Home Loan Australia Information News
Wed, 2 May 2007
Interest rates on hold: reprieve for homeowners
In a boon for the nation's mortgage belt, the Reserve Bank decided at its quarterly meeting on May 1 to leave the official cash rate unchanged at 6.25 per cent. The Reserve Bank's decision followed the publication of a much lower than expected March-quarter consumer price index, which showed inflation rose just 0.1 per cent for the quarter and 2.4 per cent for the year. This was well within the Reserve Bank’s target of 2-3 per cent. In a rare show of consensus, many economic forecasters are now predicting a further easing in inflation and most believe interest rates will stay on hold for the rest of 2007, particularly given the impending federal elections.
Thu, 08 November 2007
Tips for Home Buyers
Buying into that great Australian dream. Hot tips for home buyers. by Cathy Howley
From Darwin to Dubbo, Brisbane to Broome, Australia has one of the highest levels of home ownership in the world. In spite of the recent surge in prices in every capital city, that great Aussie dream of owning your own patch of paradise is still what most of us aspire to. But if you're smart and do some planning, there are clever ways to make buying your own home a little easier to do.
Here are seven good tips to help you get the front door key faster.
1. Don't be swayed by fabulous furniture and fresh flowers.
Many home sellers now use professional stylists to ensure their property looks the best at open for inspections. But look beyond the designer cushions and fresh flowers. Be practical. Do a pest and building inspection and check for major structural damage or signs of rot. And, don't forget to ask yourself all those mundane questions - such as is there enough cupboard space in the kitchen or will your sofa fit through the front door?
2. Location first, property second.
Your first property may not be your dream home, but it can be a vital springboard towards that long term goal. The trick is to buy in a location where property values are growing at the same rate as the location you ultimately want to live in.
This means compromising on the size or style of property. Buying a town house or a unit instead of a house, or a one bedroom instead of a two bedroom place.The important thing is that you'll have a foothold in your dream location. When you've accumulated more equity through capital growth, you'll be able to trade up to your dream home, too.
3. Small apartment blocks versus large.
The glamour of a big modern apartment block with outdoor pool, gym and on-site caretaker can certainly win over buyers. But here comes the crunch. You pay expensive body corporate fees every quarter and ongoing maintenance charges. Smaller blocks are usually older with fewer (if any) facilities, cost less to run and are often better maintained because of a higher level of owners versus renters. If you're in the market for an apartment and see several places for the sale in the same block, chances are the fees are the reason why. Beware.
4. Save valuable time. Search online for the best loan
When it comes to finding a loan, it pays to do your homework. There's a minefield of possibilities, offers, types of loans, variable and fixed rates. Compare what's on offer with different banks (not just the big 4), mortgage brokers and boutique lenders. Some places may offer only one or two loan types, but lenders such as HSBC Australia have no less than 9 different loans to suit everyone's lifestyle. Well worth checking out.
5. Don't forget about fees - keep funds aside
Okay. You've been saving hard for a deposit and your loan has been approved. When you take the plunge a sign a contract of sale, there are all sorts of little (and not-so-little extras) added on. These include stamp duty, legal costs, disbursements, mortgage insurance, pest inspection report, survey report, builder's report, loan application fee, valuation fee, registration fee and so on.
6. Another secret. Ask about "professional package" discounts
Banks are a lot more competitive nowadays and actively reward customer loyalty. If you're earning a reasonably good salary, say more than $50,000 a year, or $80,000 or more with a partner, ask about the "professional packages". The home loan interest rate you are offered is usually discounted by 0.5 per cent, which can really help. If you have a strong relationship with one lender and consolidate all your business with them, you can qualify for more discounts, savings account fee waivers and credit card annual fee waivers.
7. Forget that daily latte. Extra payments can reduce your interest faster
If you gave up buying your morning latte on the way to work, you can save over $700 a year! Put it towards your loan. Making extra repayments is one of the best ways to reduce the total interest paid and term of your loan. Some people even try making payments every fortnight - great if it works for you and your budget.
As a rule of thumb, every $1 in extra repayments you make early in the life of your loan saves around $2 in interest over the term of the loan, depending on the level of interest rates.
If you have spare cash from selling your car or a garage sale, think about making a one-off lump sum payment. Check first that your loan allows you to make additional repayments without a penalty.
About the Author
Cathy Howley is Creative Manager and Copywriter at Options Strategy, Melbourne. The digital agency with the strategy edge.
Wed, 28 November 2007
Where do I start finding a home loan?
There are so many home loans on the market these days with an increasing variety of rates, fees and features that it really pays to shop around. It may appear a bewildering prospect but somewhere there is a loan that best suits your circumstances and InfoChoice is here to help.
The main challenge is to look beyond interest rates to the features that a home loan offers. Often there is a trade off between interest rate and flexibility. Make sure the loan suits your circumstances and the way you want to pay it off:
Will you want to make extra repayments?
Do you want to have redraw access to any extra payments made?
Will you need to move within five years?
Can you benefit from having your salary directly credited to your loan account?
Is it better to just look for the lowest rate?
Should you avoid a home loan with ongoing fees?
Which lenders should you consider?
Should you use a mortgage broker?
How do you get the first homebuyers grant?
All these questions and more are answered on this site:
Source:Info choice
Sat, 08 December 2007
Multiple rate rises in 2008 not so likely
Despite the fevered predictions of one, two or even three more interest rate rises looming next year, the chances of multiple rate hikes in 2008 has lessened this week.
That's not to say the RBA no longer holds a bias towards raising rates at least once more in light of rising inflation, but is clearly watching darkening clouds on the international economic and financial horizon. Unlike Australia, the US, Britain and Canada are now all lowering rates to stave off any threat of recession, with Europe possibly next to follow.
The RBA board this week left interest rates on hold at 6.75 per cent for December as expected, but unexpectedly decided to explain why for the first time. It reiterated its concerns over inflation, forecast to go above the target limit of 3 per cent in the first half of next year. But the board said keeping official rates steady for now was prudent given uncertainty about global economic growth and rising market interest rates here following the US sub-prime mortgage shakeout on world credit markets.
The chances of a US recession remain but have reduced now the US government has imposed a freeze for five years on the honeymoon rates of sub-prime borrowers. This is to prevent a cascade of loan defaults and a crash in house prices in coming years when those loans would otherwise reset to much higher rates. Such a situation would almost certainly cause the lending market crisis to spill-over to the wider US economy, and then the world economy.
Economic growth data for the September quarter confirmed what we already knew, that the economy was bolting along. It grew 1 per cent in the three months for an annual rate of 4.3 per cent. A similar result is expected for the current quarter. Retail trade recorded a soft month in October after a strong year. Building approvals fell 2.8 per cent and remain flat.
On balance it is probably more likely we can expect one, maybe two, 0.25 percentage point rate increases next year rather than two to three. Either way borrowers can rest easy over Christmas and New Year with the RBA not meeting again until early February.
Source: Info Choice . com
Mon, 17 December 2007
Low Doc and No Doc Loans- What are they?
