Three Solid Reasons For Home Refinancing

If you've been debating about whether or not home refinancing is the right choice for you, the best way to decide is by exploring a few of the best reasons available. Below are some of those reasons.

Reason #1 - Saving Money

Probably the best reason for home refinancing is to save money, but there are several ways to accomplish this effectively. First, you can simply get a new loan which has a lower interest rate and that translates into lower monthly payments. This can be a good choice if you took out a loan when rates were higher or when your credit score was lower.

Another way to save money is by extending the life of your loan. If you currently have a 15 year mortgage, you can cut your monthly payments drastically by doing your home refinancing with a 20 or 30 year loan. Of course, you will pay more in interest over the life of the loan but if you need those lower payments today, this is a good option.

Reason #2 - Accessing Equity

Another popular for home refinancing is to gain access to the equity in your home. Equity is the difference between what is owed on the home and its value. For example, if your home has been appraised at $250,000 and you have an outstanding mortgage for $175,000 on the home, then your equity is $75,000. By doing home refinancing, you can sometimes tap into that equity to help pay off bills, pay for your child's college, or do major home renovations that could increase the value of your home.

Basically, you'll be taking out a larger loan but if you've played your cards right, then the monthly payments should be more reasonable than taking out financing to cover those other expenses separately.

Reason #3 - Consolidating Debt

Many people choose to do some type of home refinancing when they have a great deal of excess, high-interest debt they need to get out from under. Generally, the interest rates for home loans are a great deal less than for personal loans and for credit card debt. If you want to cut your overall costs and improve your credit score quickly, taking out this loan and using the equity in your home to pay off some of these bills is a wise choice.

If you choose this option, you need to make sure you aren't going to make the cardinal mistake of running up all of that debt all over again. That usually leaves you with a higher monthly mortgage payment, as well as more of those bills. Plus, if you've succeeded in improving your credit picture, you could access even more credit which could deepen your troubles. Again, this is not a good idea.

Other Reasons

Besides the reasons listed above, people do home refinancing for a wide range of reasons. You need to decide if the choice is right for your finances before you make this commitment, however.

Don't jump into Home Refinancing without considering some of the best reasons to take that plunge. You can learn more about them at http://www.homemortgageloan-refinance.com/Bad-Credit-Home-Loan-Refinance.php.

Six Easy Steps to Applying for a Credit Card for the First Time

If you’ve never applied for a credit card, the whole process can seem quite daunting. And with so many companies offering different deals, there are lots of things to consider.

Some entice customers with reward deals, while others offer interest free rates for an introductory period. The truth is, there’s no one single card that tops the list!

The trick is to work out exactly what you want the card for, and then decide which option suits your needs best.

So if you’re a credit card novice, don’t run away and hide. Simply follow our six easy steps for a stress-free application.

Step 1 – The credit check

Everyone applying for a credit card must first undergo a credit check. Your acceptance and the amount you’re allowed to borrow depends on this.

Be honest when you fill out a credit card application form. Restrictions are in place for your own good. You also risk being charged with defrauding the credit card company if you give false information.

If you’re unsuccessful, consider applying for a secured credit card. Here, you make a deposit against the credit limit of the account. The bank then holds onto it, just in case you don't make your payments as agreed.

If you’re worried about your financial history, you can always try Confused.com’s credit rating service. And if that still doesn’t give you the result you want, this article may be of help.

Step 2 - What is APR?

APR stands for Annual Percentage Rate. It takes into account the interest rate on any money borrowed along with any mandatory fees and charges. It does not include charges such as late payments.

Generally speaking, the lower the APR - the less interest you will pay.

Step 3 - Who can apply?

Standard credit cards are available to anyone over 18, subject to a credit check.

Premium cards (Gold, Black and Platinum) usually offer higher credit limits and lower interest rates, but are generally offered to people with higher income and better credit risk.

Step 4 – What card to go for?

Find the best card to suit your requirement by following these guidelines:

A) You intend to use the card to make purchases, which you intend to pay off in full each month.

In this case the APR is of less concern as you’ll be making repayments within the interest-free period. Perhaps opt for a card with decent fringe benefits – such as cash back offers, rewards or loyalty points.

B) You intend to use the card for a major purchase, spreading payments over several months.

Think about a card with a low APR. Does this change over a period of months? Some cards will offer a lower – or even 0% - introductory rate, but this will often rise dramatically. If you’re clever and ruthlessly organised, you could consider juggling payments between different credit cards. But be warned: if you don’t have the time, you could come unstuck and end up with a whopping bill down the line.

