trading is more like finding decent profit-taking opportunity with low-risk exposure. So, learn the proper way to manage your risk exposure and it will help you to become a better trader. Think twice before you execute any trades. Give priority to the daily time frame data when you focus on multiple time frame analysis. Last but not least, never ignore the high impact news.

read more
Trading

What is a Fibonacci Trading Strategy?

There are several technical analysis tools that are driven by a mathematical concept that has been around for hundreds of years. They all stem from a ratio that is driven by the Fibonacci sequence discovered by an Italian mathematician in the early 1400’s. The Fibonacci sequence can provide you with support and resistance levels as well as profit targets and stop loss level. You can use Fibonacci retracement levels on their own or combine them with other trading methodologies. The Fibonacci ratios are used by day traders and foreign exchange traders to generate investment decisions.

The Fibonacci Sequence

The inventor of the Fibonacci sequence was Leonardo Pisano Bogolla. He was an Italian mathematician and lived in the city of Pisa.  The Fibonacci sequence follows a pattern that can be observed in nature. Excluding the first number in the sequence every other number is the sum of the prior 2-numbers. The sequence starts at 1, and then progresses to 2, 2+1 is 3, and then 5, 8, 13,21, etc. Another property of the sequence is that ratios can be created from the Fibonacci numbers. The ratios are calculated by dividing the lower number by the subsequent higher number, and by dividing the lower number by the sequence higher number that is 2-places higher than it.

How to Use Fibonacci Retracement Lines

The most popular technical analysis tool constructed from the golden ratios of the Fibonacci retracement levels. Both the 32.8% ratio and the 61.8% ratio are calculated by evaluating the price of the security or exchange rate of a currency pair from a high point to a lower point.

 To draw Fibonacci retracement lines, you need to find the highest high over the time frame you are evaluating and subtract the price or exchange rate from the lowest low.  The difference is then multiplied by 61.8% and 38.2%.

Strategies for Trading Fibonacci Retracements

There are no restrictions on the time frames that you can use for a Fibonacci trading strategy. You should feel just as comfortable using this technique on intra-day data as you would on daily or weekly prices. The golden ratios will work on all periods you decide to analyze.

Fibonacci Retracement Support and Resistance

Fibonacci retracements, can be used to create support and resistance levels.  If you are a day trader and interested in using Fibonacci retracements on intra-day data, you can target profit and loss levels using support and resistance. In the chart below the EUR/USD using 15-minute bars, you can quickly generate support and resistance levels following a bounce as prices dropped from 1.2388 to 1.2285.  The first level of resistance which eventually became support was the 38.2% retracement.  Prices moved to the next target resistance level at the 61.8% retracement level.

Summary

The Fibonacci sequence which was created hundreds of years ago, has been developed into a technical analysis tool that can be used to target support and resistance as well as take profit and stop loss levels. The Fibonacci sequence was created using the golden ratios, which include the percent 38.2% and 61.8%. Fibonacci retracements are used to calculate support and resistance levels and can be used as a risk management tool. Once you are in a trade, you can use a Fibonacci retracement level as a target to take profit. You can use the Fibonacci retracement on any time frame which can help you manage your position as a day trader.

read more
Trading

Secrets of Successful Intraday Trading

Every day trader seeks the secret to earning large profits for intraday trading. The stock market can indeed generate wealth, and given this luring factor, most trading enthusiasts look for secrets from successful intraday traders. You can make excellent profits in intraday trading, with a reputed broker such as Kotak Securities, if the market goes in favour of your trading positions. But, if it does not go according to plan, you may have to incur significant losses. This is why it is crucial to make the right position at critical junctures during the day to ride the wave of volatility. Let’s look at the leading secrets of successful intraday traders and how you can profit from them.

