Debt levels are at an all time high in the UK. The younger generation tend to be feeling the pinch the most, but parents are increasingly being required to bail them out, often at great expense to their own limited mortgage or retirement savings.
It has become almost accepted as a fact of life that graduates will begin their careers with a considerable level of personal debt. The Association of Investment Trust Companies found that on average students expected to graduate with £7,208 of debt, while parents believed it would be nearer to £9,741, however the real average was found to be currently running at £13,501. Graduates then need to service credit cards, take out a mortgage, then cover the payments, repay university loans, not to mention the pressure to start saving earlier, and save more, for their retirement, whilst the basic state pension increasingly becomes inadequate. The government revealed in June that student debt for 2003-04 was seven times higher than they were in 1994-95 and the Student Loans Company has shown that debts owed to them has risen to more than £13bn.
It is not only students who face financial difficulties early in life. Consumer Credit Counselling Services - Scotland, has indicated that young adults in general, under the age of 25, now account for more than 10 per cent of the estimated 32,000 people who have fallen into severe arrears on non-mortgage debts of more than £1 billion.
Malcolm Hurlston, Chairman of the Consumer Credit Counselling Services (CCCS) said, "It is noticeable that young people are accounting for an increasing proportion and the number of them seeking assistance has risen by about 25 per cent over the past two years or so."
Analysts have been bracing themselves for news of a sharp increase in adverse debt levels from the major high street banks following report figures of a 21 per cent increase in bad debts levels at Lloyds TSB. City analysts expect HBOS and Royal Bank of Scotland to declare that bad debt charges have risen by around 20% in their personal banking businesses, and Barclays, HSBC and Alliance & Leicester are all expected to tell a similar tale of rising loan defaults. Citigroup analysts are expecting bad debt charges from its retail banking division to rise about 24% in the first half of this year to £230m, while last year HBOS’s provisions for bad debt rose from £1bn to £1.2bn.
Keith Stevens, of the chartered accountants firm Wilkins Kennedy, said: "Creditors profit by lending money to people and collecting interest, and the longer they can keep that cycle going the better for them. Unless borrowers own property of significant value, it’s often not in creditors’ interest to call in their debts." He also continued that he believed some creditors were increasingly taking a hands-off approach, allowing debtors to pile up large amounts of debt, and then collecting interest and penalty charges for as long as borrowers were able to continue paying. This has lead to an increase in the number of borrowers filing for bankruptcy themselves when previously they would have been forced into it earlier by their lenders.
House repossessions have also significantly increased over the past year, with the Council of Mortgage Lenders announcing 4,640 home repossessions during the first half of 2005, compared with 3,070 for the last half of 2004. Government figures show that there has also been an increase in the number of homeowners being taken to court for mortgage arrears.
Some of the major banks and financial service providers have taken the initiative and started to help police the growing adverse debt problems with HSBC announcing that it will share their full credit record, of both positive and negative information, on its personal customers with other regulated financial services companies through the Experian, Equifax and CallCredit credit reference agencies, in efforts to keep tabs on its consumers' debt.
Michael Geoghegan, Chief Executive of HSBC said: "It is no more in the interests of a customer to borrow more money than they can afford than it is for a bank to lend them the money." The move has been widely heralded by analysts, as Michael Geoghegan added, "It is the only way to ensure that lenders properly understand the full financial exposure of customers before they let them sign up to debt that some simply can't afford."
This all comes amidst media pressure for financial firms to become more responsible. One case widely featured in the news concerns a couple who took out the £5,740 loan at 34.9% APR for house improvements, but they were already in arrears on two prior mortgages, and became unable to keep up the loan repayments. Over the course of the 15 year loan term the amount repayable had escalated to £384,000. Attempts by the loan company to still enforce the huge debt, eventually had to be fought off by the couple through the law courts.
The couple urged others considering taking out a loan to seek advice and to, "obviously read the small print and ask the questions that perhaps you don't think about at the time, and just make sure you know exactly what the consequences are should anything go wrong".
There are currently many sources of information to help consumers make decisions regarding their finances and debt levels. Financial comparison sites like Moneynet can provide impartial information on loans, mortgages, adverse credit, etc, to find the best product for individual circumstances. Consumer help sites like the National Debtline provide free confidential and independent advice on how to deal with debt problems, and the Citizens Advice Bureau are there with trained volunteers to help with legal, monetary and other problems, through a free, independent and confidential advice service.
The more help and information that is available to consumers and the more responsible the lending agencies become, the safer finance will be for the most vulnerable who are looking to borrow money, to prevent them getting into un-repayable levels of debt, however these services can only be of help if people actually use them.
Malcolm Hurlston of CCCS said, "We are advising about 4,000 people in Scotland and I would estimate that our figures represent only about one in eight of those who need help".
Financial education is something needs to be provided at an early stage to make people realise the importance of taking on the accountability for their own finances, as well as highlighting where to access help for when it is required. Budgeting is a subject many school leavers have little practical knowledge of, but one which they desperately need to be made aware of before they start to control their own finances.
Where there is existing advice or help, this must be made available and known to all in order to prevent more people getting too deeply into debt, or falling prey to loan sharks like the recent case of Mark Washington Johnson who has been jailed in Birmingham for nearly four years. Mr Johnson was found guilty of charging up to 8,000 per cent interest on loans, taking Social Security benefit books or National Insurance numbers as "security" for the unauthorised loans and then piling on default charges for missed payments. If we are to prevent this sort of abuse occurring to the weakest members of society then public awareness needs to be raised and the most vulnerable people given the assistance best suited to understand and control their own money.
About the Author
Richard lives in Edinburgh working for bigmouthmedia, occasionally writing for the personal finance blog Cashzilla, and considering the possibility of there being intelligent life on Earth.