These loans are ideally suited to self-employed, independent contractors, investors, credit rating impaired, ex-bankrupt or clients with arrears on current mortgages and borrowers who have been rejected by traditional lenders. Including people with suitable incomes but to meet bank verification takes valuable times and money.
Source: Finance Unlimited
Thu, 27 December 2007
Home loan interest rates | charges and fees on a home loan.
Most people tend to take out a Mortgage or home loan, then forget about it. The monthly payments go out from their accounts every month, but they probably couldn't tell you what the interest rate was if you asked.
Even a fraction of a percent reduction in interest rates means big savings.
This is slack financial policy - it is easy to make sure you always have the best mortgage or home loans interest rates, and therefore pay the least interest. And believe me, over the years, even a fraction of a percent reduction in interest rates means big savings! You need to get in the habit of noticing current interest rates. This is especially true if you are currently in the market for a new mortgage.
Generally, Mortgage interest rates track the central banking system's 'base interest rate', but there are a LARGE number of deals for new customers, including early year discounts, fixed interest rates, capped rates and so on. If your mortgage company isn't offering you a competitive rate, but other mortgage lenders are, confront them with it! Often they rely on your disinterest to keep overcharing you interest (excuse the pun!). When confronted, they usually crumble and will offer you a better deal rather than lose your custom.
Shows you the true cost of the loan as a yearly rate.
Always use the APR when comparing home loans. The APR (Annual Percentage Rate) allows you to compare the loans offered by different Mortgage and home loan lenders in a like for like manner, and shows you the true cost of the loan as a yearly rate. This stops lenders hiding 'extras' (such as upfront fees) behind a fog of low rate claims, and means you have the true interest rate to play with. generally, most house hunters get an approval in principle from their chosen mortgage company.
If you meet the lender's criteria, try to lock in good interest rates.
This makes you more attractive to sellers because it shows you are serious, and have the financial wherewithall to proceed should you decide to try and buy their house.
It will also give you a firm indication that of what your budget is (although most lenders have slackened their rules in recent years, they still apply SOME rules!). This pre-qualification will keep you in the right price bracket too, and stop you wasting time on properties beyond your reach. If you meet the lender's criteria, try to lock in good interest rates. This means the lender promises to hold their offer for you at a certain interest rate for a certain time while you proceed with the purpose. Variable rate mortgages, more popular in Europe, can be crippling if interest rates rise from the historically low rates prevalent at time of writing.
Source:mortgage. seo.com
Tue, 01 January 2008
Home loan stress ?
When bills begin to pile up around you, it's a stressful situation. To make things worse, you will be denied credit from other lenders because you can’t pay the credit you already have. If that wasn’t bad enough, you will also have rude, irate and threatening letters and phone calls from your creditors, demanding that you pay them what is owed.
As these problems escalate, so do your bills. The problem with many consumer debts or unsecured credit is the interest rates are so high that, even if you are keeping up with your minimal monthly payments, chances are that you will never pay off your debts anyway. If the interest wasn’t bad enough, once you begin to fall behind in your repayments or you borrow above the limit on your credit cards, you are likely to end up paying a whole host of other additional fees, such as late payment and over the limit penalties.
When faced with these situations, you need ways to get your debt under control to place yourself in a position where you are able to get rid of your debts once and for all. Before exploring debt relief options, keep in mind that it didn’t take you a matter of days or weeks to get into debt, so you could hardly expect that debt relief will work for you in a matter of days or weeks either. Any option that you use to get out of debt will take time, patients and careful planning of your finances to make it effective.
Wed, 09 January 2008
Why get a mortgage?
This is the first place to start for non-home-owners. The most obvious answer is because if you haven’t got a mortgage then you are most probably renting [or worse, staying with family or friends]. Now whilst there’s nothing wrong with renting, the most obvious disadvantage is that you don’t really get any thing for your money.
But wait Kelsey I hear you say, surely I get a place to live in and a roof over my head? Well that is right , but think about it for a moment from your landlord’s point of view: There is a property, constantly gaining value in the housing market, the mortgage being paid and extra besides, all council tax paid, upkeep free – what a deal!
Then, from your point of view: you will always pay more in rent than if you were paying the mortgage repayments on a home loan for the same value as your house, flat, bungalow, etc.
Source:Kelsy Wainright,Home Loans and Mortgages
Tue, 15 January 2008
Mortgage Checklist
When apply for a home mortgage be sure to consider each of the following options.
1 Be clear on the type of mortgage vehical.Do you want to pay the loan quickly or do you want to keep monthly payment low.This is where you might want to consider a interest only mortgage or a varible rate mortgage is were you pay over a period of time.Interest only mortgage you only pay back interest on the loan borrowed.Make sure you shop around for the best deal.There are loads of comparison site's on the internet for loans and mortgage's.
2 Next big one to consider is your solicitor ask about fee's and get general feedback from previous customer's.Don't just jump in on the first quote but don't just go for the cheapest either sometimes it doesn't pay.
3 You will need to consider the type of survey,s there are a full survey and a bank will also do a basic survey on the property you intend to buy l must make you aware this is only a basic survey.This will depend on your budget and the value of the property you are considering buying.I would alway's recommend you have a full survey from my own experiance with property,s but at the end of the day you make the choose to suit your own pocket.
4 The last one is to make sure you have a good insurance policy for your property and possestion's.You can go to comparison site's to compare different deals that are on the table.Make sure you work out your true value of your possestion's most people don't invest enough time in this area.When they go to claim they find they have underestimated the value of the rebuild and content's of the property.
5 Last thing make sure you have at least enough money to cover your first month's mortgage and fee's very important.Most people forget to plan these things and get themselfs into debt.
By: nelson smith
Article Directory: http: //www.articledashboard.com
Tue, 22 January 2008
The Causes Of Debt - And What To Do When Bills Go Bad
By: Brian Dolezal
If you think that debt is exclusively reserved for those with an addiction for shopping, think again. The truth is that more and more Americans are struggling with mounting credit card bills, penalty interest rates and miscellaneous fees. Although unnecessary spending habits can certainly land one in hot water with their budget, there are a number of reasons why many families are in need of debt relief.
Among the most common reasons for needed debt relief are divorce, illness, sudden job loss, a failed business venture and/or excessive spending. Today, the average American family has more than $8,000.00 in credit card debt and may be forced to deal with penalty interest rates from every creditor if they even miss one single payment. How so? When you apply for a credit card, the issuing bank retains the right to monitor your credit report as they see fit. In most cases, the cardholder's agreement will also contain a clause that grants the issuer the right to increase interest rates to a penalty rate if you either fall behind with them or with another creditor. As a cardholder, this means that you only need to miss one payment with one creditor for all of your interest rates to skyrocket.
In addition to credit card debt, there are also secured debts that consist of real estate, automobiles, furniture and certain types of electronics. This type of debt, although costly, is a necessary part of life. The problem is that credit card debt, which is not considered to be a good debt, can prevent you from being able to obtain financing for necessary items, such as a home or a car.
