You've worked hard all day and come home at night, only to discover that you can't get comfortable in your own bed. You toss and you turn for well over three hours. As 3a.m. approaches, you finally go to sleep but the alarm sounds all too quickly at 6 a.m. It's time for you to go to work. Day two comes and you're off again to the usual rat race. You repeat the same pattern once you get home. Later that night you lay in bed, thinking how you're going to pay all of these bills. Despite your best efforts on the job, including overtime, it doesn't seem to be enough. What can you do? Who can you to turn to?
Does this sound like you? Are you a Christian having sleepless nights because of your finances? Here are the top five reasons I have found why people get into debt:
1) Try to live beyond their means. Keep up with the Joneses. 2) Lost job and bills pile up 3) Have never been taught money management 4) Divorcing and the other party charged up cards in the process splitting up 5) Impulse Shopping
I too was a victim. Not from just one, but two of these debt catalysts. My husband equally had financial woes, his was still on this list. Being in debt has a way of having a hold on you and causes you not to think clearly. People in debt tend to operate out of fear - for example they ignore phone calls because it might be a collection agency on the other end. How many calls have they missed? Or perhaps, they write a check in the hopes that it will clear the bank; knowing full well they spent the money on luxuries and other needless excesses that have caused the bank account to have insufficient funds.
If any of this sounds like you or someone you know, assure them they can get out of debt without filing bankruptcy. They have to want help and not let pride or embarrassment get in their way of being helped.
At Journey To Wholeness, we work with people who want help getting their finances in order. There is no charge for our help. Why would you pay someone to help you get out of debt?
About the Author
Dr. Taffy Wagner is the author of Debt Dilemma. Debt Dilemma is her own personal story of how she got into debt and was able to get out without filing bankruptcy. She will be launching a national marketing campaign on October 18, 2005. View her website at http://www.paidoff.net/SpecialPromo.html for further details.
Written by: Taffy Wagner
Sunday, February 8, 2009
Best Finance Guide
Written by: Venkata Ramana
Imagine you need to look great to get all the attention at the biggest party of the year. The cloak has already started ticking and you have got 7 days to fix yourself for the D-Day. If you can take out 15 to 30 minutes in the next few days, you can be ready for action.
Step 1:
Exercise: Start with skipping and jogging and chin-ups by hanging from a rod for warming up.
Two steps of crunches or sit-ups for strengthening and toning your abdominal muscles.
Then go for Flat bench press and dumbbell flyers for the entire chest area, focusing mainly on the inner chest and followed by 2 sets of push-ups.
Work on your trapezium for the collar muscle and shoulder pressing.
For biceps the exercise to be followed is standing barbell curl.
Next you can work out on your Triceps with Single dumbbell or French press and fore forearms.
Skipping will have an effect on your legs, other wise you can go for Squats and back with lat pull down.
Step 2:
Diets are just as important as exercise, because it is the most important part of getting the body you want. You have to eat good to look good. You need protein, and you don't need fat. Stay away from junk and fatty foods. Not all fat is bad; there is a healthy fat. This fat can be found in fish, Nuts and some oils. Have Lots of fibers such as leafy vegetables, salads and daily products.
Step 3: The results though wont come easily and they wont come very fast either, So Stay dedicated, motivated and consistent, and do all 3 steps correctly to get the desired result.
for more tips, http://ezra-get-rich.com
Imagine you need to look great to get all the attention at the biggest party of the year. The cloak has already started ticking and you have got 7 days to fix yourself for the D-Day. If you can take out 15 to 30 minutes in the next few days, you can be ready for action.
Step 1:
Exercise: Start with skipping and jogging and chin-ups by hanging from a rod for warming up.
Two steps of crunches or sit-ups for strengthening and toning your abdominal muscles.
Then go for Flat bench press and dumbbell flyers for the entire chest area, focusing mainly on the inner chest and followed by 2 sets of push-ups.
Work on your trapezium for the collar muscle and shoulder pressing.
For biceps the exercise to be followed is standing barbell curl.
Next you can work out on your Triceps with Single dumbbell or French press and fore forearms.
Skipping will have an effect on your legs, other wise you can go for Squats and back with lat pull down.
Step 2:
Diets are just as important as exercise, because it is the most important part of getting the body you want. You have to eat good to look good. You need protein, and you don't need fat. Stay away from junk and fatty foods. Not all fat is bad; there is a healthy fat. This fat can be found in fish, Nuts and some oils. Have Lots of fibers such as leafy vegetables, salads and daily products.
Step 3: The results though wont come easily and they wont come very fast either, So Stay dedicated, motivated and consistent, and do all 3 steps correctly to get the desired result.
for more tips, http://ezra-get-rich.com
Bad Credit Auto Loan Refinance - Bad Credit Auto Refinance Tips
Most people know that it is possible to refinance their homes but did you know it is also possible to refinance your auto? Indeed for many people who have high interest sub prime car loans, refinancing their auto loans may be a wise decision. How do you know when refinancing your bad credit auto loan might be a good idea? And once you have decided to refinance, how should you go about doing it so that you actually improve your loan situation?
Just as when you refinance your home loan, when you refinance your auto loan the old loan is paid off in full and it is replaced by a new loan. If when you bought your car your credit score was below 620, the interest rate on your auto loan may be significantly above the interest rate you can qualify for today. By refinancing your bad credit auto loan the monthly payment may go down substantially. Also, over the life of the loan you may save several thousand dollars in interest payments.
You may be a candidate for an auto loan refinance if
Your car loan has become "seasoned"; that is, if you have had it for at least a year.
You have made your payments in a timely manner.
Your car's value is more than the amount you owe on it.
If all of the above statements are true, then it may be time to investigate refinancing your car.
First, make sure you are fully aware of the state of your current credit report and current credit rating. Both of these are easily available online. You are entitled to one free credit report each year. Your current credit score (FICO score) should also be available for a nominal fee.
Second, find out your car's value. Having your car appraised is not a requirement for refinancing your auto loan but you should know its value. Most auto loan refinance companies require that your loan be at least $7,500 so your car value must be at least that amount. At your local bookstore and online there are many resources for estimating your car's worth. Two of the most popular sources are the Kelley Blue Book and Edmunds Buyer Guides. Be sure and have a realistic eye when surveying your car's condition, you can be sure your lender will.
Third, research the available lenders. It may be that your current lender will be open to refinancing your car. However, you should shop around for the institution that will give you the lowest interest rate and refinance as small an amount as possible. When these two conditions are met you will then also get the lowest monthly payment available.
Fourth, as with any loan, have all offers put in writing. Take the time to read the fine print and compare the proposals.
Finding a lender to refinance your bad credit auto loan may take some time and effort. The savings to your pocketbook every month and over the life of the loan, however, can easily make the time and effort worthwhile.
Written by: Carrie Reeder
Just as when you refinance your home loan, when you refinance your auto loan the old loan is paid off in full and it is replaced by a new loan. If when you bought your car your credit score was below 620, the interest rate on your auto loan may be significantly above the interest rate you can qualify for today. By refinancing your bad credit auto loan the monthly payment may go down substantially. Also, over the life of the loan you may save several thousand dollars in interest payments.
You may be a candidate for an auto loan refinance if
Your car loan has become "seasoned"; that is, if you have had it for at least a year.
You have made your payments in a timely manner.
Your car's value is more than the amount you owe on it.
If all of the above statements are true, then it may be time to investigate refinancing your car.
First, make sure you are fully aware of the state of your current credit report and current credit rating. Both of these are easily available online. You are entitled to one free credit report each year. Your current credit score (FICO score) should also be available for a nominal fee.
Second, find out your car's value. Having your car appraised is not a requirement for refinancing your auto loan but you should know its value. Most auto loan refinance companies require that your loan be at least $7,500 so your car value must be at least that amount. At your local bookstore and online there are many resources for estimating your car's worth. Two of the most popular sources are the Kelley Blue Book and Edmunds Buyer Guides. Be sure and have a realistic eye when surveying your car's condition, you can be sure your lender will.
Third, research the available lenders. It may be that your current lender will be open to refinancing your car. However, you should shop around for the institution that will give you the lowest interest rate and refinance as small an amount as possible. When these two conditions are met you will then also get the lowest monthly payment available.
Fourth, as with any loan, have all offers put in writing. Take the time to read the fine print and compare the proposals.
Finding a lender to refinance your bad credit auto loan may take some time and effort. The savings to your pocketbook every month and over the life of the loan, however, can easily make the time and effort worthwhile.
Written by: Carrie Reeder
Friday, February 6, 2009
The great credit card scandal
Companies defy ministers by increasing charges despite plunging interest rates
By Kate Hughes, Deputy Personal Finance Editor, and Andrew GriceTuesday, 9 December 2008
Credit card companies are facing an investigation by competition watchdogs after defying government warnings to improve their lending practices.
An analysis by The Independent has found that the cost of card borrowing has risen over the past three months despite three cuts to the Bank of England base rate. Cardholders are now facing average interest rates of 17.7 per cent on credit cards, up from 16.6 per cent 12 months ago.
The Business Secretary, Lord Mandelson, had given providers two weeks to come up with fair principles to help cardholders manage their debts following a summit with card providers in November. By Thursday, the Government is expecting proposals from the industry on how it will implement fair principles on existing debt, responsibly provide credit and support households in difficulty.
Failing to do so could see the card companies facing investigation by the Office of Fair Trading (OFT), but so far card providers have made no move to reduce the expensive lending rates which so often plunge debtors into further financial hardship.
One government source said last night: "We are not backing off. If the companies don't move, if necessary, we will go down the OFT route."
Only two cards, those designed to track the base rate, have reduced rates since Lord Mandelson's ultimatum and Yorkshire Bank and Clydesdale Bank have gone ahead with increases to the rates and fees they charge their Gold Mastercard customers. Halifax and the Bank of Scotland have also increased balance transfer fees.
A spokesman for Clydesdale Bank said: "The changes in our rates were announced in October and our rates remain very competitive. We fully support the Government's initiatives for helping people in difficulties."
Store card debtors are facing even higher rates despite cheaper borrowing for lenders. The average cost of borrowing is now 25 per cent a year, up from 23.9 per cent this time last year, with no sign of a cut in rates even though the base rate has dropped from 5.25 per cent to 2 per cent over the same period.
But based on the industry's response this week, Lord Mandelson and the Consumer Affairs minister Gareth Thomas are expecting to produce a plan to address the dramatic increases in some cardholders' bills.
A spokeswoman for the Department for Business, Enterprise and Regulatory Reform said: "We've asked lenders to report back by the end of this week and have been in continuing talks with industry following our summit [on 26 November]. We have every expectation that industry will come back with proposals to stop the pockets of bad behaviour that we have identified in risk-based repricing and will continue to work with them to ensure borrowers are treated fairly, responsibly and consistently."
Vince Cable, the Liberal Democrats' Treasury spokesman, said: "The Government has got to get tough with credit card companies determined to make a quick buck out the millions of people struggling to make ends meet. Tough words are worthless unless they are backed up with real action."
Alan Duncan, the Conservatives' business spokesman, accused ministers of pumping out "hot air". He said: "The Government's policy after the banks' bailout has clearly not reached the credit card sector. It has done nothing to clamp down on credit card ownership – particularly by the most vulnerable people."
Industry leaders have been summoned to another meeting with Mr Thomas on Thursday.
Apacs, the UK payments association, denied interest-rate rises were the problem. "Risk-based pricing is not about the base rate at all," said a spokeswoman. "This is about a customer with a card whose APR may go up as a consequence of changes to their circumstances. It is a feature of credit cards that the interest on this unsecured borrowing may be adjusted. If the customer can't pay, the provider has no security on getting the money back and may decide to re-price the cost of using the card. The agreements that were made [at the summit] were about breathing space for customers in difficulty."
Critics of the move believe a half-hearted approach will make little difference to consumers. Martin Lewis, of Moneysavingexpert.com, said: "This ultimatum is absolute nonsense, and shows that Lord Mandelson has never had any connection to credit cards in his life. Is he saying that credit card companies should drop their interest rates in line with the base rate drop, from an average of 18 per cent to one of 15 per cent? To make this work they would actually have to cut their interest rates by 60 per cent to mirror the real changes in the base rate, so if even if every credit card on the market took 3 per cent off their interest rates it would mean nothing."
Credit and store card companies have long been accused of employing dirty tricks to boost income. The order of payments is regularly skewed so that the most expensive debt, with the highest interest rate, is paid off last.
By Kate Hughes, Deputy Personal Finance Editor, and Andrew GriceTuesday, 9 December 2008
Credit card companies are facing an investigation by competition watchdogs after defying government warnings to improve their lending practices.
An analysis by The Independent has found that the cost of card borrowing has risen over the past three months despite three cuts to the Bank of England base rate. Cardholders are now facing average interest rates of 17.7 per cent on credit cards, up from 16.6 per cent 12 months ago.
The Business Secretary, Lord Mandelson, had given providers two weeks to come up with fair principles to help cardholders manage their debts following a summit with card providers in November. By Thursday, the Government is expecting proposals from the industry on how it will implement fair principles on existing debt, responsibly provide credit and support households in difficulty.
Failing to do so could see the card companies facing investigation by the Office of Fair Trading (OFT), but so far card providers have made no move to reduce the expensive lending rates which so often plunge debtors into further financial hardship.
One government source said last night: "We are not backing off. If the companies don't move, if necessary, we will go down the OFT route."
Only two cards, those designed to track the base rate, have reduced rates since Lord Mandelson's ultimatum and Yorkshire Bank and Clydesdale Bank have gone ahead with increases to the rates and fees they charge their Gold Mastercard customers. Halifax and the Bank of Scotland have also increased balance transfer fees.
A spokesman for Clydesdale Bank said: "The changes in our rates were announced in October and our rates remain very competitive. We fully support the Government's initiatives for helping people in difficulties."
Store card debtors are facing even higher rates despite cheaper borrowing for lenders. The average cost of borrowing is now 25 per cent a year, up from 23.9 per cent this time last year, with no sign of a cut in rates even though the base rate has dropped from 5.25 per cent to 2 per cent over the same period.
But based on the industry's response this week, Lord Mandelson and the Consumer Affairs minister Gareth Thomas are expecting to produce a plan to address the dramatic increases in some cardholders' bills.
A spokeswoman for the Department for Business, Enterprise and Regulatory Reform said: "We've asked lenders to report back by the end of this week and have been in continuing talks with industry following our summit [on 26 November]. We have every expectation that industry will come back with proposals to stop the pockets of bad behaviour that we have identified in risk-based repricing and will continue to work with them to ensure borrowers are treated fairly, responsibly and consistently."
