Like It Or Not, You Have A Score To Settle!
July 31, 2007
Like It Or Not, You Have A Score To Settle! (Part 1 of 2 on Credit Scoring)
Just when most people finish with school and can stop worrying about test scores, there’s a new kind of scoring that enters the picture. It’s called credit scoring. And, its impact on your financial future can mean more to you than a college degree.
You may never know your precise credit score, but you need to know if you’re at risk!
Credit Scoring … Why It’s So Important:
Ever wonder how a creditor decides whether to grant you credit? For years, creditors have been using credit scoring systems to determine if you’d be a good risk for credit cards and auto loans. More recently, credit scoring has been used to help creditors evaluate your ability to repay home mortgage loans.
Precisely what is credit scoring?
Credit scoring is a system creditors use to help determine whether to give you credit. Information about you and your credit experiences, such as bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and age of your accounts is collected from credit applications and your credit report.
How To Save Money On Your Mortgage
July 30, 2007
Obtaining a home loan is arguably the most expensive transaction you’ll experience in your lifetime. Therefore, getting the best home at the greatest value is an endeavor worth pursuing. Whether you’re trying to squeeze in to a higher priced home or just trying to shave a couple bucks off of the closing costs, this article will help you explore your options.
Here’s a list of our top 7 things you can do to cut corners and save money on your mortgage
1. Shop Rate!
Sometimes the obvious just needs to be stated out loud: Lenders do not charge the same rate. Some charge more, and some charge less.
- Obtain several loan offers for consideration, and compare the rate.
- If a lender offers you an unusually low rate, check for fees, points, and additional charges or changes in terms.
- Don’t fall into the trap of just going with the largest bank on the block. Do your homework and check your lender’s background and reputation, but open your doors to all the choices that are available to you.
Obtain 3 or 4 loan offers, and check to see how the rates being offered compare to the current interest rates. Our website offers a directory of resources and a ratewatch, and there are many other websites available to you through your favorite search engine that offers similar, free information.
Preventing Foreclosure Proceedings and Understanding Your Options
July 29, 2007
Every year over 8 million homeowners are seeking help preventing foreclosure proceedings. This is a stunning 30 year high. Experts project that by 2006, 12 million homeowners will be teetering on the brink of foreclosure. Many homeowners are not aware that they can prevent foreclosure and save their house. Did you know that you can stop the proceedings up to an hour before the auction takes place?
As a homeowner facing foreclosure there are various options available. We will briefly examine some of the most popular options.
Reinstate the loan ? Ideally you would like to be able to pay the loan payments that you are behind on and bring the loan current. These costs would include whatever owed on the missed payments, and any additional late charges or attorney fees. This is the most efficient way when preventing foreclosure proceedings.
Get forbearance ? When a lender forecloses on a property it is expensive for them. They would rather work out some sort of arrangement than proceed with the foreclosure. Talk to your lender and see if they are willing to work out a plan that outlines a way to get current on your mortgage. This agreement will vary depending on the situation and the lender. Some things they may be able to help with are a temporary reduction or suspension of your payments. If you have a FHA VA or other government loans you may qualify for even more options.
Money Matters: Strengthen Your Marriage by Putting Finances in Order
July 29, 2007
Did you know that 43% of all married couples argue over money issues, making it the major reason couples fight? If you and your spouse handle money differently, now is the time to talk, establish expectations, and draw up a financial plan.
Money is a very big part of a marriage. Having enough to spend, and to do the things each wants to do, is important to both parties. When couples are not able to do that, then other issues pop up in the relationship. When husband and wife are not on the same page as far as family finances go, other difficulties inevitably arise.
Effective communication often emerges as the most difficult obstacle to establishing goals and expectations, and developing a financial plan. Many of us have been taught during childhood that discussing money is somehow inappropriate. Couples must understand that it is not only appropriate but absolutely necessary to managing finances in a marriage. Just as finances must be planned in a business, they must also be planned in a marriage. You must communicate in spite of any difficulty.
For example, how do you get your spouse to understand that he or she will need to curb their spending habits so that you both can begin putting money away?
Five Things To Check Out When You Apply For a Payday Loan
July 28, 2007
Are you thinking of going in for a payday loan to meet an unexpected expense? If so, look into these five things before you finalize one. This checklist can help you make smarter choices. You might even end up saving some serious cash!
You could also consider borrowing money from friends or family. Depending on your situation, credit card funding might be an option too, because it’s usually cheaper than a payday loan.
Here’s why. If you choose to roll over all or part of the payday loan, you end up paying much more — additional charges, late fees, etc. Your APRs start climbing rapidly and you may even find yourself trapped in a vicious cycle of payday loan debt. Stay clear of this trap.
Give Yourself Credit
July 27, 2007
The Beginning of the Credit Card Era
In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York City. From that modest beginning, credit cards have become an indispensable part of modern life. Consumers rely on credit cards to help them achieve their lifestyle goals by letting them take advantage of special bargains, spread payments out over several months, and provide cash in emergencies. Credit cards have become so widespread that they are often accepted as a piece of primary identification.
Getting the most from your credit cards involves four main steps:
Use your credit cards wisely. Protect yourself against fraud. Review your credit history regularly. Get the right card for your needs.
Use your credit cards wisely Follow these simple tips to get the most from your card.
Tips:
Pay your credit card bills on time. This is the single most important thing you can do to preserve and enhance your credit rating. Always pay at least your minimum payment and allow time for your payment to reach the company if you are using the mail.