  • Staying neutral during price movements: Regarded as the best secret of successful intraday traders, observing share price movements based on the prevailing trend is what you must follow. Successful intraday traders do not consider price fluctuations. And like them, with a clearly defined entry and exit strategy, you too will be able to ride the market volatility. Ensure that you do not switch strategies during trade as it could be a dangerous move that could result in huge losses. At the end of the day, the golden rule to remember is to ride with the market trend.
  • Identifying the right stock: To search for the right stocks for intraday trading, you may want to study chart patterns and intraday charts. Before entering into the day’s trading, you may want to read up and research on historical charts and understand upward and downward moving stocks. Studying the previous day’s intraday chart can help you to understand the support and resistance levels. An excellent idea is to purchase at the previous day’s support level and short at the former day’s resistance levels. It can also help if you short below the support level and purchase above the resistance level.
  • Keep an eye out for lucrative opportunities: Share trading opportunities may appear many times during the day and is not as rare as traders make it out to be. It requires time, patience and study to identify the right opportunity and make a position for a successful trading decision.
  • Exercising patience during day trades: One of the most significant and overlooked factors in intraday trading is to be patient. Most day and margin traders jump all in, when the markets open, without prior knowledge or understanding. This eagerness and impatience result in substantial losses being incurred rather than profits. However, successful intraday traders take their time to chart out new strategies before the trading hours begin. It is critical to know that no single approach can be used every day. Hence, on some days, successful intraday traders may sit on the side-lines and observe the market to cut down their losses.
  • Avoiding greed and panic: If you have begun trading and you observe the market going in a different direction, you may want to take some time and relax, rather than panicking. This is where maintaining a fixed and strict stop loss comes into the picture. If your stop loss triggers, you may not want to enter the market again. At this time, you may want to observe market trends and join in with other stocks. Continue to watch the market and look out for a dip to re-enter trading.

Conclusion

In addition to the points mentioned above, it can also help if you manage your funds like an experienced money manager. By trading with confidence, adopting key strategies and reading chart patterns — such as candlestick charts and technical analysis — you will be able to keep emotions at bay, and adopt a neutral trading approach to make the right decision. Ensure that you make your positions and execute your orders as per prevailing trend, rather then on rumours and hearsay.

read more
Trading

Rules For Picking Stocks While Intraday Trading

As a day trader, you will have plenty of choices to choose for picking stocks. To make the most of the stocks you select for intraday trading, you must carefully plan a strategy. If you do not the following intraday trading rules to pick the right stocks, you will not be able to make much profit.

How to pick the best stocks for day trading

  1. Volume to gain liquidity – The volume of stock that you trade within a day trading is significant. As you will tend to buy more liquid stocks which comes in high volume. A great number of such stocks being bought and sold is what the day traders typical day looks like. Do not forget to check the depth of stocks to understand the market presence of such stocks.
  2. Resistance tolerance – While you are monitoring the stock prices, stay alert for any stock which has broken the boundary. Such stocks may hold great promise. You must also do your market analysis before investing. However, do not get carried away by emotions.
  3. Trend analysis – Never undermine the ongoing trend while day trading. The trend of the day should determine your entry as well as an exit strategy. Watch out for any shift. Follow patterns. Make most of your time before a reversal hits. Ignoring what the market is saying can be detrimental for your interest as a day trader.
  4. Select a sector – It is advised by many industry experts to choose a few stocks or s special sector to invest in. It helps the process of monitoring and you will be able to track any significant development in the prices. Hence, group stocks are more reliable. Accordingly, you will be able to make a decision.
  5. Research – Though intraday trading involves buying and selling on the same day. Your research can be spread over days. Learn how you can pick up on trends, identify index and relevant sectors offering enough of liquid stocks on high volume. Pick a number of stocks to have choices. Prepare your plan of action. Let the day trading begin and you can jump in at a suitable time but do remember to leave at the right time as well.
  6. How much to invest – Every time you invest in day trading, prepare your budget. Do not invest an amount whose loss you cannot sustain. For day trading especially investing a fixed amount is often considered to be a good idea. Also, stick to a pedigree and then decide how much to invest.
  7. Know when to stop – the Understanding the trend of the market is imperative while day trading. You must react with spontaneity to the market calls. If there is a lull in the market, stay put. If you find the market to be too volatile, then refrain from trading that day. An experienced day trader has a tremendous amount of patience and control.

To make your intraday trading a success keep an ardent eye on the market trend. Figure out a good entry as well as an exit strategy. If you want to experience intraday trading, visit trusted brokerage like Kotak Securities and select the free intraday service today.

read more
InvestmentNews

Top investment options in India for NRIs

Indians who live abroad often transfer money to India to meet family obligations. The money they remit may cover the daily expenses of their loved ones, as well as rent, tuition fees, medical costs, and so on. But when it comes to international money transfer for the purpose of investments, many non-resident Indians (NRIs) remain clueless.

To carry out investments in India, you will first need an NRI bank account. You could opt for a non-resident external account (NRE) account which permits you to hold your overseas earnings in Indian rupees. Alternatively, if you earn an income in India, you could get a non-resident ordinary (NRO) account to hold your earnings back home. You could also look into digital remittance solutions like Axis RemitMoney, which promise a quick, easy, and affordable international money transfer to India experience.

Once your remittance modes are in place, you are ready to start investing. Here are five investment options that NRIs could explore.

