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Saturday, November 29, 2008

A Look at the Cheapest Fixed Rate Mortgages

By Gugu Martini

Considering whether you need a 30 or 15 year fixed mortgage rate is important for people looking to buy a home and concerned about their monthly payments. Many of us are buying homes later in life these days so it is not unreasonable to have the house paid off early. There are always things to take into account before signing documents. It is always a good idea to confirm that the interest rate does not alter during the term of the mortgage.

It is always wise to avoid agreements that do not appear to have any negative aspects because they invariably have but are hidden. Interest rates remain the same throughout the life of the loan for 15 year fixed rate mortgages. This is of great benefit for anyone that does not like surprises. When we were looking to buy a home, my wife and I decided to go for a loan with a 15 year fixed mortgage rate.

Even though it was important for us to pay off our loan at the earliest possible opportunity, we did not want high, unrealistic monthly payments which we would have trouble maintaining. It became obvious that we had to look at fixed rate mortgages over a longer period and not just 15 year plans. We did not really like the prospect of having a mortgage as we approached retirement so were really hoping to get one of the loans with 15 year fixed mortgage rates. We were worried about the emphasis placed on early completion of the mortgage.

After taking everything into consideration we decided on a 30 year loan instead. There were many things that factored into this decision.The main reason was that I found out my wife was pregnant. My wife was going to raise our child from home so her addition to the monthly income would be restricted. Our monthly payment would have been too high if we had committed ourselves to the 15 year fixed mortgage plan. We could see the financial problem of getting in too deep even though there were benefits to a shorter loan period. Despite the trepidation of having a longer term loan, it did reduce the repayments considerably.

Making a few additional lump sum payments during the year helps bring down the amount owed. Those few extra payments also help reduce the number of years you have to pay the loan over. This is well worth it in the long term but it does require some discipline. Although we would have much preferred a loan with a 15 year fixed mortgage rate we had to take our needs and abilities into consideration. In retrospect, everything worked out ok for us by going down this road.

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Small Business Owners Feeling The Pinch Of The Economy

By JR Rooney

You would have to be living in a cave not to be aware that we're in the worst financial crisis in our lifetimes in the United States. If you find yourself worried about your business and what can happen next, you're certainly not alone.

As I write this, the next few days bring great uncertainty about what the government is going to do to try and help bail out the failed banking system in the US. While it's not clear what form the assistance will take, it appears almost certain that the US government will have to do something to fix the mess created in the financial system by rampant greed. What is going to happen? Who knows! What is obvious is that the vast majority of Americans are very unhappy with the situation and quite angry about spending billions of dollars to bail out an industry known for greed.

The unfortunate truth is, a bailout is not the end of the troubles for those of us who run small businesses. The American economy is in deep trouble and is not likely to be fixed very quickly. All the major news outlets have commentaries about what's happening and what to expect. It seems the consensus is that it's unlikely we're going to experience a level of unemployment seen during the Great Depression. That's the good news. The bad news is that things are ugly and their likely get much worse before they get better. And if that wasn't enough, things are probably not to get better any time soon.

Small-business owners are unlikely to be able to get the credit that they need in order to expand their business in the near future. So what can you do? No one can tell you what you need to do in your particular business, but I've always been a strong supporter of the low-cost direct marketing style in my businesses. I suggest you start rethinking all the creative ways you can seek out more revenue at a minimum cost. This means not only getting new customers at minimum cost, but equally important, you need to try to sell more services to the customers you already have.

The situation is a lot more complicated than simply not being able to obtain credit, but it is also going to be difficult for many business owners to even make it through the next several years. There has already been a big drop in consumer spending in the US, and getting new customers as well as maintaining the ones you already have is going to get more difficult. That is why this is the time to get yourself back to the basic and most important task which is to get your business well marketed. There is nothing more important for your business in difficult times such as these than your marketing efforts.

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Foreclosure Lenders: How to Find the Best One

By Michael Geoffrey

The process of finding a foreclosure lender is not one that has to be difficult and you really just have to know where to look. Whether you are looking for a foreclosure lender or foreclosure properties, there are really a plethora of places that you can look. The key here is to find them before someone else does.

Since you can review thousands of companies in a matter of just a few short minutes by using the Internet, this is one of the most effective ways to find a foreclosure property or foreclosure lender. You would not be able to see details on so many options anywhere else.

Every state is required by the law to place notice in newspapers when a foreclosure auction will be taking place. For that reason, it would also be wise to look in newspapers for foreclosure lenders and properties.

