My Loans Consolidated

In the UK, Secretary of State for Children, Schools and Families, Ed Balls, is targeting to reduce the number of children who leave school financially illiterate. Children will be taught how to manage money, calculate rates of interest and plan a pension. The younger the children being taught, the better.

66% of adults in the UK are struggling to understand basic financial language and most of them are completely ignorant about investment opportunities. While personal debt has risen to a whooping 1.324 trillion pounds, there are still those who lose 10 billion pounds every year due to bad investment decisions.

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Popularity: 8% [?]

As home prices has dropped more than 32% since 2006, the real estate market is opening up tempting opportunities for Americans to own a home with the outstanding bargains available. Additionally, Obama’s stimulus package offers up a tax credit worth up to $8,000 for qualified first-time home buyers. Moreover, since the Federal Government bought up Fannie Mae and Freddie Mac mortgage-backed securities and long-term treasury bonds, mortgage interest rates have dropped to a record low below 5%. Currently, homeowners and first-time home buyers are looking to take advantage of these low rates, whether through buying a new home or refinancing. Below are a few tips on how to get a dirt-cheap mortgage loan.

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Popularity: 12% [?]

As the name already implies, a jumbo mortgage is simply a really huge mortgage. A jumbo mortgage is specifically a mortgage where the amount being financed is greater than the top amount that has been set by GSE (Government Sponsored Enterprise. The GSE is responsible in maintaining access to housing loans and also reducing the cost of these loans in order to give Americans a chance to own a home. This organization is comprised by financial companies nationwide.

One of their duties is to set a maximum guideline amount for a mortgage. Traditionally the maximum amount so far has been $600,000. If there are any mortgage loan that is greater than this amount, this loan is called a jumbo mortgage loan.

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Popularity: 10% [?]

There are several mortgage loan types to choose from to realize the American dream of home ownership. There are 3 types that are the major mortgage loan types. These are:

1. Conventional mortgage loans
This type of mortgage loans are the simplest to understand and also the most basic. What you do is simply borrow money as much as a certain percentage of the price of your home. The price of the home is calculated by subtracting any downpayment from the sale price of the house and fees. When taking out this loan you agree to pay it back through monthly installments for a certain number of years.

2. FHA and VA loans
These kind of mortgage loans are backed up by the Federal Housing Authority and the Veterans Administration. The goal of these two groups is to help more people realize their dream to own a house. What they do is provide mortgage lenders with mortgage insurance to cover the balance in case the homeowner has to default their loan. This sounds tempting to take out, especially because this type of mortgage loan usually have a lower down payment and lower interest rates. Also, it is usually easier to qualify for some of the parameters of the loan. With the FHA and VA back up, mortgage lenders do not have much control over some of these parameters because the FHA and VA set these parameters of the loan. They set how much of the minimum down payment is, how much interest can be charged, inspections of the property, and so on. You may find that many mortgage lenders do not have this deal with FHA or VA. Offering conventional mortgage loan types would give them more control.

3. Fixed rate mortgage loan
This type of loan has an unchanged interest rate that remains throughout the life of the loan. As housing market and interest rates are low these days, it is a smart decision to get a lower rate now and keep it forever by applying for a fixed rate mortgage loan instead of a variable-rate loan. By having a fixed-rate loan will also help you budget your finances more easily as you will always know how much your payment is going to be.

4. Adjustable mortgage loan
As it can be more difficult to qualify for a fixed-rate loan, people have no choice than to take out the adjustable mortgage loan type. This type of loan begins with one interest rate but it does not necessarily remain the same until the end of the loan life. In order to suit market conditions, the interest rate can be adjusted periodically depending on the events happening in the economy and on what the prime interest rate is.

5. Unconventional mortgage loan
There are many other types of loans that are new to the home lending industry. Some of these types are interest-only mortgage loans, balloon mortgages, and even reverse mortgage loan types.

As you know all the different types of mortgage loans, make sure you look into all your options to find the one that best fits you and your family’s condition.

Popularity: 13% [?]

Popularity: 12% [?]

In today’s society it is sometimes hard not to have a credit card at all. There may be times when you have emergencies and not the cash. Possessing a credit card does not necessarily mean to jeopardize your financial health. All you have to do is to know how to use them to your benefit and not to the benefit of your credit card lender. Here are 10 basic principles you need to understand to your credit card responsibly.

