Archive for April, 2007

The Benefits Of A Fixed Rate Mortgage

Wednesday, April 11th, 2007

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What Are The Various Kinds Of Loans?

Wednesday, April 11th, 2007

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The How And Why Of Student Loan Consolidation

Friday, April 6th, 2007

Borrowing money to attend college these days is not unusual.
Thankfully, the United States Government has made doing so easier
than ever. For a number of decades, the government has been
offering financial aid to those in need through the Free
Application for Federal School Aid (FAFSA) program. The majority
of aid from this source comes in the form of student loans. Since
many students have had to take out several different loans over
the course of their college career, they may be faced with a
variety of different payments and due dates when the time comes
to begin repayment. For this reason, many borrowers have turned
their attention to student loan consolidation programs.

A student loan consolidation program may not seem important to
many new graduates. After all, repayment on the loans doesn’t
begin until 6 months after graduation. This gives the borrower
half a year to find steady employment to help them afford these
payments. However, this plan does not work out for everyone; in
these cases, student loan consolidation may be needed.

Many students intend to begin their careers upon graduation. With
today’s economy, that plan may not be realistic. After
graduation, many students find that they must settle for
internships or have to begin their careers in an entry-level
position. These types of jobs rarely pay well. The lucky few who
do land a job in their chosen career field may still find it
difficult to afford their monthly bills. In any of these
situations, a student loan consolidation can be very beneficial
to a recent graduate.

Before considering a student loan consolidation program, it is
important that the borrower understand what consolidation
entails. When a student applies for financial aid, they may
receive various types of loans; each loan will be for a different
amount and may have a different interest rate. Since students
apply for financial aid on an annual basis, the number of loans
(as well as the types of loans) they accept may vary. This can
complicate matters when repayment begins since the borrower may
have to juggle three or more student loan bills along with their
monthly living expenses.

Student loan consolidation can help simplify the repayment of
student loans. When student loans are transferred to a new
lender, all debts that the borrower owes are combined into one
amount. Student loan consolidation means that a student will only
have to focus on one debt as opposed to three or four. The
borrower owes one amount on one due date every month.

In addition, student loan consolidation can also save the
borrower money. When the government is the lender, the interest
rate on each loan is variable, meaning it is likely to increase
each year. With student loan consolidation, the interest rate is
fixed. Sometimes this rate can be lower than the original
government loans, because it is figured through a weighted
average. In other words, the lender will average all the interest
rates from the separate loans together to come up with the new
loan’s interest rate. This can result in the borrower saving
thousands of dollars over the term of his or her repayment.

Another benefit to student loan consolidation involves the
payment of monthly bills. Student loan consolidation is
beneficial in that it can decrease monthly debt. The total amount
the borrower owes is the same; however, the amount that the
borrower must pay each month can decrease dramatically with

If a borrower chooses to approach a private lender about student
loan consolidation, it is important that he/she understand how
the monthly minimum payments work. The amount owed per month
maybe low, which could give the borrower more money to work with
on a monthly basis.

However, the drawback is that if the monthly minimum payment is
low, the amount of time needed to pay off the debt will increase.
Since the interest for student loan consolidation is constantly
accruing, this means that the borrower may end up paying more
money in the long run.

In any event, it is much better to make lower payments for a
longer period of time, than to keep a higher payment and not be
able to pay the bill. Missed or late payments on any debt can
easily result in a bad credit report and a deteriorating credit
rating over time. This should be avoided at all costs, as less
than perfect credit could stand in the way of future loans.

Additionally, there are no early payment penalties on student
loan consolidations. A borrower can always pay more than the
minimum payment without being penalized. Making extra payments
when possible is always a good idea because the principal balance
will be reduced. This leads to a reduced amount of interest
accruing on the loan, which over time can save the borrower
hundreds of dollars.

Student loan consolidation is an excellent idea for anyone faced
with making payments on multiple student loans. There are several
different repayment options available and no fees to apply. A
good lender will help determine the best plan for each situation.
The benefits are numerous and the drawbacks are few. Sometimes
things aren’t too good to be true; this could be one of those

Bernard Pruett teaches people about personal finances and consumer
debt for . Find out more
information about student loan consolidation and other student
loan financial aid advice and help. Reprint this article with
links intact.

How Do You Get Lenders To Offer Their Lowest Loan Rates?

