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Fix your Finances in 7 Days-Day 3

Teena — Mon, 02 Nov 2009 06:22:52 +0000

Hope everyone had a wonderful weekend like me. Coming back to work, lets begin our third day ritual on fixing the finance. On the third day, we are going to look into the number of bank accounts we have and how to set up the necessary number of bank accounts.

Take time to analyze if the account you hold in a bank solves your purpose. If you have just a checking account, set up a Savings account and start putting some cash each month into it. An online high yielding savings account is the best option to earn some extra cash.

Make it compulsory to have just 2-3 bank accounts to solve your purpose and not more in order to make your finance simple.

Make use of setting up automatic payment options to pay your bills and debt installments on time. Ask the bank for their time to time offers and make use of them to your benefit.

Isn’t it simple? Yes thats all you need to do for today.

Why a 15 year Mortgage is better than 30 Year Mortgage?

Teena — Wed, 28 Oct 2009 13:06:50 +0000

The confusion of choosing between a 15 year mortgage and 30 year has been a common one prevailing among borrowers. Today i am going to throw some light on why a 15 year mortgage is better even if you have to increase your monthly installments and suffer for a few years.

When we have 30 years to pay a loan why should we take the trouble of paying it off in 15 years by increasing our monthly interest and suffering to make the ends meet every month? Well here is the reason.

One of the major advantages of opting for a 15 year mortgage is the lesser amount of total interest paid apart from its rate of interest being typically lower compared to the 30 year mortgage.Initially the money you pay is accounted only for the interest. As years go by the interest you pay on a monthly basis is allotted to compensate for the principal.

Imagine a person has taken a FRM for 15 years at the rate of 5% and another person for 30 years at the rate of 5.25% for a principal of $200,000, lets see what happens:

15 year 30 year

Monthly Payment $1581 $1104

Interest Paid $84,686 $197,587

Total $284,686 $397,587

With a 15 year mortgage you save about $112,901 which can be used for a constructive purpose.

Sell & Buy Properties Easily than Ever Before

Teena — Fri, 23 Oct 2009 02:00:51 +0000

Bored of searching for properties from the endless amount of listings on newspapers and websites? Fed up of not finding your dream home in spite of investing a lot of time and money? Then i have a solution for you.

Applying the concept of dating websites, Sellmestraight.com has come up with a fabulous idea where you can list your requirements and a list of homes and contact info of the sellers matching your criteria would appear. You can contact the seller and start the process of buying your dream home.

Doesn’t this sound simple? The system doesn’t not only benefit the buyers but also the sellers by saving them the cost of middle men. I think its a revolutionary idea that is going to save a lot of trouble as well as time for many.

If you have used this service, or if you are going to use it, tell us how you liked it.

7 Reasons to get a Home Energy Audit

Teena — Thu, 15 Oct 2009 19:03:54 +0000

If you are a regular reader of 8000credit, you must be familiar with the posts that tells you how to save money on travel, clothes, electricity bills, phone bills and television bills. Today there is an addition to this list. I am going to tell you how to save money on Energy and have a comfortable living while contributing to the ‘Go Green’ movement.

What will you gain out of home energy audit?

Save money on utility bills for all years to come
Learn to make your home feel comfortable during warm and cold seasons without having to spend a lot
Learn how your heating system works and why it doesn’t work sometimes
Learn to keep your home cool without the aid of air conditioning.
Less burden on earth
Spot the energy vampires of your house and learn to slay them effectively and save money in turn
Be sure about the safety of the air you breathe everyday

While this is just an attempt to creative an awareness about energy audit, more on this will be discussed in detail in upcoming posts.

What about Foreclosed Homes?

Teena — Sat, 10 Oct 2009 21:58:40 +0000

Are you fed up of adjusting to the rule of landlords? Longing for the freedom which you might get at your own place? Then why not buy a home for yourself? Oh I see, the problem is that you do have saved up a little for making that dream of yours come true but the skyrocketing rates of the properties are de-motivating you, isn’t it? Then why not go for a foreclosed property?

Although you might hear radio commercials like houses for $12000, such is not the case. The truth is that, you can get a 20-40% off on the actual value of the home. Still as its much more affordable than a new home, its a pretty good option to explore.

I recently read an article on AOL money about few tips on buying a foreclosed home and would like to share it with you all.

Check a Few Properties:

Foreclosure.com and realty trac both list thousands of property. They charge a fee but according the article, its worth paying the fee. Do some research on local economy and find a place where lot of properties are on foreclosure.

Avoid the Auctions:

When you go for a property that is on auction by a court, you might not get the opportunity to have complete inspection of the property. Wait for banks to put the property back in the market.

Compare Prices:

Do not buy a property on foreclosure without knowing about the prices of other properties in the same locality. Use zillow.com and other similar websites to compare prices

Make arrangement for Finances:

Before you shop around for the house make sure you have enough money arranged. Not all banks are comfortable lending for a distressed property. Hence you could go for a pre approved Mortgage.

