About.com Real Estate Business

Wednesday, September 15, 2010

Refinancing

Refinancing refers to the replacement of an existing debt obligation with a debt obligation under different terms. The most common consumer refinancing is for a home mortgage.
If the replacement of debt occurs under financial distress, it is also referred to as debt restructuring.
A loan (debt) can be refinanced for various reasons:
  1. To take advantage of a better interest rate (which will result in either a reduced monthly payment or a reduced term)
  2. To consolidate other debt(s) into one loan (this will result in a longer term)
  3. To reduce the monthly repayment amount (this will result in a longer term)
  4. To reduce or alter risk (e.g. switching from a variable-rate to a fixed-rate loan)
  5. To free up cash (this will result in a longer term)
Refinancing for reasons 2, 3, and 5 is usually undertaken by borrowers who are in financial difficulty in order to reduce their monthly repayment obligations, with the penalty that they will remain in debt for years longer.
In the context of personal (as opposed to corporate) finance, refinancing multiple debts makes management of the debt easier. If high-interest debt, such as credit card debt, is consolidated into the home mortgage, the borrower is able to pay off the remaining debt at mortgage rates over a longer period.
For home mortgages in the United States, there may be tax advantages available with refinancing, particularly if one does not pay Alternative Minimum Tax.

Risks

Most fixed-term loans have penalty clauses ("call provisions") that are triggered by an early repayment of the loan, in part or in full, as well as "closing" fees. There will also be transaction fees on the refinancing. These fees must be calculated before embarking on a loan refinancing, as they can wipe out any savings generated through refinancing.
If the refinanced loan has lower monthly repayments or consolidates other debts for the same repayment, it will result in a larger total interest cost over the life of the loan, and will result in the borrower remaining in debt for many more years. Calculating the up-front, ongoing, and potentially variable costs of refinancing is an important part of the decision on whether or not to refinance.
In some jurisdictions, varying by American state, refinanced mortgage loans are considered recourse debt, meaning that the borrower is liable in case of default, while un-refinanced mortgages are non-recourse debt.

Points

Refinancing lenders often require a percentage of the total loan amount as an upfront payment. Typically, this amount is expressed in "points" (or "premiums"). 1 point = 1% of the total loan amount. More points (i.e. a larger upfront payment) will usually result in a lower interest rate. Some lenders will offer to finance parts of the loan themselves, thus generating so-called "negative points" (i.e. discounts).

Types (US loans only)

No Closing Cost

Borrowers with this type of refinancing typically pay few upfront fees to get the new mortgage loan.[citation needed] This type of refinance can be beneficial provided the prevailing market rate is lower than the borrower's existing rate by at least 1.5 percentage points.[citation needed]
However, what most lenders fail to disclose is that the money a borrower save upfront is being collected on the back end through what's called yield spread premium (YSP). Yield spread premiums are the cash that a mortgage company receives for steering a borrower into a home loan with a higher interest rate. The latter will even eventually lead to borrowers overpaying.
True No Closing Cost mortgages are usually not the best options. When the borrower pays out of pocket for their closing costs, they are better able to understand all the costs associated with the loan. In most cases, the borrower is also able to negotiate the fees for the appraisal and escrows down to a reasonable cost. Sometimes, when wrapping closing costs into a loan, borrowers forget about the fees because they are usually not coming into the loan with any money.

Cash-Out

This type of refinance may not help lower the monthly payment or shorten mortgage periods. It can be used for home improvement, credit cards, and other debt consolidation if the borrower qualifies with their current home equity; they can refinance with a loan amount larger than their current mortgage and keep the cash difference.

Refinancing risk

 

In banking and finance, refinancing risk is the possibility that a borrower cannot refinance by borrowing to repay existing debt. Many types of commercial lending incorporate balloon payments at the point of final maturity; often, the intention or assumption is that the borrower will take out a new loan to pay the existing lenders.

A borrower that cannot refinance their existing debt and does not have sufficient funds on hand to pay their lenders may have a liquidity problem. The borrower may be considered technically insolvent: even though their assets are greater than their liabilities, they cannot raise the liquid funds to pay their creditors. Insolvency may lead to bankruptcy, even when the borrower has a positive net worth.
In order to repay the debt at maturity, the borrower that cannot refinance may be forced into a fire sale of assets at a low price, including the borrower's own home and productive assets such as factories and plants.
Most large corporations and banks face this risk to some degree, as they may constantly borrow and repay loans. Refinancing risk increases in periods of rising interest rates, when the borrower may not have sufficient income to afford the interest rate on a new loan.[citation needed]
Most commercial banks provide long term loans, and fund this operation by taking shorter term deposits. In general, refinancing risk is only considered to be substantial for banks in cases of financial crisis, when borrowing funds, such as inter-bank deposits, may be extremely difficult.
Refinancing is also known as “rolling over” debt of various maturities, and so refinancing risk may be referred to as rollover risk.

( source: http://en.wikipedia.org/wiki/Refinancing )

 

Monday, September 13, 2010

Real Estate

Real estate is a legal term (in some jurisdictions, such as the United Kingdom, Canada, Australia, USA and The Bahamas) that encompasses land along with improvements to the land, such as buildings, fences, wells and other site improvements that are fixed in location—immovable.[1] Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction and include things such as commercial and residential real property transactions. Real estate is often considered synonymous with real property (sometimes called realty), in contrast with personal property (sometimes called chattel or personalty under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property", referring to ownership of land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof. Real property is typically considered to be Immovable property[2] The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.

