For Many Reverse Customers the Fixed Rate May Now Be the Choice

By Matt Vanrock

At this time last year, if a senior was to ask me which was a wiser option, the fixed interest rate or the one that adjusts, my response to him would (in almost all cases) have been the latter.

But since lenders in reverse mortgage backed securities are wanting more payoff than ever, people in the mortgage industry are beginning to think twice about this.

The margin that banks and their investors needed was at approximately 1% at this time last year. Go ahead and liken the "margin" to "profit margin". It is the profit in the loan.

To give an example the borrower may have gone with an adjustable rate mortgage with an index of one percent. If the margin was an additional one percent the actual loan rate would have been 2%.

Well, margins are on the rise since this time last year. By March they went to one point five percent and by October one point seven-five percent.

Guess what, word around the campfire is the margins, industry wide, will raise next week. Fannie Mae is set to raise the margin at least 1/2 point.

I have another article dealing with why the adjustable rate option is so good when it comes to reverse mortgages. It still is, but the fixed rate is becoming more and more attractive as these margins rise.

Here is a thought: what if, at close of escrow, the senior takes a large lump sum when getting a reverse mortgage.

Let's say the lender will allow the borrower to cash out a large number like $200,000. If the seniors takes it all the fixed may be better than the ARM. The reason is the fixed rate is roughly the same as the fifteen year average for the ARM.

Although the adjustable is still extremely low right now one can expect it to go up in the coming years. We can't expect these low rates to continue.

Another thing is the amount of money a reverse mortgage lender would lend to a borrower using an adjustable rather than a fixed was more pronounced than it is today.

The ARM used to be a no brainer in terms of how much money it gave a borrower rather than the fixed. It's far closer now and one never knows. Perhaps after the change the fixed will give more.

The fixed rate was the ugly sister in reverse mortgages. This is changing.

About the Author:

Inform yourself at the Texas reverse mortgage guide website. Also, Flood your mind with education by heading to the Texas reverse mortgage website.

UK Payday Loan Service

By Ina Constantine

This article looks at the way banks exploit customers with NSF and overdraft fees. It contrasts this with the alternative of using payday loans savings and proposes that these are in fact cheaper than bank fees. It goes on to show how banks lobby aggressively against the payday industry fearing cuts in there fees. The findings are based on a US study by the federal government and is freely down loadable.

This is an independent agency part of the federal government - created in 1933, just when thousands of banks failed. The 1920s and early 1930s saw thousands of banks fail. The FDIC is managed by a five-person Board of Directors, all of whom are appointed by the President and confirmed by the Senate, with no more than three being from the same political party.

The FDIC Study of Bank Overdraft Programs was initiated in 2006 in response to the rapid growth of automated overdraft programs, defined as programs in which the bank honors a customer's overdraft obligations using standardized procedures to determine whether the non-sufficient fund (NSF) transaction qualifies for overdraft coverage. Data and information were gathered through a survey of a sample of institutions representing 1,171 FDIC-supervised banks, and a separate data request of customer account and transaction-level data from a smaller set of 39 institutions.

The Federal Deposit Insurance Corporation (FDIC) published the results of a two year study on the use of overdraft programs operated by FDIC-supervised banks. Astoundingly the study found that customers pay in excess of 3,500 percent APR on a NSF check - on average.Customers in low income areas were more than likely twice as certain to incur these fees.

The FDIC study reinforces the payday loan industry's position that short-term cash advance loans are significantly less expensive than traditional bank overdraft fees. The other major difference is than banks are automatically enrolling customers in programs that carry APRs and other fees that are in fact far more expensive than a payday loan. Namely 75% of banks did this.

The FDIC study concluded that a typical bank customer repaying a $20 overdraft in two weeks would incur a $27 overdraft fee (the survey median) at an APR of 3,520 percent. A customer repaying a $60 ATM overdraft in two weeks would incur an APR of 1,173 percent and a customer repaying a $66 check overdraft in two weeks would incur an APR of 1,067 percent. Oddly enough the faster one pays down the overdraft the higher the APR turned out to be.

