Sell Structured Settlement Annuity

Do you have a structured settlement annuity that you are looking to receive cash for right now? Well the experts here at Cash For Settlement Payments may be just the answer you are looking for. We are able to help you with your transfer and if you absolutely would like a loan against your settlement payment rights then we are glad to help facilitate that as well. What we do is we set you up with a court date so that you can let the judge in your jurisdiction know that you are looking to cash in your settlement payments because of the following typical reasons: 





    * The money can be better used else where in a lump sum situation

    * You or your family is facing a hardship and prefer to liquidate the investment holding in exchange for
        the money to save your family

    * To help make mortgage or house payments (many annuitants use the money to purchase a home)

    *  Ease the trouble of everyday life

No matter what the reason it needs to be sound and approved so please speak with us about your reason and need for money and we will work with you to help you out right away. You can contact us via email or we prefer that you call and speak to us. We would love to come and meet you in person and work with you for getting the settlement transfer done as we build a strong relationship with all of our clients.

source: cashforsettlementpayments.com

Do You Spend Too Much on Insurance Each Month?

Most people overpay for their insurance coverage. It’s unfortunate, but insurance agents aren’t always motivated to save you money. They’re motivated to sell you more insurance. Because of this, you might end up with riders you don’t need, insurance coverage that doesn’t make sense, deductibles that are too low, and an insurer who has the split responsibility of pleasing you and outside shareholders. Here’s how to save money without sacrificing coverage:  












Unnecessary Riders

Most agents have riders that they love to sell people. It’s sort of a “personal favorite” of the agent – but you may not need them. A rider is a modification to the basic policy. It modifies the policy to include some type of coverage not normally found in the basic contract.

While some riders could be beneficial, many aren’t. Take accidental death riders for example. These pay only when you die as a result of an accident. Seems reasonable, right? There’s just one problem: the odds of you dying from an accident, by definition, are low. It’s an accident.

Moreover, even if you do become injured in an accident, a coroner may rule that you’ve died from “complications” like internal bleeding instead of the accident itself. You may survive the accident, but die due to an infection you receive in the hospital (i.e. a C.Diff infection – which is common in hospitals).

If you have ordinary life insurance, you probably don’t need the accidental death coverage offered on some auto policies.

Another problem is that you may have riders that just don’t make sense given where you live. This is especially troublesome on homeowner’s policies. For example, earthquake insurance is probably necessary if you live in California. If you live in North Dakota, however, you probably don’t need it.



Low Deductibles

Many agents try to make things easier for you by selling you on a $200 deductible. It’s low – sometimes too low. You can dramatically lower your premium by raising your deductible as high as the insurer will allow and saving the difference. Once you have enough to meet your monthly deductible amount, you can allocate that savings any way you wish.

Only raise your deductible if you plan on building up a savings to cover your higher out of pocket costs.



The Mutual Advantage

Most agents don’t advertise it, but mutual insurers are usually able to offer you a better net premium than stock companies? Why? Because mutual insurers pay dividends to policyholders. For homeowner’s insurance, this means that the insurer will refund part or all of your premium through a dividend payment if and when dividends are paid by the company.

With life insurance, your policy can grow substantially over time with the addition of dividend-funded premiums and dividend-funded additional paid-up life insurance death benefit.

Mutual insurers cannot guarantee that they will pay a dividend every year. That’s why it’s important to look at the historical dividend payments made by the company. Historical performance won’t tell you about future performance, but it will tell you the track record of the company. It’ll allow you to make a decision based on the probability of a dividend being paid in the future.

Most mutual insurers have a solid track record of paying dividends every year.



You’re Paying For Insurance On The Land

One small, little, mistake can cost you thousands on your homeowner’s insurance. When you’re having your home assessed, it’s common to include the land value in the assessment. When you give this figure to the insurer, it prices your policy accordingly. However, while a flood, earthquake, or fire might damage your property, it’s not the end of the world. You really should just be concerned about the replacement value of any structures on your property (i.e. your home, garages, etc.).

Most insurers don’t even cover landscaping, so if the value of your home includes the land, you might be paying for coverage that you’ll never see any benefit from. Have your home reassessed so that you get just the home value. Turn this figure into your insurer and watch your premium drop like a stone.

Louis Winter is a personal finance expert. He frequently writes some of his best tips on money saving blogs. To learn more click AutoInsuranceQuotes.com.

source: 20smoney.com

So You Think Auto Insurance Is Expensive? Here’s The Cost Of Not Having It!

Many drivers bemoan the fact that they have to pay for auto insurance. While it may not be ideal to pay for something you may never use, and while there are affordable auto insurance options in the market, what are the costs of not having auto insurance? Let’s take a look at what expenses you could be facing if you were ever in an accident or caused damage with your vehicle while not carrying auto insurance.  








1) You Will Pay For The Damage To Your Car

Your insurance company typically pays for the damage done to your car and any other car involved in a crash that you cause. If you don’t have insurance, you will pay for damages that could easily exceed $10,000 depending on how many cars were involved in the accident.

2) You Will Pay Medical Bills For Anyone Hurt In A Crash

Standard minimum insurance policies pay for a good chunk of any costs related to bodily injury following a crash. You could be on the hook for hospital bills as well as funeral costs if you kill somebody in your car. A stay at the hospital for someone without medical care could easily cost $50,000 or more.

3) You May Be Liable For Replacing Personal Property

Say a laptop was damaged in an accident that you caused. You will have to pay to replace that laptop because you are the one who caused it to be broken. While it may only cost you $500 to replace it, that is a cost you can easily avoid with a basic insurance policy.

4) You Will Be Fined For Not Having Insurance

You will be fined for not having proof of insurance. The amount of the fine varies depending on what state you live in. However, you can expect to pay at least $100 or more.

5) Your Car Will Be Impounded If You Are Caught Driving Without Insurance

Some states will impound your car if you are caught driving without insurance. Expect to pay at least $75 a night or more depending on where you live and how long your car is impounded for.

6) You Will Pay For Your Own Attorney To Defend Yourself Against Legal Action

Your insurance policy may cover legal representation if you have to go to court. Unfortunately, you will be paying for this yourself if you don’t have auto insurance. You could be paying as much as $150 an hour for a good lawyer.

7) You Will Pay For Your Own Rental Car While Your Car Is In The Shop

A rental car is going to be necessary while your car is in the shop. That could cost you as much as $100 a day or more. If you had insurance, your costs would be covered for up to 30 days.

8) You Will Pay For Any Real Property Destroyed In A Car Accident

What happens if you destroy a house or tear up a yard in a car accident? The answer is that you will pay for the cost to repair the damage. That will cost you several hundreds or thousands of dollars.

Paying for auto insurance may seem like a drag. However, you are going to bankrupt yourself rather quickly if you get into an accident during a time in which you don’t have coverage. The lesson is that you should buy a good policy and be thankful that you have it if you ever need it.

source: 20smoney.com

4 Tips to Help 40-Somethings Manage Their Debt

Handling debt is a challenge for those of all ages, and the problems start early in our adult lives. It's only natural to incur some heavy debts in our 20s and 30s, as we're dealing with the imbalance between our relatively scarce financial resources and the sizable expenses of getting started with careers and families.

By the time you hit your 40s, you might hope to have moved past that phase. But although many people in their 40s have well-established careers that produce sizable incomes, they also often face growing financial commitments -- both to themselves and to family members. That's a big reason why 40-somethings have the highest levels of debt of any age group, and unlike younger groups, they've seen their debt levels increase slightly since 2005, according to figures from the FICO Banking Analytics Blog.

Debt management in your 40s isn't just about paying down debt. It's also about making sure you're using the right kind of debt to handle the most important expenses you face. Also vital -- maintaining the ability to repay your debts while simultaneously ramping up savings for your longer-term goals.