Etymology

In law, the word real means relating to a thing (res/rei, thing, from O.Fr. reel, from L.L. realis "actual," from Latin. res, "matter, thing"[3]), as distinguished from a person. Thus the law broadly distinguishes between "real" property (land and anything affixed to it) and "personal" property (everything else, e.g., clothing, furniture, money). The conceptual difference was between immovable property, which would transfer title along with the land, and movable property, which a person would retain title to. The oldest use of the term "Real Estate" that has been preserved in historical records was in 1666.[3] This use of "real" also reflects the ancient and feudal preference for land, and the ownership (and owners) thereof.
Some people have claimed that the word real in this sense is descended (like French royal and Spanish real) from the Latin word for 'king'. In the feudal system (which has left many traces in the common law) the king was the owner of all land, and everyone who occupied land paid him rent directly or indirectly (through lords who in turn paid the king), in cash, goods or services (including military service). Property tax, paid to the state, can be seen as a relic of that system, as is the term fee simple. However, this derivation of real is a misconception.[4]

Real estate terminology and practice outside the United States (around the world)

Real estate as "real property" in the U.K.

In British usage, “real property”, often shortened to just “property”, generally refers to land and fixtures, while the term “real estate” is used mostly in the context of probate law, and means all interests in land held by a deceased person at death, excluding interests in money arising under a trust for sale of or charged on land.[5]
See Real property for a definition and Estate agent for a description of the practice in the UK.

Real estate in Mexico and Central America

The real estate businesses in Mexico and Central America are different from the way that they are conducted in the United States.
Some similarities include a variety of legal formalities (with professionals such as real estate agents generally employed to assist the buyer); taxes need to be paid (but typically less than those in U.S.); legal paperwork will ensure title; and a neutral party such as a title company will handle documentation and money in order to make the smooth exchange between the parties. Increasingly, U.S. title companies are doing work for U.S. buyers in Mexico and Central America.
Prices are often much cheaper than most areas of the U.S., but in many locations, prices of houses and lots are as expensive as the U.S., one example being Mexico City. U.S. banks have begun to give home loans for properties in Mexico, but, so far, not for other Latin American countries.
One important difference from the United States is that each country has rules regarding where foreigners can buy. For example, in Mexico, foreigners cannot buy land or homes within 50 km of the coast or 100 km from a border unless they hold title in a Mexican Corporation or a Fideicomiso (a Mexican trust).[6] In Honduras, however, they may buy beach front property directly in their name. There are different rules regarding certain types of property: ejidal land – communally held farm property – can only be sold after a lengthy entitlement process, but that does not prevent them from being offered for sale.
In Costa Rica, real estate agents do not need a license to operate, but the transfer of property requires a lawyer.

Business sector

 

With the development of private property ownership, real estate has become a major area of business, commonly referred to as commercial real estate. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields. Specialists are often called on to valuate real estate and facilitate transactions. Some kinds of real estate businesses include:
Within each field, a business may specialize in a particular type of real estate, such as residential, commercial, or industrial property. In addition, almost all construction business effectively has a connection to real estate.
Professional university-level education in real estate is primarily focused at the graduate level. Focus in towards the commercial real estate sector, primarily real estate development or investment rather than residential real estate sales conducted by a REALTOR.
See also graduate real estate education for a discussion and list of university-level real estate programs.
"Internet real estate" is a term coined by the internet investment community relating to ownership of domain names and the similarities between high quality internet domain names and real-world, prime real estate.

Residential real estate

 

The legal arrangement for the right to occupy a dwelling is known as the housing tenure. Types of housing tenure include owner occupancy, Tenancy, housing cooperative, condominiums (individually parceled properties in a single building), public housing, squatting, and cohousing. The occupants of a residence constitute a household.
Residences can be classified by, if, and how they are connected to neighboring residences and land. Different types of housing tenure can be used for the same physical type. For example, connected residents might be owned by a single entity and leased out, or owned separately with an agreement covering the relationship between units and common areas and concerns.
'Single-family detached home'
Major physical categories in North America and Europe include:
  • Attached / multi-unit dwellings
    • Apartment - An individual unit in a multi-unit building. The boundaries of the apartment are generally defined by a perimeter of locked or lockable doors. Often seen in multi-story apartment buildings.
    • Multi-family house - Often seen in multi-story detached buildings, where each floor is a separate apartment or unit.
    • Terraced house (a.k.a. townhouse or rowhouse) - A number of single or multi-unit buildings in a continuous row with shared walls and no intervening space.
    • Condominium - Building or complex, similar to apartments, owned by individuals. Common grounds are owned and shared jointly. There are townhouse or rowhouse style condominiums as well.
    • Cooperative (a.k.a. "co-op) - A type of multiple ownership in which the residents of a multiunit housing complex own shares in the cooperative corporation that owns the property, giving each resident the right to occupy a specific apartment or unit.
  • Semi-detached dwellings
    • Duplex - Two units with one shared wall.
  • Single-family detached home
  • Portable dwellings
    • Mobile homes - Potentially a full-time residence which can be (might not in practice be) movable on wheels.
    • Houseboats - A floating home
    • Tents - Usually very temporary, with roof and walls consisting only of fabric-like material.
The size of an apartment or house can be described in square feet or meters. In the United States, this includes the area of "living space", excluding the garage and other non-living spaces. The "square meters" figure of a house in Europe may report the total area of the walls enclosing the home, thus including any attached garage and non-living spaces, which makes it important to inquire what kind of surface definition has been used.
It can be described more roughly by the number of rooms. A studio apartment has a single bedroom with no living room (possibly a separate kitchen). A one-bedroom apartment has a living or dining room separate from the bedroom. Two bedroom, three bedroom, and larger units are common. (A bedroom is defined as a room with a closet for clothes storage.)
See List of house types for a complete listing of housing types and layouts, real estate trends for shifts in the market and house or home for more general information.

