Harmoney

[BJ1]

This is why my autolend has been turned off all 2018. The norm is to expect that housing will take 25%+ of income, although this is a very rough measure. Add 20% of after tax income for this debt and the large topup after only 6 months and I wouldn't touch it with your bargepole. Let the institutions take a portfolio approach - we individuals need to steer clear of these.
While you're at it have a look at 144078 - has just moved house with a new mortgage and needs to refinance $40k of non mortgage debt and is willing to pay a $4000 fee to protect him/herself. I'll bet the bank didn't know all the details when it approved the house loan.

[icyfire]

Am I missing something here? $45k for home improvements when the person is renting?

Attachment 10113

The loan could be for their investment rental property. I know someone who lives in a rented property but owns two rental properties.

[Gill]

If this is the case, then this is the vital information and should have been added to the comments. But without the information, there is no way to know.

[Wsp]

Am I missing something here? $45k for home improvements when the person is renting?

Attachment 10113

One possibility is that they are renting temporarily while they undertake house renovations.

Having said that I still wouldn't touch it

[RMJH]

Am I missing something here? $45k for home improvements when the person is renting?

Attachment 10113

Rewrite with large payment protect fee....

[PennyPicker]

This is why my autolend has been turned off all 2018.

Does auto lend still even work? Is there a confirmed cash to loan ratio that is known to trigger the auto lend feature? (I have ~5% and it's not enough).

[IntheRearWithTheGear]

How do other people calculate what a dollar invested in harmoney might be worth theoretically at the end of 5 years if you could keep the capital/interest bouncing into other loans as it becomes available (taking into account taxes and harmony fees etc).

I don’t think its correct to use a online compounding interest to do this.

However this site could be a contender if you add the harmony fees percentage to the tax percentage.

https://www.calculator.net/interest-...nterestresults


For example $1 dollar invested in c2 loan at 22.99%, 15% percent harm fee, 17.5 tax could be worth 83 cents in interest but according to the above site its worth much more ie $2.16 if compounding is used.

I wrote a program to do it using the vb pmt functions and to recursivly call the interest calculation - but then you come into issues with rounding, and i dont have the fin background to get over this issue.


Just interested on how others calculate it.

[BJ1]

I have 3 family members piggy backing with small amounts included in my total Harmoney investment, so I need to be able to account accurately for annual results and to forecast future returns so they can make decisions to continue. I run a spreadsheet of all exposures with forecast returns taking into account all fees, RWT and writeoffs (the latter based on my personal expectation which to date over nearly four years is tracking on the money). While RAR to date is 13.58% (got hit a month ago with a big one which took it down a few points) my forecast return is currently 14.54% which is right on the monthly average projection for the past 2 years. I will add that I am expecting another hit to my RAR soon, of about 0.14%, but that is already in my forecast rate. Over the past few months I have altered my mix to fewer A and more B, shrunk my average term and almost halved my average commitment per loan, to reflect my concerns with the global / local economy.

[myles]

For example $1 dollar invested in c2 loan at 22.99%, 15% percent harm fee, 17.5 tax could be worth 83 cents in interest but according to the above site its worth much more ie $2.16 if compounding is used.

There shouldn't be a problem calculating return rate for a month on a single (or group of) loan(s) and then plugging that into a compounding 'calculator'/calculation, however it won't take into consideration defaults unless you use some average value or rely on Harmoney's suggested default rates.

My current 'guage' for the value of my current loans is to calculate the return for 1 day using interest, tax, fee rates on each loan and then applying a historical default rate window, at grade level and annualising that. I believe it gives me a fair snapshot indication of the return/value of my current loans with as up-to-date default rates as I can confidently calculate.

At a portfolio level, in my opinion, an XIRR calculation is still the best calculation to use, as it takes into consideration all ins and outs, but it is total portfolio value from the start, so is 'slow' to show more recent changes and is not a prediction of future value - but that should be obvious.

[myles]

A partial sample of what I calculate - which shows annualised values and rates based on current loans:

Grade	Loans	Principal	Interest	Fee	Default	Tax	Income	CRAR
C5	93	$9423.31	$2061.83	($309.28)	($205.58)	($216.49)	$1330.49	14.12%
D1	100	$12381.41	$2855.35	($428.30)	($133.39)	($299.81)	$1993.85	16.10%
D2	91	$11222.20	$2719.02	($407.85)	($95.96)	($285.50)	$1929.71	17.20%

I ignore PP for simplicity, but may add it in at some stage. Runs a little low of actual due to PP which has a positive return for me.

I don't include tax deductions - I see those as a bonus