[crumoursegemo]

Invest in me, I am a professional gambler.

[EnubreBense]

Yes, but instead of offsetting your own money, you take out an £85k mortgage and leave the funds sat in an offsetting account (mortgage therefore attracts no payments as it is interest only). You invest your own £85k but have an £85k cash call at less than 3% pa.

If the bank goes caput, the £85k is protected and they use whatever other deposits (assuming less than £85k) you have to repay the £85k loan. You settle the difference and walk away with what's left, that being whatever was in your other deposits (ignoring any fees).

It essentially amounts to having an £85k low-interest, colateralized overdraft.

Neat, a colleague of mine still has an old "base rate +79bps" offset mortgage running on the side. Very handy!

[iceleliewBync]

Maybe you guys can offer some advice on this.... a friend of mine was in a joint mortgage until recently, then his half was bought out by the other party. What kind of mortgage does he go for now? Does the system allow him to become a first time buyer again?

[Patamuta]

Maybe you guys can offer some advice on this.... a friend of mine was in a joint mortgage until recently, then his half was bought out by the other party. What kind of mortgage does he go for now? Does the system allow him to become a first time buyer again?

What's the advantage of him being a first time buyer in mortgage terms?

[Smittoh]

Are there any peer to peer lending schemes in Europe? I've been putting money into Lending Club here in the US which is effectively direct lending in small diluted risk units called notes.

My net ammualized returns since I started this are 13.9%. Pretty good for what's moderately low risk.

[iceleliewBync]

What's the advantage of him being a first time buyer in mortgage terms?

I have no idea. I just threw that in as a query. Where does he stand on the mortgage ladder though? Is he re-mortgaging?

--- Post Update ---

Are there any peer to peer lending schemes in Europe? I've been putting money into Lending Club here in the US which is effectively direct lending in small diluted risk units called notes.

My net ammualized returns since I started this are 13.9%. Pretty good for what's moderately low risk.

I don't know of any, but currently these two are giving me a major boner:

http://www.kiva.org/
http://www.lendwithcare.org/

However, it probably won't excite you as there are no real returns to be made, but the philanthropic nature of it excites me.

[PriniMai]

First time buyers have to pay less fees and don't pay stamp duty. I know this because i am soon going to be one.

And no, he cant be a first time buyer again, doesn't matter what has happened with this mortgage currently.

[Smittoh]

I have no idea. I just threw that in as a query. Where does he stand on the mortgage ladder though? Is he re-mortgaging?

--- Post Update ---


I don't know of any, but currently these two are giving me a major boner:

http://www.kiva.org/
http://www.lendwithcare.org/

However, it probably won't excite you as there are no real returns to be made, but the philanthropic nature of it excites me.

I have a Kiva account. Unfortunately they charge you every time the money is distributed, so your fund decreases every time. Other than that, I like Kiva.

[Patamuta]

Are there any peer to peer lending schemes in Europe? I've been putting money into Lending Club here in the US which is effectively direct lending in small diluted risk units called notes.

My net ammualized returns since I started this are 13.9%. Pretty good for what's moderately low risk.

Yes, you essentially write your own business within the rules of the site, Zopa is an example from the UK.

I have no idea. I just threw that in as a query. Where does he stand on the mortgage ladder though? Is he re-mortgaging?[COLOR=#209fff]

Re-mortgaging is organising borrowing on a property that is already mortgaged or owned. He would just be a Joe Bloggs getting a new mortgage.

First time buyers have to pay less fees and don't pay stamp duty. I know this because i am soon going to be one.

And no, he cant be a first time buyer again, doesn't matter what has happened with this mortgage currently.

The stamp duty holiday has lapsed, everyone's under the same umbrella now aren't they? You pay based on the value of the house. As for "first time buyer" mortgages with lower fees, the associated interest rate is higher and the mortgages are generally available to everyone, the exception being third party (i.e. parent) colateralised lending, unless you mean ones with free valuations etc? You can probably find something cheaper with another lender anyway. In nominal terms, it is always cheaper over the term of a mortgage product to pay booking and arrangement fees with the same lender on comparative products i.e. a 3 year fixed at 75% LTV will be cheaper over 3 years by paying the upfront fees, though admittedly you need more cash upfront.

[Keyblctt]

OK - so I had a meeting this week with AES international - a finance / investment company specialising in expat finance (I'm a Brit living in The Netherlands).

http://www.aesfinance.com/

We've gone through the risk profiling, now waiting for the results - then we will start to talk specifics of investments; both in terms of accepable risk as well as currency (inside / outside of the EURO).

So far I have to say I've been very impressed with both their sales-patter and their attention to detail / straight talking. I don't have anything at the moment that is making me doubtful about them.

Based on the last meeting, our expected risk profile is judged to be medium-risk, which in their experience apparently equates to investments giving an average return of 8-10%. The initially suggested investment profile is a 24 year plan with monthly investments, with a committment to 23 months at 1,125 euro per month. After the intial 23 months the monthly invested amount can be varied (or stopped) without issue.
The chosen investment portfolio can also be adjusted as frequently as necessary, with in principle four meetings per year with AES to review.
We've been advised that spreading investments in monthly amounts is preferrable to lump sum investing, as you spread both your risk and benefit from any intermediate rate changes. A monthly investment of 1125 euro ensures an automatic monthly return of 55 euro just from the scheme vehicle itself, before factoring in the return on the actual investments. So essentially at this level of investment the scheme pays for itself each month, and gives you a small return irrespective of investment performance. The investments themselves would be offshore, with no tax payable on the returns (a much better option than keeping the money in Dutch banks, where I pay income tax on the interest generated... all 2% of it )

If anyone is able to use their l33t interweb skillz (is that what the kids call it these days?) to find out more about this company I would be highly appreciative. Further more, if anyone has investments themselves and wants to offer up any pearls of wisdom, feel free.