Things to Remember

When it comes to foreclosure, there are a few things that are going to be important for you to remember. First of all you should never ignore letters that you get from your foreclosure lender. Instead you need to make sure that you stay in close contact with them and keep them aware of what is going on.

There are also a few alternative options that you can choose to go with, one in particular being special forbearance. Your foreclosure lender may be able to arrange a repayment plan based on your financial situation, and this can help you not only to get out of the negative financial situation that you are presently in but also prevent you from getting back in the same sort of problem in the future.

Then there is also the option of mortgage modification, and here you may be able to refinance the debt that you owe which can help you to catch up by reducing the monthly payments.

If you handle the situation decisively and responsibly, foreclosure does not have to be the terrible occurrence that it often is for so many people. The best way to deal with foreclosure, of course, is to prevent it from ever happening. To do so, do whatever you can to not allow yourself to get behind on mortgage payments.

Keep in mind that you have options. You can sidestep foreclosure by repaying your debts and once again making routine payments on your mortgage.

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What is Earned Income Credit (EIC)?

By William Blake

Taxpayers are always very interested in the various tax credits that they can use to reduce their overall tax payments. The Earned Income Credit, commonly referred to as the EIC, is a tax credit which was established in an effort to help people who earn a low income to live as well as possible in their financial situation.

Set up in the year 1975, the concept behind the earned income credit was that since poor workers were having to pay so much in income taxes that they could never hope to move up the financial ladder they needed to be able to pay less taxes. By means of the EIC, low income families are given back a large amount of the money that has been deducted from their pay because of taxes throughout the year.

As time has passed, the amount that the earned income credit returns to individuals has gone up. Supporters of the EIC assert that the earned income credit does more for low income workers than simply increasing the minimum wage would. This is because people who are awarded the EIC use the money they get back to make purchases that boost their local economy.

There are three types of EIC eligible incomes. The first is money that is earned at a job. This money would include any wages earned by means of tips. If you are given a bonus by your employer, it can also be counted towards the earned income credit.

Self-employed earnings are also eligible for the earned income credit. If you own your own business but the money you earn with it is not enough to sufficiently care for your family, you may be able to receive the EIC. Any and everything your business earns can be counted.

Any money earned by one of your dependents can also be used to obtain the EIC. For example, the money that your teenage son or daughter makes while working summers or before and after school can be counted by you in order to get the earned income credit. This is true even if they have not earned enough to have to file for taxes themselves. The combined total of your income and your children's will be used to determine your EIC.

The money that your investments earn for you is counted as income by the IRS, as is money you collect because of unemployment. These sources of income may reduce your chances of getting the earned income credit. For example, if your investments earn you more than $2,800 in one year, you are disqualified from the EIC.

Each year thousands of dollars in earned income credit go unclaimed. Filers either don't know about the tax credit or they don't think that they will qualify. Not having to file a return doesn't mean that the tax credit doesn't apply to you. Even if your income is below the amount that which is required for filing a tax return, you may still qualify for the earned income credit. Don't sell yourself short. You could be passing up thousands of dollars that is yours under this tax credit.

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Are credit cards on a collision course with interest rates?

By Frank Armstrong

The Bank of England may have given UK PLC an economic boost with its recent interest rate cut of 1.5%, but the credit crunch isn't just affecting big business and the banking sector. The average person in the street is feeling the squeeze too. So will the reduction of the base rate to 3% offer any short-term relief to the customers holding a total of 72 million credit cards, beleaguered by interest charges far and above the base rate?

Mortgage borrowers are eagerly awaiting news of the trickle-down effect reducing their monthly mortgage repayments. But credit card customers have been warned not to expect the same benefits, with interest rates on cards remaining unchanged. Consumers look set to continue paying an average of just over 17% APR on their cards, with no change as a result of the base rate cut due any time soon. The credit card lenders tend to only reduce interest rates to attract new customers, with 0% deals for fixed periods being the carrot of choice to draw customers in. However, in the current economic climate, lenders are reluctant to expose themselves to potential problems further down the line. An impulsive reduction of rates could actually compound the issue, destabilising an already shaky financial marketplace. Nobody wants to see another major firm go to the wall, and a sudden reduction of income as a result of APR cuts could start a chain reaction that would be difficult to bring under control. For the moment, maintaining the status quo is a more pragmatic approach.

The lenders are more aware (and increasingly concerned) by the prospect of 'bad debt' eating into their profits, as some cardholders struggle to make repayments. Profit is intrinsically tied up in the amount of interest charged, and consequently lenders are fighting hard to make sure those profits aren't squeezed further by cutting interest rates, despite Government attempts to boost the economy at ground level. This reluctance to expose their companies to a worsening position has drawn the attention of the Prime Minister and the Chancellor, prompting them to call for a "new, responsible approach" to lending. Card lenders in return have made it quite clear that they do have their customers interests at heart, and stabilising the market is their first priority, rather than making knee-jerk cuts that could cause more problems than they solve.