Vince Cable, the Liberal Democrats' Treasury spokesman, said: "The Government has got to get tough with credit card companies determined to make a quick buck out the millions of people struggling to make ends meet. Tough words are worthless unless they are backed up with real action."
Alan Duncan, the Conservatives' business spokesman, accused ministers of pumping out "hot air". He said: "The Government's policy after the banks' bailout has clearly not reached the credit card sector. It has done nothing to clamp down on credit card ownership – particularly by the most vulnerable people."
Industry leaders have been summoned to another meeting with Mr Thomas on Thursday.
Apacs, the UK payments association, denied interest-rate rises were the problem. "Risk-based pricing is not about the base rate at all," said a spokeswoman. "This is about a customer with a card whose APR may go up as a consequence of changes to their circumstances. It is a feature of credit cards that the interest on this unsecured borrowing may be adjusted. If the customer can't pay, the provider has no security on getting the money back and may decide to re-price the cost of using the card. The agreements that were made [at the summit] were about breathing space for customers in difficulty."
Critics of the move believe a half-hearted approach will make little difference to consumers. Martin Lewis, of Moneysavingexpert.com, said: "This ultimatum is absolute nonsense, and shows that Lord Mandelson has never had any connection to credit cards in his life. Is he saying that credit card companies should drop their interest rates in line with the base rate drop, from an average of 18 per cent to one of 15 per cent? To make this work they would actually have to cut their interest rates by 60 per cent to mirror the real changes in the base rate, so if even if every credit card on the market took 3 per cent off their interest rates it would mean nothing."
Credit and store card companies have long been accused of employing dirty tricks to boost income. The order of payments is regularly skewed so that the most expensive debt, with the highest interest rate, is paid off last.
Low Interest Credit Cards
Many consumers continue to pay far higher rates of interest for spending on their credit cards than the current average APR. By simply changing to a different provider they are likely save a significant amount of money each year in interest.
People who have stayed loyal to their bank and never changed their credit card are more than likely being charged excessive rates of interest. With lower standard rates and introductory 0% offers for purchases and balance transfers available, now is the time to switch to a low interest credit card. It's never been easier to switch deals, and there is a wide choice on offer.
Posted by Mony at 2:02 PM 0 comments
Labels: Best Credit Cards
Ten ways to cut the cost of Christmas
If you exploit good deals and avoid the bad ones, then the credit crunch does not have to mean a gift crunch, find Nargis Ahmad and Julian Knight
Christmas can send a shiver through our finances. Each of us spends about £400 on yuletide presents and festivities, according to Asda. But with unemployment rising and credit both expensive and harder to get, Britons are looking to cut back – by up to £300m in total, says the Centre for Economics and Business Research. But what tactics can you adopt to make Christmas less expensive without being a credit-crunch Scrooge?
1. Look for card cashback
Many people spend more than they expect on plastic at this time of year. If that's you, look to use one of the cashback credit cards on the market. The American Express platinum card returns 5 per cent on the first £4,000 you spend in the first three months you have the plastic. Abbey's new "essentials" card offers a 3 per cent refund, up to £75 or £12.50 a month, on supermarket and petrol purchases at selected outlets for the first six months. But take care: fail to clear the outstanding balance within the interest-free period and you will be hit by high rates.
2. Get cashback on the web
Combining a cashback credit card with a cashback website could earn you even more. Sites such as Topcashback.co.uk, Greasypalm.co.uk and Quidco.com offer shoppers an additional rebate of 2 per cent to 10 per cent, but you will need to set up an account first. Some sites will only release the money once you have earned a minimum amount, and it takes time for the cash to reach you.
3. Price-comparison websites
These services can also help you to find the cheapest deals. Sites such as Pricerunner.co.uk and Kelkoo.co.uk search the web to find which stores sell what you are looking for and at what price.
4. Make use of vouchers
To save a few bob at online retailers' virtual checkouts, it's worth getting your hands on a voucher code. These can be found on sites including My-vouchercodes.co.uk, Hotukdeals.com and vouchercodes.com. It's also worth keeping an eye on forums such as Moneysavingexpert.com. Once you have found a code, all you need to do is type it in at the checkout to get the discount. But be quick, as most codes expire quickly.
5. Redeem loyalty points
Many of us will have built up pots of money on our supermarket loyalty cards, which are just waiting to be spent. Rather than using the points at the checkout, switch to vouchers, perhaps trading Tesco Clubcard vouchers for Deals Tokens through the Tesco site. These can be used for trips to the theatre, days out and jewellery, which can make nice Christmas presents.
6. Switch to Christmas ecards
Save on the cost of cards and stamps by sending a free ecard online from sites such as Ecards.co.uk or Hallmark.com. For the ethically conscious, charities now do their own ecards. Friends of the Earth is encouraging others to ditch the paper version and save trees at www.foe.co.uk.
7. Sell unwanted gifts
If last year's dud Christmas presents are sitting in the loft somewhere, now's the time to turn them into hard cash. According to a survey by Churchill Home Insurance. 21 per cent of us will sell out unwanted gifts via the internet or at a car boot sale, and 14 per cent will recycle our presents, passing them on to someone else. You can flog your clutter from the comfort of your own home by selling at an online auction site such as eBay or eBid.
8. Avoid in-store credit
We've all been there. That expensive gift that will make a loved one's Christmas can be yours at a discount, provided you take out the store card offered by the smooth-talking salesman. But store cards are expensive, often charging 30 per cent interest. And like cashback cards, if you fail to pay off the debt within the interest-free period, it can soon eat into any initial discount given for taking out the card.
9. Bulk buy wine
Lots of off-licences and wine clubs offer deals to those buying a case of wine rather than a bottle. Tesco's wine store has substantial discounts in the run-up to Christmas and free delivery nationwide on orders worth £100 or more. Likewise, Majestic.co.uk is discounting mixed-case wine deals. If you're partial to a nice vintage, the recently launched lastdropwines.com buys its stock at auctions and closed busi-nesses and sells them at discounts of up to 50 per cent.
10. Plan your present buying
Even with Christmas around the corner, a little planning can help you to spend less by avoiding impulse buying. Money advice website Fool.co.uk recommends making a list of who you want to buy for and setting a budget for each. If you think you're going to find that difficult, says Fool.co.uk, consider giving what you would spend on a present as a simple cash gift. After all, in these credit-crunch blighted times, cash is always welcome.
People who have stayed loyal to their bank and never changed their credit card are more than likely being charged excessive rates of interest. With lower standard rates and introductory 0% offers for purchases and balance transfers available, now is the time to switch to a low interest credit card. It's never been easier to switch deals, and there is a wide choice on offer.
Posted by Mony at 2:02 PM 0 comments
Labels: Best Credit Cards
Ten ways to cut the cost of Christmas
If you exploit good deals and avoid the bad ones, then the credit crunch does not have to mean a gift crunch, find Nargis Ahmad and Julian Knight
Christmas can send a shiver through our finances. Each of us spends about £400 on yuletide presents and festivities, according to Asda. But with unemployment rising and credit both expensive and harder to get, Britons are looking to cut back – by up to £300m in total, says the Centre for Economics and Business Research. But what tactics can you adopt to make Christmas less expensive without being a credit-crunch Scrooge?
1. Look for card cashback
Many people spend more than they expect on plastic at this time of year. If that's you, look to use one of the cashback credit cards on the market. The American Express platinum card returns 5 per cent on the first £4,000 you spend in the first three months you have the plastic. Abbey's new "essentials" card offers a 3 per cent refund, up to £75 or £12.50 a month, on supermarket and petrol purchases at selected outlets for the first six months. But take care: fail to clear the outstanding balance within the interest-free period and you will be hit by high rates.
2. Get cashback on the web
Combining a cashback credit card with a cashback website could earn you even more. Sites such as Topcashback.co.uk, Greasypalm.co.uk and Quidco.com offer shoppers an additional rebate of 2 per cent to 10 per cent, but you will need to set up an account first. Some sites will only release the money once you have earned a minimum amount, and it takes time for the cash to reach you.
3. Price-comparison websites
These services can also help you to find the cheapest deals. Sites such as Pricerunner.co.uk and Kelkoo.co.uk search the web to find which stores sell what you are looking for and at what price.
4. Make use of vouchers
To save a few bob at online retailers' virtual checkouts, it's worth getting your hands on a voucher code. These can be found on sites including My-vouchercodes.co.uk, Hotukdeals.com and vouchercodes.com. It's also worth keeping an eye on forums such as Moneysavingexpert.com. Once you have found a code, all you need to do is type it in at the checkout to get the discount. But be quick, as most codes expire quickly.
5. Redeem loyalty points
Many of us will have built up pots of money on our supermarket loyalty cards, which are just waiting to be spent. Rather than using the points at the checkout, switch to vouchers, perhaps trading Tesco Clubcard vouchers for Deals Tokens through the Tesco site. These can be used for trips to the theatre, days out and jewellery, which can make nice Christmas presents.
6. Switch to Christmas ecards
Save on the cost of cards and stamps by sending a free ecard online from sites such as Ecards.co.uk or Hallmark.com. For the ethically conscious, charities now do their own ecards. Friends of the Earth is encouraging others to ditch the paper version and save trees at www.foe.co.uk.
7. Sell unwanted gifts
If last year's dud Christmas presents are sitting in the loft somewhere, now's the time to turn them into hard cash. According to a survey by Churchill Home Insurance. 21 per cent of us will sell out unwanted gifts via the internet or at a car boot sale, and 14 per cent will recycle our presents, passing them on to someone else. You can flog your clutter from the comfort of your own home by selling at an online auction site such as eBay or eBid.
8. Avoid in-store credit
We've all been there. That expensive gift that will make a loved one's Christmas can be yours at a discount, provided you take out the store card offered by the smooth-talking salesman. But store cards are expensive, often charging 30 per cent interest. And like cashback cards, if you fail to pay off the debt within the interest-free period, it can soon eat into any initial discount given for taking out the card.
9. Bulk buy wine
Lots of off-licences and wine clubs offer deals to those buying a case of wine rather than a bottle. Tesco's wine store has substantial discounts in the run-up to Christmas and free delivery nationwide on orders worth £100 or more. Likewise, Majestic.co.uk is discounting mixed-case wine deals. If you're partial to a nice vintage, the recently launched lastdropwines.com buys its stock at auctions and closed busi-nesses and sells them at discounts of up to 50 per cent.
10. Plan your present buying
Even with Christmas around the corner, a little planning can help you to spend less by avoiding impulse buying. Money advice website Fool.co.uk recommends making a list of who you want to buy for and setting a budget for each. If you think you're going to find that difficult, says Fool.co.uk, consider giving what you would spend on a present as a simple cash gift. After all, in these credit-crunch blighted times, cash is always welcome.
10 Things You Didn’t Know About Credit Reports
Think you know everything you need to know about borrowing and credit? Think again. Many of us are surprisingly uninformed about the information that goes into deciding who gets to borrow what. We’ve debunked some of the more pervasive credit myths and collected a few of the lesser-known but more important facts to help you get your borrowing basics straight.
1. Previous occupants of your home have no affect on your credit rating
Pub bores often put this nonsense about and a recent survey showed that 71% of people believe it, but it’s completely untrue. The previous occupant of your house or flat could have been a millionaire or a bankrupt but that makes no difference to lenders at all.
2. Family and friends living at your address cannot harm your credit rating…
Until a few years ago, lenders checked the credit reports of others living at your address, taking their finances into account when deciding whether to offer you credit. This is no longer the case. The people with whom you share an address (but no financial responsibilities) have no bearing on your ability to obtain credit. So for the 63% of you who think they do, they don’t.
3. … But your partner or financial associates can
The people with whom you share financial responsibilities, such as joint accounts, credit cards and mortgages, are referred to as your financial associates. Their names appear on your credit report and lenders will check if they have had any credit problems before deciding whether or not to offer credit to you.
This means you are strongly advised to take a look at the financial history of anyone with whom you enter into a shared financial responsibility, as their past will affect your future.
4. Credit reference agencies do not decide your credit rating
53% of you think they do, but they don’t. Credit reference agencies collate the information held in credit reports and hold it securely, but they don’t have anything to do with deciding your credit rating. Lenders do this, using the information held in your credit report and that submitted by you in your application form.
5. There is no credit blacklist
A staggering 41% of you are convinced that someone, somewhere, holds a very long list of credit baddies. You’re all wrong.
Ruling out whole streets or estates, or ‘red-lining’, as it’s known, simply does not happen. And while we’re on it, your credit score does not take account of factors such as gender, religion, race or ethnic origin.
6. You have more than one credit rating
You can have many different credit ratings, depending on who you apply to, what you apply for and your circumstances at the time you apply. Every lender uses a slightly different equation to calculate a credit score, and some use different versions for different products. Your credit rating also changes when your circumstances change. For example, paying off a debt could improve your score, while missing a series of repayments could damage it.
7. You can be turned down for credit if you haven’t borrowed enough...
You’d think lenders would love a customer with no debts, but they actually rely on the details in your credit report to show them you make repayments on time. If you have no track record, they cannot tell how you might behave in future and could decline to lend to you as they have no evidence you manage credit well. The solution? Borrow wisely, repay on time and build yourself a nice little credit history.
8. … But you can also be turned down if you’ve applied too often
Every time you apply for credit, the lender dealing with your application makes a full search of your credit report. This leaves a search footprint on your report. Make enough applications and the profusion of search footprints could lead prospective lenders to think you are overstretching yourself, desperate for money, or even that fraudulent activity is taking place.
To avoid this problem, when applying for any kind of credit, specify that you want a quotation and make it clear that you are not making a full application. This will prevent unnecessary footprints from marking up your report.
9. Your profile may matter more than your score
Many lenders target specific groups of people – home owners, students, older people and so on. Regardless of how high your credit score is, if your profile doesn’t fit their template, you may find your application is turned down. To give your application the best chance at success, do your research before you apply and identify lenders who want to deal with people like you.
10. Your vote counts… sort of
From a credit perspective, it doesn’t matter if you vote or not, but it does matter that you are registered to vote, as lenders check local electoral registers to verify that you are who you say you are and live where you say you live. They also look for stability – ideally, that you’ve lived at the same address for some years. If they don't find your name at your address, they may make further checks or just turn you down.
If you’re not yet registered to vote, ask your local authority for a rolling registration form. This will enable you to register at your current address and de-register from any old ones.
