Mortgage & Credit Diva

How to Find the Best Mortgage Loan

2010-08-18T03:05:00.000-07:00

Guest post by Sharon Smith

Planning a home-buying venture? The right kind of finance is of utmost importance as it helps you get the best deal. The most crucial task of a would-be home owner is to shop for a suitable mortgage loan.

Shopping for a good mortgage loan is not a very time consuming process. All you need to know is where to search for and what best suits your needs.

Remember these important tips before going for a mortgage loan:

1. If you are a first time buyer, you need to dedicate some time in studying the various loan options that you may lay your hands on. Compare the various aspects such as interest rates, terms, closing costs and conditions for each loan. This not only helps you in getting the best deal, but also helps you gather knowledge about the loan before you apply.

2. Before applying for a mortgage loan, order a free credit report. You can get your annual credit report from all three of the credit agencies: Equifax, Experian and TransUnion. Your present credit score would help you in determining whether it is the right time to apply for a mortgage loan or not.

If your credit report is on the negative side, you might have to pay a higher rate of interest. Therefore, it is always advisable that you apply for loans, be it a mortgage or a debt consolidation loan only when you have a high credit score and a positive credit history.

3. Make sure, you read about all the fees, cost, terms and conditions involved with the mortgage loan before you sign on the dotted line of your agreement with the lender.

Your eligibility to apply for a mortgage loan is based on your total income. The monthly mortgage payments are however, based on your net income. Therefore, take an honest look at your finances before you apply for a mortgage loan.

How to Find Investors for Starting a Business

2010-07-14T10:02:00.000-07:00

Finding an investor for your business provides you with the seed money you need to start the business. In return for investing in your business, most investors receive a percentage of the sales or company stock. Finding an investor for your business may be harder than it sounds, but there are some ways to go about locating and convincing investors to invest in your business.

Write a business plan. Before looking for investors write a business plan. A business plan is a written guide of your business including the purpose, the startup costs, expenses, sales forecasts and other information to gain the interest of investors.

Make a list of possible investors. Add people you know to the list who have money to invest and may be willing to take a risk with your business startup. Friends, family members and business owners of related businesses are the best places to start. For example, if your business involves a computer software product, then other software companies may be interested in investing in your company.

Locate business investors on investor websites. Dozens of investor websites exist, where business startups can search for investors (see resources), which may be called angel networks. If you do not have someone you know personally that can invest in your business startup idea, you can typically find possible investors through these networks.

Develop an investor presentation. Compile a speech or pitch to present the business idea for convincing investors to invest in your startup. Include information in your presentation that includes what the product or service offering for the business is, the costs involved in starting the business, what kind of demand there is in the market for the item and how much the company stands to make in one year, three years and so on.

Contact the possible investors. Schedule a time to meet with and make your presentation to each investor on your list.

Present your business idea to investors. At the meeting with the investor, pitch your business by giving your presentation and providing a copy of your business plan to the investor. Answer any questions the investor has about the startup and tell the investor what is in for them such as shares of the company stock or a percentage of the sales.

Sign an investor agreement. Once you find an investor, put your agreement in writing. You can find general agreement templates online or work with a business attorney to help you draw up a legally binding contract for both you as the business owner and the investor to sign.

http://money.cnn.com/2007/05/03/magazines/fsb/raising.money.fsb/
http://www.score.org/best_ways_to_finance.html
http://www.entrepreneur.com/money/finance/index.html
Lending Club: Find Investors for a Startup Business
https://www.lendingclub.com/public/about-us.action
http://www.gobignetwork.com/
http://www.angel-investor-network.com/

How to Look Up a Tax Lien

2010-07-08T05:39:00.000-07:00

According to Experian, one of the credit reporting agencies, a tax lien is a claim by a taxing authority on an asset owned by someone who owes back taxes. For a business, a tax lien may be on a commercial property the business owns, possibly the property where the business operates. The two major taxing authorities include the Internal Revenue Service (IRS) for business back taxes the business owes to the federal government and the county where the property is located. Whether it is a federal or county tax lien, the lien shows on the property records, which the county clerk’s office where the property is records on the public records. Whether you’re looking up a tax lien on your own property to pay it off or you’re an investor looking to invest in tax liens, your computer is the main tool you need to look up a tax line.

Find the county website. Use the National Association of Counties website to determine if the county where the property is located has a website.

Search the county website. Once you determine if the county is online, go to the county website and conduct a tax lien search. You can typically search for liens on the property using the parcel number, address or owner of the property. If the property is going to auction, the county websites also list upcoming tax lien sales and the procedures for paying off your own lien or buying tax lines.

Review the tax lien or tax lien lists. Once you pull up the tax lien for the property you’re interested in, the website provides various information on the lien. Typically, it lists the amount, date and payoff instructions for the tax lien.

Tips
If the county where the property is located does not have a website or does not allow online searches for tax lines, you have to go in person to look up the tax lien. Look up the address for the county clerk’s office, note the hours of operation and then go in person to obtain the tax lien information.

Some counties provide tax lien information by phone, but if you want a copy of the tax lien information, there is usually a charge.

Some websites, such as www.taxsalelists.com sell tax lien lists, which is another way to look up tax liens. Before you pay a third party to obtain a tax lien list, conduct some research on the business with organizations such as the Better Business Bureau, to make sure that the website is legitimate.

If it is a business IRS tax lien, you can contact the Centralized Lien Unit of the
IRS by calling 1-800-913-6050.

Debt Consolidation Tips

2010-06-30T12:50:00.000-07:00

Debt consolidation consists of rolling all of your debt into one loan or line of credit. This consolidation allows you to make one monthly payment at one fixed interest rate. Usually the interest rate on the new debt is lower than the original loans, which creates a long-term savings. Following some debt consolidation tips and guidelines can help ensure that your debt consolidation is a successful venture.

Get a Big Picture View of Your Debt

In order to understand the debt you’re in, make a thorough list of all the debts you have and want to consolidate. Include the interest rates for each debt and the balance you owe. Creating a written list allows you to see where your spending weaknesses are and account for every dollar of debt. The written list lays out a road map for you to determine which debts should be tackled first, allowing you to put together a plan of attack on consolidating and getting rid of high interest debt first and then working your way down the list.

Select the Right Company

Although you can consolidate on your own, a debt consolidation company is an option for some who cannot manage consolidation alone. Shop around for a company that is well established and highly experienced. Debt consolidation companies charge fees to help you create a written plan on how to consolidate debt and then to help you implement the plan. Make sure that the fees are not exorbitant. Ask the company for references and then contact the references, if possible. By law, debt consolidation companies have to provide you with a written agreement that spells out your working relationship, including fees.

Choose the Best Plan for You

Several debt consolidation options exist. Credit card counseling can help you to lower your interest rates on credit cards in order to pay off the balances more quickly. Credit card consolidation places all of your debt on one lower interest rate credit card. A debt management plan involves you depositing a sum of money with a debt consolidation company each month. The company uses that money to pay off your debts on a schedule that they have negotiated with your creditors. A consolidation loan is a personal loan to pay off all of your creditors, leaving you with just one payment each month.

Be Patient

The debt did not accumulate overnight and it is not going to disappear overnight. Once you have a plan in plan, stick with the program until the debt is completely paid. Keep track of the total and watch the amount come down each month. Each payment brings you closer to financial freedom.

Make Payments on Time

The debt consolidation process is a prime opportunity to train yourself to be wiser with money than you were previously. Put your monthly budget on paper, so you can see income and expenses. Make every effort to pay your bills on time, every month. Check with your former creditors to ensure payments from the debt consolidation company are on time. If the debt consolidation company is not paying on time, it can hurt your credit further.

Stop Spending

Many think that debt consolidation solves financial problems. It does not. It helps a debtor pay off outstanding debts at a specific time in his/her life. Debt consolidation does not account for continual spending after the process has begun. Some programs offer financial counseling to help you build appropriate spending habits, but the overall goal of debt consolidation is to get you out from under the current debt. Do not use this opportunity to go out and spend more. Instead, look at the habits that caused your debt and train yourself to avoid those pitfalls.

Employment Credit Checks

2010-06-29T06:27:00.000-07:00

Most people know that when they apply for a loan or credit, the lender or creditor is going to check their credit. What may not be common knowledge is that some employers also run a credit check as part of the employment process. When a potential employer runs a credit check on a potential employee, it is typically called an employment credit check.

Types

A potential employer has the right to pull a credit report or to run a credit check on an employee before offering employment. An employer also has the right to run a credit check before deciding to promote the employee, give the employee a raise or deciding whether to continue employment of the employee. According to the Employee Issues website, an employer has the right to run a credit check because there are currently no laws that exist that prohibit discrimination based on the status of the credit report.

Identification

The employer requests credit information from the three credit agencies: TransUnion, Equifax and Experian. An employer is typically privy to pulling a full credit report on an employee, which can include personal information and information pertaining to credit and debt accounts held by the employee. Information the employer can obtain from a credit report may include the year the employee was born; current and previous addresses; marital status and name of spouse; names of current and former employers; bankruptcy, liens and judgments; child support and alimony obligations; payment history on any account listed; a credit score; and other companies that have checked the credit report.

Permission

The Fair Credit Reporting Act does govern how employers can obtain a credit report on employees. An employer has to inform an employee that a credit check is going to be run and the employer has to obtain written permission from the employee. If an employee does not provide consent to the employer to check credit, the employer won’t be allowed to run a credit check, but this may also mean the potential employee does not get the job and an existing employee may not get to keep their job.

Use

The Fair Credit Reporting Act also requires employers to provide the employee with disclosures before taking action based on the credit report. For example, if the employer intends on letting an employee go, the employer first has to hand over a "pre-adverse action disclosure," which includes a copy of the employee’s credit report and a written summary of the employee’s rights under the Fair Credit Reporting Act. After the employer takes adverse action against an employee, the employer then has to provide the employee with an "adverse action notice," provide the name and complete contact information of the credit agency the employer received the credit report from, the employer cannot disclose the credit check results to anyone else and is not allowed to place the information in an employee’s personnel record.

State Laws

In the wake of the downturn in the economy that began in 2007 and the high unemployment rate, many consumers were not able to pay their bills, which left many of these employees or potential employees with negative credit reports. Some states have proposed bills that prohibit discrimination on employees based on the findings of a credit check by an employer.

Freelance writer at ZSB (Las Vegas, NV)

2010-06-24T05:43:00.000-07:00

Freelance writer at ZSB (Las Vegas, NV)
This company hires writers and then does not pay them for completed work. DO NOT do business with them and expect to get paid! They have owed me $400 for months and keep promising to pay me, but never do.

Elastic Credit with New Credit Card Laws

2010-06-23T11:16:00.000-07:00

Credit cards have long been a source for quick and easy cash when needed—making this type of credit very elastic. Credit cards are getting a facelift with the new credit card laws, which makes credit card purchases and cash advances more elastic than ever before.

One way that credit cards are becoming more appealing to cardholders is due to the new credit card laws passed by the Federal Reserve. The new credit card laws help to protect consumers from being charged high late and penalty fees by card issuers. The changes are due to take effect on August 22, 2010 and are the closing act to the Credit Card Accountability and Disclosure Act introduced by Congress in 2009.

New Credit Card Fee Limits

Credit card issuers can no longer set and charge their own rate fees. The new credit card laws limit late payment fees to a maximum amount of $25. The only exception is if a cardholder has made a late payment in the previous seven months, then the late fee limit does not apply. The penalties charged by the card issuer also have to be proportionate to the minimum payment due. For example, if the minimum payment due is $15 and the cardholder makes a late payment, the card issuer can only charge a late fee of $15. Cardholders who have credit cards that they do not use also do not have to worry about being charged fees for inactivity because inactivity fees are eliminated with the new law.

Mortgage Elimination Scams to Avoid

2010-05-12T03:12:00.000-07:00

For those struggling to make mortgage payments, there are a variety of assistance and counseling options from the government and from private organizations. However, homeowners should beware of any company promising “mortgage elimination.” The U.S. Secretary of the Treasury and the Office of the Comptroller of the Currency recognize a number of companies that try to suck in unsuspecting homeowners, defraud them of their savings or even the title of their home, and possibly even leave them homeless. Any company that advertises to help a homeowner eliminate a mortgage—for a significant fee—is almost certainly running a scam.

Lender and Signature

In some cases, the mortgage elimination company will present information to the effect that a mortgage company is profiting from the homeowner’s signature on the loan contract by selling it to secondary mortgage companies. The company will claim that this is fraudulent activity on the part of the lender (despite the fact that it is legal) and that it can assist the homeowner in eliminating the mortgage payment altogether, after the homeowner turns over a fee. The reality is that if fraud is occurring, the homeowner should consult a real estate attorney to see if legal action can be taken. In the unlikely event that the mortgage elimination company can actually do something, the homeowner will end up paying more money in fees to the company and may possibly risk losing his home. A real estate attorney will be able to address the issue effectively and, more importantly, legally.

Currency Value

Some mortgage elimination companies present the idea that a lender cannot legally offer the mortgage due to complex, and often confusing, reasons about the value of the U.S. currency and the money that the Federal Reserve must “create” (through printing) to keep the economy from failing. To put it simply, the mortgage elimination company will claim that because the value of the U.S. dollar is so debased through the Fed’s activities, the lender cannot require the homeowner to pay off the full loan amount, since the loan amount is based on dollars that have no value. The mortgage elimination company will purport to act on behalf of the homeowner by having the homeowner sign a power of attorney and possibly even sign his or her title over to the company, in addition to paying considerable up-front fees. By the time the homeowner realizes what's going on, the mortgage elimination company owns the property title and the homeowner may lose the property.

Phantom Money from Banks

Similar to the scam regarding currency value, one scam claims that the bank cannot issue a loan because the money does not actually exist. The homeowner will pay the mortgage elimination company an upfront fee (and in some cases, the homeowner will also be required to sign a power of attorney giving the title to the company), and the mortgage elimination company will provide the homeowner with a fraudulent loan release. The homeowner files this loan release form with the county, giving the impression that the homeowner has actually paid off the loan and allowing the homeowner to apply for a new loan. After applying for a new loan, the homeowner will continue the process again and again, until the homeowner is embroiled in multiple default loans. As far as the lenders are concerned, of course, the homeowner owes on the loans, but by this time the mortgage elimination company will have proven that it has no legal case, but it certainly has the homeowner’s fees and possibly even his title.

How to Dig Your Way Out of Credit Card Debt

2010-05-11T14:08:00.000-07:00

Credit card debt can leave you with sinking feeling, stressful days and sleepless nights. Rather than allow the debt to simply take you down with it, take the steps you can now to dig yourself out of debt.

Consolidate the Debt

Rather than have a myriad of credit cards with multiple balances, consolidate all your outstanding credit cards into one debt. You can obtain a formal consolidation loan or simply consolidate on your own. Consolidation loans typically offer a lower overall interest rate and one-payment option than paying each credit card company individually.

Use a Home Equity Loan
If you have an existing home equity loan, these are ideal for creating your own consolidation loan. Not only do home equity loans tend to have lower interest rates than credit cards, but the interest you pay on a home equity loan also tends to be tax deductible.

As you consolidate your debt, you’ll feel more in control of your finances. With manageable monthly payments, you can now focus on getting rid of the debt that you have consolidated. You’ll sleep better at night and your finances will be better off in the long run.

Poor Credit? How to Refinance Your Home Anyway

2010-04-28T07:40:00.000-07:00

Refinancing your home can lessen the burden of high mortgage payments, release cash for valuable home improvement projects, or be used to alleviate debt. For the borrower with poor credit, a simple refinance can be problematic. Mortgage lenders are understandably hesitant to give mortgages to people with bad credit. Because of this, there are now specified lenders and brokers that work with those with bad credit. Refinancing with poor credit is now possible, but it may require a bit of legwork.

Step 1

Determine amount of equity in the home. When refinancing, the lower the borrower’s score, the lender likes to see more equity is built up in the home, which may require you to make 20-25 percent payment to build equity in the home and assure the lender that you are less likely to default on the loan.

Step 2

Start with your current mortgage lender. You already have a relationship with your existing lender, so the lender may be willing to work with you in order to keep your business. This is also a great place to get your first rate quote. From here, you can compare other loan offers until you make your selection. Do not be discouraged if the existing lender is unwilling to work with you. Keep looking for lenders that are willing to work with you.

Step 3

Visit online mortgage brokers (see resources). Here you can get compare mortgage rates and find brokers in your area. Visit the offices or email the local mortgage brokers that work with those with poor credit.

Step 4

Choose the lender. Compare the interest rates and types of loans and determine which will fit your situation the best. For example, if you will not remain in the home long, an adjustable rate mortgage will allow you to start with lower payments. But keep in mind that you need to stay put long enough to recoup any fees that were paid for the refinance itself.

Step 5

Apply for the refinance mortgage loan. If you are refinancing through a different lender than your original mortgage loan, you will probably have to provide all of the documentation you provided for the original loan. Although your current lender may not provide the best offer, the lender has all of your information on file, so the time and resources necessary for processing your application will be reduced.