Written by: Richard Green
Tuesday, November 17, 2009
Adverse Credit Remortgage: Refinance at Better Terms
Getting a remortgage with adverse credit is a daunting task and it is increasingly becoming a widespread problem in UK. An adverse credit remortgage is a type of mortgage, which is particularly used by people who have adverse remarks in their credit history.
Adverse credit ratings are rising as people are finding it difficult to repay the loans they took in order to remedy their financial exigencies. The credit ratings are remarks given by your previous creditors based on your repayment history. If you are punctual and prompt in repaying the installments they give you a positive remark and a negative rating incurs, if you miss their installments and are erratic in the repayment schedule.
Lenders are wary of this negative or adverse credit rating. They find it risky to lend any amount to such persons and reject their applications in most of the cases.
While, applying for an Adverse credit remortgage, the borrower has to face two kinds of situations. In the first case, although he has an adverse credit rating against him, he can offer something like a house or home equity as a collateral to the remortgage. In second case the borrower with the adverse credit history doesn't have anything to offer as collateral or the value of collateral is not adequate to guarantee the loan.
The lenders, if they find that they can get something as collateral for the remortgage offer, are prompt in lending as compared to a situation where they have to lend solely on the basis of creditworthiness of the borrower. The lenders are comfortable by the fact that if the borrower defaults in payments, they can repossess the collateral. Depending on the collateral and creditworthiness, lenders fix interest rates, lending amount and the repayment schedules.
Remortgaging involves changing the mortgage without changing the existing house or property. Adverse credit remortgage can be used for getting a better deal on mortgage from a different lender. It can also be used to get an improved deal on mortgage from the existing lender. Adverse credit remortgage may also be used to provide funds or to get a loan on the increased equity in home or property. They are very useful in consolidating existing debts from various sources into one single manageable loan. Emergency expenditures like the purchase of a car, a holiday, some reconstruction or medical bills can be funded by such remortgages.
Getting an adverse credit remortgage to finance these purchases is considered a wise option because remortgage offers lower interest rates and easy repayment options as compared to other methods of borrowing.
People with adverse credit should be very cautious while taking a remortgage. Mortgage lenders in UK are squeezing such people with higher interest rates and unreasonable terms and conditions.
Remortgaging involves many fees, which increase the cost of the process. There are early redemption penalties, re-appraisal of property, solicitor fees, office and conveyance charges, which have to be taken into consideration while taking an adverse credit remortgage. The fact that a borrower has an adverse credit rating makes the situation even worse for him. As the lending market in UK is very competitive the borrower is advised to shop around for lenders, which offer zero product fees, cashback, free basic property valuation and minimum fee for legal and other expenses. A good lender, who provides adverse credit remortgage will negotiate the best possible deal on prepayment penalties for its client. Finding such a lender is not easy but ultimately it will be worth the effort.
For most of us, if we have something to offer as collateral, getting an adverse credit remortgage will be quite easy. The new lender will ask for all the documents and complete the formalities. If everything goes smoothly, it won't take long to get an adverse credit remortgage.
Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the Secured loan web site uk finance world for any type of uk secured and unsecured loan please visit http://www.ukfinanceworld.co.uk
About the Author
Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the Secured loan web site uk finance world for any type of uk secured and unsecured loan please visit http://www.ukfinanceworld.co.u
Adverse credit ratings are rising as people are finding it difficult to repay the loans they took in order to remedy their financial exigencies. The credit ratings are remarks given by your previous creditors based on your repayment history. If you are punctual and prompt in repaying the installments they give you a positive remark and a negative rating incurs, if you miss their installments and are erratic in the repayment schedule.
Lenders are wary of this negative or adverse credit rating. They find it risky to lend any amount to such persons and reject their applications in most of the cases.
While, applying for an Adverse credit remortgage, the borrower has to face two kinds of situations. In the first case, although he has an adverse credit rating against him, he can offer something like a house or home equity as a collateral to the remortgage. In second case the borrower with the adverse credit history doesn't have anything to offer as collateral or the value of collateral is not adequate to guarantee the loan.
The lenders, if they find that they can get something as collateral for the remortgage offer, are prompt in lending as compared to a situation where they have to lend solely on the basis of creditworthiness of the borrower. The lenders are comfortable by the fact that if the borrower defaults in payments, they can repossess the collateral. Depending on the collateral and creditworthiness, lenders fix interest rates, lending amount and the repayment schedules.
Remortgaging involves changing the mortgage without changing the existing house or property. Adverse credit remortgage can be used for getting a better deal on mortgage from a different lender. It can also be used to get an improved deal on mortgage from the existing lender. Adverse credit remortgage may also be used to provide funds or to get a loan on the increased equity in home or property. They are very useful in consolidating existing debts from various sources into one single manageable loan. Emergency expenditures like the purchase of a car, a holiday, some reconstruction or medical bills can be funded by such remortgages.
Getting an adverse credit remortgage to finance these purchases is considered a wise option because remortgage offers lower interest rates and easy repayment options as compared to other methods of borrowing.
People with adverse credit should be very cautious while taking a remortgage. Mortgage lenders in UK are squeezing such people with higher interest rates and unreasonable terms and conditions.
Remortgaging involves many fees, which increase the cost of the process. There are early redemption penalties, re-appraisal of property, solicitor fees, office and conveyance charges, which have to be taken into consideration while taking an adverse credit remortgage. The fact that a borrower has an adverse credit rating makes the situation even worse for him. As the lending market in UK is very competitive the borrower is advised to shop around for lenders, which offer zero product fees, cashback, free basic property valuation and minimum fee for legal and other expenses. A good lender, who provides adverse credit remortgage will negotiate the best possible deal on prepayment penalties for its client. Finding such a lender is not easy but ultimately it will be worth the effort.
For most of us, if we have something to offer as collateral, getting an adverse credit remortgage will be quite easy. The new lender will ask for all the documents and complete the formalities. If everything goes smoothly, it won't take long to get an adverse credit remortgage.
Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the Secured loan web site uk finance world for any type of uk secured and unsecured loan please visit http://www.ukfinanceworld.co.uk
About the Author
Andrew baker has done his masters in finance from CPIT. He is engaged in providing free, professional, and independent advice to the residents of the UK.He works for the Secured loan web site uk finance world for any type of uk secured and unsecured loan please visit http://www.ukfinanceworld.co.u
A Mortgage Refinance with Bad Credit - The Pros and Cons
To many, the term 'bad credit' is the end of the world when it comes to getting financing in the near future. However, it doesn't always have to be like that, you can take the bad credit mortgage refinance option!
Mortgage refinance vs. equity finance
It is essential at the outset that you understand there is a fundamental difference between mortgage refinancing and equity financing. Basically, with equity financing you are using the surplus amount you may have stored up in your property between your outstanding mortgage amount and the appraised value of your home. However a mortgage refinance is where you find a new lender willing to lend you the whole appraised value of your property, the sum of which you then use to repay your existing mortgage lender and the remaining sum you can utilize in any manner you wish. Because of this, you are faced with a different set of problems than would be the case with an equity financing.
The pros of a bad credit mortgage refinance
Aside from any possible equity financing you can do with your property, without doubt the biggest upside to a bad credit mortgage refinance is the fact that it is a long-term and cheap form of borrowing. Interest rates are likely to be low and, possibly, can even be fixed. You could even possibly benefit from certain tax advantages from a bad credit mortgage refinance.
Because of this, bad credit mortgage finance can allow you to do things financially that may not otherwise be available to you as a person with a bad credit rating. You could use the equity you free up after you repay your original mortgage lender to invest in stocks and savings that will give you a better yield than you are currently getting on the property.
Alternatively, you could pay off all outstanding debts you have so that you have no interest and debt payments to make each month – merely a mortgage repayment. Finally, you could even use the equity you get to invest in a long-term investment plan like your pension. In fact the options are so limitless that you should really consult with a financial expert who can best advise you on how you should put that money to the best use for you!
The cons of bad credit mortgage refinance
The number one downside to any mortgage refinancing, whether it be bad credit or otherwise, is the fact that mortgage lenders do not like to be repaid early. As such they usually incorporate some expensive penalty clauses to try and make it not worth your while repaying them early. With this in mind, you will need to read your original mortgage agreement with your original lender very carefully to make sure you won't have any onerous default payments to make; or, you could try and arrange for the new lender to swallow these.
That said, if you make any arrangements with the new lender that they agree to pay these fees for you, you then need to make sure they do not put any restrictive clauses in your new refinance mortgage agreement that would prohibit you from refinancing your mortgage again at some time in the future if the occasion warrants such.
Without a doubt, as a person with a bad credit history and bad credit rating, a bad credit mortgage refinance can open up avenues to you that would not otherwise be there. You do, however, need to give consideration as to whether or not you want to take this route. Not least because at the end of the day your house and family home is on the line!
About The Author
Monique Thomas helps you find the resources and information you need to make an informed decision on your finances. Subcribe to our announcement list by visiting: http://www.crazydebt.com
Mortgage refinance vs. equity finance
It is essential at the outset that you understand there is a fundamental difference between mortgage refinancing and equity financing. Basically, with equity financing you are using the surplus amount you may have stored up in your property between your outstanding mortgage amount and the appraised value of your home. However a mortgage refinance is where you find a new lender willing to lend you the whole appraised value of your property, the sum of which you then use to repay your existing mortgage lender and the remaining sum you can utilize in any manner you wish. Because of this, you are faced with a different set of problems than would be the case with an equity financing.
The pros of a bad credit mortgage refinance
Aside from any possible equity financing you can do with your property, without doubt the biggest upside to a bad credit mortgage refinance is the fact that it is a long-term and cheap form of borrowing. Interest rates are likely to be low and, possibly, can even be fixed. You could even possibly benefit from certain tax advantages from a bad credit mortgage refinance.
Because of this, bad credit mortgage finance can allow you to do things financially that may not otherwise be available to you as a person with a bad credit rating. You could use the equity you free up after you repay your original mortgage lender to invest in stocks and savings that will give you a better yield than you are currently getting on the property.
Alternatively, you could pay off all outstanding debts you have so that you have no interest and debt payments to make each month – merely a mortgage repayment. Finally, you could even use the equity you get to invest in a long-term investment plan like your pension. In fact the options are so limitless that you should really consult with a financial expert who can best advise you on how you should put that money to the best use for you!
The cons of bad credit mortgage refinance
The number one downside to any mortgage refinancing, whether it be bad credit or otherwise, is the fact that mortgage lenders do not like to be repaid early. As such they usually incorporate some expensive penalty clauses to try and make it not worth your while repaying them early. With this in mind, you will need to read your original mortgage agreement with your original lender very carefully to make sure you won't have any onerous default payments to make; or, you could try and arrange for the new lender to swallow these.
That said, if you make any arrangements with the new lender that they agree to pay these fees for you, you then need to make sure they do not put any restrictive clauses in your new refinance mortgage agreement that would prohibit you from refinancing your mortgage again at some time in the future if the occasion warrants such.
Without a doubt, as a person with a bad credit history and bad credit rating, a bad credit mortgage refinance can open up avenues to you that would not otherwise be there. You do, however, need to give consideration as to whether or not you want to take this route. Not least because at the end of the day your house and family home is on the line!
About The Author
Monique Thomas helps you find the resources and information you need to make an informed decision on your finances. Subcribe to our announcement list by visiting: http://www.crazydebt.com
A Guide to Bad Credit Finance Options
Have you been trying to find out what bad credit finance options were available? Perhaps you're in the market for a new car or truck, but aren't sure if you can find a dealer or lender who'll offer you a bad credit finance?