1. Previous occupants of your home have no affect on your credit rating
Pub bores often put this nonsense about and a recent survey showed that 71% of people believe it, but it’s completely untrue. The previous occupant of your house or flat could have been a millionaire or a bankrupt but that makes no difference to lenders at all.
2. Family and friends living at your address cannot harm your credit rating…
Until a few years ago, lenders checked the credit reports of others living at your address, taking their finances into account when deciding whether to offer you credit. This is no longer the case. The people with whom you share an address (but no financial responsibilities) have no bearing on your ability to obtain credit. So for the 63% of you who think they do, they don’t.
3. … But your partner or financial associates can
The people with whom you share financial responsibilities, such as joint accounts, credit cards and mortgages, are referred to as your financial associates. Their names appear on your credit report and lenders will check if they have had any credit problems before deciding whether or not to offer credit to you.
This means you are strongly advised to take a look at the financial history of anyone with whom you enter into a shared financial responsibility, as their past will affect your future.
4. Credit reference agencies do not decide your credit rating
53% of you think they do, but they don’t. Credit reference agencies collate the information held in credit reports and hold it securely, but they don’t have anything to do with deciding your credit rating. Lenders do this, using the information held in your credit report and that submitted by you in your application form.
5. There is no credit blacklist
A staggering 41% of you are convinced that someone, somewhere, holds a very long list of credit baddies. You’re all wrong.
Ruling out whole streets or estates, or ‘red-lining’, as it’s known, simply does not happen. And while we’re on it, your credit score does not take account of factors such as gender, religion, race or ethnic origin.
6. You have more than one credit rating
You can have many different credit ratings, depending on who you apply to, what you apply for and your circumstances at the time you apply. Every lender uses a slightly different equation to calculate a credit score, and some use different versions for different products. Your credit rating also changes when your circumstances change. For example, paying off a debt could improve your score, while missing a series of repayments could damage it.
7. You can be turned down for credit if you haven’t borrowed enough...
You’d think lenders would love a customer with no debts, but they actually rely on the details in your credit report to show them you make repayments on time. If you have no track record, they cannot tell how you might behave in future and could decline to lend to you as they have no evidence you manage credit well. The solution? Borrow wisely, repay on time and build yourself a nice little credit history.
8. … But you can also be turned down if you’ve applied too often
Every time you apply for credit, the lender dealing with your application makes a full search of your credit report. This leaves a search footprint on your report. Make enough applications and the profusion of search footprints could lead prospective lenders to think you are overstretching yourself, desperate for money, or even that fraudulent activity is taking place.
To avoid this problem, when applying for any kind of credit, specify that you want a quotation and make it clear that you are not making a full application. This will prevent unnecessary footprints from marking up your report.
9. Your profile may matter more than your score
Many lenders target specific groups of people – home owners, students, older people and so on. Regardless of how high your credit score is, if your profile doesn’t fit their template, you may find your application is turned down. To give your application the best chance at success, do your research before you apply and identify lenders who want to deal with people like you.
10. Your vote counts… sort of
From a credit perspective, it doesn’t matter if you vote or not, but it does matter that you are registered to vote, as lenders check local electoral registers to verify that you are who you say you are and live where you say you live. They also look for stability – ideally, that you’ve lived at the same address for some years. If they don't find your name at your address, they may make further checks or just turn you down.
If you’re not yet registered to vote, ask your local authority for a rolling registration form. This will enable you to register at your current address and de-register from any old ones.
Sunday, February 1, 2009
Does It Pay To Refinance?
Refinancing isn't always the best move. Here are some things to consider before you decide to redo your mortgage.
Refinancing a mortgage means paying off an existing loan and replacing it with a new one.
There are many common reasons why homeowners refinance: the opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage; the desire to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa; the opportunity to tap a home's equity in order to finance a large purchase; and the desire to consolidate debt.
Some of these motivations have both benefits and pitfalls. And because refinancing can cost between 3% and 6% of the loan's principal and--like taking out the original mortgage--requires appraisal, title search and application fees, it's important for a homeowner to determine whether his or her reason for refinancing offers true benefit.
One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb was that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, many lenders say 1% savings is enough of an incentive to refinance.
Reducing your interest rate not only helps you save money but increases the rate at which you build equity in your home and can decrease the size of your monthly payment. For example, a 30-year fixed-rate mortgage with an interest rate of 9% on a $100,000 home has a principal and interest payment of $804.62. That same loan at 6% reduces your payment to $599.55. (To learn more about the home costs, see "Mortgages: How Much Can You Afford?""Home-Equity Loans: The Costs" and "The Home-Equity Loan: What It Is And How It Works.")
When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another that, without much change in the monthly payment, has a shorter term. For that 30-year fixed-rate mortgage on a $100,000 home, refinancing from 9% to $5.5% cuts the term in half to 15 years, with only a slight change in the monthly payment, from $804.62 to $817.08.
While ARMs start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available through a fixed-rate mortgage. When this occurs, converting to a fixed-rate mortgage results in a lower interest rate and eliminates concern over future interest rate hikes.
Conversely, converting from a fixed-rate loan to an ARM can also be a sound financial strategy, particularly in a falling interest rate environment. If rates continue to fall, the periodic rate adjustments on an ARM result in decreasing rates and smaller monthly mortgage payments, eliminating the need to refinance every time rates drop. Converting to an ARM may be a good idea, especially for homeowners who don't plan to stay in their home for more than a few years. If interest rates are falling, these homeowners can reduce their loan's interest rate and monthly payment, but won't have to worry about interest rates eventually rising in the future.
While the previously mentioned reasons to refinance are all financially sound, mortgage refinancing can be a slippery slope to never-ending debt. It's important to keep this in mind when considering refinancing for the purpose of tapping into home equity or consolidating debt.
Homeowners often access the equity in their homes to cover big expenses, such as the costs of home remodeling or a child's college education. These homeowners may justify such refinancing by pointing out that remodeling adds value to the home or that the interest rate on the mortgage loan is less than the rate on money borrowed from another source. Another justification is that the interest on mortgages is tax deductible. While these arguments may be true, increasing the number of years that you owe on your mortgage is rarely a smart financial decision, nor is spending a dollar on interest to get a $0.30 tax deduction.
Many homeowners refinance in order to consolidate their debt. At face value, replacing high-interest debt with a low-interest mortgage is a good idea. Unfortunately, refinancing does not bring with it an automatic dose of financial prudence.
In reality, a large percentage of people who once generated high-interest debt on credit cards, cars and other purchases will simply do it again after the mortgage refinancing gives them the available credit to do so. This creates an instant quadruple loss composed of wasted fees on the refinancing, lost equity in the house, additional years of increased interest payments on the new mortgage and the return of high-interest debt once the credit cards are maxed out again. The possible result is an endless perpetuation of the cycle of debt.
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting your debt under control. Before you refinance, take a careful look at your financial situation and ask yourself, "How long do I plan to continue living in the house?" and "How much money will I save by refinancing?" (For more information, see "The True Economics Of Refinancing A Mortgage.")
Again, keep in mind that refinancing generally costs between 3% and 6% of the loan's principal. It takes years to recoup that cost with the savings generated by a lower interest rate or shorter term. So, if you are not planning to stay in the home for more than a few years, the cost of refinancing may negate any of the potential savings.
It also pays to remember that a savvy homeowner is always looking for ways to reduce debt, build equity, save money and eliminate that mortgage payment. Taking cash out of your equity when you refinance doesn't help you achieve any of those goals.
For a one-stop shop on subprime mortgages and the subprime meltdown, check out the "Subprime Mortgages Feature."
This article is from Investopedia.com, the Web's largest site dedicated to financial education. Click here for more educational articles from Investopedia.
Does It Pay To Refinance?
Refinancing isn't always the best move. Here are some things to consider before you decide to redo your mortgage.
Refinancing a mortgage means paying off an existing loan and replacing it with a new one.
There are many common reasons why homeowners refinance: the opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage; the desire to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa; the opportunity to tap a home's equity in order to finance a large purchase; and the desire to consolidate debt.
Some of these motivations have both benefits and pitfalls. And because refinancing can cost between 3% and 6% of the loan's principal and--like taking out the original mortgage--requires appraisal, title search and application fees, it's important for a homeowner to determine whether his or her reason for refinancing offers true benefit.
One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb was that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, many lenders say 1% savings is enough of an incentive to refinance.
Reducing your interest rate not only helps you save money but increases the rate at which you build equity in your home and can decrease the size of your monthly payment. For example, a 30-year fixed-rate mortgage with an interest rate of 9% on a $100,000 home has a principal and interest payment of $804.62. That same loan at 6% reduces your payment to $599.55. (To learn more about the home costs, see "Mortgages: How Much Can You Afford?""Home-Equity Loans: The Costs" and "The Home-Equity Loan: What It Is And How It Works.")
When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another that, without much change in the monthly payment, has a shorter term. For that 30-year fixed-rate mortgage on a $100,000 home, refinancing from 9% to $5.5% cuts the term in half to 15 years, with only a slight change in the monthly payment, from $804.62 to $817.08.
While ARMs start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available through a fixed-rate mortgage. When this occurs, converting to a fixed-rate mortgage results in a lower interest rate and eliminates concern over future interest rate hikes.
Conversely, converting from a fixed-rate loan to an ARM can also be a sound financial strategy, particularly in a falling interest rate environment. If rates continue to fall, the periodic rate adjustments on an ARM result in decreasing rates and smaller monthly mortgage payments, eliminating the need to refinance every time rates drop. Converting to an ARM may be a good idea, especially for homeowners who don't plan to stay in their home for more than a few years. If interest rates are falling, these homeowners can reduce their loan's interest rate and monthly payment, but won't have to worry about interest rates eventually rising in the future.
While the previously mentioned reasons to refinance are all financially sound, mortgage refinancing can be a slippery slope to never-ending debt. It's important to keep this in mind when considering refinancing for the purpose of tapping into home equity or consolidating debt.
Homeowners often access the equity in their homes to cover big expenses, such as the costs of home remodeling or a child's college education. These homeowners may justify such refinancing by pointing out that remodeling adds value to the home or that the interest rate on the mortgage loan is less than the rate on money borrowed from another source. Another justification is that the interest on mortgages is tax deductible. While these arguments may be true, increasing the number of years that you owe on your mortgage is rarely a smart financial decision, nor is spending a dollar on interest to get a $0.30 tax deduction.
Many homeowners refinance in order to consolidate their debt. At face value, replacing high-interest debt with a low-interest mortgage is a good idea. Unfortunately, refinancing does not bring with it an automatic dose of financial prudence.
In reality, a large percentage of people who once generated high-interest debt on credit cards, cars and other purchases will simply do it again after the mortgage refinancing gives them the available credit to do so. This creates an instant quadruple loss composed of wasted fees on the refinancing, lost equity in the house, additional years of increased interest payments on the new mortgage and the return of high-interest debt once the credit cards are maxed out again. The possible result is an endless perpetuation of the cycle of debt.
Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting your debt under control. Before you refinance, take a careful look at your financial situation and ask yourself, "How long do I plan to continue living in the house?" and "How much money will I save by refinancing?" (For more information, see "The True Economics Of Refinancing A Mortgage.")
Again, keep in mind that refinancing generally costs between 3% and 6% of the loan's principal. It takes years to recoup that cost with the savings generated by a lower interest rate or shorter term. So, if you are not planning to stay in the home for more than a few years, the cost of refinancing may negate any of the potential savings.
It also pays to remember that a savvy homeowner is always looking for ways to reduce debt, build equity, save money and eliminate that mortgage payment. Taking cash out of your equity when you refinance doesn't help you achieve any of those goals.
For a one-stop shop on subprime mortgages and the subprime meltdown, check out the "Subprime Mortgages Feature."
This article is from Investopedia.com, the Web's largest site dedicated to financial education. Click here for more educational articles from Investopedia.
your credit score
your credit score is made up of a myriad of factors. A few of these are:
1. How long your accounts have been open
2. Recency and number of credit applications
3. The number of inquiries attached to your credit report
4. The "mix" of your various credit accounts (house, car, credit card, lines of credit)
5. How long you've lived at your current address
6. How long you've work at your current job
7. Judgments, tax liens, bankruptcies, and other adverse information reported in public records
In summary, your credit scores tell companies how well you are managing your financial life. They, in turn, make decisions about their risk and your trustworthiness. High credit scores can open doors to just about anything you want, while low scores create huge hurdles that are hard to climb over.
If you are willing to take control of your financial future instead of leaving it to chance, all it takes is a little knowledge about the "do's" and "don'ts" of the credit system. Repairing your credit takes a lot of time and effort. Using the right knowledge to make good credit moves in advance, is so much easier and so much more rewarding!
1. How long your accounts have been open
2. Recency and number of credit applications
3. The number of inquiries attached to your credit report
4. The "mix" of your various credit accounts (house, car, credit card, lines of credit)
5. How long you've lived at your current address
6. How long you've work at your current job
7. Judgments, tax liens, bankruptcies, and other adverse information reported in public records
In summary, your credit scores tell companies how well you are managing your financial life. They, in turn, make decisions about their risk and your trustworthiness. High credit scores can open doors to just about anything you want, while low scores create huge hurdles that are hard to climb over.
If you are willing to take control of your financial future instead of leaving it to chance, all it takes is a little knowledge about the "do's" and "don'ts" of the credit system. Repairing your credit takes a lot of time and effort. Using the right knowledge to make good credit moves in advance, is so much easier and so much more rewarding!
Credit Repair: What’s The Score?
Article by Jim Kemish
So Many Scores
Credit scores can be confusing. FICO, TrueCredit, PLUS, Beacon, and Empirica scores are all in daily use. Why are there so many scores? A nationally recognized credit repair expert explains the different scores and how they can impact your life.
FICO, the Score that Counts
There are many credit scores available, but the FICO score is the one that matters. FICO, by the way, is an acronym for Fair Isaac & Company, the creator of the scoring model. Virtually all lenders use FICO scores to make loan decisions. If you are in a credit repair program, any score you monitor is fine for measuring progress. But if you are planning to apply for a loan the FICO score is the one to watch.
FICO and Your Lender
When you apply for a loan, the lender orders your credit report from one (or more) of the three credit bureaus, Experian, Equifax, and TransUnion. Each credit bureau report comes with a FICO score. If you speak with your lender about your credit, they are likely to refer to each of your scores using the specific credit bureau name.
The Credit Bureau Illusion
Given the constant association of FICO scores with the three credit bureaus, you might assume they have some proprietary claim on the scores. You might also assume that if you purchased your scores from the credit bureaus, you would get the same FICO scores the bureaus sold to your lender. You would not be alone. In the credit repair business, we find most of our customers make the same assumptions. The assumptions are wrong.