Market sector value

 

According to The Economist, "developed economies'" assets at the end of 2002 were the following:
That makes real estate assets 54% and financial assets 46% of total stocks, bonds, and real estate assets. Assets not counted here are bank deposits, insurance "reserve" assets, natural resources, and human assets. It is not clear if all debt and equity investments are counted in the categories equities and bond.

Mortgages in real estate

In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich and poor, a significant fraction of the total wealth is in the form of land and buildings.
In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is mortgage loans (or other instruments). These are loans for which the real property itself constitutes collateral. Banks are willing to make such loans at favorable rates in large part because, if the borrower does not make payments, the lender can foreclose by filing a court action which allows them to take back the property and sell it to get their money back. For investors, profitability can be enhanced by using an off plan or pre-construction strategy to purchase at a lower price which is often the case in the pre-construction phase of development.[citation needed]
But in many developing countries there is no effective means by which a lender could foreclose, so the mortgage loan industry, as such, either does not exist at all or is only available to members of privileged social classes.

( source : http://en.wikipedia.org/wiki/Real_estate )

 


 



 

Sunday, September 12, 2010

100 Home equity loan

A home equity loan (sometimes abbreviated HEL) is a type of loan in which the borrower uses the equity in their home as collateral. These loans are useful to finance major expenses such as home repairs, medical bills or college education. A home equity loan creates a lien against the borrower's house, and reduces actual home equity.
Home equity loans are most commonly second position liens (second trust deed), although they can be held in first or, less commonly, third position. Most home equity loans require good to excellent credit history, and reasonable loan-to-value and combined loan-to-value ratios. Home equity loans come in two types, closed end and open end.
Both are usually referred to as second mortgages, because they are secured against the value of the property, just like a traditional mortgage. Home equity loans and lines of credit are usually, but not always, for a shorter term than first mortgages. In the United States, it is sometimes possible to deduct home equity loan interest on one's personal income taxes.
There is a specific difference between a home equity loan and a Home Equity Line of Credit (HELOC). A HELOC is a line of revolving credit with an adjustable interest rate whereas a home equity loan is a one time lump-sum loan, often with a fixed interest rate.
This is a revolving credit loan, also referred to as a home equity line of credit, where the borrower can choose when and how often to borrow against the equity in the property, with the lender setting an initial limit to the credit line based on criteria similar to those used for closed-end loans. Like the closed-end loan, it may be possible to borrow up to 100% of the value of a home, less any liens. These lines of credit are available up to 30 years, usually at a variable interest rate. The minimum monthly payment can be as low as only the interest that is due.
Typically, the interest rate is based on the Prime rate plus a margin.
When considering a loan, the borrower should be familiar with the terms recourse and nonrecourse loan, secured and unsecured debt, and dischargeable and non-dischargeable debt.
US traditional mortgages are usually non recourse loans. "Nonrecourse debt or a nonrecourse loan is a secured loan (debt) that is secured by a pledge of collateral, typically real property, but for which the borrower is not personally liable."[1] A US home equity loan may be a recourse loan for which the borrower is personally liable. This distinction becomes important in foreclosure since the borrower may remain personally liable for a recourse debt on a foreclosed property.
Home equity loans are secured loans. "The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to satisfy the debt by regaining the amount originally lent to the borrower."[2] Credit card debt is an unsecured debt such that no asset has been pledged as collateral for the loan. Using a home equity loan to pay off credit card debt essentially converts an unsecured debt to a secured debt.
When deciding upon a type of loan, the borrower should also consider if the debt is dischargeable in bankruptcy. For instance, US student loans are "practically non-dischargeable in bankruptcy".[3]

( source : http://en.wikipedia.org/wiki/Home_equity_loan )

Anabolic steroid

Anabolic steroids, officially known as anabolic-androgen steroids (AAS), are drugs which mimic the effects of the male sex hormones testosterone and dihydrotestosterone. They increase protein synthesis within cells, which results in the buildup of cellular tissue (anabolism), especially in muscles. Anabolic steroids also have androgenic and virilizing properties, including the development and maintenance of masculine characteristics such as the growth of the vocal cords and body hair. The word anabolic comes from the Greek ἀναβολή anabole, "that which is thrown up, mound", and the word androgenic from the Greek ἀνδρός andros, "of a man" + -γενής -genes, "born".
Anabolic steroids were first isolated, identified and synthesized in the 1930s, and are now used therapeutically in medicine to stimulate bone growth and appetite, induce male puberty, and treat chronic wasting conditions, such as cancer and AIDS. The American College of Sports Medicine acknowledges that AAS, in the presence of adequate diet, can contribute to increases in body weight, often as lean mass increases, and that the gains in muscular strength achieved through high-intensity exercise and proper diet can be additionally increased by the use of AAS in some individuals.[2]
Some health risks can be produced by long-term use or excessive doses of anabolic steroids. These effects include harmful changes in cholesterol levels (increased low-density lipoprotein and decreased high-density lipoprotein), acne, high blood pressure, liver damage (mainly with oral steroids), and dangerous changes in the structure of the left ventricle of the heart.
Ergogenic uses for anabolic steroids in sports and bodybuilding are controversial because of their adverse effects and the potential to gain an advantage conventionally considered "cheating." Their use is referred to as doping and banned by all major sporting bodies. For many years AAS have been by far the most detected doping substances in IOC-accredited laboratories.[3][4] In countries where AAS are controlled substances, there is often a black market in which smuggled or even counterfeit drugs are sold to users.

