Syd Johnson

Once you get a quote for a home loan don't be tempted to take the entire amount if it looks like you overqualified. Most consumers fill out an application for a home loan and hope they can get enough money to buy their dream house.

A nice chunk of those consumers also overqualify for their home loans. If go to your local bank, credit union or mortgage broker and you are approved for a $500,000 home loan, they payments might be a bit more than you realistically afford.

Look at your entire budget
If you are not good with your money or would prefer to not stretch your finances to the limit to get a home, get your hands on a good mortgage calculator as soon as you get the figures on your home loan. You might think all will be fine as long as you can own your own property.

However, you must take into account all of the things that come along with owning a home. Sometimes you can get so caught up with the actual dollar amount of your home loan= that you forget the other pieces of your budget.

Check your budget to see if you still have money to enjoy things like going out, purchasing new furniture, a family vacation once per year and regular manicures and pedicures. Then add in your student loans, car payments, credit card bills, lunches at work and tickets to take your family to baseball games a couple of times every season.

Don't forget home maintenance costs
There are also the home maintenance issues that are not included when you qualify for a home loan. If you live in a part of the country that's particularly hot or cold, your heating and air conditioning bill could easily add up to a couple of hundred dollars per month.

Your home loan package does not include budgeting for lawnmowers, landscaping and fixing broken windows. Some of these expenses can be put off until a later day, but some of them will require your immediate attention once you move into your home.

Know your spending= habits
If you are used to living paycheck to paycheck and generally not taking care of your budget as a renter, you will probably carry over some of the same habits to your new home.

The best way to avoid a financial disaster is to make your home loan a part of your financial life instead of the centerpiece of your financial life. If you are stressed out about money issues from the very first move in, it is unlikely that you will enjoy your new home or anything else in your life for a long time.

About the Author

This article may be freely distributed as long as there's an active link to http://www.rapidlingo.com
Syd Johnson
Editor

Barrett Niehus

Should I Refinance?

By Barrett Niehus

Interest rates are at an all time low. Lower in fact than they have been in forty years. With this low rate comes huge opportunity for home owners to lower their payments and take some equity out of their home. The question about weather refinancing is necessary is dependent on your current financial situation, and what you will save versus how much the refinance will cost. The analysis is a simple one, but one must understand the process in order to benefit from the refinance activity.

When weighing the decision to refinance, one must simply look at your current monthly payment and your remaining payoff period. Then compare this to the monthly payments and required payoff after the refinancing activity. If the benefit of refinancing outweighs the cost of the process, then the refinance makes sense.

The easiest way to evaluate if a refinance makes sense from a quantitative sense is to list= your current monthly payment the amount left on your mortgage, and the number of payments that you have left. Multiply the number of remaining payments by your current monthly mortgage payment and list this under all of the numbers.

Next to these numbers write down the amount that you are refinancing, the refinance period, and the estimated monthly payment. The payment amount can be calculated using a spreadsheet, or possibly a mortgage calculator like the one found at http://www.freetrainer.com/overview.htm. Within the amount that you are refinancing, be sure to include the cost of the refinance, origination fees, appraisal fees and transfer and escrow costs. Once again, multiply the monthly payment by the total number of payments and record this number.

If you are refinancing your current mortgage and not taking out any equity, the refinance makes the most sense if you can reduce your monthly payment, and if the total amount paid (number of payments multiplied by= the monthly payment) after the refinance is less than the total amount to be paid on your current mortgage. If the monthly payment is less than your current payment, but the overall amount is greater, you must decide if paying less monthly outweighs the increased amount you will need to pay. The opposite decision is required if your payment goes up but the total amount due decreases. If in either of these situations, care must be taken and the returns evaluated carefully to make the best decision.

A caveat to the above analysis is that the amount refinanced must be equal to the existing mortgage. If the refinance amount exceeds the amount currently due on the mortgage then a much more complex analysis is needed. For this type of analysis, you will require a spread sheet with present value and amortization calculations. If you are not comfortable with these type of calculations, consult a financial advisor or accountant to assist with quantifying your= decision.

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ABOUT IP WARE
http://www.freetrainer.com

With IP Ware Real Estate Investment Software, you can evaluate rental properties in seconds. Weed out unfavorable properties in minutes, and save weeks of research with a quick and concise analysis. Begin using this amazing tool TODAY! http://www.freetrainer.com

 

About the Author

Barrett Niehus is the Managing Director or IP Ware Real Estate Investment Analysis Software, http://www.freetrainer.com

 

by Craig Romero

With so many homeowners refinancing lately, there are hundreds of refinancing questions being asked. One of the most common is "Should I refinance with my current lender?" The answer is both yes and no.

Your current lender should be the last lender that you obtain a quote from, but you should definitely contact them when you are thinking of refinancing. Get together quotes from other lenders, and then approach your current lender and ask them to meet, or even better, beat those quotes.

You can also ask them to waive certain settlement costs and other fees involved since you are already an established customer and your lender may have customer retention programs, but you will need leverage before you do this. That leverage should come in the form of quotes from your lender's competitors.

In fact, your lender may opt to just decrease the interest rate you are currently paying, thereby allowing you to avoid settlement costs= altogether.

However, there are drawbacks to using your current lender. Your lender already has your business, once you pay the lock-in fee, they have your money too. Since they already have your mortgage, they have no incentive to close the deal in a timely manner. There are also times when lenders will not quote you the best rate they have, but will quote you a rate that is lower than your current rate.

For instance, if you're at an eight-percent interest rate currently, your lender may offer you 6.5 percent because it's significantly lower than your current rate. Normally, that would be great, but if rates are at 5.5 percent, your lender isn't doing you any favors. That is why it is so important to be prepared with quotes from other lenders. It lets you know what rates are available to you, and lets your lender know that you're not going into the situation blind.