You shouldn't worry too much about bad credit finance options, because there are several financing options available regardless of your credit history… some of them charge higher interest rates or require some additional security, but in the end may be just what you're looking for.
Vehicle financing
If you're looking for a bad credit finance for a new or used vehicle, your best option is most likely going to be to visit a finance company as opposed to a traditional bank.
Some finance companies are more likely to offer bad credit finance options for vehicles than others, and the financing will usually depend upon the type of vehicle being financed, where the vehicle is being purchased from, and what sort of insurance and driving record you have.
Other factors that will be taken into consideration include your annual and monthly income, any cosigners that you might have for the loan, and any recommendations or referrals that you might have.
Home financing
Finding someone to offer you a bad credit finance for a house or other real estate can sometimes be tricky, but generally real estate shouldn't be too difficult to finance.
Major factors in getting a mortgage lender to approve you for bad credit finance options include your income, any insurance that you will purchase for the house or real estate, the amount of a down payment that you're willing to offer, and any references of former landlords that you can offer.
Mortgage lenders for bad credit finance loans can be found online, at finance companies, and at some real estate and property management services.
Other financing
Should you be seeking bad credit finance options for other items (such as collectibles or electronics), you might find your search to be a little more difficult.
Smaller and less valuable items are often harder to repossess and find buyers for than vehicles and real estate, so many finance companies are hesitant to lend money to people with bad credit in order to purchase these items. Instead of financing, you might want to consider other venues for bad credit loans (such as auto title loans and the like) to get you the money that you need for your purchases.
Some lenders will offer financing for these items, though, but the only way to find out is to see for yourself. Should you be rejected, asking for a reference as to where to find financing might point you in the right direction.
You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.
You shouldn't worry too much about bad credit finance options, because there are several financing options available regardless of your credit history… some of them charge higher interest rates or require some additional security, but in the end may be just what you're looking for.
Vehicle financing
If you're looking for a bad credit finance for a new or used vehicle, your best option is most likely going to be to visit a finance company as opposed to a traditional bank.
Some finance companies are more likely to offer bad credit finance options for vehicles than others, and the financing will usually depend upon the type of vehicle being financed, where the vehicle is being purchased from, and what sort of insurance and driving record you have.
Other factors that will be taken into consideration include your annual and monthly income, any cosigners that you might have for the loan, and any recommendations or referrals that you might have.
Home financing
Finding someone to offer you a bad credit finance for a house or other real estate can sometimes be tricky, but generally real estate shouldn't be too difficult to finance.
Major factors in getting a mortgage lender to approve you for bad credit finance options include your income, any insurance that you will purchase for the house or real estate, the amount of a down payment that you're willing to offer, and any references of former landlords that you can offer.
Mortgage lenders for bad credit finance loans can be found online, at finance companies, and at some real estate and property management services.
Other financing
Should you be seeking bad credit finance options for other items (such as collectibles or electronics), you might find your search to be a little more difficult.
Smaller and less valuable items are often harder to repossess and find buyers for than vehicles and real estate, so many finance companies are hesitant to lend money to people with bad credit in order to purchase these items. Instead of financing, you might want to consider other venues for bad credit loans (such as auto title loans and the like) to get you the money that you need for your purchases.
Some lenders will offer financing for these items, though, but the only way to find out is to see for yourself. Should you be rejected, asking for a reference as to where to find financing might point you in the right direction.
You may freely reprint this article provided the following author's biography (including the live URL link) remains intact:
About the Author
John Mussi is the founder of Direct Online Loans who help homeowners find the best available loans via the www.directonlineloans.co.uk website.
A Good Credit Report - The Key To Cheap Finance
Is your credit report important? There are a lot of people who would not consider their credit rating as something too important to them in their life. There are others who, while recognising its importance, would not be overly concerned about the issue or understand the reasons for its importance. Well, to those people, they should at least be aware of some of the uses that are made of credit reports in the world in which we live.
While it may seem obvious to state it, credit reports are predominantly concerned with assessing the risk involved in lending money to you. Lenders are obsessed with one thing, getting repaid, and their entire industry revolves around making this occur. Therefore, they have developed the credit score that will assess your likely hood of repaying them and this is then used to either approve or reject your application for credit. While this is the basic purpose, some more sophisticated lenders desire to get in on an ever larger share of the market and in order to lend to higher risk borrowers, they create different categories of loans which people with lower scores can qualify for. These loans will invariably have higher interest rates and other less favourable conditions and this will be the price you pay for having a lower credit rating.
Since loans are used to finance homes, education, cars, and most other large purchases in life, the inability to get access to credit, or only to be able to get it at less attractive terms and rates, is a substantially reason to care about your credit report and try to keep it in as good a condition as possible.
Credit reports are also used when you apply for renting or leasing accommodation. This is usually because the landlord wants to be fairly certain that you'll be able to pay your rent as it falls due. So keeping your credit score healthy at this stage will pay off if you need to be approved for renting or leasing residential property.
There is also a trend among employer to start using credit ratings when assessing job applicants. The reasons they are making use of credit reports are of course different for every employer but there is a consensus that a healthy credit report and a good past record of meeting financial commitments is a good sign that the job applicant is someone reliable and worth employing. While it does seem slightly perverse that the very people that will need a job the most are precisely the ones that can be denied it but that's the direction things are moving in.
About the author:
Joseph Kenny is the webmaster of the UK credit card comparison site http://www.creditcards121.co m/, where you can find a selection of credit card advice. For US visitors there is also the comparison site http://www.credit-cards-i nfo.com/ for all US interest free offers.