History

Isolation of gonadal AAS

Chemical structure of the natural anabolic hormone testosterone, 17β-hydroxy-4-androsten-3-one
The use of gonadal steroids pre-dates their identification and isolation. Medical use of testicle extract began in the late 19th century while its effects on strength were still being studied.[5] The isolation of gonadal steroids can be traced back to 1931 when Adolf Butenandt, a chemist in Marburg, purified 15 milligrams of the male hormone androstenone from tens of thousands of litres of urine. This steroid was subsequently synthesized in 1934 by Leopold Ruzicka, a chemist in Zurich.[6]
In the 1930s it was already known that the testes contained a more powerful androgen than androstenone, and three groups of scientists, funded by competing pharmaceutical companies in the Netherlands, Nazi Germany and Switzerland, raced to isolate it.[6][7] This hormone was first identified by Karoly Gyula David, E. Dingemanse, J. Freud and Ernst Laqueur in a May 1935 paper "On Crystalline Male Hormone from Testicles (Testosterone)."[8] They named the hormone testosterone, from the stems of testicle and sterol, and the suffix of ketone. The chemical synthesis of testosterone was achieved in August that year, when Butenandt and G. Hanisch published a paper describing "A Method for Preparing Testosterone from Cholesterol."[9] Only a week later, the third group, Ruzicka and A. Wettstein, announced a patent application in a paper "On the Artificial Preparation of the Testicular Hormone Testosterone (Androsten-3-one-17-ol)."[10] Ruzicka and Butenandt were offered the 1939 Nobel Prize in Chemistry for their work, but the Nazi government forced Butenandt to decline the honor, although he accepted the prize after the end of World War II.[6][7]
Clinical trials on humans, involving either oral doses of methyltestosterone or injections of testosterone propionate, began as early as 1937.[6] Testosterone propionate is mentioned in a letter to the editor of Strength and Health magazine in 1938; this is the earliest known reference to an anabolic steroid in a U.S. weightlifting or bodybuilding magazine.[6] There are often reported rumors that German soldiers were administered anabolic steroids during the Second World War, the aim being to increase their aggression and stamina, but these are, as yet, unproven.[11] Adolf Hitler himself, according to his physician, was injected with testosterone derivatives to treat various ailments.[12] AAS were used in experiments conducted by the Nazis on concentration camp inmates,[12] and later by the allies attempting to treat the malnourished victims that survived Nazi camps.[11]

Development of synthetic AAS

Chemical structure of the synthetic steroid Methandrostenolone (Dianabol). 17α-methylation (upper right corner) enhances oral bioavailability.
The development of muscle-building properties of testosterone was pursued in the 1940s, in the Soviet Union and in Eastern Bloc countries such as East Germany, where steroid programs were used to enhance the performance of Olympic and other amateur weight lifters. In response to the success of Russian weightlifters, the U.S. Olympic Team physician Dr. John Ziegler worked with synthetic chemists to develop an anabolic steroid with reduced androgenic effects.[13] Ziegler's work resulted in the production of methandrostenolone, which Ciba Pharmaceuticals marketed as Dianabol. The new steroid was approved for use in the U.S. by the Food and Drug Administration (FDA) in 1958. It was most commonly administered to burn victims and the elderly. The drug's off-label users were mostly bodybuilders and weight lifters. Although Ziegler prescribed only small doses to athletes, he soon discovered that those who abused Dianabol suffered from enlarged prostates and atrophied testes.[14] AAS were placed on the list of banned substances of the IOC in 1976, and a decade later the committee introduced 'out-of-competition' doping tests because many athletes used AAS in their training period rather than during competition.[3]
Three major ideas governed modifications of testosterone into a multitude of AAS: alkylation at 17-alpha position with methyl or ethyl group created orally active compounds because it slows the degradation of the drug by the liver, esterification of testosterone and nortestosterone at the 17-beta position allows the substance to be administered parenterally and increases the duration of effectiveness because agents soluble in oily liquids may be present in the body for several months, and finally alterations of the ring structure were applied for both oral and parenteral agents to seeking to obtain different anabolic to androgenic effect ratios.[15]

Pharmacology

Routes of administration

A vial of injectable testosterone cypionate
There are three common forms in which anabolic steroids are administered: oral pills, injectable steroids, and skin patches. Oral administration is the most convenient. Testosterone administered by mouth is rapidly absorbed, but it is largely converted to inactive metabolites, and only about 1/6 is available in active form. In order to be sufficiently active when given by mouth, testosterone derivatives are alkylated at the 17 position, e.g. methyltestosterone and fluoxymesterone. This modification reduces the liver's ability to break down these compounds before they reach the systemic circulation.
Testosterone can be administered parenterally, but it has more irregular prolonged absorption time and greater activity in propionate, enanthate, undecanoate or cypionate ester form. These derivatives are hydrolyzed to release free testosterone at the site of injection.[16] Injectable steroids are typically administered into the muscle, not into the vein, to avoid sudden changes in the amount of the drug in the bloodstream. Transdermal patches (adhesive patches placed on the skin) may also be used to deliver a steady dose through the skin and into the bloodstream. Injection is the most common method used by individuals administering anabolic steroids for non-medical purposes.[17]
The traditional routes of administration do not have differential effects on the efficacy of the drug. Studies indicate that the anabolic properties of anabolic steroids are relatively similar despite the differences in pharmacokinetic principles such as first-pass metabolism. However, the orally available forms of AAS may cause liver damage in high doses.[4][18]

Mechanism of action

 