C) You intend to use the card abroad or only in an emergency.

Go for a lower credit limit and no annual fee. Choose a card that is accepted in most foreign locations. Look at the fees and transactions in foreign currencies.

D) You want to support a particular charity of organisation.

Charity cards will donate a sum for every purchase made at no additional cost to you.

Step 5 – The pros and cons

Credit cards are often demonised as a one-way ticket to spiralling debt. But used sensibly they can be a great means of securing free, short-term credit and making money work for you.

They’re also a much safer way of making purchases – particularly over the internet, by telephone and mail order. If you buy something that costs more than £100 and less than £30,000, you gain a valuable legal protection under Section 75 of the Consumer Credit Act. Additionally, if you’re a victim of credit fraud you probably won’t be expected to pay.

Step 6 - Avoid debt

Credit cards are as much about responsible borrowing as they are about responsible lending.

It’s important to bear in mind that different interest rates apply to different means of borrowing. Generally speaking, cash withdrawals on a credit card will incur a higher interest rate, and the interest-free payback period does not apply. You will be charged interest instantly.
Unless you keep control on your spending, you could end up in financial difficulties. High interest rates and late payments could make the situation even worse.

So if you do intend on borrowing money for a longer period of time, it might be more cost effective to choose a loan.


Find out more about applying for a credit card at http://www.confused.com/credit-cards

Is the housing market looking to settle down?

Whether the housing market is going to settle down is among many economic issues that are being speculated on right now. Most people believe, though, that the market is getting better than it was last year.

When it first started experiencing problems it was generally a result of the economic slowdown and problems that were being seen in the US. Eventually these difficulties drifted over to the UK and to other countries in Europe and around the globe. They caused problems with the stock market, but they also caused problems with the housing market and other areas of the economy. The recovery will be slow, of course, but the main idea right now when it comes to the housing market is whether a bottom has been reached or whether it appears as though the housing prices will continue to fall. Naturally, this matters to both buyers and sellers.

If people want to buy but the prices are going to keep going down, it might be better if they would wait to buy until prices have bottomed out more. There's no point in spending more on a house than you really need to. However, you also want to be careful that you aren't waiting too long, because you could end up missing the bottom and not buying until prices started going back up.

Housing prices appear to be settling, though, which is very good for both buyers and sellers. When buyers wait too long to make a purchase it can be a serious problem for people who are trying to sell their homes, especially if there are concerns about issues like foreclosure. If they sell first, they don't end up struggling to pay their bills or potentially losing their homes. Instead someone else buys them and the seller can find other accommodations by renting, living with family or friends, or purchasing a house that's cheaper. With stabilizing prices it's more likely to bring buyers back into the market, and eventually the housing demand (and the prices) will start to rise again, instead of staying where they are or even continuing to drop lower.


This article was written by Tom Sangers on behalf of Gateway Homes who provide a Sell House for Cash service.

Patriotic Refinancing

Offering a silver lining to the cloudy economy, President Obama encouraged Americans to take advantage of the lowest mortgage rates on record by refinancing their homes. According to the Associated Press, Obama said in a recent press conference, "The main message we want to send today is there are 7 to 9 million people across the country who right now could be taking advantage of lower mortgage rates."

With Americans who had recently refinanced their homes by his side, Obama encouraged homeowners across the nation to use the low mortgage rate to their advantage. "That is money in their pocket," he said of those homeowners who refinanced.

Thanks to efforts by the Federal Reserve, current rates on 30-year mortgages have fallen to 4.78 percent, the lowest on record. This means that rates are down by more than a full percentage point from just a year ago.

However, the president doesn't necessarily mean all homeowners. The president's Making Home Affordable program is geared to help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage. It is also meant to help homeowners who are struggling to pay their mortgage after their interest rate has increased or they have less income. The government Web site makinghomeaffordable.gov offers all the details.

According to the Web site, the Obama administration considers stabilizing the housing market to be one of the key components to reviving the nation's struggling economy. The program is designed to pinpoint those Americans who are most likely headed to foreclosure despite having kept up their mortgage payments. The president stressed the importance of not only keeping Americans in their homes, but also giving them money to spend on something other than over inflated mortgage payments.

President Obama himself during the press conference, as well as the Making Home Affordable Web site, stressed the importance of watching out for refinancing scams. "If somebody is asking you for money up front before they help you with your refinancing," Obama said, "it's probably a scam." The Web site stressed the following:

* There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor.

* Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay - walk away!

* Beware of anyone who says they can "save" your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.

* Never submit your mortgage payments to anyone other than your mortgage company without their approval.

