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It seems only yesterday that lenders were coming up with new and better ways to get people into the housing market. Gone were the stern bankers who appeared to delight in turning down loan applications and in their place came a group of lenders that adopted the tactics formerly reserved for dubious used home furniture salesmen. Thankfully some of this foolishness has subsided but non-traditional loans like an interest only mortgage loan still exist. While risky, this type of loan may bear consideration for some.

Interest only mortgages are home loans where the buyer is only paying the interest due on a monthly basis and is not contributing towards the loan’s principal. The most obvious benefit to the buyer is the lower monthly payments at the start of the loan. These cheaper payments can put some buyers into a bigger home as they may be able to borrow more.

If the buyer is contemplating a short stay in the property and the loan’s terms are also relatively short in duration, this type of loan may be worth some detailed online research. The upside is that the marketplace for more expensive homes is open to some who could not typically afford this, and if the market gets hot, the house should go up in value. The flip side is that today’s real estate market is still struggling and most homes are not appreciating in value dramatically.

Anyone thinking about this type of loan needs to explore in detail interest only mortgage rates and even more importantly, the specific loan terms. It is possible to find an interest only mortgage calculator online to assist in truly understanding how these loans work and look at the savings versus the risks. A potential loan candidate must always be aware that the day will come when it is time to address paying the principal.

The bottom line on an interest only mortgage is an honest assessment of the risks involved in trying to buy a home that is out of one’s price range. If the cost is such that the potential buyer simply cannot afford to pay both principal and interest together, this should be a warning flag. Eventually, the principal will need to be addressed and if the money is not available, foreclosure is a very real possibility.

Posted: March 10th, 2010 under Financial Planning Tips.
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If your credit card statements are weighing you down, you should perhaps consider a debt consolidation loan. Don’t wait until your condition gets worse, find out sooner rather than later about how to consolidate your debts. If you want to recover before your credit score really suffers, it’s time to sit down with a professional about repaying your debts, even more so in the economic climate of today.

Did you know that you can consolidate your credit card debts without opening another line of credit or getting a loan, to do it? You can do this, and many people are turning to this resource that will enable you to get control of your finances and help pay off your unsecured debt.

Call a credit counseling agency or other non profit group to help you in repaying your loans. Make sure you select a reputable company – check with the Better Business Bureau. There are a lot of charlatans that campaign as debt consolidation organizations, and then take your payments but don’t pay your creditors. If you are in the military, look for a military debt consolidation loan and you can get even lower interest rates on the loan.

A good debt consolidation group can speak with your creditors on your behalf. They may be able to lower your interest rate, wipe out late and over-limit fees, and possibly even lower your total amounts due, depending on the companies they are dealing with. You will be happy to imagine the lack of your phone ringing with creditors on the line.

Talk with a reputable debt consolidation group about the predicament in which you find yourself. They will ask for a list of the companies you owe and the amounts, and you will give them permission to contact the companies on your behalf. They can contact your creditors and make the necessary arrangements to lower your total amount due, and condense your payments into usually one monthly payment. With their help and some smart budgeting, you can get out from under your debts, without the drastic step of bankruptcy.

Posted: March 6th, 2010 under Financial Planning Tips.
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If you are wanting to start planning for your future, and you’re considering different financial planning ideas, then one of the first things you need to do is to fix bad credit that you may have.  It’s not worth investing for your future if your current financial situation is pretty messed up.  It’s not worth getting 10% on your investments (which is a pretty high number) when you’re getting finance charges at a 15-30% APR on your debt.  Instead, you should focusing on fixing your credit, and getting out of debt, then you can begin saving for your future.

The first thing you should do is to look at your credit report.  Look for any errors that may be in there, and then contact the credit reporting agency and let them know so that they can fix the errors.  The next thing that you need to do is to make sure that you’re paying on time every single month, so that you don’t get hit with late fees, and mess up your credit even more.

One of the best ways to improve your credit is to get out of debt.  There are some kinds of debt that are okay such as student loans, mortgages, and even some car loans, but any consumer debt like a credit card or a store card should be paid off.

You will want to start with whatever card has the highest APR, so that you don’t get tons of higher finance charges while paying off other cards.  All of that money you save can go towards paying off even more debt.  As you continue to pay down your debt, your credit score will increase.  If it means getting a part time job in order to get some extra cash, I would definitely do it, so you can get your debt paid off quicker.

Posted: February 17th, 2010 under Financial Planning Tips.
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