Store cards are some of the worst offenders, cashing in on customer loyalty and a high street that relies on continuous spending. The average credit card APR rate has risen from 16.8% in 2007 to 17.6% today, despite the interest rate almost halving from 5.75% to 3% during the same time. Store card rates have risen more sharply, up by 1% over a six-month period. The most expensive store cards now charge an average of 30%. Government officials have been angered by the reluctance shown by card lenders to reciprocate the base rate cuts, accusing the credit card companies of behaving "irresponsibly" despite the mounting pressure from the Government and the public to mirror the base rate cuts with cuts of their own APR levels. Credit card lenders, however, remain steadfast in their refusal to adjust interest charges, knowing that to do so could damage the market far more than 'instant fixes' such as rate cuts.

The credit card lenders, concerned by 'bad debt' exposure, are tightening their policies on repayments, and enforcing stricter approval guidelines for first-time card applicants. Minimum monthly repayments, as any cardholder knows, barely cover the cost of administration or interest charges. The Citizen's Advice Bureau has seen more new debt inquiries in 2007-08, with 20% of its clients expressing concerns over credit card, store card and charge card debts. The Consumer Credit Counselling Service reports a surge in 'charging orders' being enforced by lenders, potentially putting customers in even more financial difficulty as a result of missed payments. The truth is that reducing the APR on credit deals to reflect the fluctuating base rate could compound matters, forcing lenders into ever-tighter controls over lending to keep their exposure to bad debt to a minimum. That wouldn't help the consumer at all. Nor would it help to stabilise the market.

The US has responded to the credit crisis by ensuring that interest charges to credit cards have been mirroring the base rate cut, but the UK has yet to follow suit, despite only a 2% difference in base rates between the two countries. Card lenders put the blame squarely on the Government?s shoulders, claiming that regulation such as the Office of Fair Trading?s 2006 decision to put a ?12 cap on penalty fees, as well as their own falling profits on payment protection insurance, is responsible for increasing the cost of credit. They claim that this leaves them unable to reflect changes in the base rate by cutting the APR rate on credit cards. With this in mind, reductions in credit card interest rates look unlikely any time soon. However, with a little bit of legwork and a pocket calculator, a clever consumer can still find some good credit card bargains, with some card lenders bucking the trend and continuing to offer incentives to new and existing customers.

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What is a Collection Angeny and how do I know if I need one?

By JR Rooney

Debt collection agencies are hired on behalf of creditors to collect money when the creditors don't have the time or resources to effect collections on overdue debts for themselves. Collection agencies specialize in getting people to pay, they have staff that specializes in debt collection and skip-tracing, which covers a broad range of FDCPA legal and debt negotiating skills, and a streamlined process for going after accounts.

As a company that is owed money you can hire a collection agency. They get assigned the task of collecting the account. Most agencies, when successful will take a small portion of the collected amount. Be careful of firms that want money upfront.

Most collection agencies do not buy the debt outright. The debtor does not actually owe the agency the money. It still owes the debt to the original creditor. The collection agency will provide, if asked, proof (known as validation of debt) that they have been placed into collections on behalf of a creditor.

Occasionally, collection agencies will purchase the debt from the creditor. However, usually all that the collection agencies acquire is the right to carry out the process of debt collection.

All collection agencies are governed by federal laws and no collection agency is, or wishes to be in, the business of collecting fraudulent debts. However, when acting on behalf of a legitimate creditor they will take all legal steps to enforce the collection of badly overdue accounts, if necessary going to court on behalf of the creditor.

You need a debt collection company when -

the debtor gives you broken promises The debtor refuses to pay voluntarily they have not filed bankruptcy

A debt collection agency will approach the issue through a multi-stage writing campaign which can be effective, if occasionally slow, but it may not lead to recovery when -

the debtor has or thinks he/she has a valid defense the amount owed is disputed in full there is faulty product the debtor's solvency is in doubt or there is the possibility of bankruptcy

If any of these circumstances occur, the creditor should for their own legal protection retain control of critical decisions such as if and when to litigate, what attorney to retain and any other decisions made prior to or during litigation. This is particularly important where the creditor has a long term interest in retaining the customer as his client. Not retaining control of critical decisions and proceeding without the advice of an attorney could leave the creditor open to adverse legal liability.