Consumer advocacy groups like the Center for Responsible Lending (CRL) have lobbied to ban payday lending, leaving consumers with no option other than to pay overdraft fees to banks and credit unions. CRL have led a charge to pass a law banning payday lending in Ohio. In 2006, Ken Compton, CEO of Advance America, said, "Contrary to the CRL's spin, responsible uses of the payday product provides consumers firm footing to overcome unexpected financial circumstances,".

Some key findings;

Over 90% of banks completed overdraft fees without informing the customer.Less than 8 percent of banks inform consumers that funds are insufficient before transactions are completed, offering the customers an opportunity to cancel the NSF transaction and avoid a fee.

Consumer complaints about automated overdraft programs were received by 12.5 percent of banks that operated these programs.

Almost 9 percent of consumer accounts had at least 10 NSF transactions during a 12-month period. 4.9 percent had 20 or more NSF transactions.Clients of banks with 20 or more NSF transactions are charged $1,610 per year.

About the Author:

Marsha Smythe is intrigued by the concept of APR and how banks can get away with charging such high amounts. He makes available on his blog downloads from the Federal Deposit Insurance Corporation (FDIC). These are a must read for anyone contemplating overdraft versus same day loan. Although US bank orientated the same rules apply to both UK same day loan and Canada payday cash.

Refinancing In Arizona

By Brent Mackelprang

What are you waiting for? Refinance today for less? Mesa Mortgage, a premiere Arizona mortgage company has a question for you; what's preventing you from refinancing today? There is a lot of talk about the current state of the economy, and of course there are many concerns about it, but what you may not know is that now is a great time to refinance! Mesa Mortgage, as an established Arizona Mortgage company is able to assist you with your refinancing with rates that are lower than the national average! Low rates that will save you $1000's!

Over the years Mesa Mortgage has proudly established itself as one of the most respected and trusted Arizona mortgage companies. They have been able to achieve this very prestigious reputation by setting industry standards with absolute commitment to customer service. They are dedicated to making sure your mortgage and refinancing needs are attended to in every way.

It is fairly common for home owners to believe refinancing is their sole option, but unfortunately, on occasion some Arizona mortgage companies see this as an opportunity to convince these individuals to refinance when it may not be necessary. Mesa Mortgage believes in properly determining if refinancing is the best choice. And as a premiere Arizona mortgage company, Mesa Mortgage can you help refinance for less if it is the best option.

Many times individuals permit themselves or others to talk them out of refinancing when refinancing is really the best choice. Whether its worries about monthly payments, interest rates, a lack of steady income or some other concern, it may become tempting to choose not to refinance even if it is the best option available. Mesa Mortgage can help you determine if refinancing is right for you.

As a leading Arizona mortgage company, Mesa Mortgage is able to help potential home buyers get into their new homes faster and more affordably. Among the reasons to choose Mesa Mortgage you'll find that they offer low rates and low payments. Additionally, their loan program identifies the loan that is perfect for you and your needs.

It's easier than ever to apply for a loan or refinancing at Mesa Mortgage with their online application! When you apply online you are guaranteed fast processing with the most current information. Along with the online application, you'll find that Mesa Mortgage has rates that are considerably lower than many Arizona mortgage companies and always lower than the national average!

Mesa Mortgage offers a many kinds of different loan programs, including some loan programs other Arizona mortgage companies do not offer. At Mesa Mortgage you'll find great rates on High Debt Ratio loans, Challenged Credit loans, Jumbo loans, Second investor loans, Mortgage loans and more.

Among the many kinds of loans you'll find at Mesa Mortgage, some of which other Arizona mortgage companies do not offer you'll also find Construction loans, Investor loans, FHA Mortgage loans, VA Mortgages and more. And Mesa Mortgage proudly offers the most competitive and appealing rates on all of their loans.

About the Author:

Need to Refinance? Choose the Mortgage Company in Arizona with rates that are always below the national average!

House Short Sale: Is It Time?

By Sunny Kwong

If you are like the rest of us, your home has recently dropped in value by a whole lot. There comes a time when you have to ask yourself if it makes sense anymore to continue the monthly agony of pouring money, time and effort into a never ending black hole. It may be time for you to look at some of your exit options, short of foreclosure. Here's how I determined my position, and how I decided if I need a house short sale.