To address all those issues, here are four things that 40-somethings should keep in mind in dealing with their debt.

1. Anticipate Big-Ticket Expenses.

Dealing with unanticipated expenses can break the budgets of young adults. But by the time you hit 40, you have plenty of life experience behind you and can predict what sorts of financial demands will come up. In particular, major expenses like putting children through college or replacing a vehicle are fairly easy to foresee. The smarter you can be about planning for them beforehand, the better you'll be positioned to minimize how much debt you have to take on to pay for those expenses later.

Having an emergency fund with three to six months' worth of income is out of reach for many young adults, but by your 40s, it becomes more realistic. Having that fund available can keep you from incurring debt and provide a cushion you can tap later for college expenses and other big-ticket items.

2. Get The Right Protection For Your Family.

As 40-somethings hit the peak debt levels of their lifetimes, they're most vulnerable to unforeseen tragedies like a death or major illness in the family. Between lost income and increased expenses, such events can crush even a well-crafted financial plan.

Having the right insurance policies in place to protect against tragic events can ensure your family's financial survival. A simple term-life insurance policy usually costs relatively little but can provide enough death benefits to pay off a home mortgage and other debt while potentially leaving additional savings available for future needs.

Disability insurance can replace lost income and cover qualifying expenses if you're unable to work following an accident or illness. Working with an insurance company to craft the right protection package for you could mean the difference between beating debt and suffering a big financial setback.

3. Put Your Best Debt-Foot Forward.

Young adults tend to take advantage of credit wherever they can get it. But as you get older, your access to better credit should increase, allowing you to skip expensive forms of debt like credit cards and payday loans and instead get low-rate loans that are much easier to pay off. Although low-rate specials on car loans and credit cards can make their interest costs attractive, the most consistently inexpensive financing usually comes from a home mortgage or home equity loan, with government-subsidized student loans also offering reasonable rates for many students. If you have to have debt, look to consolidate it into these favorable areas, then avoid taking out further high-cost debt in the future.

4. Set the Stage For Your Own Future.

As important as debt reduction is, 40-somethings also have to face the inevitability of their own future financial needs. One big reason why it's so important to get rid of bad debt and focus on concentrating outstanding balances in inexpensive forms of credit is to give yourself the flexibility to save more for retirement. As your salary increases, the potential matching contributions from your employer also rise, and you won't want to miss out on the opportunity to collect more free money to put toward your retirement savings.

The hallmark of your 40s is that debt stops being a necessary evil and starts becoming more of a potentially useful tool. By focusing on the positive aspects of debt in helping you balance competing financial needs while avoiding the downsides with which you're already familiar, you can put debt on your side and manage it effectively.

source: dailyfinance.com

Tuition Isn't the Only College Expense on the Rise

WASHINGTON -- Despite all the grumbling about tuition increases and student loan costs, other college expenses also are going up.

The price of housing and food trumps tuition costs for students who attend two- and four-year public universities in their home states, according to a College Board survey. Even with the lower interest rates on student loans that President Barack Obama signed into law, students are eyeing bills that are growing on just about every line.

A look at typical college students' budgets last year and how they're changing:

Community Colleges

The public two-year schools charged in-state students an average $3,131 last year, up almost 6 percent from the previous year. While the tuition hike was larger than at other types of schools, students at community colleges saw the smallest increase in room and board costs -- a 1 percent increase to $7,419. Total charges for students to attend an in-state public two-year school: $10,550.

Tuition and fees at community colleges are up 24 percent beyond overall inflation over the past five years, according to the College Board.

Public Four-Year Colleges

Tuition for students attending public four-year schools in their state was an average $8,655 last year, a 5 percent jump from the previous year. They paid more than that -- $9,205 -- for housing and food. These schools, like other four-year schools, posted a 4 percent jump in housing costs. Add in books and supplies, transportation and other costs and the total reaches $17,860 to attend an in-state public school, such as a student from Tallahassee attending Florida State University. When grants and scholarships are included, the average student pays $12,110 at such schools.

For students who choose to attend state schools outside their home state, the costs increase to $30,911. They pay the same $9,205 price tag for room and board, but the tuition rates are more expensive. The typical student who crossed state lines to attend a public college in 2012 paid $21,706 in tuition and fees after grants and scholarships -- a 4 percent jump from the previous year.

Over the past five years, the tuition sticker price at public four-year colleges is up 27 percent beyond overall inflation.

Private Schools

On the surface, private four-year schools are the most costly colleges, with the average student's sticker price coming in at $39,518 for all expenses. Tuition and fees were $29,056 last year -- another 4 percent jump -- while room and board ran to $10,462. After grants and scholarships, the average student paid $23,840 to attend schools such as Yale or Stanford.

The tuition at private schools was up 13 percent beyond overall inflation over the past five years adjusted for inflation.

 source: dailyfinance.com

My Kid's Drowning in Credit Card Debt! What Do I Do?

If you trusted your son or daughter to keep track of their finances, and they slipped up, what in the world are you supposed to do?

Let's say they've racked up a big, nasty credit card debt -- to the tune of thousands of dollars. Should you pay off their debts to help keep their credit score above water? Or is it better to let them learn from their mistakes and suffer the consequences? Though each individual situation is different, here are your options, what's at stake, and a few pointers to help you plot your course of action.  



A Personal Loan, With a Contract

If you have the means, think about whether or not you want to loan your daughter the money. Sometimes her debt is manageable enough that you can pay it off in the form of a personal loan to your daughter. You can charge her interest as well, so she learns just how much a high APR can cost her.

But you have to examine the situation from a lender's perspective, rather than simply write a check and expect she'll make payments. What is her employment situation? Will she be able to make payments to you without the security blanket of your relationship making her complacent? Has she typically been a responsible spender in the past, or does she impulsively purchase on a grand scale regularly? If you do decide to help protect her credit history, it's a smart idea to sign a contract with your daughter to make your agreement more official and binding.

If You Co-Signed, You're on the Hook

If you co-signed on your son's account, you're responsible for his credit card debt. Because of regulations passed in the CARD Act of 2009, it's more difficult for young adults to qualify for credit cards, so more and more parents are co-signing on accounts and acting as guarantors for their children. If you've already taken that step, you should hopefully have realized that your son's purchases will affect your credit, regardless of your involvement.



 In this case, it may be more prudent to pay off the debt if you can, cancel his account, and work together to come up with a payment plan to rectify the situation and make sure it never happens again. If you haven't co-signed yet, sit down for a serious conversation with your son on your values and financial responsibility.

Lessons to Be Learned?

Bad credit now will impact her financial future later, but so will bad habits. If your daughter doesn't learn from her mistakes now, there could be bigger and more damaging mistakes ahead. Will bailing your daughter out of her financial mess with creditors make her realize the gravity of her mistake? Or will you just end up fostering her sense of dependence on you? You won't always be there, wallet in hand to save her, so if she can manage to take the credit hit, perhaps it's best to let her learn her lesson this time, and give her some tough love.

Communication Is Key

Loaning money to someone you love is always, always messy. While your son should intellectually know that your love is unconditional (which is why your help comes so willingly), for him, it's emotionally very difficult to face your parents when you owe them money. Plenty of relationships have been ruined by debts of personal loans, both from neglected payments and feelings of shame. Be sure that if you choose to help your son, you commit to maintaining an open dialogue and doing your best to keep business and family separate.