A wise decision is to treat your current lender as you would any other lender (see examples= at: http://debt-solution.biz ). If they do not come in with the lowest rate or best service, take your business elsewhere. While it is nice to do business with a familiar face, you are not obligated to refinance with them, and if you can save money by going elsewhere, you should do so.

About the Author

Written by Craig Romero/Mortgage Analyst

Discover how to quickly build a minimum of $40,000 worth of home equity and pay your mortgage off in 10 years or less without making biweekly mortgage payments. Visit:
http://debt-solution.biz

 

Michael VanDeMar

There are several reasons that might make someone consider refinancing their existing mortgage. One would be to get a lower interest rate than what they currently have, thereby reducing monthly payments and lowering the overall cost of the mortgage. Another is to shorten the length of the loan, which can save quite a bit in interest payments. Thirdly, someone may have other debts that they wish to pay off, and refinancing may provide them a means of consolidating that debt into one overall lower payment.
A lower interest rate isn't the only thing that should be taken into account when thinking about refinancing. There are costs and fees associated with refinancing your mortgage. The bank will charge fees, there will be costs for a new inspection and a new appraisal, title search, and so on. The process that is gone through is very much like the process that one goes through on getting a first mortgage. It requires a new application with a new credit= check, survey, and appraisal. As it is with a first mortgage, this can be a long and costly process.
In general, it makes sense to refinance if the interest rate on the new loan is at least two percentage points lower than that of the current loan, although this is not always the case. Some things that need to be taken into consideration are the total cost of the refinancing, the total monthly savings, and how long you plan to stay in your house after you refinance. You can calculate how long it will take you to break even on refinancing costs by dividing the total cost of the refinance by the monthly amount you will be saving. For example, if the cost is $2,500, and you reduce your monthly payments by $100, then it will take 25 months to start seeing the savings from the reduced mortgage rate. If you plan on staying in your house longer than this, then it may just make sense for you.
Another reason that someone might consider refinancing is if they are trying to consolidate= debt. In such cases, there is also the tax impact that one should look at. Many loan types are not tax deductible, whereas mortgage loans are. Therefore for that reason alone it may be a good idea to consolidate outstanding credit card debt, student loans, car loans, as well as others.
Some people may not have a choice about refinancing, it is a must for them. This happens in cases where they have a loan with a balloon payment coming up and no conversion option. In instances like this the best bet is to refinance the mortgage a few months before the balloon payment is due.
If you do decide that the costs associated with doing a refinance outweigh the benefits, you should ask your bank or financial institution if you can get some of the terms that you want by agreeing to a modification of your current loan. However you choose to go, remember that it always makes sense to consult with a mortgage professional before making your move. This can end up saving you both time and= money. You should also do research before making a decision. Spend some time on the web familiarizing yourself with what you are getting yourself into. Take the time to read up on and understand what your options are.
More on Mortgage Refinancing.

About the Author

None

George A. Parker

There are lots of ways to get additional capital to expand a home-based business. But before you look outside for financing, leaving the decision about your company's progress and merits to someone else, consider these six ways under your nose to finance your home-based business:

Personal Savings

Savings are easy to tap and involve no paperwork.

The negatives: if you use the money in your business, it eats into your safety reserve and is no longer there for emergencies. It diverts funds from a very low risk investment to a high one.

Whole-Life Insurance

Whole life policies accumulate tax-deferred cash value that you can tap for your business. But the only way you can tap this cash without paying taxes is to borrow against your policy. As long as you keep your policy intact and pay premiums when due, loans remain tax-free.

The negatives: you will be converting a low risk investment into a high one; if you decide to terminate your policy or if you default on repaying your loan, taxes will be due on all cash value accumulated under the policy; if you die before your loan is repaid, any distributions to your beneficiaries will be reduced by the amount of your outstanding loan.

A Loan from Your 401-K Plan

You can borrow up to $ 50,000 of the money you have saved under many 401-K plans. There are no credit checks. Interest is usually a percentage point or two above the prime rate and the interest that you pay back to the plan will be tax-deferred to the plan. Most loans are repayable out of salary deductions over five years.

The negatives: you will have less money invested toward retirement; the dollars used to repay the loan will be after-tax dollars withheld from your paycheck; if you fail to repay the loan, the IRS considers your failure a premature distribution -- you will be charged taxes on the borrowed amount plus you may be assessed a 10% early-withdrawal penalty.

A Home-Equity Loan

These loans do require that you apply and be reasonably credit worthy. You generally can borrow up to 80% or 90% of the equity value of your home. Interest on these loans is generally tax-deductible.

The negatives: you will reduce the equity value of your home by the loan amount; you will be diverting funds from a relatively safe investment to a high risk one; if you default, you put your house at risk of foreclosure. Think very carefully before using this form of financing.

Personal Credit Lines and Credit Cards

They are convenient, versatile forms of financing. You can borrow and re-borrow up to the line limit as needed.

The negatives: you will pay relatively high interest rates-- rates range from 12% to over 18%; the minimum monthly payment on many of these arrangements will repay the outstanding balance within 42 months; it is easy to dig yourself deep into debt using credit lines and credit card debt; high outstanding balances against your line can negatively impact your personal credit rating.

A Margin Loan

You can use margin loans for purposes other than buying additional securities.

Any margin loan will be secured by your equity shares. Rates are often below prime, applying is relatively easy, and these loans have very flexible repayment terms.

Loans are initially limited to 50% of the purchase price of your equity securities. Loan repayments are triggered when the value of your stock falls below the margin limit.

The negatives: Because borrowings are predicated on volatile stock values, a margin loan can be a risky proposition; if you default in repaying, the brokerage firm can sell your securities to satisfy the loan; an untimely sell-off can have a devastating effect on your portfolio and negative tax consequences.

The only safe way to consider a margin loan to finance your home-based business is to limit advances to a relative low ratio of your stock portfolio value – say, 25% or less.

Most of these financing methods are under your control and don't require business plans or company financials to qualify. Although each of these methods has risks and disadvantages, so do most external methods of financing. Before proceeding with one of these financing methods, carefully consider the potential benefits, risks and consequences. Whatever you decide, it helps to know the options right under your nose.