Friday, April 6th, 2007

to obtaining loan quotes consumers want the
answer in simple, plain English, i.e. `the bottom line’.
However, the problem we all encounter is that trying to find
out the `bottom line’ can often be as painful as pulling teeth.

Let’s take the APR, for example. On the surface, this seems
like the most obvious and simplest way of determining whether
or not lender A is likely to be cheaper than lender B and,
therefore, that should make our decision easier, shouldn’t it.
Errm=85.well, no not really.

Lenders are becoming savvy that, as consumers, we’re likely to
shop around for the cheapest loans deals and they’re also aware
that one of the key indicators when we’re doing our comparisons
is the APR. But therein lies the problem. If you ever see their
tempting advertising, you’ll no doubt be familiar with that all
important little word they include before the APR =96 “typical”.
Well, typical means that they only have to ensure that two
thirds of all applicants are offered the typical APR. But, what
if you’re in the other third? Quite often you might contact half
a dozen lenders as you’ve been attracted by their APR to find
that the loan quotes you are given are higher than the rate

So, depending on your credit rating, you may find you get the
advertised APR or you may find that you can still have a loan
but only at a considerably higher APR or you might even find
that you are refused altogether.

OK, so you’re accepted onto the typical APR. You’ve made all of
your loan quotes comparisons and you’ve come up with a lender
that’s the cheapest. But are you sure they are the cheapest?

Well, have they told you about any redemption penalties that
you may have to also pay in addition to the specified monthly
repayments should you have the audacity to repay the loan
early? What about payment protection insurance? They may insist
that you have to take that out with them too in the event that
you find yourself temporarily unable to meet your repayments.
Have you factored that into your loan quotes?

Consumers need to be extremely wary of the underhanded, yet
perfectly legal, tactics they’ll employ to entice you into
choosing them as your lender. However, instead of asking for
loan quotes comparisons, you should start adopting the mindset
of asking for the bottom line =96 i.e. the total amount you’ll
have to repay over a determined period and how much that breaks
down month by month and, if there are any clauses or conditions
attached. In asking these questions, you can start unravelling
the `mystery’ of loan quotes to ensure that you get yourself
the best deal possible.

About The Author: You can count on Marcus Brooks for useful
money saving and finance tips. Get more of his help on

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How To Qualify For A Low Interest Debt Consolidation Loan

Friday, April 6th, 2007

If you are like many people in the world today, you have found
yourself dealing with an ever more complicated financial
situation. You are beginning to worry more as your debts
mount. In this regard, you may be looking for solutions
through which you can restore a better sense of order to your
finances and to your debts.

With this in mind, you might want to consider the possibility
of obtaining a low interest debt consolidation loan. Through
this article, you will be provided with some tips, pointers and
suggestions about how you can qualify for a low interest debt
consolidation loan.

When it comes to qualifying for a low interest debt
consolidation loan, there are two primary factors that a lender
will take into consideration when considering your application
for this type of financing:

— credit score

— steady income

These elements that are essential to qualifying for a low
interest debt consolidation loan will be discussed in turn in
this informational article.

Qualifying for a Low Interest Debt Consolidation Loan:
The Importance of a Decent Credit Score

If your credit score has really dipped downward you will not be
able to qualify for a low interest debt consolidation loan.
While you may be able to obtain some sort of debt consolidation
loan, it will not be a low interest debt consolidation loan.
Therefore, it is important — when seeking a low interest debt
consolidation loan — that you act in a proactive manner. You
do not want to reach the point where your financial situation
is so dismal that your credit score has crashed.

You will be able to qualify for a low interest debt
consolidation loan largely because your credit score is at a
decent level. While there is some variation from lender to
lender, certainly if you’ve dipped into the “poor” zone — you
will not qualify for a low interest debt consolidation loan.
Indeed, most lenders will not extend to you a low interest debt
consolidation loan if you’ve dropped beyond the “good” credit
score zone.

Thus, and as has been mentioned, you really do need to be
proactive when it comes to obtaining a low interest debt
consolidation loan. You need to act before you really have
begun to have more serious financial problems associated with
your credit and debt.

Qualifying for a Low Interest Debt Consolidation Loan:
A Steady Income

Beyond your credit score, when you are considering making
application for a low interest debt consolidation loan, you
need to appreciate that the lender will closely scrutinize your
income history. A lender likely is going to want to go back
three to five years in order to get a clearer picture of your
income over that period of time. Obviously, the primary
concern of a lender considering your application for a low
interest debt consolidation loan will be your ultimate ability
to satisfy the loan pursuant to the terms and conditions of the
low interest debt consolidation loan agreement.