Ultimately, each family and financial situation is different. But before you make a plan to tackle your son or daughter's debt, you need to examine the situation from all angles. There are many factors in play, but above all, your relationship and your child's sense of responsibility from this learning experience should be at the forefront of your mind.

source: dailyfinance.com

How to Get Cash Back on Purchases - Without a Credit Card

Rewards credit cards have become so ubiquitous -- and their cash-back rewards so lucrative -- that it's become a common refrain that you're leaving money on the table if you don't have one. But amid all the talk of rotating categories, double rewards and sign-up bonuses, it's easy to forget a simple truth about rewards cards: Many people can't get them.

The truly premium credit cards -- those that provide solid cash-back rewards without an annual fees -- are typically reserved for those with very good credit, which leaves many people without an invitation to the cash-back party. And even if you've got good enough credit to qualify, you might decide you don't want to incur the temporary hit to your credit score caused by opening a new account.

Here's the good news, though: You don't need a credit card to get cash-back rewards. There are a couple of other options.

It Pays to Be Loyal

One is to join store loyalty programs, which usually provide combinations of members-only markdowns and cash-back benefits. CVS (CVS), for instance, has its ExtraCare card, which in addition to discounts also offers 2 percent cash back on most purchases, with the rewards disbursed on a quarterly basis. Safeway (SWY) offers 1 percent cash back on groceries, which can then be used to get as much as a dollar a gallon off your gas purchases. Neither requires you to sign up for a store credit card, so you can get these rewards regardless of your credit situation.

The downside is that retailers like Safeway and CVS are exceptions, not the rule: In general, if you want store-specific rewards, you have to sign up for a store credit card, which can be dangerous to your financial health, especially if you carry a balance.

Cutting Yourself in on the Commission

The other way to get rewards is to go through a website that offers cash-back deals.


These websites aren't selling products directly; instead, they're referring you to products sold on e-commerce sites. One example is FatWallet, which aggregates deals, sales and discounts. If you click on a deal or sale, you're first taken to an interstitial page informing you that you can get cash-back from FatWallet if you make a purchase at the retailer's site.

There's no credit check or extensive registration process: Just create an account with a username and password, and henceforth you'll get varying levels of cash-back when you buy something after following a link from FatWallet. How varying? Anywhere from 1 percent to 40 percent, depending on the destination site and what you're buying there. Most merchants offer between 1 percent and 5 percent; visiting Amazon via FatWallet, for instance, will get you 3 percent cash back, but only if you're buying from the shoe, automotive or Amazon Local departments.

A Win-Win Arrangement

It might sound too good to be true, but it makes perfect business sense for all involved. Online retailers want to encourage other sites to link to their products, so they give out referral commissions -- a cut of the sale to whichever site referred the customer. Sites like FatWallet take a percentage of that commission and give it back to the customer, and everyone wins: The online store gets a sale, the referring site gets a commission, and the customer gets some cash back.

(Rewards cards operate on a similar principle: Stores get a sale, banks get a portion of that sale in the form of a swipe fee, and customers get a cut of that fee.)

FatWallet isn't alone in providing cash-back rewards. There's ExtraBux, which promises up to 30 percent in cash-back deals; current deals include 8 percent cash back from GNC, which is on top of a 15 percent discount offered via coupon code. There's eBates, which says that it has earned members more than $100 million in cash back. Another is ShopAtHome, which currently offers 7 percent cash-back for select deals from Walmart. TopCashback, meanwhile, has a slightly different business model: It says that it passes 100 percent of its sales commission on to the user, instead making its money through Google ads.

These sites can offer even better cash-back rewards than credit cards, which usually offer a standard 1 percent cash-back across the board and 5 percent on certain rotating categories. The downside is that you're a lot more limited on where you can get that cash -- only certain online retailers participate, and those that do may restrict the offer to certain products.

Still, it's nice to know that people with poor or even nonexistent credit can still score cash back just by shopping via one of these sites. And keep in mind that they aren't just for the credit-challenged: If you use a rewards card to shop through a cash-back site, you're getting rewards from both parties.

Isn't it nice to get paid to shop?

source: dailyfinance.com

Settle Debts Before Investing?

Question: Hi Rose. I enjoy reading your FQ and parenting articles. I also want to start investing now but I think I have to settle my debts first. What do you think? – J.N. via email

Answer: Hi J.N. Yes I agree with you. If you have been carrying debts, which cost you money, the first step is to pay them off. Think of it this way, if you’re able to pay off your credit card debts that charge 3.5% per month, you just “earned” yourself an annual return of 42%! Where can you find an investment return like that?

Sometimes people are also afraid to touch their Emergency Fund to pay off their credit card debts because they want the security of having ready cash for emergency. However, please remember that while your credit card charges you 42% p.a. your Emergency Fund, even if kept in money market placements, only gives you around 2-3% p.a. So pay those loans, then start building your Emergency Fund again. If you have an existing home mortgage with a decent interest rate of 5 to 5.5% p.a., then I think you don’t have to wait to fully pay that before you can start investing. Just make sure that you pay your mortgage on time so you don’t incur penalties and other charges.

I am preparing for a half-day workshop this week for the employees of a government agency. The Human Resources Director asked me to tackle the issue on debt management because she knows that a lot of their employees have debt problems.

She shared with me that their salaries are still given in cash instead of direct credit to employee ATM accounts. When I suggested that they shift to direct credit system in order to nudge their employees to save, she said, “We’re concerned that they might pawn their ATM cards!” I was surprised to hear this and learn that this has become a common practice among people who are living from paycheck to paycheck.

The Origin of Debt:



To know more about debt, I did some research on the origin of debt. I found this book entitled Debt: The First 5,000 Years by anthropologist David Graeber. His interesting theory is that debt originated as early as 3500 B.C., long before the advent of coinage or money in 600 B.C., refuting the traditional explanation for the origins of monetary economies from primitive bartering system as laid out by Adam Smith, the father of modern economics.

I’m not yet done reading the book but it promises to be an interesting read as it talks about how throughout our history indebtedness has led to unrest, insurrections and revolts. The morality of debt is also discussed – how people mired in debt would resort to using their children as payment; how the IMF and the big banks convinced the Third World dictators and politicians to take out loans (while pocketing some in their Swiss accounts) whose interest rates later on skyrocketed leading to the Third World Debt Crisis in the 80s; how the sub-prime lending era crafted mortgages that makes default inevitable, taking bets on these defaults and selling them to institutional investors, turning over the responsibility of paying off debts to giant insurance conglomerates and eventually being bailed out by taxpayers.

What we can gather from this data so far is that debt is really something to be careful with, both on a personal and national/international basis. Inasmuch as it can help us enjoy big-ticket items like buying a house or expanding our business, growing our country without having to put up 100% of cash required, mismanagement can also make life miserable. I’m glad that you intend to pay off your debts now.

Ways to pay off your debts:


The most cost-efficient way to retire your debts is to pay off those which carry high financing cost. And since front-end fees would have been paid by now, these are the loans that carry the highest interest rates. Always make sure you compare the rates on a per annum (p.a.) basis.

However, since handling money is not all about math but has a lot to do about emotions, there are a lot of proponents of the so-called Debt Snowball Method. This method, popularized by Dave Ramsey, advises you to pay off the loan with the smallest outstanding balance first, on to the bigger ones until you pay off all loans. The primary advantage of this method is the psychological contentment that you will feel as you tick off debts from your list. So the smaller the debt, the easier and sooner you can pay it off. You’ll feel the progress more in doing this and give you optimism and drive to pursue until all debts are paid off.

Check which one works for you. As I’ve discussed in previous articles, humans are not always rational and we should work out systems for ourselves such that we move towards our goals more successfully.

May I also remind you not to incur new debts? Review and reflect on how you got into indebtedness so you know what to avoid. Remember debt is bondage. The sooner you get out of it, the closer you move towards your financial freedom. Continue to read up on investing. The more you know about it, the more excited you will be to start the adventure, the more motivated you’ll be to pay off your debts.