1) Get a Great Realtor: I would interview a number of them, and find a good fit for your situation. Preferably, they have a degree in finance and a brokers license in real estate. Don't be afraid to ask the tough questions, because its your life, your house short sale, and your money! You don't want to find someone that will make a bad situation worse! Be careful of the referral service mills too. They always ask for money up front, and that should be a big red flag! All of the legitimate realtors I found will never ask you for a dime. They pay all costs including advertising, and the bank pays them a finders fee.

2) Find the Present Market Value: You need this to figure out just how upside down you are. Do not spend the money on an official appraisal. They cost $300-$500 and they won't be any good in a few months anyway! Your realtor will give you a good idea of the what the home is worth, and how much it can bring in as a distressed home. The more upside down you are, the better your chances of a successful house short sale. So forget about the nice drapes and all the sweat you put into your lawn. Just let the straight numbers do the talking.

3) Judgement Time: This is where you determine if you need a house short sale. Take your total loan amount, and subtract the present value of the house. Not what you think it's worth, but how much you can get for it TODAY. This is how much your "Upside Down" in the loan. Then, figure your annual expenses including a year's worth of payments, taxes, insurance, maintenance, and repairs. This is your "Yearly Cost" to keep the house. Now, take the amount your upside down and multiply it by 8%. We will assume the best case scenario. In a FAST appreciating market, this is how much your house value would go up each year, if the housing bubble was over today. (yeah right!) We'll call this number: "Appreciation per Year." Finally, divide the Upside Down amount, by Appreciation per Year. This is how many years it will take for you just to break even with the amount you owe on your loan. No profit, no realized appreciation. Compare the Number of Years to Break even with Yearly Cost to Keep the House. Can you hold out for that long? Does it still make sense to hold on? Or would letting it go make more sense?

For example: You bought a luxury condo with a $9,00,000 loan. In one year it has depreciated drastically and will sell for only $700,000. Should you put the house on the market for a short sale?

Upside Down: $900,000 - $700,000 = $200,000 Estimated Annual Costs: Include all your yearly expenses = $60,000 Appreciation: A health growth real estate market = $200,000 x .08 = $16,000

The Bottom Line: It will cost $60,000 per year in payments, for 12.5 years, just to break even with the original value. That's assuming a strong market with all 12.5 of those years of appreciation, at 8%. In that time period over $750,000 will have been spent in principle, interest, taxes, and insurance, along with other expenses with no equity gain.

You don't have to guess what I decided to do. My numbers we're very similar to these. I know I'll take a hit on my credit, but for me, 2 -3 years to rebuild my credit is a lot better than 12.5 years of suffering. I'm going to call it quits and live to fight another day.

About the Author:

If you liked this story, come read some more on my blog at HouseShortSale.org. It's free and there's no sign up, just my story about how I dealt with my house short sale!

Buying a Home with Reverse Mortgage WAS a Great Deal

By Veagure Vanrock

I was pleasantly surprised in November to see two things: One was a HUD mortgagee letter stating they would allow home purchases with a reverse mortgage.

Prior to this notice, using the reverse mortgage as a means to refinance was the only option seniors had.

Now they can actually use the reverse like a forward mortgage. The difference being they don't make payments. Certainly a delight to many seniors.

The second great thing I read nearly took me off my seat; it was how they would figure the loan. The appraised value of the home would be the factor detemining the actual loan amount, not the actual sale price.

As it stands for reverse mortgage refinances, there are several different things the banks look at when determining loan amount, but the value of the home is number one.

It was identical when a senior uses the reverse loan for the purpose of buying of a house. The difference to realize is when you get a reverse loan to actually buy a house, it is determined by the least of the cost and the worth.

For a reverse mortgage purchase to be based upon value only sounded almost too good to be true.

Say the loan was just based on value alone. If that were so, and a senior discovers a steal of a house running at forty percent below and nabs it, at closing time, hypothetically the borrower would owe nothing.

The Dept. of Housing and Urban Development doesn't just give things away. They arent considered strict by any means, but they want to make sure that there is a down payment. The senior must give something in order to get something.

Wouldn't you know it; HUD has come around to this fact. The rule that was so good, is now gone. HUD reverted back to the conservative policy.

It's interesting HUD takes seemingly forever to put out their mortgagee letters to us lenders. You'd think they have teams of lawyers working day and night making sure the thing is right the first time.