About The Author George Parker is a Director and Executive Vice President of Leasing Technologies International, Inc. ("LTI"). He is responsible for overseeing the company's marketing and financing efforts. One of the co-founders of LTI, Mr. Parker has been involved in secured lending and equipment financing for over twenty years. Mr. Parker is an industry leader, frequent panelist and author of several articles pertaining to equipment financing. Headquartered in Wilton, CT, LTI is a leasing firm specializing nationally in direct equipment financing and vendor leasing programs for emerging growth and later-stage, venture capital backed companies. More information about LTI is available at http://www.ltileasing.com. gpmail129-groups@yahoo.com

Kathleen Sutera

What is finance and what do you need to know? Finance can
mean different things. It may refer to your personal
financial situation. It could refer to your investments or a
business's investments. It could refer to a credit or loan
purchase.

Financing can be involved in your life in different ways.
For example, if you are going to invest in a large purchase
such as a house or even a car. Large furniture purchases and
credit cards all fall into these categories. Interest rates
are the most integral part of financing. Why else would a
company want to loan you money or offer you credit? How else
would they benefit? They benefit from the interest that you
have to pay in on financing your loan. There are different
types of financing options available.

The percentage rate is the amount of interest that you pay.
The percentage rate is the certain portion of your loan or
credit that you pay back in interest. For= example, if your
loan was for $40,000 and your interest rate was 12.3% then
you would pay 12.3% of $40,000 in interest. The interest
would be added onto your $40,000 and you would pay it back
via your monthly payments.

Fixed rate: A fixed rate means your interest rate will stay
the same no matter what. People usually prefer these. If you
can get a low fixed rate, it will stay with you even if
other average interest rates are going up. Balloon rate: A
balloon rate can fluctuate with the times and the stock
market but depending on the situation, this can be
beneficial to you as well. You will have to decide which you
think is best for you.

There are different types of financing options as we
mentioned earlier. Probably the most common example of
finance in the United States is credit cards. A credit card
allows you to make purchases with the card. The bank issuing
the card will pay on your behalf and you then pay the= bank
back, plus the interest. The bank makes money off the
interest and you get what you want right away.

The same thing applies to pay-as-you-go or rental furniture
companies. There are even rent-to-own housing services now
where your monthly rent can go towards buying the house if
you want to stay. Financing should be a way to help you
achieve something that you're going to be purchasing anyway.
Financing can get you in your house quicker than saving up
the cash. Become knowledgable and financing can be a tool
that will serve you well.

About the Author

The author has discovered that what you do NOT know about your finances can hurt you. She has shared her knowledge and tips about finances with thousands of people and helped them to have a good relationship with money and financial matters

Kathleen Sutera is founder of All About Finance an excellent resource site dedicated to information on finance

Debra Lohrere

To find money to invest for your future, you need to make sure that your outgoing expenses are less than the income that you are receiving. You need to develop an excess that you can have free to invest.

Now before you start to think...."well I don't have any excess left...if I was earning more money....then I would have some free". Let me dispel this myth...and tell you that it is a known and excepted fact that the amount of money that people earn has little if any bearing on whether or not they have an excess left to invest. The only way to create an excess it to spend less than you earn, instead of spending all that you earn.

Even doctors and lawyers, who earn well over $100,000.00 per year, often end up at retirement with little more Net Worth than factory or office workers.

Net Worth is calculated by deducting the value of all the liabilities or loans you have from the income-producing assets owned to give you the net value of= your income-producing assets.

Why aren't high-income earners retiring wealthy? Why don't they end up with a greater Net Worth than someone on a low income? It is quite simple. Human nature seems to dictate that whatever anyone earns....they spend....some even spend more than they earn and charge it on their credit card.

The higher your income grows...the more you spend and the only way to get out of this cycle is to realise that it is happening, and make a concerted effort to reverse this habit....and to begin reducing your expenditures so that you can free up money to invest.

The best way to do this, is to try the 20/80 plan. This plan simply means that as soon as you receive your pay....you put aside 10% for God, 10% of it for investment....and then use the other 80% to live off of. Put aside the 20%, and then pay all the bills and do the grocery shopping....and then after that whatever is left over you can spend.

Most people do it the wrong way= around...they pay the bills, do the shopping and spend what is left over, never leaving any left to save or invest. By taking the investment money out first you will alleviate the temptation to spend it.

The road to wealth is not determined by how much you earn, but by how you utilise the income you have and how much you save and invest.

You need to take control of your finances. One of the best ways to start having more control over your money is to find out where it has all been going, and then amend your spending habits to allow you to live within the 20/80 plan.

If you write down a list of your monthly net income, then in another column write down a list of the essential items that you have to spend money on. You should be able to work out an average for telephone, gas, electricity, insurances and rates, from your previous bills. Work out an average of how much is spent on grocery shopping and petrol. If there are any other necessary utilities include them= as well. Then deduct the second column from the first - and this will give you the maximum potential savings for each month.

It can be quite startling how high this figure can be and make you wonder where all the extra money went.

Another good learning experience is to simply write down for a fortnight every dollar spent and write next to it what it was for. You will soon find that there are a lot of unnecessary expenses, often caused by impulse buying, where you have spent money on items that you neither needed or really wanted, and could easily have gone without.

When you can begin to recognise these areas, and start to consider whether or not you are spending your money wisely, before you hand it over, then you will be beginning to take control over your money and are well on the way to embarking on your investment journey, which will enable you to have a financially secure future for you and your children.

Visit my website at To find money to invest= for your future, you need to make sure that your outgoing expenses are less than the income that you are receiving. You need to develop an excess that you can have free to invest.

Now before you start to think...."well I don't have any excess left...if I was earning more money....then I would have some free". Let me dispel this myth...and tell you that it is a known and excepted fact that the amount of money that people earn has little if any bearing on whether or not they have an excess left to invest. The only way to create an excess it to spend less than you earn, instead of spending all that you earn.