The pharmacodynamics of anabolic steroids are unlike peptide hormones. Water-soluble peptide hormones cannot penetrate the fatty cell membrane and only indirectly affect the nucleus of target cells through their interaction with the cell’s surface receptors. Conversely, as fat-soluble hormones, anabolic steroids are membrane permeable and influence the nucleus of cells by direct action. The pharmacodynamic action of anabolic steroids begin when the exogenous hormone penetrates the membrane of the target cell and binds to an androgen receptor located in the cytoplasm of that cell. From there, the compound hormone-receptor diffuses into the nucleus, where it either alters the expression of genes[20] or activates processes that send signals to other parts of the cell.[21] Different types of anabolic steroids bind to the androgen receptor with different affinities, depending on their chemical structure.[3] Some anabolic steroids such as methandrostenolone bind weakly to this receptor in vitro, but still exhibit androgenic effects in vivo. The reason for this discrepancy is not known.[22]
The effect of anabolic steroids on muscle mass is caused in at least two ways:[23] first, they increase the production of proteins; second, they reduce recovery time by blocking the effects of stress hormone cortisol on muscle tissue, so that catabolism of muscle is greatly reduced. It has been hypothesized that this reduction in muscle breakdown may occur through anabolic steroids inhibiting the action of other steroid hormones called glucocorticoids that promote the breakdown of muscles.[24] Anabolic steroids also affect the number of cells that develop into fat-storage cells, by favouring cellular differentiation into muscle cells instead.[25] Anabolic steroids can also decrease fat by increasing basal metabolic rate (BMR), since an increase in muscle mass increases BMR.

Anabolic and androgenic effects

Relative androgenic:anabolic
activity in animals[16]
Preparation Ratio
Testosterone 1:1
Methyltestosterone 1:1
Fluoxymesterone 1:2
Oxymetholone 1:3
Oxandrolone 1:3–1:13
Nandrolone decanoate 1:2.5–1:4
As the name suggests, anabolic-androgenic steroids have two different, but overlapping, types of effects: anabolic, meaning that they promote anabolism (cell growth), and androgenic (or virilizing), meaning that they affect the development and maintenance of masculine characteristics.
Some examples of the anabolic effects of these hormones are increased protein synthesis from amino acids, increased appetite, increased bone remodeling and growth, and stimulation of bone marrow, which increases the production of red blood cells. Through a number of mechanisms anabolic steroids stimulate the formation of muscle cells and hence cause an increase in the size of skeletal muscles, leading to increased strength.[26][27][28]
The androgenic effects of AAS are numerous. Processes affected include pubertal growth, sebaceous gland oil production, and sexuality (especially in fetal development). Some examples of virilizing effects are growth of the clitoris in females and the penis in male children (the adult penis does not grow even when exposed to high doses of androgens), increased growth of androgen-sensitive hair (pubic, beard, chest, and limb hair), increased vocal cord size, deepening the voice, increased libido, suppression of natural sex hormones, and impaired production of sperm.[29]
The androgenic:anabolic ratio of an AAS is an important factor when determining the clinical application of these compounds. Compounds with a high ratio of androgenic to a anabolic effects are the drug of choice in androgen-replacement therapy (e.g. treating hypogonadism in males), whereas compounds with a reduced androgenic:anabolic ratio are preferred for anemia, osteoporosis, and to reverse protein loss following trauma, surgery or prolonged immobilization. Determination of androgenic:anabolic ratio is typically performed in animal studies, which has led to the marketing of some compounds claimed to have anabolic activity with weak androgenic effects. This disassociation is less marked in humans, where all anabolic steroids have significant androgenic effects.[16]
A commonly used protocol for determining the androgenic:anabolic ratio, dating back to the 1950s, uses the relative weights of ventral prostate (VP) and levator ani muscle (LA) of male rats. The VP weight is an indicator of the androgenic effect, while the LA weight is an indicator of the anabolic effect. Two or more batches of rats are castrated and given no treatment and respectively some AAS of interest. The LA/VP ratio for an AAS is calculated as the ratio of LA/VP weight gains produced by the treatment with that compound using castrated but untreated rats as baseline: (LAc,t–LAc)/(VPc,t–VPc). The LA/VP weight gain ratio from rat experiments is not unitary for testosterone (typically 0.3–0.4), but it's normalized for presentation purposes, and used as basis of comparison for other AAS, which have their androgenic:anabolic ratios scaled accordingly (as shown in the table above).[30][22] In the early 2000s this procedure was standardized and generalized throughout OECD in what is now known as the Hershberger assay.

Body composition and strength improvements

A review spanning more than three decades of experimental studies in men found that body weight may increase by 2–5 kg as a result of short term (<10 weeks) AAS use, which may be attributed mainly to an increase of lean mass. Animal studies also found that fat mass was reduced, but most studies in humans failed to elucidate significant fat mass decrements. The effects on lean body mass have been shown to be dose dependent. Both muscle hypertrophy and the formation of new muscle fibers have been observed. The hydration of lean mass remains unaffected by AAS use, although small increments of blood volume cannot be ruled out.[31]
The upper region of the body (thorax, neck, shoulders and upper arm) seems to be more susceptible for AAS than other body regions because of predominance of androgen receptors in the upper body. The largest difference in muscle fibre size between AAS users and non-users was observed in type I muscle fibres of the vastus lateralis and the trapezius muscle as a result of long-term AAS self-administration. After drug withdrawal the effects fade away slowly, but may persist for more than 6–12 weeks after cessation of AAS use.[31]
The same review observed strength improvements in the range of 5-20% of baseline strength, largely depending on the drugs and dose used as well as the administration period. Overall, the exercise where the most significant improvements were observed was the bench press.[32] For almost two decades it was assumed that AAS only exerted significant effects in experienced strength athletes, particularly based on the studies of Hervey and coworkers.[33][34] In 1996 a randomized controlled trial published in the New England Journal of Medicine demonstrated however that even in novice athletes a 10-week strength training program accompanied by testosterone enanthate at 600 mg/week may improve strength more than training alone does.[32][35] The same study found that dose was sufficient to significantly improve lean muscle mass relative to placebo even in subjects that did not exercise at all.[35] A 2001 study by the same first author, showed that the anabolic effects of testosterone enanthate were highly dose dependent.[31][36]