Written by: Joseph Kenny
While it may seem obvious to state it, credit reports are predominantly concerned with assessing the risk involved in lending money to you. Lenders are obsessed with one thing, getting repaid, and their entire industry revolves around making this occur. Therefore, they have developed the credit score that will assess your likely hood of repaying them and this is then used to either approve or reject your application for credit. While this is the basic purpose, some more sophisticated lenders desire to get in on an ever larger share of the market and in order to lend to higher risk borrowers, they create different categories of loans which people with lower scores can qualify for. These loans will invariably have higher interest rates and other less favourable conditions and this will be the price you pay for having a lower credit rating.
Since loans are used to finance homes, education, cars, and most other large purchases in life, the inability to get access to credit, or only to be able to get it at less attractive terms and rates, is a substantially reason to care about your credit report and try to keep it in as good a condition as possible.
Credit reports are also used when you apply for renting or leasing accommodation. This is usually because the landlord wants to be fairly certain that you'll be able to pay your rent as it falls due. So keeping your credit score healthy at this stage will pay off if you need to be approved for renting or leasing residential property.
There is also a trend among employer to start using credit ratings when assessing job applicants. The reasons they are making use of credit reports are of course different for every employer but there is a consensus that a healthy credit report and a good past record of meeting financial commitments is a good sign that the job applicant is someone reliable and worth employing. While it does seem slightly perverse that the very people that will need a job the most are precisely the ones that can be denied it but that's the direction things are moving in.
About the author:
Joseph Kenny is the webmaster of the UK credit card comparison site http://www.creditcards121.co m/, where you can find a selection of credit card advice. For US visitors there is also the comparison site http://www.credit-cards-i nfo.com/ for all US interest free offers.
Written by: Joseph Kenny
A Fresh Start for Family Finances in 2005
While 40% to 50% of us make New Year’s resolutions on January 1—a ritual that has existed since ancient times—approximately 60% to 80% of us have already broken them by the end of February, according to researchers.
It’s still not too late, however, to reset the trajectory on your family’s finances, experts note.
1. Build a Budget
If you haven’t already done so, create a realistic budget.
Approximately 85% of your income should be set aside for necessities like housing, food, health care and clothing, according to the professionals at VISA USA.
This leaves 15% for entertainment—and something many consumers completely neglect: savings.
2. Distinguish “Needs” from “Wants”
Make sure you have a clear understanding of what you need in life versus what you want in life.
You need to pay for the antibiotics when the doctor diagnoses a respiratory infection. You don’t need to buy the latest movie released on DVD to aid in your recovery.
You need to pay the rent or mortgage. You don’t need to buy the lovely accent pillows that beckon to you from the interior design boutique.
Always separate the needs from the wants—particularly if money is tight.
3. Monitor Your Spending
To see what you really spend each month, keep a running log of all purchases—no matter how small—for a full month. This will give you a visual display of where your money goes after you deposit your paycheck.
You may find that the $3 cup of coffee that starts each day adds up to $90 a month—a pocketbook pincher that may prompt you to buy a pound of coffee beans at the local market and grind them yourself. That $90 blossoms into $1,080 in savings at the end of a year.
4. Create an Emergency Fund
Life is full of surprises—both positive and negative. If you happen to lose your job or suffer an illness that temporarily sidelines you, you will need cash reserves to support you during the rough months.
“In most cases, consumers who find themselves dealing with a financial hardship are unprepared and have not saved for unexpected situations,” says Diane Giarratano, director of education for Novadebt, a U.S. financial management service agency, with multiple locations, that provides credit counseling, budgeting and financial education.
5. Educate Yourself
When you attended high school or college, you studied history, mathematics, language and science, but there was probably no course in basic money management.
If you need help in meeting a financial goal—whether it’s buying a home or reducing your debt—take advantage of community resources.
“Consumers should feel free to contact a good credit-counseling agency to obtain free advice with regard to establishing a budget or to learn how to handle unexpected hardships,” Giarratano says.
6. Don’t Become a Victim
Identity theft has become an international epidemic, so be extremely cautious when giving out your credit card or personal identifying information. Monitor your credit card bills carefully for unauthorized charges, and immediately report suspicious activity to the issuing company.
“Identity theft is often an inside job,” warns Robert L. Siciliano, a personal security expert with Boston, Massachusetts-based SafetyMinute Seminars and author of “The Safety Minute.”
“Lower-level help desk workers and frontline call center employees often have access to all our personal information in their databases,” he says. “What are you doing to protect yourself? If you’re not paying attention, you could be a victim, too.”
And when a disaster strikes, such as the recent killer tsunamis in South Asia and East Africa, be wary of scammers from fake charities before reaching for your checkbook. Unfortunately, there will always be unscrupulous individuals who seize such opportunities to profit from others’ misfortune.
“Avoid using your credit card to make contributions,” advises James Walsh, author of “You Can’t Cheat An Honest Man: How Ponzi Schemes and Pyramid Frauds Work…and Why They’re More Common Than Ever.”
“Even though this can be a convenient way to proceed, many crooks are looking for credit card numbers,” Walsh says. “They will press strongly for ‘immediate support.’ Don’t rush.”
Instead, initiate the call yourself, and select a reputable charity.
“Go with recognized names,” Walsh says. “No organization is perfect; even the best-meaning groups occasionally misallocate money or fall victim to abusive employees. But larger charitable groups—like the Red Cross, the United Way and Catholic Charities—have the mechanisms in place to audit their people and performance.”
Charitable contributions are tax-deductible, so keep good records of all donations—including small cash gifts.
---------
Fox Symes assists all Australians discover the truth about their debts and how they can rapidly reduce them. There are methods available to the Australian public and you can discover how to use these to assist you in reducing your debt with a free phone consultation from Fox Symes. Visit http://www.foxsymes.com.au or contact them directly on 1300 361 204
It’s still not too late, however, to reset the trajectory on your family’s finances, experts note.
1. Build a Budget
If you haven’t already done so, create a realistic budget.
