The Federal Open Market Committee recently (Dec. 1) released a report showing slow but continued improvement in the economy for October thru November. The report in general was positiveshowing increased consumer spending. Consumer confidence also recently showed some improvement. While these are good trends it will still take some time and more positive economic news to see any real impact on lending and financing overall. Credit rating and debt ratio remain the two most important factors for consumers in obtaining a loan right now. The large banks are once again posting large profits but have not loosened their lending guidelines due to a number of factors. Some of which include employment, the economy as a whole and the banks anticipated losses from ongoing and future foreclosures (along with the government reviewing all banks foreclosure processes).
Interest rates remain very attractive, both on the secured and unsecured sides of lending. Mortgage rates are still hovering around historic lows for both 30 year and 15 year terms. Rates for home equity lines of credit (HELOC) and second mortgages are also doing very well. Unsecured loans and credit lines of credit carry higher rates than mortgage/secured products but continue to be low, relatively speaking. Here at Paramount Capital, we continue to educate customers on the current “cost of money” as it compares not only to the past but also to the near future, as rates will have to rise at some point. Interest rates have remained historically low for quite some time now, so it is not a matter of if, it is a matter of when interest rates will rise. The Federal Reserve will have to raise interest rates when the economy demonstrates sustained economic growth and to combat possible inflation. If a customer is in the market and wants/needs to finance, it is a great time to take advantage of the current interest rates and overall cost of financing a pool.
Despite the conservative lending market that continued this year, 2010 produced some successes here at Paramount Capital. One of which was our ability to partner with new lenders and offer some of the most aggressive lending programs out there. It has been refreshing to find and work with excellent lending institutions that still believe in “make sense” lending. We will continue to be proactive and aggressive in getting out in front of new lending opportunities and programs in 2011.
The enhancement of the Paramount Capital web-link program this year was also a success worth highlighting (available to all approved Paramount dealers only) and we are excited to announce a whole new look to our site for 2011. With applications for 2010 up over 2009, along with a large increase in traffic on our Paramount Capital website, we feel this is a great time to enhance and improve our website for our dealers and their customers. Keep an eye out for our official announcement but our target date is early 2011. There will be a whole new look to the site and we are very pleased to announce a new “resource” page/tool for the site, where Paramount dealers can go and utilize different marketing tools, icons, and announcements to compliment and enhance their current websites for financing. The Paramount Capital website link is providing leads for many of our dealers and our goal is to help all our dealers in communicating to customers that there are financing options out there and that Paramount dealers can provide that thru their partnership with Paramount Capital’s services.