Free Yourself From Debt
In Debt?
With the recent economy in the condition that it is, loans and debts are multiplying by the day. These days people will get into debt to buy almost anything. Buying a car or a home? You can get a loan. People even get loans for appliances, furniture and big screen TV’s. People think, these loans replace having ready-cash. But more often than not these loans turn into long -term debts and then you are at the mercy of the lenders.
If you think that you can take out a loan and then not pay it back, think again. In this age of information and technology, you have to work very hard to keep your name and credit rating in top form. Here are a few consequences of a defaulted loan.
Ten Percent Yields Without Buying a Single Stock?
By Alex Daley, Casey Research
The average interest rate for a savings account today is 0.45%. It wasn’t that long ago that one could easily earn 5% in a well-chosen savings account, like those offered by ING Direct, or bump that up by a point or two by putting money away in a CD. Thanks to the largesse of our Federal Reserve and the antics of bankers around the country and world, those days are over, probably for a very long time. Interest rates are at an all-time low, and they look poised to stay there for a while. It’s just about impossible for a saver to find the kind of yield that will beat inflation, let alone be enough to provide an income one can live on.
Savings and CD rates are at extreme lows. Bonds aren’t much better. The S&P 500 dividend yield sits at 1.97%. Yet the interest rates that banks charge for consumer loans – other than mortgages, which are artificially low thanks to government subsidies – are still quite high. Federal Reserve statistics peg a 24-month personal-loan interest rate at an average of 10.92% at the end of 2011, down just under 1.5% from 2007 highs. With credit cards the rate is even higher, an average of 12.78% as of the end of November 2011.
The agreement between banks and savers has always been one of mutual convenience. Savers put their money on deposit with a bank, and in exchange the bank pays interest while keeping that money safe, generating income from lending it out. That income comes from all sorts of sources, ranging from mortgages to commercial business loans, but consumer credit is and has always been a large part of that equation. In fact, today consumer credit outstanding in the United States is just north of $2.5 trillion. (Commercial banks hold nearly $1.1 trillion of those debts; finance companies more than $500 billion; credit unions over $225 billion; and now the federal government is in the game, with $453 billion on its books, up more than fourfold since 2008. The remainder is held in savings institutions, nonfinancial businesses, and pools of securitized assets.) In the past, as banks made more and more money from their loan operations, they were able to share more with savers. They competed based on interest rates, even offering higher rates of return to customers willing to sacrifice liquidity and lock up their money for a few months or a few years in savings accounts with minimum balances or certificates of deposit with early-termination fees.
However, these days that accord seems to have fallen apart. With official inflation hovering above 3%, and the real rate – including the types of things every consumer needs to buy, like energy and food – well above 6%, half-a-percent interest simply doesn’t make the grade. Banks continue to charge high interest rates, yet federal policy leaves the individual investor or saver holding the bag. Continue reading
Is Financing Your Child’s Mortgage Right for Your Family?
Having children requires a considerable financial investment. It calls for clothes to be bought, education costs to be paid, and years of doctor’s appointments to cover, and that doesn’t even include the cost of the latest iPad or htc android camera phones. But what if your child is 30 years old, and hasn’t lived under your roof for years? And what if they come to you, asking for help buying a house?
Tips to Generate Home Equity
Home equity is the difference between the amount you owe on your loan, and the amount your home is worth. Building equity is like saving, but without you having to do a thing. Your home increases in value without you have to do anything other than maintain it, and as long as you pay your loan on time each month, the principle amount owing will be going down.
For example, if your loan is for $200,000 and a house of the same size and style as yours sold for $300,000 around the corner then you have around $100,000 of equity in your home, which is the part of your home owned by you, not the bank, and is yours to do with as you please. With your mortgage schedule in place and property prices rising steadily on their own, you can continue to passively build equity in your home.
However, if you want to Continue reading
What’s a No Doc Or Low Doc Home Loan?
A “Lo Doc” or sometimes called “Lo Doc Home loan” are mortgage or home loans where documentation for verification of your income is not required. However, all other documentation is.
These loans are ideally suited to self-employed, independent contractors, investors, credit rating impaired, ex-bankrupt or clients with arrears on current mortgages and borrowers who have been rejected by traditional lenders. Including people with suitable incomes but to meet bank verification takes valuable times and money.
Low Doc Home Loans (Low Document) are usually slightly more expensive than traditional loans due to the higher risk profile.
This is primarily for people who are looking to Continue reading
Credit Scoring On Mortgage Refinancing
For years, lenders have utilized “credit scoring” to determine whether or not an individual is a good credit risk. Credit scoring has recently become a hot topic, due in large part by the mortgage lending industry’s willingness to use the process to evaluate one’s likelihood of repaying home mortgage refinancing or second mortgage loans. Even insurance companies use credit scoring as part of their underwriting procedure when writing automobile and home insurance coverage.
Credit scoring is a system, based on a statistical program, which awards points for certain factors that help predict who is most likely to repay a debt, such as a mortgage refinancing or second mortgage loan. The total number of points, or score, is what lenders use to determine Continue reading
Consumer Credit Counseling
Being in debt causes life to be more stressful and less enjoyable . By the time most people see the error of their ways, they’re already in so much debt that it will take them many years to get out of it. Fortunately, there are options that can help you get your debts paid off more quickly. Here is some borrowing advice to help you.
Two of those options are credit counseling and getting a debt consolidation loan. With credit counseling, a third party negotiates lower payments and interest rates for you. You then start making one monthly payment to the credit counselor, and he forwards the monthly payments to your creditors on your behalf. With a debt consolidation loan, you simply take out a loan, use the proceeds to pay off your existent debts, and then repay the loan.
Either of these approaches can help you reapy your debts . Which one is best for you depends on your individual circumstances. Here are some pros and cons of credit counseling versus debt consolidation loans to consider. Continue reading
What You Should Know When Getting a Mortgage
Mortgage lenders are usually very keen on reminding potential clients about all the conditions and terms of a home loan. However, there will still be some cases when important information are left out of the original discussion, leading to confusion later down the road. Anytime lenders don’t completely tell borrowers about mortgages, the applicants wind up being confronted with mysterious costs and increased interest rates later in time.
This is actually the best bit of mortgage advice you can ever get: prior to visiting the mortgage provider that’ll be funding your home loan, invest some time carrying out research on your own so no information falls through the cracks. There are certain key phrases and terms generally used with reference to a home morgage, and they will assist you to stay in tune with the information your mortgage lender could be explaining to you. Continue reading
Loans
Do you know what to ask your lender before signing for a mortgage? (Read This…)
Why You need to Get Pre-Qualified for a mortgage before talking to a Realtor. (Read More…)
Probably at no time in America’s history has its citizens entrenched themselves in debt as today. Find out how to make wise decisions regarding credit cards, home equity loans, mortgages, college education and vehicular loans.
Vehicular Loans
| A couple of years ago we needed a “new” car. We consulted Consumer Reports on the best buys for the type of vehicle and amount we could afford. We then searched the Internet (see CarsDirect to the left) for the make and model we had decided upon. We were able to find what we were looking for within a couple hours drive at a much cheaper price than we could find locally. It was definitely worth the drive. We were even able to get some frequent flier miles by using a credit card for part of the purchase price. |