"The Obama Administration has launched a coordinated effort across federal and state government and the private sector to target mortgage loan modification fraud and foreclosure rescue scams that threaten to hurt American homeowners and prevent them from getting the help they need during these challenging times."


Jill works on a website that has information on real estate in Fort Worth. It provides a free search of the Fort Worth MLS along with a real estate blog.

Credit Cards: Who Owns Your Plastic?

Keeping up with who owns what in the financial services industry is never easy, particularly when it comes to credit cards.

And, it's just got even more confusing thanks to the recent wave of consolidation in the banking sector, creating anomalies where banks have the same parent company but a different credit card provider.

Who owns what?

One of the UK's biggest credit card providers is MBNA Europe Bank.

As well as offering its own-brand credit cards, it also provides plastic for:

• Alliance & Leicester
• Virgin Money
• Smaller building societies
• 400 affinity cards including Manchester United, Liverpool Football Club, the WWF and the British Heart Foundation

Barclaycard

Barclaycard are also a major card issuer after acquiring Discover Financial Services' UK credit card portfolio last year. While most of us may not have heard of Discover before, many of its brands are household names, such as Goldfish, Morgan Stanley and the Caravan Club.

Barclaycard has since rebranded all these cards to contain the Barclaycard name, but also provides a number of cards for third parties including Sky, Thomas Cook, Argos, Bhs and Hilton Hotels.

Multiple brands

A number of banks operate cards under several of their own brand names:

• The Royal Bank of Scotland has credit cards bearing its own name and NatWest's, as well as Mint.
• The Bank of Ireland provides credit cards for the Post Office, as well as their own brand.
• HBOS offers credit cards under both the Halifax and Bank of Scotland names, in addition to more than 30 affinity or co-branded cards.

Co-operative Bank

The Co-operative Bank has its own credit card and one under its Smile brand. It also has 18 affinity cards with charities including Amnesty International, Oxfam, the Woodland Trust and the RSPCA.

But who is the owner?

Just because two banks belong to the same banking group, doesn't mean it's safe to assume their credit cards have the same owner.

Lloyds TSB and Halifax are both owned by Lloyds Banking Group, but as they operate under separate banking licences, their credit cards are classed as having separate owners.

Abbey and Alliance & Leicester both belong to Spanish banking giant Santander. Abbey provides its own cards, but Alliance & Leicester cards are issued by MBNA.

Why it matters

So is it really that important to know who owns your plastic? The answer is yes. It's of crucial importance, particularly if you want to take advantage of a balance transfer deal.

Many credit card providers tempt new customers to take out one of their cards by offering 0% interest on debt transferred from other providers.

But, in order to take advantage of the offer, a different group must own the card from which the debt is being transferred.

If you fail to check who owns which card before applying, you may find you can't transfer your balance as planned. Not only does this mean you're back to square one, making multiple credit card applications could damage your credit rating. This could make it more difficult to take out a credit card, loan or mortgage in the future.


Find out more about Credit Cards, Who Owns Your Plastic? at http://www.confused.com/credit-cards

Mortgage Rates Hover Near All Time Lows

There was not much movement in most of the major mortgage products this week. The 30 year rate dropped from 4.86 to 4.82. This is only slightly above the 4.78 all time low that was reached a few weeks ago. The 15 year rate dropped from 4.52 to 4.50. There was some interesting movement with the 5 and 1 year arm. The 5 year arm dropped from 4.82 to 4.79. At the same time the 1 year arm rose from 4.71 to 4.82. This is the first time the 1 year arm has been above the 5 year arm. Regardless both rates are pointless because they are at or near the same rates for a 30 year arm; therefore there is no reason to get an arm instead of a 30 year mortgage in the current market. Below are mortgage rates for the last few weeks and from 6 months ago on November 20, 2008.

May 21, 2009

30-yr 4.82 15-yr 4.50 5-yr ARM 4.79 1-yr ARM 4.82

May 14, 2009

30-yr 4.86 15-yr 4.52 5-yr ARM 4.82 1-yr ARM 4.71

May 07, 2009

30-yr 4.84 15-yr 4.51 5-yr ARM 4.90 1-yr ARM 4.78

Apr 30, 2009

30-yr 4.78 15-yr 4.48 5-yr ARM 4.80 1-yr ARM 4.77

Nov 20, 2008

30-yr 6.04 15-yr 5.73 5-yr ARM 5.87 1-yr ARM 5.29

As we can see rates have not experienced much movement in the last month. They have continued to hover around all time lows for the month of May. They remain substantially lower than what we saw 6 months ago. In addition to rates we always like to look at actual mortgage payments. We took today's rates and translated them into a mortgage payment for a 200k mortgage. We did the same thing with rates from last week and rates from November 20, 2008.