Step 6

Complete the loan. Completion of a refinance loan is simpler than the closing on a home purchase because there are not any other people to deal with. You home will most likely require a new appraisal. Check your private mortgage insurance at this point. If your loan-to-value ratio is less than 80 percent, you will no longer be required to pay this. After the appraisal is complete, your signature will be required on many pages and your refinance loan will be complete.

Warnings

* Your credit score will impact your refinance rate. The interest rate on your refinance loan will be higher if your score is lower than 740. Even small improvements to your score can make a difference in the rate.

* A bad credit refinance can also carry higher closing fees.

For Sale by Owner (FSBO)

2010-04-27T15:22:00.000-07:00

In a 2006 National Association of Realtors survey, only 7% of sellers sell their homes without a licensed broker. Owners attempting to sell their own homes, also known as FSBOs (For Sale by Owners), will have many tasks to accomplish with which they may not be familiar. The valuation of the property is just the beginning; timing, marketing, preparing the home, negotiations, and so many other things are hurdles the owner must research and tackle to be successful.

Benefits

First and foremost, when an owner sells the home the realtor commission fees are nonexistent. These fees can add up to 6% of the selling price of the home; this amounts to $12,000 on a $200,000 house. Another benefit is the vested interest the owner has in the sale of the home. It is often the case that realtors work to secure a quick sell without so much worry about the price or conditions on the contract. The owner can set their own schedule for showings and can openly negotiate with a potential buyer without the hassle of sending paperwork back and forth.

Multiple Listing Service

The Multiple Listing Service (MLS) is a national marketing tool that all licensed agents use to share listings and match buyers. Previously, sellers not using an agent had no access to the MLS. Now FSBOs can list their home on the MLS using one of many websites that offer this fee-based service.

Advertising

There are many new real estate services online that cater specifically to the FSBO market. For a reasonable fee, the property is posted online with photographs and virtual tours. Zillow.com, ForSalebyOwner.com, and homesbyowner.com are just a few such sites. Along with this, open houses, full-color brochures, ads in newspapers and real estate circulars, and personal networking are all advertising tools that can lead to the sale of a home.

Challenges

The owner that hopes to sell a home without the help of a broker will face more work than he or she might think. In order to price the home correctly, the owner must research recent sales and home prices in the area. The owner must also know the state laws and regulations of fair housing, home disclosure, sales contracts, and sales negotiations. Financing can also be a confusing category, so the owner should know how to tackle this subject with a buyer.

Warnings

Buyer’s agents are often reluctant to work with owners trying to sell their own homes, even if the home is listed in the MLS. Also, buyers tend to submit lower offers to FSBO homes because they know the owner is saving money on sales commissions. The National Association of Realtors reports that the majority of owners attempting to sell their own home eventually hire a realtor, mostly because buyers typically use agents.

How to Get Your First Home Loan with Poor Credit

2010-04-15T07:49:00.000-07:00

Buying a home for the first time can be exciting, but if you have poor credit, it can also be a challenge. One of the main factors that a mortgage lender considers when approving or denying an applicant for a loan is credit history. The good news is that if you have poor credit, there are subprime lenders that are willing to loan money to first-time home buyers with poor credit.

Find a subprime lender for a poor-credit loan.

Credit: alaska home image by Silke Wolff from Fotolia.com

Step 1

Find a subprime lender. A subprime lender is a lender that offers loans to those who do not have good credit. These are not your traditional banks and lenders so the fastest and easiest way to find a subprime lender is to contact a mortgage broker or search your local phone for mortgage lenders that specialize in subprime loans.

Step 2

Submit a mortgage application. Once you find a subprime lender, the next step is to apply for the mortgage. Even if you do not have a property chosen yet, you can submit a mortgage application and the subprime lender will approve you or deny you based on your personal financial information.

Step 3

Submit supporting documentation. You'll need to submit copies of your last two year's tax returns, the last two month's paycheck stubs and copies of the last two month's bank and brokerage account statements. These documents along with the information you supply on the mortgage application are used by the lender to qualify you for the mortgage.

Indemnity Insurance Plan Information

2010-04-14T07:47:00.000-07:00

Deciding on which type of health insurance coverage to carry for you and your family can be challenge. An indemnity insurance plan, also known as a reimbursement plan, is the most common type of health insurance plan offered. Understanding the ins and outs of this type of plan can help you decide whether it's the right type of health insurance plan for you.

Significance

The purpose of an indemnity insurance plan is to allow individuals to choose their own health-care providers and to be reimbursed medical expenses no matter who they choose as a health-care provider.

Limitations

While indemnity insurance plans do reimburse for medical expenses, reimbursement amounts vary. While the doctors and hospitals you can utilize are not restricted, how much of the medical expense your insurance policy covers does have limitations. Reimbursement amounts may be limited under an indemnity plan, which means you may have some out-of-pocket expenses.

Benefits

While other types of insurance policies limit doctors and hospitals to providers on the health insurance carrier's list, an indemnity insurance plan does not have this type of a limitation. As opposed to a PPO, where you are responsible for a certain amount of your medical care depending on whether you see an "in-network" or "out-of-network" provider, and you have a deductible to meet, this is not the case with an indemnity plan. Whatever doctor you see, there is not a difference in cost to you. As opposed to an HMO plan, where you have to see a doctor or visit a hospital on the plan's list of carriers, an indemnity plan removes this factor completely. So, another primary benefit of this type of plan is that it is very flexible and reduces your out-of-pocket expenses.

Actual Charges

Under an indemnity insurance plan that pays actual charges, you will receive a reimbursement for the cost of your medical expenses. An actual charges indemnity insurance plan gives you back the cost no matter how much the expense is.

Percentage of Actual Charges

If an indemnity insurance plan offers reimbursement as a percentage of actual charges, then you will receive a set percentage of the actual medical expenses. Again, the reimbursement is regardless of how much the medical services cost. The most common percentage of actual charges reimbursement is 80 percent. For example, is a medical procedure costs $1,000, the indemnity insurance plan carrier will reimburse you $800 and you are responsible for the difference of 20 percent or $200. This percentage can vary by policy, so check with your insurance provider for specifics on what your percentage of reimbursement is.

Indemnity Reimbursement

With an indemnity reimbursement schedule, the insurance company pays a certain amount of the medical expenses per day and for a certain number of days. With an indemnity reimbursement schedule, the reimbursement amount is not determined by the cost of the medical care, but your reimbursement amount also cannot and will not exceed your expenses.

How to Learn Real Estate Law

2010-04-13T06:53:00.000-07:00

Real estate law involves dealing with both commercial and residential property, finalizing transactions and finding potential issues, looking into property regulations and boundaries. You can learn real estate law on your own.

Step 1

Research online law libraries. They provide a wealth of information, explaining the facets of law and providing further reading resources for you to look into.

Step 2

Take note of further resources that directly apply to the category of real estate law you’re looking into. If you are researching landlord-tenant law, for example, take note of all the resources you find on that subject. Studying all the information you can find will prove to be advantageous when you apply it in a real-life situation.

Step 3

Visit your state’s real estate commission. You’ll gain knowledge about real estate laws, regulations and requirements for licensing.

Step 4

Consider taking advantage of free real estate advice online. You can not only read online articles that keep you up-to-date on all of today’s real estate information, you can ask questions regarding home selling and buying to get answers from real estate professionals in online forums and on blogs kept by real estate professionals. Select your location and find professionals and stores of information close to you.

Step 5

Look into online universities with courses in real estate law. Courses might cover real estate contracts, closing property transactions and learning how to read a survey. You’ll be able to study from the comfort of home. There will more than likely be a small fee for each course you take.

California Home Warranty Policies

2010-04-08T06:43:00.000-07:00

Home sellers or their real estate agents acquire home warranties to protect themselves against lawsuits if something in the house breaks within the first year. The Home Warranty Association of California (HWAC) is made up of the state's warranty providers who offer some of the top home-warranty policies in California.

Fidelity National Home Warranty Company

Fidelity National Home Warranty Company is a member of the HWAC, receiving the association's seal of approval, as well as a good rating from homewarrantyreviews.com. Fidelity National offers one-year Standard and Comprehensive Plus home protection plans to cover California policy holders’ major home appliances and systems. It pre-screens repair technicians and utilize an automated tracking system monitoring the status of your repairs. The company offers optional or additional coverage for certain household items and a 30-day guarantee on labor and parts. Policies are specifically catered to California home warranty specifications, which includes contractor response to a service call within 48 hours, a $55 service fee and guaranteed work for 30 days with a 90-day guarantee for parts. Buyer’s Coverage begins at escrow closing and New Construction coverage begins on the first anniversary of escrow closing.

Old Republic Home Protection Company, Inc.

Founded in 1974, Old Republic Home Protection Company Inc. is not only a HWAC member but also listed by Home Inspections USA. It received a good rating from homewarrantyreviews.com as well. The Comprehensive Plan allows customers to create custom plans by adding options to the Standard Plan. The Standard Plan covers failure due to lack of maintenance, rust or corrosion, improperly installed or mismatched HVAC systems, water heater sediment and unknown pre-existing condition coverage. Optional choices allow coverage of unique systems and the addition of enhanced services. The Sample Coverage plan is for single-family home dwellings under 5,000 square feet. Upgrade options include the Ultimate and Platinum Plus protection plans. All have extra options available for home buyers only.

2-10 HBW Warranty of California

An HWAC member and listed by Home Inspections USA, 2-10 HBW of California offers two types of warranties, the 2-10 Warranty/New Construction Home Warranty, and the Systems and Appliances Warranty/Home Service Contract. The 2-10 Warranty/New Construction Home Warranty must be applied for by the builder of a home who is required to meet underwriting guidelines and agree to follow the terms of his agreement with 2-10. On the date of closing, homeowners receive a Certificate of Warranty backed by 2-10 with the builder’s name on it. The Systems and Appliances Warranty/Home Service Contract covers major home systems and appliances. If one of the systems or appliances that a homeowner’s contract covers breaks down, 2-10 sends a contractor to do the repair. The homeowner pays a deductible and 2-10 covers the rest.

Claiming the Sale of Vacant Land on Your Federal Tax Returns

2010-04-07T06:40:00.000-07:00

When vacant land is sold, the sale must be filed with the Internal Revenue Service. You must report the sale on your personal federal tax return if it meets certain criteria. These include whether the land is adjacent to your primary residence, if you owned or used the land as part of your primary residence and whether the sale of your primary residence and the vacant land occurs within two years of each other.

Step 1

Calculate the profit or loss by subtracting the selling expenses from the selling price and any outstanding mortgage balances or tax liens paid out of the proceeds of the sale. Determine whether it's a profit or loss and the exact amount.

Step 2

Report the gain, if there was one, on Schedule D of the 1040 federal return form. Use line 1 if it's a short-term debt, meaning that you owned the land for one year or less. Use line 8 if it's long-term, or you owned the land for more than one year.

Step 3

Report the loss, if that's the case, on Schedule D, lines 1 or 8. The loss is not tax-deductible, but you still have to report it.

Step 4

Fill in the information associated with Lines 1 or 8 in sublines a through e. Enter the amount of your gain or 0 (zero) on subline f, if it's a loss. File the form along with your personal income tax return.

Tip

If the vacant land was used for business purposes or rented for income, you may be required to file IRS Form 4797 to report the sale of the vacant land.

How to Change the Deed or Title to Your Home

2010-04-06T18:37:00.000-07:00

When you buy or receive a home as a gift, the deed to the home is the written proof of ownership of the home. It is also referred to as a title. If you need to change the deed on your home because of a name change resulting from a marriage or a divorce, it is a simple process that typically takes about 30 days to complete. Other reasons you may change a deed include death, inheritance, adding a new spouse or adding a child's name.

Step 1

Gather documents. In order to start the name change process for your deed, first get together the necessary documentation. For a name change, you'll need your name change document. For a marriage, a copy of your marriage license is required. For a divorce, you'll need a divorce decree and for a death, you may have to provide a copy of the death certificate, as well as the will that turned ownership of the home over to you. If you are adding a child's name to your deed, you will need the child's birth certificate.

Step 2

Call the title company and inform them that you want to change the name on your home deed, and explain your reason. Title companies usually require you to complete an application and request a picture ID, as well as the appropriate documentation to begin the change process on the deed.

Step 3

Pay the title company. In order to change the name, or add or remove a name on the home deed, the title company collects a fee for their services. The fee covers the time it takes to prepare the new deed and file it with the county clerk’s office where the home is located.

Step 4

Obtain new deed. When the new deed is recorded in the public records by the title company, you will also receive a copy of the deed with the new names on it. File the deed in a safe place as your proof of ownership of the home.

Tip

If you prefer, you can use a real estate attorney to help you change the deed on your home.

Employers: Find Out How You Can Contribute Tax Free Savings to Employees

2010-03-18T05:53:00.000-07:00

With all of the various tax laws in place, untaxed savings accounts might seem too complicated to use. There are, however, several savings account options that can serve a two-fold purpose: providing tax free income that can grow uninhibited over the course of decades and providing a retirement program or health savings program that employers can add to and thus ensure that employees have a financial cushion for the future. Setting up the best tax free savings option is largely a matter of considering the employee’s situation and then counseling the employee about the savings plan that will be most beneficial.

401(k)

The 401(k) is probably the most common and most popular type of tax-free savings account that an employer can use for contributing to an employee. The 401(k) allows an employer to match an employee’s own contribution. Additionally, a 401(k) provides the opportunity for an employer to arrange for a variety of investment possibilities, including mutual funds and bonds. With this type of account, the income added to the account is untaxed in the year that it is contributed. What is more, the money in the account remains untaxed until it is removed from the account, unless the account holder leaves the money intact until he or she is almost sixty years old. Recent changes in income tax laws have also provided for the Roth 401(k), to which 401(k) holders can move funds without risk of taxation. Because of the changes, Roth 401(k) holders can also remove the money from the account with risk of taxation.

Employer Retirement Savings Account

The Employer Retirement Savings Account (ERSA) was created under the similar rules of the 401(k) but with the goal of simplifying the process in order to motivate employer contribution and encourage savings among the many Americans who do not currently have a retirement plan. In particular, the ERSA creates the opportunity for smaller businesses – which previously were unable to set up basic 401(k) plans for employees due to various regulations – to establish Employer Retirement Savings Accounts and thus give employees the chance to save money for retirement. Like the 401(k), the ERSA also creates tax-free income growth.

Health Savings Account

Created for those who are part of a High Deductible Health Plan, a Health Savings Account (HSA) allows employees to save for their health spending without taxation on the money that is saved. The rules for a Health Savings Account are fairly strict, in that the account must be created within the boundaries of an HSA trustee – which may be a bank or even an IRS-approved employer. Money contributed to an HSA is not taxed when it is deposited; and unlike in the Flexible Spending Account (also designed for health savings), the money is an HSA can be retained in the account from one year to the next.

Rural Property Defined by the Beholder

2010-03-17T05:49:00.000-07:00

Defining rural property is a term relative to the person or organization you’re asking to define it. The United States Census, the United States Department of Agriculture (USDA) and the Office of Management and Budget (OMB) and real estate professionals, for example, all have slightly different interpretations of what rural means in respect to their individual areas of coverage.

Real Estate Professionals

The most popular use for the term rural is when talking about the area where a piece of real estate is located. Rural property in this case is used to describe a home, vacant land or piece of real estate that is located in the country. The country is a less densely populated area than cities. When talking about rural property in this instance, it may also include agricultural or farming areas. In essence, rural is the direct opposite of the city or urban property.

United States Census Bureau

The Census Bureau offers its own set of definitions to describe rural property. Since the Census Bureau is involved in population statistics, it defines rural property areas in terms of population density. The U.S. Census Bureau states that rural property is such that there is open country and less than 2,500 residents populate the area. In terms of people per square mile, this equates to areas that have anywhere from one to 999 people per square mile of land.

United States Department of Agriculture

The United States Department of Agriculture (USDA) is the agency that oversees the Office of Rural Development, so it defines rural property by the thresholds of population an area meets. Therefore, the USDA and the Office of Rural Development define rural property as a city or town that has a population of less than 50,000 people.

Office of Management and Budget (OMB)

Office of Management and Budget defines rural areas as those areas that fall outside of metropolitan areas. Rural areas are broken down further into areas that have clusters of people that range from 10,000 to 50,000 residents.

National Center for Education Statistics (NCES)

The National Center for Education Statistics works in conjunction with the U.S. Census Bureau and the Office of Management and Budget to classify areas by population in order to determine the educational needs of the area. One of the classifications is rural property, which is broken down further into those areas that are on the fringe of an urban area, distant rural properties and remote rural properties. Ultimately, the National Center for Education Statistics considers rural areas to be the areas that are outside of an urban.

Federal Grants for Mortgage Borrowers in Default

2010-03-16T15:23:00.000-07:00

Especially in a turbulent housing market, where default and foreclosure are rather commonplace, some borrowers seek assistance. For mortgage borrowers that are facing default on their mortgage or foreclosure on their home, there are some home mortgage assistance grants that are available on a federal government level. Each grant has its own eligibility requirements and amounts of assistance can vary greatly, so be sure to consult with the federal government, local entities and nonprofit organizations that oversee these programs for the details on how to qualify for and how to apply for the grant.