Quotes on Debt:

Let me end with some quotes on debts that may be good for you to ponder upon.

“Wars in old times were made to get slaves. The modern implement of imposing slavery is debt.” - Ezra Pound

“If you have debt I’m willing to bet that general clutter is a problem for you too.” - Suze Orman

“In the long run we shall have to pay our debts at a time that may be very inconvenient for our survival.” - Norbert Wiener

“One of the greatest disservices you can do a man is to lend him money that he can’t pay back.” - Jesse Jones

“Debt is like any other trap, easy enough to get into, but hard enough to get out of.” - Henry Wheeler Shaw

“Debt is the secret foe of thrift, as vice and idleness are its open enemies.”-James H. Aughey

“It is poor judgment to countersign another’s note, to become responsible for his debts.” - Bible

“If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours.” - John Maynard Keynes

I wish you freedom from debt soon and financial happiness.

Sincerely,

Rose

source: philstar.com

5 Golden Rules For Investing In Annuity

Regardless of your age, your retirement is something that should never be too far away from your thoughts. But as you begin to reach a ‘certain age’, the importance that your pension holds and the role it will play in your future becomes a much more real prospect.

The earlier you start a pension fund, the greater the rewards. But, the tick-tocking of retirement draws closer, people begin to look at making investments to help bolster their pension pot. One concept many people consider is finding an annuity payment. This pays a guaranteed income for life, but is subject to varying interest rates.

To Risk Or Not To Risk?

Knowing what options are available to you will help put you in great stead when it comes to making the most of your hard earned cash. With this in mind, it is always worth seeking the expert of advice of a specialist financial advisor. Using their experience and expertise, they will be able to guide you in finding the right financial retirement plan.

The recent low level of annuity interest rates has seen many people lose out on their investments. This means the amount of guaranteed income paid that can be purchased from a pension fund is at its lowest ever level. This only emphasises the need for investors to consider their options in even more detail.

So if you’re considering investing through annuity, what things must you consider?

Golden Rule #1

Ensure that you have other sources of income or capital to fall back on. Do not put all your eggs in one basket. In today’s climate, there is no guarantee that annuity rates will improve should your decision be deferred so it’s important be stable should your future income fall in value.

Golden Rule #2

Make sure you understand the risks that are involved with your chosen annuity investment. Investments can come with a number of possible outcomes and inconsistent variables so be sure that you fully understand your investment and its consequences

Golden Rule #3

Make sure you have considered all options available to you. The beauty of retirement is that it can be what you make it and, depending on your income, there are a number of options you can opt for.

Golden Rule #4

A risk is a risk for a reason. Many people facing retirement face what is called a ’risk paradox’ between option of guaranteed annuity no longer proving a just investment due to rising inflation. Not only that, your personal circumstances may change, opening up a number of possibilities for you to consider.

Golden Rule #5

Acquire the services of a retirement specialist financial advisor. With their experience and expertise in retirement planning and the options available to you, they will be able to offer guidance on how to invest your money. They will take the time to understand you, your financial situation and your retirement plans before suggesting the most beneficial and secure route.

Make The Most Of Your Retirement

By following these golden rules, you will be able to make the most of your pension pot, giving you the options to plan the retirement you deserve.

source: everythingfinanceblog.com

Comparing Mortgage Offers Online

Canada’s housing market is filled with overpriced properties, which means fewer people are interested in buying a home of their own.  But over the past year, restrictive measures from the government slowed down the number of homes that are actually selling.  As the trend continues and owners are unable to offload their specific properties, prices inevitably must come down.

Buying a home is arguably one of the most expensive investments a person can make, but unless you have a savings account stashing away the national average home price of $400,000, you will require a mortgage.  Qualifying for a mortgage requires an adequate credit score, and enough savings to put down a down payment on a home.  The quality of your credit score and the size of the down payment both contribute to the mortgage interest rate you receive.

However, the art of negotiating for the mortgage loan is different in today’s market compared to years past.  In the old days, a loan applicant would be forced to meet with a banker or a mortgage broker, and plead the case for home financing.  This process required a significant amount of time, and likely cost more money than necessary.  Many creditors prefer dictating what they feel is a reasonable mortgage interest rate, and expect you as the applicant to accept their terms.

Thankfully, technology in today’s market simplifies the application process, and can potentially save you thousands of dollars over the lifetime of your mortgage loan.  There are now websites that act as one-stop shops for comparing mortgage interest rates from some of the leading providers across Canada.  Using these sites and the mortgage calculator tools, you can find the best advertised rates within minutes.  Offers from all viable competitors are available in one place, which puts the leverage for a fair mortgage loan back in your hands.

Many Canadians don’t realize that even a fraction of a lower mortgage rate percentage can save potentially tens of thousands of dollars by the end of the loan term.  This means you make smaller monthly mortgage payments, and the interest remains significantly lower than it would be otherwise, which means you pay closer to the amount that you borrow.

Opportunities are out there to find an affordable home in Canada, and online mortgage comparison helps you acquire the best options in no time at all.

source: marriedwithdebt.com

How Much Life Insurance Does a Stay-at-Home Parent Need?

Generally, financial gurus recommend that you get 5-20 times your annual income in life insurance coverage. But what if you have no income because you’re a full-time stay-at-home parent? Or what if you contribute a few hundred bucks a year to the family bank account with your side job while you mostly stay home with the kids?

We all know that anything times zero is zero, but that doesn’t mean that a stay-at-home parent should not have life insurance.

In fact, as a stay-at-home parent, you make hugely valuable contributions to your household, contributions that would cost your family a pretty penny should something happen to you.

According to a recent Salary.com survey, the services of a stay-at-home mom in 2012 (sorry, dads, you weren’t part of the survey this time) would cost about $113,000 if you had to outsource those services. The survey looked at the services provided by a typical homemaker, including housekeeper, child care, chauffeur and more. If you had to outsource all those services, you’d pay a lot to do it.

But does that mean that a stay-at-home parent needs more than $1 million in life insurance? Probably not.

The truth is that in single-parent households, not all of these services are outsourced. Yes, if something happened to you, your spouse would have to pay for day care and would probably like to pay for extra services like housekeeping. But plenty of working single parents clean the house, make the lunches, plan the doctor’s appointments, run to school and soccer practice, and work.

The Goal is Something In Between

 

While your stay-at-home parent services are invaluable for your family, you don’t want to wind up with more life insurance than you can afford. So when you’re deciding how much term life insurance coverage to buy for yourself, you’ll have to do some personal calculations and some hard thinking.

Here’s one process for deciding how much life insurance to carry on the stay-at-home parent in your family:

First, talk about what life would look like if that parent died. No one likes to think about this possibility, but to make good life insurance decisions you must.Which services would the surviving spouse need or want to outsource? Look into the cost of full-time child care in your area and include that in your calculations.You may also want to check out things such as housekeeping services.

Remember to look at the ways a stay-at-home parent saves your family money, as well. For instance, many stay-at-home moms are able to shave hundreds off the monthly grocery bill by meal planning, couponing and cooking at home. If something happened to this parent, the family’s food costs could go up quite a bit.

Also look into counseling services. If something happens to your children’s primary caregiver, chances are they’ll need some professional help to cope in a healthy way. How much would some basic grief counseling or therapy cost your family?

Again, it’s not fun to think about these possibilities, but it’s essential to choosing the right amount of life insurance for a stay-at-home parent.

Second, research how much life insurance coverage would cost. Term life insurance rates are typically low. But if you’re a one-income family living on a tight budget, you may not be able to afford much coverage. On the other hand, if rates are very low, you might be able to afford the luxury of more coverage.

