Online Financial Tips

Archive for March, 2011

Home equity loans are regulated in California to limit fees and caps.
No matter where your financial company is based, they will have to
follow these regulations if you are living in California. By expanding your
search to national financing companies, you can find competitive rates
and terms that still follow California law.

Providing Full Home Equity Disclosure

Many of the basic ideas of the federal “Truth In Lending Act” are based
off of California financing law. By using lenders who follow California
financing laws, you can protect yourself from predatory lending.

For example, one such California principle is the idea of full
disclosure, listing out interest rate, fees, and terms before signing a loan
contract. In California, lenders must offer contract copies before
application and before using the credit.

It is a good idea to look over the fees and terms to be sure they are
fair and meet your needs. For example, if you find a prepayment penalty,
then you may want to negotiate a waiver or find a different lender.

Placing Caps on Home Equity Loan Fees and Terms

California laws also place caps on fees and terms, particularly with
sub prime loans. For example, interest cannot be charged on a loan until
one day after closing. There are also limits on late fees and early
payment.

Large financial companies have been prosecuted in California for
failing to meet regulations. So even with the biggest names, look over the
terms to be sure they are not overcharging you.

Shopping Outside of California for Best Home Equity Loan

Even with local laws, you can still search outside of California for
low rates. By expanding your search online, you can find competitive
rates and terms than still meet California law.

Start with a broker site that will link you to several lenders. By
providing your address, financial companies will be aware of the unique
laws related to your loan quote.

Be A Smart California Home Equity Loan Shopper

Your California address won’t protect you from unscrupulous lenders. Be
sure that you practice good credit habits by reading and understanding
all your loan terms. Also, compare rates and fees with other lenders to
be sure they are inline with the market.

Discover Open Road Card

As a cardholder of Discovers Open Road card, you receive a 5% cash back each time you spend on gas or auto maintenance. Other purchases reward 1% in cash rebate. A 0% introductory APR applies on balance transfers and purchases for a 6 month period and purchases afterward are charged a 10.99% APR. Discover’s online site offers cardholders up to 5-20% cashback on purchases. There is no annual fee, cash rewards are unlimited and do not expire. A good credit score is a necessary asset when applying for the Discover Open Road Card.

Chase BP Visa Card

Though great on making savings, Chase BP Visa Card rewards cash back to cardholders only when they make gas purchases from BP stations. This card offers a 10% cash back for gas purchases, 4% for flight tickers, restaurant expenses and 2% for other purchases. The introductory period offers a 0% APR on balance transfers. Cash rewards are cut in half after the first two billing cycles pass. Chase BP card has charges no annual fee.

Chase PerfectCard MasterCard

Chase’s PerfectCard Master Card includes an effective reward program that helps cardholders retrieve substantial amounts expended on eligible purchases. The card offers an attractive 6% cash back rewards for gas purchases carried out within the first 90 days after which cash rewards go back 3%. All other purchases receive a 1% cash reward and are charged at 10.99% provided these purchases were made after the introductory APR period. There is no annual fee to worry about.

Traditionally, home equity loan rates have been higher than first
mortgages. However, you can find low rates with some online searching and
savvy negotiating. The follow tips will help you get the lowest interest
rates on your home equity loan.

Review Your Free Credit Report

A quick look over your credit report is always wise before you make any
credit request. Double checking for accuracy, you guarantee that you
don’t needless pay high rates for an error on your report.

Apply for Home Equity Loan Online

Your first impulse may be to apply for a home equity loan with your
current bank, but wait. You probably will find better rates online,
especially with a lender that specializes in home equity financing.

With thousands of lenders online, you can search rates, fees, and terms
to find the best offer. Mortgage broker sites can get you started in a
short amount of time.

Request Estimate from Online Home Equity Loan Lender

Asking for home equity loan estimates will help you sift through the
rates and fees. While your focus may be on low rates, don’t forget to
factor in closing costs and other fees.

When you request an estimate, only give your basic information so your
credit score isn’t dinged by multiple credit inquiries. Try to be as
precise with your credit and financial assets info to get the most
accurate rate quote.

Be Flexible With Home Equity Loan Terms

Home equity loans come in a variety of terms. You can find fixed or
adjustable rates, short or long term, even lines of credits. The lowest
rate terms are usually the adjustable rate loans, but they could cost you
more if rates go up.

You can also reduce your rates by adjusting the amount you borrow. Some
lenders will charge you more the less you borrow, others do the
opposite. It is a good idea to play around with numbers when requesting
quotes.

Consider Cashing Out with a Mortgage Refinancing

Depending on your first mortgage’s rates, you may find the lowest rates
by refinancing your entire mortgage and cashing out part of the equity.
Usually having one mortgage qualifies you for lower rates than having
two. But, be sure to look at the numbers to be sure it fits for your
situation.

Representing a safe way to invest, a high interest rate online savings account is more sought after than ever. Currently with the economy and financial markets in a flux many have images of the 1920′s. Then average citizens invested hard earned money into stocks, bonds and other investments only to be wiped out during the great crash of 1929. From that financial tragedy sprung the FDIC. Now not only are your deposits into a savings account insured up to $100,000 now there are also online savings accounts that have many benefits.