For homeowners who find themselves drowning in a pool of debt, a home equity loan or line of credit may seem like a quick resolution. The problem with this scenario is that unsecured credit card debt will instantly become secured with your home as collateral. When you request a home equity loan or line of credit, you can use the money to pay off credit cards. But, what happens if you later are unable to repay the home equity lender? The unfortunate truth is obvious in that your home may be in jeopardy. Additionally, most who request a home equity loan or line of credit fail to close their credit card accounts once they are paid in full, which leaves the potential for the cards to be maxed out again in the future. In a worst case scenario, you could later end up with a home equity loan or line of credit and a whole new set of credit card bills.
When finances begin to spiral out of control, it's often difficult to recover. For some, debt consolidation or debt settlement may be the answer. Either of these methods can be beneficial and will help you to regain control over your finances. Debt consolidation is a structured repayment program with lower interest and/or monthly payments, whereas debt settlement requires one lump sum payment to permanently settle a debt at a fraction of the actual balance due.
If you are in need of debt relief, the actual method that you choose will greatly depend on the type(s) of debt that you have. Unsecured debt, such as credit cards, can often be settled for as little as 20% of the total account balance. With debt negotiation, creditors are often willing to greatly reduce or even eliminate interest altogether. What this means for you is a fast track to financial freedom and a comfortable view from the driver's seat. Debt wasn't incurred overnight and it will not go away overnight but, with time and dedication, it will go away.
Wed, 30 January 2008
Solving A Crisis With An Unsecured Personal Loan
If you have recently found yourself in financial trouble because of an unexpected event or problem and you aren't sure how you are going to pay the bills or get the problem taken care of you might want to consider taking out an unsecured personal loan. This is a great way to protect your assets and solve the problem sooner rather than later. This is not something that you want to do for just any reason, if you can help it, but a personal loan can really help you out in a pinch.
Personal loans come in really handy in a pinch because you don't have to wait weeks at a time for an approval process. These loans are made for those that need to pay off other debts or paying off a onetime expense that you hadn't planned for. Many people use these loans when unexpected medical bills come up or when they have to travel for a family emergency, buy a new car, or repair a vehicle.
Unsecured personal loans are preferable because you can receive the entire amount of the loan up front, you don't have limits as to what you can use and when. In addition to getting the full amount of the loan right away, if you need it, the funds that you are approved for will be paid to you by check or even by direct deposit into your checking account so they are available for immediate use. You can be approved for a personal loan in as little as a couple hours and you can receive the money in as little as 24 hours. You simply cannot beat timing like this.
Personal loans provide consumers with the ability to pay off bills and other expenses to help prevent a financial crisis, but then they continue to be affordable. Most of the time personal loans have interest rates and principal so you don't have to worry about fluctuating interest rates. In addition you will usually have monthly payments and you can usually pay more towards the principal at any time and there is typically not a pre-payment penalty. So, if you take out the loan and you are able to pay it off sooner than you thought, you won't be penalized for it.
Most banks will offer unsecured personal loans for as little as $1,000 to as much as $250,000 though these amounts may vary slightly. The term of the loan will generally be up to five years, though this may depend on the state that you live in, your credit, as well as the amount of money that you are borrowing. Fees associated with the loan will vary depending on your bank as well as where you live.
Unsecured personal loans have the ability to get you out of very sticky situations very quickly. If you have had something come up and you just cannot pay it off consider what an unsecured personal loan can do for you. In just a few days time you may be able to take care of those finances that are leaving you stressed out and tossing and turning at night.
Source; Article Dashboard
Sun, 03 February 2008
Interest Only Home Mortgage Loans - Good Or Bad Idea?
Is an interest only home mortgage loan a good or bad idea for financing a home? These loans have become very popular and are one of the many different kinds of financing available for property!
Opinions vary as to whether an interest only home mortgage loan is a good idea for the average home owner, with valid points being made on both sides. If you are in the market for a home you need to consider all the finance options available to you, together with your ability to repay them.
Here are some interest only mortgage loan pro and cons to look at both sides of this kind of financing.
If you are employed full time, single and making a good salary then an interest only home mortgage loan may not be the best financing for you. That's because you could pay off your loan at a lower rate of interest and in less time with a different kind of loan program.
On the other hand, you could save a lot of money by only paying the interest. It is possible that if you invested this in a safe investment you would not only have enough to pay off the principle on the mortgage, but would also gain a little capital for yourself at the same time.
This of course is a gamble, because how many people will actually invest the savings? However, if you have no other financial responsibilities, it's one you might find attractive.
If you work in seasonal employment, like in the tourist industry, you may find that paying an interest only monthly mortgage payment allows you the freedom to pay a minimum amount when you are in "off season".
But during the time you are working, you can make accelerated payments off the principle in addition to the interest.
The risk of paying an interest only mortgage loan repayment is that the principle is not being repaid. Unless the price of homes in your area rises, you don't build up any equity in your home.
Paying the monthly mortgage payment on an interest only mortgage can become like paying rent. You don't have the safety net of being able to sell your home to raise cash if you are faced with some emergency in your life.
As a young professional just starting out on your own, this might not be an issue you need to consider. But if you are married and have a family, you should seriously consider the implications of not having the kind of mortgage that allows you to build a financial safety net.
Home equity gives you a form of financial security that can come in handy if you really need to use it. This should be a consideration when deciding which home loan to choose.
A lower monthly mortgage payment will always look attractive on paper, but consider all the implications carefully before taking the option of an interest only mortgage loan as a way of financing your home!
Posted by Handy Saputra
Thu, 07 February 2008
Melbourne house prices surge 25%
Author: Cameron Houston and Ben
Schneiders
Date: February 5, 2008
Publication: The Age
House prices in Melbourne surged by
a record 25% last year, adding to the
miserable outlook for first home
buyers and fuelling renewed political
debate over housing affordability.
A report released last month reveals
that Melbourne's median house price
grew faster than in any other
Australian city in 2007, jumping by
almost $100,000 to $463,488 and
closing in on the prices in Sydney and
Perth.
Shrugging off successive rises in
interest rates, Melbourne apartment
values also soared, with the median
price rising by almost 15% to
$335,088.
Renters were not spared either, with
the Bureau of Statistics reporting that
Melbourne rents jumped 5.4%, the
biggest annual rise since 1991.
Mon, 18 February 2008
Payday Loans Can Powerful Tool For Those In Financial Need
If you are in a tough financial situation, and find yourself needing cash and your next paycheck is several days away a payday loan just might be the solution to all of your financial needs. If your think you have seen those ads for the fast cash payday loans, and you and others you know assume right away that they are scams, maybe you should think again. Sure they do charge more interest than a more traditional loan for the cash that they lend you until your next payday, but you know what, there are plenty of people who need money immediately, and have been saved by a easy, simple fast payday loans that give you cash when you need it.