Adverse effects

Anabolic steroids can cause many adverse effects. Most of these side effects are dose-dependent, the most common being elevated blood pressure, especially in those with pre-existing hypertension,[37] and harmful changes in cholesterol levels: some steroids cause an increase in LDL cholesterol and a decrease in HDL cholesterol.[38] Anabolic steroids have been shown to alter fasting blood sugar and glucose tolerance tests.[39] Anabolic steroids such as testosterone also increase the risk of cardiovascular disease[40] or coronary artery disease.[41][42] Acne is fairly common among anabolic steroid users, mostly due to stimulation of the sebaceous glands by increased testosterone levels.[43][44] Conversion of testosterone to dihydrotestosterone (DHT) can accelerate the rate of premature baldness for males who are genetically predisposed, but testosterone itself can produce baldness in females.[45]
High doses of oral anabolic steroid compounds can cause liver damage, as the steroids are metabolized (17α-alkylated) in the digestive system to increase their bioavailability and stability.[46]
There are also sex-specific side effects of anabolic steroids. Development of breast tissue in males, a condition called gynecomastia (which is usually caused by high levels of circulating estradiol), may arise because of increased conversion of testosterone to estradiol by the enzyme aromatase.[47] Reduced sexual function and temporary infertility can also occur in males.[48][49][50] Another male-specific side effect which can occur is testicular atrophy, caused by the suppression of natural testosterone levels, which inhibits production of sperm (most of the mass of the testes is developing sperm). This side effect is temporary: the size of the testicles usually returns to normal within a few weeks of discontinuing anabolic steroid use as normal production of sperm resumes.[51] Female-specific side effects include increases in body hair, deepening of the voice, enlarged clitoris, and temporary decreases in menstrual cycles. When taken during pregnancy, anabolic steroids can affect fetal development by causing the development of male features in the female fetus and female features in the male fetus.[52]
A number of severe side effects can occur if adolescents use anabolic steroids.
For example, the steroids may prematurely stop the lengthening of bones (premature epiphyseal fusion through increased levels of estrogen metabolites), resulting in stunted growth. Other effects include, but are not limited to, accelerated bone maturation, increased frequency and duration of erections, and premature sexual development. Anabolic steroid use in adolescence is also correlated with poorer attitudes related to health.[53]
Other side effects can include alterations in the structure of the heart, such as enlargement and thickening of the left ventricle, which impairs its contraction and relaxation.[54] Possible effects of these alterations in the heart are hypertension, cardiac arrhythmias, congestive heart failure, heart attacks, and sudden cardiac death.[55] These changes are also seen in non-drug using athletes, but steroid use may accelerate this process.[56][57] However, both the connection between changes in the structure of the left ventricle and decreased cardiac function, as well as the connection to steroid use have been disputed.[58][59]

Psychiatric effects

A 2005 review in CNS Drugs determined that "significant psychiatric symptoms including aggression and violence, mania, and less frequently psychosis and suicide have been associated with steroid abuse. Long-term steroid abusers may develop symptoms of dependence and withdrawal on discontinuation of AAS".[60] High concentrations of AAS, comparable to those likely sustained by many recreational AAS users, produce apoptotic effects on neurons, raising the specter of possibly irreversible neuropsychiatric toxicity. Recreational AAS use appears to be associated with a range of potentially prolonged psychiatric effects, including dependence syndromes, mood disorders, and progression to other forms of substance abuse, but the prevalence and severity of these various effects remains poorly understood.[61] There is no evidence that steroid dependence develops from therapeutic use of anabolic steroids to treat medical disorders, but instances of AAS dependence have been reported among weightlifters and bodybuilders who chronically administered supraphysiologic doses.[62] Mood disturbances (e.g. depression, [hypo-]mania, psychotic features) are likely to be dose- and drug-dependent, but AAS dependence or withdrawal effects seem to occur only in a small number of AAS users.[63]
Large scale long term studies of psychiatric effects on AAS users are not currently available.[61] In 2003, the first naturalistic long term study on ten users, seven of which completed the study, found a high incidence of mood disorders and substance abuse, but few clinically relevant changes in physiological parameters or laboratory measures were noted throughout the study, and these changes were not clearly related to periods of reported AAS use.[64] A 13-month study, published in 2006 and which involved 320 body builders and athletes suggests that the wide range of psychiatric side effects induced by the use of AAS is correlated to the severity of abuse.[65]
Aggression and hypomania
From the mid-1980s onwards the popular press has been reporting "roid rage" as a side effect of AAS (the term being a play on the more established phenomenon of road rage).[66]
A 2005 review determined that some, but not all, randomized controlled studies have found that anabolic steroid use correlates with hypomania and increased aggressiveness, but pointed out that attempts to determine whether AAS use triggers violent behaviour have failed, primarily because of high rates of non-participation.[67] A 2008 study on a nationally representative sample of young adult males in the United States found an association between lifetime and past-year self-reported anabolic-androgenic steroid use and involvement in violent acts. Compared with individuals who did not use steroids, young adult males who used anabolic-androgenic steroids reported greater involvement in violent behaviors even after controlling for the effects of key demographic variables, previous violent behavior, and polydrug use.[68] A 1996 review examining the blind studies available at that time also found that these had demonstrated a link between aggression and steroid use, but pointed out that with estimates of over one million past or current steroid users in the United States at that time, an extremely small percentage of those using steroids appear to have experienced mental disturbance severe enough to result in clinical treatments or medical case reports.[69]
A 1996 randomized controlled trial, which involved 43 men, did not find an increase in the occurrence of angry behavior during 10 weeks of administration of testosterone enanthate at 600 mg/week, but this study screened out subjects that had previously abused steroids or had any psychiatric antecedents.[35][70] A trial conducted in 2000 using testosterone cypionate at 600 mg/week found that treatment significantly increased manic scores on the YMRS, and aggressive responses on several scales. The drug response was highly variable, however: 84% of subjects exhibited minimal psychiatric effects, 12% became mildly hypomanic, and 4% (2 subjects) became markedly hypomanic. The mechanism of these variable reactions could not be explained by demographic, psychological, laboratory, or physiological measures.[71]
A 2006 study of two pairs of identical twins, in which one twin used anabolic steroids and the other did not, found that in both cases the steroid-using twin exhibited high levels of aggressiveness, hostility, anxiety and paranoid ideation not found in the "control" twin.[72] A small scale study of 10 AAS users found that cluster B personality disorders were confounding factors for aggression.[73]
Depression and suicide
The relationship between AAS use and depression is inconclusive. There have been anecdotal reports of depression and suicide in teenage steroid users,[74] but little systematic evidence. A 1992 review found that anabolic-androgenic steroids may both relieve and cause depression, and that cessation or diminished use of anabolic-androgenic steroids may also result in depression, but called for additional studies due to disparate data.[75]
Addiction potential
In an animal study male rats developed a conditioned place preference to testosterone injections into the nucleus accumbens, an effect blocked by dopamine antagonists, which suggests that androgen reinforcement is mediated by the brain. Moreover, testosterone appears to act through the mesolimbic dopamine system, a common substrate for drugs of abuse. Nonetheless, androgen reinforcement is not comparable to that of cocaine, nicotine or heroin. Instead, testosterone resembles other mild reinforcers, such as caffeine, or benzodiazepines. The potential for androgen addiction remains to be determined.[76]