Even doctors and lawyers, who earn well over $100,000.00 per year, often end up at retirement with little more Net Worth than factory or office workers.

Net Worth is calculated by deducting the value of all the liabilities or loans you have from the income-producing assets owned to give you the net value of your income-producing assets.

Why aren't= high-income earners retiring wealthy? Why don't they end up with a greater Net Worth than someone on a low income? It is quite simple. Human nature seems to dictate that whatever anyone earns....they spend....some even spend more than they earn and charge it on their credit card.

The higher your income grows...the more you spend and the only way to get out of this cycle is to realise that it is happening, and make a concerted effort to reverse this habit....and to begin reducing your expenditures so that you can free up money to invest.

The best way to do this, is to try the 20/80 plan. This plan simply means that as soon as you receive your pay....you put aside 10% for God, 10% of it for investment....and then use the other 80% to live off of. Put aside the 20%, and then pay all the bills and do the grocery shopping....and then after that whatever is left over you can spend.

Most people do it the wrong way around...they pay the bills, do the shopping and spend= what is left over, never leaving any left to save or invest. By taking the investment money out first you will alleviate the temptation to spend it.

The road to wealth is not determined by how much you earn, but by how you utilise the income you have and how much you save and invest.

You need to take control of your finances. One of the best ways to start having more control over your money is to find out where it has all been going, and then amend your spending habits to allow you to live within the 20/80 plan.

If you write down a list of your monthly net income, then in another column write down a list of the essential items that you have to spend money on. You should be able to work out an average for telephone, gas, electricity, insurances and rates, from your previous bills. Work out an average of how much is spent on grocery shopping and petrol. If there are any other necessary utilities include them as well. Then deduct the second column from the first -= and this will give you the maximum potential savings for each month.

It can be quite startling how high this figure can be and make you wonder where all the extra money went.

Another good learning experience is to simply write down for a fortnight every dollar spent and write next to it what it was for. You will soon find that there are a lot of unnecessary expenses, often caused by impulse buying, where you have spent money on items that you neither needed or really wanted, and could easily have gone without.

When you can begin to recognise these areas, and start to consider whether or not you are spending your money wisely, before you hand it over, then you will be beginning to take control over your money and are well on the way to embarking on your investment journey, which will enable you to have a financially secure future for you and your children.

To find money to invest for your future, you need to make sure that your outgoing expenses are less= than the income that you are receiving. You need to develop an excess that you can have free to invest.

Now before you start to think...."well I don't have any excess left...if I was earning more money....then I would have some free". Let me dispel this myth...and tell you that it is a known and excepted fact that the amount of money that people earn has little if any bearing on whether or not they have an excess left to invest. The only way to create an excess it to spend less than you earn, instead of spending all that you earn.

Even doctors and lawyers, who earn well over $100,000.00 per year, often end up at retirement with little more Net Worth than factory or office workers.

Net Worth is calculated by deducting the value of all the liabilities or loans you have from the income-producing assets owned to give you the net value of your income-producing assets.

Why aren't high-income earners retiring wealthy? Why don't they end up with a greater= Net Worth than someone on a low income? It is quite simple. Human nature seems to dictate that whatever anyone earns....they spend....some even spend more than they earn and charge it on their credit card.

The higher your income grows...the more you spend and the only way to get out of this cycle is to realise that it is happening, and make a concerted effort to reverse this habit....and to begin reducing your expenditures so that you can free up money to invest.

The best way to do this, is to try the 20/80 plan. This plan simply means that as soon as you receive your pay....you put aside 10% for God, 10% of it for investment....and then use the other 80% to live off of. Put aside the 20%, and then pay all the bills and do the grocery shopping....and then after that whatever is left over you can spend.

Most people do it the wrong way around...they pay the bills, do the shopping and spend what is left over, never leaving any left to save or invest. By taking the= investment money out first you will alleviate the temptation to spend it.

The road to wealth is not determined by how much you earn, but by how you utilise the income you have and how much you save and invest.

You need to take control of your finances. One of the best ways to start having more control over your money is to find out where it has all been going, and then amend your spending habits to allow you to live within the 20/80 plan.

If you write down a list of your monthly net income, then in another column write down a list of the essential items that you have to spend money on. You should be able to work out an average for telephone, gas, electricity, insurances and rates, from your previous bills. Work out an average of how much is spent on grocery shopping and petrol. If there are any other necessary utilities include them as well. Then deduct the second column from the first - and this will give you the maximum potential savings for each month.=

It can be quite startling how high this figure can be and make you wonder where all the extra money went.

Another good learning experience is to simply write down for a fortnight every dollar spent and write next to it what it was for. You will soon find that there are a lot of unnecessary expenses, often caused by impulse buying, where you have spent money on items that you neither needed or really wanted, and could easily have gone without.

When you can begin to recognise these areas, and start to consider whether or not you are spending your money wisely, before you hand it over, then you will be beginning to take control over your money and are well on the way to embarking on your investment journey, which will enable you to have a financially secure future for you and your children.

Visit the authors web site at http://members.optushome.com.au/dlohrere/

About the Author

Debra has spent several years researching the powerful medium of property investment and speaking with hundreds of other property investors. She has discovered many different strategies that have been used and the ones that have worked best. She now writes books and articles about property investment, goal setting, budgeting and how to create financial security for retirement

cashzilla

Families are becoming an increasingly complex unit when it comes to money management. Parents are working longer hours, couples are spending less time with each other and children are becoming increasingly sophisticated in their material wants and information needs. Whilst centralising funds is important in the family, so is an analysis of the individual roles and associated financial requirements.