Yeah, I know that I am well off now, and really want very little in my life but this was not always quite the case, just as it is not the case for millions of Americans today that work hard and live from paycheck to paycheck. There was a time when I was on the edge of absolute abject poverty with not a thing in the world. It had gotten so bad that the banks were threatening to repossess my car, which would have meant that I would not have had a vehicle to travel to and from work, and if I lost my job I would only get deeper in debt and had zero income. I needed money pretty darn bad. So, I decide to look into getting money through a payday loan advance.
By money, I mean almost a thousand dollars. It's strange to have all that cash in transferred to your bank account when your used to your balance never being over a couple of hundred dollars, and knowing that you can not spend any of it on luxury items. It is all set aside for important bills, which I paid and I was no longer worried about losing my car, or anything else for that matter. The payday loan I received saved my job, and my car.
I had suddenly gotten enough to get back on my feet again. The process of getting my payday loan was really quite simple. I filled out the forms on the Internet and gave them all of the information they requested, including my bank account number and bank routing number. Very quickly I was informed my loan was approved and the money would be in my bank account within twenty four hours, and sure enough the money was tin my account the next morning. I did not have to beg a loan officer to ignore my bad credit, or convince someone that the reason I needed to borrow the money was for a good cause. There was absolutely no embarrassment on my part or judgments from the payday loan company. I did not even have to fax the payday loan company any documents, the whole process was just easy.
Several weeks after I got my loan, I paid it off. Since I paid the loan off on time the company let me know that I could get another loan with them without any problems if I needed it. I took the up on that offer several months later; I borrowed less money this time to make sure I had enough cash for my vacation. Payday Loans can be a powerful tool to help those in financial need, if used correctly.
Source: http://powerfulpaydayloans.com/
Wed, 05 March 2008
Do you have all the right Info on Credit Card Debt?
Are you drowning in credit card debt? Many people around the world (not just Americans) are. The root cause of America’s problems with credit card debt stem from a lack of education by American consumers in how credit cards (and debt) and interest actually work. If you’re drowning quick and need info on credit card debt, this article can be thought of as something of a life preserver.
The first thing to know about credit card debt is a formula called the Rule of 72. When you put money on a credit card, there’s interest to pay. Interest is the annual percentage of the initial amount borrowed that you have to pay extra each year for the average balance on the card. In a very simple case, if you borrow $1,000, at 18% interest, and maintain an average balance of $1,000 you’ll have to pay $180 in interest during that year. The rule of 72 is how banks and credit card companies make their money. Divide 72 by the interest rate you’re being charged, and you’ll have the time frame (in years) in which your accumulated interest payments on your credit card debt will equal the amount borrowed. In the example above, 72 divided by 18 is 4, so if you float your balance around $1,000 for four years, you’ll have paid roughly $1,000 in interest.
The best way to use a credit card is to pay the balance off every month in full. Unfortunately, credit cards make it really prominent to see the minimum monthly payment which is usually a payment that covers the interest and about 25 cents to a dollar of the total amount owed. If you’ve gone overboard on credit binging, that may not be doable. However, it’s usually possible for most people to dig themselves out of the hole with some fiscal discipline. It takes planning, effort and the right info on credit card debt .
The first step: Start by sorting all your info on credit card debt in descending order of interest rates. If you can make a transfer from a higher rate card to a lower rate card, do so.
Second, figure out what your minimum payments are. Now, look at what you bring in each month, and save a month’s worth of receipts. Look at what you can trim out of your budget to pay down those debts. If, for example, you go to a coffee shop every morning, that’s an additional $5 to $7 you spend every working day. Over a 21 day working month, that’s $105 dollars. If you always eat out for lunch, that’s an extra $5 there as well. We’re not saying give up all the luxuries in your life; but try and limit your Starbucks consumption to, say, every Friday, or every payday, and make coffee at home before you leave instead – a home brewed cup of coffee costs you about a nickel, rather than $5.
Next, go through your list of credit card debts. Set each card to get a payment of at least 10% over your minimum payment each month; devote all the extra to paying off the highest rate card you’ve got. Leave your credit cards at home; if you need some electronic way to pay for things, get a debit card from your bank and have it deduct straight from your checking account. Hopefully this info on credit card debt helps with a method or two on ways to improve your credit and debt standing.
Source: http://www.beatlandscreditrepair.com/
Sat, 08 March 2008
How do I get the best home loan with these constant rate rises?
Home loan competition is red hot at the moment and consumers should be focused on taking advantage of this. The hot competition in the home loan market means there are thousands of different loans now available. If you’re not sure you’ve got the best home loan for you seek advice from a financial adviser or undertake a review of your loan with an industry accredited mortgage broker.
Borrowers should also be cautious not to take what appears to be the cheapest interest rate. In many cases there are fees, charges and conditions that may impact the real cost of loans with that particular lender. You need to be particularly cautious and do your homework to ensure that you get the best possible outcome.
Refinancing can sometimes result in lower interest rates, lower (or no) monthly fees and reduced charges for features on your loan. The savings made can then be used to boost your repayments which could cut years off your loan, saving you even more.
Even a small improvement in the interest rate you’re paying could end up reducing your monthly payments significantly and saving you thousands. Refinancing can also be very worthwhile if you want to borrow more for renovations to add value to your property.
Many people assume that their bank will offer them the best deal on offer but this is not always the case. They don’t necessarily have the best products, nor do they provide you with the right advice to meet your specific needs. An accredited mortgage broker can help you compare your current home loan to hundreds of alternatives from a wide range of the most popular lenders in around an hour. They can also help you co-ordinate the process and paperwork associated with refinancing.
Source:http://www.realestate.com.au
Mon, 17 March 2008
How To Get A Bad Credit Home Equity Loan
If a person has bad credit, trying to get a loan for new car, pay off medical debts or even
trying to consolidate all your credit cards can be if very difficult process. However, for homeowners who are also facing these challenges with bad credit, there may be hope. If you have built up some equity as a homeowner, a bad credit home equity loan made just be the ticket that you're looking for.
Most people with bad credit are very reluctant to apply for a loan. Perhaps they may feel some shame about exposing their past credit history. However, the beauty of a bad credit home equity loan is that you are only borrowing against the equity that you have built the up in your home. As long as you avoid using credit cards or other lines of credit, once you have borrowed against your home, and have paid off that loan, you can actually repair your credit history in very short order.
So What is Home Equity?
Before you decide to run out and apply for a loan, let's start off by explaining what home equity is and what it is not. In its simplest explanation, home equity is the amount that your home praises for on the current real estate market, minus the current balance of your mortgage. For example, let's say your home is currently appraised at $200,000 and you have a remaining balance of $50,000 owing on your mortgage; then the amount of equity that you have is $150,000. This means that you can borrow up to $150,000 on a bad credit home equity loan.
Notice that we say it's "up to" $150,000. Just because you have $150,000 in equity, doesn't mean that you will get the full $150,000 loan. The banks will look into other factors as well. Such as your actual credit history, your current income as well as your spouse's income too, your length of employment, etc.
An experienced loans officer will take into account all these factors before making a decision on how much to loan you. Just be sure to bring plenty of information as well as proof of all real income on hand when you apply for a bad credit home equity loan. The more information you can provide, the better the odds of you getting a loan.