Not so, this particular letter was out no more than two months before revision.

Reverse mortgage loans used for purchases are now based upon the sale price or appraised value, whichever is lower.

About the Author:

Get the low down on the a California reverse mortgage and 5 things to be careful of, go here. Or take a little trip over here for fact after fact about the California reverse mortgage

How to Capitalize On Your Time with a Credit Counselor

By Steve Collins

Seeking the services of a credit counselor is an intelligent way to find a solution to your financial problems. An experienced credit counselor has a full arsenal of suggestions and strategies to assist you in making the most of your income and modify your spending habits as you work towards reducing and eventually eliminating your debts.

A key to exploiting your time with a credit counselor is to have certain pieces of information in hand prior to your first meeting. Being ready will help you both avoid wasting time on activities that could have easily been done on your own such as making a list of your expenses and income.

The first thing a credit counselor will ask you is how much you make and how much you spend. The answers need to be exact so that your counselor can help you work out a budget that is actually achievable. As any good credit counselor will tell you, its easy to underestimate how much money youre actually spending every month, so dont simply estimate it. Take a moment to look over a few months worth of bank savings and checking account statements and all of your credit card and store card statements. Try to use the average of at least the last three months to get as accurate a picture of your true spending habits as possible. This is precisely the kind of information your credit counselor will bank on to give you the best help he or she can.

If your income fluctuates because youre self-employed, work on commissions, or get bonuses from time to time, find an average for the last 6-12 months. Again, this is a more accurate picture of your true income numbers, which will greatly improve your chances of maximizing your time with a credit counselor. Having this information in hand before your first meeting with the credit counselor will mean you can move on to the advice portion of the meeting much faster.

Finally, it is a good idea to write out any and all questions that you may want to ask the credit counselor the night before your meeting so that its still fresh in your mind during your session. Remember " there is no such thing as a stupid question when it comes to finding ways to improve your financial situation!

About the Author:

Steve Collins is a writer and journalist. In these trying times, he knows the importance of obtaining effective debt solutions if necessary. Read his article about debt solutions here.

UK Drowning in Debt, Is Debt Management a Way Out?

By Phillip Evans

A report out from the UK Insurer AXA suggests the UK public is drowning in debt with 11.6 million people (25 per cent of the adult population) saying are under pressure financially with a momentous number, around one million three hundred thousand people, admitting their finances are entirely unmanageable.

The report suggests that over 3.7 million people are reported to be struggling to cope with mounting credit card bills and just over a million people have borrowed too much money and are now struggling to keep up their repayments.

Half a million home owners have been threatened with a bailiff or eviction and personal county court judgements CCJs has increased in quarter 3 to their highest level since the start of 2007

In England and Wales CCJs rose by 17.4 per cent year on year to 223,519, their highest level since the first quarter of 2007, according to figures published by the Registry Trust, the public interest company which manages the register of judgements, orders and fines on behalf of the Lord Chancellor. This represents an increase of 24.8 per cent from the second quarter of 2008.

Individual insolvencies in England and Wales increased to 27,087 in the third quarter of 2008, up 8.8 per cent from 24,893 in the previous quarter.

Bankruptcies and Individual Voluntary Arrangements (IVAs) have increased 12 and 3 percent respectively.

The sharp rise in corporate and individual insolvencies merely reflects the treacherous economic conditions people and businesses continue to face through this deteriorating recessionary backdrop; making an even sharper rise in both business and personal insolvencies look inevitable in the coming quarters of 2009.

It was hoped that the planned Simplified Individual Voluntary Arrangement (SIVA) that had been planned to be implemented early next year would offer some way out, however this has been abandoned by the Insolvency Service.

Where an IVA needed 75 per cent of creditors to accept the proposal for insolvency a Simplified IVA or SIVA only required that a majority accept the terms. The SIVA was intended to be launched next year with a creditor cap of 75,000.

The British borrower drowning in debt not wishing to go bankrupt really should consider both the individual voluntary arrangement or a more informal debt management program to help get your debt problems under control.

About the Author:

Enable Finance Ltd offer a FREE private and confidential debt management advice service to ensure our customers don't drown in debt. For our Corporate clients Enable Finance has a dedicated corporate recovery unit if your business is facing debt problems.