Approximately 85% of your income should be set aside for necessities like housing, food, health care and clothing, according to the professionals at VISA USA.
This leaves 15% for entertainment—and something many consumers completely neglect: savings.
2. Distinguish “Needs” from “Wants”
Make sure you have a clear understanding of what you need in life versus what you want in life.
You need to pay for the antibiotics when the doctor diagnoses a respiratory infection. You don’t need to buy the latest movie released on DVD to aid in your recovery.
You need to pay the rent or mortgage. You don’t need to buy the lovely accent pillows that beckon to you from the interior design boutique.
Always separate the needs from the wants—particularly if money is tight.
3. Monitor Your Spending
To see what you really spend each month, keep a running log of all purchases—no matter how small—for a full month. This will give you a visual display of where your money goes after you deposit your paycheck.
You may find that the $3 cup of coffee that starts each day adds up to $90 a month—a pocketbook pincher that may prompt you to buy a pound of coffee beans at the local market and grind them yourself. That $90 blossoms into $1,080 in savings at the end of a year.
4. Create an Emergency Fund
Life is full of surprises—both positive and negative. If you happen to lose your job or suffer an illness that temporarily sidelines you, you will need cash reserves to support you during the rough months.
“In most cases, consumers who find themselves dealing with a financial hardship are unprepared and have not saved for unexpected situations,” says Diane Giarratano, director of education for Novadebt, a U.S. financial management service agency, with multiple locations, that provides credit counseling, budgeting and financial education.
5. Educate Yourself
When you attended high school or college, you studied history, mathematics, language and science, but there was probably no course in basic money management.
If you need help in meeting a financial goal—whether it’s buying a home or reducing your debt—take advantage of community resources.
“Consumers should feel free to contact a good credit-counseling agency to obtain free advice with regard to establishing a budget or to learn how to handle unexpected hardships,” Giarratano says.
6. Don’t Become a Victim
Identity theft has become an international epidemic, so be extremely cautious when giving out your credit card or personal identifying information. Monitor your credit card bills carefully for unauthorized charges, and immediately report suspicious activity to the issuing company.
“Identity theft is often an inside job,” warns Robert L. Siciliano, a personal security expert with Boston, Massachusetts-based SafetyMinute Seminars and author of “The Safety Minute.”
“Lower-level help desk workers and frontline call center employees often have access to all our personal information in their databases,” he says. “What are you doing to protect yourself? If you’re not paying attention, you could be a victim, too.”
And when a disaster strikes, such as the recent killer tsunamis in South Asia and East Africa, be wary of scammers from fake charities before reaching for your checkbook. Unfortunately, there will always be unscrupulous individuals who seize such opportunities to profit from others’ misfortune.
“Avoid using your credit card to make contributions,” advises James Walsh, author of “You Can’t Cheat An Honest Man: How Ponzi Schemes and Pyramid Frauds Work…and Why They’re More Common Than Ever.”
“Even though this can be a convenient way to proceed, many crooks are looking for credit card numbers,” Walsh says. “They will press strongly for ‘immediate support.’ Don’t rush.”
Instead, initiate the call yourself, and select a reputable charity.
“Go with recognized names,” Walsh says. “No organization is perfect; even the best-meaning groups occasionally misallocate money or fall victim to abusive employees. But larger charitable groups—like the Red Cross, the United Way and Catholic Charities—have the mechanisms in place to audit their people and performance.”
Charitable contributions are tax-deductible, so keep good records of all donations—including small cash gifts.
---------
Fox Symes assists all Australians discover the truth about their debts and how they can rapidly reduce them. There are methods available to the Australian public and you can discover how to use these to assist you in reducing your debt with a free phone consultation from Fox Symes. Visit http://www.foxsymes.com.au or contact them directly on 1300 361 204
A College Loan Will Finance Your Education!
A college loan has given people all over the United States a chance to further their education, even if they are not making a lot of money. Education loans can be a big help in paying for college. You'll find these loans offer a low interest rate and a generous repayment period. Of course, student loans must be repaid, usually with interest, although some education loans have provisions for cancellation if the borrower performs a program-related service. If you are looking for a loan, be aware that there are many different types of loans. Try to find the student loan that fits you the best. For example, there is a loan called the Federal Stafford Loan. The Federal Stafford Loan is the most widely used loan in the student education loan program. Federal guidelines limit the maximum interest rate to no more than 8.25% and outline repayment terms of up to 10 years. Remember that if you ever need help or are falling behind on payments, consider a consolidate student loan.
Tips on getting a deferment for your College Loan.
If for some reason you are unable to meet your monthly payments, consider a college loan deferment. A deferment is a suspension of payments for special reasons. Usually, those who borrowed their first Stafford Loans after July 1, 1993, are eligible to defer payments if are enrolled in at least half-time at an eligible school, unemployed, in a graduate fellowship program, in a rehabilitation training program for people with disabilities, or suffering economic hardship. A college education is expensive, but with the right student loan you will be attending class without financial worry in no time
Tips on getting a deferment for your College Loan.
If for some reason you are unable to meet your monthly payments, consider a college loan deferment. A deferment is a suspension of payments for special reasons. Usually, those who borrowed their first Stafford Loans after July 1, 1993, are eligible to defer payments if are enrolled in at least half-time at an eligible school, unemployed, in a graduate fellowship program, in a rehabilitation training program for people with disabilities, or suffering economic hardship. A college education is expensive, but with the right student loan you will be attending class without financial worry in no time
4 Good Reasons to Get a Refinance Home Loan
Refinance Your Home Now and Lower Your Interest Rate
What is a refinance home loan?
A refinance home loan or a home loan refinance is a new loan obtained through your lender or a new lender to pay off existing loan. However, you may opt to apply for a lower interest rate and or cash out on your homes equity.