If you require a bad credit home equity loan to pay off some over due bills or credit cards, you may want to make certain that you have built up enough equity in your home to be able to cover the amount that you will need to borrow. There are two ways to build equity in your home. One way is to pay off your mortgage faster. The other way is to wait for your home to appreciate in value. Over a period of time, chances are pretty good that your home will rise in value. Of course, if you can do both (double upon your mortgage payments AND wait till your home appreciates in value), then that will really help you in getting that loan.
By: Kerry Ng
Article Directory: http://www.articledashboard.com
Sat, 22 March 2008
Online Refinancing Option
Although the Internet is useful for handling important matters, some people are leery about obtaining a loan through online mortgage brokers. Online refinancing is becoming increasingly popular. Most mortgage websites include comprehensive information about refinancing. The objective is to lessen nervousness and increase your trust in a lender or broker. Home buyers may complete applications online and receive a quote within a few hours. Through online refinancing, homeowners receive two quotes. If refinancing by way of a mortgage broker, the broker will obtain estimated quotes from different lenders. Requesting estimated quotes from various lenders will not lower credit scores. Homeowner can browse lenders and compare rates. Next, homeowners may select a lender from the brokers list and request an official quote. Upon reviewing an applicant's credit rating, lenders send an official quote highlighting the best interest rate and closing fees.
Source: http://home-loan-rate.blogspot.com/
Thu, 27 March 2008
Refinance Your Home Loan
by LetYourMortgageMakeYouRich.com
A Home Equity Line of Credit is just one Option
You can refinance your home loan a number of different ways depending on your credit worthiness. You might even consider refinancing for a shorter amount of time in order to save thousands of dollars in interest in the long run.
Of course, you'll need to discuss your options with your lender and find out what kind of interest rate you can get for different types of loans. If you intend to refinance your home loan for a home equity line of credit, your interest rate and terms would be quite different than if you were refinancing in order to save money on interest. Your mortgage broker will be able to advise you as to what your best options are.
While a home equity line of credit will be there when you need it for either unexpected expenses or a major purchase, you should ask your mortgage broker a lot of questions because if you refinance your home loan as a home equity loan you have the choice of obtaining a lump sum or setting up the home equity line of credit.
Check with more than one lender before you refinance your home loan. Make sure you understand the different loan terms available and the risks involved with each. If you will not have a fixed rate of interest, make sure you understand on what criteria it fluctuates. Is it tied to the prime rate? Don't let anyone talk you into anything, especially something you don't quite understand.
Make a comparison study of the different types of loans and interest rates available. You can literally save thousands of dollars depending on how you finance your home. Be patient and do plenty of research so you will get the best deal available.
Fri, 11 April 2008
Bad Credit And Your Home Equity Loan
Are you having a rough time trying to find low rates home equity loans? Many times, a good home equity loan is just a click of your mouse away. If you know how to stylize your search, finding information on home equity loans can be a whole lot easier online. Read the rest of this article and find out how.
Bad Credit And Your Home Equity Loan
Low interest rates home equity loans have become increasing popular. The collateral of your home provides an easy way to secure an equity loan, and even homeowners with poor credit can obtain a home equity loan quite easily. Caution must be exercised to balance your debt payments, though, when using a home equity loan to avoid foreclosure.
There Are Few Restrictions On What You Can Use Your Home Equity Loan For.
Low rates home equity loans can finance any need, but you must choose a type of home equity loan carefully to ensure you can repay according to the loan terms. One type of loan may offer balloon payments, offering a lower monthly payment with one large lump sum due at the end of the loan. Others types of loans may offer higher monthly payments that divide the borrowed amount equally over the life of the loan. Your situation may be best suited for either one.
Shop Around Before You Make Your final decision.
If you choose a home equity line of credit, be sure to shop around carefully. As a rule, your credit limit will be assigned based on a formula: 75% of your home's assessed value minus the amount that you still owe on the home. However, the specific credit limit that you receive will be partially based on traditional credit factors such as credit history, employment status and ability to repay.
Your annual percentage rate, or APR, is partially determined by your credit rating. Shop around to find the best APR for which you are eligible. You also need to compare closing costs and similar financial factors in order to find the best overall deal. Interest rates on home equity loans are generally variable, which means that they are tied to a fluctuating publicly available index. Your interest rate is, by law, required to have a certain cap above which it may not rise.
Did you know?
A home-equity line of credit (HELOC) is a variable-rate loan that works much like a credit card and, in fact, sometimes comes with one.
Don't Be Surprised If There Are Some Additional Fees.
Make sure that you have a clear understanding of all the fees that will be involved in your home equity loan. You may be required to pay upfront closing costs, an application fee, a property appraisal fee and other charges. You may also be charged annual maintenance or membership fees as well. If you only plan to use a small amount of your available credit line, you might end up paying hundreds of dollars for the privilege
Home equity loans are ultimately secured loans. Your home serves as the collateral for your loans. Therefore, it is quite important that you fully understand the way that your loans will be handled. There are many factors to consider when choosing among the various low interest rates home equity loans that are currently on the market.
Have A Repayment Plan In Place Prior To Taking The Loan.
A clear strategy is the best goal to have for repaying your low rates home equity loans. Paying more than the minimum monthly payment is one strategy to repay a loan and rid yourself of debt sooner. Setting aside a special fund to repay the balance on a balloon payment is another alternative. No matter what, making timely payments every month is necessary to avoid a foreclosure on your home. Whatever your decision, be informed and make the best choice for your situation.
In the end, the final choice for your home equity loan will be up to you. Use these valuable tips for making the best choice on your next low interest rates home equity loans.
Source:http://www.financeandbusinessfacts.com/
Sun, 20 April 2008
Personal loans for homeowners – one of the numerous rewards for being a homeowner
By Amanda Thompson
You no longer look at the pictures of homes cause you yourself bought one. Well, you know how you got that, it was a huge investment. Now that you are facing some financial issues and you are thinking of taking a loan to cope with monetary crisis. Taking loans is a growing phenomenon. And this has a lot to do with the changing configuration of the current economic scene. Monetary and fiscal requirement of the people have increased and in turn led to increase in loan borrowing. So, it is not exceptional that you are looking for loans. If you are a homeowner in the pursuit of personal loan, all I can say is “you are fortunate”.
Personal loans for homeowners are one of the most universal loan types available. You must have encountered it in its one form or another. It is know by many names like homeowner loans, secured loans, homeowner personal loans, mortgage etc. Personal loans for homeowners are straightforward loans which can be moulded to fit in any circumstances whatsoever.
Personal loans for homeowners exclusively deal with homeowners which mean they are unavailable to tenants. Homeowner personal loans are a great instrument for exploiting the equity in your home, to further your interests in any fashion you desire. Equity is difference between the market value of the home and the total debt against it in the form of mortgage or lien. Lien is the right to take another’s property if an obligation is not discharged. Personal loans for homeowners can be highly profitable and can save a lot in terms of your money. In case you are taking personal loans for homeowners you need to look carefully for one erroneous step would land you on alien grounds.