Super-mums
It seems that the proof of maternal efforts is no longer found in the pudding … it's in the spending. Women are increasingly outsourcing personal grooming tasks and the pressure of looking good, feeling healthy, maintaining a tight ship and IQ level has meant that housecleaning and gardening are again fashionable methods to promote the family brand; housewifery is now a career, with all the attitude of 21st century post-feminism. It emerged in a recent BBC report, that a new type of parent was surfacing….the "manager mum". Manager mums tend to use= the internet to save time on tasks and streamline activity, using the Web to undertake jobs such as grocery shopping or banking.

Once they've got their partner, it doesn't seem women can relax about their appearances, with women in relationships spending more on their appearance than their single counterparts. UK housewives spend a massive £5 billion on 'keeping up appearances', in terms of gardening, home furnishings and personal grooming, according to a study by Virgin Money Credit Cards. UK women are splurging out an average of £3,488 each on personal appearance and their home and garden. Of the £3,488, 47% is spent on the home and garden, whilst the remainder goes on clothes, haircuts, beauty products and treatments.

The pressure to look good may be a factor in women being labelled as the worst savers, as reported by Guardian Unlimited. In an annual study by IFA Promotion, 63% of the women who stated that they were unable to put aside further savings, admitted= to spending their spare cash on costly and unnecessary luxuries, whilst 28% of women get themselves into debt with expensive purchases. Women apparently seem to be content with spending up to 75% of disposable income and saving less than 20%, in contrast to men who save over 25% of their income and invest 8%.

Peter Pan fathers
Whilst fathers are not physically getting any younger, there is evidence that their mental age may be falling. The BBC recently reported that a new type of dad had emerged – the "gadget dad", whilst in November last year, the Guardian reported that men were significantly delaying fatherhood. In a study by Panlogic, "gadget dads" love technology and have all the latest tech toys, from Sky TV to a car navigation system. Perhaps this love of tech toys is also the reason inhibiting men from diverting funds to babies. According to the Guardian, 81% of men admitted that financial fears would make them postpone having children and if current trends= continue, the average age of men becoming fathers will rise to 40 by 2065. Virgin Money Life Insurance also reported in their studies that new fathers were waiting longer to start families and that UK fathers are working the longest hours in Europe.

Savvy kids
A recent investigation by Halifax found a positive attitude towards saving is increasing amongst children. Whilst in 1998, a third of children saved more than they spent; now that figure is over fifty percent. The bank discovered that most children are prepared to save for an expensive item, though parents of younger children faced more of a struggle, as 22% of seven to eleven year olds pestered their way towards getting what they wanted. Piggy banks, it would seem, may become sentimental souvenirs, as more children save their money in a bank or building society.

This trend of 'keeping up appearances' seems to induce individualistic behaviour in families, reducing co-operation on financial issues. This= erodes family values in society and discourages future generations from investing in children. Without the motivation to invest in sustainable communities or even a sustainable standard of living, (currently supported by £1.1 trillion of debt), the issue of successful management of family finance remains trivial.

Additional information:
Family finance information:
http://www.moneynet.co.uk/
Useful brochures & fact sheets:
http://www.unbiased.co.uk/website/brochures/
Random financial ranting:
http://cashzilla.blogspot.com/

Hilda Schultze

What does it mean to refinance? Why would anyone want to
consider it? There are numerous situations when someone
would refinance. When we use the word refinance, we are
basically referring to a loan: for example a car or house
loan. It may also be a business loan. In this article, we
are going to explain the home loan and some of the common
terms of refinancing and how they apply to other types of
loans as well.

The process of taking out a new mortgage or loan is called
refinancing, and using that money which you have received,
to close out your older mortgage. The process of doing a
refinance helps many homeowners, because you may then be
able to obtain a loan at a more favorable interest rate.
This can mean that you have the capability to retire
your mortgage earlier and have a lesser amount owed.

Since a refinance plan basically amounts to taking out a
new mortgage and closing out the previous mortgage,= the
procedures involved resemble, those involved in taking out
your first mortgage. It is vital to keep in mind that the
procedure will probably involve at least some of the same
expenses again, because of this. But in view of the huge
amount of money that refinancing can benefit you, homeowners
discover that it is often well worth the hassle. Some
people may even decide to save up a specific amount of
money and apply it as a 'down payment" on the sum that they
refinance. They can then refinance a lesser amount and the
payments will be less.

Of course, the most popular reason to refinance is so
that homeowners can secure a lower interest rate and
therefore pay lower repayments each month. If the interest
rate that you received on your mortgage is higher than
current interest rates, you will probably want to consider
the benefits of refinancing. This means that even if your
refinanced mortgage is for the same amount as= your
original mortgage, the lower interest rate means a total
lowered cost to you. Often a long-term loan will have a
large amount of interest and you may spend years paying
off just the interest and not paying the principal.

Naturally, when you refinance, it can mean lower
monthly mortgage payments for you and your family.
This essentially gives you greater freedom each month,
and far better security financially. Look into refinancing
options today, and start saving on your home mortgage!
Contact a mortgage broker and ask him or her to investigate
what options are open to you.

Sam Vaknin

Strange, penumbral, characters roam the boardrooms of banks in the countries in transition. Some of them pop apparently from nowhere, others are very well connected and equipped with the most excellent introductions. They all peddle financial transactions which are too good to be true and often are. In the unctuously perfumed propinquity of their Mercedesed, Rolex waving entourage - the polydipsic natives dissolve in their irresistible charm and the temptations of the cash: mountainous returns on capital, effulgent profits, no collaterals, track record, or business plan required. Total security is cloyingly assured.

These Fausts roughly belong to four tribes:

The Shoppers

These are the shabby operators of the marginal shadows of the world of finance. They broker financial deals with meretricious sweat only to be rewarded their meagre, humiliated fees. Most of their deals do not materialize. The principle is very simple:

They approach a= bank, a financial institution, or a borrower and say: "We are connected to banks or financial institutions in the West. We can bring you money in the form of credits. But to do that - you must first express interest in getting this money. You must furnish us with a bank guarantee / promissory note / letter of intent that indicates that you desire the credit and that you are willing to provide a liquid financial instrument to back it up.". Having obtained such instruments, the shoppers begin to "shop around". They approach banks and financial institutions (usually, in the West). This time, they reverse their text: "We have an excellent client, a good borrower. Are you willing to lend to it?" An informal process of tendering ensues. Sometimes it ends in a transaction and the shopper collects a small commission (between one quarter of a percentage point and two percentage points - depending on the amount). Mostly it doesn't -and the Flying Dutchman resumes his wanderings looking= for more venal gulosity and less legal probity.