The key is to make sure you can pay for it, even if you get into a tight place financially. Not paying your premiums can result in a termination of coverage, which is not a place you want to find yourself.

Finally, choose how much coverage you want. Your best bet is to apply through a broker, so you can get the best deal on the amount of coverage you need. It’s also easy to get life insurance quotes online.

Having the right type of life insurance coverage for both parents in a family can give you peace of mind, knowing that you’re protecting your family, and especially your children, in the worst possible circumstances. If one partner in your family stays at home with the kids, figuring up life insurance can be more complicated, because you can’t just multiply your annual income. But taking the time to figure out how much life insurance the stay-at-home parent needs is an important step in making sure your family is well protected.

source: doughroller.net

How to Refinance Any Debt

What do you think of when you hear the word refinance? If you’re like most people, you probably think of refinancing a mortgage.

In my weekly newsletter, however, we’ve been talking about how you can refinance any debt. I’ve encouraged my newsletter subscribers to write down every debt they have, including the interest rate. With the list in hand, they are reviewing each loan to determine if they can lower their interest rate. It’s one of the easiest ways to save money.

So today I thought we’d look at what refinancing involves, why you might want to refinance, and how to refinance any type of debt.

What is Refinancing?

Refinancing is trading one debt for another. If you refinance your mortgage, you’re trading your original mortgage for a new mortgage, usually with better terms that save you money.

You could also trade your credit card debt for a lower-interest home equity loan, which is refinancing. Or you could move your car loan to a new lender to get a better interest rate.

Sometimes you refinance with the same lender. In this case, you’re changing the terms of your original loan based on new financial factors, such as a better credit score on your part or lower overall mortgage interest rates. Sometimes, you may take out a new loan to pay off the old loan, getting better loan terms in the process.

As an aside, a loan consolidation is a bit different. With consolidation, you are usually consolidating multiple loans into a single loan. This process is a form of refinancing, but involves trading multiple debts for one.

When Should You Consider Refinancing?

Usually the goal of refinancing is to save money, especially on interest paid over time and on monthly payments. But you could also choose to refinance to change your loan terms.

For instance, you might refinance your mortgage from a 15- to a 30-year loan. A longer term gives you lower (often much lower) monthly payments, which are great if you’re in a financial pinch. Even if you’re paying your 15-year mortgage with ease, you might want to take a longer term and invest the extra money each month, hoping to come out ahead financially in the long run.

On the flip side, you might choose to refinance your 30-year mortgage to a 15-year mortgage. If you want to be debt free faster, this is a way to make it happen without making extra mortgage payments. Plus, the shorter loan term can save you tens of thousands of dollars in interest paid over time because 15-year interest rates are lower and you’ll pay down principal faster.

If you owe less on your home than it’s worth, you might want to do a cash out refinance, in which you remortgage it and take the difference in cash.

One more option is to switch from a variable-rate mortgage to a fixed-rate mortgage. A set interest rate and predictable payments can make it much easier to plan your personal finances.

As you can see, there are many instances in which you might consider refinancing your debts. Be sure you run the proper calculations, especially if you’re refinancing a larger debt like a home or a car. These refinances can cost you cash up front, so make sure they’ll be worth your while in the long run.

Refinancing other debts, on the other hand, may not be so complicated. If you’re dealing with high-interest credit card debt, all you need to do is transfer the balance to a lower-interest card to save a fortune.

How to Refinance all Your Debts

As I said earlier, you can refinance any debt with the proper steps. Here are some of the ways that you can refinance various types of debt:

Straight-up refinancing

 

Although any of these methods is refinancing, let’s first talk about traditional refinancing. This term is most likely to be used for mortgage loans, auto loans and student loans. Basically, you either get a loan with better terms from your current lender or from a new lender. The key to this is to shop around for your new loan.

Refinancing your mortgage may take more legwork because you’ll likely need to talk with loan officers about refinancing offers and the potential costs of the process. When refinancing a secured loan like your home or auto loan, you may not be able to refinance if you owe more than the home or vehicle is worth. A loan for more than an item is worth is riskier for lenders.

We talk elsewhere about how to refinance a home in which you don’t have a lot of equity. One option is to refinance through the Home Affordable Refinance Program, and another is to take out two loans, one for the negative equity in your home, and another for a regular mortgage at a lower rate.

If you have negative equity in your vehicle, you may need to take out a separate, unsecured loan to pay down part of the car loan. For instance, if you owe $15,000 on a car worth $11,000, take out an unsecured loan (or use a low-interest credit card) to pay off $4,000, and then refinance the remaining auto loan. Or you could keep paying on the vehicle until you build more equity.

Finally, let’s talk about straight-up refinancing of student loans. Because student loans are unsecured, it’s very hard to get a new lender to take them on at a lower interest rate or better terms. Bloomberg’s BusinessWeek notes that there are several ways to change some of your student loan terms. If you can’t make minimum payments on federal loans, look into modified payment plans or forbearance. Even some private lenders offer forbearance in some instances.

Unfortunately, you probably won’t be able to refinance these loans at a lower interest rate simply by finding a new lender. But you may be able to use one of these options for refinancing your student loans:

Using your home’s equity

 

If you have equity in your home, you can use that to refinance some of your other debts, such as school loans, credit cards or other personal debts. There are three options for doing this, including a home equity loan, a home equity line of credit, and a cash out refinance:

• Home Equity Loan: This is an installment loan based on your home’s equity. It’s also known as a second mortgage. If your home, for instance, is worth $500,000 and you owe $300,000 on your first mortgage, you could borrow $150,000 against your home’s value as a second mortgage. You’d pay back this type of loan in set installments, just like your first mortgage. All other things being equal, however, the interest rate on a second will be higher than your first mortgage
• Home Equity Line of Credit: This is similar to a home equity loan, except that it’s a revolving debt like a credit card. With a HELOC, you can write a check or use a debit card attached to the account, pay back some or all of the charge, and then charge again.
• Cash Out Refinance: Instead of taking out a second mortgage as a home equity loan, you might consider a cash out refinance, which will leave you with one mortgage payment. In the home equity loan scenario above, you could just refinance your first mortgage as a $450,000 mortgage, and take the excess $150,000 in cash.

Using your home’s equity to refinance other debts can be a good option because a secured loan against your home’s equity will likely have a much lower interest rate than the rates on other debts.

The rates you’ll pay on a home equity loan are typically much lower rate than you’re likely to be paying on any credit cards, and it’s also a lot lower than the locked-in 6.8 percent rate on federal student loans. So you could lower your overall debt payments and reduce the time it takes to pay off debts by using your home’s equity to pay off the balance of other loans.

If you can’t pay on your credit cards or student loans normally, the creditors can’t come after your property directly. If you can’t pay your HELOC or home equity loan, your lender could foreclose on your home.

Refinancing with credit cards

 

The most common way to refinance credit card debt is a balance transfer. You transfer the balance from one credit card to another, normally with a much lower interest rate.

Your best bet is to consider a zero interest credit card set up to encourage balance transfers. Note that some balance transfer credit cards come with fees, even if they have a limited-time zero interest rate on balance transfers.

There are some no-fee balance transfer cards available, so you should check out these options first. Some cards have an option for either zero interest with a balance-transfer fee (which is usually a percentage of the balance you transfer), or a zero transfer fee with a low interest rate. You’ll have to do the math to figure out which works best for you.

If you get a really great deal on a credit card and have enough available credit, you can use a credit card to refinance other higher-interest debts, as well. For instance, you could pay off a very high-interest personal loan with a lower-interest credit card, effectively using your credit card to refinance it.

Always check your credit card contract first because different types of purchases, transfers and payments may result in different interest rates.