May 21

30-yr $1051.74

15-yr $1529.98

5-yr ARM $1048.12

1-yr ARM $1051.74

May 14

30-yr $1056.59

15-yr $1532.03

5-yr ARM $1051.74

1-yr ARM $1038.47

Nov 20

30-yr $1204.24

15-yr $1658.67

5-yr ARM $1182.43

1-yr ARM $1109.36

A mortgage payment this week is slightly lower than what it would have been last month. This is nothing compared to the saving one would get compared to 6 months ago. For a 200k house a mortgage payment is $152.50 less a month now than it would have been on November 20, 2008 for a drop of 12.66%. This is often forgotten when the media talks about home prices being down 15% to 20%. After one factors in mortgage rates along with falling house prices the actual payments could be down over 30%.

So what do we expect to happen over the next few months? As long as the economy stays week mortgage rates will probably continue to hover around just under 5%. Once the economy starts to recover the general expectation is that rates should start to rise. It's hard to know how high mortgage rates will go once the economy recovers. Estimates have ranged from 10% to 18%. Most of this will depend on how quickly the economy recovers and if the FED moves quickly enough to changes policies from boosting the economy to slowing inflation.


Ki lives in Austin Texas. He website provides a free Austin home search. He also provides a mortgage calculator widget along with a few other mortgage widgets that show updated information on mortgage rates.

A Look At Credit Cards : The Psychology of Plastic

"We said that big banks can no longer take advantage of hardworking Americans," Senate Majority Leader Harry Reid, D-Nev., said of the recent legislation that will restrict rate hikes and late fees charged by credit card companies. But some out there argue that credit card holders are just as culpable. It seems there is a fine line between who is really to blame: the companies that provide the easy credit with high penalties or the consumers that take easy credit and ignore the possible penalties.

Just how did credit cards become so ubiquitous in the American financial landscape? A recent article in Time magazine noted that credit cards have been around since the 1920s. Service stations, hotels and restaurants began offering credit cards when Americans began venturing out in their cars to a world beyond the convenience of their local banks. By the 1950s, over 20,000 Americans carried the Diners Club card in their wallets. That success was followed by American Express and Bank of America, which both began offering credit cards in 1958.

Flash forward 50 years and Americans are predicted to be in credit card default to the tune of $75 billion this year. It seems psychology had a little to do with that, after all no one forced Americans to obtain credit cards and then charge on them beyond their means. No, it seems that the perceived irresistibly of not actually paying now is hard to refuse.

A study at the Massachusetts Institute of Technology showed that people can be quite irrational when it comes to credit. The study by Drazen Prelec and Duncan Simester showed that people don't perceive credit and cash in the same way and will pay twice as much for something, in this case basketball tickets, purchased with credit. Researchers at the University of Pennsylvania have estimated that the typical cardholder pays an extra $200 a year in interest on a credit card balance while keeping a large amount of cash in savings or checking.

It seems people happily ignore the fine print in those multiple-page credit card bills that come every month and focus instead on the minimum amount due, which is printed in large bold numbers. While the new credit card laws may offer consumer protection from the credit card companies, perhaps it is protection from the innate urge to whip out the plastic now and pay later that is the real culprit.

Here are a few tips on how to be smarter about credit cards:
1. Look over credit card bills carefully. Taking a few minutes to look at the fine print can save a cardholder money in the long run. While the new credit card legislation stipulates that lenders must say how much time it would take and how much money in interest would be paid if only the minimum monthly payments are made, it will be several months before that disclosure shows up on bills. In the meantime, consumers should do the math and make purchases with the long-term costs in mind.

2. Credit cards make it easy to track spending, so consumers should pay close attention to what goes on the bill every month. It doesn't make sense to carry a balance on lattes and lunch when paying cash for those items would save money in the long run.

3. Get a credit report and make sure the facts are correct. Credit scores determine not only a consumer's credit worthiness, but also the interest rate that will be paid on loans.

4. Make an effort to pay off credit balances, starting with those carrying the high interest rates. By paying a little extra each month, cardholders can chip away at debt and improve credit scores. However, financial planners warn consumers not to close accounts once they are paid off. A long history of good credit with many accounts is what credit scores are based on.


Ki works as a realtor in Central Austin. He maintains a website focused on Austin Texas real estate. The site allows future owners to search the Austin MLS as well as read stats and analysis on his real estate blog.