Medical and ergogenic uses

Medical uses

Various anabolic steroids and related compounds
Since the discovery and synthesis of testosterone in the 1930s, anabolic steroids have been used by physicians for many purposes, with varying degrees of success.

Ergogenic use and abuse

Numerous vials of injectable anabolic steroids
Between 1 million and 3 million people (1% of the population) are thought to have misused AAS in the United States.
[92] Studies in the United States have shown anabolic steroid users tend to be mostly middle-class heterosexual men with a median age of about 25 who are noncompetitive bodybuilders and non-athletes and use the drugs for cosmetic purposes.[93] Another study found that non-medical use of AAS among college students was at or less than 1%.[94] According to a recent survey, 78.4% of steroid users were noncompetitive bodybuilders and non-athletes while about 13% reported unsafe injection practices such as reusing needles, sharing needles, and sharing multidose vials,[95] though a 2007 study found that sharing of needles was extremely uncommon among individuals using anabolic steroids for non-medical purposes, less than 1%.[17] Another 2007 study found that 74% of non-medical anabolic steroid users had secondary college degrees and more had completed college and less had failed to complete high school than is expected from the general populace.[17] The same study found that individuals using anabolic steroids for non-medical purposes had a higher employment rate and a higher household income than the general population.[17] Anabolic steroid users tend to research the drugs they are taking more than other controlled-substance users; however, the major sources consulted by steroid users include friends, non-medical handbooks, internet-based forums, blogs and fitness magazines, which can provide questionable or inaccurate information.[96]
Anabolic steroid users tend to be disillusioned by the portrayal of anabolic steroids as deadly in the media and in politics.[97] According to one study, AAS users also distrust their physicians and in the sample 56% had not disclosed their AAS use to their physicians.[98] Another 2007 study had similar findings, showing that while 66% of individuals using anabolic steroids for non-medical purposes were willing to seek medical supervision for their steroid use, 58% lacked trust in their physicians, 92% felt that the medical community's knowledge of non-medical anabolic steroid use was lacking and 99% felt that the public has an exaggerated view of the side effects of anabolic steroid use.[17] A recent study has also shown that long term AAS users were more likely to have symptoms of muscle dysmorphia and also showed stronger endorsement of more conventional male roles.[99]
Anabolic steroids have been used by men and women in many different kinds of professional sports to attain a competitive edge or to assist in recovery from injury. These sports include bodybuilding, weightlifting, shot put and other track and field, cycling, baseball, wrestling, mixed martial arts, boxing, football, and cricket. Such use is prohibited by the rules of the governing bodies of most sports. Anabolic steroid use occurs among adolescents, especially by those participating in competitive sports. It has been suggested that the prevalence of use among high-school students in the U.S. may be as high as 2.7%.[100] Male students used anabolic steroids more frequently than female students and, on average, those who participated in sports used steroids more often than those who did not.

Legal and sport restrictions

The use of anabolic steroids is banned by all major sporting bodies, including the International Olympic Committee, Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League, World Wrestling Entertainment, ICC, ITF, FIFA, FINA, UEFA, the European Athletic Association, and the Brazilian Football Confederation.

Legal status

The legal status of anabolic steroids varies from country to country: some have stricter controls on their use or prescription than others though in many countries they are not illegal. In the U.S., anabolic steroids are currently listed as Schedule III controlled substances under the Controlled Substances Act, which makes the first offense simple possession of such substances without a prescription a federal crime punishable by up to one year in prison, and the unlawful distribution or possession with intent to distribute anabolic steroids punishable as a first offense by up to ten years in prison.[101] In Canada, anabolic steroids and their derivatives are part of the Controlled drugs and substances act and are Schedule IV substances, meaning that it is illegal to obtain or sell them without a prescription; however, possession is not punishable, a consequence reserved for schedule I, II or III substances. Those guilty of buying or selling anabolic steroids in Canada can be imprisoned for up to 18 months. Import and export also carry similar penalties.[102] Anabolic steroids are also illegal without prescription in Australia,[103] Argentina, Brazil and Portugal,[104] and are listed as Class C Controlled Drugs in the United Kingdom. On the other hand, anabolic steroids are readily available without a prescription in some countries such as Mexico and Thailand.