When should I refinance my home? It is a known fact that interest rates are lower than they have been in years. This is due to our fast paced and ever changing economy and market. Now would be the perfect opportunity to refinance your home to obtain a lower interest rate. Even a .25 difference can save you thousands of dollars a year in mortgage payments.
Why should I refinance my home?
There are several reasons home owners decides to refinance. The four most common reasons include:
To obtain a lower interest rate
Home owner generally are aware of interest rate down fall. They take advantage of this opportunity by applying to a refinance loan to lower their existing interest rates and save money on mortgage expenses. The money that a borrower saves on mortgage expenses can be invested in other financial investments.
To receive a refinance cash out
Some home owners who have enough equity accumulated in their homes refinance to cash out their equity and get a lower interest rate
To make home improvements
Sooner than later you will find that maintaining your home is hard work (not to mention quite expensive). In most cases, home owners will pursue a refinance, rather than a personal loan, in order to save on interest rates. A personal loan may have higher interest rates and are normally, not as large as a home improvement loan.
To change loan programs
A majority of home owner refinance because they are not satisfied with their current loan program. They may be under a 5 year arm, but somewhere down the line they decided they would prefer a 30 year fixed loan. Whatever the reason may be, a refinance home loan will solve the problem.
What are the benefits of refinancing my home?
There are several benefits included with refinancing your home, including:
Your credit may be in better standings then before you purchased your home, now you can refinance and obtain a more suitable loan, with lower interest rates and terms.
Or, you can obtain a home equity line of credit and have cash available when you need it.
With refinance cash out, your lender can consolidate your bills and pay off all of your debt. You will not have to deal with the hassle by yourself.
What are the different refinance loan options?
As with a traditional loan, refinance home loans offer some of the same loan programs, such as:
10/15/30 year fixed
Zero Down
Interest Only
And so on
Where can I refinance my loan?
You can apply for a refinance home loan through your current lender. Or you may search for a new lender more suitable to your financial needs. This search can be done by internet search, flipping through the yellow pages, or consulting with your real estate agent.
About the Author
Khali S. founder of Home Loan Guidance - a free online guide to help discover more home loan options secrets
What is a refinance home loan?
A refinance home loan or a home loan refinance is a new loan obtained through your lender or a new lender to pay off existing loan. However, you may opt to apply for a lower interest rate and or cash out on your homes equity.
When should I refinance my home? It is a known fact that interest rates are lower than they have been in years. This is due to our fast paced and ever changing economy and market. Now would be the perfect opportunity to refinance your home to obtain a lower interest rate. Even a .25 difference can save you thousands of dollars a year in mortgage payments.
Why should I refinance my home?
There are several reasons home owners decides to refinance. The four most common reasons include:
To obtain a lower interest rate
Home owner generally are aware of interest rate down fall. They take advantage of this opportunity by applying to a refinance loan to lower their existing interest rates and save money on mortgage expenses. The money that a borrower saves on mortgage expenses can be invested in other financial investments.
To receive a refinance cash out
Some home owners who have enough equity accumulated in their homes refinance to cash out their equity and get a lower interest rate
To make home improvements
Sooner than later you will find that maintaining your home is hard work (not to mention quite expensive). In most cases, home owners will pursue a refinance, rather than a personal loan, in order to save on interest rates. A personal loan may have higher interest rates and are normally, not as large as a home improvement loan.
To change loan programs
A majority of home owner refinance because they are not satisfied with their current loan program. They may be under a 5 year arm, but somewhere down the line they decided they would prefer a 30 year fixed loan. Whatever the reason may be, a refinance home loan will solve the problem.
What are the benefits of refinancing my home?
There are several benefits included with refinancing your home, including:
Your credit may be in better standings then before you purchased your home, now you can refinance and obtain a more suitable loan, with lower interest rates and terms.
Or, you can obtain a home equity line of credit and have cash available when you need it.
With refinance cash out, your lender can consolidate your bills and pay off all of your debt. You will not have to deal with the hassle by yourself.
What are the different refinance loan options?
As with a traditional loan, refinance home loans offer some of the same loan programs, such as:
10/15/30 year fixed
Zero Down
Interest Only
And so on
Where can I refinance my loan?
You can apply for a refinance home loan through your current lender. Or you may search for a new lender more suitable to your financial needs. This search can be done by internet search, flipping through the yellow pages, or consulting with your real estate agent.
About the Author
Khali S. founder of Home Loan Guidance - a free online guide to help discover more home loan options secrets
1st And 2nd Mortgage Refinance Loan - Why Refinance Both Mortgages?
The hassle of making two monthly mortgage payments has prompted many homeowners to consider refinancing their 1st and 2nd mortgages into one loan. While combining both loans into one mortgage is convenient, and may save you money, homeowners should carefully weigh the risks and advantages before choosing to refinance their mortgages.
Benefits Associated with Combining 1st and 2nd Mortgages
Aside from consolidating your mortgages and making one monthly payment, a mortgage consolidation may lower your monthly payments to mortgage lenders. If you acquired your 1st or 2nd mortgage before home loan rates began to decline, you are likely paying an interest rate that is at least two points above current market rates. If so, a refinancing will greatly benefit you. By refinancing both mortgages with a low interest rate, you may save hundreds on your monthly mortgage payment.
Furthermore, if you accepted a 1st and 2nd mortgage with an adjustable mortgage rate, refinancing both loans at a fixed rate may benefit you in the long run. Even if your current rates are low, these rates are not guaranteed to remain low. As market trends fluctuated, your adjustable rate mortgages are free to rise. Higher mortgage rates will cause your mortgage payment to climb considerably. Refinancing both mortgages with a fixed rate will ensure that your mortgage remains predictable.
Disadvantages to Refinancing 1st and 2nd Mortgage
Before choosing to refinance your mortgages, it is imperative to consider the drawbacks of combining both mortgages. To begin, refinancing a mortgage involves the same procedures as applying for the initial mortgage. Thus, you are required to pay closing costs and fees. In this case, refinancing is best for those who plan to live in their homes for a long time.