Definition of a Grant
The most popular form of a grant and the type of grant that most consumers are familiar with is an educational grant to cover college education tuition and expenses. Educational grants lend the meaning to the term "grant" that consumers tend to think that it implies it is free money that does not have to be paid back (as is the case with the term loan, where people pretty much know that they have to pay the money back to the lender). When it comes to federal mortgage grants, it depends on the grant as to whether or not you have to repay the money given to you. Some grants do not have to be paid back while other grants are meant to temporarily assist homeowners until they can get back on their feet.

Where Grants Come From
Federal grants for mortgage defaults come from the U.S. government, but the grants may be overseen or distributed to recipients through various programs or organizations. Some of the top agencies or segments of the federal government that issue mortgage default grants include the U.S. Housing and Urban Development (HUD), which oversees federal mortgage grants that fall under the jurisdiction of the American Recovery and Reinvestment Act (ARRA).

Grant Distribution
Even though the grant money stems from the federal government, local government, municipalities or non-profit organizations may distribute the grant funds these organizations may also be directly involved in the grant application, approval and denial process. For example, of the $13.61 billion allocated from ARRA, a portion of these funds were distributed to states, counties, municipalities and non-profit organizations to assist mortgage borrowers currently in default or heading for default on their mortgage.

How to Convert a 401(k) into a Roth IRA

2010-03-12T08:37:00.000-08:00

The 401(k) is one of the most popular employee retirement plans offered by employers across the county. 401(k) plans allow pre-tax contributions to be made and the growth in the account grows at a tax-deferred rate. Withdrawals from the plan are taxed at the individual’s income tax rates. A Roth IRA, on the other hand, is the direct opposite, so contributions are made after-tax dollars, the account grows on a tax deferred basis and withdrawals from the account are not taxed (because the money was taxed before it was put into the account). The more optimal tax treatment of Roth IRAs urges many 401(k) plan holders to convert to a Roth IRA.

Contact the 401(k) financial institution. In order to initiate a conversion from a 401(k) plan to a Roth IRA, use the 401(k) statement to identify and contact the financial institution that holds the account.

Roll over your 401(k) to a Traditional IRA. Since funds cannot be directly transferred from a 401(k) plan to a Roth, you first have to convert your 401(k) to a Traditional IRA. Tell the financial institution that you want to convert the funds in your 401(k) account to cash and then transfer the cash into a Traditional IRA.
Convert the traditional IRA to a Roth. After the Traditional IRA account is funded with the cash from your 401(k), contact the financial institution again and request that the Traditional IRA account be converted to a Roth.

Invest in the Roth account. Since the cash from the Traditional IRA is used to fund the Roth account, once the cash is sitting in the Roth account, work with the investment advisor at the financial institution that holds your account to make investment decisions.

Pay taxes. When you convert the Traditional IRA into a Roth, this act generates a tax liability for the current tax year. You have to pay the taxes on this amount with your own cash – not cash from the retirement account.

Tips

Before you convert a 401(k) or a Traditional IRA to a Roth, speak with your tax advisor to make sure this is a financially sounds decision for your personal financial situation. The tax advisor can also help you calculate the amount of tax liability you will incur when you transition to the account. It’s important that you can afford to pay the taxes out of your own pocket because you are not allowed to use cash from the retirement account to pay for the tax liability.

How to Start a Florida Title Insurance Company

2010-03-10T16:34:00.000-08:00

Title insurance protects against loss from problems related to the title on a property. These problems can stem from liens, unrecorded easements, building permit violations from previous owners, forgery, and human error, among other things. All mortgages require the protection of title insurance, so as long as homes are being sold, there is a need for title insurance companies. As with any business, regulations are specific to the state and/or county. Below you will find how to start a title insurance company in Florida.

Step One:
Identify the title insurance companies in your area. It may be beneficial for you to know what kind of competition you will face. Seek out a successful title insurance business owner with whom you can talk. It may be best if this person is out of town. Ask for tips in starting the company, gaining business, trouble-shooting, and basic business needs. Keep your eyes and ears open for things that may make this business owner rise to the top of the field.

Step Two:
Establish your business entity. Businesses are set up as corporations, sole proprietorships, partnerships, or limited liability companies. The legal structure of your business will be dependent on your entity. Complete online research to determine which structure fits your business best, and then file the appropriate forms with the Federal Government/IRS, and the Florida Department of State.

Step Three:
Obtain a Title Agency License package from the Florida Department of Insurance: Bureau of Agent and Agency Licensing. In this package will be the Title Agency Insurance Application Form; fill out the form in its entirety. Also in the package will be information on completing a fingerprint card, obtaining a surety bond, and fees. Send all completed information back to the Florida Department of Insurance.

Step Four:
Make sure your own license is complete and up to date. For the original license, you must complete a 40 hour insurance classroom course in title insurance and work for at least one year in title insurance duties under a licensed title insurer or complete three semester hours in real estate or real property law. You must also take the insurance examination. After your initial license, you will have to complete the prescribed hours of continuing education courses as approved by the Florida Department of Financial Services.

Step Five:
Hire a business attorney or consultant to review all paperwork and guide you through any additional necessary steps.

Alabama Repossession Laws

2010-02-26T14:53:00.000-08:00

Any purchase made in Alabama on credit or using collateral may be repossessed by the creditor. Repossession is most frequently seen with cars. Until the creditor receives the final loan payment, the lender holds crucial rights to the vehicle. Every state has specific laws regarding repossession and these laws are constantly changing. The laws in Alabama might differ from laws in some other states.

When Repossessions Can Happen

As soon as a borrower defaults on the loan, the creditor can repossess the property. The lender is not required to provide a grace period or extra time for payments. Repossession can begin as soon as one day after a payment was due. If the borrower knows he will be late on payment, he should contact the creditors immediately to inform them of the issue. To avoid repossession, creditors may work with borrowers to make a revised payment schedule or delay the payment, although they are not legally obligated to do so.

How Repossessions Happen

A creditor can repossess property at any time, as long as it is handled in a peaceful manner. The creditor does not have to officially sue the borrower or take her to court before it occurs, but the borrower has to be notified of the repossession. The creditor cannot lure the borrower into bringing the property to a desired location or use any force or threats of violence. The borrower does have the right to any personal property left within the vehicle. She should approach the creditor immediately to retrieve those items or write a letter listing the items and make arrangements to collect them.

After the Repossession

Once the property is gone, the borrower will receive a notice of his right to redeem the automobile. This simply means that the borrower has the right to get the car back, but only if he satisfies the conditions set forth. Usually the borrower has to pay the entire balance of the loan, not just the sum of late payments. The borrower will also have to pay any expenses associated with the repossession (such as storage and preparation for sale). If the borrower cannot pay off the loan, the creditor normally sells the car. If the car sells for less money than the balance of the loan, the borrower is still responsible for the remaining balance. The creditor will inform you of the deficiency and will sue you for the payment. If the creditor did not follow the law on repossession (breached the peace or failed to sell the car in a reasonable manner), the borrower may have some legal defense against paying the deficiency on the loan. In this case, the borrower should obtain sound legal advice.

The Process of Foreclosure

2010-02-24T18:48:00.000-08:00

The process of a foreclosure may differ from state to state, but the basics remain constant. Foreclosure can happen to any home-owner and typically no one benefits from it. It damages the credit of the home-owner and usually results in loss for the lender. If you are facing foreclosure, or you represent a lender foreclosing on a borrower, these steps should accurately reflect the process.

Step One:

Neglect to pay the loan payment. Most banks will not start foreclosure after just one missed payment. There tends to be a grace period before the proceedings begin. After the second missed payment, the bank will contact the borrower. At this point, the lender will usually accept both missed payments to rectify the situation. If the borrower is unable to pay, the situation will escalate.

Step Two:

Continue into foreclosure. At the third missed payment, the mortgage holder will proceed with a judicial sale or a power of sale. In a judicial sale, the mortgage lender files suit with the court system, and the borrower receives a letter demanding payment. Usually the court gives the borrower 30 days to respond with payment. If thirty days lapses without payment, then the lender can sell the property in an auction. A power of sale is less common, but operates without the court system. The mortgage lender demands payment from the borrower; if the payment is not received in the established time period, a deed of trust transfers the property to a trustee. The trustee then sells the house at a public auction. The home owner will be notified of all proceedings.

Step Three:

Sell the home. At auction, the opening bid is usually set at the sum of the outstanding loan balance, interest accrued, and legal fees associated with the foreclosure. If the opening bid is not met, the property is purchased back by the lender and deemed an REO or Real Estate Owned.

Step Four:

Leave the property. Once the property is sold, the sheriff’s office will serve an eviction notice. The borrower must vacate the home immediately. If the property was sold for an amount less than what was owed on the mortgage, there can be a deficiency judgment. The borrower will be required to pay the difference on the mortgage.

Warnings

A foreclosure should not be seen as an easy solution to a financial hardship. The foreclosure can leave a family homeless and can damage the family’s hopes of buying real estate in the future. Many employers are now requiring a good credit rating for employment, and in some cases, foreclosure can be grounds for termination.

A foreclosure can cost the local government thousands of dollars in trash removal, unpaid utilities, police costs, and inspections.

It is likely that the value of properties near the foreclosed home will decrease.

Buying a Home with Bad Credit

2010-02-23T13:29:00.000-08:00

Simply because you have bad credit doesn’t mean that the dream of home ownership is out of your reach. While credit scores and credit history do play a role in mortgage financing approval, it’s not the end all and be all of the approval process.

Different Borrowers Require Different Lenders

Borrowers with good credit and borrowers with bad credit should not be approaching the same mortgage lenders. It’s similar to a bargain shopper heading to the Gucci store. The two things do fit in the same category.

Borrowers with bad credit typically need to seek lenders that cater to low credit score and poor history borrowers. Generally, these lenders are called B-paper lenders or subprime lenders. The interest rates between traditional lenders and subprime lenders is subprime lenders typically have higher interest rates because they are dealing with higher risk borrowers. Fees can also differ between the two, with subprime lenders charging more to process a mortgage than a traditional lender.

Where to Find Bad Credit Lenders

Probably one of the best sources to turn to for subprime lending is a mortgage broker. Since a mortgage broker doesn’t work for any one lender, they have access to a variety of lending sources. One of the lending options is sure to fit the need of a bad credit borrower.

Another option is to work on repairing your credit before applying for a mortgage. Once you have your credit under control, then you can apply with a traditional lender and keep your fees and interest rate down.

Bad credit borrowers are not exempt from home ownership. You may have to take a different route than a good credit borrower, but in the end home ownership is within reach.

Federal Reserve Raises Interest Rate Charged to Banks, In First Move Since 2008

2010-02-18T13:52:00.000-08:00

Read the Breaking News

How to Get a Mortgage after Bankruptcy

2010-02-16T02:14:00.000-08:00

Bankruptcy may seem like an option to wipe your credit problem slate clean so you can start anew, but filing bankruptcy decreases your credit score and stays on your credit for up to ten years. This means every time a lender pulls your credit report to make a lending decision, they see you filed for bankruptcy, which can make it difficult to obtain mortgage financing. The good news is that there is still hope in obtaining a mortgage even after filing for bankruptcy.

3 Steps for Building Credit After Bankruptcy

After a bankruptcy, you have to take a proactive approach to rebuilding your credit and improving your credit score. This shows lenders that you’re back in control of your finances. Rebuilding your credit is a process and one a process that may take years to truly accomplish. Don’t get frustrated though. If you’re persistent, the persistency pays off and puts you back in a position where you can obtain mortgage approval.

1. Build new credit. It’s important to apply for new credit as soon as possible. You may have to start small – applying for gas or department store credit accounts – and then progress into larger credit purchases such as vehicles and eventually a mortgage. You can also apply for a secured credit card from your bank, which leverages the amount of money you have deposited with the institution to extend you a credit card.

2. Repair bad credit. If you have late payments or no pay accounts, work on repairing these items. Contact the creditors or collection agencies you have negative items with (that were not part of the bankruptcy) to make payment or payoff arrangements to clear these items up and remove them from your credit report.

3. Increase your credit score. Several factors go into calculating your credit score.
The number one factor in calculating your credit score is making your payments on time, so always make payments on or before the due dates. Other ways to increase a credit score is to keep good longstanding relationships with creditors, have a mixture credit account types and obtain new credit from time to time.

While a bankruptcy may seem equivalent to wearing a Scarlet Letter, there are proactive steps you can take to get your credit back on track. It illustrates to creditors such as mortgage lenders that you are all about regaining control of your finances and a worthy credit risk.

Top Ten Rules for Saving for Retirement

2010-02-11T02:11:00.000-08:00

Saving for your retirement years is as important as planning your finances for the here and now. With more and more seniors finding themselves without enough money to live out their retirement years, take the time now to make sure you’re following the top ten rules for saving for your retirement.

Plan
The first rule of retirement savings is to create a written plan. Financial plans include your income and expenses now and how you should invest your money today in order to grow it enough to cover future living expenses.

Budget
Create a budget that plots your income and expenses and use the budget to keep track of your spending. This ensures you don’t overspend so you can reach your retirement goals.

Continue to Work Part-time
Working a second part-time job during the years leading up to your retirement gives you an additional source of savings income. You can take on a part-time job during retirement to earn extra money or to keep your mind busy.

Review Bills Carefully
Don’t give away your money for free. Review monthly bills for accuracy so that you only pay creditors what is due to them.

Discounts
Clip coupons and take advantage of discounts where and when you can. Deposit the money you save savings into your retirement account. If you do this each time you eat out or buy an item, it will quickly add up over the years.

Comparison Shop
Never pay more than you have to for an item, especially a big-ticket one. Shop and compare at least three places before making a major purchase.

Start Now
It’s never too late to start saving for retirement. So, even if you’re only a few years away from retiring, put away money, invest your money and start planning today for your tomorrow.

Be Conservative
Invest your retirement money more conservatively than you would other funds. It’s as important to grow your money as it is to preserve the principal balance and protect it against inflation.

Professional Advice
Most individuals are not equipped to make investing and estate planning decisions. Seek the advice of a Certified Financial Planner (CFP) to help you review your situation, create a plan and set you on the path to reaching your retirement goals.

Consider Time
The number of years you have left until retirement plays a starring role in your investment options. Invest in a way that gives you the highest possible return for the time you have left until retirement.

How College Students Can Maximize and Make the Best Use of Their Tax Refund

2010-02-10T02:08:00.000-08:00

College students are notoriously known for being bad with their money, but this doesn’t have to be the case. The Internal Revenue Service (IRS) provides students paying for higher education tuition to take some tax deductions that can maximize the amount received as a tax refund. The other side of the coin is that once you receive the tax refund, you have to figure out how to make the best use of the money.

College Tuition Tax Credits

If you’re paying for your own college tuition, you may have the option of taking advantage of one of two tax credits available - Hope/American Opportunity and Lifetime Learning. If you meet certain requirements, these programs can help you reduce how much you pay Uncle Sam and may even require Uncle Sam to pay you back.
Let’s cover what a tax credit is so you can fully understand how it can help you maximize your tax refund. When you earn income, you have to pay taxes on the money you earn. An education tax credit, however, allows you to deduct the amount you paid in college tuition costs, thus reducing the amount of income on which you have to pay taxes.

Hope/American Tax Credit

Part of the economic stimulus American Recovery and Reinvestment Act of 2009 was an expansion of the Hope Tax Credit, which was renamed the American Tax Credit. This tax credit is applicable to the 2009 and 2010 tax years. The old tax credit allowed you to deduct tuition costs for up to two years of your college education. The expanded version of the tax credit allows a deduction of four years of tuition costs and an expansion of income eligibility requirements.

Criteria for Claiming the Credit:
• You must be enrolled at least as a half-time student in an undergraduate degree program or legitimate educational program
• $2,500 is the maximum annual credit per student permitted
• For low-income students who have little or no tax liability, the credit may permit for up to $1,000 to be paid back to you
• The amount of the credit decreases if adjusted gross annual income for an individual is $80,000 and $90,000 or $160,000 or more for a joint return
• In order for a student to claim the credit, they must not be listed as a dependent on their parent’s (or parents’) tax form

Lifetime Learning Tax Credit

The Lifetime Learning Tax Credit allows you to deduct all of the years of your college tuition costs. This credit also allows for deductions for those that take a course or courses in order to improve their hob skills.

Criteria for Claiming the Credit:
• The credit is allowed for 20% of the tuition and fees paid for a college tuition, course or course
• The maximum amount of a tax credit is $2,000 per year, which is 20% of $10,000 in tuition and fees
• The amount of the credit decreases if adjusted gross annual income for an individual is $50,000 and $60,000 or $100,000 or more for a joint return
IRS Publication 970, Tax Benefits for Education, provides more information on education tax credits.

Making the Most of Your Refund

Essentially, you have three options in using your tax refund – spend it, save it or donate it. While it may be more fun to take all of your college pals out for a night at the bar, it’s not really the wisest way to spend your tax refund check. You worked hard for it though, so you should get to enjoy spending some of it on something fun.
Sit down with a paper and pencil and make a list of the ways you want to spend the money. Now list outstanding debt or bills you may have (such as credit card balances). Pull out your bank statements and look at the balances of your checking and savings accounts.