About The Author: Thomas Erikson is co-founder of which provides debt
consolidation information and solutions. Find out how you can
effectively get your finances under control with a Low Interest
Debt Consolidation Loan

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Friday, April 6th, 2007

elimination, this is the word that rings a bell
in many of the home owners out there. Ever imagined paying off
your mortgage in one go when you strike a first prize lottery or
the day you inherited a lump sum of cash from a deceased old
woman down the street whom you always say good morning to?
Reality says this is not going to happen nor is there any
magical formula that will pay off your mortgage the next day.

Well, if you’re still reading after the first paragraph, there
are actually ways that would make you better off by lightening
your mortgage debt.

First off, one of the most commonly adopted methods is to
increase your monthly mortgage repayment. By increasing your
monthly repayment rates, you are effectively shortening the
duration of your repayment period. I’m sure most of the
homeowners out there would realize that by the end of their
repayment period, they would have paid off more than the value
of the house itself. This addition of payments would namely be
known as interest rates. By shortening your repayment period,
you are effectively decreasing the amount of interest rates you
pay. A quick illustration says that if you pay an extra $100
per month for a $120,000 (30 years @ 9%) mortgage, you would be
looking for a saving of approximately $80,000 after the end of
your repayment.

It should be noted that there are shortcomings in increasing
your mortgage repayment rates. For example, the extra $100 per
month could have been invested elsewhere that would potentially
generate more than $80,000 under the same period of time.
However imagine this; if you are someone constantly being
tempted to stick your hand into the piggy bank, increasing your
repayment rates would be a wiser option as there is a good
chance of you blowing away your investment/savings before the
compounding of interest rate takes effect.

Secondly, this seems like a rather old suggestion but if you
cannot afford more than 20% down payment, you should rethink
the value of your house. The reason is because for a less than
20% down, you will be required to pay for additional insurance
which is known as mortgage insurance. Unlike a life insurance,
the mortgage insurance is there to protect the better interest
of the bank (ssshh, let’s not say you hear that from me)
because it covers only the mortgage. Life insurance basically
covers you because in case unpredicted fate takes place in your
life, the compensation would be able to cover your mortgage and
your life whereas mortgage insurance basically covers only,
errr the mortgage.

Last but not least, consider this when you are taking your
mortgage. If you are a wise money saver (or we call them penny
pincher in some cases) and if this is within your means, take a
shorter repayment period. In the short term, it may seem you
are paying more compared to other homeowners. However consider
this, your mortgage is spread across for 15 years as compare to
30 years and effectively, although you are paying an extra say
$100 per month, the savings from interest rate paid for a 30
years mortgage will not even come close to what you have saved
from a 15 year mortgage. Additionally, the plus is you get a
peace of mind and security knowing you have paid off your
mortgage earlier.

Think about this, buying a house is one of life’s biggest
purchase. If you think you are not ready, take a little time
off for reconsideration as the decision you make today would
affect you for years to come.

About The Author: The new bankruptcy law provisions have
prevented people from above a certain income level from being
able to eliminate or cancel their debt through bankruptcy. Find
out more on how you can save yourself with Paul’s essential debt
elimination resource website at

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Find A Great Remortgage Deal

Friday, April 6th, 2007

than you need to for your mortgage. There’s
almost certainly a far better deal out there than your current
one. Maybe it’s time to get up-to-date with the new mortgage

As far as your mortgage is concerned, you might be pleased to
know that you can probably save an appreciable amount each
month, by re-mortgaging. If you’ve been in your home for some
years, you will have built up appreciable equity in it. You
could re-mortgage to improve or extend your home, buy a second
home, combine your loans, or just to save money.

More and more people are switching mortgages all the time, so
whatever your reasons for considering this move, you’ll be in
good company.

If you’re on your lender’s standard variable rate, you will
probably be able to save around 2% on the interest rate by
switching to a two or three year fixed term interest only loan.
If your mortgage sum is around =A3100,000, this could save you in
the region of =A32,000 per year. It’s true that there are
expenses involved but with the latest mortgages and the number
of lenders in competition for your business, you should be able
to find a fee-free one who will be keen to help you to keep your
expenses right down to the minimum.