Keep some things in mind while looking for personal loans for homeowners. First sort out why you need homeowner personal loans. Personal loans for homeowners are offered for many reasons like home improvement, wedding, education, debt consolidation, buying a car and cosmetic surgery. The thing worth appreciating about personal loans for homeowners is that the loan lender is not concerned about the purpose the loan is taken for. Thus, homeowner personal loans cater freedom along with many other things.
Personal loans for homeowner allow you to borrow amount from $5,000 to $500,000. The amount you can take is dependent on your income and the equity in your property. Taking money that is more than you require or that is beyond your ability to repay is a serious slipup that should be avoided. Homeowner personal loans allow you to borrow upto 125% of your property. With personal loans for homeowners you might be tempted to borrow more than required. Avoid not fall into this lure for there is nothing worse than an unpaid debt.
Personal loans for homeowners would invite lower interest rate, in fact the lowest in the market. Homeowner personal loans require your property as a security. Under no circumstances forget the fact that you can lose the property under non repayment condition. The terms and condition along with repayment terms are very pliable. The interest rate on homeowner personal loans is dependent on many things like the loan amount, the loan term etc. Start by researching about interest rates. Keeping an eye on the current interest rate trends and key economic indicators will anticipate good chances of finding lower interest rates and saving money.
Personal loans for homeowners are appealing due to the fact that they offer money to even sub prime borrowers. 9% of the mortgages in the last year were sub prime, amounting to 388bn pounds in money. Bad credit with homeowner personal loans is compatible. Bad credit with homeowner personal loans would mean comparative higher interest rates. Loan lenders are eagerly considering homeowner loans applications with bad credit. If you are in the loan race for homeowner personal loans, it would require you to know your credit score. You would be paying more as interest rate if you have bad credit score.
With online application process, you get quotes from various loan lenders to compliment your financial condition and expectation. The options with personal loans for homeowners are stretched along the length and breadth of the loan market. Personal loans for homeowners are easy on interest rates, they conform to your loan expectations and you can protect your repayment in case of adversity by applying for payment protection. Is there more? Yes – you can have personal homeowner loans even if you are sub prime borrower or self employed or unemployed. With personal loans for homeowner, everything is possible. Isn’t that promising? All I can say is “if you are a homeowner, you are fortunate.”
Sat, 17 May 2008
Jargon Buster
When you are looking to get a loan or a mortgage there are some commonly used terms that your advisor might use. Below is an explanation of the most common terms :
Advice
A recommendation about the most suitable mortgage for you made by an advisor who is regulated by the FSA.
Annual Statement
A statement from your mortgage lender, sent every year, showing among other things what you've paid and what you still owe.
Approval In Principle
A certificate which some lenders will give you that shows the amount they will probably be prepared to lend you. This is not a guarantee, but can be helpful when signing up with estate agents.
APR
Annual Percentage Rate. This shows the overall cost of a loan, taking into account the term, interest rate and other costs.
Authorised Firm
A firm that has permission from the FSA to carry out regulated activities.
Capital
The amount you borrow to help buy your home.
Capped Mortgage
A mortgage that has a maximum limit on the interest rate you'll have to pay during a special deal period.
Cashback Mortgage
A mortgage that comes with a cash sum (often a percentage of the amount you're borrowing).
Collared Mortgage
A mortgage with a minimum interest rate you'll pay during a deal period.
Deposit
The amount of money that you're putting into buying a home (not including the mortgage money you're borrowing).
Discounted Mortgage
This has a discounted variable rate of interest for a set period, after which the rate will increase.
Early Repayment Charge
A charge you may have to pay if you break off a mortgage deal - by paying it back early and/or moving to another lender.
Fixed Rate
An interest rate that is fixed (ie it doesn't move up or down) for a set period of time.
FSA
The Financial Services Authority - the UK's financial watchdog.
Income Multiples
The factor by which your earnings are multiplied to find out how much you can borrow.
Interest
The charge made by lenders when you borrow their money.
Interest Rate
The figure that determines how much interest you pay. Usually linked to the Bank of England's rates and can move up or down.
Interest-Only Mortgage
A mortgage where you only pay the interest charges of the loan each month. This means you are not reducing the loan amount (or capital) itself, and this will need to be repaid in some other way.
Keyfacts Documents
Standard documents that all authorised lenders and brokers must give you to explain their services and details about the mortgage you're interested in.
Loan-To-Value
The percentage of money you want to borrow compared to the cost of the property.
Mortgage
A loan which is secured against your property.
Mortgage Broker
A mortgage broker helps you understand the various mortgage types and deals available to them. A mortgage broker may recommend a mortgage for you or they may provide you with information to enable you to make your own choice.
Register
A list of firms that are regulated to carry out financial services in the UK.
Remortgaging
The process of changing your mortgage for a different one, without moving home.
Repayment Mortgage
A mortgage that pays off both the home loan and the interest at the same time. Make all the payments and the mortgage will be fully repaid.
Stamp Duty
A tax which home buyers must pay on properties above a government set figure.
Standard Variable Rate Mortgage
A loan at the lender's normal mortgage rate - ie without any discounts or deals.
Secured
A mortgage is a secured loan on your home; this means that if you fail to repay it, your lender may be able to sell your home to get its money back.
Survey
A report on the condition of the property you are planning to buy.
Tracker Mortgage
A mortgage with an interest rate that is usually linked to a particular rate that is set independently from the lender and moves up or down with it.
Term
The length of your mortgage.
Valuation
A brief inspection, for the benefit of your lender, of the home you hope to buy. This is to make sure they are not lending more than the property is worth and that the property is suitable security for the mortgage, but this will not tell you if it is a good or bad buy. For your own peace of mind, you may want your own survey.
Source: http://www.loans-and-loans.co.uk
Thu, 29 May 2008
18 Personal Loan Tips For Intending Borrowers
If you're thinking of borrowing money to buy a car, boat, debt consolidation, home repairs, medical bills or anything else for that matter, here are some red hot tips to make the process much, much easier.
Avoid unsecured loans if possible
Avoid using unsecured personal loans if you can put up some security for your borrowings. This will get you a lower interest rate. A home equity loan, or redraw of extra repayments, allowing you to borrow against the equity built up in your own home or an investment property, is the best option of all, and could get you finance at up to 5 percent less than a personal loan.
Be honest in loan applications
Be honest about why you want the loan. Your bank may be able to offer you a loan option that better suits your circumstances. There are an increasing variety of different types of personal credit these days; car loans, commercial loans, leases, home equity loans, are just some of the examples.
Can't get a standard loan? There are alternatives
If the banks, building societies and credit unions won't lend to you because you're self employed, newly arrived in the country or have a poor credit history, consider the booming non-conforming and "low doc" loan market. A number of non-bank lenders offer loans which especially cater for this type of borrower. The interest rates on non-conforming loans are generally higher but come down after a few years of on-time repayments.