The Con-Men

These are crooks who set up elaborate schemes ("sting operations") to extract money from unsuspecting people and financial institutions. They establish "front" or "phantom" firms and offices throughout the world. They tempt the gullible by offering them enormous, immediate, tax-free, effort-free, profits. They let the victims profit in the first round or two of the scam. Then, they sting: the victims invest money and it evaporates together with the dishonest operators. The "offices" are deserted, the fake identities, the forged bank references, the falsified guarantees are all exposed (often with the help of an inside informant).

Probably the most famous and enduring scam is the "Nigerian-type Connection". Letters - allegedly composed by very influential and highly placed officials - are sent out to unsuspecting businessmen. The latter are asked to make their bank accounts available to the= former, who profess to need the third party bank accounts through which to funnel the sweet fruits of corruption. The account owners are promised huge financial rewards if they collaborate and if they bear some minor-by-comparison upfront costs. The con-men pocket these "expenses" and vanish. Sometimes, they even empty the accounts of their entire balance as they evaporate.

The Launderers

A lot of cash goes undeclared to tax authorities in countries in transition. The informal economy (the daughter of both criminal and legitimate parents) comprises between 15% (Slovenia) and 50% (Russia, Macedonia) of the official one. Some say these figures are a deliberate and ferocious understatement. These are mind boggling amounts, which circulate between financial centres and off shore havens in the world: Cyprus, the Cayman Islands, Liechtenstein (Vaduz), Panama and dozens of aspiring laundrettes.

The money thus smuggled is kept in low-yielding cash deposits. To escape= the cruel fate of inflationary corrosion, it has to be reinvested. It is stealthily re-introduced to the very economy that it so sought to evade, in the form of investment capital or other financial assets (loans and credits). Its anxious owners are preoccupied with legitimising their stillborn cash through the conduit of tax-fearing enterprises, or with lending it to same. The emphasis is on the word: "legitimate". The money surges in through mysterious and anonymous foreign corporations, via off-shore banking centres, even through respectable financial institutions (the Bank of New York we mentioned?). It is easy to recognize a laundering operation. Its hallmark is a pronounced lack of selectivity. The money is invested in anything and everything, as long as it appears legitimate. Diversification is not sought by these nouveau tycoons and they have no core investment strategy. They spread their illicit funds among dozens of disparate economic activities and show not the= slightest interest in the putative yields on their investments, the maturity of their assets, the quality of their newly acquired businesses, their history, or real value. Never the sedulous, they pay exorbitantly for all manner of prestidigital endeavours. The future prospects and other normal investment criteria are beyond them. All they are after is a mirage of lapidarity.

The Investors

This is the most intriguing group. Normative, law abiding, businessmen, who stumbled across methods to secure excessive yields on their capital and are looking to borrow their way into increasing it. By cleverly participating in bond tenders, by devising ingenious option strategies, or by arbitraging - yields of up to 300% can be collected in the immature markets of transition without the normally associated risks. This sub-species can be found mainly in Russia and in the Balkans.

Its members often buy sovereign bonds and notes at discounts of up to 80% of their face value.= Russian obligations could be had for less in August 1998 and Macedonian ones during the Kosovo crisis. In cahoots with the issuing country's central bank, they then convert the obligations to local currency at par (=for 100% of their face value). The difference makes, needless to add, for an immediate and hefty profit, yet it is in (often worthless and vicissitudinal) local currency. The latter is then hurriedly disposed of (at a discount) and sold to multinationals with operations in the country of issue, which are in need of local tender. This fast becomes an almost addictive avocation.

Intoxicated by this pecuniary nectar, the fortunate, those privy to the secret, try to raise more capital by hunting for financial instruments they can convert to cash in Western banks. A bank guarantee, a promissory note, a confirmed letter of credit, a note or a bond guaranteed by the Central Bank - all will do as deposited collateral against which a credit line is established and cash is= drawn. The cash is then invested in a new cycle of inebriation to yield fantastic profits.

It is easy to identify these "investors". They eagerly seek financial instruments from almost any local bank, no matter how suspect. They offer to pay for these coveted documents (bank guarantees, bankers' acceptances, letters of credit) either in cash or by lending to the bank's clients and this within a month or more from the date of their issuance. They agree to "cancel" the locally issued financial instruments by offering a "counter-financial-instrument" (safe keeping receipt, contra-guarantee, counter promissory note, etc.). This "counter-instrument" is issued by the very Prime World or European Bank in which the locally issued financial instruments are deposited as collateral.

The Investors invariably confidently claim that the financial instrument issued by the local bank will never be presented or used (which is true) and that this is a risk free transaction= (which is not entirely so). If they are forced to lend to the bank's clients, they often ignore the quality of the credit takers, the yields, the maturities and other considerations which normally tend to interest lenders very much.

Whether a financial instrument cancelled by another is still valid, presentable and should be honoured by its issuer is still debated. In some cases it is clearly so. If something goes horribly (and rarely, admittedly) wrong with these transactions - the local bank stands to suffer, too.

It all boils down to a terrible hunger, the kind of thirst that can be quelled only by the denominated liquidity of lucre. In the post nuclear landscape of this part of the world, a fantasy is shared by both predators and prey. Circling each other in marble temples, they switch their roles in dizzying progression. Tycoons and politicians, industrialists and bureaucrats all vie for the attention of Mammon. The shifting coalitions of well groomed man in back= stabbed suits, an hallucinatory carousel of avarice and guile. But every circus folds and every luna park is destined to shut down. The dying music, the frozen accounts of the deceived, the bankrupt banks, the Jurassic Park of skeletal industrial beasts - a muted testimony to a wild age of mutual assured destruction and self deceit. The future of Eastern and South Europe. The present of Russia, Albania and Yugoslavia.