When it comes to making a choice, there are so many different
mortgages out there we couldn’t begin to list them. You may
find well there’s a mortgage better suited to your
circumstances than the one you’re currently on, in addition to
the money saving.

Traditional repayment mortgages are probably of more interest
to homebuyers who don’t want to take any risks. This type of
mortgage offers the certainty that, as long as payments are
made, the debt will be paid in full by a specified date.

Interest only mortgages are growing in popularity and would
suit borrowers who are not afraid of some degree of investment
risk, in the anticipation that this may allow them to repay
their loan early, or maybe hopefully produce a final sum
greater than the original sum borrowed. Three of the most
fashionable types of interest only schemes are endowment,
pension and ISA (individual savings account) mortgages.

The ISA mortgage is designed so that you can invest your ISA
allowance (=A37,000 in 2006). The ISA is designed to hold
investments such as shares, bonds, unit and investment trusts.
Investment gains are free of tax. Most ISA mortgages are
invested in products designed to spread your money over a wide
range of assets. Results from shares and share-based funds have
provided greater returns historically and therefore these types
of ISA are likely to mean that the mortgage debt will be paid
earlier than with other schemes. There could be a tax free lump
sum as a bonus, after paying off the mortgage. Unfortunately,
there is no built in life cover, and it is a fact that there is
always the possibility that the investment income could be less
than adequate. It can be very worrying for some borrowers to
see volatility in the stock market, where shares can be up one
day and down the next.

There are other interest free mortgages available, such as:-

Endowments, which holds the hope of a tax free maturity value
exceeding the mortgage debt and also some in-built life cover.

A pension mortgage, where there’s tax relief on your
contributions, a tax free lump sum and again the possibility of
a high maturity value.

Then there are the flexible mortgages, where there’s the
possibility of varying the monthly repayments and increasing
them when you’re able to. There is also the possibility of
funding all your credit needs.

With such a wide range of mortgages, how do you decide which is
right for you? This is where some help is invaluable. An
on-line broker will know the market inside out and will offer
you all the help you need, searching the whole market to find
the right deal for you.

Your new mortgage could be a great deal better!

About The Author: Great mortgage articles from the Mortgage

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Mortgages – Ad Infinitum

Wednesday, April 4th, 2007

exiting developments in the mortgage market with
the birth of a new mortgage designed in order to allow home
owners to pass on their mortgage debt in the event of their
death. Whilst some people might think this is a rather odd
thing to do, read on for the full story:-

The new inter-generational mortgage =96 surely to be known by
something less tongue-twisting =96 is a product which has the
promise of parents being able to pass on the mortgage debt on
their home to their children, whilst considerably reducing the
amount of inheritance tax paid on their estate.

The way in which this works is simple. Say, for example, the
parent’s home is worth =A3250,000. The mortgage on this could be
=A3150,000. Because this is an interest-only mortgage, the debt
doesn’t reduce and the monthly repayments are purely interest.
On the death of the parents, the house and its mortgage would
pass on to their children. As there is a debt on the house, its
value, excluding the mortgage, would only be =A3100,000 and this
would be included in the parent’s estate as far as inheritance
tax is concerned. Inheritance tax allowance rises annually. For
the year 2006/7 this allowance is =A3285,000.

The children are then free to choose what they want to do with
the property. If they decide to keep the home, maybe as a buy
to let or for a family member to live in, then they continue
with the mortgage, as there is no fixed time limit, unlike the
situation with a normal mortgage. As long as the value of the
house is more than the mortgage, then the children have still
been left an asset of value.

Whilst the very thought of this type of loan is new to the UK,
it’s already extremely popular in some other countries. The
Japanese and Swiss have adopted the product with enthusiasm and
neither of them are known for their lack of business acumen.

Where houses have risen in value over the past years,
inheritance tax is proving a very real problem to people who
would never have previously considered themselves wealthy
enough to be in that tax bracket.

For older home owners, who might be finding their retirement
years more expensive than they expected, they might find this
mortgage useful. Borrowing on this basis would be at a much
lower interest rate than the costs involved with equity release
schemes and would release money to help the family during their
own lifetime, rather than the tax man after it.

Interest only mortgages in themselves are not new, having grown
from 18% to 30% of all mortgages in just two years. Prices of
property are still rising faster than most young people can
scrape together the deposit for a home and an interest only
mortgage may be their only way to get that all-important first
step on the home-ownership ladder.

