When a person buys a house through s home loan, every EMI that he pays towards servicing the loan increases his equity in the house. Once he pays off the loan in full, his equity in the house is 100%. In a reverse mortgage, exactly the opposite happens.When he pledges his house for a reverse mortgage with a lending institution, his equity in his own house decreases with … [Read more...] about 15 Benefits and Problems of Reverse Mortgage
Investment & Earning
27 Key Benefits of Depository System (Explained)
The depository system involves the participation of a depository, depository participants, company/registrars, and investors. The company is also called the issuer.The depository system operates in the ones of a banking system.A bank holds funds in its accounts and transfers funds between accounts whereas a depository holds securities in accounts and transfers … [Read more...] about 27 Key Benefits of Depository System (Explained)
5 Essential Steps of Depository System Process
The depository system performs its function through a network of depository participants (DPs) who interact with the clearing members and investors. Therefore, the depository system works as an Interacting system because it directly interacts with the investors.There are four parties in a Demat transaction the customers, the depository participants, the depository, and … [Read more...] about 5 Essential Steps of Depository System Process
12 Variables Considered in Methodology of Credit Rating
A large number of variables affect the quality of writing of a debt instrument of an organization. The credit rating methodology should include these variables.The variables are history, quality of management, business fundamentals, accounting quality, liquidity management, quality of the assets, profitability, return on equity and investment, capital structure, past … [Read more...] about 12 Variables Considered in Methodology of Credit Rating
16 Key Pros and Cons of Credit Rating (With Examples)
A credit rating tells a lender or investor the probability of the subject being able to pay back a loan. However, in recent years, credit ratings have also been used to adjust insurance premiums, determine employment eligibility, and establish the amount of a utility or leasing deposit.It also assists to the institutional investors regarding the framing of public policy … [Read more...] about 16 Key Pros and Cons of Credit Rating (With Examples)
