Archive for the ‘Finance’ Category

The First House

Sunday, January 31st, 2010

That is the translation of the current crediting program financed by our government and executed by a few selected banks in our country. Since I got fired up by the offer I saw (see previous post), I did a research on the offers the banks had. The offers have some difference, so I did a preliminary research on them using only data published on their websites. I have selected three banks:

I took as target credit the value of the flat I liked (without the garage): €42.000, and a crediting period of 240 months (20 years).
Banner BT
The first bank I examined, was BT, the preferred bank, because it is the regions bank and because I like them in general 🙂 . They offer only one, basic crediting mechanism, with a flat paying rate of €257.91/month. This value is however composed of the credit+interest which varies along the 240 months:

Month # Rate Interest Fees Total
Month 001 €99.87 €158.04 0 €257.91
Month 240 €256.89 €1.02 0 €257.91

Although I have written 0 to the Charges section, there are occasional charges to be payed at certain periods. These are handling fees by the bank, which occur only occasionally.

There are also initial payments that have to be done when applying for the credit. According to the bank’s website, these are the numbers:

Advance €2100 5% of the credit
Credit fee 0 it says “gratuit”
Guarantee €472.92 3 rates of the interest
Evaluation 0 Done by BT evaluator
Total €2572.92 – estimation

Banner BRD
Next I examined BRD. This bank seems to offer two methods of paying the rates: it offers an almost flat payment rate with the following characteristics:

Month # Rate Interest Fees Total
Month 001 €119.36 €105.24 €39.9 €262.49
Month 240 €224 €0.59 €0.22 €224.82

and another type, the decreasing payment rate, with the following characteristics:

Month # Rate Interest Fees Total
Month 001 €166.25 €158.04 €39.9 €311.39
Month 240 €166.25 €0.44 €0.17 €166.85

The advantage of this second type of payment rate is of course the fact, that the rates are actually being payed at the flat rate… in other words this is the actual flat rate payment. It could represent a huge advantage when trying to pay the rest of the credit instantly in the future.

Here is the list of down-payments that have to be done when applying for the credit:

Advance €2100 5% of the credit
Credit fee 0 it says “gratuit”
Guarantee €314.77 3 rates of the interest
Evaluation €100 Approximation. By preferred evaluator.
Total €2514.77 – estimation

Banner BCR
Unfortunately BCR does not offer any calculator to calculate the rates for this type of credit. For this reason I do not know what the rates are. I was able to gather some information about the down-payments:

Advance €2100 5% of the credit
Credit fee €79.8 0.2%
Guarantee €400 Approximation. 3 rates.
Evaluation €83 300RON + Taxes
Total €2661 – very rough estimation

The research shows, that in order to have this type of credit the down-payment is really low. However it must be taken into consideration, that additional charges may be asked by the real-estate agency (see my previous post) and take into account that you might need some money for furniture also. The rates themselves are OK, but can be changed and I think they will be changed during the crediting period. For this reason I like the 2nd offer of BRD, where you actually pay linearly the credit, so after 10 years, there will be actually 50% payed of the credit and the rest is easier to be payed…



Saturday, January 23rd, 2010

In the past year I have never written about something that I do almost daily: I gamble… or at least, that is what many of my relatives and friends say. The general idea is the same: I supposedly put money into something I cannot control, and pray to God that I win. Most of these people of course haven’t got a clue of what I am on about. Those people generally just get terrified by hearing the word: stocks.
Our country has a very short history in trading. During the time of the communism this way of making money was nonexistent of course. After Romania has met capitalism, however, things have changed: those who had the spirit and moreover the mind, opened up a whole new chapter in some of the citizens life.

Over time more and more people started to join this “mysterious club”, soon people of all ages gave in their money in the big pool and tried their luck. Before the crisis this was an almost 100% guaranteed winning-game. Almost everyone had a 50-100% growth of their investment yearly. In 2007, a new phenomenon appeared on the Romanian stock market: the stocks started to lose value. By the year 2008 the game turned into a 100% losing-game. Most players simply got fed up and got out.

Last year hope reappeared: the stock-exchange grew and people started to win again. However this time, it seemed to resemble more to a simple party of Blackjack: people knew, that they could win or also lose.

So what can be done? Is this like Blackjack then? Honestly: YES, it is like Blackjack… and like in Blackjack, also here, people can count cards, only here, it is not illegal. Actually counting cards when playing with stocks, should be a required skill: read the news, draw the correct conclusions. Simple, isn’t it? So then, what should be read? There are thousands of news written (or not) circulating daily. Even the smallest detail, like what kind of credits banks are giving has to be taken into account… (as most of us now know…). It is a challenge to keep up with them, not to mention draw the correct conclusions. But then again counting cards in Blackjack isn’t an easy task either…

To everyone who is out there and wants to join the game then: yes it can be done, yes it is controllable and yes you have to be very very prepared. One thing to note: the tendency is when someone is winning in the stock exchange, someone will lose… try to stay more on the winning side than on the losing 🙂 …