With the economy and markets changing rapidly again, people that have invested in volatile stocks and other risky investments are now seeking to reduce their risk. The good thing is that in the time since the great crash of ’29 they have a option that is safe, a high interest savings account.

These types of savings accounts with high interest rates are a god send to many. Especially since we all like money, in particular money that is made by just leaving our deposits in the account of a bank or financial institution.

What is the secret? There really is not one. A large sum of money to deposit initially is a sure way. To paraphrase an old saying “It takes money to make money”. It used to be you could qualify for a savings account with a high interest rate only with a deposit of a minimum of $10,000. Some savings accounts still have these requirements, but not all

Today a high interest online savings account is actually available to the average person. The only requirement is a little research. That’s it. The internet has made it easy to find and compare high interest rate savings accounts online. You will find these from reputable and recognizable financial institutions online and even traditional brick and mortar banks.

There was a time when it was necessary for people that wanted to take advantage of savings accounts with high interest to come together and pool their funds to accumulate the needed large deposit. Now not only do you not need a large deposit some savings accounts have little to no restrictions such as a minimum deposit or maintaining minimum balances.

Financial institutions that are online only like ING Direct and others often provide more aggressive annual percentage rates for their internet savings accounts than many brick and mortar banks can offer. You reap the benefits, since operating online allows for low overhead costs, that is no banking location, no financial officers, no branches to manage. These higher interest rates are usually the big draw for those interested in opening a savings accounts on line, specifically one with high interest rates .

When you begin to research financial institutions that offer you a savings account that meets your requirement of a high interest rate, be sure to keep an eye out not only for restrictions but also perks. Competition is high among the banks and your deposit dollars are in demand so make sure you compare everything. No matter what your savings goal is, with just a little research you should have no problem securing a high interest online savings account.

Third mortgages are loans that are subordinate to the existing first and second mortgage loans. Though, third mortgages were common in the seventies and eighties, the savings and loan scandals changed the course of home mortgage loans.

Nowadays, it is rare to find home equity lenders offering third mortgages. You can find properties that have two to three mortgages or land contracts at the same time. Lien position is required mainly because in case of a foreclosure, the legal entities identify the mortgage lenders to be paid first, depending upon the lien position on title. There are a number of home equity lines considered to be third mortgages.

Similar to fixed rate third mortgages, it is difficult to locate a broker or a bank that would provide you with a secured line of credit in the third position. However, it might be possible provided you have equity in your home and you wish to leave your existing first and second mortgages out of refinance. Only then you can get cash through the third mortgage credit line. Third mortgage loans have a number of benefits. They offer a number of options, debt consolidation loans, third mortgage refinance, third mortgage lines of credit and more.

You can enhance or at least maintain the value of your home by financing home improvements with a third mortgage. The mortgage rates are generally low when secured by home equity loans. Moreover, tax laws allow you to subtract the second mortgage interest in certain cases. You should also research properly the lenders, to find low rates and fees. Before searching for financing for your home repairs or remodeling projects, always draw up a realistic budget along with the estimated cost overruns. Once you finalize the type of financing you need, shop around for the rates and fees and identify the best possible deal.

There are more and more people reaching retirement with mortgages. In fact, many people are acquiring mortgages in retirement. Is it a good idea?

First of all, most financial advisors will tell you that you shouldn’t carry a mortgage into retirement. That is because most retirees are cutting back on what they are living on, income-wise. Personally, I don’t want to carry a mortgage into retirement because I want that extra money for myself. I also strive for the clear ownership of my property. But you have to look at what fits you.

Yes, you can get a mortgage when you are close to retirement or in retirement already. Yet, what the bank will lend you isn’t the issue. You have to determine the amount you can spend on housing based on your personal preferences and situation. The lender doesn’t know your budget or how you spend or what your goals are. The lender only cares about getting money out of you.

So what do you do? If you currently have a mortgage and are afraid that you won’t be able to afford it in retirement, look at paying it off early. This is a good idea for anyone. Just make sure that your loan doesn’t carry any prepayment penalties. Not only will you save interest, but you will also have the freedom of not having a mortgage to pay.

If you have the income and the inclination, make your mortgage selection carefully. Look for a fixed-rate mortgage. This is important for anyone on a fixed income. You have the security of a mortgage payment that will always be the same amount.

You should really consider what you can afford to spend in retirement. Create a budget, if you don’t already have one in place. Add in any housing costs that you might forget about, such as property taxes and homeowner’s insurance.

Now take a look at your financial situation. For example, do you have emergency savings? Everyone, even retired people, should have an emergency stash. If there is a death in the family or an accident or repairs needed, the emergency money will help buffer your fixed income. If you don’t have the cash to pay for the unexpected, your mortgage could be at risk.

I think that one of the most important things you can do is to play a little game of “what if…” Consider all of the possibilities. If you can get your mortgage paid off, great. But if you can’t, don’t worry too much. You will. From my own experience, owning your own property in retirement is a prefect situation. My parents would have never been able to retire had they not owned their own property — their retirement income was too limited. But they have been comfortable due to less monthly housing costs.

Having a mortgage in retirement is fine for many people who can afford it. But remember, the rules don’t change: fixed rates are best, don’t borrow too much and buy wisely.