Hi,
The fall is always a good time to take inventory of our financial affairs. Once the holiday season is in full swing, many people find themselves short of time to address financial matters. Here are some steps to take so that you can go into the holiday season with the peace of mind that you know your financial standing.
1) First look at your credit cards and and audit the following:
a) Make sure the current interest rate being charged is the same interest rate which came with the card when you applied for it. If it has gone up, contact the credit card company to ask why.
b) Make sure the due dates on your cards are the same as when the cards were obtained. Once again, if any were changed, make sure that you get clarification as to why.
c) Check for any unusual late fees or finance charges and if anything seems out of
the ordinary, immediately contact the credit card company.
d) Check your credit limit on all your cards and make sure to write down the limits so you are aware of them going into the holiday season. Exceeding your credit limit will cost anywhere between $35.00 - $50.00 per card plus the risk of increased interest rates.
e) Find out what extras each of your cards offer in the form of frequent flyer miles, service protection, life insurance etc., All cards are different and knowing which card benefits your situation might help you decide which card you want to use.
2) Audit your bank statements:
a) Make sure service charges haven't arbitrarily risen without your knowledge and that any interest on savings and checking accounts has been paid as agreed.
b) Look out for extraordinary items such as direct withdrawals that have been cancelled continuing to be debited.
Many banks are notorious for increasing fees for services without our knowledge. In some instances, notices are sent masquerading as junk mail, so as not to alert the customer of proposed charges.
3) Personal loans and car loans: It's a good idea to request a printout of all activity on any outstanding personal loans. It is important to check to make sure that all payments have been applied in an appropriate manner and that the financial institution has not added unwarranted late fees or other finance charges. By auditing personal loans, it will ensure that the interest rates have not increased and that your credit score is not being affected by any errors committed by the financial institution.
4) Cell phones and other telephone bills: Cell phone bills should be monitored on a monthly basis but in most cases, are not examined carefully each month. This allows cell phone companies to include unauthorized charges and third party billings on the bill of the consumer. If these charges are never questioned, they will never be corrected. Therefore it is imperative to catch them as soon as possible. Some examples unauthorized billings are ring tones, games, jokes of the week etc., If your cell phone bill includes a high number of calls, it is essential to make sure you are paying for calls you made and not mistaken charges. Last but not least, if you have had any new services added to your bill, you need to make sure all charges appear on your bill as agreed.
5) If you struggled with high utility bills last winter, take steps to avoid that problem this year. These steps could include contacting your local utility company to become enrolled in a monthly averaging program. This will allow you to budget the same amount for utilities every month of the year.
6) Get a printout of your past twelve month transaction history from your mortgage company. Make sure all payments have been applied correctly and that no extraordinary finance charges or late fees have been added. Check to see that all other mortgage terms are documented as agreed. If you have any questions, contact your mortgage company as soon as possible for clarification.
Until later,
Alan
Showing posts with label Mortgages. Show all posts
Showing posts with label Mortgages. Show all posts
Sunday, September 23, 2007
Tuesday, February 27, 2007
Other Mortgage Structures
Hi,
Some of the remaining mortgage structures are 15, 20, 40 or 50 year mortgages. In addition some financial institutions are utilizing reverse mortgages. 15 and 20 year mortgages are generally used when people do not want the burden of a 30 year mortgage and want to realize the savings of a shorter term. Either one of these mortgages saves the borrower tens of thousands of dollars over the term of the loan. In some instances, certain institutions are not allowed to give over a 20 year mortgage due to credit guidelines. The trade-off in either one of these mortgages is that for a slightly higher payment the borrower realizes substantial savings. The interest rates on these loans are usually comparable to those of the 30 year fixed mortgage. 40 and 50 year mortgages evolved to allow high credit risks the ability to purchase property and in some cases, borrowers to purchase a more expensive home than they normally would be able to afford. These mortgages generally come with a variety of payment options including interest only payments. While this sounds attractive on the surface, the borrow is not building any equity in his or her home as long as the principal remains unpaid. Interest only mortgage payments are suitable for buyers with substantial but erratic incomes. It allows these buyers to remain current on their mortgage payments while paying down the principal whenever funds are available to them. Reverse mortgages are one of the newer financial instruments available to people. A reverse mortgage is that a financial institution agrees to buy an home for a specific amount of money and pay the owner in monthly installments. One reason for the evolution of this financial instrument is that people are living longer and want to remain in their homes. They find themselves without an adequate income, but with equity in their homes. The downside to reverse mortgages is that in most cases appreciation in the properties is lost. It is important for all borrowers to be aware of unusual additions to their mortgages. These include, but are not limited to, excessive points, finance charges and balloon payments. Tomorrow I'm going to talk about leases.