About the Author

Sam Vaknin is the author of Malignant Self Love - Narcissism Revisited and After the Rain - How the West Lost the East. He is a columnist for Central Europe Review, United Press International (UPI) and eBookWeb and the editor of mental health and Central East Europe categories in The Open Directory and Suite101.

Web site:

http://samvak.tripod.com/

 

Jay Ball

Between 15 - 20% of people in our country own there own businesses. This statistic is on the rise thanks to the incredible invention of the Internet. The staggering truth is that of these only 5% are genuinely financially free! You may well see lots of expensive cars driving on our roads and big houses inhabited by the seemingly wealthy, but these houses and cars are not yet paid for.

Never in our history has it been so easy to lend money. Banks and building societies are falling over backwards to lend us money. You can sign your life away to a 50-year mortgage these days if you choose! Banks and building societies are offering 125% mortgages to first time buyers and business is looking outwardly great.

The credit card companies also love today's economy. You can borrow enough money on a credit card nowadays to buy a brand-new car! The loan companies are also cashing in on ignorant and naive individuals and this really concerns me. The advertisement= marketplace is going wild on media adverts for consolidation loans. You know the type? "We will help you to consolidate all of your existing loans into one affordable monthly payment" They call this type of loan a HOME OWNERS loan. Yes you can consolidate all of your existing debts into one affordable monthly loan, but what do you call affordable? People are consolidating their present debts into one huge debt and loaning the money to repay this new debt. To actually repay this debt in full will take these people years. What's more they've secured this loan on their one and only ASSET - their HOME!

These unfortunate people aren't thinking about the future and their long-term future plans, they're thinking about the immediate and present situation. In the meantime what happens when the interest rates begin to rise? The interest rates on a consolidation loan will take years to pay off and whilst you owe money to your lender you're not secure at all because your= consolidation loan is secured on your home.

What does this mean?

If you cannot pay your loan the Loan Company will TAKE YOUR HOME as payment!

The reason it is so easy to lend money at present is because the interest rates are so low. At the time of writing this web page our present government has set the base rate of lending so low that people are dangerously getting themselves into debt through their own ignorance towards the economy. What is really happening will become all too apparent in the next few years when the tide turns and the interest rates begins to rise sharply. If you're not financially free or in control of your assets when the tide turns you will lose everything. History always repeats itself and sooner or later a recession will hit the world trading markets and all of those people who borrowed huge amounts of money to buy their big house and their BMW or Mercedes will be in big financial trouble.

Wait, it gets worse!

SHOCK –= HORROR!
Once the tide turns the interest rates will saw and if you're not secure your financial world will come crashing down. The mistake that people have made is to foolishly believe that their loan rates will remain the same, they won't. Let me explain in simple terms to you my theory by giving to you a simple example:

If you have a current 'interest only' mortgage of say £100k and the interest rate applied is £5% your monthly payment will increase with the interest rate. What happens if the interest rate climbs to 10%? Your mortgage could double. In 1989 the interest rate sawed to 15%. If this happens (and it could) your present mortgage payments could treble! How will you survive financially?

Your mortgage payments could increase by 300% inside 12 months and any other loans you may have will also require payment. If your wage doesn't allow sufficient funds to meet these demands than you will lose everything slowly and painfully. When the interest rates do= begin to rise (and they will) the debt consolidation companies will cash in on you. Before you know it you could owe money for the rest of your life and if you can't pay what you owe than your lender will take your car your home and the clothes off your back to meet their demands.

SO WHAT'S THE ANSWER?
My advice to you is to pay off your existing debts as quickly as possible. If you are driving around in a car that is financed by a finance company pay this loan off as quickly as possible. Contact the finance company and ask them for a final settlement figure. This way you'll know exactly how much debt you're in. If you can afford to settle your finance early than take advantage of this and settle immediately. This way you'll own your car outright, you'll have paid less in interest and you'll have some equity if you need it. If you can't afford to settle the finance at the present than check what interest rate you are currently paying and search around on the= Internet or in the high street for a lower rate of interest. Whatever you do, don't delay in taking control of your finances today.

Another mistake people make is to fall into the trap of 'false economy'. They begin with the right intentions by searching for a lower rate of interest for their mortgage. What this means is that their monthly payments become lower. The mistake they make is to think they've got more money in their pocket. In affect this is a false economy. Instead of settling for more money in your pocket and still enduring a 10 year (or whatever) term loan ,why not use this extra money to increase payment on the capital of your loan?

This simple technique is called 'Mortgage Acceleration' The Banks and Building Societies know all about Mortgage Acceleration they just don't mention it because it loses them lots of money in interest payments!

If you increase the capital payments of your mortgage every month you're paying off the entire= loan quicker. If you can shave 2 years off your loan you've not only shortened your mortgage by 2 years you'll have saved yourself a packet in interest charges. A 25-year £50k mortgage repaid 16 years early could save you over £60k in interest! (dependant on the interest rate) Ask your Bank or Building Society about 'Mortgage Acceleration' and see the look of loss on their face!

Don't settle for a lower rate of interest and extend your loan payments thinking that you're saving money, you're not. You are only extending your debt! You need to pay off this loan as quickly as possible whilst the interest rates are low. The longer you take to pay off your mortgage the more interest rate the Bank or Building Society will take from you. Whilst the interest rate is currently around 5% accelerate payment NOW and save even more money! Take advantage of the fact that if the interest rates are currently low than the amount of interest that you pay on top of your loan will be also= low. If you can afford to increase payment whilst the rates of interest are low than I urge you take advantage of this immediately. If there is any way that you can accelerate your loan and pay it off early than I would strongly advise you to begin your financial organisation here and organise this today. A simple increase of £50 per month in mortgage payments will save you money in interest payments in the long run. Your first step to taking control of your financial world is to pay off all of your existing debts as quickly as possible. When you have no debts, you'll be financially free and you'll feel as if a huge weight has been lifted from your shoulders.