Take the amount of your refund and divide it up into parts, deciding how much you need to pay off or reduce outstanding debt and how much you need to save (make sure you have an emergency fund cushion). After you pay off or pay down at least one bill and sock away some money in savings, see how much you have left to have a little fun. Now look at your list of fun items and choose one based on the amount of money you have left to spend.

What You Know to Know about Student Health Insurance

2010-02-09T11:34:00.000-08:00

Health insurance costs continue to rise and whether you’re a college student or a senior citizen, having health insurance coverage has become a necessity. Most college students have never had to deal with health insurance coverage before because they’ve been covered under their parents’ policy. If you’re a novice to student health insurance coverage, here’s what you need to know to make the right choice in health insurance policies.

Benefits

The benefits of a health insurance policy vary from insurance provider to insurance provider and even from policy to policy under the same provider. It’s important to break down each coverage option of the policy you are considering because some policies contain items you do not need, which means you’re paying for coverage that is going to go to waste. For example, if you’re a male and the policy you’re paying for contains maternity coverage, then you’re paying for something that you’re never going to use. On the other hand, some policies do not contain benefits that you do need, so it’s imperative that you understand what is and what isn’t covered by the policy you’re considering.

Some of the benefits you need to consider when comparing policies:
• The maximum amount of coverage the policy provides
• Deductible amount
• What is not covered under the policy (i.e., intramural sports injuries)
• Restrictions on choice of doctors
• Requirements (i.e., referral) for specialist care
• Travel coverage
• Ability to see a doctor without insurance company approval
• Undergraduate and graduate coverage restrictions
• Wellness visits to the doctor are covered or it’s only emergency coverage

Rates

The benefits contained in a health insurance policy directly relates to the cost of the policy. The more benefits a policy contains typically the higher the cost of the policy. When comparing policies make sure you understand the costs involved in establishing and maintaining the policy. It’s about more than the monthly premium you pay. You also need to understand the policy deductibles and co-pays (co-payments) because this determines the total amount of money you’re out-of-pocket when visiting the doctor or hospital.

The Need for Health Insurance

Most college campuses provide a health clinic for students to use at a reduced rate, but the quality of care from these clinics is not typically up to par with private doctors. These clinics are also not equipped to deal with every illness and disease. Since college campuses are a hotbed of germs and diseases, it’s wise to have a health insurance plan that is separate from on-campus health services, so you can practice preventative care, as well as deal with any illness or disease you acquire.

Shopping for student health insurance coverage is a major purchase that requires you to understand how the benefits of having it exceed the costs of having it. Health insurance is also an item that requires you to comparison shop to ensure you’re establishing the policy that is the most beneficial to you financially and to your health.

Get Your Finances in Order: 5 Personal Finance Reads that Should Be On Your List

2010-02-04T13:58:00.000-08:00

If you’re not spending your Valentine’s Day weekend with someone special, maybe you can snuggle up with your finances and finally get them in working order. Even if you're spending Valentine's weekend doing something romantic, get these books to read on a rainy day or another time.

Career Building: Your Total Handbook for Finding a Job by editors of Careerbuilder.com

With an ever rising unemployment rate, this book unveils all of the secrets of searching for and landing a job. From revealing ways to spring-clean your resume and ace the interview to smoothing over workplace (and resume) blemishes and writing compelling cover and thank-you letters, if you’re searching for a job, then this is the guide you should be using.

10,001 Ways to Live Large on a Small Budget from Wisebread.com
This book is a collection of the wisdom finance experts and personal finance bloggers share on Wisebread.com. the book reveals how to live on a budget without feeling like you’re frugal or downright cheap.

I Will Teach You to Be Rich by Ramit Sethi

A young, hip and Stanford educated approach to managing money. Ramit speaks directly to college students to help them learn how to manage money and their personal finances in a more adult manner. The book is a spinoff from his personal finance blog, but readers of all ages can heed his advice.

Get a Financial Life (Personal Finance in Your Twenties and Thirties) by Beth Kobliner

For generations at the next level in life – those in their 20s and 30s – financial writer Beth Kobliner shares basic financial principles about saving and investing, paying taxes, choosing insurance, buying a home and finally getting out of debt. She uses real-life examples to illustrate that you can take these steps too.

Investing 101 by Kathy Kristof

Personal finance columnist for The Press Democrat shares investing tips based on personal and professional interviews with hundreds of investing gurus. The book covers every investing topic under the sun, from the basics of timing your buys to specific types of investment accounts such as IRAs and 529 college savings plans.

American Wind Energy Association Puts the Spotlight on Green Jobs

2010-02-02T05:12:00.000-08:00

Is it possible that wind turbines can not only save the environment, but save the economy at the same time? The American Wind Energy Association seems to think so and it’s telling the world what it thinks with a new campaign that includes TV and online video ads. The purpose of the campaign is to promote a national renewable energy policy with a focus on how we can rebuild the economy, “One bolt at a time, one worker at a time, one factory at a time—all building wind turbines and creating thousands of new jobs.”

The American Wind Energy Association believes that a national renewable energy policy could be the foundation that creates hundreds of thousands of jobs in the U.S. and generates billions of dollars in revenue – ultimately stimulating the economy and putting a halt to increasing unemployment rate.

The Campaign

• A 30-second TV commercial, featuring Cardinal Fastener workers at a Bedford Heights, Ohio plant that makes bolts for wind turbines and other industrial products
• Two ads playing on YouTube featuring interviews with Cardinal Fastener workers, some of whom were laid-off autoworkers, and an interview with the president of Cardinal Fastener, John Grabner, discussing the importance of adopting a strong renewable energy policy

As smart online marketers, the TV commercial and all of the online videos send traffic to the website www.powerofwind.com, which allows visitors to send a message to Congress to let them know they support the Renewable Energy Standard, which a proposed bill calling for 25% of electricity to come from renewable resources by 2025.

What You Need to Know About Fixed Rate Mortgages

2010-01-31T05:44:00.000-08:00

When you’re buying your first home, establishing the mortgage financing can be a dizzying experience. Fixed rate mortgages seem to many like the best option, but mortgage financing is not a one-size-fits-all financial decision. Before you make a decision either way, find out what you need to know about fixed rate mortgages. Then, make a decision as to whether it’s the right financing option for you.

Same Mortgage Payments

Fixed rate mortgages offer a sense of comfort to most homebuyers because borrowers know the interest rate and monthly mortgage payments stay the same month after month. For example, if you purchase a home today using a 30 year fixed rate mortgage and your monthly mortgage payment is $1,200, you know that for the next 30 years your mortgage payment is going to be $1,200 (if you even have the mortgage for the next 30 years).

Interest vs. Principal

One of the biggest downsides of a fixed rate mortgage is that the majority of the monthly mortgage payment is made up of interest - interest that you are paying to the lender, meaning you end up paying far more than 100% of the principal balance of the mortgage in the form of interest. A borrower doesn’t really start to chip away at the principal portion of a fixed rate mortgage until about the halfway point. For a 30 year fixed mortgage, this means you’re not reducing a significant portion of your principal balance until about 15 years into it and for a 15 year mortgage, principal reduction starts at about the seven and a half year mark.

There is no doubt that the fixed rate mortgage offers a sense of safety and security to borrowers. On the other hand, how secure can you really feel when you realize a fixed rate mortgage has you paying twice the amount of the price of your home when all is said and done?

How to Buy Mortgage Notes

2010-01-26T11:32:00.000-08:00

When you think of a mortgage, you probably think of it as a way to finance the purchase or refinance of a home. Mortgage notes, however, can also be an investment option where you may be able to earn a return on your investment. Buying mortgage notes may also be referred to as hard money lending or private mortgages, where personal money is being used to fund the financing of a property. In exchange for buying mortgage notes, you receive monthly principal and interest payments on the amount of the note until the note is paid in full.

Find and contact a mortgage note broker. Mortgage note brokers or private mortgage brokers act as liaisons between investors looking to buy mortgage notes and borrowers. Use the yellow pages of your local phone book to locate and contact a local mortgage broker to see if they have any mortgage notes for sale.

Write up and sign a legal contract and promissory note. When you find a mortgage note or notes you want to buy, have an attorney draw up a legal contract between you as the mortgage note buyer and the borrower or seller of the mortgage note. A real estate attorney can draw up the contract as well as the promissory note for the transaction, which both the borrower and buyer must sign and agree to before it becomes a legally binding agreement between the two parties.

Establish and fund the escrow account. After all of the terms and conditions of the mortgage note purchase are in writing, you as the buyer must establish and fund the escrow account. This is the account where you deposit the money you’re loaning to the borrower for the real estate purchase. The account is managed by a third party so that the doling out of the funds from the account is fair and equitable and in accordance with the terms of the written legal agreement.

Receive your returns on your investment. Each month, on a quarterly basis or in accordance with the terms set forth in the written agreement, you receive your checks from the escrow account, which is principal and interest on your mortgage note investment. This occurs until the note comes due and is paid in full.

Tips
The rate of return for a typical mortgage note can run anywhere from 12% to 15% for a mortgage note buyer.

The escrow account is also the depository for the monthly payments made on the mortgage by the borrower. When it’s time for the mortgage investor to receive his monthly payment, the funds are disbursed from the escrow account as well.

How Your Real Estate Agent Should Work with You

2010-01-21T12:13:00.000-08:00

The transition away from face to face and more to online transactions and communication has caused many business professionals to forget how to deal with clients face to face. One of the hardest hit professions of the syndrome may be real estate agents. If you’re transitioning from an online to a face to face relationship with your real estate agent, it may leave you wondering how this relationship should shake out.

Communication is a Skill

Communication is a skill you can learn, but is necessary for a real estate agent to have in order to form a successful relationship with clients. How comfortable you feel with dealing with a real estate agent the first time you meet with them can dictate whether the agent winds up with a sale at the end of the process. Make sure that the agent is calling you and emailing you to keep you abreast of the situation throughout the process as well.

Emotions are Part of the Process

When you’re buying or selling a home, it can be a very emotional process. A professional and experienced real estate agent understands and expects this from clients. Panic, fear, uncertainty, and joy are but a few of the emotions that may make an appearance during the process. This is where good people skills come in handy when working with a real estate agent because a good agent knows how to deal with these emotions and not allow them to get in the way of the end-result – buying or selling the property.

Agents Work with You, Not for You

Working with a real estate agent means that you have access to professional help and advice when buying or selling a home. An agent should work in a way that is in your best interest, but it’s important to remember that the agent is human and can only control so much of the process. A professional real estate agent should do everything in their power to satisfy a client’s needs, but jumping through hoops is not really part of the job description.

Working with a real estate agent on your real estate transaction is a professional interaction, but the relationship has plenty of personal and emotional touch points. When choosing a real estate agent, make sure you feel comfortable with the person because it may be someone you’re working with for months to come. While their professional experience is a factor that should play into your decision, you need to find the balance between their professional and personal experience in order to make it a truly enjoyable process.

Pennsylvania Sets its Sights on 11,000 Homebuyers

2010-01-14T05:36:00.000-08:00

The Federal government has instituted programs to help stimulate the housing market and the economy as a whole. Individual states such as Pennsylvania have also instituted programs to help local housing markets and the local economy receive stimulation of its own.

The governor of Pennsylvania announced a $1.2 billion mortgage program, which is the baby of the U.S. Treasury, the Pennsylvania Housing Finance Agency, Fannie Mae and Freddie Mac, with the intention of making home ownership more affordable for 11,000 homebuyers in the state of Pennsylvania. Not only does the program help residents of the state but it also helps to boost the state economy.

The implementation of the program is expected to provide $50 million in seed money to fund construction loans for the building of approximately 450 new homes. New-home construction requires contractors, workers, builders and other construction related workers, so the program is also responsible for creating new jobs, which is another booster shot to the local economy. State programs like this are spreading across the country and contributing to the recovery of the state itself and the country as a whole.

Las Vegas is High Rolling in Housing Too

2010-01-12T05:31:00.000-08:00

As 2009 came to a close, it had many analysts reviewing the standings of home sales around the country. The results for the Las Vegas area were positive, revealing that the Las Vegas housing market is high rolling with a 44% increase in home sales from the beginning of 2009 as compared to the end of 2009.

From October to November of 2009, the home sales in Las Vegas dropped by 5.5%, according to a MDA DataQuick report, which is an information provider based in San Diego. MDA DataQuick suggests that the major increase in home sales is attributed to the usual characters such as a decline in prices, low mortgage interest rates and the availability of the federal tax credit for first time homebuyers.

The resale of foreclosure homes populated the housing market in Las Vegas, but this phenomenon too seems to be coming to a close. According to MDA DataQuick, 64.2% of the homes and condos sold in Las Vegas in November were the resale of foreclosures. This number is down from October levels of 66.8% and November levels of 68.1%. Las Vegas foreclosure re-sales saw an uptick in April 2009, but every month since then the sale of foreclosures has declined.

In November 2006, 5,803 homes sold in Las Vegas, which is the highest sales volume in recorded history for the area. By November of 2009, new and existing home sales was at 4,787, which is the second highest number in recorded Vegas history and celebrated the 15th consecutive month that home sales have increased since the previous year.

Happy Holidays

2010-01-01T05:56:00.000-08:00

Happy New Year

2010-01-01T04:00:00.000-08:00

Bi-monthly Mortgage Payments: What You Need to Know

2009-12-17T18:45:00.000-08:00

Similar to the way it sounds, a bi-monthly mortgage is paid every two weeks instead of once a month. One-half of the monthly payment is paid during these two payments, so instead of 12 payments per year, you end up making 26 installments per year. At the end of the year, this equates to making one extra mortgage payment per month, which deducts directly from the principal balance of your mortgage.

Is this a good thing, a bad thing or neutral?

The Good, Bad and Ugly of Bi-monthly Payments

Bi-monthly mortgage payments can reduce your principal mortgage balance faster. And, yes, bi-monthly mortgage payments can shorten the term of your loan. Bi-monthly payments can even save you money in interest in the long run. Whether or not this option is good, bad or ugly depends on several factors, but the biggest factor is how your mortgage company handles the payments. Typically, you cannot take upon yourself to set up your own bi-monthly mortgage payment schedule. The mortgage servicing company probably has a bi-monthly payment option, but it’s going to cost you to establish it.

Generally, this fee tends to outweigh the benefit, which means it may not be worth it you’re your company does not charge a pre-payment penalty and allows you to pay every two weeks instead of monthly, then you can take advantage of the benefits of a bi-monthly program you set up for yourself. Another option, if you can afford it, is to place 50% of your mortgage payment into a special bank account each time you get paid. When your mortgage payment is due, use all of the money in the “mortgage bank account” to make a mortgage payment. If you get paid on a weekly basis then this equates to one extra payment a month or 12 extra payments a year.

Before you establish your own bi-monthly mortgage payment program, check with your mortgage lender to see if they offer a bi-monthly payment options and if there are any fees associated with it. If they do not have a program, inquire as to whether or not you can pay twice a month instead of once a month and see if there are any pre-payment fees for reducing your principal mortgage balance early.

Once you have the answers to these questions, you can truly assess if a bi-monthly mortgage payment option is good, bad or ugly for your personal financial situation.

Financial Help Resources You Want on Your Side

2009-12-16T13:16:00.000-08:00

If you've become a victim of identity theft, the Identity Theft Resource Center provides free victim assistance. You can also give them a call at 1.888.400.5530.

If you suspect or are a victim of mortgage fraud, contact Freddie Mac or NeighborWorks America for information on predatory lending.

Before you decide to work with a financial advisor or investment broker, do a broker background check first with the Financial Industry Regulatory Authority or call 1.800.289-9999.

Technology Can be Hazardous to Your Credit Health

2009-12-15T04:30:00.000-08:00

According to the Federal Trade Commission, more than 9 million Americans each year are victims of identity theft. The ease of technology adds to the hazard because once the thieves get a hold of your information, they can quickly and easily go online and apply for new credit in your name.

4 Ways to Protect Credit Online

* Never give out your social security number unless you know who you're providing it to
* Only shop secure websites where your information is encrypted
* If a company calls you on the phone asking for personal information, tell them you'll call back. Then hang up, find the phone number listed for the creditor and call back. Scammers try to identify themselves as one of your creditors in order to get information from you they can use.
* When you receive an email from a creditor asking for personal information, rather than click on a link in the email, type the web address in yourself. This helps you avoid providing personal information on a phishing website.

Tips for Getting Good Advice on Home Loans

2009-12-09T12:16:00.000-08:00

Whether you’re a first time buyer or an old pro, there are always things you can learn to be a better shopper for home loans. There are various sources you can turn to for professional advice such as mortgage lenders, banks and mortgage brokers. The thing is you should be educated enough on your own to know right from wrong before relying solely on the advice someone else gives you.

Especially with the recent problems the lending market has faced, it’s more important than ever to be a savvy home loan shopper. Being in the know helps you to avoid being scammed or misled by professionals in the industry that may have lost their scruples.