Check your statements for errors
There are claims that more than 50 percent of loan statements contain calculation errors. Simple mistakes, like the entry of the incorrect balance or the application of the wrong interest rate at the wrong time can be costly and mostly favour the lender. We all make mistakes, even bank computers make them and that's why borrowers should keep a close eye on loan statements. Various software for your home PC is available that can run a check on your statements.
Consider smaller lenders too
When shopping around for a car loan, consider community banks, credit unions and other smaller financial institutions which might be more approachable, and offer lower interest too.
Do you have to take out a personal loan at all?
Think twice before borrowing money without security. You may have a better option already available; home equity extension to your home loan, a new loan that uses your property as security, a credit card, or even a rich relative!
Do you qualify for a 'relationship discount'?
Relationship discounts are available from banks and credit unions for those borrowers who consolidate a range of banking business with the one institution. Home and personal loan interest rate discounts, term deposit bonuses, savings account fee waivers and credit card annual fee waivers are commonly offered.
Don't just take the dealer finance
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Don’t accept loan or lease finance offered by a car dealer before comparing the offer with finance options offered by your bank or other credit providers. Dealer finance might be less hassle but you could well end up with an expensive loan and more restrictive terms and conditions. The same goes when buying furniture or any consumer goods where finance terms are offered.
Don't make multiple applications
Don’t fill out applications at several financial institutions and have all of them checking into your credit history. This can make you look desperate and lower your credit score.
Don't rely solely on comparison rates
All lenders must now include "comparison rates" in advertisements for their home loans and personal loans to help consumers get a feel for their total cost - fees and the interest. Don't rely solely on comparison rates when choosing a loan and beware of their shortcomings. They only take into account fees and interest rates, not the features and how suitable the loan is for your circumstances.
Have the right information when applying
What you will be required to supply in any application for lease finance will depend on whether the lease is for personal or business use.
Personal lease applications will require:
· proof of current employment
· income details or tax returns
Business lease financing requires more detailed information and may include your:
· balance sheet
· tax returns
· cash flow projections
· business plan
Confirm with the lender what you will need before the interview.
Have you considered a credit card?
Consider also a credit card as your source of credit. Interest rates are generally higher but credit cards are easier to secure and offer greater flexibility of repayments.
Honesty counts
Be honest about why you want the loan. Your bank may be able to offer you a loan option that better suits your circumstances. There are an increasing variety of different types of personal credit these days; car loans, commercial loans, leases, home equity loans, are just some of the examples.
Keep accurate records
Keep accurate records of your deposits and ATM transactions. It is also wise to keep copies of your loan application and approval documents in a safe place.
This is the best way to avoid hefty fees which may be charged by a bank when its customers want to see copies of their cheques or loan files.
Know what interest rate applies
When offered car finance, either lease or loan, always be sure you know what interest rate applies. Lenders often ‘sell’ you their finance packages by quoting the monthly repayments only. This may disguise a high interest rate.
Look beyond the banks
Get a feel for what's on offer across the wide range of financial providers around these days. Credit unions, building societies, mortgage originators, community banks and boutique online or telephone banks may offer better interest rates or lower fees than the big banks because they are anxious to win new business or they are non-profit organisations.
Try lenders with whom you are a regular customer
Take advantage of the human factor. Being a familiar face may earn you some slack if your credit background is smudged.
Understand what's on offer
Is the interest rate fixed or variable? What up-front, annual or ongoing fees are charged?
Source: http://www.money-tips.com.au/
Thu, 12 June 2008
9 Ways to Stretch Your Income
Here are some great tips for stretching every dollar.
1. Save a penny, keep a penny.
Dump your pocket change into a jar each night.
Invest it in a high-interest bearing account at the end of each month.
Woman's Day magazine recently suggested this money-saver, adding that if a couple puts just one dollar each into the jar every day, the sum will top $700 at the end of the year.
Invested at 10 percent interest over 10 years, that pocket change will grow into $12,000.
2. Use your computer.
You can save big money by shopping online, if you know where to look.
Do a Google search for coupon codes before you start shopping from online merchants.
You can also purchase a local coupon book for offline purchases (The Entertainment Book, for example.) I use mine all the time for groceries, oil changes, and dining out.
3. Write letters.
Whether you love the product or hate it, write the manufacturer a letter.
A company that receives a complaint is bound to make amends.
On the same token, many companies will acknowledge--and encourage--your satisfaction with coupons and discounts.
4. Shop smart.
Look at the grocery store ads before heading off to the store.
Maybe you can reserve a few items for purchase at a nearby store that is offering unusual bargains.
5. Ban impulse buying.
Make it a family policy: if you see something you like, write it on a wish list and wait at least three days before buying.
6. Watch out for "nickel and dime" expenses.
Those little snacks and coffee stops can easily add up to more than $500 per year.
7. Shop around.
Research purchases on the internet.
Before making a big online purchase, visit http://www.dealtime.com and http://www.mysimon.com.
8. Refinance your home.
Signing a few papers can save you big money on your mortgage payments. In fact, if you refinance and consolidate your debts into your home mortgage you'll find that your monthly outgoings can decrease dramatically.
It's really not as big a hassle as you might think.
Ask your friends and family for the name of a good mortgage broker
9. Examine credit card use.
If you're paying credit card debt, you're paying not just 17 percent more for your purchases than you need to, you're also missing out on the money that the sum could earn for you if you had invested it.
Try calling your credit card company and ask if there’s a way to lower your rate.
One two-minute phone call recently reduced our rate by 4 percentage points. That was one call I wish I'd made a long time ago.
The most important thing is to recognize that you control your finances. Empower yourself with smart spending.
Source:Susie Cortright
Fri, 20 June 2008
16 Simple, Everyday Ways to Save Money
Here are 16 of the simple, everyday changes that have worked for us.
1. Use a coupon, absolutely whenever possible. I was really surprised by how many money-saving opportunities are out there when I knew where to look.
For local purchases, get an “Entertainment Book” each year and you will save on those inevitable everyday expenses ranging from dining out to accommodation and admission to movies, theme parks, etc.
For online purchases, stick to the reputable retailers. You certainly will not save any money if you are the victim of fraud or if you are simply unable to return an item. And before you start shopping, always look for a coupon code that will allow you to save on your purchase. In the past, many online retailers sent out promotional codes as a series of letters or numbers that could be entered at checkout. Now, many retailers use a button or text link that automatically activates your coupon when you click through, so it is often a good idea to find the coupon first, before you start to shop.
2. Shop around. The internet is an amazing tool for researching products and retailers, as well as for comparison shopping. We make nearly all of our large purchases online. It is also important to know where to shop. For holiday gifts, plan ahead and check out the big online discount stores. Many offer significantly reduced prices on trusted brands. And you can get great delivery rates too, even on large gifts. I once had an enormous game table shipped to me for $2.50.
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3. Keep a running list of gift ideas for your loved ones. I have found that when I am confident that a gift is perfect for the recipient, I am much less likely to overspend. But that kind of inspiration rarely hits me during the pre-Christmas rush, so I need to keep a list going the whole year through.