United States

The history of the U.S. legislation on anabolic steroids goes back to the late 1980s, when the U.S. Congress considered placing anabolic steroids under the Controlled Substances Act following the controversy over Ben Johnson's victory at the 1988 Summer Olympics in Seoul. During deliberations, the American Medical Association (AMA), Drug Enforcement Administration (DEA), Food and Drug Administration (FDA) as well as the National Institute on Drug Abuse (NIDA) all opposed listing anabolic steroids as controlled substances, citing the fact that use of these hormones does not lead to the physical or psychological dependence required for such scheduling under the Controlled Substance Act. Nevertheless, anabolic steroids were added to Schedule III of the Controlled Substances Act in the Anabolic Steroid Control Act of 1990.[105] The same act also introduced more stringent controls with higher criminal penalties for offenses involving the illegal distribution of anabolic steroids and human growth hormone. By the early 1990s, after anabolic steroids were scheduled in the U.S., several pharmaceutical companies stopped manufacturing or marketing the products in the U.S., including Ciba, Searle, Syntex and others. In the Controlled Substances Act, anabolic steroids are defined to be any drug or hormonal substance chemically and pharmacologically related to testosterone (other than estrogens, progestins, and corticosteroids) that promote muscle growth. The act was amended by the Anabolic Steroid Control Act of 2004, which added prohormones to the list of controlled substances, with effect from January 20, 2005.[106]
Movement for decriminalization
After the Anabolic Steroid Control Act of 1990 listed anabolic steroids as Schedule III controlled substances in the U.S., a small movement has arisen that is highly critical of current laws concerning anabolic steroids. On June 21, 2005, Real Sports aired a segment discussing the legality and prohibition of anabolic steroids in America.[107] The show featured Gary I. Wadler, M.D., chairman of the U.S. Anti-Doping Agency and a prominent anti-steroid activist. When pressed for scientific evidence by correspondent Armen Keteyian that anabolic steroids are as "highly fatal" as is often claimed, Wadler admitted there was no evidence. Bryant Gumbel concluded the "hoopla" concerning the dangers of anabolic steroids in the media was "all smoke and no fire".[107] The show also featured John Romano, a pro-steroid activist who wrote "The Romano Factor", a pro-steroid column for bodybuilding magazine Muscular Development.

United Kingdom

In the United Kingdom, anabolic steroids are classified as class C drugs for their illegal abuse potential, which puts them in the same class as benzodiazepines. Anabolic steroids are in Schedule 4, which is divided in 2 parts; Part 1 contains most of the benzodiazepines and Part 2 contains the anabolic and androgenic steroids. There are no special controls on Schedule 4 drugs.

Status in sports

Anabolic steroids are banned by all major sports bodies including Fédération Internationale de Football Association[108] the Olympics,[109] the National Basketball Association,[110] the National Hockey League,[111] as well as the National Football League.[112] The World Anti-Doping Agency (WADA) maintains the list of performance-enhancing substances used by many major sports bodies and includes all anabolic agents, which includes all anabolic steroids and precursors as well as all hormones and related substances.[113][114] Spain has passed an anti-doping law creating a national anti-doping agency.[115] Italy passed a law in 2000 where penalties range up to three years in prison if an athlete has tested positive for banned substances.[116] In 2006, Russian President Vladimir Putin signed into law ratification of the International Convention Against Doping in Sport which would encourage cooperation with WADA. Many other countries have similar legislation prohibiting anabolic steroids in sports including Denmark,[117] France,[118] the Netherlands[119] and Sweden.[120]

Detection of use

The most commonly employed human physiological specimen for detecting anabolic steroid usage is urine, although both blood and hair have been investigated for this purpose. The anabolic steroids, whether of endogenous or exogenous origin, are subject to extensive hepatic biotransformation by a variety of enzymatic pathways. The primary urinary metabolites may be detectable for up to 30 days after the last use, depending on the specific agent, dose and route of administration. A number of the drugs have common metabolic pathways, and their excretion profiles may overlap those of the endogenous steroids, making interpretation of testing results a very significant challenge to the analytical chemist. Methods for detection of the substances or their excretion products in urine specimens usually involve gas chromatography-mass spectrometry or liquid chromatography-mass spectrometry.[121][122][123][124]

Illegal trade

Several large buckets containing tens of thousands of Anabolic steroid vials confiscated by the DEA during "Operation Raw Deal" in 2007.
Anabolic steroids are frequently produced in pharmaceutical laboratories, but in nations where stricter laws are present, they are also produced in small home made underground laboratories, usually from raw substances imported from abroad.[125] In these countries the majority of steroids are obtained illegally through black market trade.[126][127] These steroids are usually manufactured in other countries, and therefore must be smuggled across international borders. Like most significant smuggling operations, organized crime is involved.[128]
In the late 2000s the worldwide trade in illicit AAS increased significantly, and authorities announced record captures on three continents. In 2006 Finnish authorities announced a record seizure of 11.8 million AAS tablets. A year later the DEA seized 11.4 million units of AAS in the largest U.S seizure ever. In the first three months of 2008, Australian customs reported a record 300 seizures of AAS shipments.[129]
In the U.S., Canada and Europe, illicit steroids are sometimes purchased just like any other illegal drug, through dealers who are able to obtain the drugs from a number of sources. Illegal anabolic steroids are sometimes sold at gyms, competitions, and through the mail, but may also be obtained through pharmacists, veterinarians, and physicians.[130] In addition, a significant number of counterfeit products are sold as anabolic steroids, particularly via mail order from websites posing as overseas pharmacies. In the U.S., black market importation continues from Mexico, Thailand, and other countries where steroids are more easily available as they are legal.[131]

(source : http://en.wikipedia.org/wiki/Anabolic_steroid )