Obtaining a Home Equity Loan Online
July 26, 2007
Private lenders, banks, and mortgage companies are all setting up shop on the internet, and all make it possible to obtain a home equity loan online. Competition between lenders is stiff, so be sure to check a few companies that offer applications about their rates, products, and customer service.
A mortgage site that provides a home equity loans will also give more detailed information for the typical uses of a home equity loan. Many people choose to get a home equity loan in order to consolidate existing debts- such as credit cards, loans, educational expenses, and car payments. Home equity loans are also used in order to finance home improvements that you’d like to make but don’t have the cash on hand to pay for them, since the loans tend to be more economical than some of the other options for obtaining financing.
Debt is The Master of Souls
July 25, 2007
Wholeness requires separation. In order for you to experience yourself as being whole, you spend most of your live experiencing being separated, trying to get back to wholeness.
One of your most creative ways of moving away from happiness has been through consumer debt. Your fixation with spending, gives you little time to contemplate being whole, until it hits you in the face with a debt load that you can no longer manage.
The Black Plague of the industrialized world is debt for consumer goods and services. No matter how you may reason it, going into debt to buy a big screen TV or stereo system, a new boat, or lawn furniture, just is not necessary. You have been taught that all of these things are necessary to be happy and successful. You have moved away from happiness in order to feel it again by learning how to be miserable. Now that you are up to your ears in bills, you think that you would be happy again, if only you did not owe all this money.
Facts You Should Know About Types of Loans
July 24, 2007
When you set out to borrow, you often come across terms like unsecured loans, revolving loans, adjustable rate loans, etc. While these terms are more or less self-explanatory, it is still useful to be clear on their exact meanings and what they imply before you finalize a loan contract.
Unsecured versus secured loans
As the name implies, a secured loan is one where you offer some kind of collateral against the loan. The agreement is that if you default on the loan, the lender has the right (but not the obligation) to take possession of the asset you have pledged.
In most cases, this asset would be what the lender has financed. For example, when you take a home loan, you offer the home as collateral.
There may also be cases where you may need to offer additional collateral over and above the asset that is being financed. This happens, for example, when the lender is financing close to 100% of an asset that is prone to rapid reduction in market value. In such cases, the lender may insist on your putting up another asset so as to provide a reasonable margin of protection in case of default.
Unsecured loans are those where such collateral arrangements do not exist. These loans are granted based on your credit standing, ability to repay and other factors.
In cases where there’s a choice available to the customer to take either a secured or an unsecured loan, the former may be offered at a somewhat lower rate. That is, assuming every other factor remains equal. This is because of the lower risk involved to the lender, who has recourse to a specific asset in case you default. However, this situation is comparatively rare in consumer financing, although it is more common in financing businesses.
Installment versus revolving loans
A revolving loan is one where you have access to a continuous source of credit, up to a pre-determined credit limit. If the limit is say, $10,000, you can borrow any amount up to $10,000. And typically, you can repay all or part of the amount you borrowed at a time of your choosing, within the overall tenor of the loan.
You pay interest only on the amount you borrow for the time you borrow it. Sometimes, banks may charge a commitment fee for making a revolving line of credit available to you. This fee is usually charged on the average unutilized amount of your limit.
You can also re-borrow the amount you have repaid. In effect, you have a loan that’s always available to you on demand.
Unlike revolving loans, installment loans have a fixed repayment schedule. In most cases, the full amount of the loan is drawn down (i.e., borrowed) at once and both repayment schedule and amounts are fixed in advance. You do not have the option to re-borrow the amount that has been repaid.
Adjustable rate versus fixed rate loans
A fixed rate loan is one where the interest rate charged is fixed for the entire duration of the loan. The advantage is that you are immune to fluctuations in interest rates and can budget your cash outflows precisely. The disadvantage to you (the borrower) is that should interest rates fall, you lose in terms of opportunity costs. That is, you could have obtained a lower interest rate had you opted for an adjustable rate loan.
In practice, you can always choose to refinance the fixed rate loan at a lower rate if interest rates fall sharply enough to justify it. Bear in mind that your current lender may charge a pre-payment fee if you choose to repay before due date. So the difference in interest rates between your old fixed rate loan and the new loan should be large enough to justify a switch.
An adjustable rate loan is one where the interest charged fluctuates in line with a benchmark rate. This benchmark rate is usually the Prime Rate, which is what the US Treasury charges its prime (or best) borrowers. The advantage of an adjustable rate (or floating rate) loan is that what you are paying is more or less in line with the market. If interest rates decline, so do your costs and vice versa. The disadvantage is that your cash outflows for interest are unpredictable.
As a borrower, if you hold the view that interest rates are going to decline, it is best to opt for an adjustable rate loan. But arriving at the correct view consistently is easier said than done. Predicting interest rates is a game where even professional market participants and institutions frequently go wrong.
If it is important to you to be able to budget for your interest obligations in advance, a fixed rate loan may be the best choice. After all, you can refinance it should the interest rates fall significantly.
Keeping these basic facts in mind should help you make more informed borrowing decisions.
Special Credit Information for Married Couples
July 24, 2007
If you are married, establish separate credit accounts.
Try to finance real estate in just one partner’s name to increase your investment financing potential.
Avoid joint credit, which limits financing possibilities for both individuals rather than one at a time. Accounts in one partner’s name only count against that individual’s credit.
In other words, when applying for an individual loan, the spouse’s accounts won’t be listed as monthly expenses and this makes it easier to qualify for a loan.
When beginning your real estate investment business, keep in mind that double income helps qualify you for higher mortgage payments.
(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.
Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy to the Home, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, newsletters, and sales flyer template, see http://www.doghousetodollhousefordollars.com/pages/5/index.htm