Although the prospect of house prices actually falling, leaving
people with negative equity in their homes, is always a
possibility, over the medium term property has remained a
stable investment. There seems to be no reason to doubt that
this will continue.

Monthly repayments are very much more affordable on an interest
only basis, and you could save around =A3130 per month on a loan
of =A3100,000, compared to a comparable repayment mortgage.

However, you must bear in mind that the original debt is not
being tackled. Whilst the inheritance tax saving aspect is an
interesting thought for older couples, maybe youngsters should
consider the interest free loan as a step up on the ladder
rather than a permanent ball and chain.

If all this is new to you, the easiest way to find out what’s
on offer is via the internet. A broker will be up to date on
what’s going on in the market and find out what’s right for

About The Author: Visit scrouge mortgages to see how much the
old skinflit can save you on your mortgage

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Creative Financing For Your Mortgage – Pros And Cons Of Using Creative Financing

Wednesday, April 4th, 2007

More About Creative Financing? The largest
majority of residential real estate financing is provided to
home buyers by traditional mortgage lenders through traditional
channels. However, there are multiple alternatives to the
traditional mortgage that are unknown to most borrowers, and
some of these alternatives present potentially greater
benefits. The reason for the lack of popularity of such options
is they have miniscule or even non-existent compensation for
mortgage brokers. Since brokers account for the largest
majority of loan originations, these agencies and their
employees will obviously steer borrowers toward options that
provide better commission.

The Pros – However, for the borrower with the time and
motivation to investigate alternative funding methods for real
estate purchase, there exists a wealth of information and
resources that can lead to property acquisition without the
need for a traditional bank loan. Some of the positive aspects
of such programs are lower overall costs, less stringent
documentation requirements, and potentially significant
leverage opportunity. Some of the potential risks associated
with such alternative methods include a lack of contract
guarantees, inability to capitalize on market fluctuations,
time pressure, and the need for reliance on multiple
individuals and/or organizations.

The Cons – For the inexperienced real estate investor or home
buyer, the use of such alternative financing techniques is
usually not recommended simply because of the dramatic risks
and potential problems. Home buyers are usually best suited to
mortgage loans with predictable and fixed payments, and the use
of unorthodox acquisition techniques presents a plethora of
complications that could threaten the home owner’s ability to
retain possession of the property.

The majority of alternative financing solutions are utilized by
professional and experienced real estate investors whose
knowledge of such methods includes enough a comprehensive
understanding of the worst case scenario. Only those investors
who are sophisticated enough and have large enough financial
reserves to handle any potential problems should consider the
use of techniques outside the traditional lending channels.

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Easy Home Equity Loan – Is A Home Equity Loan Online Easy?

Wednesday, April 4th, 2007

vices make applying for home loans easy and
convenient. One particular loan that is widely offered on the
internet is home equity loans. Owning a home makes it easier to
get your hand on extra cash. If the home as gained equity,
owners may tap into this equity in the form of a home equity
loan. Here are a few tips for applying online for a home equity

Benefits of Applying for Online Home Equity Loans

The major advantage of using the internet to apply for an
online loan is speed and convenience. Ordinarily, homeowners
would have to visit their local bank branch, complete an
application, and wait up to a week for a response.

With online home equity loans, the process is much shorter.
Homeowners can apply for a loan within the comforts of their
home, and receive a response through email.

Choosing an Online Home Equity Lender

There are multitudes of home equity lenders that operate
online. For this matter, choosing the right lender may be a
difficult task. Nonetheless, there is help available. When
selecting a good lender, it helps to choose a lender with a
good reputation. Often times, your bank, credit union, or
current mortgage lender may offer online home equity loans.
Applying with these lenders may help you avoid shady lenders
who take advantage of homeowners.

Comparing Online Home Equity Quotes

Although many homeowners opt to obtain home equity loans from
their current mortgage lender, you have the option of choosing
an entirely new lender. As a matter of fact, many mortgage
experts encourage homeowners to obtain a home equity quote from
both their current lender and one or two new lenders. This is
the only way to ensure that you are receiving the best deal

Using an Online Mortgage Broker

Because comparison-shopping for mortgages is important, several
borrowers take advantage of online mortgage brokers. Using a
broker makes comparing loan offers easy. After obtaining a
borrower’s information, brokers will locate suitable lenders.
On average, brokers can find at least four home equity lenders
to service a single loan request.

About The Author: Visit Home Equity Wise to view our online. Also, visit Home Equity
Wise to find an

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