  • Fixed deposit

This is a popular investment tool among resident Indians as well as NRIs. One key advantage is that fixed deposits offer a fixed interest rate throughout the term of the deposit. That makes it a good proposition for investors with a low risk tolerance. The interest rates vary according to the term selected. In general, you can expect to earn interest of around 6% to 7%. Senior citizens enjoy a slightly higher rate.

You can invest in a fixed deposit through your NRE or NRO account. Just keep in mind the tax implications. Interest earned on NRE fixed deposits are tax-free. But any interest earnings from NRO fixed deposits are subject to tax deducted at source (TDS).

  • Equity and convertible debentures

Stock market investments offer relatively higher returns but they come with risks too. As an NRI, you cannot buy shares directly from a company. But you can invest in equities and convertible debentures through portfolio investment schemes of the Reserve Bank of India (RBI). To start investing, you will need an NRE or NRO account, a trading account, and a demat account.

Here are a few things to remember before you start:

  • As an NRI, you cannot engage in intraday trading and short selling.
  • The profit made from holding shares for over a year falls under long-term capital gains and is tax-free. If you sell the shares before one year is up, a short-term capital gains tax of 15% will apply.
  • Mutual fund

Are you investing for the long haul or the short term? Whatever your time horizon might be, there is sure to be a mutual fund to help you reach your goals. Choose from a wide range of schemes based on your risk appetite. Investing in mutual funds is easy when you have an NRE or an NRO account. However, NRIs based in the United States (US) and in Canada could face some restrictions. Owing to strict Foreign Account Tax Compliance Act (FATCA) rules, not all asset management companies permit NRI investment in mutual funds.

  • National Pension Scheme (NPS)

NPS is an excellent investment tool that allows you to save for long-term goals like retirement. This tax-efficient scheme brings you market-linked returns. The portfolio is diversified across a range of financial securities, such as corporate bonds, government securities, and equity-related investments. The scheme allows investors to create a corpus for retirement as well as a regular source of income. Any Indian citizen aged between 18 and 60 is free to invest in NPS.

  • Real estate

A large number of NRIs who live abroad hope to invest in property in their native land. Indian real estate is also a profitable investment option. NRIs can freely invest in residential and commercial properties and use them however they wish. But the purchase of agricultural and plantation land is not permitted in the case of NRIs.

Wrapping up

No matter how big or small your investment is, make sure to carry out end-to-end research before making any investment decision. Consider all options available to you based on your financial goals, risk appetite, and returns. By doing your homework, you can make wise decisions about how to invest your hard-earned money.

read more
Trading

Trade360 Review

Decided to invest money in the financial markets, but not sure which broker to use? Don’t worry, it’s easy! First, you need to determine what kind of trader you are and which trading tools you need to be profitable over time. In this Trade360 review, you’ll discover a fully regulated and highly professional CFD broker that provides great investment opportunities for short-term traders.

Pros Cons
MT4 available for almost all account types Few indices available to trade
10 languages supported  
Live CrowdTrading Feed  
Islamic trading account  
WhatsApp Support  
Signals and market analyses from Trading Central  

 General Information

ST Services Ltd. owns Trade360.com. The legal holder of the trade name is incorporated in the Marshall Islands at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands (Registration Number MH96960).

Trade360 is a regulated broker based in Cyprus that was founded in 2013. Therefore, this online trading broker specializing in CFDs on assets including stocks, commodities, Forex, and indices is also covered by the MiFID regulation.

With Trade360, you can trade a wide range of financial assets on the hugely popular MetaTrader4 platform. You can also trade using its intuitive and user-friendly web-based and mobile trading platforms, making it easy and convenient to open, monitor and close trades wherever and whenever you wish.

When trading with Trade360, you do have to provide certain ‘Know Your Customer’ documents, so the broker can verify your identity and comply with Anti-Money Laundering and due diligence procedures.

In this Trade360 review, we’ll talk about the different accounts available to you, as well as the Live CrowdTrading Feed, two of the core strengths of this broker.

Accounts available

Depending on the type of account you choose, Trade360 will offer different features and services. There are 6 accounts available, including an Islamic account for observant Muslim traders who are looking for a Sharia-compliant investment solution. Depending on your financial goals, and the amount of capital you initially want to invest, you can choose between the following accounts: Mini, Standard360, Gold, Platinum, VIP, and Islamic360.

Live CrowdTrading Feed

Trade360 is well-known for its innovative and exclusive CrowdTrading feature, which generates real-time insights into the behavior of its entire trading community. These can reveal emerging market trends and movements, enabling you to act fast on the very latest data.