If your credit score has dropped considerably within recent years, lenders may not approve you for a low rate refinancing. By refinancing and consolidating both mortgages, be prepared to pay a higher interest rate. Before accepting an offer, carefully compare the savings.
Moreover, refinancing your two mortgages may result in you paying private mortgage insurance (PMI). PMI is required for home loans with less than 20% equity. To avoid paying private mortgage insurance, homeowners may consider refinancing both mortgages separately, as opposed to consolidating both mortgage loans.
About the author:
Carrie Reeder offers advice about Mortgage Refinance Loans Online. View our Recommended Lowest Rate Mtg Refinance Lenders Online.
Benefits Associated with Combining 1st and 2nd Mortgages
Aside from consolidating your mortgages and making one monthly payment, a mortgage consolidation may lower your monthly payments to mortgage lenders. If you acquired your 1st or 2nd mortgage before home loan rates began to decline, you are likely paying an interest rate that is at least two points above current market rates. If so, a refinancing will greatly benefit you. By refinancing both mortgages with a low interest rate, you may save hundreds on your monthly mortgage payment.
Furthermore, if you accepted a 1st and 2nd mortgage with an adjustable mortgage rate, refinancing both loans at a fixed rate may benefit you in the long run. Even if your current rates are low, these rates are not guaranteed to remain low. As market trends fluctuated, your adjustable rate mortgages are free to rise. Higher mortgage rates will cause your mortgage payment to climb considerably. Refinancing both mortgages with a fixed rate will ensure that your mortgage remains predictable.
Disadvantages to Refinancing 1st and 2nd Mortgage
Before choosing to refinance your mortgages, it is imperative to consider the drawbacks of combining both mortgages. To begin, refinancing a mortgage involves the same procedures as applying for the initial mortgage. Thus, you are required to pay closing costs and fees. In this case, refinancing is best for those who plan to live in their homes for a long time.
If your credit score has dropped considerably within recent years, lenders may not approve you for a low rate refinancing. By refinancing and consolidating both mortgages, be prepared to pay a higher interest rate. Before accepting an offer, carefully compare the savings.
Moreover, refinancing your two mortgages may result in you paying private mortgage insurance (PMI). PMI is required for home loans with less than 20% equity. To avoid paying private mortgage insurance, homeowners may consider refinancing both mortgages separately, as opposed to consolidating both mortgage loans.
About the author:
Carrie Reeder offers advice about Mortgage Refinance Loans Online. View our Recommended Lowest Rate Mtg Refinance Lenders Online.
1st And 2nd Mortgage Refinance Loan
Refinancing a first and second mortgage requires some extra considerations. Depending on your equity, you may find that combining the two mortgages results in a higher interest rate. You may also find that you have to carry PMI with the refinanced mortgage.
Will Refinancing Benefit You?
Refinancing two mortgages allows you to consolidate your loans into one payment, often lowering your monthly bill. You may also find lower rates under the right circumstances.
Those with a large amount of equity benefit most from consolidating loans since they qualify for the lowest rates. It is important to look at interest savings, not just monthly numbers which can be misleading.
However, if you have less than 25% equity, you may end up qualifying for higher rates. With less than 20% equity, you will also have to pay for private mortgage insurance. Even with these factors, you may still find that you will save money by refinancing.
Have You Done Your Research?
To see if refinancing makes sense for you, research mortgage lenders. You can quickly go online and request quotes and terms. Look at the different offers, and work out the numbers. An online mortgage calculator can help you figure out monthly payments and interest costs.
An easy way to compare cost is to first add up your interest payments for both mortgages. Use this number to compare interest payments with each potential mortgage.
You also need to factor in the cost of refinancing. Just like with your original mortgage, you will have to pay fees and points. You want to be sure that you can recoup these costs with your interest savings.
Why Do You Want To Refinance Both Mortgages?
While refinancing both mortgages is convenient, you may decide to refinance only one or both separately. With your main mortgage, you can expect to get low rates.
A second mortgage will usually qualify for higher rates, but you can lock them in. You may also choose to convert from a line of credit to an actual mortgage. Again, you will want to investigate financial packages before signing up with a lender.
About the author:
View our recommended mortgage Refi lenders. Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.
Will Refinancing Benefit You?
Refinancing two mortgages allows you to consolidate your loans into one payment, often lowering your monthly bill. You may also find lower rates under the right circumstances.
Those with a large amount of equity benefit most from consolidating loans since they qualify for the lowest rates. It is important to look at interest savings, not just monthly numbers which can be misleading.
However, if you have less than 25% equity, you may end up qualifying for higher rates. With less than 20% equity, you will also have to pay for private mortgage insurance. Even with these factors, you may still find that you will save money by refinancing.
Have You Done Your Research?
To see if refinancing makes sense for you, research mortgage lenders. You can quickly go online and request quotes and terms. Look at the different offers, and work out the numbers. An online mortgage calculator can help you figure out monthly payments and interest costs.
An easy way to compare cost is to first add up your interest payments for both mortgages. Use this number to compare interest payments with each potential mortgage.
You also need to factor in the cost of refinancing. Just like with your original mortgage, you will have to pay fees and points. You want to be sure that you can recoup these costs with your interest savings.
Why Do You Want To Refinance Both Mortgages?
While refinancing both mortgages is convenient, you may decide to refinance only one or both separately. With your main mortgage, you can expect to get low rates.
A second mortgage will usually qualify for higher rates, but you can lock them in. You may also choose to convert from a line of credit to an actual mortgage. Again, you will want to investigate financial packages before signing up with a lender.
About the author:
View our recommended mortgage Refi lenders. Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.
Subscribe to:
Posts (Atom)
Subscribe To
Posts
All Comments