1. Remember that your credit limit is not your income.

People tend to feel like they’re flying when their banks offer them a high credit limit. You need to understand that the higher the credit limit, the bigger your responsibility to keep you and your family financially healthy. The credit limit is not your income. Eventually you have to pay back every penny you used with the interest.

2. Avoid Annual Fees

There are lifetime free credit cards that don’t charge you any annual fees. As much as possible, try avoiding paying these annual fees. You can either call your credit card lender and negotiate this or switch to a free annual fees credit card.

3. Avoid Priced Upgrades

Your credit card lender will offer you to upgrade your card to Platinum or Titanium all the time. Usually they charge you a one time fee for that or annual fee. When this happens, insist on free conversions.

4. Avoid Cash Withdrawals

Cash withdrawals are very expensive because they will charge you a transaction fee. Additionally, you will have to pay interest from the date that you withdraw cash, regardless of whether you pay in full or not.

5. Avoid Revolving Credit

Revolving credit means paying outstanding balance only in installments according to your convenience and therefore attracting interest on the balance after your partial payment.

6. Pay more than the Minimum Amount Due

Paying only the minimum amount will get you into an endless cycle of revolving credit. This will become worse and worse and you will have to pay for so much more than you originally bargained for.

7. Pay Your Dues Regularly

Never forget to make any payment no matter what. Even if your finances for one month stresses you out more than usual, try not to skip payments but pay at least the minimum due for that month. If you are out of town or for some reason will not be able to personally make payments, talk to your bank and arrange with them to make the payments automatically.

8. Time Your Shopping

By timing your major shopping 2-3 days before the monthly statement dates of your accounts, you can enjoy a maximum free credit period of 45-50 days.

9. Credit Card Loans

Credit card loans usually have a low fixed rate interest. If you use credit card loans to buy a car, it will cost you less than if you take out a normal automobile loan.

10. Co-Branded Cards

There are service providers that work together with banks to offer co-branded credit cards. Consider taking these offers especially if it is the service provider that you use frequently.

By keeping these 10 principles, you will make your credit cards work for your benefit only.

Popularity: 11% [?]

Until about 10 years ago, credit card companies in Indonesia were able to issue a new credit card in people’s names taken from a database and mailed it to them. Back in the 1960’s, it was legal in America to do so as well. College students have always been targets by credit companies and back in that time, they were able to issue new cards under a student’s name and mailed it to them.

Although this has been banned by the Congress as they began regulating the credit card industry, credit card companies are still aggressively chasing after new young customers like first year college students. Today, the average undergraduate students have a balance of over $3,000 in their credit card. This is the highest record since 1998.

Colleges and universities are not doing anything against this aggression either because credit card companies are generating income for them by renting space on their campuses to set up tables for their credit card offers. By offering coupons or CD’s or even cash for free, they entice students to apply for a credit card right there on the spot.

Getting these students to decide right there, right then to get a credit card is like a trap that these companies are setting up. This will prevent the students from taking their time to read the fine print on their offers. It will also prevent them from doing their due diligence and compare credit cards. Most of these kinds of credit cards come with annual fees that is charged to the new card even before the student makes their first purchase with it. Many charge only low interest rates for an introductory period. But as soon as this period is over, the rates are on the high end compared to other credit cards.

The Congress is being pushed to enact legislation that will make it more difficult for credit card companies to issue a credit card to anyone under the age of 21. They are already considering regulations to end the many deceptive ways that credit card companies are practicing to entice students. This is in addition to new regulations already passed by Federal Regulators and set to become effective in July 2010.

Popularity: 10% [?]

As the Federal Reserve constantly making moves to keep mortgage rates low, the rates remain low and are even falling. According to the weekly report by Freddie Mac, the 30-year old fixed rate mortgage is down to an average of 4.82% whereas last week it was 4.86%. Last year, the average 30-year mortgages was about 6%.

For the past 10 weeks, as reported by Freddie Mac’s chief economist Frank Nothaft, long-term fixed-rate mortgages has been stable below 5%. This was because the US Treasury and Federal Reserve have kepet the rates low through mortgage-backed security purchases which was $136 billion through April by the Treasury and $740 billion through mid-May by the Federal Reserve. Since March, the Federal Reserve has also purchased $115 billion in Treasury bonds.