Where to Turn for Professional Advice
• Real estate attorney: While hiring a real estate attorney to represent you in a real estate purchase does cost you, it tends to be well worth the investment. The attorney, paid by you, typically works with your best interest in mind and can help you to finalize financing that is beneficial for you and your personal financial situation.
• Recommended mortgage brokers: There are a multitude of talented and professional mortgage brokers in this country. There are also some predators that are more interested in churning a commission than they are about what’s best for you. If you choose to work with a mortgage broker, get a recommendation from friends, family members and co-workers that have used a broker to buy or refinance a property. People only recommend those they’ve had a positive experience with, so it reduces your chances of being on the losing end.
• Bank you have a relationship with: Chances are good that you have an existing banking relationship. Most banks also provide mortgages and home loans. An existing relationship can work to your advantage—helping you get approved faster and with better terms and prevent you from being scammed on your mortgage financing.

Foreclosure Buyers Beware: Don’t Buy at Auctions

2009-12-08T13:06:00.000-08:00

Foreclosure rates are at an all-time high and many real estate investors are using this an opportunity to buy properties at bargain pricing. While buying low and selling at a point in the future for a higher price can be a reality, it's not something the novice real estate investor should necessarily consider. If you're an uneducated buyer, foreclosure properties can become a money pit and eventually wind up damaging your credit and your finances.

Unless you're a huge risk-taker, don't buy foreclosure properties at auctions. Foreclosure properties that are auctioned off to the highest bidder may come with liens and other legal headaches that make it less of a money maker and more of a trauma. If you're considering the purchase of a foreclosure, then buy directly from the bank holding the foreclosure instead.

Also, get financing for the purchase of the property before you start your shopping expedition. Many mortgage lenders offer mortgage pre-qualification, where you're pre-approved for a mortgage without having a specific property in mind. This can be a bargaining tool with the bank or it can put you at the head of the list over other buyers that do not have their financing in order.

Bad Credit and Your Mortgage

2009-12-04T10:27:00.000-08:00

When it comes to obtaining a mortgage for the purchase or refinance of a piece of real estate, one of the primary factors that plays a role in the approval of the mortgage is your credit score. This doesn’t mean that bad credit borrowers cannot obtain a loan, but it’s going to more difficult and come with less favorable terms than a mortgage for good credit borrowers.

What is a Bad Credit Rating?

The recent collapse of the mortgage industry has changed the landscape of credit scores. What was once considered to be a high credit score, in the low 700s, is now considered to only be mediocre at best. Your credit is calculated using several different factors, which includes your payment history, the type of credit you have, the longevity of your credit accounts and possessing the right mixture of a variety of credit accounts (credit cards, mortgages, auto loans, student loans, store credit accounts, etc.). In today’s mortgage arena, lenders want to see a borrower with a credit score of at least 740 to be considered a great credit borrower. Below 740 to about 720 is considered good and anything falling below this is considered a bad credit rating.

Getting a Mortgage with Bad Credit

When you have bad credit, but a lender approves you for a mortgage, it usually comes with higher interests rate (anywhere from two and five percent higher than the interest rate for good credit borrowers). On top of this, traditional mortgages such as fixed rate mortgages may not be an option. Some lenders offer less favorable terms to bad credit borrowers, so you may wind up with an adjustable rate mortgage and a variable monthly payment.

How to Fix Bad Credit

If you have bad credit that is your fault—meaning you make late payments or do not make your payments at all—then the primary step for improving your credit score is to make all of your bill payments on time.

If your credit score is low but you’re not sure what’s causing it, or if you don’t know what your credit score is, then you need to order a copy of your credit report and credit score from each of the three credit agencies (TransUnion, Experian and Equifax). Review these reports carefully for negative items. If the negative items are not yours, then follow the dispute process instructions for each agency to remove the negative activity.

If the negative items do belong to you, then contact the creditors and collection agencies you have negative items with to see if you make payment arrangements or some other arrangements to take care of the debt. If and when the creditor agrees to an arrangement, be sure to obtain the agreement in writing. Also, be sure to stick to your end of the deal. Over time, these efforts will increase your credit score and make it easier and more affordable to obtain a mortgage.

Business Credit Cards & Your Personal FICO Score

2009-12-02T07:19:00.000-08:00

There are situations where your employer pays your business credit card bills, but what happens if your employer makes late payments? How does this affect your personal FICO score? As you probably know, a few late payments can adversely affect your credit score. It’s one thing if you’re the one making the late payments. When it’s out of your control, then what?

According to Fair Isaac Corporation (FICO), late payments on your company issued credit card can adversely affect your credit score in the same way late payments on personal credit cards can. It all depends on whether or not the credit card issuer required personal information to apply for and get approval for the corporate credit card.

As you should be pulling and monitoring your credit reports once or twice a year anyway, be sure to check for the corporate card on your credit reports. If the corporate credit card is listed as one of your accounts on your credit reports, then late payments are being reported, which means your credit score may be in harm’s way. If the corporate credit card is not listed, then the activity for this card is NOT being reported to the credit agencies on a monthly basis.

Happy Thanksgiving

2009-11-26T07:33:00.000-08:00

Government Money to Reduce Credit Card Debt

2009-11-25T09:17:00.000-08:00

When the Obama administration took over, one of its main initiatives was to help put the economy back on stable ground. Strategies for accomplishing this goal included the establishment of grants to help Americans get out of credit card debt. The overall American economy is made up of many parts, but when individuals and families are on steady ground, it contributes to the good of the overall economy. Find out how grants work and how these funding sources may help you to get out of the debt you are in.

Finding a Grant

The first step, and probably the trickiest part for most people, is knowing where and how to find a government grant to pay off debt. Start by contacting your county government, local associations and local organizations to find out what grants are available and for what purposes. The U.S. Department of Health and Human Services helps manage Grants.gov, a site providing information on a wide variety of federal government grants (see Resources).

Applying for the Grant

Grant applications can be long, labor intensive and tedious. When you obtain information on a grant you are interested in applying for, be sure to read the requirements carefully to make sure that you are eligible to apply. Once you pass the eligibility test, follow the instructions for completing the grant application very carefully and line by line. Grant application review committees tend to be sticklers when it comes to awarding grant money, which means it’s imperative that you complete the application completely and correctly. It’s also important to know the deadline of the grant application. Depending on the deadline, you may have a limited amount of time to complete what can be an arduous process.

Types of Grants

While most grants are not earmarked specifically to help you get out of debt, you may be able to find grants based on a personal need, business need, ethnicity, religion and more. You can also look to local organizations and associations. These organizations receive money from the federal and local governments to fund specific projects or support specific initiatives.

Debt Consolidation

While you probably won’t locate a grant with the title “Grant for Debt Consolidation,” you may be able to locate available government money based on how you got into credit debt in the first place. For example, if you funded the opening of an art gallery and backed a local artist and this is what put you in credit card debt, then the local art council may offer grants for local art projects. While some grants require that you apply for the grant before funding the project, other grants will allow you to pay in reverse order—you pay first and pay off the debt with grant money later. You’ll only be able to pay off expenses directly related to the project and you will have to provide evidence of what you spent and what the outcome of the spending was, but it is a way to use grant money to consolidate existing debt.

Tips

Register on websites such as Grants.gov to find and apply for possible grants. You can signup to receive email announcements when new grants are added to the database. this helps to ensure you meet the grant application deadlines.

10 Steps to Financial Recovery

2009-11-19T16:35:00.000-08:00

Getting control of your finances is within your reach Take these ten proactive steps to get yourself on the road to financial recovery.

1. Budget and save
Systematically add funds to a savings or emergency fund. Whether it's 10% each paycheck or $100 per month, automatically put a certain amount of money into a savings vehicle and forget you have it unless an emergency arises.

2. Cut spending
There are a multitude of ways you can cut back on expenses. It may require big cutbacks such as downsizing to a smaller and less expensive place to live or taking on a roommate, or less drastic costs such as buying ground beef instead of steak at the grocery store.

3. Track spending
Write down everything you spend money on. It's easy to see how much you're spending and where you're spending your money when it's all in writing. This is a quick and easy way to identify where you're overspending and cut back and cut out unnecessary spending.

4. Set goals
Set some short and long-term financial goals. Start with small goals you can accomplish such as paying off the $1,000 credit card balance you have. Work up into bigger financial goals such as having all of your credit card debt paid off in five years or less.

5. Earn more
There are plenty of ways you can earn some extra money. Take on a second part-time job, work from home freelance writing on the side or start a business selling your craft item. Use all of this extra cash to pay down and get rid of your outstanding debt such as credit cards. It's amazing how quickly this can help you gain control of your finances again.

6. Pay off bad and high interest debt first
Bad debt and high interest rates typically go hand-in-hand. Concentrate on paying off this debt first.

7. Check your credit score
Credit scores of 720 and higher typically bring borrowers lower interest rates and better terms on loans. Find out what your credit score is and if it's low, take some steps to improve it.

8. Dispute and correct credit errors
If there are items that are incorrect or do not belong to you, it may be bringing your credit score down. Work with the credit agencies to dispute any erroneous items and it can improve your score.

9. Use automatic payments
Pay your bills online or setup your bills for automatic payments. It ensures your bills are always paid on time, which reduces late fees and improves your credit score.

10. Do financial check-ups
Set a schedule once a quarter or a couple times a year where you check on your financial situation and make repairs and fixes where needed.

The Psychology of Spending Money

2009-11-14T15:43:00.000-08:00

A report released by the Journal of Experimental Psychology reveals people tend to spend less when:

1. Paying in cash rather than using a credit card or gift card

2. Carrying bigger bills such as $20s, $50s or $100s rather than $1s, $5s and $10s

So the moral of the story is pay in cash but carry big bills.

How to Leverage Real Estate Equity

2009-11-12T08:29:00.000-08:00

Some homeowners turn to the equity they have built up in their home as leverage for other purposes. Some of the common ways homeowners leverage their equity funds is by obtaining a home equity loan. A home equity loan allows homeowners to pull out the equity they have built in the home, which is the difference between the current value of the home and the balance of their existing mortgage.

Read the full story

3-step Approach to Refinancing Your Home

2009-11-10T06:51:00.000-08:00

Especially at a time when interest rates are low, refinancing your home loan can be beneficial to your financial situation by saving you hundreds of dollars on your mortgage payment each month. Refinancing a mortgage is a process though—a process that can be tedious and frustrating at times. Before you sign your refinance mortgage application, take this 3-step approach to refinancing and make sure that it’s the right move for you and that you approach the process in the right way.

Start with your current mortgage lender. The most logical place to start with your refinance investigation is to start with your existing mortgage lender. Since you have an existing relationship with the lender, it may be faster and easier to refinance with them. First, the cost of refinancing (closing costs) may be reduced, depending on how old your loan is. Credit report checks, escrows and appraisals may all be waived if your loan is less than two years old an you have a positive payment record with the lender (always make your payments on time). The existing relationship may also equate to a lower interest rate than borrowing from a lender you don’t currently have a relationship—especially if it means they may lose your business to a competitor.

Compare current lender with other lenders. Shopping for the best deal does not only occur on car dealership lots and the local mall. Refinancing a mortgage is a major financial decision and you need to shop and compare at least three other mortgage lenders to your current lender. It’s almost a guarantee that if you shop four different lenders, you’ll walk away with four different closing costs, interest rates and annual percentage rates.

Once you have your facts and figures together, it’s important to compare the right items to each other before deciding the offer is the right one for you. Many refinance shoppers find the lowest interest rate and decide this is the lender offering them the best deal. This, however, may not be the case. The number you really should be comparing is the annual percentage rate (APR). the APR is the annualized cost of credit, so it give you a true picture of how much the refinance is costing you because it includes the closing costs in the percentage rate.

After comparing the APR, it’s also important to compare the terms and conditions of the new loan. For example, you can’t really compare a 30-year fixed rate mortgage to a 15-year and say that one lender is better than the other. You need to compare lenders based on the same types of mortgages.

Apply for the mortgage refinance. Once you have chosen the lender, the next step is submitting your mortgage application and any supporting documents the lender needs to process you application. Most mortgage companies have stepped into the 21st century so you can speed up the application process by submitting everything online from the comfort of your own home or office. Even if you don’t complete the application yourself, the loan officer you’re talking to on the phone is submitting the information into her computer and everything is done electronically. This also opens up your lender options so that you’re not bound by geography. Expect a mortgage application processing time of anywhere from three to six weeks from the time you submit the application until the time you close on the mortgage refinance

Interest rates are low, so refinancing your home loan may be on your list of things to do before the end of the year. When you chunk the mortgage process down into these three easy steps, it can be a faster, easier and more beneficial way to refinance your home, save you money and make your overall financial situation a little bit brighter.

How to Become an Affiliate for Loan Modification Company

2009-11-05T07:40:00.000-08:00

Looking for a revenue stream for your mortgage website or a way to make money online?

Check it out now

How to Invest in Real Estate Using Your 401k

2009-11-04T05:56:00.000-08:00

Are you interested in purchasing real estate but don’t have the immediate capital to make the investment? Have you begun planning for retirement by opening a 401k? If the answer to both questions is “yes,” you might be in luck. Consider using the capital of your 401k to invest in the real estate by borrowing against the retirement account to fund the real estate loan. Any investment includes some risk, but with careful planning you will be on your way to utilizing the money that is sitting in a retirement account and profiting from a wise real estate investment.

Step 1: Assess the value and rules of your 401k. The amount of your loan will be based on the value in your retirement account, and while the 401k provides guaranteed funds, you will still be unable to borrow more than you can be expected to pay back. Additionally, your 401k might have rules that make borrowing against it difficult or subject to certain conditions. Be sure to check on this before beginning the process of acquiring a loan against the account.

Step 2: Research the different options available for investing in real estate using a 401k. One of the safest options is the real estate investment trust (REIT), which is composed of other companies that purchase and dispose of property. By investing in the REIT, the investor is allowing others to make the actual real estate investment, and while limits the investor to the decisions of others it also takes some of the load off the investor’s back.

Step 3: Research the option of the individual retirement account (IRA) for your investment. The IRA is not always a feasible option for some holders of a 401k, but it is something to consider when planning for a real estate investment with a 401k. Bear in mind that relocating money from the 401k to the IRA could impose a financial penalty, and this might or might not be worth the cost for your investment.

Step 4: If you are planning to use a loan for your investment, research and select a lender. With a conventional loan, you are essentially borrowing against yourself and ultimately pay yourself back with the loan. But this is considered a valid option for the 401k, so be sure to look into it closely. Each lender will have different rules for this type of investment, so ask around, and be sure to check on the specific requirements of the lender. Fees, interest rates, and so forth will vary, and these can have a significant impact on the value of the investment.

Step 5: Select the type of investment that you will use. Be sure that you have consulted a financial advisor, and particularly one that is familiar with real estate investments before you make your ultimate decision.

Tips and Warnings:

Many investment professionals will advise against taking out a loan against the 401k, due to the inevitable risk that ensues. As a result, the REIT might be the only option, because it is usually considered the safest.

The Truth about Credit Counseling Agencies

2009-10-28T08:51:00.000-07:00

Credit counseling agencies, debt relief services, consumer credit help--these are but a few of the names that companies claiming to help consolidate consumer debt go by. As a former mortgage and credit specialist, I've had an up close and personal view of how consumers turning to these companies for help can also receive a big fat mortgage denial.

Why?
The answer is rather simple. A lender or a creditor gets an uneasy feeling when they see that you couldn't manage your finances on your own, but had to turn to a "credit counseling" agency to do it for you. Lenders would rather see that you took control of the situation yourself and took the steps necessary to get out of debt on your own.

The truth is that everything you can pay a credit counseling agency to do for you, you can do for yourself. Yes, it will take some of your time, but you put yourself in debt so it is your responsibility to get yourself out of it too.

Take Control

First, contact each of your creditors and lenders. Explain you're having problems paying your bills but you want to work out an arrangement that is mutually beneficial. Most companies would rather work out a payment arrangement than not get paid at all, so you may be surprised at how many of your creditors work with you.

Second, get all of your agreements in writing. Get the name and contact information for the person you speak with at each lender. Follow-up your phone call with a written description of the agreement. Most companies will send you something more formal via email or in the mail, but you need to be proactive about the situation and document everything.

Stick to it. Once you establish an arrangement with your creditors, make sure to hold up your end of the bargain by making the agreed upon payments and making them on time--always.

Credit counseling agencies saw a need (or more of an opportunity) in the market to make money and they took it. Working with a credit counseling agency can solve your debt problems in the short-term, but can be damaging to your ability to obtain new credit in the future and in the long-term. Avoid this problem by acting as your own credit counselor. It resolves your debt problems and shows creditors and lenders that you are in full control of your finances and you have the ability to manage your own finances.

When a Fixed Rate Mortgage is the Best Option

2009-10-27T10:54:00.000-07:00

Mortgages are not one-size-fits all financing options. The type of mortgage that is right for your neighbor may be disastrous for your personal financial situation. Also, there is a major misconception that fixed rate mortgages are always the best option. Always is a strong term and there aren’t many things in this world that are “always.” The same is true with fixed rate mortgages.

So when is a fixed rate mortgage the way to go?