The option exists where the creditor does not wish to do additional business and the creditor is not interested in the outcome of a debt collection, beyond getting his money, to sell the debt to a debt purchaser.

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The National Student Loan Database: How to Conduct Searches

By William Blake

If you need to obtain a student loan to finance your college education, you should start searching for a company that provides a student loan that you are interested in. No doubt your ideal student loan has a low interest rate and will give you enough money to pay for all of your college expenses. To find a lending institution that offers a student loan that you would like to apply for, you can search using the national student loan database. This database is filled with all kinds of extremely useful information regarding student loans and the organizations and businesses which provide them to students. With the information they give you, you will be able to choose the student loan that best matches your wants and needs.

College Financial Aid Office: A Starting Point

Stop into your college's financial aid office and ask to use their computers to search the national student loan database. The financial aid office is where you can find all the information you seek. They'll have flyers and brochures on all kinds of student loan corporations but the national student loan database is much more thorough.

Make sure, though, that you are only looking at the student loan companies that offer loans to your college. Sometimes, searching the national student loan database has student loan companies that don't apply to your college. That's why the financial aid office may be your best bet when searching the database.

Making Good Use of the Internet

The national student loan database is an especially useful tool for individuals who know they will require financial aid to attend college but have not yet chosen which school they will be attending. The database can help you narrow down the loans you want and the corresponding schools which accept those loans. Selecting a college based off of your student loan is not the most common method, but it is done. Using the Internet and your own computer, you should be able to find a student loan that is accepted at the school you wish to study at.

There are many student loan companies out there that offer the criteria you're looking for. You can go to college even though you may not have the initial money in order to attend the classes you need.

All you have to do is search the national student loan database, find a student loan company, apply for a loan and then receive that check in the mail. Then, just focus on school so that you can get the job you need in order to succeed in life.

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Tax Consequences of Foreclosure

By David Pierce

If you think that you can escape the IRS when you decide to foreclose on your house, think again, there can be huge tax disadvantages to letting your house go back to the bank, it can mean thousands of dollars you could owe to uncle Sam.

Many homeowners bought their house under creative financing terms such as interest only and variable rate loans. With the recent shakedown of the mortgage industry and rates adjusting, it can be a recipe for disaster for homeowners. You can owe the IRS in one of two ways, which we will discuss in detail.

The difference between what you owe on your mortgage and what the bank has to sell it for is called a short sale. Short sales are becoming widespread as many people are losing their homes to foreclosure. The difference in the two numbers is usually taxable.

The other way in which you will owe taxes is when the bank forgives part of the balance, this is taxable as well. In the eyes of the Internal Revenue Service, this is COD or cancellation of debt income or discharge of debt income, as it is often called.

Tax rates can be from 10 to 35%, but it depends on the tax bracket of the indebted homeowner. It can vary greatly but tax law mandates that the owner actually sell back the house with the proceeds going back to the bank to cover their debt.

Any of the debt owed beyond what was paid is cancellation of debt income, which is always taxable. Many homeowners, after some advice of a loved one or someone they trust, wrongly think they will not have to pay the IRS for their discharged debt, which is not the case.

Owners of homes should always consider the tax consequences before they give thier home back to the bank, it is never as easy as it seems, and by giving their keys back to the bank, they could end up having a huge tax bill at the end of the year.

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What is the definition of Debt?

By JR Rooney

What is debt?

Debt is that which is owed. A person or company owing debt is called a debtor. An entity to whom debt is owed is called a creditor. Debt is used to borrow purchasing power from the future. Companies use debt as a part of their overall corporate finance strategy.

What types of debt are available

There are numerous types of debt obligations. They include loans, bonds, mortgages and promissory notes. It is common to borrow large sums for major purchases, such as a mortgage and pay it back with an agreed premium interest rate over time, or all at once at a later date (balloon payment). The amount of money outstanding is usually called a debt. The debt will increase through time if it is not repaid faster than it grows. In some systems of economics this effect is termed usury, in others, the term "usury" refers only to an excessive rate of interest, in excess of a reasonable profit for the risk accepted.

Larger companies can issue debt in the form of securities, known as bonds. Each bond entitles the holder to specific interest and principal payments. Bonds are traded in the bond markets, and depending on the rating are relatively safe investments in comparison to stocks.

For additional info Google "debt

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Business Credit

By Dane Masters

Business credit is essential for the survival and proper functioning of any business. The type of business credit used to finance a business will depend on the size and characteristics of the business itself. If you are a business owner, the good news is that you have a variety of business credit options available to you.