Credit Score Re-Branding
As an aside, I should mention that the three bureaus have re-branded the FICO scores they sell to lenders. Equifax calls it a Beacon score, TransUnion calls it an Empirica score, and Experian calls it an Experian Score. Different names, but they are all FICO scores. Our credit repair customers often ask about numeric differences in the scores. Numeric differences arise because each bureau gets information from a slightly different mix of creditors. Timing also plays a roll in score variance; a recent change in your credit may be picked up sooner at one bureau than another.
The Business of Credit Scores
As it happens, the credit bureaus don’t own the FICO scores, nor do they sell them directly to consumers. Fair Isaac & Company owns the scoring model and licenses it to the credit bureaus. The credit bureaus use the model to score the data they have on file for consumers. Then they bundle the scores with consumer credit reports and sell them to lenders. Fair Isaac collects royalties from the credit bureaus for these sales.
Putting Credit Scores to Use
If you are planning to apply for a loan, you might want to purchase your FICO scores beforehand. You would want your real scores, not “estimated” scores that might vary widely from the ones the lender will use. Yet “estimated” scores are exactly what millions of consumers get every year when they visit the credit bureau’s websites. Many of these consumers go on to apply for a loan, and are disappointed when the lender tells them that their scores are lower than they were led to believe. We hear this story almost every day from people starting up their credit repair effort.
Estimated Scores
Fair Isaac would have been happy to have the credit bureaus sell FICO scores directly to consumers. The credit bureaus, however, seeing the opportunity, developed their own “estimated” credit scores rather than paying royalties to Fair Isaac. Equifax, the exception, offers a FICO score to consumers, which provides an economical way for consumers, or anyone in a credit repair program, to monitor their score, but on its own does not provide a complete solution.
Experian’s PLUS Score
Experian sells a credit score at their website called the “PLUS Score”. Here is the small print from their website, “Your PLUS Score is formulated using the information in your credit file. It is modeled after the hundreds of commercial credit scores that help potential lenders, landlords, and employers quickly gauge your credit history and decide what kind of a risk they might be taking if they approve your application.”
TransUnion’s TrueCredit Score
TransUnion sells a credit score called the “TrueCredit” score. Here is the small print from their website. “TrueCredit” is not connected in any way with Fair, Isaac and Company; the credit score provided here is not a so-called FICO score. The credit scores of TransUnion may not be identical in every respect to any consumer credit scores produced by any other company.”
Equifax FICO Score
Equifax, as mentioned, makes a FICO score available to consumers. If you are in a credit repair program, or planning to apply for a loan, this is the most economical way of seeing a real FICO score. But it is important to know that many lenders, and almost all mortgage companies, look at all three of your FICO scores, and base their decision on the value of your middle score. One score is simply not enough.
Myfico.com the FICO Source
So, if you want to know where you stand prior to applying for a loan, or to monitor your credit repair efforts for each credit bureau, you will need to see all three FICO scores. These are available at myfico.com, The Fair Isaac website.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
So Many Scores
Credit scores can be confusing. FICO, TrueCredit, PLUS, Beacon, and Empirica scores are all in daily use. Why are there so many scores? A nationally recognized credit repair expert explains the different scores and how they can impact your life.
FICO, the Score that Counts
There are many credit scores available, but the FICO score is the one that matters. FICO, by the way, is an acronym for Fair Isaac & Company, the creator of the scoring model. Virtually all lenders use FICO scores to make loan decisions. If you are in a credit repair program, any score you monitor is fine for measuring progress. But if you are planning to apply for a loan the FICO score is the one to watch.
FICO and Your Lender
When you apply for a loan, the lender orders your credit report from one (or more) of the three credit bureaus, Experian, Equifax, and TransUnion. Each credit bureau report comes with a FICO score. If you speak with your lender about your credit, they are likely to refer to each of your scores using the specific credit bureau name.
The Credit Bureau Illusion
Given the constant association of FICO scores with the three credit bureaus, you might assume they have some proprietary claim on the scores. You might also assume that if you purchased your scores from the credit bureaus, you would get the same FICO scores the bureaus sold to your lender. You would not be alone. In the credit repair business, we find most of our customers make the same assumptions. The assumptions are wrong.
Credit Score Re-Branding
As an aside, I should mention that the three bureaus have re-branded the FICO scores they sell to lenders. Equifax calls it a Beacon score, TransUnion calls it an Empirica score, and Experian calls it an Experian Score. Different names, but they are all FICO scores. Our credit repair customers often ask about numeric differences in the scores. Numeric differences arise because each bureau gets information from a slightly different mix of creditors. Timing also plays a roll in score variance; a recent change in your credit may be picked up sooner at one bureau than another.
The Business of Credit Scores
As it happens, the credit bureaus don’t own the FICO scores, nor do they sell them directly to consumers. Fair Isaac & Company owns the scoring model and licenses it to the credit bureaus. The credit bureaus use the model to score the data they have on file for consumers. Then they bundle the scores with consumer credit reports and sell them to lenders. Fair Isaac collects royalties from the credit bureaus for these sales.
Putting Credit Scores to Use
If you are planning to apply for a loan, you might want to purchase your FICO scores beforehand. You would want your real scores, not “estimated” scores that might vary widely from the ones the lender will use. Yet “estimated” scores are exactly what millions of consumers get every year when they visit the credit bureau’s websites. Many of these consumers go on to apply for a loan, and are disappointed when the lender tells them that their scores are lower than they were led to believe. We hear this story almost every day from people starting up their credit repair effort.
Estimated Scores
Fair Isaac would have been happy to have the credit bureaus sell FICO scores directly to consumers. The credit bureaus, however, seeing the opportunity, developed their own “estimated” credit scores rather than paying royalties to Fair Isaac. Equifax, the exception, offers a FICO score to consumers, which provides an economical way for consumers, or anyone in a credit repair program, to monitor their score, but on its own does not provide a complete solution.
Experian’s PLUS Score
Experian sells a credit score at their website called the “PLUS Score”. Here is the small print from their website, “Your PLUS Score is formulated using the information in your credit file. It is modeled after the hundreds of commercial credit scores that help potential lenders, landlords, and employers quickly gauge your credit history and decide what kind of a risk they might be taking if they approve your application.”
TransUnion’s TrueCredit Score
TransUnion sells a credit score called the “TrueCredit” score. Here is the small print from their website. “TrueCredit” is not connected in any way with Fair, Isaac and Company; the credit score provided here is not a so-called FICO score. The credit scores of TransUnion may not be identical in every respect to any consumer credit scores produced by any other company.”
Equifax FICO Score
Equifax, as mentioned, makes a FICO score available to consumers. If you are in a credit repair program, or planning to apply for a loan, this is the most economical way of seeing a real FICO score. But it is important to know that many lenders, and almost all mortgage companies, look at all three of your FICO scores, and base their decision on the value of your middle score. One score is simply not enough.
Myfico.com the FICO Source
So, if you want to know where you stand prior to applying for a loan, or to monitor your credit repair efforts for each credit bureau, you will need to see all three FICO scores. These are available at myfico.com, The Fair Isaac website.
Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.
4 Steps to Financially Surviving a Recession
Families are financially bleeding as your reading this. Are you going to be next or are you going to survive this financial crisis. Here are simple 4 steps you can do now to survive this drought.
Article by Justin Verrengia
If you live in the United States then it's no secret we are living in a recession as we speak, if you cannot see that then your living in denial and if that's the case go take a long look around you.
This article was designed to help you survive this financial recession millions of families are struggling through as we speak.
Here are 4 steps you can start implementing immediately...
1. Calculate your current cash flow and necessary living expenses.
Calculate exactly how much all your necessary living expenses are. Then calculate your income. Your cash flow is the money left over after you pay all your necessary expenses such as credit card debt, mortgage debt, food, etc.
Your whole objective here is to eliminate all your unnecessary bills such as cable tv, expensive meals, entertainment and all other discretionary forms of expense. You need to eliminate everything you possibly can in which you can go by without.
Then recalculate your new total cash flow which is the excess money left over after you pay all your bills. The more the merrier. Our goal is to maximize our cash flow so we can have extra money to survive the financial drought.
2. Start Saving Now!
This is the holy grail of surviving right here. Cash flow without saving is dead. Saving is the only other required action needed to take place and without this discipline your toast.
Setup a target with some goals, for example you might say, " For this month of May, 2008 my target is to save $2,000." That is the target and then set 3 goals in which you can already do in way's of budgeting that will aid you in achieving your target such as, "I will cut my $200 cable bill" or "I will work X amount of extra hours this month" you get the point.
Be sure to setup realistic targets at first because they're very attainable and once you see how easy it really is then challenge yourself and go for the gusto. Keep in mind the more you save the more you survive, this is vital to get it through your head.
3. Make more money!
Making more money, This is easier said then done, right? You can simply ask for a raise and pray for a yes, but even then it's not enough if we truly demand to get ahead.
You can network with others to find new opportunities to advance in your company, find a better company itself or come up with ideas to earn some extra cash. Maybe try to find a part time job where you could make more money, even if temporarily.
Cash is king, the more you earn the more you can save and make wise investments which will produce you even more money.
4. Staying Positive!
Personal Growth is the power to become wealthy from within. By staying positive you are then attracting positive circumstances into your life . This concept is explained well in the recent book/movie "The Secret" in which states, "We are what we think." This means if we think positive and emotionalize in that action we will attract exactly that into reality every single time, without fail.
A great way to stay positive throughout the day is to either read or listen to some audio books on your IPod on a daily basis, Material such as Napoleon Hill's classic "Think & Grow Rich", Robert Kiyosaki's "Rich Dad Poor Dad", or Joe Vitales "The Attractor Factor".
These kind of teaching are all personal growth and will reprogram your brain to think positive and control your reality and future.
Law of attraction states, "if you think of your debt then you will attract more debt" but "if you think about making more money, better health, or abundance you will attract exactly that. Again the key is always staying positive so you can always grow and attract more greatness into your life.
So to recap here there are 4 steps needed to be followed if you expect to survive this financial recession which has already began.
Know your expenses and cash flow, minimize unnecessary expenses and maximize your cash flow. Then save your money and continue to make more money. Don't forget to always stay positive so you can always continue to grow.
Learn how personal development author Justin Verrengia & his inner circle are helping thousands of families put $5,000, $10,000 into their pockets every week.
Credit Card Rewards
With the increasing popularity of credit cards in America, it's no surprise that credit card companies and banks continue to flood the market with all manner of cards--rewards credit cards, cash back credit cards, 0% APR credit cards--all in an effort to
Article by Robert Alan
With the increasing popularity of credit cards in America, it's no surprise that credit card companies and banks continue to flood the market with all manner of cards--rewards credit cards, cash back credit cards, 0% APR credit cards--all in an effort to appeal to as many potential cardholders as possible by offering a wide variety of incentives for use. The major problem with the strategy, however, is that there's often little explanation of exactly how credit card rewards work in their respective programs: what's the difference, for example, between cash back cards and rewards credit cards? And which card will, in the end, save you more? The variety and sheer number of rewards programs leaves some potential cardholders confused about the actual market value of their "points" values.
The most prevalent credit card rewards plans out there today fall into two different categories -- percentage-based rewards and points-based systems. The former offers a percentage of your money back on purchases in certain targeted categories, most commonly gas, travel, and in some cases entertainment. The latter offers a series of "points" for all purchases made, which can eventually be redeemed for reimbursements on various expenses, most commonly travel. The percentage rewards plans are fairly straightforward (except for a few obscure snags, such as how your cash actually gets back to you and how much you can earn in any given year through credit card rewards), but in the case of "points", it's often difficult to determine exactly what you're getting for your purchases using a points-based rewards credit card.
But in the end, it all comes down to the numbers, specifically the math formula used to calculate the rewards. A good percentage-based rewards credit card will offer anywhere from 3-5% back on targeted purchases (again, commonly gas and travel.) If you spend $1,000 at the pump in a given year (which, with current gas prices, is a pretty low amount to spend on gas in a year), you'll earn $50 back in rewards at a 5% rate. For a year's worth of gas purchases, $50 isn't a huge amount of money, but it'll fill you up twice and it's certainly better than nothing.
Compare this to "points" systems. One points system (from Chase's Free Cash Rewards Visa) offers a rewards rate of 2,500 points for $25, with one point earned for every dollar of purchases. That's only a 1% rate of return on the money you put into the card. Certain airline credit cards offer a slightly better deal, such as American Express's Blue Sky, which allows you to redeem points (again, one dollar per point) in 7,500 increments for a $100 reimbursement on travel expenses, meaning about a 1.3% rate of return. Again, even a low rate of return can help to offset any expenses you may incur, and can make certain purchases essentially free. But 1.3% versus 5% -- you do the math.
On non-targeted purchases, points systems and percentage rewards credit cards even out, since most percentage reward cards offer a 1% rate of return on the majority of non-targeted purchases you make. And the "points" cards can offer a few incentives that a percentage rewards credit card can't, such as bonus points on sign-up, anywhere from 1,000 to 15,000 and up (depending on the value of a given points system, of course.) But, assuming that you frequently purchase the targeted items on a percentage rewards credit card (and who doesn't make frequent gas, travel, and entertainment purchases?), you've got a slight edge with percentage-based rewards programs.
Check all of the fine print and consider your specific purchasing needs, of course, but remember one of the first rules of finance: when dealing with credit card rewards, always look at the long term and make sure to do the math.
Article by Robert Alan
With the increasing popularity of credit cards in America, it's no surprise that credit card companies and banks continue to flood the market with all manner of cards--rewards credit cards, cash back credit cards, 0% APR credit cards--all in an effort to appeal to as many potential cardholders as possible by offering a wide variety of incentives for use. The major problem with the strategy, however, is that there's often little explanation of exactly how credit card rewards work in their respective programs: what's the difference, for example, between cash back cards and rewards credit cards? And which card will, in the end, save you more? The variety and sheer number of rewards programs leaves some potential cardholders confused about the actual market value of their "points" values.
The most prevalent credit card rewards plans out there today fall into two different categories -- percentage-based rewards and points-based systems. The former offers a percentage of your money back on purchases in certain targeted categories, most commonly gas, travel, and in some cases entertainment. The latter offers a series of "points" for all purchases made, which can eventually be redeemed for reimbursements on various expenses, most commonly travel. The percentage rewards plans are fairly straightforward (except for a few obscure snags, such as how your cash actually gets back to you and how much you can earn in any given year through credit card rewards), but in the case of "points", it's often difficult to determine exactly what you're getting for your purchases using a points-based rewards credit card.