Personal Situation

The first aspect of your life you to need to review is your financial situation. Ask yourself the following questions to gain a better understanding of where you stand.

o How long will I realistically live in or own this home? No matter how many years you say, see if there is a mortgage that matches or comes to close to the number of years in your answer. For example, if you say five years then a mortgage fixed for five years may afford you a lower interest rate than a 30 year fixed.

o Do I live on a fixed income or will it stress me out if my monthly mortgage payment fluctuates? If you need to know exactly how much your monthly mortgage payment is going to be at all times or it stresses you out to think of your payment changing, then a fixed rate mortgage is the most beneficial one for you.

o Did I have my past mortgage(s) for the entire time I lived in the home or did I refinance or sell before the end of the mortgage? The national American average reveals that homes are refinanced or sold in five to seven years. This means that it’s rare, if not non-existent, to hold a mortgage for a 15 or 30 year period. So if you can get a lower interest rate and lower monthly mortgage payment with another type of fixed rate or variable rate mortgage then it may be worth looking into it.

Interest Rate Environment

The other major item you need to consider before deciding on a fixed rate mortgage is the current interest rate environment. If the current interest rates are low, then locking in on the low rate with a fixed rate mortgage probably is the best way to go. If interest rates are high and are expected to drop in the near future, then a fixed rate mortgage may not be the best option as part of your long-term strategy.

When is a fixed rate mortgage the best option? It depends on your personal financial situation, emotional state and current interest rates. Long-term and short-term considerations can also affect your decision, so keep all of these things in mind when choosing your next mortgage.

5 Things to Do Before You Apply For a Mortgage

2009-10-21T08:03:00.000-07:00

Applying for a mortgage, whether it's for a purchase or a refinance, is a major financial undertaking. It's a financial step that should be taken very seriously. You should also go into the process with your eyes wide open and with enough knowledge to understand what it is happening and you move through the mortgage process. Before you start submitting your mortgage application, there are some things you need to do to prepare for the process.

1. Decide on a mortgage amount. The amount you want or need to mortgage versus how much of a mortgage you can afford may be two different numbers. You need to have a realistic idea of the mortgage amount you can afford. One of easiest ways to figure out how much a mortgage payment is going to be based on the mortgage amount you want is to use a mortgage calculator or refinance calculator. You can input the amount of the mortgage and the current interest rate to see what the monthly payment comes out to be. You can then compare the monthly payment with your budget to sit if the two fit. You can continue to adjust the mortgage amount or type of mortgage to see how this changes the monthly payment until you create an affordable scenario.

2. Decide how long you'll live in the home. People often have the misconception that if the current interest rate is less than what they are paying now that they should run out and refinance. Since there are closing costs involved in a refinance, getting a lower interest rate may not be enough to truly save you money. In order to determine if you will recoup your closing costs in a refinance, you should do a break even analysis, which will tell you how long it will take you to recoup your closing costs. If you're planning on being in the home longer than it takes you to break even then it is usually beneficial to refinance.

3. Include the cost of homeowners insurance and taxes. You may be able to afford the monthly mortgage payment, but it's also important to consider the other costs involved in owning a home. Find out the estimated taxes and insurance for the home and be sure to add this cost to your monthly payment. This will provide a full cost view as to whether or not you can afford to buy a home.

4. Check your credit report. Especially during the economic downturn, a high credit score is more important than ever to get approved for a mortgage. Generally speaking, lenders are looking for credit score of 720 or higher. You'll want to get a copy of your credit report from each of the three credit agencies (TransUnion, Experian and Equifax) to make sure that all of the information is correct. If you find any incorrect information on your credit reports, correct it by contacting the agency or opening a dispute with the credit bureau reporting the negative information.

5. Get pre-approved. If you're purchasing a home, you may want to get pre-approved for a mortgage before you start house hunting. Not only will a pre-approval letter from a mortgage lender allow you to look at homes in your price range, but it may also be a bargaining tool for negotiating the purchase price of the home.

Applying for a mortgage, especially in today's economy, isn't always an easy task. You may be able to streamline the process by doing some preparation ahead of time. Before you apply for a mortgage, take a look at your financial situation and go through these seven steps to make sure that obtaining a purchase mortgage or refinancing your current one is a viable option for you.

How to Become Mortgage Loan Officer

2009-10-20T12:33:00.000-07:00

According to the Mortgage Banker's Association, approximately 99 percent of the homes purchased in the U.S. are financed with a mortgage. With such a demand for mortgages, becoming a mortgage loan officer may be a career option worth looking into.

Check job postings. The Bureau of Labor Statistics states that nine out ten loan officers in the United States work for institutions such as banks, credit unions and other related financial institutions such as mortgage lenders. Look at the websites for local banks in your area to see which career positions are available. You can also look at job posting websites such as Monster, CareerBuilder and Hot Jobs.

Qualification match. See how your experience and background lines up with the job requirements for the position you're interested in applying for. Typically, a loan office has a bachelor's degree in business, finance, economics or a related field. Experience working in a bank or for a lending institution can be beneficial, but is not always required. This type of experience may be substituted for the education requirements as well.

Licensure. Loan officers working in banks or credit unions typically are not required to obtain a mortgage broker license. Working as a loan officer for another type of institution may require you to obtain your mortgage broker license. It may be a state requirement where you'll be processing loans for you to obtain a license. Mortgage News Daily breaks down the licensing requirements by state, so you can follow the guidelines for the state you'll be working in if you need to obtain a license.

Salary range. Working as a mortgage loan officer can be a salaried position, a commission position or a combination of the two. Some institutions pay loan officers a salary based on experience. Other institutions pay for each mortgage file that the loan officer processes and closes. Finally, some companies pay the loan officer a salary (which is typically lower than a straight salaried loan officer) and then pay a commission for each mortgage file that is processed and closed.

The Role of an Attorney in Your Home Purchase

2009-10-15T10:39:00.000-07:00

As is the case with most major purchases, buying a home is a multistep process. It also typically requires the involvement of several different parties including your real estate agent, real estate attorney, mortgage lender, title company and more. By using professionals such as real estate agents and attorneys from the beginning of the process, you can save yourself from making mistakes that can cost you time and money in the end.

What a Real Estate Attorney Does

A real estate attorney can help you with a home purchase before you even start looking for a new home.

Some of the roles your attorney play include:

• Advising you on the best way for you take title of the home, financing issues that may arise and helping you to make the right decisions based on your overall financial picture
• Reviewing your purchase offer price and terms before you submit it to the seller
• Reviewing or drafting the purchase and sale agreement, the terms of the agreement and who will hold the deposit
• Providing you advice in terms of mortgage financing so that the purchase and sale terms of the contract can be tailored to fit your lender’s requirements
• Obtaining an abstract of title for the property from the seller
• Examining the abstract for title defects
• Establishing an escrow account
• Recording the legal documents in the public records and paying the applicable taxes and recording fees after the mortgage closes
• Issuing title policies upon receipt of the recorded documents

You wouldn’t build a house without consulting an architect and builder, so you shouldn’t enter into a home purchase without first consulting a real estate attorney. The knowledge and experience a real estate attorney has can save you from irreversible mistakes that can cost you money or kill a real estate deal completely.

Understanding Homeowners Insurance

2009-10-14T11:19:00.000-07:00

When you own a home, you’ll want to protect it from loss or damage with a homeowners insurance policy. In fact, if your home is financed, then the mortgage company probably requires you to carry a certain amount of coverage. There are different options for covering the loss of or damage to the home itself and coverage options against loss or damage to your personal property. Then there is personal liability insurance, which covers you if someone is injured on your property that can be added to your policy.

Types of Coverage

Dwelling coverage. This type of coverage provides you with the money you need to cover the cost of rebuilding your home, which includes the interior and exterior. The square footage of the home is used to calculate the amount of coverage you should carry. You may also want to inquire with your insurance carrier to see if the policy has guaranteed replacement cost, which covers the cost to rebuild your home, even if the costs exceeds your policy amount.

Personal property coverage. This type of coverage insures the contents of the home. Personal property coverage typically amounts to 50-75% of the amount of dwelling coverage.

Liability insurance. If someone is injured while on your property, this type of coverage helps you to cover their medical expenses and the legal fees of a lawsuit. The amount of the policy is usually double the amount your personal assets are worth.

Master policy. If you own a co-op or condo, a master insurance policy typically covers damage to or injuries incurred in the common areas of the complex such as the pool, roof, exercise facility and walkways. This policy does not protect individual tenants for damage to the interior of their units or their personal property. You can ask your association for the details on what the master policy covers, but dwelling, personal property and liability insurance for your is still necessary.

Types of damage usually covered by a homeowner’s insurance policy:

• Fire or lightning
• Explosion
• Windstorm or hail
• Aircraft or vehicle crash damage
• Smoke
• Theft
• Vandalism
• Volcanic eruption
• Snow, sleet, or ice weight damage
• Water or steam damage from an internal problem like a plumbing, heating, air conditioning, or automatic fire-protective sprinkler system, or from a household appliance leak

Buying a Policy

You can do some online comparison on policies or contact your insurance agent for more information on homeowner policies. Since insurance needs vary by the person, you should base your needs on your personal situation rather than what a neighbor, family member or friend has. Organizations such as the Insurance Information Institute (www.iii.org) offer more information and resources on homeowner policies.

5 Ways to Earn Money and Get Out of Debt

2009-10-13T11:26:00.000-07:00

When you are burdened with debt, it can make you feel like you are trapped under a heavy weight. Debt can wreak havoc on your life and even your health--causing stress, loss of sleep and loss of an appetite to name but a few side effects. One of the easiest ways to get out of debt is to increase your income and here are five ways you can earn some extra money. Focus on applying all of the extra money you earn to paying down your debt. You'll be amazed at how quickly you can earn extra money to get out of debt.

1. Sell your stuff online. While sites such as ebay may charge you a small fee to sell items online, there are other classified sites such as Craigslist where you can list items for sale for free. It's like having a virtual garage sale where you sell items you no longer want or need. Depending on what you have to sell, virtual garage sales can rake in some big bucks.

2. Sell what you grow. If you have a green thumb and grow beautiful flowers or delicious fruits and vegetables, turn it into a moneymaker. Sell at the local farmer's market, flea market or if your town permits on the side of the road. Even selling your goods on the weekends may provide you with enough extra income to take a big chunk out of the amount you owe.

3. Have a garage or yard sale. While selling your stuff online allows you to reach a wider audience, a one or two day garage sale can attract quite a gathering of locals. How much you make can vary, but it's not unheard of to rake in a couple hundred bucks or more from a decent size garage sale.

4. Babysit. Offer babysitting services to friends, family members and neighbors. This is an easy way to rake in $10-$20 an hour without ever having to leave the comfort of your own home.

5. Sell your crafts. If you're creative or artsy, you can also turn your hobby into a side business to earn extra income. Whether you make handmade greeting cards and invitations or furniture and jewelery, there are craft markets where you can list items for sale online. You can also build and sell from your own website or attend local craft fairs and church bazaars.

Is Investing in Real Estate Still Wise?

2009-10-08T13:51:00.000-07:00

With a tumultuous housing market and economy as a whole, you may be wondering if real estate is still a good investment. As part of a long-term investment strategy it is still an investment that is considered to build wealth. The dip in the price of homes and other pieces of real estate may mean that you have the opportunity to earn an even greater return. Because you can buy real estate now at bargain pricing, you may be able to earn more of a profit when you sell it later, when the real estate market returns to normal.

Fellow finance writer Rayce Banner answers the question, "Is Real Estate Investing Still Evergreen?"

Investing in real estate is another time-tested method for building wealth. Over the generations, real estate owners and investors have enjoyed rates of return, comparable to the stock market. The best place to start with real estate ownership is to buy your own home. The equity, which is the difference between the market value of the home and the loan owed on it, in your home that builds over the years can become a significant part of your net worth. Among other things, this equity can be tapped to help finance other important financial goals such as retirement, college and starting or buying a business.

In addition to building wealth through home ownership, you can also consider investing in real estate that you rent out, often referred to as investment property. If you wish to invest directly in real estate, residential housing (such as single-family homes or small multiunit buildings) is a straightforward and attractive investment for most people.

Before you venture into real estate investing, be sure that you have sufficient time to devote to it. Also be careful not to sacrifice contributions to taxdeductible retirement accounts in order to own investment real estate.In the early years of rental property ownership, many investors find that their property's expenses exceed its income. This "negative cash flow" can siphon off money that you could otherwise direct into your retirement accounts to earn tax benefits. When selecting real estate for investment purposes, remember that local economic growth is the fuel for demand for housing.

In addition to a vibrant and diverse job base, a limited supply of both housing and land on which to build is another factor that you should take into consideration. When you identify potential properties in which you might invest, run the numbers to understand the cash demands of owning the property and the likely profitability.

If you don't desire to be a landlord (one of the biggest drawbacks of investment real estate) consider investing in real estate through real estateinvestment trusts. REITs are diversified real estate investment companies that purchase and manage rental real estate for investors. You can invest in REITs either through purchasing them directly on the major stock exchanges or through a real estate mutual fund that invests in numerous REITs. Because REITs tend to pay fairly healthy dividends, it's best to avoid investing in them outside of tax-sheltered retirement accounts during your working years or if you're in a high tax bracket.

Most diversified U.S. stock mutual funds invest a small portion of their assets in REITs. If you'd like REIT-focused mutual funds, among better such funds are Fidelity Real Estate, Cohen & Steers Realty Shares and Vanguard REIT Index.

Rayce Banner is a freelance writer on financial topics. Check out the learning "game" that has had a huge positive impact on his career direction: http://www.best-online-golf-game.com/cash-flow-game.html.

Teach Your Kids about Adult Bills

2009-10-07T16:52:00.000-07:00

In the final tip about teaching your kids how to be responsible money managers, you'll learn how to give your kids a realistic view of bills. Bills are a fact of life and now is the time to teach them what their future holds when it comes to expenses.

The easiest way to do it is to open bills when they come in the mail or hit your inbox. Sit down with your child and make a list of the monthly household bills. This helps them to gain perspective on what things cost and how much they can expect to pay for things when they become adults. You can use this as a guide to teach older children how to create a budget.

Teach Your Kids about Investing

2009-10-07T09:48:00.000-07:00

In spite of what has taken place in the history of the stock market, investing today for tomorrow is an important lesson to teach your children. The point can easily be illustrated by taking them to open their own ROTH IRA account when they start to earn money of their own.

You can illustrate the same point by sharing your own retirment accounts or that of your spouse. If you have a 401k or IRA of your own, explain to your child how investing works, where the money comes from that goes into the accoun and how the money grows and changes over time.

Consolidation Definition

2009-10-06T17:39:00.000-07:00

The term consolidation has several different meanings, depending on the context in which it is used. Consolidation may be used in the business or corporate world or it may be used to refer to a financial situation.

Business

As a business term, the term consolidation is used to describe a situation in which two different companies, lines of business such as product lines or different areas of the company become one. This is different from a merger, Which is when a new business is formed when the two businesses come together. In a consolidation, one company is left standing. Examples are the 1999 takeover of Nabisco by Kraft Foods and the acquisition of Best Foods by Unilever.

Shakeout

In a mature business market, consolidation is the process of natural selection in which successful businesses grow bigger and begin to acquire smaller businesses. In the process, this also shuts down some smaller companies. In the end, this leaves only the strongest and biggest of the companies left standing. The consolidation process is also referred to as a shakeout.

This is exactly what happened in September 2008 when bank failures hit the news on a daily basis. Merrill Lynch was soon acquired by Bank of America, which did away with Merrill Lynch but left Bank of America standing as a financial giant.

Debt

When referring to debts, consolidation is the term used when several loans are replaced with one single loan. When this occurs, it usually creates a lower loan payment and a longer loan term.

Some consumers use debt consolidation companies to assist them in working with their creditors to turn several loans or credit accounts into one loan or credit account and one monthly payment. Typically, this includes paying a lower interest rate on the consolidated loan than what the consumer was paying for each loan individually.

Other consumers take out a new loan (such as an equity line of credit) to pay off and consolidate higher interest rate debt (such as credit cards). This type of consolidation helps the consumer to pay less interest in the long run and turn several loans or credit accounts into one loan and payment.

British Government

In Britain, this is also the term given to the process of combining two or more acts, bills or statutes before they are presented to Parliament. This typically occurs for legislation that is related in some way so that it makes sense to combine two or more pieces into one.

Teach Your Children about Money Tip #5

2009-10-01T14:30:00.000-07:00

Tip #5 for teaching your child about money involves teaching them how to bail themselves out of financial jams. It may be hard to resist the urge to help bailout your child, but when you don't always come to their rescue, your child learns to save themselves. So if your child wants to buy an expensive toy or item, have them take a good look at the amount of money they have in their own account. If they do not have enough money to buy the item then do not give a cash advance to your child so they can buy the item. Instead, brainstorm with your child to see what ways they may be able to come up with the extra money they want to buy the item.

For college aged children that run up their credit cards, do not offer to pay them off. Again, spend some time talking with your child to see how she can come up with the extra money needed to pay off the credit card bill. These types of lessons teach your children that they have to work for their money and manage their debt themselves because there isn't always going to be somebody (like Mom and Dad) to bail them out all the time.

Day #4 Teaching Your Child about Money

2009-09-30T12:55:00.000-07:00

Financial obligations are a commitment and it's important to drive this point home to your children. Mother of four, Alicia Vargo, could not have driven this point home even better with her four children (ages 16, 17, 19 and 21).