POSITIVE PLAN OF ACTION:

Contact the bank or building society that you have your mortgage with. Ask for a final settlement figure on your mortgage and also enquire into the current interest rate that you are paying. Chances are that if you've not checked the interest rate you are currently paying in the past 12= months than you could save yourself money immediately by choosing a better deal. There are currently plenty of lenders all willing to offer you competitive deals on your mortgage and I would advise you to check them all out before you commit yourself to one. A simple saving of 1% in interest can save you pounds every month. With this saving in interest payments, use this extra money to increase your capital payments. If you only manage to shave a year off the length of your mortgage it will be one less year that you are in debt and one year sooner to becoming financially independent.

Talking of your mortgage, if you currently have an Endowment policy running alongside your mortgage than investigate this policy thoroughly. Most endowment policies are useless in today's interest market. What this means is that when your mortgage term ends there may be insufficient funds in your endowment policy to pay off what you owe to the lender. If this is true than your lender will be= knocking on your door for this short fall. If you can't afford to pay than you could lose your home after 25 years or more of payments! Recently I read that some Endowment policies were running a short fall of up to £13000! If this happens to you you'll owe your lender £13k plus interest!

The smartest mortgage you can take is a straight 'repayment' mortgage. As well as paying the interest back to your lender you are also paying the capital off from the offset, therefore reducing the total amount you owe quicker. My advice is to accelerate your mortgage and pay it off as quickly as possible before the interest rates sky rocket and your payment doubles or even trebles. When the tide turns (and it will) you'll be smiling in the content that you own your home and you own your car and nothing can take these away from you.

--------------------------------------------------------------------------------

These ideas have been taken from Jay Ball's brilliant '10= simple seeds to success' 334 page paperback book, 12- hour CD course, and 334-page e-book.

About the Author

Jay Ball is a recognised Success Mentor in the UK. His visions and inspirations have helped many accomplish amazing results. Jay Ball is the author of '10 simple seeds to success' and 'Believe & Achieve' Check out his website and download over 8 hours of FREE self-development seminars! www.successacademy.co.uk

 

Cindy Morus

Of course, these don't have to be done in any particular order!

Just pick one or two that particularly apply to your situation.

• Create your 2004 filing system. This might include new file folders, a new box to hold them or space in a filing cabinet with easy access.

• Set up a folder to collect all the important 2003 tax documents which will be arriving soon. Sure to arrive at your house are W-2s, 1099s, mortgage statements, etc.

• Set up an appointment with your tax professional early so you get the appointment of your choice. This also gives you a deadline to get your information ready! If you're self-employed, the next quarterly estimated tax payment will be due on January 15.

• Review last year's investments especially in your 401(k), IRA's etc. Find out what financial planning resources your company or 401(k) plan administrator offers and set up an appointment to talk to them. For non-company portfolios, talk to your investment advisor. You have until April 15 to make contributions to IRA type accounts (check with your tax preparer for eligibility).

• What about Quicken or Microsoft Money? If you don't use software to balance your checkbook, pay your bills and keep track of your savings and investments, this is a great time of the year to get started. My personal favorite is Quicken and for small businesses, you might consider Quicken Home and Business. If you are a small business with Payroll needs, check out QuickBooks.

• Medical Insurance reimbursements. If you haven't submitted all your medical bills to your insurance provider, now is the time to do so.

• Will and Estate Planning. No one likes to think about dying, but the best thing you can do for your family is to make sure they are taken care of by creating a will and making sure you have adequate life insurance. Think how easily you'll sleep knowing you have provided for your family even if you are no longer there.

• Speaking of insurance… If you haven't reviewed your health or home and auto policies in the last couple of years you might find you can save money and/or have better coverage. For example, if you still have a $250 deductible (which was my first deductible in 1979!), you will probably save by increasing it to $500 or $1000. Try to set aside some of your savings for deductibles in case you need them.

• Create your own Anti-Emergency Fund! We all know those car and home repairs, school fees, medical expenses and vacations are going to happen. Why not determine how much you'll need and save 1/12 of it each month? To read more go to: http://www.phelps-creek.com/archives/Anti-Emergency.htm.

• Holiday Bonus or Money Gifts If you received a financial gift this holiday season, hold on to it for at least 30 days while you decide what you really want to spend it on. All too often financial windfalls are spent before they even arrive. Consider dividing it into thirds: 1/3 to the past, 1/3 to the present and 1/3 to the future. Past might include paying down debt, present could be something you need or want now and future could be retirement, college savings, or a special vacation

• Financial Goals for next year. Think about where you want to be next year at this time financially. If you want to save $1000, put aside $2.74 each day and you'll be there! Break down your financial goals into monthly, weekly and daily amounts and watch how quickly your savings will grow. Read more about it at: http://www.phelps-creek.com/archives/PDQFactor.htm.

Happy New Year!!!!!

(c) Phelps Creek Financial Coaching - All Rights Reserved

About The Author Cindy Morus (www.cindymorus.com) is a Certified Financial Recovery Counselor specializing in showing women and their families how to achieve financial well-being and peace of mind. She is also a Certified Credit Report Reviewer. Contact her at 541-387-2995 or cindy@cindymorus.com. Sign up for the "Get Ready to be Rich!" teleclass community for FREE for 30 days at www.phelps-creek.com/riches.htm! Attention Ezine editors/Site owners: Feel free to reprint this article in its entirety in your ezine or website as long as you leave all links in place, do not alter the content and include our resource box as listed above. If you do use the material please send us a note (cindy@cindymorus.com) so we can take a look. Thanks. cmorus@phelps-creek.com