When you trade with Trade360, this feed is accessible at any time. It aggregates vital information about the mood of other market participants – you can go with the flow or swim against the tide, according to your own trading strategy.

Conclusion

The process of putting together this Trade360 review has shown us that this is an online broker that’s intently focused on providing actionable market intelligence to its members through its Live CrowdTrading Feed.

Trade360 is currently available in 10 different languages, including Arabic, which means that users from the Maghreb to the Gulf can trade in the best possible environment – one that adheres to the laws of Islam. And let’s not forget that MetaTrader 4 (MT4) is available to almost all Trade360 traders.

One of the best things about MT4 is that it is suited to traders of all levels of experience. Beginners and professionals alike use it for their daily trading, as it provides a reliable and robust point of entry into the financial markets, along with some of the world’s most advanced trading tools.

read more
Insurance

Car Insurance Regulations and Required Coverage in Lake Charles

An accident happens while driving an auto. It is surprising, in some areas of the USA, for example, Alabama, Mississippi, Iowa, Pennsylvania, and New Hampshire, it isn’t mandatory to have car insurance. These states have their own ‘financial responsibility’ laws which need to have cash deposit, bond, or approved self-insurance with the state covering damages if you’re involved in an accident. Before going into auto insurance Lake Charles, take a quick look at what happens in other states. In other states, car insurance is mandatory. Lake Charles is a city of the state of Louisiana. The state has a mandatory requirement regarding car insurance. Any of its drivers compulsorily need to have a car insurance policy to meet financial responsibility while driving a vehicle. Louisiana follows strict adherence to car insurance law in a tort manner. It means, it always places the driver under the scanner to find fault when an accident happens and he has to pay for the damage incurred.

Required Coverage

Auto insurance Lake Charles needs the following liability coverage requirements:

Bodily Injury Liability

According to the statute, Louisiana residents having a car need to cover a minimum limit of $15,000 / $30,000 for bodily injury liability. It means, if it is seen in an accident you are at fault, this policy will pay a compensation up to $15,000 per person for their injury and $30,000 in total per accident. It means if two or more persons cause injury in an accident, the policy will pay up to and not more than $30,000 in total. Your bodily injury isn’t covered under this policy. This liability coverage is for others to whom the physical injuries are caused due to an accident within the terms and meaning of the plan.

Property Damage Liability

Property damage liability refers to damage caused to another automobile or any other property such as a fence, a home, etc. The law demands you need to cover a minimum limit of $25,000. It states that in case of an accident, this policy will pay a maximum up to $25,000 towards compensation of other property damage.

However, $15,000, $30,000, and $25,000 are the minimum requirements that your car insurance policy should have. While purchasing auto insurance Lake Charles, it advisable to consider the present price of the luxury cars or trucks which are well above $50,000. You can increase your coverage, adding an affordable increase in premium.

Medical Payments or Personal Injury Protection (PIP)

You can purchase personal injury protection (PIP) to cover for medical expenses, which may be necessary after an accident. Unlike other health policy, the personal injury protection part of auto insurance Lake Charles pays for medical costs incurred. You will get these benefits even when you and your family members travel in someone else’s car and have fallen in an accident. The policy also covers an accident when you’re hit by a vehicle while walking.

Comprehensive Insurance

Comprehensive policy covers for loss of car resulting from theft, vandalism, fire, riots, explosions, storms, floods, falling objects, collision with animals, etc. The comprehensive policy does not cover collision with other vehicles or purposes for which you need additional collision insurance coverage. This policy has a lower excess than a collision cover.

Collision Insurance

Collision insurance covers only damage caused due to the collision to your vehicle irrespective of the person who was responsible for the loss. Auto insurance Lake Charles reimburse you the cost repair less the deductible. The higher the deductible, the lower is the premium. However, the collision coverage premium depends on the value of your car.

Failure to Maintain Insurance — Penalties

If you are not able to show proof of insurance, you have to face the following penalties:

Immediate loss of registration, license plates, and impoundment of the vehicle

Motor vehicle office can suspend your license and registration if you can’t show any proof of insurance and impose penalties at the rates as applicable according to the law.

read more
Finance

Differences Between Commercial & Consumer Debt Collection

As long as there has been a system of monetary exchange people have been getting into debt. A person can promise to pay the money back that they have borrowed in a specific period. If that does not happen a debt collector will come looking for their money. There are now laws regarding debt and practices for commercial debt collection. These laws for debt collection will vary based on whether the debt is commercial or consumer debt.

Consumer Debt

When dealing with consumer debt this debt is between a business and a consumer. The consumer purchased something and now owes the business money. Some examples of this debt are money that is owed on a personal credit card or another type of loan.