4. Budget. Of course, it is important to know what you are really spending. For years, the budget I had in mind was really more of a “wishful thinking” budget. But this quickly led to debt. It pays to get realistic. Whether you use a computer program or a simple ledger book, make sure you know where your money is really going.
5. Save for the future. Take 10 percent of your income and put it in savings, right off the bat. Now you know what you need to cut back on (or how much more you need to earn) to shore up the deficit.
6. Plan ahead. You will want to make sure you have money in the bank for emergencies. Experts say you should have three to six months of living expenses set aside, for those just-in-case times. It sounds like a lot, but start socking away money each month, and it will add up fast.
7. Get organised. When your home is organised, you will be less likely to spend money on items that are already hiding in the nether reaches of your closet and drawers. The same goes for your refrigerator and kitchen cupboards. Purge and organize before you shop.
8. Simplify. There is a certain romance to the “simplify your life” movement. And having too much stuff really does weigh us down. Take a look at everything in your home. If it does not add joy, beauty, meaning, or usefulness to your life, give it away. And when you are tempted to buy something new, it must pass the same test.
On a quarterly basis, go through your house and ask yourself these same things again. Go through your closet, attic, garage, and basement and purge those items that do not add genuine joy, beauty, meaning or usefulness to your everyday life.
9. Reduce, reuse and recycle. A simple lifestyle, for me, is about reducing my urge to over-consume. It is about being kind to the environment. It is about spending less money on material things, so that I have more time and money to spend on memories with my family. Make changes that will help the environment and your purse at the same time. Install water saving kits on your toilet. Write on the back sides of paper. Use reusable containers in your lunches. All these little things really do add up, and it is important to show our children how we can all be part of the solution.
10. Shop without your kids. I know that if I get a shopping cart at Coles and I do not have a list, I will spend $150. If the kids are with me, I will spend even more. This is another reason it makes sense to do your shopping online. You are less likely to purchase the incidentals.
11. Make sure that your credit card is paying you back via an incentive program. I found a credit card that allows me to earn points on my daily purchases toward our annual vacation trip, including airline miles and hotel accommodations. Since most of my expenses each month are incurred at the grocery store, I found a card that rewards specifically for these types of purchases. Of course, you will need to make sure that you are paying off your balance each and every month. Paying a high interest rate on your credit card will quickly negate any savings you accrue on your incentive plan.
12. Lower your interest rates. If you are carrying a balance on a credit card, give the credit card company a call to see if they will give you a lower rate. Sometimes, it is just that easy.
13. Shop around for insurance. The money you pay for car, home, life and health insurance can vary greatly. Do some research to find out if you are getting the best rate.
14. Be wary of the influence of TV commercials and print ads, especially on your children. We hear fewer cries of “I want that!” when we keep our kids programming to those channels rely less on advertising dollars, such as the ABC and some pay TV channels.
15. Play “Time Warp.” This is a technique I first learned from “My Monastery is a Minivan,” by Denise Roy, and I use it quite a lot. It goes like this: When you are tempted to make a purchase, mentally fast-forward through the life of the item. For example, in her book, Roy thinks she needs new candleholders. She imagines spending time at the mall to find them, soon having to clean them, and then, years down the road, packing them in the giveaway box. She shirks the purchase and soon rediscovers the heirloom candleholders that are packed away right in her own home.
I like to play this "fast forward" technique in reverse, too, asking: What new clothes did I buy last season? (Sometimes, I can not remember). Where are those "I have to have it" items now?
16. Keep your mind on abundance. When you are thinking about money, it is really important to get out of the poverty mindset. Too often, when we are focused on saving money, we are living from a perspective that focuses on lack and scarcity, which tends to bring about more of the same. It has been really helpful for me to make a conscious effort to see the world as infinitely abundant and to rest in the notion that my needs will be taken care of. This is generally a simple matter of thinking more about what I *do* have than what I do not have.
All my days of penny-pinching have certainly proven to me that it truly does not take money to make us happy. Many of my fondest memories have occurred in the smallest homes. My child’s favourite playthings tend to be the inexpensive items that were never designed to be toys at all.
And it is the simple, everyday pleasures that are the sweetest, when enjoyed together.
Source: Jamie Jefferson
Sat, 28 June 2008
Do You Work For Your Money Or Does Your Money Work For You ?
The Poor Cash Flow Pattern
In order to understand the three basic cash flow patterns, you must first understand the difference between an asset and a liability. When you stop working for money, an asset is something that will put money in your pocket every month. A liability is something that will take money out of your pocket every month. This idea touches on the difference between earned income and passive income.
The first basic cash flow pattern is the poor cash flow pattern. Before most people even learn about money they want things, and so they learn first to work FOR money. As their income is earned it is just as quickly spent on their list of wanted items. The poor cash flow pattern has earned income flowing in and entirely back out to expenses.
It does not matter if you have a sizeable income, because money does not make you rich or poor. Money is just a tool. It is how you are managing the tool (money) that determines whether you become rich or poor. Even with a substantial income you are still poor as long as your focus is only to earn your income and pay your expenses.
You may make $500,000 a year, you may have enough income to cover all of your expenses, but if you were to stop working for money you would quickly realize that you are poor, and the idea that you were not was just a temporary illusion.
The Middle-Class Cash Flow Pattern
Eventually people get tired of this routine and begin to gain better understanding and control over their expenses. Enough time spent focused on working for money may produce extra income in the way of a raise or a promotion.
Most people still have not spent any time to financially educate themselves, so they don't know what to do with the extra money. They don't have any ideas of their own about financing their retirement, either. The extra money is usually used to buy a newer car, a bigger house, and anything left over usually accumulates as savings. Eventually most are sold on putting the extra money into a portfolio for their retirement, usually consisting of mutual funds.
These purchases make life more comfortable, and so feel like assets...but they create an expense every month for a very long period of time. The misunderstanding is made worse by bankers who ask you to list your cars and home as assets against loans. By definition, these purchases are liabilities.
The Wealthy Cash Flow Pattern
A change of focus to passive income leads people down the path to a wealthy cash flow pattern. When you look at the pattern of the wealthy you may notice- they do not get their income from a job. Their cash flows in from assets.
Imagine spending your time figuring out a process that will automatically produce some income for you every month. Now imagine duplicating and improving upon that process until it automatically produces your ENTIRE income every month. Finally, you will stop working for money. That process is a business, and that income is a passive income.
From that point forward you will be financially independent. You will not work for money, you will have money working for you. It might take you 2, 3, or even 5 years to establish a system to that point, but once you do you can retire. Once you retire, you have all of your time to spend however you like.
This is the reason understanding the three basic cash flow patterns is so important. These patterns demonstrate the reason why you can become financially independent in just a few years working at a seven dollar an hour job. Your biggest obstacle in the beginning is controlling your expenses and changing your focus from earned income to passive income. Once you have become committed to these fundamental ideas, only persistence stands between you and great wealth.
Written by: Frank Hills
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