Debt consolidation

 

If you’re swamped in debt and are unable to make minimum payments on everything, debt consolidation could be a good option. You’ll get one large loan to pay off part or all of your other debts, consolidating them into one loan.

The advantage of debt consolidation is often that it lowers your overall monthly payments, a relief for hard-hit consumers. Depending on the interest rates of the loans you’re carrying, consolidation may lower your overall interest rate and total interest payments.

According to the FTC, using your home’s equity is the most common way to consolidate debt, but you may also be able to get a consolidation loan. However, some disreputable so-called debt relief organizations will offer debt consolidation loans that aren’t a great deal. They may increase the overall interest paid, extend your repayment time to decades, or charge fees that increase your overall debt load.

It’s very common to consolidate student loan debt, and this is usually an automatic option with federal student loans. If you took out student loans for several years in a row, you probably have several loans from several lenders. It’s a pain to make so many separate payments, and your minimum payments are probably quite high.

In this case, you can consolidate all your loans into one by a single lender. Consolidating federal loans usually means that you lock in your interest rate, which may otherwise vary from year to year. Plus, you could lower your overall monthly payments and gain access to several repayment plans.

You’ll have to consolidate private student loans separately, but there are several lenders who will do it. You can read more about how to consolidate student loans here.

Using LendingClub or Prosper

 

LendingClub and Prosper are peer-to-peer lending marketplaces. Basically, you can get a fairly low rate on an unsecured personal loan that comes from other individual lenders. LendingClub statistics say that nearly half their loans are used to consolidate debt or pay down credit cards with a lower interest loan.

Peer-to-peer lending options generally come with competitive interest rates that depend on your credit history, and they’re relatively quick to get. But the loan limits are usually around $25,000, though you may be able to take out multiple loans at once. They can be a good option if you need to refinance debt quickly.

The Bottom Line

 

Refinancing some or all of your debts may or may not be a good idea. Look at your debts, interest rates and minimum payments. If you could reduce interest rates significantly, refinancing is usually a great option. Also, if you can lower your monthly payments, you could kick the money you save into paying off your principal balances more quickly, or into investment accounts that allow you to save for the future.

source: doughroller.net

Bank of America's Newest Credit Card Pays You to Repay Them

A new credit card from Bank of America (BAC) will offer cash rewards up to $120 a year to cardholders who pay off more than the minimum balance every month.

The BankAmericard Better Balance Rewards card gives cardholders $25 per quarter as long as they always pay their bill on time and pay off more than their monthly minimum due amount. Cardholders who also have a Bank of America bank account get another $5 each quarter, bringing the total to $120 a year just for staying on top of their bills and making an effort to bringing down their debt. The rewards can be cashed out or put toward your credit card balance.




That's a very different rewards program than you see on standard rewards cards, which focus on getting cardholders to spend as much as possible to get cash back. And while those rewards cards tends to be geared toward people with excellent credit, the Los Angeles Times notes that this card is likely to be aimed at lower-income consumers with fair credit.

So is the card a good deal?

The rewards are certainly attractive. To get $120 in annual cash rewards on a standard rewards card with 1 percent cash-back, you'd need to spend $12,000 in a calendar year (though bonus categories with rewards of up to 5 percent can allow you to get there more quickly).

By contrast, you don't have to rack up a ton of spending on this card to get a comparable cash bonus. In fact, even if you have only a $15 minimum payment, you could put a measly $20 on the card every month, and as long as you're paying a little more than the minimum due amount, you'll reap the rewards. If you also have a bank account with Bank of America, that means you could wind up getting $120 in bonuses on $240 of spending, a tidy 50% cash-back rate.

But that same feature also means that the card doesn't necessarily encourage people to make a serious dent in their balances. Because the cardholder need only pay "any amount more than the monthly minimum due" to get the cash bonus, simply paying a dollar over the minimum would be sufficient to get the rewards. A better incentive to encourage responsible borrowing might be to require cardholders to pay a minimum percentage of their total balance.

Another issue is that the annual $20 perk for holding an account with Bank of America might backfire on some consumers. The card, after all, is aimed at lower-income customers, who may not be able to maintain the necessary minimum account balance to avoid Bank of America's monthly account fees. If you're considering this card and you're currently with a bank or credit union that doesn't charge a monthly maintenance fee, you should examine Bank of America's fee structure to make sure that switching banks won't cost you considerably more in the long run.

As with any other credit card, then, you'll need to examine your own personal finance habits to determine whether it's a good fit for you. Played the right way, the Better Balance Rewards card can help you make some easy money without significantly altering your spending. Just don't be fooled into thinking it's a magic bullet for eliminating your credit card debt.


source: dailyfinance.com

Most Americans Have More Savings Than Credit Card Debt

Rumors of the spendthrift American consumer may be slightly exaggerated. Bankrate's 2013 February Financial Security Index found that a majority of consumers -- by a narrow margin -- say they have more savings than credit card debt.

For more than half the country, 55 percent, an emergency fund outweighs credit card debt. Nearly a quarter, 24 percent, admit to having more debt on plastic than money in the bank, while 16 percent say they have neither credit card debt nor savings. That puts 40 percent of the population close to the edge of ruin while everyone else seems to be sitting pretty.

If most people have more savings than credit card debt, "Why are so many people broke?" asks Howard Dvorkin, CPA and founder of ConsolidatedCredit.org.

It's a curious question. The answer may be that although credit card balances came down through the financial downturn that began in 2007, consumers' fundamental behavior of not saving enough did not change.

According to the Department of Commerce, for 2012, the overall savings of the average household were 3.9 percent, much better compared to the 0.9 percent Americans were saving in 2001. However, this is down from the average 5.4 percent savings rate in 2008.

Even with a low savings rate, why wouldn't a supposedly low credit card debt rate put Americans in better financial shape?

"The fact of the matter is that America is broke -- whether it's mortgages, student loans or credit cards, we are broke. The old rule of thumb is that people should have six months' of savings," Dvorkin says."If you talk to people, most don't have two pennies."

Who's In Trouble?

In Bankrate's survey, men were more likely than women to say their emergency fund outweighed credit card debt, at 60 percent, compared to 49 percent of women.

But credit card debt hits all kinds of consumers. Bankrate's survey has found that roughly a quarter of all income levels has more credit card debt than savings.

"Credit card debt will eat you alive no matter who you are," Dvorkin says.










Those people with incomes more than $75,000 were less likely to have no savings or credit card debt compared to those at the opposite end of the spectrum, with incomes less than $30,000. Only 7 percent of high earners have no credit card debt or savings, while 28 percent of the bottom rung of earners say they aren't in debt but have no savings.

While staying out of credit card debt is a good place to be,having no savings puts low-income earners in danger of falling into a payday-loan cycle or needing to borrow from family or friends.

"People who earn less than $30,000 may not have the credit score to get credit cards. That keeps them from getting into trouble with debt, but it also keeps them from saving," says Xavier Epps, CEO and founder of XNE Financial Advising in Woodbridge, Va.

For the rest of the population, there may be a fundamental divide between consumers who are fine with carrying credit card balances and dedicated savers who strictly avoid debt.

"It tends to be that debt and savings are very lumpy; you rarely find someone that has both. It's either someone has a lot of debt and little to no savings, or someone has savings and very little debt,"says Elliott Orsillo, CFA, co-founder of Season Investments in Colorado Springs, Colo.

"There isn't much of a fluid spectrum of people with a ton of savings and no debt and a nice mixture down to people with no savings and lots of debt. It's usually either one or the other," he says.

"One of my clients had $400,000 in credit card bills. He came to me because it was impeding his ability to fuel his jet. The credit card companies would not allow him to charge his fuel anymore," he says.