But in the end, it all comes down to the numbers, specifically the math formula used to calculate the rewards. A good percentage-based rewards credit card will offer anywhere from 3-5% back on targeted purchases (again, commonly gas and travel.) If you spend $1,000 at the pump in a given year (which, with current gas prices, is a pretty low amount to spend on gas in a year), you'll earn $50 back in rewards at a 5% rate. For a year's worth of gas purchases, $50 isn't a huge amount of money, but it'll fill you up twice and it's certainly better than nothing.
Compare this to "points" systems. One points system (from Chase's Free Cash Rewards Visa) offers a rewards rate of 2,500 points for $25, with one point earned for every dollar of purchases. That's only a 1% rate of return on the money you put into the card. Certain airline credit cards offer a slightly better deal, such as American Express's Blue Sky, which allows you to redeem points (again, one dollar per point) in 7,500 increments for a $100 reimbursement on travel expenses, meaning about a 1.3% rate of return. Again, even a low rate of return can help to offset any expenses you may incur, and can make certain purchases essentially free. But 1.3% versus 5% -- you do the math.
On non-targeted purchases, points systems and percentage rewards credit cards even out, since most percentage reward cards offer a 1% rate of return on the majority of non-targeted purchases you make. And the "points" cards can offer a few incentives that a percentage rewards credit card can't, such as bonus points on sign-up, anywhere from 1,000 to 15,000 and up (depending on the value of a given points system, of course.) But, assuming that you frequently purchase the targeted items on a percentage rewards credit card (and who doesn't make frequent gas, travel, and entertainment purchases?), you've got a slight edge with percentage-based rewards programs.
Check all of the fine print and consider your specific purchasing needs, of course, but remember one of the first rules of finance: when dealing with credit card rewards, always look at the long term and make sure to do the math.
Friday, January 30, 2009
A Walk Through Of Financial Planning Process
As an adult, almost every decision you make, mostly has to do with money: your diet plan, your education & career goals, a family vacation & etc, all involve financial planning component to it. Hence financial planning is important to your life; success or fail to plan your financial will impact your life related to money, whether you chase after money (if you are in debt) or you make the money work for you (if you invest your money to increase your net worth).
Many people don't plan to fail but they fail to plan; either they don't know the correct financial planning process or they are chartered procrastinators who have thousands of excuses not to get started their financial planning process. Don't let the procrastination to be your obstacle to get started your financial planning to secure for tomorrow. The bottom line for everyone to plan their financial successfully is to know the process of financial planning and know how to get started; here are six areas of financial planning that we will review together. Please note that these areas are all interrelated. What affects one area impacts the others as well.
1. Goal Settings
In your financial planning process, you can always get started with your financial goals setting. You should make your goals realistic so that they will be achievable. In order to set a realistic goal, you need to know your financial situation and the project future financial ability. Takes out all the important documents such as mortgage agreement, bank account fixed deposit, car loan contract & etc; based on all these information, compile a list of your current debts and assets. And from there, estimate the timeline when you will paid off these debts and make a projection of your future incomes. You set your goals based on these results at a realistic and achievable level.
2. Risk Management
Common method of risk management is using insurance to protect your assets from a loss that you couldn't afford on your own. Insurance is a financial product that will give you a piece of mind. The insurance company will try to make you whole if you suffer a loss. Insurance coverage for assets, disabilities, sickness and even life is an important element that you should include in your financial planning process to minimize the potential risk of loss.
3. Tax Planning
Are you taking advantage of all tax benefits Uncle Sam has to offer? Although Uncle Sam has always has his hand in your wallet because he wants his fair share, but he also offer tax benefits for you, so you need to know how to take advantage of these benefits. The goal of tax planning is to help you minimize your federal income tax liability as much as you are allowed by tax law while saving for retirement.
4. Retirement Planning
When you are at age 25, retirement will seem so far away. At 25, you will think 60 are old, but when reach 60, you think 85 are old. Retirement planning should begin with your first job. So you need to figure out how much to save from now so that you will reach you goals of retirement later. There is never too early to start planning for your retirement.
5. Investment Planning
In your financial planning process, you should think of how to increase your asset net worth and achieve your financial goals with what you have right now. Investing is a tool you can use to achieve your financial goals that you set for yourself. All investments come with certain risks; you need to understand how much risk you should be taking with your investment to achieve your goals.
6. Estate Planning
Life journey will end one day, but many people try to avoid thinking about. The fact is no one will get out of this world alive, so you might as well plan for it. There is a need to protect your assets from Uncle Sam and to have things get in order for your loving family that you will left behind later.
In Summary
Financial planning is important to your life; success or fail to plan your financial will impact your life related to money. The six areas of financial planning that we just reviewed are all interrelated. Hat affects one area impacts the other areas as well, you should be aware of these areas and ho they impact your financial strategies.
Article by Cornie Herring
Many people don't plan to fail but they fail to plan; either they don't know the correct financial planning process or they are chartered procrastinators who have thousands of excuses not to get started their financial planning process. Don't let the procrastination to be your obstacle to get started your financial planning to secure for tomorrow. The bottom line for everyone to plan their financial successfully is to know the process of financial planning and know how to get started; here are six areas of financial planning that we will review together. Please note that these areas are all interrelated. What affects one area impacts the others as well.
1. Goal Settings
In your financial planning process, you can always get started with your financial goals setting. You should make your goals realistic so that they will be achievable. In order to set a realistic goal, you need to know your financial situation and the project future financial ability. Takes out all the important documents such as mortgage agreement, bank account fixed deposit, car loan contract & etc; based on all these information, compile a list of your current debts and assets. And from there, estimate the timeline when you will paid off these debts and make a projection of your future incomes. You set your goals based on these results at a realistic and achievable level.
2. Risk Management
Common method of risk management is using insurance to protect your assets from a loss that you couldn't afford on your own. Insurance is a financial product that will give you a piece of mind. The insurance company will try to make you whole if you suffer a loss. Insurance coverage for assets, disabilities, sickness and even life is an important element that you should include in your financial planning process to minimize the potential risk of loss.
3. Tax Planning
Are you taking advantage of all tax benefits Uncle Sam has to offer? Although Uncle Sam has always has his hand in your wallet because he wants his fair share, but he also offer tax benefits for you, so you need to know how to take advantage of these benefits. The goal of tax planning is to help you minimize your federal income tax liability as much as you are allowed by tax law while saving for retirement.
4. Retirement Planning
When you are at age 25, retirement will seem so far away. At 25, you will think 60 are old, but when reach 60, you think 85 are old. Retirement planning should begin with your first job. So you need to figure out how much to save from now so that you will reach you goals of retirement later. There is never too early to start planning for your retirement.
5. Investment Planning
In your financial planning process, you should think of how to increase your asset net worth and achieve your financial goals with what you have right now. Investing is a tool you can use to achieve your financial goals that you set for yourself. All investments come with certain risks; you need to understand how much risk you should be taking with your investment to achieve your goals.
6. Estate Planning
Life journey will end one day, but many people try to avoid thinking about. The fact is no one will get out of this world alive, so you might as well plan for it. There is a need to protect your assets from Uncle Sam and to have things get in order for your loving family that you will left behind later.
In Summary
Financial planning is important to your life; success or fail to plan your financial will impact your life related to money. The six areas of financial planning that we just reviewed are all interrelated. Hat affects one area impacts the other areas as well, you should be aware of these areas and ho they impact your financial strategies.
Article by Cornie Herring
Adverse Credit Mortgages
Get up to £ 750,000 with a mortgage or re-mortgage, even with an adverse credit rating. If you have adverse credit you could remortgage your house to release between £10,000 and £750,000 for debt consolidation, home improvement, a dream car or for that perfect holiday. At Ocean Mortgages we are dedicated to providing you with a mortgage or a remortgage that matches your needs regardless of any adverse credit rating.
You may feel that having an adverse or bad credit history limits your ability to find a new mortgage deal. At Ocean Mortgages we have specialised in adverse credit mortgages. If you've missed payments, have CCJ’s, defaults or any other credit problems, talk to us about the wide range of mortgage plans we have available.
Getting a new mortgage deal when you have an adverse credit history may be simpler than you think, at Ocean Mortgages we specialise in providing straightforward fast decisions to applicants with bad or adverse credit ratings.
Ocean Mortgages work with many mortgage lenders throughout the UK with a vast range of mortgage & remortgage plans. Ocean Mortgages have a great deal of experience in the provision of adverse credit mortgages and can find a mortgage offer tailored to your specific needs.
===>By using our extensive panel of lenders (many of whom specialise with mortgage plans and experience of arranging finance for people with current or past credit problems), Ocean Mortgages are often able to help arrange refinance mortgages for many.
===>All of our mortgage advisers hold the 'Certificate in Mortgage Advice & Practice’ (CeMAP) qualification, so you can be sure you are dealing with a company who will provide you with a first class service.
===>We arrange for all of the processing & legal work to be completed on your behalf, thus ensuring your remortgage is arranged with the minimum of fuss
You may feel that having an adverse or bad credit history limits your ability to find a new mortgage deal. At Ocean Mortgages we have specialised in adverse credit mortgages. If you've missed payments, have CCJ’s, defaults or any other credit problems, talk to us about the wide range of mortgage plans we have available.
Getting a new mortgage deal when you have an adverse credit history may be simpler than you think, at Ocean Mortgages we specialise in providing straightforward fast decisions to applicants with bad or adverse credit ratings.
Ocean Mortgages work with many mortgage lenders throughout the UK with a vast range of mortgage & remortgage plans. Ocean Mortgages have a great deal of experience in the provision of adverse credit mortgages and can find a mortgage offer tailored to your specific needs.
===>By using our extensive panel of lenders (many of whom specialise with mortgage plans and experience of arranging finance for people with current or past credit problems), Ocean Mortgages are often able to help arrange refinance mortgages for many.
===>All of our mortgage advisers hold the 'Certificate in Mortgage Advice & Practice’ (CeMAP) qualification, so you can be sure you are dealing with a company who will provide you with a first class service.
===>We arrange for all of the processing & legal work to be completed on your behalf, thus ensuring your remortgage is arranged with the minimum of fuss
Release Yourself From The Burden Of Debt
Do you feel like you are in debt prison? Are you in financial turmoil wondering how you can continue to keep everything from imploding on you? Did you know that there were actually debtor prisons in America before the Revolutionary War? Robert Morris, a signer of the Declaration of Independence, was imprisoned in the 1700's for failure to pay debts. The bible also warns against borrowing more than we can afford to pay. Proverbs 22:26-27 says do not be a man who strikes hands in pledge or puts up security for debts; if you lack the means to pay, your very bed will be snatched from under you.
Credit card use has continued to grow in leaps and bounds. From 1996 to 2005, the total number of bank credit cards almost doubled. In 2004 alone, credit card companies generated $43 billion in fee income from late payment, over-limit, and balance transfer fees. The Federal Reserve reports that the total US consumer revolving debt reached 2.46 trillion in 2007. This large increase in card usage has created a "fee feeding frenzy," among credit card issuers. The whole credit card industry has really evolved for the benefit of creditors in recent years, with the industry imposing fees and increasing interest rates if a single payment is late. Penalty interest rates usually are as much as 30-39%, while late fees now often are $39 a month and over-limit fees are as much as $35. If you consider how that can add up over just one year, it could be very expensive. Consider this: late and over-limit fees alone can easily rack up $900, and a 30 percent interest rate on a $3,000 balance can add another $1,000.
The bottom line is, credit card companies want to issue as much credit as possible to as many people as possible and hope you barely make the minimum payment. It's the exact same way these cash advance companies all over town work. They couldn't care less if you ever pay it off. In fact, they do not want you to pay it off. While most card issuers claim this is the cost of doing business, consumers should not be charged excessively for small errors. Ultimately we are responsible for our own financial choices and credit purchase decisions. However its clear to see that credit card companies will continue to entice and market low teaser rate introductory offers (the bate) and make it easy for us to use the cards. This is attractive to the consumer because they can avoid waiting and have the items or purchases they want now. But what price will we actually pay for these items?
That said, roughly $355 billion in mortgage loans are set to adjust during 2008, to significantly higher interest rates. This means many borrowers may face additional difficulties. Hopefully the Bush administrations plan for a rate freeze for adjusting arms and foreclosure prevention will help many consumers avoid catastrophe. The combination of mortgage woes and credit card debt pileup has made many people feel as though they just walked out on a pirate ship plank with nowhere to turn.
So, what is the best way to find the road to financial prosperity?
First and most importantly, if you are in an adjustable rate arm loan, check the date that it is set to adjust in your paperwork from your title closing. If you closed two or three years ago and took one of these teaser loans it will adjust 24-36 months from the original closing date. This is very important because when it adjusts it can increase by two or three interest points. Your lender should notify you 30 days prior to your reset date and you may get reminders from lenders vying for your business. Don't get yourself caught in this self destruction.
Mortgage interest rates are anticipated to remain steady or dip slightly in 2008; this may be a good opportunity to refinance into a 30-year fixed-rate. The FHA modernization act will make refinancing a good option for damaged credit borrowers to qualify for up to 95% of their homes value at competitive single digit interest rates and avoid incurring prepay penalties. The teaser arms sold over the past 2-3 years are under extreme scrutiny due to the explosive foreclosure epidemic and its effect on the overall economy. The FHA Secure is also a great option for those who need help to avoid foreclosure, allowing them to roll in the arrearage. The future of sub-prime lending appears to be bleak at best. Many borrowers had little options other than 2 or 3 year fixed rate sub prime arms over the last few years because of credit issues, and aggressive lenders pushing these loans on poor credit borrowers. Unfortunately, these same borrowers are now in trouble and imploding due to a cocktail of housing value depreciation, adjusting rates and maxed out credit cards. The bottom line to most of these issues is proper guidance and good decision making. Additionally, it is prudent that you choose an advisor that will educate you about any loans that are different than the norm, like arm loans, negative amortization loans and loans that do not collect escrows. Now, if that is not upsetting enough, federal regulators pressured credit card issuers to double the minimum payment requirements on credit card balances. This can be both good news and bad news for many Americans burdened by debt. While it may force you to pay the balance down, it can mean disaster for many who cannot afford the extra out-of-pocket expense each month.