"I have always made certain that if anything were to ever happen to me that they would know how to take care of themselves. Examples of this are each one of them saved for their cars, we matched down payments, but we put the cars mainly in their names so they could build their credit, pay their car payments and their insurance," says Alicia.

Alicia and her husband have downsized significantly in their "things" as an example for the kids in being financially responsible while maintaining quality of life. Alicia and her husband have tried to teach their children not live for their mortgages, but rather to purchase a home they can afford to pay for each month. Circumstances in life can and do change quickly, so teach your child to have a realistic view of what quality of life means and that bigger isn't always better.

Alicia's daughters are 19 and 21 and already have a substantial and positive credit history, strong savings accounts, and can rent an apartment or house on their credit alone.

Alicia states, "We have taught them how to pay their bills and build their credit."

It just goes to show that no matter what age you start, it's imperative to teach your children that when they use a credit card, take out a car loan or use a mortgage to buy a home that they are responsible for making the payments--each and every month--so they need to make wise purchase decisions and buy what they can afford to pay for.

Is Credit Card Counseling the Way to Go?

2009-09-29T10:37:00.000-07:00

Especially if you are in credit card debt, you may have heard of or investigated working with a credit card counseling agency. A credit card counseling agency helps consumers to consolidate their credit card debt, lower their monthly payments and make it more affordable for credit card holders to pay off their debt. These counseling agencies negotiate with your credit card companies for you to make this happen, but is it worth it to work with a credit counseling agency to get your debt under control?

The cold hard truth is that it may not be worth it at all.

First of all, it can damage your credit, which may sound like the direct opposite of what you would expect. Using a credit counseling agency to help you consolidate your debt is the equivalent to writing your future creditors a letter stating that you are financially irresponsible and can't manage your own money. Therefore, you have to turn to professionals for help in getting your finances in order. This means that it can harm your chances of obtaining credit in the future when creditors see that you had to turn to a credit counselor for help in the past.

Second, you don't need a credit counseling agency to negotiate better rates on your credit accounts or to consolidate debts. These are steps you can take on your own. Call each of your creditors, explain your situation or financial challenge and see what they may be willing to do. Most creditors would rather work out an arrangement with you than not get paid at all.

So before you throw up your hands in defeat and turn everything over to a credit counseling agency, be sure to measure some of the disadvantages of working with this type of agency. Once you take a look at both sides of working with an agency, then decide if it's still something you want to pursue or if it's something you can handle on your own.

Teach Your Child Amount Money by Limiting their Access to It

2009-09-23T12:33:00.001-07:00

It's Day #3 on how to teach your kids what they need to know about being responsible managers of their money. No matter how wealthy or poor your family is, the only way to teach your children how to budget and manage money the right way is by limiting how much money you give to them. This is not an encouragement to let your child suffer. It's fine to give your child an allowance in exchange for doing household chores or completing tasks, but make sure that the payment fits the duties.

This helps children to learn how to save and spend their money according to how much they have. If the latest video game has hit stores and your son is saving up his allowance to buy it, then he knows he has to forgo buying a shirt he wants and hitting Starbucks everyday with his friends after school for an iced latte. Otherwise, he won't have enough money to buy the game.

Providing an allowance to college-age children is OK too, but you'll better prepare them for adulthood by keeping this amount within meager means as well. When they hit the real world, they are going to have to start at an entry-level job, probably not making a ton of money. They need to learn how to live within their means and by not overindulging them, you're preparing them for their financial future.

Teach Your Child about Budgeting

2009-09-22T12:21:00.000-07:00

Today it's time for Tip #2 about how to teach your children about money. The old adage, "Money doesn't grow on trees," probably isn't enough to teach your children that money is a limited resource. Instead of giving them a visual of a money tree, share the family budget with them instead.

Depending on your child's age, you can accomplish this in a couple of different ways. With a set of jars and a pile of change, you can easily show small children how limited money can be. Label each jar with a sticky note or piece of paper that describes a household expense.

Some categories may include mortgage, food, electricity, water and clothing. Start out with a pile of money (can be bills, coins or even monopoly money in order to illustrate the point).

Tell the kids how much money in income you have every month and then go through expense by expense as you drop the money in the appropriate jars. At the end of the expenses list, explain the money that is left over can be used for other purchases such as going to the movies, on vacation or buying "extras" such as candy or other things your children enjoy.

Older children probably don't need the jar exercise, but sit down with a spreadsheet on the computer or a paper and pen list of income and household expenses. You can illustrate the same point--money is limited and "fun money" can only be spent after all of the necessities in life are paid for.

Teach Your Children about Personal Finance

2009-09-18T08:04:00.000-07:00

If you've been paying attention over the past few years, then you know that your child's college savings plan doesn't have as much money as it used it. Maybe you or your spouse lost their job in the past year or two and you don't have enough money coming in to even cover the cost of saving for your child's education.

Whether or not it's about sending the kids off to college is irrelevant. It's more important to note that you have to teach them how to manage their personal finances. Unless, that is, you want them to live with you for the rest of your life. Since the answer to this is probably no, over the next few weeks I'll be running a series on how to teach your kids about personal finance so they can manage their own finances and become financially independent and responsible adults. Some of the tips may need to be modified slightly depending on how old your kids are, but the earlier you start teaching, the better it will be for them and for you.

Tip #1 Create a plan

The only way you can teach kids about managing their money is to make a plan that helps to guide them in money management. Children typically earn money in a couple of ways--chores, birthday and holiday money and a part-time job when they become teenagers. So instead of letting them spending every dollar they earn or receive as a gift, create a plan where some of the money has to be used to pay for one of their own expenses or put into a savings account that they are not allowed to use.

For example, a teenager may be required to pay for a portion of her car insurance payment or put gas in her car with her own money rather than money from Mom and Dad. Pre-teens may be required to put 10% of the gift money they receive in a savings account, mutual fund or stock. You can have them buy a fun stock such as Disney, which will even mail them a really cute stock certificate with Disney characters on it.

Child wants an expensive pair of designer jeans that are too much? Offer to pay for a certain portion of the jeans and then the child has to find a way to come up with the difference or they can't have the jeans. When the child has a vested interest in making a purchase, it helps them to appreciate the value of money better than when you buy everything for them.

Financial Knowledge is Power

2009-09-16T11:25:00.000-07:00

It's no wonder the American economy is in the toilet. According to a recent survey conducted by the Center for Economic and Entrepreneurial Literacy:

1. Only 47 percent surveyed knew what the Dow Jones Industrial Average is

It's an index that measures the performance of stock for 30 American companies.

2. Fifty-seven percent knew that their credit score is the most important factor in whether or not they can get approved for a loan.

3. A mere 48 percent understood that one of the primary benefits of investing in an IRA is that the contributions are tax-deductible.

If you don't find yourself in the know about these and other important financial factors, then start reading articles and doing some of your own research to bone up on your finances. It may make the difference from having a healthy financial life or a miserable one.

Loan Modifications: Helpful or Harmful?

2009-09-15T11:22:00.000-07:00

Before the foreclosure rates started to reach an all-time high, many of you may not have even heard of a loan modification. Most mortgage borrowers think that establishing a mortgage is a binding contract (which it is) and that the only way to change your mortgage is to refinance it. For the most part this is true, but in extenuating circumstances and on a case-by-case basis you may be able to to modify your existing mortgage.

What is a loan modification?
A loan modification occurs when a lender agrees to modify an existing mortgage because a borrower can longer afford to pay on the mortgage. This is a long-term inability to pay because of an extenuating circumstance (loss of a job, huge interest rate and payment adjustment of an adjustable rate mortgage, death of the bread winner). A loan modification typically involves a decrease in the interest rate of the mortgage, a lower monthly payment, a change in the type of mortgage or an an extension in the term (or length) of the mortgage. A mortgage lender typically agrees to a loan modification because it's less expensive for them to modify the loan than it is to foreclose on the home.

It sounds good so far, right?

Where the Problems Creep In
While hundreds of thousands of homeowners heading down the foreclosure path have been saved by loan modifications, there are just as many that have been adversely affected by the loan modification process.

Some of the disadvantages that loan modification borrowers have experienced include higher mortgage payments and a higher balance due on the mortgage than before the modification. So how does this happen?

What many loan modification borrowers do not realize is that many lenders are rolling costs such as late fees, the amount of unpaid back taxes on the home and other administrative costs back into the balance of the mortgage. This is leaving some borrowers with a higher mortgage balance and monthly balance payment than before the modification, which is the direct opposite effect they were looking to achieve.

This is not always the case. There have been many borrowers that have come out ahead and saved their home with a loan modification. For example, 80% of the borrowers that modified their loans through Wells Fargo are now enjoying lower monthly mortgage payments than they were before the modification took place. At Citimortgage, 92% of its loan modification customers have benefited from a loan modification.

The moral of the story is that it could go either way. Mortgage modification is not the panacea to the foreclosure problem. You need to speak with your lender and make sure that you fully understand all of the terms, conditions and fees associated with a loan modification to make sure it puts you on the beneficial side of the equation.

Commercial Mortgage Defaults To Rise

2009-09-11T13:18:00.000-07:00

Are Commercial Mortgages Suffering Too?

2009-09-10T13:54:00.000-07:00

I met with an old friend yesterday, who also happens to be a commercial real estate agent. He cried (not literally) that the commercial real estate market was feeling the ill effects of the economy too, so it got me to thinking, how are commercial mortgages fairing in this economy? Are commercial mortgage borrowers in the same dire straights as residential borrowers. Are foreclosures on commercial properties the same, lower or higher than residential properties?

According to Deutsche Bank, the increase in the unemployment rate and the increase of business failures has caused the number of defaults on commercial mortgages to rise. In fact, in the second quarter of 2009 the delinquency rate on commercial mortgages almost hit 3 percent and totaled $750 billion in delinquent debt.

To add insult to injury, the tanking of the housing market also led to a loss of mortgage brokers, real estate agency offices and a multitude of other real estate professionals. The unemployment and closures of real estate businesses also caused the commercial spaces once filled with these businesses to empty out.

In total, this has left $3.5 trillion in commercial loans with more than $2 trillion in commercial mortgages maturing between now and 2013. The short answer is that it looks pretty grim for the commercial mortgage industry, so even as the residential market seems to be heading toward a recovery, there is a lag in the commercial industry that means it'll take longer for this market to catch up.

Your First Car Loan

2009-09-04T13:42:00.000-07:00

Financing a new or previously owned car for the first time may seem like a scary experience. It will be less scary if you know what you're doing before you step foot in the financing office of the dealership.

Know your credit score
If you don't already know your credit score, then find it out by ordering it from one or all three of the credit agencies (Experian, TransUnion and Equifax). Your credit score plays a huge role in whether or not you get car loan approval and it's also a factor in the interest rate and term (length) of the loan you can get. Shoppers with higher credit scores (usually above 700) get lower interest rates than those with lower credit scores.

Comparison Shop
As you would with any major financial purchase, you should shop and compare at least three auto lenders before going with one of them. Interest rates can vary from lender to lender and you want to make sure that you're getting the best deal possible--no matter what your credit score is.

Shop with approval in hand
It's possible to get pre-approved for an auto loan before you've even started shopping for the car. It's also a good idea because it gives you a price range to stick with. This prevents a crafty car salesman (or woman) from up-selling you into a more expensive vehicle than you may not be able to afford. Pre-approval also cuts down the time you have to spend at the car dealership while the finance department pulls credit and tries to put together an auto loan through the dealership.

It can also give you some negotiating power. Some dealerships offer cash rebates or low interest rate financing. If you already have low interest rate financing setup for your auto loan then have the opportunity to take advantage of the rebate--and you'll still get a low interest rate from the original lender.

Shopping for a car loan isn't brain surgery by any means, but if you're prepared you are more likely to come out ahead in the deal.

Your Money: Reverse Mortgages

2009-09-03T18:19:00.000-07:00

Mortgage Fraud & Pot Houses

2009-09-01T17:10:00.001-07:00

Adjustable Rate Mortgages – Good or Bad?

2009-08-26T16:56:00.000-07:00

Does the term adjustable rate mortgage or the thought of having one send you into a panic? While an adjustable rate mortgages (ARM) is not right for everyone or for every situation, there are advantages to having an ARM over a fixed rate mortgage.

First, adjustable rate mortgages tend to have lower interest rates than fixed rate mortgages. Depending on when the ARM is due to adjust and what interest rates are expected to do (increase or decrease), an adjustable rate mortgage can cost a borrower a lot less in the long run.

A scenario where it may be beneficial to have an ARM is when you know that your time living in the home or having the mortgage will be short. If you can deal with possible adjustments in your monthly mortgage payment and only plan on living in the home for a short period, it may save you thousands of dollars to obtain an ARM over a fixed rate. For example, if you know that you will only be living in the home for 3 years, then a 3/1 ARM may work for you. This is a fixed-to-adjustable rate mortgage that has a fixed interest rate for the first 3 years of the mortgage. After the third year, the interest rate adjusts every year.

If you'll only be in the home three years, it doesn't matter what the interest rate does on the fourth year because you'll no longer be living there. During the three year period, however, you can enjoy a lower interest rate than a fixed rate mortgage, which means less in monthly mortgage payments.

Another situation where ARMS are more beneficial is when interest rates are expected to drop. For example, Mr. Smith purchases a home using an adjustable rate mortgage that adjusts every six months. He did this because he expects interest rates to drop over the next couple of years. It is a gamble because interest rates can go either way, but if you can emotionally and financially handle fluctuations, ARMs can be more cost effective ways to finance a home.

Mortgage Fraud Task Force

2009-08-25T12:34:00.000-07:00

At least eight states have woken up and seen what is going on the arena of mortgage fraud. The Attorney General (AG) offices for the states of Arizona, Colorado, Illinois, Nevada, North Carolina, Massachusetts, Missouri and Ohio have announced that they are forming a mortgage fraud task force.

The task force will be tackling issues such as equity skimming, bogus foreclosure rescue, straw purchases and unethical lending practices.

The leader of the task force is the Washington Attorney General Rob McKenna. Representatives from the Department Justice, federal treasury, Department of Housing and Urban Development and (HUD) Federal Trade Commission (FTC) will also be involved in combating mortgage fraud as part of the task force duties.

Cash for Clunkers Comes to a Screeching Halt

2009-08-21T06:32:00.000-07:00

The Cash for Clunkers program was introduced a few short months ago and the total amount devoted to the stimulus program was $1 million. The program was to run until November 1 or when the $1 million set aside in rebates was reached, whichever of the two came first.

As of Monday, August 24, 2009 the Cash for Clunkers program will come to a halt, so car buyers have one last weekend to get to their favorite dealership and trade-in their clunker for a brand new car--at least if you want to take advantage of the $4,500 rebate.

5 Reasons Why Seniors Get Reverse Mortgages

2009-08-19T10:03:00.000-07:00

If you're nearing the age of retirement, usually 62 years old, and you have equity built up in your home, you may have looked into doing a reverse mortgage. You should do your homework and really research what a reverse mortgage is all about and how it may or may not benefit you to have one before making any final decisions. Here are the top five reasons that seniors obtain a reverse mortgage. Do you see your self in any of these scenarios?

1. Retirement Lifestyle

Homeowners that have lived in their home for the last thirty years or so have either paid off their mortgage completely or have been making monthly payments that is bringing them to the end of their mortgage journey. Depending on how much your mortgage is or was, this may be the biggest expense you pay out on a monthly basis. As you reach retirement, you may be starting to worry about how your fixed income will weather in continuing to cover all of your fixed monthly living expenses such as housing, medical and insurance. Even if you have income from retirement accounts, pension plans, social security or other sources, a reverse mortgage can allow a retiree to increase their fixed income amount. In essence, the added income a reverse mortgage provides can establish a higher quality of life--a nicer retirement lifestyle--than if they didn't have the reverse mortgage payment coming in every month.

2. Pays for medical expenses

Medical expenses are a fact of life, but this fact seems to increase as you get older. And since the cost of health care isn't getting any cheaper, rising costs make it harder for seniors to pay for health care on a fixed income. It forces some to have to choose between buying food and paying for their medication on a regular basis. With a reverse mortgage adding to monthly income, it can help you to cover all of your expenses and not have to choose between medicine and some other necessity.

3. Changes to home

As you age, your living accommodations have to change as well. For example, it's harder for you to get up and down the stairs, so if you have a two-story home it may be time to modify your existing home or move to a more accommodating home for your aging needs. Reverse mortgage payments can help to cover moving or renovation expenses to make your home more comfortable for your next thirty years of life.

4. Gives you spending money

Probably one of the top things that retirees look forward to when they retire is the ability to travel more. Reverse mortgage payments have been known to provide retirees with extra spending money to cover the necessities in life and to splurge a little along the way on items such as vacations.

5. Pay off or pay down debt

Just because you retire doesn't mean that your debts simply disappear. Reverse mortgage payments may be the extra cash you need to finally pay off, or at least pay down your outstanding debts. Once your debt is paid off, the reverse mortgage money that keeps rolling in means you'll have even more money each month to apply toward other expenses and purchases.

If you are nearing retirement and you have equity built up in your home, you may want to consider what a reverse mortgage can do for you. Be sure to research what a reverse mortgage is all about and how it may or may not benefit you before making a final decision. It may be just what you need to live out your retirement years in style.