No matter how much money you have coming in, learning to save and live beneath your means is the key to getting ahead.

source: dailyfinance.com

Debt Consolidation To Free Yourself From Slavery

You’ve probably heard someone say that the borrower is slave to the lender. If you’re currently struggling with debt, have you ever thought about how true this is? Owing money to someone is constantly in the back of your mind. Every dollar that comes in comes with a nagging reminder that it’s not really yours – that you owe it to someone else.

Every purchase you make might also set off an alarm bell, telling you that it really belongs to the person or institution who you’re in debt to.

The word slave might be a bit melodramatic, but it’s not that far from the truth. It’s a terrible feeling to be in that kind of debt to someone, so let’s talk about how to get out.

If you’re truly drowning in debt, be it credit cards, student loans, lines of credit, car loans, or some combination of all of these, being pulled in so many different directions is just as stressful as the actual amount you owe.

That’s why debt consolidation can be a good option to help deal with everything.

Debt consolidation is the process of borrowing enough money to pay back all of your debts at once. This loan is then your only debt that you’ll focus on paying down. At first it may seem like you’re just moving money around, but there are several benefits:

• Lower monthly payment – rather than a bunch of different monthly minimum payments (which you may not even be able to afford), you’ll be able to negotiate for a single payment that works well with your income and budget. This alone can take a lot of the stress off of your debt. Of course a lower monthly payment means it will also take longer to pay off your debts. There are many calculators available to help you see what your options are. Check out http://debt.ca for some great ones.
• Lower interest rate – some debt, such as credit card debt can carry an astonishingly high interest rate. Through debt consolidation you may be able to negotiate for an interest rate that is, on average, lower than what you were paying before.
• Less pressure – if you’ve been getting harassed by creditors, debt consolidation will stop all of that. Debt consolidation Ontario or any other province in Canada will speak directly to your creditors and arrange payback in full. You’ll only owe one institution, and they’ll be the ones setting up your payments to make sure you don’t fall behind again.   

There are some dangers to debt consolidation. If it was bad habits that got you to this point, doing what seems like clearing out your debts might lead you to make the same mistakes again. For example, if your credit card is maxed out and all of a sudden it’s cleared, you might be tempted to make more purchases with it. If you think this might happen, debt consolidation will only serve to drive you further into debt.

source: christianfinanceblog.com

Ways to Renegotiate Your Mortgage

If you are like many Americans struggling to make your monthly mortgage payment, you are not alone.  While the current economy has many struggling, the good news is that banks are more likely now to work with you than ever before.

Because banks have had to foreclose on so many homeowners, they would rather negotiate with you than have another foreclosure where they will likely lose money.  Banks want to get paid, and they now understand that the best way to get their money is to work with you, the borrower.

What You Need Before You Begin to Renegotiate

If you would like to renegotiate your mortgage, you will need several documents to prove that you are having a hard time making your payments.  You’ll want to round up your credit card statements, loan statements, unemployment information (if applicable) or your last paycheck stub, your last two years’ tax returns, and your checking and saving information as well as possibly other investments you have.

Ways to Renegotiate Your Mortgage

There are two main ways you can renegotiate your mortgage.  Which way you chose depends on several variables.

1.  Work with the lender.  Call the lender and honestly tell them that you are having a hard time making your monthly mortgage payment.  You will need to also tell them why you are having trouble, whether that be because of job loss, an injury or illness or another reason.

Ideally, the best time to work with the lender is before you fall behind on your payments.  This was not traditionally the case, but times have changed, and the lender wants to hear from you and work with you as soon as possible.

2.  Consider refinancing.  If you have more than 10% equity in your home and a credit score of 720 or higher, you may be a good candidate for a refinance.  Refinancing can lock you into a lower interest rate and give you a lower monthly payment that you will be able to afford.

While you may initially work with your own lender on a refinance, that is not your only option.  You can contact a mortgage broker who can help you find the best offers, or you can look around yourself and compare rates.  If you belong to a credit union, don’t forget that credit unions often offer lower rates than banks do.

In addition, consider changing the terms of your loan.  If you have a fixed rate mortgage, a 5 year adjustable rate mortgage may give you some breathing room with a lower interest rate and lower monthly payment.  This alternative is especially attractive if you plan to move within 5 years.

If you are having trouble making your mortgage payment, don’t despair.  You are certainly not the only one who has been in this situation, and you will likely find your lender willing to work with you.  Even if your lender isn’t, there are likely other lenders who will work with you and be glad to get your business.  Remember, in general renegotiating your existing mortgage is easier than getting a new mortgage.

source: everythingfinanceblog.com

Lifestyle changes and how they affect your mortgage

Maybe you just lost your job. Perhaps you just had a baby. Or,maybe you’re planning your wedding. No matter the reason, any time your lifestyle changes is an opportunity to evaluate your home loan, to help you reduce your expenses and maximize the money in your pocket.

Major Illness or Job Loss

If a pink slip or a major illness knocks you out of work for a few months, you may panic as you wonder how you’re going to make ends meet. Fortunately, there are ways to rearrange your mortgage to make the situation work for you.

Your first step may be to refinance. Use a mortgage calculator to see how much you could save by refinancing to a loan with a lower interest rate; mortgage rates are currently near historic lows, meaning now is a great time to shop around. Depending on your current interest rate, a refinance could save you hundreds of dollars a month in mortgage payments.

If that’s not enough, you may consider a forbearance. This option allows you to halt your mortgage payments, typically between six and twelve months, until your financial situation is less dire; then, you’ll have another six to twelve months to repay the interest and principal payments that accumulated while you were out of work. Most lenders will only offer a forbearance to borrowers who can prove their financial hardship is temporary, typically lasting six months or less.

Here Comes the Bride

If wedding bells are in the future, it’s a great time to look at your mortgage using a home loan calculator. Marriage means not only joining your lives, but your finances as well. If you’re in the market for a new home, adding in a second person to your family – and a second income – can increase the amount you may qualify for. If your partner has a strong credit score, he or she may also help you qualify for a lower interest rate based upon it.

You may be tempted to draw money out of your property to pay for your wedding through a cash-out refinance. This is where you liquidate some of the equity in your home to pay for expenses. If at all possible, resist the urge. For one thing, a wedding is a day, while your home is your shelter for months, maybe even years, down the road; reducing your financial stake in your home to pay for a one-day party is putting the cart before the horse. If you need more convincing, you should know that withdrawing some of your home’s equity will lead to higher mortgage payments, since you’ll have a higher principal to pay down on the loan.

And Baby Makes Three!

If your major lifestyle change involves starting a family, you’ve likely already started evaluating everything in your world, whether it’s the arrangement of furniture in a previously unused bedroom (where will the crib go?) to when – or if – you’ll return to work after the baby’s born. Spending some time with a mortgage calculator should be on your list, too.

Although the U.S. Government does not offer paid maternity leave to new parents, you can take advantage of the Family Medical Leave Act, or FMLA, which guarantees new moms and dads up to 12 weeks of leave – unpaid leave. To bridge the gap in finances during that period, consider refinancing your mortgage to a lower rate. Not only could you save hundreds of dollars a month, depending on your current interest rate, but you may also be able to “skip” a mortgage payment while you refinance from one loan to another.

One thing to consider here: my husband and I refinanced right after the birth of our first child. Shortly thereafter, we discovered that our previously-roomy house wasn’t big enough for our growing family. However, the refinance had really locked us in to staying in our home for the foreseeable future. In other words, the birth of a child may not be the best time to make dramatic changes to your mortgage situation.

source: everythingfinanceblog.com

Can You File for Mortgage Bankruptcy?