Should you use a mortgage refinance as an Option to Debt Consolidation? If you are a homeowner with verifiable income, who pays their bills on time for the most part, but who would sincerely like to be debt-free and financially secure while still young enough to enjoy it, maybe even become wealthy. Whether you've had some credit problems and have a blemished credit report, whether you're struggling now and need immediate help to avoid foreclosure, or are doing okay but wish there was a strategy to get out of debt and build some net worth. Then this could be a possible option.
When you really analyze your financial situation, are you using too much of your income just servicing debt making the minimum payments? You absolutely can not build wealth overusing your credit cards you have to make a conscious decision not to make purchases with credit cards unless you can payoff the balance. While home equity has been reduced dramatically in some declining markets, many people may still be able to benefit from restructuring the way they pay their bills and by using their home's equity as the means of accomplishing this.
Do you have two loans with one of them adjustable? Consider consolidating your 1st and 2nd mortgage loans. Do you have high balance credit card in which you are being charged late fees, over limit fees and excessive interest? Consider paying off obligations such as auto or high rate credit cards, overdue property taxes or insurance premiums.
This will wrap up your existing obligations into one tax-deductible payment and puts you back in control of your debt with one manageable payment. Consult your accountant or tax advisor on this as it could equate to a 20-30% savings in interest and your overall Net Effective Rate. If you can eliminate your credit card payments, late fees and penalties and start enjoying increased monthly disposable cash flow, you may actually be able to make financial choices that will help you build a positive net worth. Another way you can reduce mortgage interest further is by signing up for a biweekly repayment plan that splits your mortgage into two monthly payments, this forces you to pay down your mortgage interest much faster. I know, I know your friend said just make one additional payment per year to accomplish this, seriously! Who does this? I say forced biweekly, kind of like forced property taxes through escrows, you get the idea! Then take the savings, say for example $200 a month, and purchase an equity indexed life insurance policy that will protect your family if you die to cover the mortgage balance. More importantly, if you live, the account your premiums go into is tied to an investment account so that it will accumulate a cash value that could be drawn on at retirement, and essentially you could pay off your mortgage tax free. Imagine the benefits of having fewer bills to deal with every month and simplifying your financial life!
Here are a few things to consider to decide if you could benefit from a refinance consolidation:
Do you have equity based on a current appraised value?
Do you have a home equity line of credit that's increasing out of control?
Do you have a loan that does not collect escrows for taxes and insurance and have difficulty paying them at the time they are due?
Do you have too many credit cards that are near or above the credit limit?
Do you have an Adjustable Rate Mortgage on the brink of spiking Up?
Do you make minimum payments on credit cards and are unable to make a dent in the balance?
Are you saving and investing less than 15% of your income?
Would you like to take advantage of the FHA Modernization and qualify for a great rate?
Would you like to get out of that high interest rate sub-prime loan and qualify for a single digit 30 year fixed rate loan without a prepay penalty?
Are there tax-deductible savings opportunities like pension plans, IRA, Keogh, Medical Savings Accounts, etc. that you are missing out on because you don't have enough money after paying bills to participate in them?
Would you like to take a really nice vacation or make some improvements to your home this year without going into debt to do it?
Would you like to eliminate years off of your mortgage balance?
Do you have a mortgage protection insurance plan to protect your home and family should you die or become disabled?
If any of these questions apply to you, consider the following:
The average personal savings of a retiree amounts to about $6,500. The average benefit check is about $968.00 according to the Social Security Administration. Baby boomers are expected to enter retirement starting in 2010 and considering people are living longer, it is expected that these funds will be exhausted by the year 2040 and will create a deficit in the trust, only providing 72% of what is needed.
The key thing to consider with proper debt management is to make a conscious effort to avoid using credit cards for unnecessary purchases. If you cannot afford it, do not buy it! More simply said than done, I know. Look for ways to curtail extra activities such as eating out everyday, soft drinks, anything you can do without. Use the extra savings to pay off your high interest cards first. Contact a credible mortgage advisor to see if you qualify for a debt consolidation loan at a competitive interest rate. Transfer non tax deductible interest from other debts to a tax deductible loan. If the loan will not create a tangible benefit to your financial picture do not do it.
Article by Christopher Beard
Credit card use has continued to grow in leaps and bounds. From 1996 to 2005, the total number of bank credit cards almost doubled. In 2004 alone, credit card companies generated $43 billion in fee income from late payment, over-limit, and balance transfer fees. The Federal Reserve reports that the total US consumer revolving debt reached 2.46 trillion in 2007. This large increase in card usage has created a "fee feeding frenzy," among credit card issuers. The whole credit card industry has really evolved for the benefit of creditors in recent years, with the industry imposing fees and increasing interest rates if a single payment is late. Penalty interest rates usually are as much as 30-39%, while late fees now often are $39 a month and over-limit fees are as much as $35. If you consider how that can add up over just one year, it could be very expensive. Consider this: late and over-limit fees alone can easily rack up $900, and a 30 percent interest rate on a $3,000 balance can add another $1,000.
The bottom line is, credit card companies want to issue as much credit as possible to as many people as possible and hope you barely make the minimum payment. It's the exact same way these cash advance companies all over town work. They couldn't care less if you ever pay it off. In fact, they do not want you to pay it off. While most card issuers claim this is the cost of doing business, consumers should not be charged excessively for small errors. Ultimately we are responsible for our own financial choices and credit purchase decisions. However its clear to see that credit card companies will continue to entice and market low teaser rate introductory offers (the bate) and make it easy for us to use the cards. This is attractive to the consumer because they can avoid waiting and have the items or purchases they want now. But what price will we actually pay for these items?
That said, roughly $355 billion in mortgage loans are set to adjust during 2008, to significantly higher interest rates. This means many borrowers may face additional difficulties. Hopefully the Bush administrations plan for a rate freeze for adjusting arms and foreclosure prevention will help many consumers avoid catastrophe. The combination of mortgage woes and credit card debt pileup has made many people feel as though they just walked out on a pirate ship plank with nowhere to turn.
So, what is the best way to find the road to financial prosperity?
First and most importantly, if you are in an adjustable rate arm loan, check the date that it is set to adjust in your paperwork from your title closing. If you closed two or three years ago and took one of these teaser loans it will adjust 24-36 months from the original closing date. This is very important because when it adjusts it can increase by two or three interest points. Your lender should notify you 30 days prior to your reset date and you may get reminders from lenders vying for your business. Don't get yourself caught in this self destruction.
Mortgage interest rates are anticipated to remain steady or dip slightly in 2008; this may be a good opportunity to refinance into a 30-year fixed-rate. The FHA modernization act will make refinancing a good option for damaged credit borrowers to qualify for up to 95% of their homes value at competitive single digit interest rates and avoid incurring prepay penalties. The teaser arms sold over the past 2-3 years are under extreme scrutiny due to the explosive foreclosure epidemic and its effect on the overall economy. The FHA Secure is also a great option for those who need help to avoid foreclosure, allowing them to roll in the arrearage. The future of sub-prime lending appears to be bleak at best. Many borrowers had little options other than 2 or 3 year fixed rate sub prime arms over the last few years because of credit issues, and aggressive lenders pushing these loans on poor credit borrowers. Unfortunately, these same borrowers are now in trouble and imploding due to a cocktail of housing value depreciation, adjusting rates and maxed out credit cards. The bottom line to most of these issues is proper guidance and good decision making. Additionally, it is prudent that you choose an advisor that will educate you about any loans that are different than the norm, like arm loans, negative amortization loans and loans that do not collect escrows. Now, if that is not upsetting enough, federal regulators pressured credit card issuers to double the minimum payment requirements on credit card balances. This can be both good news and bad news for many Americans burdened by debt. While it may force you to pay the balance down, it can mean disaster for many who cannot afford the extra out-of-pocket expense each month.
Should you use a mortgage refinance as an Option to Debt Consolidation? If you are a homeowner with verifiable income, who pays their bills on time for the most part, but who would sincerely like to be debt-free and financially secure while still young enough to enjoy it, maybe even become wealthy. Whether you've had some credit problems and have a blemished credit report, whether you're struggling now and need immediate help to avoid foreclosure, or are doing okay but wish there was a strategy to get out of debt and build some net worth. Then this could be a possible option.
When you really analyze your financial situation, are you using too much of your income just servicing debt making the minimum payments? You absolutely can not build wealth overusing your credit cards you have to make a conscious decision not to make purchases with credit cards unless you can payoff the balance. While home equity has been reduced dramatically in some declining markets, many people may still be able to benefit from restructuring the way they pay their bills and by using their home's equity as the means of accomplishing this.
Do you have two loans with one of them adjustable? Consider consolidating your 1st and 2nd mortgage loans. Do you have high balance credit card in which you are being charged late fees, over limit fees and excessive interest? Consider paying off obligations such as auto or high rate credit cards, overdue property taxes or insurance premiums.
This will wrap up your existing obligations into one tax-deductible payment and puts you back in control of your debt with one manageable payment. Consult your accountant or tax advisor on this as it could equate to a 20-30% savings in interest and your overall Net Effective Rate. If you can eliminate your credit card payments, late fees and penalties and start enjoying increased monthly disposable cash flow, you may actually be able to make financial choices that will help you build a positive net worth. Another way you can reduce mortgage interest further is by signing up for a biweekly repayment plan that splits your mortgage into two monthly payments, this forces you to pay down your mortgage interest much faster. I know, I know your friend said just make one additional payment per year to accomplish this, seriously! Who does this? I say forced biweekly, kind of like forced property taxes through escrows, you get the idea! Then take the savings, say for example $200 a month, and purchase an equity indexed life insurance policy that will protect your family if you die to cover the mortgage balance. More importantly, if you live, the account your premiums go into is tied to an investment account so that it will accumulate a cash value that could be drawn on at retirement, and essentially you could pay off your mortgage tax free. Imagine the benefits of having fewer bills to deal with every month and simplifying your financial life!
Here are a few things to consider to decide if you could benefit from a refinance consolidation:
Do you have equity based on a current appraised value?
Do you have a home equity line of credit that's increasing out of control?
Do you have a loan that does not collect escrows for taxes and insurance and have difficulty paying them at the time they are due?
Do you have too many credit cards that are near or above the credit limit?
Do you have an Adjustable Rate Mortgage on the brink of spiking Up?
Do you make minimum payments on credit cards and are unable to make a dent in the balance?
Are you saving and investing less than 15% of your income?
Would you like to take advantage of the FHA Modernization and qualify for a great rate?
Would you like to get out of that high interest rate sub-prime loan and qualify for a single digit 30 year fixed rate loan without a prepay penalty?
Are there tax-deductible savings opportunities like pension plans, IRA, Keogh, Medical Savings Accounts, etc. that you are missing out on because you don't have enough money after paying bills to participate in them?
Would you like to take a really nice vacation or make some improvements to your home this year without going into debt to do it?
Would you like to eliminate years off of your mortgage balance?
Do you have a mortgage protection insurance plan to protect your home and family should you die or become disabled?
If any of these questions apply to you, consider the following:
The average personal savings of a retiree amounts to about $6,500. The average benefit check is about $968.00 according to the Social Security Administration. Baby boomers are expected to enter retirement starting in 2010 and considering people are living longer, it is expected that these funds will be exhausted by the year 2040 and will create a deficit in the trust, only providing 72% of what is needed.
The key thing to consider with proper debt management is to make a conscious effort to avoid using credit cards for unnecessary purchases. If you cannot afford it, do not buy it! More simply said than done, I know. Look for ways to curtail extra activities such as eating out everyday, soft drinks, anything you can do without. Use the extra savings to pay off your high interest cards first. Contact a credible mortgage advisor to see if you qualify for a debt consolidation loan at a competitive interest rate. Transfer non tax deductible interest from other debts to a tax deductible loan. If the loan will not create a tangible benefit to your financial picture do not do it.
Article by Christopher Beard
The Fine Print on Long-Term Care Insurance
"If I would have known I was going to live this long I would have taken better care of myself!" That funny line isn't so funny when you're facing a health crisis without the funds to deal with it. Health care costs go up as we age but fortunately we now have some financial tools to help. Now we can make those golden years more comfortable; both physically and financially. Here's one vehicle... Long-term care insurance (LTCI). But don't hop on this insurance product until you really understand what you're getting into. Like any insurance policy, we learn how well it works when we really need it. Here are some of the fine-print considerations to examine if you are looking at any form of long-term care insurance (LTCI).
Long-term care is often considered an issue exclusively for elders. Not so. A person who requires continuous care because they are unable to independently perform basic daily living activities such as dressing, bathing, or eating due to an injury, illness or in some cases, cognitive disorders may be a long-term care candidate. Being able to afford long-term care is something that concerns many of us. One way to deal with the unpredictability of long-term care costs may be long-term care insurance (LTCI).
Hopefully you'll live a long and prosperous life and health or money issues won't cloud your golden years. But, if you want to be prepared, consider how to make long-term care insurance work to your advantage. Don't count on Medicaid. It does cover a bit of your long-term care expenses but you've got to be dang near death or flat broke or a combination of the two to qualify. Then there's your friendly neighborhood HMOs, Medicare, and Medigap but guess what. Right. They don't help much either.
Here are three things you can do to get over your anxiety about this whole not-so-fun question of "How long will I live and can I afford it if I do?"
1. Eat your dang vegetables! Your mother was right. They are good for you and they keep you healthy. In other words, get with a fitness plan, clean up your diet, kick the smokes, and see if you can't add a few more healthy years to your life before long-term care insurance becomes a really big issue.
2. Make a ton of money. Yeah, yeah, yeah, your mother told you to start saving early. If you did as mama advised and got yourself some of that thar financial plannin' stuff then yer in dang good shape. If not, it's never too late to start with some basic planning and investing.
3. Buy some long-term care insurance. Nobody likes paying those insurance premiums but the right kind of long-term care insurance could make a huge difference when the going gets tough.
Eat your veggies, make some money, and buy some long-term care insurance. The first two are relatively easy; the last one has a few complexities to be aware of. Get with an agent you trust. Get a referral from someone in the legal or financial fields. Here is some of the even finer print to watch for when it gets down to the nitty gritty of policy comparison:
1. Elimination Complication... Or, in the insurance industry words, Elimination Period: This is the period of time before your insurance policy will actually begin paying out benefits. They typical options range from 20 to 100 days. This is also referred to as a waiting period. Make sure and ask your agent to clarify what your elimination period is and have him explain the cost/benefit considerations of making it longer or shorter.
2. Time Crunch... Or, as the insurance lingo goes, Duration of Benefits: The ceiling or limits placed on the benefits a policy holder will receive. This may be limits such as a set amount of money or a time limit of two years, etc. Again, it's important to compare these benefits to other financial capabilities and resources available to you.