The Positive Effects of the Mortgage Bailout

2009-08-18T10:29:00.000-07:00

Of the trillions of dollars going toward the various federal government bailout programs, only about one-tenth of the funding is earmarked for the mortgage and lending bailout. Plenty of programs have already been instituted to help lenders as well as homeowners, but how are things shaking out so far?

The proof is in the numbers.

Recently, the U.S. Census Department and the Department of Housing and Urban Development (HUD) reported that the home sales in the U.S. are on the rise. In June of 2009, house sales were up by 11% as compared to the May figures. It's also 21.3% over the figures reported in June of 2008.

While foreclosure rates are still very high, it's not as bad as it could be.

The Federal Housing Finance Agency (FHFA) reported fourth quarter 2008 foreclosure rates totaling 149,981 homes. The foreclosure figure had increased to 243,824 by the end of the first quarter of 2009, which indicates a 61% increase in a short three-month period.

This doesn't create a future picture that is very positive, but when you take into consideration that the bailout provided incentives to lenders to institute programs such as loan modifications to prevent foreclosure, these foreclosure numbers could be worse without these programs.

Again, the proof is in the numbers. During the fourth quarter of 2008, approximately 65,000 homes were saved from foreclosure because of programs such as loan modifications. In the first quarter of 2009, homes saved from foreclosure because of these programs increased to 78,000.

And with even more home retention and government programs still being put in place, foreclosure rates may be kept from reaching higher rates--making the bailout even more of a success.

How College Students Can Save Manage, Money & Reduce Credit Card Debt

2009-08-07T08:33:00.000-07:00

Money, College & Cash

2009-08-06T08:57:00.000-07:00

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It's Your Call--Mortgage Fraud Prevention

2009-08-05T19:32:00.000-07:00

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Home Affordability Refinance Program Comes to the Rescue Sooner than Planned

2009-07-23T09:46:00.000-07:00

At the beginning of July, Freddie Mac and Fannie Mae backed mortgage holders received some good news. In an effort to help homeowners that have negative equity in their homes (when the value of the home is less than the amount owed on the mortgage), the Home Affordability Refinance Program (HARP) was introduced. The program allows homeowners with Freddie and Fannie mortgages to refinance and receive up to 125% of the current home value for better loan terms and conditions. Better loan terms and conditions may mean lower monthly mortgage payments, a shorter pay-off term and a reduced principal balance.

Originally, the program was scheduled to roll out at the beginning of September, but has been moved up to become available to borrowers August 1, 2009 instead. Fannie Mae announced that moving the program availability date up would help loan originators to obtain secondary marketing pricing (the pricing investors will buy loans from the lenders at) sooner and allow them to set its origination prices sooner as well. One month may make the difference between Fannie and Freddie mortgage borrowers fighting off foreclosure or succumbing to it.

For homeowners with a Fannie Mae or Freddie Mac loan interested in applying for the HARP initiative, contact the servicer of your loan for the details on eligibility and the application process.

Does the Increase in Housing Starts Mean We're Heading Toward Recovery?

2009-07-22T06:22:00.000-07:00

According to the number of building permits applied for in June, which is an indicator of future building growth, June has marked the highest amount of applications since September of 2008. Building permit applications are up 14.4% in June from figures reported in May of this year. Is this an indication that the housing and lending market is starting to make a comeback?

It does infer that things are starting to turn around, but since it took years to get to this point, it will likely take years to turn the bad back into the good. For one thing, lenders have to get the foreclosure rate under control. Some lenders are using recovery alternatives such as loan modification programs to reduce the amount of foreclosures--keeping mortgage income in place for the lenders and homeowners in their homes.

Second, after the foreclosure rates are reeled in, the flow of credit will have to start streaming from lenders to borrowers to truly restore the market. Lending money is one of the stimulants to the economy that has the ability to put this shaky economy back on solid ground.

Housing starts are up 14.4%, which is a step in the right direction, but it is certainly not the end all and be all or the resolution to the lending and housing market problems. But, it has to start somewhere so it might as well be here.

The Financial Side of Balancing a Family and Career

2009-07-21T06:13:00.000-07:00

Having children can be expensive, but that shouldn’t stop you from pursuing your dream of starting a family. Don’t think that raising a family “on a budget” is impossible. It has been done hundreds of millions of times before. Learning how to build a realistic budget is the key here, and like any other business or personal venture, it all depends on making more income than you spend.

Food will cost you about $300 a month per child, and clothing about $75 a month. You may have to upgrade to a larger apartment (which will amount to a couple of hundred dollars increase in rent) or you may already have a home with a child’s bedroom. Aside from these basic expenses you will also have to give thought to child care (if both parents work), family vacations and of course fun stuff for children who always demand attention and amusement. This certainly emphasizes the need to educate your children to read and use their imagination. Not only will this pay off later on in life, but will also save you money in the present! Limit mindless TV watching in your family, as much of TV programming (and especially commercials) is just training your child to become an impulsive buyer.

If you choose to hire a baby sitter or use a child care service then you will be spending anywhere from $300-$1,250 a month. Some families have used telecommuting jobs to their advantage, which reduce the time spent away from home, as well as extra-curricular school programs and an employer-provided flexible-spending account.

Saving money for college can be another trial, as the price of a college education ten years from now will be between $100,000 and $225,000 for one student. Start saving early by looking into college programs that help students while they are still in high school. You can also look into community colleges, which allow students to earn credits, which are usually transferable to a four-year college to earn a bachelor’s degree--a “half price” college education arrangement that will still provide many professional opportunities.

Having children will not be as expensive as you fear if you take the time to budget and plan now.

The Senate Does its Homework on Foreclosure Prevention

2009-07-17T11:52:00.000-07:00

It's good to know that yesterday the Senate spent some time learning about programs to prevent foreclosure. With the foreclosure rate at one of its highest points in history, it's a good idea for them to figure how some prevention programs can help bring this economy back on firm ground.

Herbert Allison, the assistant secretary for financial stability of the U.S. Treasury Department, announced that so far 27 mortgage loan servicers have registered to participate in the Treasury's home loan modification program.

While the new program is still young in its inception, it has already helped to save homeowners from foreclosures. While millions of mortgages are expected to be "saved" through the new program, it is not expected to be the cure to the foreclosure crises. Every little bit helps though.

June Housing Starts Up 3.6%

2009-07-17T09:49:00.000-07:00

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What Are Mortgage Interest Rates Up to This Week?

2009-07-16T11:46:00.000-07:00

You may have noticed that the stock market has been rallying lately. This is great news for investors that have money in the market. What does the uptick of the market do to mortgage interest rates? Is a rally in the market a sign that it's time to obtain mortgage financing or do a refinance?

Well, a day or so of an up market does not send a signal that it's time to do anything one way or the other. What goes up, most of the time comes back down. What the change in the market did do though was it caused the price of mortgage backed securities to fall, which in turn causes mortgage interest rates to increase. Yesterday, the up market translated into an increase in mortgage rates by approximately .375 percent, sending the average 4.875% mortgage rate to 5.25%.

To get an idea where current mortgage rates are, check out the new widget in the right sidebar.

The 5-step Process of Turning Your Bad Credit Good

2009-07-09T12:16:00.000-07:00

With almost 100% of the homes purchased in the United States being purchased with mortgage financing and a tightening credit environment, it's more important than ever to have great credit. All mortgage lenders use your credit score as the basis for making a lending decision, so if you have bad credit your chance of being denied is high. Bad credit borrowers also receive loan terms, rates and conditions that are not as favorable as those offered to good credit borrowers. Now is the time to do what you can to turn your credit situation around. Use this 5-step process to turn your bad credit good and you'll be well on your way to home ownership.

Step 1. Find out what's bringing your credit down.
The first step is to pull your credit report from the three major credit reporting agencies—TransUnion, Experian and Equifax. Usually on the first page, there is a section that highlights negative items that are showing on your credit report. This includes late pay accounts, collection accounts, bankruptcies and charge-offs. There may be items showing here that you aren't aware of. Any negative items that are being reported are the ones that you need to focus on correcting in order to increase your credit score. Order your credit report from each agency today by visiting www.transunion.com, www.experian.com and www.equifax.com.

Step 2. Scour your credit reports like there is no tomorrow.
When you receive your credit reports, make sure to review the information very carefully. While negative items are usually listed separately and in one area, it's important to go line-by-line on each credit report to look for any inaccuracies. Mark or highlight the inaccurate items or items you need to address in order to increase your credit score. Be sure to do this for each of the credit reports because information may vary from credit agency to credit agency.

Step 3. Write a dispute letter to tackle to inaccurate items.
First, you want to address the information showing on your credit reports that is inaccurate. Write a letter to each agency addressing each inaccurate item. Fully explain why the information is inaccurate and why it should be removed from your credit report.

Step 4. Tackle the negative, but accurate items.
If you've earned bad credit the honest way by making late payments, not making payments at all, and having your accounts sent to collection agencies, then it's time to face the consequences. Call the creditors, lenders and collection agencies (the numbers are usually on the credit report) and talk with them to see what you can do to make your wrong right. You may be able to work out payment arrangements with them to bring the account current. Some will even discount the amount you owe if you agree to pay it off in-full. When you are able to make arrangements be sure to get everything in writing. Also, make sure that whatever arrangements you make with the creditor that you to stick to it.

Step 5. Follow-up to ensure negative items and inaccurate information is removed.
When you dispute inaccurate information, the credit agency will automatically send you an updated credit report if the information is changed or the negative items are removed. If you do not receive a new copy, then request one. Make sure you follow-up on your disputes and the outcomes. As the negative items start to disappear from your credit report, your credit score will go up. And a higher credit score improves your chances of getting approved for any type of new credit or loan, but in these days and times, it especially helps with home mortgage loan approval.

What Does the $787-billion American Recovery and Reinvestment Act Mean for Green Jobs?

2009-07-08T12:43:00.000-07:00

Obama's stimulus package's true intent was to save 3.5 million jobs over the next couple of years. But is that where the power of this money ends? The answer is no. Not when it comes to going green anyway. Part of the package is to increase the amount of renewable energy that the U.S. produces, so it's a move toward a more environmentally friendly way of life.

Increase in green jobs
The really great news is that the need for more renewable energy also calls for more professionals that can help with all of the renewable energy initiatives. The bottom line is this stimulus package may create an opening for more green jobs. So, a company that has 15 biologists on its payroll may have a need now for 30. And these aren't job roles that just anyone can fill. These are highly specialized and trained professionals. With more money available from the Federal Government, companies in the renewable energy industry will have the means to go after, recruit and attract the right professionals for these positions.

Tax relief
Not only will funding be available but there will also be some tax relief associated with the deal. The new Clean Energy Finance Authority has been established to make the process of getting financing and approval for renewable energy loans easier on the borrowers. When the chips fall where they may, it is expected that $100 billion in renewable energy projects will spurt from the cash and tax credit incentives.

So what does the $787-billion American Recovery and Reinvestment Act mean for green jobs? It means there may be a whole lot more green job positions available in the near future.

Save $250 on Electric Bills Each Year

2009-07-07T06:40:00.000-07:00

According to the U.S. Department of Energy, the average household spends more than $250 per year on standby power. So now it's time to do your part--your part to save energy and a little green (money) this year!

Ways to save standby power

1. When you're not using your computer, turn it off!
2. When you step away from your computer for more than a few minutes, put your computer into sleep mode.
3. When your cell phones and other devices are not charging, unplug the chargers.
4. Unplug anything and everything when you're not using it. Plugged in items do draw electricity even when not in use.
5. To turn items off and unplug in one fell swoop, plug items into a power bar. For example, every time you leave your office, turn the power strip off that has your computer, printer and fax machine plugged into it and then unplug the power bar.

Take these five steps and you can save around $250 on your electric bill each year. You'll be saving energy too!

Save Money at College

2009-07-03T11:08:00.000-07:00

When you're off at college and living off campus, you have to start worrying about paying electricity as part of your expenses. Or if you're a parent a parent with a child that has a cell phone, a gameboy and several other gadgets, plugging all of these items in to charge can really add up.

Solution: A Solar Powered Backpack
That's right. Most office supply stores and some retailers online sell solar-powered backpacks that you can plug in cell phones, laptops and other gadgets into to charge. It's a win-win. Gadgets get the juice they need and it saves money on electricity.

A New Way to Drive

2009-07-02T06:27:00.001-07:00

Car rentals and airfare can put a big dent in your wallet. Are you looking for a new way to travel without emptying your wallet and without putting miles and wear to your personal vehicle? Guess what? You can actually take a long car trip using somebody else's car!

There are several car and vehicle relocation services, which allow you to drive a car from one location to another. You, obviously, need a valid driver's license and are required to pay a deposit (which varies by the service). For example, Auto Driveway requires a $350 deposit for you to drive, but the deposit is returned to you when the vehicle is delivered safe and sound.

There are some caveats to making your long distance drive with another's car. First, drivers are expected to drive a certain number of miles each day. You also have to deliver the car to its destination at a specific time. You may be able to catch some sights of the towns and cities you drive through, but you're not allowed to take side trips. Finally, expenses for the trip are covered by you, so you still have to pay for the gas, food and hotel expenses.

It's something to consider the next time you're thinking about heading out on the open road. You may be able to get to your destination without the added expense of airfare or a rental car.

3 Ways to Save on Your Vet Bill

2009-06-30T06:57:00.000-07:00

If you love your dog like I adore mine, then you may be interested in learning how to save on your vet bills. I'd pay almost any amount of money to make sure that my JRT, Cody, is safe, healthy and comfortable in life, but sometimes the sting of the vet bill has made me wish I had invested in pet insurance!

There are three easy steps you can take to not only ensure your pet stays healthy but to also save you money at the vet.

3 easy rules to abide by
1. Don't fee your dog like he's a human. Even if you're a very healthy eater by human standards, you shouldn't feed your dog human food. Their tummies cannot digest the same food and ingredients that human tummies can. You can avoid an unnecessary trip to the vet and the racking up of your vet bills by feeding your dog food for dogs!

Especially avoid:

1. Bones (or foods with bones in them such as turkey and chicken)
2. Cheese
3. Chips
4. Chocolate
5. Grapes and raisins

2. Exercise your pet to keep them at a normal weight. Make sure that you feed your pet the proper amount of food and that they get exercise on a daily basis. Keeping your pet at the ideal weight for their body can help you avoid extra vet bills for joint problems, exercise programs and special diets, heart problems and more. Just like it is unhealthy for you to be overweight, it is unhealthy for your pets to be overweight too.

3. Do your own exams. I don't mean avoid taking your pets to the vet. What I mean is pay attention to your dog on a weekly basis. Feel his body for lumps, bumps or other issues that aren't normally there. If you perform weekly exams at home, you have a better chance of catching diseases and ailments early on, which may save your pet's life. Catching problems early can also save you money.

The healthier your pet is the less you have to take them to the vet (except for annual check-ups, shots, etc.). By taking these three steps, you can help ensure that you keep the money in your wallet instead of having to shell it out to your vet. All pets have expenses involved in taking care of them, but you can eliminate the unnecessary ones with these three easy steps.

Identity Theft Chat

2009-06-25T13:36:00.000-07:00

Millions of Americans each year fall victim to the identity theft thieves. I too was once a victim of identity theft. In my personal situation, it was someone I knew who stole my identity, but it didn't make my nightmare any easier. Not only can identity theft be a hassle for you, but it can wreak havoc on your credit.

I recently came across a new website called Identity Theft Chat. It covers real life stories of identity theft victims so you can learn from the experiences of others how to avoid becoming a victim or how to deal with it if you do fall prey. My story will be featured on the site in the near future but I urge you to take a moment to visit the site to learn how NOT to become a victim.

How the Interest on Your Credit Card is Calculated

2009-06-24T09:03:00.000-07:00

You certainly know how to use your credit card, but it's also important that you understand how the interest is calculated on the credit card balance you keep on your card. The calculation your credit card issuer uses to calculate the interest on your credit card can vary, but the most popular calculation is compounded interest based on a daily rate.

What in the world does this mean and how does this work?

Let's take a look.

How to calculate compound interest

A typical credit card statement covers a 30 day period (give or take a day or so). If you carry a balance over from the previous month to the new month, then the interest typically starts to accrue on the first day of your new statement period. So if your new statement starts over again today, June 23 and covers purchases made from today through July 22, then the $100 balance you carried over from last month starts to accrue interest from the date of purchase until you pay it off.

Using a compound interest calculation, your card issuer uses a daily rate to figure out how much interest to charge you, which is determined by dividing the annual rate by the 365 days in the year. You accrue interest on the daily average outstanding balance you've have outstanding throughout the month. So as you make charges during the new monthly period, you begin to accrue interest on the average daily balance you have on your account--if you don't pay the balance off by the due date.

Accrued interest may be nominal when your balances are small but as your balances grow, so does the amount of accrued interest. This is when it seems to spiral out of control, causing many consumers to start drowning in a sea of debt. Credit cards may be a big part of your life, but it's important to understand how your credit card issuer is charging you to use the card they've issued to you. It's the only to determine how much that purchase is really costing you.