Have you fallen behind in your mortgage payment?  Do you worry about losing your house or creditors calling you?  If so, you are not alone.  Since 2008, many people have had to leave their homes because they could not keep up with the monthly payments and were eventually foreclosed on.  Thousands of homes sit empty because people bought homes with alternative mortgages such as 0% down or adjustable rate mortgages.

If you now find yourself unable to keep up with your mortgage payments, you have a few options.


 Can You File for Bankruptcy on Your Mortgage Alone?

If you are behind on your mortgage payment but not on the rest of your obligations, unfortunately, you cannot file for mortgage bankruptcy alone.  Likewise, if you are behind on your second mortgage but not your first, you can’t file for bankruptcy on just the second mortgage.



When you file for bankruptcy, you must include all of your debts.  Creditors can no longer contact you about repayment.  If you file for Chapter 7 bankruptcy, you will lose your home as it will be liquidated to help cover your debts.  If you can afford to make payments on your debts, a far better choice is to file for Chapter 13 bankruptcy as your home and retirement, among other assets, will be yours to keep.

What Other Alternatives Are There to Filing Bankruptcy?

If you only want to file bankrupcty due to your mortgage, you have a few other options available instead of filing bankruptcy.

1.  Apply for a mortgage modification.  Many, many Americans have been able to keep and stay in their homes over the last several years thanks to loan modifications.  You can apply for a loan modification whether you are current in payments, behind, in foreclosure or filing for bankruptcy.  The bank often prefers to work with you on a mortgage modification so that they can get their money.  Foreclosing on your property also costs the bank money and time that they would rather not spend.

2.  See if you have enough equity in your first mortgage to become current on your second.  If you are current on your first mortgage but behind on your second mortgage, you can see if you have enough equity in the home to refinance.  You can then take the money from the first mortgage to help you become current with your second mortgage.

3.  Stop making payments temporarily.  If you simply need some breathing room financially, you can stop making payments temporarily.  The bank will eventually begin the foreclosure process, but in some states, when you make another payment, the foreclosure process has to start all over again from the beginning.  Of course, this is not the ideal way to go.  Some people believe this is unethical, and you do run the risk of losing your home.

If you are behind on your mortgage and considering filing bankruptcy, remember that there are other alternatives before you take such a drastic step as filing for Chapter 13 or 7 bankruptcy.  Often the best choice is to contact the bank, explain your situation and see if they will be willing to work with you.

source: everythingfinanceblog.com

How to Restructure Credit Card Debt

For consumers struggling to make ends meet and racking up credit card debt and barely making minimum payments, hardship programs might provide a welcome relief.

Many credit card companies offer these programs that target borrowers who have fallen behind on payments. They typically offer debtors lower interest rates as well as reduced payments, fees and penalties. In general, most hardship programs fall into two categories: short-term, which could be for a few months or up to a year, or permanent which is until the credit card balance is paid.

Credit card companies don’t publicize these programs because they hurt revenues due to the lowered interest rates. But for most banks, these programs are a better option than not getting any money back as a result of an individual’s default or bankruptcy.

Delinquency: Not a Good Strategy

There are a couple of things to keep in mind when approaching a credit card company about enrolling in a hardship program. Most creditors will want to look at your income and expenses so be prepared to explain your budget. The company will evaluate your ability to pay your debt to determine your eligibility.

They will also look at your account history, so it is a good idea to inquire about the program before falling behind on payments. Using delinquency as a strategy to get your creditor to work out a deal with you is a bad idea. You’ll get a more sympathetic ear if you approach them prior to missing a payment.

Hardship programs are not designed for reckless spenders who have maxed out their credit cards and are looking for an easy way out. They are aimed at debtors who have been hit by catastrophic, life-altering crises like a job loss, major illness, inability to work or loss of spouse or breadwinner. That is not to say that banks will not work with you if you don’t fit into one of these categories.

Stop the Plastic Habit

Be warned that these programs usually mean you will lose use of the credit card. In most cases, your charging privileges will be suspended or revoked. Some companies, however, have programs that restore your privileges upon completion of the program.

Entering a hardship program could also impact your credit score. Before entering the program it is a good idea to ask what repercussions this could have on your credit. Some companies negatively report this information to credit bureaus. Sometimes the negative references on your credit are removed after the program is completed. When negotiating with your creditor about being placed on the hardship track, it is important to understand the card issuer’s policies and the consequences.

The policy on credit reporting depends on the company. Most short-term plans are no more than a year. Long-term plans can go as long as five years. American Express, for example, doesn’t negatively report borrowers on short-term programs. But those who are on long-term programs should expect large dings on their credit regardless of what bank or issuer you owe.

source: foxbusiness.com

File Bankruptcy to Get Off Mortgage With Ex?

Dear Bankruptcy Adviser,

My ex-husband and I divorced in 2005 and he kept the house. The problem is that we agreed to everything but didn't specify that he must get my name off the house in the divorce papers. So we both have remarried and he has been late on the house payments, which is affecting my credit and preventing me and my husband from getting a home loan. My ex-husband is missing payments. He does get caught up, but this has occurred on and off. It also means he cannot refinance because his credit is poor and now mine is, too. So my question is: Could I file bankruptcy and list only the house so that I am no longer responsible for it? Also, if I did file, would that affect me being able to get a loan for a house?

-- Kathy

Dear Kathy, Most things in life are not as simple as we want them to be. I respect that you just want to be done with the ex-husband and the past. Your approach may work, but not as easily as you would like it to.

If you are eligible for the Chapter 7 bankruptcy, it would eliminate your liability on the mortgage but it would not remove your name from the property title or the mortgage loan. You may have signed your name off of the title during the divorce, but your ex-husband would have to refinance the mortgage to take your name off the loan.

Here are the issues you have to address.

Are you eligible for Chapter 7 bankruptcy? You did remarry. While you can file bankruptcy as an individual, you must qualify as a couple. Your new husband may have separate assets and those generally do not need to be listed in your bankruptcy. However, his income and any post-marriage assets must be listed in your case. So, you need to find out whether you are eligible for Chapter 7 bankruptcy.

Do you have joint accounts with your new husband? The bankruptcy will impact any joint credit card accounts that you have with your husband. He can keep paying and his credit should not be harmed, but the lender may place a notation on his credit report. That note will say, "Included in bankruptcy." I am not a credit reporting expert, but I have researched this issue and my research shows that this note should not impact his credit score. It may only require an explanation to future prospective lenders.

Know that all debt must be included. You cannot file bankruptcy only on some debt. You have to include all other accounts, such as credit cards or personal loans. Even accounts without balances will likely be closed. You can start over, but not with your current accounts.

What will happen to your mortgage with your ex-husband? The mortgage lender will receive notification that you have filed bankruptcy. The positive part is that future late payments will no longer report to the credit bureaus.

The negative part is that a future foreclosure will show up on your credit report. Your ex-husband may lose the house in foreclosure one, two or many years later. The lender would not have been reporting the late payments on your credit report all that time, but will report the foreclosure. That will definitely impact your credit.

Will you be able to get future mortgage loans? The bankruptcy will impact your credit for the next few years. Even though the bankruptcy notation stays on your credit for 10 years, you can get new credit sooner. Obtaining credit after bankruptcy is not impossible and your new husband could help you establish new, post-bankruptcy credit. Even though I do not endorse co-signing, it is a way for your current husband to help rebuild your credit faster.

You cannot expect to get a mortgage loan immediately after filing. Lenders want to see that you have established post-bankruptcy credit and confirm the bankruptcy case was filed more than two years ago.

As I said, this is an option, but most things are not as easy as we would like them to be. You will have to do some research and may need to talk to a bankruptcy attorney before you take this approach.

source: foxbusiness.com