Orchard Bank Credit Card

By Daniel Moskel

The Orchard Bank credit card is issued by HSBC Bank. This is a sub prime credit card.

This card has a unique application process. When you apply they will match your credit score to one of four sub prime credit cards.

This includes a secured card and three unsecured credit cards. If you have made some mistakes in the past with your credit then you are guaranteed to be issued a card that corresponds to your credit score.

If you have made many mistakes then you will likely be issued the secured card. With this card you must secure it by making a deposit between $200 and $15,000, your credit limit will be equivalent to your deposit.

It works just like an unsecured card and you will have to make monthly payments. Your APR will be between 8.9% and 14.9%; this is much lower than most sub prime credit cards.

If you have only made a couple of mistakes with your credit then you will likely be approved for an unsecured card. However if you prefer the secured card you can be issued that instead.

The unsecured cards have an APR between 8.9% and 18.9%. One of the unsecured cards will carry a $19 account set up fee and you will have to pay a low annual fee.

The fees that come with the Orchard Bank cards are much less than any other bad credit credit cards. In addition they offer much lower interest rates too.

These cards will all report monthly to the three major credit bureaus. With responsible use of your card you can create a positive payment history on your report.

A positive payment history will help to improve your credit score. It is estimated that this factor makes up to 35% of your score.

These cards will also help to improve your ratio of available credit to debt. This is estimated to account for 30% of your score. It is how the bureaus check to see if people are in over their heads financially.

For your information it is rumored that once a negative mark on your credit report ages four years it has much less weight on your credit score. However if you remove negative items from your report and create a positive payment history your credit score will jump substantially.

In sum no matter what your credit history is; bankruptcy, judgments, charge offs, collections you can be approved for an Orchard Bank credit card. This card can be used to repair your credit score by creating a positive payment history and improving your ratio of available credit to debt.

About the Author:

For more about the Orchard Bank Card or for more information about Bad Credit Credit Cards visit us.

Personal Finance Troubles? Consider Debt Negotiation

By Dillon Azungen

Are you drowning in debt and considering debt negotiation? Debt negotiation has a bad connotation but does it affect your credit that badly? There are pros and cons to debt negotiation and there are alternatives. Here are some things to consider which will help you decide if debt negotiation is right for you.

First, you need to educate yourself on debt negotiation since there is a lot of misinformation out there. Debt negotiation is also known as debt arbitration or debt settlement. A third party negotiates with creditors and lenders on a payment plan and decreased interest. The creditors will put further credit to you on hold so you won't be able to use your credit cards until after your debt is repaid. After that, it is up to the creditor to decide if you should regain credit approval and if so, how high of a limit.

Lenders will usually only lower your rates and give you a break on fees if there is a reason. If they can be shown you're personal finances are not in a position to make the agreed upon payments then they will usually negotiate. They would prefer to negotiate rather than turn your account over to a collection agency.

Some people think that your credit report is unaffected by debt negotiation. This is not the case however. Your negotiation is reported and shows as such on a report. This is why debt negotiation should be used only if you can't otherwise pay off your bills. If you're finding yourself paying your lenders late and incurring fees then this will hurt your credit rating more than negotiation. And if you end up declaring bankruptcy then this can be even worse.

Before debt negotiation you should first find help with your budgeting and learn about other options by seeking a credit counseling service. A credit counselor can give you the information you need to help reduce your payments and get your finances back on track. They will tell you what will affect your credit rating, what will not and recommend what steps you should take. They can also help you with credit consolidation.

To find a credit counseling service search the internet or the yellow pages. Be careful since there are some that are not as helpful or legitimate as others. There are some that are supported by the government which are legitimate and should be researched first. A legitimate service will usually have a free consultation face-to-face and will be upfront about their services and fees. Don't sign anything until you are comfortable with their terms.

Don't think that since debt negotiation will tarnish your credit report that you should give up and let your account go to collection agencies. Ignoring the problem will make things much worse.

About the Author:

Concentrating on the area of how to negotiate a settlement amongst creditors, Dillon Azungen is publishing first and foremost for http://www.debtania.com . You can find his abstracts on how to negotiate debt settlement yourself over at http://www.debtania.com .