Until then,
Alan
Some of the remaining mortgage structures are 15, 20, 40 or 50 year mortgages. In addition some financial institutions are utilizing reverse mortgages. 15 and 20 year mortgages are generally used when people do not want the burden of a 30 year mortgage and want to realize the savings of a shorter term. Either one of these mortgages saves the borrower tens of thousands of dollars over the term of the loan. In some instances, certain institutions are not allowed to give over a 20 year mortgage due to credit guidelines. The trade-off in either one of these mortgages is that for a slightly higher payment the borrower realizes substantial savings. The interest rates on these loans are usually comparable to those of the 30 year fixed mortgage. 40 and 50 year mortgages evolved to allow high credit risks the ability to purchase property and in some cases, borrowers to purchase a more expensive home than they normally would be able to afford. These mortgages generally come with a variety of payment options including interest only payments. While this sounds attractive on the surface, the borrow is not building any equity in his or her home as long as the principal remains unpaid. Interest only mortgage payments are suitable for buyers with substantial but erratic incomes. It allows these buyers to remain current on their mortgage payments while paying down the principal whenever funds are available to them. Reverse mortgages are one of the newer financial instruments available to people. A reverse mortgage is that a financial institution agrees to buy an home for a specific amount of money and pay the owner in monthly installments. One reason for the evolution of this financial instrument is that people are living longer and want to remain in their homes. They find themselves without an adequate income, but with equity in their homes. The downside to reverse mortgages is that in most cases appreciation in the properties is lost. It is important for all borrowers to be aware of unusual additions to their mortgages. These include, but are not limited to, excessive points, finance charges and balloon payments. Tomorrow I'm going to talk about leases.
Until then,
Alan
Thursday, February 22, 2007
Mortgage Overview
Hi,
Different types of mortgages have grown enormously over the last ten years. The reasons for this vary from accommodating buyers to making more money for lenders. There has been quite a change since our grandparents' day when 90%+ of mortgages were one type: the 30 year fixed rate mortgage. In the the past, many of these were assumable mortgages, which meant that buyers generally did not have to seek financing on their own. They simply needed to qualify for the existing mortgage on the home they wanted to purchase. In today's mortgage market, the most important factor is for people to do their research and find the most economical form of financing to fit their needs. Generally, the cost of mortgages is directly related to the credit worthiness of the buyer. A mortgage is no different than any other loan in that obtaining funds from a primary lender (IE., banks, credit unions etc., ) is more economical than dealing with secondary lenders. The costs in getting a mortgage differ from lender to lender. These costs include, but are not limited to, appraisals, title insurance, and points.
1) Appraisals: Some lenders use drive by appraisals as a basis for lending money. Others require a full appraisal which costs the borrower more money. Some lenders (primarily second tier) advertise "free appraisals". Those lenders include the appraisal costs under other fees in the loan.
2) Most major title companies are fairly competitive in issuing title insurance.
3) Points: These are usually fees only charged by second tier lenders. The basic premise is that the credit risk associated with the borrower warrants a fee for obtaining a mortgage. These costs are generally rolled into the overall mortgage, so at the time of closing, the borrower doesn't analyze them. Certain circumstances justify the need to get a mortgage which includes points. Be aware that an extra $4,000.00-$5,000.00 in fees tacked onto a mortgage can end up costing many thousands of dollars in interest over the term of the loan.
I am going to discuss various mortgages and mortgage rate structures, including the adjustable rate mortgage, (ARM), 15 year mortgages, 30 year mortgages, reverse mortgages, and my personal favorite, 50 year mortgages. Tomorrow, I'll begin with ARM's.
Until then,
Alan
Different types of mortgages have grown enormously over the last ten years. The reasons for this vary from accommodating buyers to making more money for lenders. There has been quite a change since our grandparents' day when 90%+ of mortgages were one type: the 30 year fixed rate mortgage. In the the past, many of these were assumable mortgages, which meant that buyers generally did not have to seek financing on their own. They simply needed to qualify for the existing mortgage on the home they wanted to purchase. In today's mortgage market, the most important factor is for people to do their research and find the most economical form of financing to fit their needs. Generally, the cost of mortgages is directly related to the credit worthiness of the buyer. A mortgage is no different than any other loan in that obtaining funds from a primary lender (IE., banks, credit unions etc., ) is more economical than dealing with secondary lenders. The costs in getting a mortgage differ from lender to lender. These costs include, but are not limited to, appraisals, title insurance, and points.
1) Appraisals: Some lenders use drive by appraisals as a basis for lending money. Others require a full appraisal which costs the borrower more money. Some lenders (primarily second tier) advertise "free appraisals". Those lenders include the appraisal costs under other fees in the loan.
2) Most major title companies are fairly competitive in issuing title insurance.
3) Points: These are usually fees only charged by second tier lenders. The basic premise is that the credit risk associated with the borrower warrants a fee for obtaining a mortgage. These costs are generally rolled into the overall mortgage, so at the time of closing, the borrower doesn't analyze them. Certain circumstances justify the need to get a mortgage which includes points. Be aware that an extra $4,000.00-$5,000.00 in fees tacked onto a mortgage can end up costing many thousands of dollars in interest over the term of the loan.
I am going to discuss various mortgages and mortgage rate structures, including the adjustable rate mortgage, (ARM), 15 year mortgages, 30 year mortgages, reverse mortgages, and my personal favorite, 50 year mortgages. Tomorrow, I'll begin with ARM's.
Until then,
Alan
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