Despite a drop in housing starts, the National Home Builders Association reported an increase in homebuilder’s confidence this month, May 2009. A continued rise in mortgage application due to refinancing activities has also been reported by the Mortgage Bankers Association. 74% of all mortgage applications are applications for refinancing.

Popularity: 9% [?]

If you are a parent with a child who is leaving for college you should know that they are going to have all kinds of freedom that they never had while still living at home. You are probably already aware that they are going to have new friends, a new community, new hobbies, new habits,… and a whole new world where they are their own decision maker for their lives. They will also have a brand new freedom in deciding their own destination financially.

College students will be bombarded with offers to get a student credit card which on one side can be very helpful in emergencies. But on the other side, if your child is not mature enough in their character and money management, they will start a brand new journey into a deep financial pit by over exercising their freedom to spend. If they have taken out student loans to finance their college education, with their credit card, their debt will be a snare that will take away their freedom and change it into a depressing future very soon.

Before your child leaves home for college, they need to have a solid basic understanding about managing their own finances. Explain to them the consequences of being in debt, including student loan debt and credit card debt and teach them to plan their monthly expenses using a budget spreadsheet. Encourage your child to be aware of the dangers of using credit cards while in school. Students may quickly see the advantages of having a credit card, but they may not be aware that the minute they start overuse it, they and their parents will have a hard time paying the bills in the end.

College students will be bombarded with credit card offers through their email, snail mail, campus displays, college magazine or newspaper or other publications, flyers all over in the bookstores, tables at athletic events… basically everywhere they go. Many fresh high-school graduates are still very immature in their money management and most likely completely financially illiterate. Credit card providers are preying on their immaturity and financial illiteracy by offering credit cards with very few restrictions and without their parents’ consent.

A report from the US General Accounting Office states that 64% of college students have at least one credit card. 42% of them have an average balance in their credit cards of $577. Moreover, 50% of all the college students in the US graduate with the average student loan debt of $19,400. With the burden of student loan debt, the credit card debt will get them even deeper into trouble.

Many college students are reckless when it comes to paying their credit card bills. They dream of having a six-figure income after graduation and think that $20,000 in debt is not that much to repay. But what they don’t know is that putting off payments on credit card bills will result in a worse financial situation than procrastinating about studying for midterm or endterm exams. Make sure you teach your child that by letting the bills pile up while they have no income, the interest on their credit card debt will build up and in the end they will have to pay a much larger bill that they bargained for in the beginning.

Even with a part-time job, a student can easily rack up too much debt from overspending and in the end are not able to keep up and pay the bills. With so many credit card offers constantly flashing in front of them, it is very easy to have 4 or 5 credit cards, or even 9 or 10 from major credit card providers, stores or gas companies. Teach your child that creditors will frequently call them about overdue payments. Very soon the joyful freedom they experienced in the beginning when they first left home for college will be gone, replaced by stress from being in debt. Make them understand that it is way much harder to get out of debt than getting into it.

If your child is in a situation where they really have to have a credit card, teach them these important points:

1. Tell them that there are credit cards with no annual fee and low interest rate. If they are offered their first credit card, tell them not to just take it, but show them to do some research first. Tell them to compare credit cards first.

2. They will be able to control their spending and debt better by only having one credit card and one limit. They will be able to avoid racking up too much debt and also keep track of how much they owe.

3. Teach them to only use the credit card for emergencies and not for shopping. They may need money for medical services, traveling home or other school expenses that their student loan can pay off later.

4. Teach them really to budget their money. If they do not know how to plan their monthly expenses, it is very possible that they will use their credit card for groceries, transportation and entertainment. Make sure they understand how important it is not to use their credit card for other than emergencies.

5. Tell them that all the big-ticket item purchases are for people who have a steady income and can afford to buy them without sacrificing other monthly expenses such as food or clothes. Tell them to wait until after college or save money to buy the item and not use their credit card.

If your child is already deep in debt, they can go and ask for help from credit counseling services where they can help your child with debt management programs.

Popularity: 10% [?]

The most common option that people would go for when considering to consolidate their loan is by taking out home equity loans. This option may seem to make sense because you may get a lower interest rate loan by using your home equity as collateral. This is even better if you are offered a fixed rate instead of a floating rate.

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Popularity: 14% [?]