Inspect Thoroughly:

Make a thorough inspection of the property. It is an important step while buying a foreclosed property. This way you can be sure of the amount you have to allot on repairs. Make sure the property is a value for your money.

How to Sell your House in a Week?

Teena — Sun, 27 Sep 2009 20:20:34 +0000

Is It possible to sell a property in such a short span of time? Well It is, Use the Ebay technique. If it can work for books, tickets, cameras and clothes, it surely can work for your house.

Start by displaying ads on local news papers, internet and sign boards for an open day.

Conduct 2 open days and ask the visitors to bid their amount in a piece of paper.

Next begin to call the bidders and ask if they are ready to raise their bid until you are left with the single bidder.

Now what? Sell your house and enjoy the profit.

Isn’t that simple? In this fast paced life, why should selling house cannot be done swiftly? How did you sell your house in a week? Give us more tips.

Top 5 Purchases to Avoid to Keep Credit Card Companies Happy

Teena — Mon, 03 Aug 2009 00:57:08 +0000

Someone had said that if you want to know about the righteousness of your actions, all you have to do is ask if you would mind if the whole world knew about it! Well all of us certainly do not apply this rule to the ‘decision making’ part of our life. Why not apply it to personal finance and see of what gain it could be?

We all know that using credit card could be a tricky business. Every purchase you make is being tracked by the bankers and accordingly your credit score and cash limit is adjusted. So i suggest you to avoid using credit cards for 5 unique situations by which you could avoid lowering your credit score or credit limit.

1)If you are prone to get attracted to over speeding or parking your vehicles at wrong places, then you might better avoid using credit card for this , i.e. if you have decided to continue with this habit. As people who pay traffic tickets would be considered as a lower category borrower who is likely to be a defaulter.

2) Credit card companies think that saving money by retreading tires than replacing them, your financial condition has deteriorated. Hence your benefits might be altered. Can you believe it? In a Democratic country we do not even have the right to be a little more cautious about saving money.

3) I have not heard anything more funnier than American Express Curtailing the benefits for customers who do shopping at Wal mart, or any such bargain shopping outlet. It is believed that the sudden concern for money might be because of the fact that a job loss might be around the corner.

4) If you are consulting a relationship counselor,the credit card company thinks that the possibility of divorce might even leave you bankrupt as a lot of expense is involved in the process of divorce.

5) DO NOT BUY PORN with credit card. Adult entertainment is no more considered entertainment but an escape from real world. Hence they consider that the customer might even want to escape from his financial obligations. I wouldn’t be surprised if in coming years going to theme parks and watching movies are put under the same category.

Now don’t think that some employee is tracking down all of your activities, the computer is programmed to detect and keep a record of such purchases. Hence it would be better if you just paid cash for such purchases as you will have to give up on many benefits that might even include paying more mortgage interest.

There is more to follow in this regard in future. Meanwhile what are your opinions?

Home Equity & ATM Machines

Teena — Sun, 26 Jul 2009 19:58:08 +0000

In the past, many people have used their homes as ATM machines. homes were being utilized as money spinners and people were inclined to improve their homes to increase their value. As the ongoing housing market disaster showed, a home should be treated as something which is an integral part of your existence rather than as a money spinner.

The housing market has started to steadily find its feet and this may see people beginning to utilize their home equity as they did before. Seeing this change in fortune for the housing market, banks are offering second mortgage products such as the home equity line of credit (HELOC) and home improvement specialists have resurfaced with bargain basement charges. From previous experience, the right decision may be to enhance your home equity rather than go for home improvement.

Do not get entrapped by home improvement
If you want to achieve financial stability, then treating your home like an ATM machine may not help you. You do not have to create a lot of fuss to attain your dream of purchasing a home. Nothing more than a down payment and a home mortgage is needed to be able to realize your dream. Depending upon the ups and downs in the housing market, your property will gain or loss home equity.

Banks have over the years, helped consumers to utilize their home equity if they are willing to pay them interest for doing so. You will have the chance to avail a second mortgage by taking a home equity loan or a HELOC. So, allow your home equity to build up sufficiently before thinking about home improvement.

Risks related with unreasonable home equity tapping
You have to be very careful while attempting to tap your home equity as the market can be very unpredictable. No matter whether or not you are tapping your home equity for making your home more valuable, you may have to bear the brunt of a sudden market turnaround similar to the recent crisis. Foreclosures were a major feature of the ongoing housing market disaster as people went for ill-advised tapping of the home equity.

Anybody who has learnt a lesson from the recent market disintegration will not try to tap their home equity without building their equity up to an extent that can be considered safe. This will allow them to stay afloat in case another crisis hits the market. Even if they want to improve their homes, they should do so by utilizing the savings they have assembled thus far. A fair money budgeting is also necessary and people should understand the financial limitations they have and spend accordingly.

A shelter is among the basic needs of a human being without which a human being will not be able to survive. Therefore, a home should be given its due importance. Certainly, a home is an investment opportunity, but unlike stocks or bonds, spending of which will not create a major impact on your financial stability, the equity associated with your home will decide whether or not you have a shelter. Many homeowners did not care for their home equity during the housing market boom and paid the price. So, play safe when it comes to your home.