I can offer a Steam Guest Pass: Red Orchestra 2: Heroes of Stalingrad to whomever I consider gives me the most useful information - on in the case of this place the least condescending and sarcastic information (don't judge, its the only giftable item I have!)

[Patamuta]

An investment vehicle that generates a return just by investing in it, probably provides 8-10% (I'm guessing pa rather than capital growth over 24 years) on medium risk and is offshored for about 15k pa? Sounds like a ponzi, you're right to investigate.

What downside risk did they discuss?

In terms of other thoughts, don't you have your own place? Do they do offset mortgages in the Netherlands?

[Rjvpicux]

rule one, if the bank made the product, the bank always wins

[Patamuta]

Chris, let me be less controversial. It sounds to me like you'd be buying units in a fund (or fund of funds) of non-investment grade corporate bonds, but happy to hear the views of the guys who work specifically in banking or investment (I've been out for about 5 years). There is significant downside risk in a fund of this type and it'll be relatively illiquid and I wouldn't have thought a guy with a young family would want to take those kinds off risks or have lack of access to funds.

I'm not on the forum in the day time any more so see what other advice or comments you get but feel free to drop me a PM to chat about lower risk ways of holding liquid assets (hence my offset mortgage question). It won't be advice, just a few ideas about different ways of thinking. I'll just add that rule one for me is that you pay someone to be independent; if they're not charging you up front, they're not telling you what you need to hear, and that seems to be the case here.

EDIT: Have been reading this on my phone so missed a couple of details. A 5% nominal return just for investing? Either you've got mixed up over the details or you need to steer well clear. I thought it said 5 euros, not 55 euros!

[iceleliewBync]

I went to school with one of their relationship managers and one one of their private client advisers. They are both based in Dubai now, but I can put you in touch with them directly if it would help out at all.

Both are decent blokes I'd say after knowing them for 20 years, but I know nothing about the company. I tend to think that decent people tend to be fairly ethical. Just my two cents though.

[EnubreBense]

Chris, let me be less controversial. It sounds to me like you'd be buying units in a fund (or fund of funds) of non-investment grade corporate bonds, but happy to hear the views of the guys who work specifically in banking or investment (I've been out for about 5 years). There is significant downside risk in a fund of this type and it'll be relatively illiquid and I wouldn't have thought a guy with a young family would want to take those kinds off risks or have lack of access to funds.

EDIT: Have been reading this on my phone so missed a couple of details. A 5% nominal return just for investing? Either you've got mixed up over the details or you need to steer well clear. I thought it said 5 euros, not 55 euros!

I agree with the above.
I do not like this at all. Also the word "commitment" hurts my eyes.

I would never, I repeat NEVER buy into a scheme if I do not know exactly what is inside.
Especially if it promises 5% tax free + extra returns.

Based on your post above I will also say steer clear unless they can give you full transparency (and then I'd like to see it). There's no such thing as a free lunch.

PS: I'm a derivatives salestrader, for the records. I have a large aversion for funds and funds of funds (and black boxes for that matter).

[aburva.org]

I too would urge caution. Extreme caution even. You should know exactly what's in the product you're buying and how much that product is costing you. Do you have any literature directly from the vendor that explains what this product is? It sounds suspect.

It's entirely possible that this is a completely legitimate product that, for example, owns stable dividend-paying utilities or something and uses written puts and/or calls (either a combination of naked puts, covered calls or short straddles) to generate ongoing income. Such a strategy could absolutely deliver 5-odd percent monthly returns in the right market and with ideal execution, but I would call it a very risky proposition.

I would suggest that actively-managed products and services tend to be very expensive as compared to something like index funds, and they overwhelmingly tend to underperform indices in the long term as well. The more exotic the product, the more costly it is and the worse it's apt to perform in my experience. Even if the short-term performance is good, in the long term you're often better off with simple, passive funds/products purchased in small amounts on a regular basis.

What you've been told about ongoing, regular contributions is spot on. This is called dollar cost averaging. In a choppy or declining market, it's likely to deliver the best average entry prices for assets.

What you've been told about the tax implications is suspect. You should consult with a tax expert or some legal representation. I know that in Canada, you are obligated to pay taxes for any offshore assets that generate income or returns for you. If you already pay foreign taxes on those, then by treaty those amounts will count towards your Canadian taxes and you will not be taxed twice. If you pay nothing to a foreign country, then you will pay Canadian taxes. You are also obligated to document in explicit detail what foreign assets you own if they cost in excess of a certain dollar amount. You can elect not to document any of these activities, but this does not make a tax-sheltered investment of them. It's simply breaking the law and exposure to legal ramifications.

[Keyblctt]

Thanks guys - really much appreciated

Like I say -I'm still at the risk-profiling / investigation stage currently. Not going to jump into anything without doing all necessary investigation & due diligence. I will get more detail from them in the next meeting also.

[Patamuta]

What became of this Chris?

[iceleliewBync]

I have thought about this a bit, and in my mind it means that you have a medium (50%?) chance of losing 27,000 Euros.

[Keyblctt]

Put the whole thing on indefinite hold for the time being as my work is mental at the moment, and might cause a shift in my circumstances depending on the outcome of tenders in progress.

Not sure exactly what I will do once my situation becomes clearer. I do want to make my savings work harder for me, but just not sure how.