Some laws control debt collection when it comes to dealing with consumers. The debt collector needs to be licensed in the state they work in. The privacy of the consumer also needs to be protected. The Fair Debt Collection Practices Act has certain regulations that must be followed for consumer debt and they cannot use abusive practices to collect this money. Consumers may also dispute this debt and may ask for proof that the debt is valid.

The debt collection service is allowed to send collection notices in the mail. If they do make phone contact with the consumer they must be informed that the call if for debt collection purposes and all information can be used to help them collect on that debt.

Commercial Debt

Commercial debt involves a business that owes another business money. Debt is the payment that is owed between businesses. There is less control and fewer regulations when it comes to collecting this debt. The law states that a business should be disciplined enough to know their operating rights and they do be able to pay back their financial obligations. The FDCPA does not have rules and regulations when it comes to collecting commercial debt. The agencies allow the business and their debt collectors to use their approach to collecting this debt.

When it comes to successful debt in the commercial field the skill of the debt collector is very important. There are different ways that they can go about collection thing debt. This is a specialized field and a business can enjoy success if they can collect money for their clients. The debt collector needs to be able to recover the money that is owed to their client while still keeping positive business relations.

When it comes to commercial collecting unethical practices are still not allowed but there is more flexibility for repayment. Each business can have its representative speak and work out a solution that is fair to both parties. They may call each other often to talk about regular repayment options.

Some collection agencies can work with commercial and consumer debt collection. To get the best service and best chance of betting repaid it is better for work with an agency that works on collecting one specific type of debt. Since there are different regulations needed for each type of debt it is best to work with an agency that is specialized in collections with a specific effort.

If a business is owned money they need to understand their options for collecting this debt and how they should proceed with the collection process. This will give them the best chance of getting some of this debt repaid and they will be able to continue with their business operations.

read more
Loans

4 Reasons That Can Cost You Your VA Loan Plano Application

Image Source

For most people, one of the best ways to buy a house is through a mortgage application. This is especially true if you haven’t got enough cash on hand to pay for the full price yourself. For vets ad service members, you can take advantage of a VA Loan Plano to make your dream home purchase a reality.

Image Source

Good Read: The Many Advantages Of VA Loans

What does it take to qualify for a VA mortgage? A VA Loan Plano has its own set of criteria for vets and service members who wish to acquire a home loan. The following are eligible for a VA mortgage.

  • you’re able to commit active service no lower than 90 consecutive days during a war
  • you’re able to commit active service of at least 181 consecutive days during peacetime
  • you performed duties in the National Guard or even in the reserves for six years
  • your spouse was a vet who was killed while on duty
  • can produce a COE or Certificate of Eligibility

This is to say that not all active service members and vets get mortgage approval. So, you’re planning on applying for a VA Loan Plano, it pays to check what could cause your lender to decline your home loan application. These are as follows.

You applied for a VA mortgage to buy a vacation home

Note is that a VA loan is only for those eligible vets and service members who want to buy a primary residential house. If you’re wish to invest in real estate or want to buy another house as a vacation home, you’re wasting your time applying for a VA loan. This type of mortgage is only for owner-occupied residences.

You applied for foreclosure or bankruptcy in the past

The Department of Veterans Affairs is indeed keen on helping eligible members acquire a home through the VA loan. However, you’re still required to show your lender that you’re able to pay off a mortgage. If you hit a rough financial patch such as a foreclosure or bankruptcy, then you’re most likely to get a no from your lender. You will need to wait a few years and work your way into showing lenders you’re capable and responsible enough to qualify for a VA loan.

You have a bad credit score

VA loans do not require its members a high credit score to qualify for a home loan. However, a reputable lender has the right to deny your mortgage application if your credit score comes up too low. The cause can be anything – bankruptcy, foreclosure, and poor debt payments. If you plan on getting a VA mortgage in the future, make sure to start building up your credit score up to at least 620.

Good Read: The Side Effects of Bad Credit

You have a high Debt-To-Income Ratio

Most lenders allow their borrowers a mortgage as long as they don’t go beyond a DTI ratio of 41%. Your DTI ratio is your monthly gross income compared to your debt obligation each month. This means you, as a borrower, need to have a decent amount of cash left even after you pay your monthly debts.

VA mortgage is an excellent home loan option for those eligible vets and service members. If you don’t want to get denied for this type of mortgage, keep these facts in mind. You’ll get better chances of a mortgage approval with a good credit score, low DTI ratio, a good credit report, and by using the loan to buy a residential home. 

read more
1 2 3 4 5 6 8
Page 4 of 8