Negotiating Good Mortgage Deal Through Internet?

Teena — Sun, 21 Jun 2009 22:19:04 +0000

I have realized that financial decisions are complicated! If you are planning to look up information on mortgage on the net, it’s not as simple as purchasing books online which have user reviews about how many of them bought the book, loved the book or gifted it to someone.

You would see consumers spending time and efforts more time bargaining for a discount as low as $5 on their grocery shopping as compared to seeking information on mortgage or analyzing whether the timing is correct to purchase a house.

If it’s refinancing that’s on your mind (and concerns pertaining to the drop in your credit scores due to late payment of bills) or if you are buying your first home ever seeking to take advantage of really low rates of the past (even though they are fast rising), then by all means it’s the most daunting task for consumers today.

I see borrowers having hitches even in a time when refinancing has picked up lightening speed. Not only that but I see homeowners paying sky high costs of closing existing mortgages, and ignorant of the rates that are applicable which can be fixed or adjustable. If this is not enough, I have seen homeowners being uncertain as to how and why do the points matter.

If you too felt helpless then there’s hope as a new website called SmartHippo.com offers clear and forthright advice. CEO of SmartHippo.com, an online mortgage shopping site, George Favvas opines that mortgage overpowers borrowers.

Explanation on mortgages is very complex, full of with jargons, and do not have a transcriber who could educate the customers about the esoteric but critical information about the deal.

The SmartHippo website, which is in the beta stage of testing, comprises a new feature that enables borrowers to ask questions from loan officers directly. Initially this looks like an advertising and promoting effort, however, the identity of the officers and their employers is visible to the borrower. If you think this was good then there is something much better, borrowers can now rate these officers as good bad or phoney! Zillow, a real estate online firm has a user centric question and answer feature.

I posted a query on SmartHippo on the type of mortgage fee levied and frankly got a detailed explanation from the loan officer that was excellent.

I wrote a query asking what could be expected in terms of mortgage fees. The loan officer who answered my query advised me to go mortgage hunting and bargain on the mortgage fee with possible loaners. Of course, the material had promotional information about the lending firm towards the end of the reply but it was transparent, as the lender had listed his firm’s name. The portal not only was user friendly and allowed multiple answers from loaners for a query. I feel that different opinions do give a user a chance to measure the available options.

I don’t think that online sites like SmartHippo offer any sort of protection for borrowers who could opt for bad mortgage deals, but they definitely do give guidance to borrowers to make judicious deals. Well, if you have ever visited an online mortgage site then you can let us know where you source information on mortgages online. What helps you to decide whether the information is trustworthy? Which site is filled with complex terminologies and which has simple and concise explanations? Do share your experiences on mortgage with me.

FREDDIE MAC’S AGENDA ON AFFORDABLE HOMES

Teena — Tue, 09 Jun 2009 19:08:30 +0000

President Obama’s program for making homes affordable got a further thrust with Freddie Mac’s last week announcement of changes aplenty in its offer for refinancing.

Mortgage plan which is known as Freddie Mac relief refinance has been contrived to aid home owners who are currently paying out on their the mortgages but would gain by refinancing the mortgage under plans that would encourage their long term ownership.

Borrowers could now refinance their Freddie Mac guaranteed/owned mortgage with lenders who are affiliated to Freddie Mac. Borrowers previously had no choice other than using the services of the lender who they approached initially. In a move to maximize their reach among borrowers, Freddie Mac has increased the sum of closing cost which could be incorporated into the refinanced mortgage.

Freddie Mac, Executive Vice President of Don Bisenius said that this was a move to respond to the desire of customers who wanted a variety of options for refinancing. He further went on to say that it was an added benefit as this gives borrowers more higher flexibility to finance their closing costs and by expanding the program to have more reach.

Mr. Mac is dedicated to bring the benefit of president Obama’s making home affordable program to reach out to a large number of borrowers. Homeowners could also choose to retain their current lenders to refinance mortgage following which the lender need not to underwrite the borrowers again. Borrowers could also choose to switch to another lender affiliated to Freddie Mac; however mortgage would have to be underwritten again.

Borrowers will now be able to roll into their refinanced mortgage, amounts less than 4% on the refinanced amount or $5,000 of closing cost, prepaid/escrows and cost of financing. A set post settlement delivery fee up to 2% would be levied on the Relief Refinance Program.

To know more about this program and to determine if Freddie Mac owns their mortgage borrowers can visit: https://www.freddiemac.com/corporate/ and fill up the online form.

Freddie Mac was founded by the Congress in the year 1970 with the vision to provide affordability, stability and liquidity to residential mortgage markets in the U.S.’s. This includes support to communities nationwide by making mortgage capital available to the lenders. In the past 3 decades Freddie Mac has enabled 1 in 6 homeowners to purchase homes and made homes possible for more than 5 million tenants.