3. Daily Bread... Or, as the insurance industry feeds it to you: Daily Benefit: This is the amount of coverage you choose as your benefit on a daily basis. This usually ranges from about $50 to as much as $350 each day. Also keep in mind the cost of living in your neighborhood. Health care in a small town in Wisconsin may be less costly than downtown San Diego. Your agent should be able to give you some guidance on this.
4. Easy Rider... Or as our insurance friends call it, Optional Inflation Rider: The term used to describe the method of protection against inflation.
5. Done-Got-That-Bug Before Or, affectionately known as Pre-existing Conditions and we-aint-gonna-cover-your-tail-for-that-one-for-a-while rule. The insurance provider will require a waiting period (in some cases 6 or months or more) before full coverage goes into effect on treatment for pre-existing conditions. This will vary from company to company.
6. Home on the Range... Or, our insurance folks refer to this as Range of Care: In other words, coverage may vary for different levels of care. Some care may be at a skilled level, intermediate level, or a custodial level. The facility will also have a range-of-care definition that the insurance agent should thoroughly explain. The nursing home is one price. The assisted living facility is another. And of course, the home care is still another price. Maybe a little complicated but this each of these services has different costs and various levels of service. Therefore they all have their own unique price tag. Ask for clarification on this.
7. Jacking Premiums... Or, also known as Premium Increases: Your policy will have terms in it that explain if, how, and when your premiums will increase. Reality check here. There is rarely an "if" but almost certainly a "when." Of course your costs will go up, just make sure you know how much and if you have any options when they do. Can you reduce the type of coverage you have if your premiums increase or are you locked in? Ask your agent.
8. To Know me is to Renew me... Or more commonly referred to as: Guaranteed Renewability: This is a policy agreement in long-term care insurance policies that allows you to renew it and maintain coverage even though you may have had changes in your health.
9. Amazing Grace Period... Or in less poetic terms, Grace Period for Late Payment: If you slip up and you're a little late on your payment, this is how much time the company will allow before they do something nasty like cancel your policy. It is wise that you don't put your grace period to the test. They may not always have the same warped sense of humor that certain article writers do.
10. No Debate Rebate... This is a fun one for a change, Return of Premium: This is the little clause that says you may get some of your money back if you haven't used your policy for a certain number of years. Remember, we did say "may get some of your money back."
11. Bed Pan Ally... Better known as Prior Hospitalization: This is the tiny little clause that indicates whether or not you must stay in a hospital before you qualify for long-term care insurance benefits.
It's obvious there's a lot to know about long-term care insurance so do your homework early. Make sure and check with a financial planner, attorney or accountant to get some guidance on this complicated topic. Not everyone needs or qualifies for long-term care insurance so ask a lot of questions and don't forget to eat your dang vegetables!
Article by Steve Dahl
Long-term care is often considered an issue exclusively for elders. Not so. A person who requires continuous care because they are unable to independently perform basic daily living activities such as dressing, bathing, or eating due to an injury, illness or in some cases, cognitive disorders may be a long-term care candidate. Being able to afford long-term care is something that concerns many of us. One way to deal with the unpredictability of long-term care costs may be long-term care insurance (LTCI).
Hopefully you'll live a long and prosperous life and health or money issues won't cloud your golden years. But, if you want to be prepared, consider how to make long-term care insurance work to your advantage. Don't count on Medicaid. It does cover a bit of your long-term care expenses but you've got to be dang near death or flat broke or a combination of the two to qualify. Then there's your friendly neighborhood HMOs, Medicare, and Medigap but guess what. Right. They don't help much either.
Here are three things you can do to get over your anxiety about this whole not-so-fun question of "How long will I live and can I afford it if I do?"
1. Eat your dang vegetables! Your mother was right. They are good for you and they keep you healthy. In other words, get with a fitness plan, clean up your diet, kick the smokes, and see if you can't add a few more healthy years to your life before long-term care insurance becomes a really big issue.
2. Make a ton of money. Yeah, yeah, yeah, your mother told you to start saving early. If you did as mama advised and got yourself some of that thar financial plannin' stuff then yer in dang good shape. If not, it's never too late to start with some basic planning and investing.
3. Buy some long-term care insurance. Nobody likes paying those insurance premiums but the right kind of long-term care insurance could make a huge difference when the going gets tough.
Eat your veggies, make some money, and buy some long-term care insurance. The first two are relatively easy; the last one has a few complexities to be aware of. Get with an agent you trust. Get a referral from someone in the legal or financial fields. Here is some of the even finer print to watch for when it gets down to the nitty gritty of policy comparison:
1. Elimination Complication... Or, in the insurance industry words, Elimination Period: This is the period of time before your insurance policy will actually begin paying out benefits. They typical options range from 20 to 100 days. This is also referred to as a waiting period. Make sure and ask your agent to clarify what your elimination period is and have him explain the cost/benefit considerations of making it longer or shorter.
2. Time Crunch... Or, as the insurance lingo goes, Duration of Benefits: The ceiling or limits placed on the benefits a policy holder will receive. This may be limits such as a set amount of money or a time limit of two years, etc. Again, it's important to compare these benefits to other financial capabilities and resources available to you.
3. Daily Bread... Or, as the insurance industry feeds it to you: Daily Benefit: This is the amount of coverage you choose as your benefit on a daily basis. This usually ranges from about $50 to as much as $350 each day. Also keep in mind the cost of living in your neighborhood. Health care in a small town in Wisconsin may be less costly than downtown San Diego. Your agent should be able to give you some guidance on this.
4. Easy Rider... Or as our insurance friends call it, Optional Inflation Rider: The term used to describe the method of protection against inflation.
5. Done-Got-That-Bug Before Or, affectionately known as Pre-existing Conditions and we-aint-gonna-cover-your-tail-for-that-one-for-a-while rule. The insurance provider will require a waiting period (in some cases 6 or months or more) before full coverage goes into effect on treatment for pre-existing conditions. This will vary from company to company.
6. Home on the Range... Or, our insurance folks refer to this as Range of Care: In other words, coverage may vary for different levels of care. Some care may be at a skilled level, intermediate level, or a custodial level. The facility will also have a range-of-care definition that the insurance agent should thoroughly explain. The nursing home is one price. The assisted living facility is another. And of course, the home care is still another price. Maybe a little complicated but this each of these services has different costs and various levels of service. Therefore they all have their own unique price tag. Ask for clarification on this.
7. Jacking Premiums... Or, also known as Premium Increases: Your policy will have terms in it that explain if, how, and when your premiums will increase. Reality check here. There is rarely an "if" but almost certainly a "when." Of course your costs will go up, just make sure you know how much and if you have any options when they do. Can you reduce the type of coverage you have if your premiums increase or are you locked in? Ask your agent.
8. To Know me is to Renew me... Or more commonly referred to as: Guaranteed Renewability: This is a policy agreement in long-term care insurance policies that allows you to renew it and maintain coverage even though you may have had changes in your health.
9. Amazing Grace Period... Or in less poetic terms, Grace Period for Late Payment: If you slip up and you're a little late on your payment, this is how much time the company will allow before they do something nasty like cancel your policy. It is wise that you don't put your grace period to the test. They may not always have the same warped sense of humor that certain article writers do.
10. No Debate Rebate... This is a fun one for a change, Return of Premium: This is the little clause that says you may get some of your money back if you haven't used your policy for a certain number of years. Remember, we did say "may get some of your money back."
11. Bed Pan Ally... Better known as Prior Hospitalization: This is the tiny little clause that indicates whether or not you must stay in a hospital before you qualify for long-term care insurance benefits.
It's obvious there's a lot to know about long-term care insurance so do your homework early. Make sure and check with a financial planner, attorney or accountant to get some guidance on this complicated topic. Not everyone needs or qualifies for long-term care insurance so ask a lot of questions and don't forget to eat your dang vegetables!
Article by Steve Dahl
The Fine Print on Long-Term Care Insurance
"If I would have known I was going to live this long I would have taken better care of myself!" That funny line isn't so funny when you're facing a health crisis without the funds to deal with it. Health care costs go up as we age but fortunately we now have some financial tools to help. Now we can make those golden years more comfortable; both physically and financially. Here's one vehicle... Long-term care insurance (LTCI). But don't hop on this insurance product until you really understand what you're getting into. Like any insurance policy, we learn how well it works when we really need it. Here are some of the fine-print considerations to examine if you are looking at any form of long-term care insurance (LTCI).
Long-term care is often considered an issue exclusively for elders. Not so. A person who requires continuous care because they are unable to independently perform basic daily living activities such as dressing, bathing, or eating due to an injury, illness or in some cases, cognitive disorders may be a long-term care candidate. Being able to afford long-term care is something that concerns many of us. One way to deal with the unpredictability of long-term care costs may be long-term care insurance (LTCI).
Hopefully you'll live a long and prosperous life and health or money issues won't cloud your golden years. But, if you want to be prepared, consider how to make long-term care insurance work to your advantage. Don't count on Medicaid. It does cover a bit of your long-term care expenses but you've got to be dang near death or flat broke or a combination of the two to qualify. Then there's your friendly neighborhood HMOs, Medicare, and Medigap but guess what. Right. They don't help much either.
Here are three things you can do to get over your anxiety about this whole not-so-fun question of "How long will I live and can I afford it if I do?"
1. Eat your dang vegetables! Your mother was right. They are good for you and they keep you healthy. In other words, get with a fitness plan, clean up your diet, kick the smokes, and see if you can't add a few more healthy years to your life before long-term care insurance becomes a really big issue.
2. Make a ton of money. Yeah, yeah, yeah, your mother told you to start saving early. If you did as mama advised and got yourself some of that thar financial plannin' stuff then yer in dang good shape. If not, it's never too late to start with some basic planning and investing.
3. Buy some long-term care insurance. Nobody likes paying those insurance premiums but the right kind of long-term care insurance could make a huge difference when the going gets tough.
Eat your veggies, make some money, and buy some long-term care insurance. The first two are relatively easy; the last one has a few complexities to be aware of. Get with an agent you trust. Get a referral from someone in the legal or financial fields. Here is some of the even finer print to watch for when it gets down to the nitty gritty of policy comparison:
1. Elimination Complication... Or, in the insurance industry words, Elimination Period: This is the period of time before your insurance policy will actually begin paying out benefits. They typical options range from 20 to 100 days. This is also referred to as a waiting period. Make sure and ask your agent to clarify what your elimination period is and have him explain the cost/benefit considerations of making it longer or shorter.
2. Time Crunch... Or, as the insurance lingo goes, Duration of Benefits: The ceiling or limits placed on the benefits a policy holder will receive. This may be limits such as a set amount of money or a time limit of two years, etc. Again, it's important to compare these benefits to other financial capabilities and resources available to you.
3. Daily Bread... Or, as the insurance industry feeds it to you: Daily Benefit: This is the amount of coverage you choose as your benefit on a daily basis. This usually ranges from about $50 to as much as $350 each day. Also keep in mind the cost of living in your neighborhood. Health care in a small town in Wisconsin may be less costly than downtown San Diego. Your agent should be able to give you some guidance on this.
4. Easy Rider... Or as our insurance friends call it, Optional Inflation Rider: The term used to describe the method of protection against inflation.
5. Done-Got-That-Bug Before Or, affectionately known as Pre-existing Conditions and we-aint-gonna-cover-your-tail-for-that-one-for-a-while rule. The insurance provider will require a waiting period (in some cases 6 or months or more) before full coverage goes into effect on treatment for pre-existing conditions. This will vary from company to company.
6. Home on the Range... Or, our insurance folks refer to this as Range of Care: In other words, coverage may vary for different levels of care. Some care may be at a skilled level, intermediate level, or a custodial level. The facility will also have a range-of-care definition that the insurance agent should thoroughly explain. The nursing home is one price. The assisted living facility is another. And of course, the home care is still another price. Maybe a little complicated but this each of these services has different costs and various levels of service. Therefore they all have their own unique price tag. Ask for clarification on this.
7. Jacking Premiums... Or, also known as Premium Increases: Your policy will have terms in it that explain if, how, and when your premiums will increase. Reality check here. There is rarely an "if" but almost certainly a "when." Of course your costs will go up, just make sure you know how much and if you have any options when they do. Can you reduce the type of coverage you have if your premiums increase or are you locked in? Ask your agent.
8. To Know me is to Renew me... Or more commonly referred to as: Guaranteed Renewability: This is a policy agreement in long-term care insurance policies that allows you to renew it and maintain coverage even though you may have had changes in your health.
9. Amazing Grace Period... Or in less poetic terms, Grace Period for Late Payment: If you slip up and you're a little late on your payment, this is how much time the company will allow before they do something nasty like cancel your policy. It is wise that you don't put your grace period to the test. They may not always have the same warped sense of humor that certain article writers do.
10. No Debate Rebate... This is a fun one for a change, Return of Premium: This is the little clause that says you may get some of your money back if you haven't used your policy for a certain number of years. Remember, we did say "may get some of your money back."
11. Bed Pan Ally... Better known as Prior Hospitalization: This is the tiny little clause that indicates whether or not you must stay in a hospital before you qualify for long-term care insurance benefits.
It's obvious there's a lot to know about long-term care insurance so do your homework early. Make sure and check with a financial planner, attorney or accountant to get some guidance on this complicated topic. Not everyone needs or qualifies for long-term care insurance so ask a lot of questions and don't forget to eat your dang vegetables!
Article by Steve Dahl
Long-term care is often considered an issue exclusively for elders. Not so. A person who requires continuous care because they are unable to independently perform basic daily living activities such as dressing, bathing, or eating due to an injury, illness or in some cases, cognitive disorders may be a long-term care candidate. Being able to afford long-term care is something that concerns many of us. One way to deal with the unpredictability of long-term care costs may be long-term care insurance (LTCI).
Hopefully you'll live a long and prosperous life and health or money issues won't cloud your golden years. But, if you want to be prepared, consider how to make long-term care insurance work to your advantage. Don't count on Medicaid. It does cover a bit of your long-term care expenses but you've got to be dang near death or flat broke or a combination of the two to qualify. Then there's your friendly neighborhood HMOs, Medicare, and Medigap but guess what. Right. They don't help much either.
Here are three things you can do to get over your anxiety about this whole not-so-fun question of "How long will I live and can I afford it if I do?"
1. Eat your dang vegetables! Your mother was right. They are good for you and they keep you healthy. In other words, get with a fitness plan, clean up your diet, kick the smokes, and see if you can't add a few more healthy years to your life before long-term care insurance becomes a really big issue.