Where small businesses are involved, business credit in the manner of small business loans is the most frequently availed option. You can get this credit type from private finance companies like banks. There is a very good and high volume competition in the small business loans arena today. This has ensured that no matter what bank you use, they will attempt to provide the best and the lowest interest rates, along with comfortable and adjustable repayment alternatives.

Besides the small business loan, a business owner has several other business credit options. These include secured/unsecured, start-up and commercial real estate loans, as well as merchant account cash advances and accounts receivable factorization. If you are in a dilemma about which type to choose, all you need to do is do an internet research. There are plenty of resources to help you with finding the perfect business credit option for your purposes.

Websites offering business credit information and products also allow you to request for a quote, which will be done fast and accurately. Before you start searching for ideal business credit option, draft a proper business plan. Whether online or offline, your chances of getting a good business credit plan will depend on how you can project your business idea to your potential creditors. Also, a properly laid out business plan will give you some insight into what to expect in the future.

If you do choose to obtain business credit from your bank, you first need to evaluate what kind of credit you qualify for and whether you want a secure or unsecured loan. You should also be sure to present your bank with a professional business plan at your business credit meeting.

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Financial Solvency Details

By Dave Almentenk

The high level of stress and the tension of paying your loan cannot be explained in written or words only a person who is facing it knows how it feel if the burden of the loan is they in your head all the time. But you should not get so restless because they are the solution for the problems in this world. You must have heard of the debt consolidation for the people who have a bad credit card and this debt consolidation will definitely give you back your peace of mind and of course the money.

What are the benefits of debt consolidation loan given to people who have bad credit?

The uppermost and most significant gift it will give you is the dignity of yours by the loan consolidation repair. After having loan from them you will once again feel like human and not as an animal that can be hunted anytime, and like animals you don't have to run here and here from debts collector. The debt consolidation repair will clear your bills and you will get back your normal life with your dignity.

And there is also other benefits like your bad credit will improve and the credit scores by taking the debt consolidation help. If you are not paying your bills on time than the company will make a complain against you all the times, when you are failing to pay the bills on time and if this happens you will lose your credit score and after that when ever you have requirement for loans, you will not get it because of less score on your card or from your bad credit reputation.

So if have taken the help from the debt consolidation repair than this people will take care of your bills and pay on time, and by doing this it will increase your score once again and then you will have no problem of getting the loan whenever you are require to have because they have maintain your good reputation and scores.

After you have taken the debt consolidation loan you will also realize that these agencies will give you the specialized service and will try to reduce your outstanding loan from the debtors. In the other way they will also take care of your other loans which you have taken it from the market. There will pay all your loans and will give the loan on a low interest as compare to other providers and if you have to pay loan to one person or one place it will easy for you to do it and you can take proper care of it and again your life will be tension free and easy.

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What Is Considered a Good Credit Score

By Gugu Martini

Figuring out how to improve your credit rating might require an measure of drive on your part. A credit rating is an indicator of your financial solvency and it is important if you need to borrow money from lenders. A low credit score would always result in your credit application getting rejected.

Your credit score tells loaners of how dependable you are as a borrower. money lending institutions take this figure to measure your fiscal status. That is because the rating is a mathematical measure of a person's borrowing habits and behavior based on some crucial credit factors. The credit rating is also called the FICO score since the formula for calculating credit ratings was developed by the Fair Isaac Corporation (FICO).

When you have a low-level ranking, it tells the lender right away that you are not a very great candidate as a borrower. This may be based on your previous credit accounts from which you may have defaulted on, late payments of debts, bankruptcy or foreclosure issues that you may have in the past and other similar factors. A high ranking instantly puts you in a positive light to the lender and your credit application might be sanctioned.

There are many ways that you may be able to amend your credit score and this will include having a closer look at your current credit rating. See if you have overdue bills to pay, and pay them off instantly, as this can affect your credit ranking in a negative way. Remember that to improve credit history, you need to always pay your outstanding on time.

In case you find that you have missed on some past payments, make the situation current as soon as you can by clearing past dues. To have a good credit score, you need to stay current with your credit accounts. The really bad news is that history of all late or neglected payments stay in your credit history for 7 long years. This remains as a stark reminder of your delinquency even when you have cleared all your dues.

If you find that you are unable to handle the outstanding situation anymore, it makes sense to contact either the creditors or take professional advice from a credit counselor. This cannot dramatically amend your credit score, but the sooner you start clearing your past dues, it starts getting reflected on your improved credit rating.

Learning how to improve your credit would increase your chances to acquire that loan or mortgage, when you desperately need it. It would be frustrating for one to apply for some much needed credit and not get sanctioned in the end, all because of a low score. When you improve your credit rating, you are assured that you would get the money when you need it most.

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