2. Make a ton of money. Yeah, yeah, yeah, your mother told you to start saving early. If you did as mama advised and got yourself some of that thar financial plannin' stuff then yer in dang good shape. If not, it's never too late to start with some basic planning and investing.
3. Buy some long-term care insurance. Nobody likes paying those insurance premiums but the right kind of long-term care insurance could make a huge difference when the going gets tough.
Eat your veggies, make some money, and buy some long-term care insurance. The first two are relatively easy; the last one has a few complexities to be aware of. Get with an agent you trust. Get a referral from someone in the legal or financial fields. Here is some of the even finer print to watch for when it gets down to the nitty gritty of policy comparison:
1. Elimination Complication... Or, in the insurance industry words, Elimination Period: This is the period of time before your insurance policy will actually begin paying out benefits. They typical options range from 20 to 100 days. This is also referred to as a waiting period. Make sure and ask your agent to clarify what your elimination period is and have him explain the cost/benefit considerations of making it longer or shorter.
2. Time Crunch... Or, as the insurance lingo goes, Duration of Benefits: The ceiling or limits placed on the benefits a policy holder will receive. This may be limits such as a set amount of money or a time limit of two years, etc. Again, it's important to compare these benefits to other financial capabilities and resources available to you.
3. Daily Bread... Or, as the insurance industry feeds it to you: Daily Benefit: This is the amount of coverage you choose as your benefit on a daily basis. This usually ranges from about $50 to as much as $350 each day. Also keep in mind the cost of living in your neighborhood. Health care in a small town in Wisconsin may be less costly than downtown San Diego. Your agent should be able to give you some guidance on this.
4. Easy Rider... Or as our insurance friends call it, Optional Inflation Rider: The term used to describe the method of protection against inflation.
5. Done-Got-That-Bug Before Or, affectionately known as Pre-existing Conditions and we-aint-gonna-cover-your-tail-for-that-one-for-a-while rule. The insurance provider will require a waiting period (in some cases 6 or months or more) before full coverage goes into effect on treatment for pre-existing conditions. This will vary from company to company.
6. Home on the Range... Or, our insurance folks refer to this as Range of Care: In other words, coverage may vary for different levels of care. Some care may be at a skilled level, intermediate level, or a custodial level. The facility will also have a range-of-care definition that the insurance agent should thoroughly explain. The nursing home is one price. The assisted living facility is another. And of course, the home care is still another price. Maybe a little complicated but this each of these services has different costs and various levels of service. Therefore they all have their own unique price tag. Ask for clarification on this.
7. Jacking Premiums... Or, also known as Premium Increases: Your policy will have terms in it that explain if, how, and when your premiums will increase. Reality check here. There is rarely an "if" but almost certainly a "when." Of course your costs will go up, just make sure you know how much and if you have any options when they do. Can you reduce the type of coverage you have if your premiums increase or are you locked in? Ask your agent.
8. To Know me is to Renew me... Or more commonly referred to as: Guaranteed Renewability: This is a policy agreement in long-term care insurance policies that allows you to renew it and maintain coverage even though you may have had changes in your health.
9. Amazing Grace Period... Or in less poetic terms, Grace Period for Late Payment: If you slip up and you're a little late on your payment, this is how much time the company will allow before they do something nasty like cancel your policy. It is wise that you don't put your grace period to the test. They may not always have the same warped sense of humor that certain article writers do.
10. No Debate Rebate... This is a fun one for a change, Return of Premium: This is the little clause that says you may get some of your money back if you haven't used your policy for a certain number of years. Remember, we did say "may get some of your money back."
11. Bed Pan Ally... Better known as Prior Hospitalization: This is the tiny little clause that indicates whether or not you must stay in a hospital before you qualify for long-term care insurance benefits.
It's obvious there's a lot to know about long-term care insurance so do your homework early. Make sure and check with a financial planner, attorney or accountant to get some guidance on this complicated topic. Not everyone needs or qualifies for long-term care insurance so ask a lot of questions and don't forget to eat your dang vegetables!
Article by Steve Dahl
Financial Responsibility
What is financial responsibility? Is it making money, being thrifty, having a budget, paying bills on time, getting a job? Or is it much more than this?
Responsibility as defined in the dictionary is – being the primary cause for; accountability for your actions.
When someone is said to be responsible with money they are generally thrifty, pay what they owe on time, save money and maybe even work to a budget.
Is this all the money responsibility that's needed in order to get ahead?
Maybe. But these traits alone are unlikely to bring you great wealth. They might be good for keeping you out of trouble so you meet your basic needs and keep hungry creditors from bashing down your door.
Really they are just the starting point.
Real financial responsibility requires you to set goals, learn new skills and become independent – financially independent. That means getting to the point where you have enough money invested in some way that it is actually earning sufficient funds for you to live on in the lifestyle you desire without having to go out to work.
There is a plethora of information around on setting goals. The new skills you will have to learn will depend on your interests and the activities you choose in your pursuit of financial independence.
But the challenge of financial independence will demand much more of you than goal setting and action plans.
Your responsibility is much more than saving, managing and growing your money. In fact the major obstacle to your accumulating the money you'd like has nothing to do with actual money or financial skills.
By far the biggest and toughest responsibilities are overcoming personal doubt and fear, the criticism and negativity of friends and family, and eliminating self-defeating habits.
It's often tough to face the truth about ourselves. The truth is that our reaction or response to the criticism of others is our choice. However we respond is contingent upon our inner beliefs, particularly our beliefs about ourselves.
Lack of belief in ourselves will cause our confidence to wither like a vine in the desert when we are subjected to criticism and negativity from others. We can soon lose our power and enthusiasm for our project when a skeptic, cynic or otherwise uninformed but probably well-meaning person dampens our parade.
When we react with hurt and feel discouraged the chink of fear appears in our armour and the doubts set in.
Personal doubt is fear-based. Fear is driven by underlying beliefs that result in the self-defeating habits that keep us stuck. These habits keep us from accumulating the wealth that is rightfully ours and that we all have the potential to acquire.
Before you can have that financial wealth you have to exercise that financial responsibility. Before you can practice financial responsibility you have to work on the beliefs underpinning your reactions to others and your own personal actions.
The beliefs you hold lead to the actions you will take that will determine the money you get.
Article by Alwyn Beikoff
Responsibility as defined in the dictionary is – being the primary cause for; accountability for your actions.
When someone is said to be responsible with money they are generally thrifty, pay what they owe on time, save money and maybe even work to a budget.
Is this all the money responsibility that's needed in order to get ahead?
Maybe. But these traits alone are unlikely to bring you great wealth. They might be good for keeping you out of trouble so you meet your basic needs and keep hungry creditors from bashing down your door.
Really they are just the starting point.
Real financial responsibility requires you to set goals, learn new skills and become independent – financially independent. That means getting to the point where you have enough money invested in some way that it is actually earning sufficient funds for you to live on in the lifestyle you desire without having to go out to work.
There is a plethora of information around on setting goals. The new skills you will have to learn will depend on your interests and the activities you choose in your pursuit of financial independence.
But the challenge of financial independence will demand much more of you than goal setting and action plans.
Your responsibility is much more than saving, managing and growing your money. In fact the major obstacle to your accumulating the money you'd like has nothing to do with actual money or financial skills.
By far the biggest and toughest responsibilities are overcoming personal doubt and fear, the criticism and negativity of friends and family, and eliminating self-defeating habits.
It's often tough to face the truth about ourselves. The truth is that our reaction or response to the criticism of others is our choice. However we respond is contingent upon our inner beliefs, particularly our beliefs about ourselves.
Lack of belief in ourselves will cause our confidence to wither like a vine in the desert when we are subjected to criticism and negativity from others. We can soon lose our power and enthusiasm for our project when a skeptic, cynic or otherwise uninformed but probably well-meaning person dampens our parade.
When we react with hurt and feel discouraged the chink of fear appears in our armour and the doubts set in.
Personal doubt is fear-based. Fear is driven by underlying beliefs that result in the self-defeating habits that keep us stuck. These habits keep us from accumulating the wealth that is rightfully ours and that we all have the potential to acquire.
Before you can have that financial wealth you have to exercise that financial responsibility. Before you can practice financial responsibility you have to work on the beliefs underpinning your reactions to others and your own personal actions.
The beliefs you hold lead to the actions you will take that will determine the money you get.
Article by Alwyn Beikoff
The Will: Don't Be Caught Dead Without One
Article by Linda Hodge
Disclaimer: This article is for informational purposes and is in no way meant as legal advice, nor should it substitute for the advice of an attorney.
Admit it folks, mortality (especially your own) is not the most pleasant topic of discussion for you. For most of you, life couldn’t be sweeter right now. Whether you’re in your prime or approaching your “golden years”, you no doubt have found a sense of security in the fact that medical technology combined with this era of health-consciousness, is keeping you healthier longer. The Center for Disease Control and Prevention recently reported that by the year 2030 the number of older Americans will have more than doubled to 70 million! The United States is truly on the brink of a longevity revolution. Consequently, you probably feel justified in putting off those matters that you perceive as being morbid – such as Will preparation. After all, you are not are planning to die tomorrow. And besides, only the aged and infirmed need to be concerned about making Will preparation, right? Unfortunately, this is not the case. In fact, this could not be farther from the truth.
The fact is that it just makes good sense for any mature adult to have a Will in place. A Will is simply a written legal document that states how you want your property and assets dispersed, to whom they are to be dispersed, and who you want to handle your affairs after your death. A person who dies (the “decedent”) without a will is said to have died "intestate". Some people mistakenly believe that only those who have large estates with significant assets need a Will. But, the truth is that whether you leave a large estate or a few assets and personal items, it would be a wise choice for you to have a Will in place stating your wishes. Here is why:
In most states, if you die without leaving a Will, the state will decide who gets guardianship of your minor children. Also, the state of your residence will appoint someone to act as administrator over your estate. If it happens to be some family member who hadn’t spoken to you in the last 10 years, it wouldn’t make any difference as your wishes were not stated in a Will. And in the event you don’t leave any living relatives, your property will be left to the state!
Here are some sobering facts regarding “intestate” successions: If you die “intestate” in the state of Louisiana, leaving a spouse, but no children, your spouse will get all of your community property (generally, property acquired during your marriage). However, if you are survived by siblings or by your parents, and if you had property that was separate from your community property, then your surviving spouse will not be entitled to your separate property. Your surviving parents or siblings will get all of your separate property. If you die intestate in the state of California, leaving no next of kin, and if your spouse has predeceased you, but is survived by parents or siblings, then your estate will pass to your spouse’s parents or siblings.
Now, perhaps you have given verbal instructions to your loved ones, relating how you want your assets and personal effects distributed when you pass on. And of course, you are fully confident that your wishes will be carried out without a hitch. Well, if you will reflect for a moment, you will surely be able to recall more than one instance where a close-knit and loving family was transformed into virtual enemies over a few acres of land, a piece of jewelry, or some other material item left by a deceased family member who died without leaving a Will. This would surely have been avoided if the decedent had left a Will.
Finally, consider this: One of the last things your family might remember about you is how your estate is settled. If you leave an estate that is extremely difficult to administer because you failed to leave an up-to-date Will, you may be indicating to your family that they were not worth the trouble of planning ahead for their future. So do yourself and your family a favor – go ahead and get your Will prepared. You’ll probably live to be a hundred, but you’ll live with the peace of knowing you have your affairs in order.
Research Sources: Louisiana Revised Statutes; Center for Disease Control and Prevention website; and the California Probate Code.
Disclaimer: This article is for informational purposes and is in no way meant as legal advice, nor should it substitute for the advice of an attorney.
Admit it folks, mortality (especially your own) is not the most pleasant topic of discussion for you. For most of you, life couldn’t be sweeter right now. Whether you’re in your prime or approaching your “golden years”, you no doubt have found a sense of security in the fact that medical technology combined with this era of health-consciousness, is keeping you healthier longer. The Center for Disease Control and Prevention recently reported that by the year 2030 the number of older Americans will have more than doubled to 70 million! The United States is truly on the brink of a longevity revolution. Consequently, you probably feel justified in putting off those matters that you perceive as being morbid – such as Will preparation. After all, you are not are planning to die tomorrow. And besides, only the aged and infirmed need to be concerned about making Will preparation, right? Unfortunately, this is not the case. In fact, this could not be farther from the truth.
The fact is that it just makes good sense for any mature adult to have a Will in place. A Will is simply a written legal document that states how you want your property and assets dispersed, to whom they are to be dispersed, and who you want to handle your affairs after your death. A person who dies (the “decedent”) without a will is said to have died "intestate". Some people mistakenly believe that only those who have large estates with significant assets need a Will. But, the truth is that whether you leave a large estate or a few assets and personal items, it would be a wise choice for you to have a Will in place stating your wishes. Here is why:
In most states, if you die without leaving a Will, the state will decide who gets guardianship of your minor children. Also, the state of your residence will appoint someone to act as administrator over your estate. If it happens to be some family member who hadn’t spoken to you in the last 10 years, it wouldn’t make any difference as your wishes were not stated in a Will. And in the event you don’t leave any living relatives, your property will be left to the state!
Here are some sobering facts regarding “intestate” successions: If you die “intestate” in the state of Louisiana, leaving a spouse, but no children, your spouse will get all of your community property (generally, property acquired during your marriage). However, if you are survived by siblings or by your parents, and if you had property that was separate from your community property, then your surviving spouse will not be entitled to your separate property. Your surviving parents or siblings will get all of your separate property. If you die intestate in the state of California, leaving no next of kin, and if your spouse has predeceased you, but is survived by parents or siblings, then your estate will pass to your spouse’s parents or siblings.
Now, perhaps you have given verbal instructions to your loved ones, relating how you want your assets and personal effects distributed when you pass on. And of course, you are fully confident that your wishes will be carried out without a hitch. Well, if you will reflect for a moment, you will surely be able to recall more than one instance where a close-knit and loving family was transformed into virtual enemies over a few acres of land, a piece of jewelry, or some other material item left by a deceased family member who died without leaving a Will. This would surely have been avoided if the decedent had left a Will.
Finally, consider this: One of the last things your family might remember about you is how your estate is settled. If you leave an estate that is extremely difficult to administer because you failed to leave an up-to-date Will, you may be indicating to your family that they were not worth the trouble of planning ahead for their future. So do yourself and your family a favor – go ahead and get your Will prepared. You’ll probably live to be a hundred, but you’ll live with the peace of knowing you have your affairs in order.
Research Sources: Louisiana Revised Statutes; Center for Disease Control and Prevention website; and the California Probate Code.
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