Sunday, November 30, 2008

Getting Out of Credit Card Debt is Important

Studies show that 75% of Americans failed to pay their utility bills on time; about 39% of people who have mounting debts or bills say that they had to deplete their savings in order to pay off bills; around 30 percent of them accumulated credit card debt. Debt is certainly not something that just happens as you go about your daily routine. Lack of knowledge on financial management in most cases leads to out-of-control debt. The partners in this financial demise are the financial giants making money out of the huge interests and fees they charge.

This is the worst possible situation anyone can get into – self-created, albeit unintentional. With the task of eliminating the mountain of debt staring on the face, most people wonder which outstanding bills to clear first. Setting up a debt plan works but it will work only if you discipline yourself to pay back the money within a specified length of time. When in debt, it has to be done immediately. Paying a little back is better than worrying and doing nothing about it. You will have to stick to the plan until the debt is completely paid.

Preparation of well debt payment plan is very important here. Being a financial advisor for so long now i have actually gained a lot of knowledge regarding the debt payment plans. You can actually follow some of my effective steps regarding this context:

Stop using extra credit: I will not say much regarding this but i just want to add here that is stop using your finances in the future and plus cut up your credit cards at any cost. Cutting up cards may seem extreme and tough to follow. Many financial consultants say that it is not required but if you are neck deep in debt, let me tell you, credit cards are nothing but a trap and throw you in deeper. Once you straighten out your finances, you can always get another credit card. Cancel all your accounts that you use a credit card for paying.

Immediately setup an Emergency Fund: Many people may ask why you need an emergency fund even before paying off the debts. The reason is that you are saving for unforeseen emergencies, so that you do not have to take another loan. Please do not say that you can use your credit card for emergencies; you are not going to. You are only going to save cash for any emergency. Try and keep aside at least $1000 for emergencies. Make sure not to use it for a drink or a new dress, this money is only to be used for emergency hospital visits or when your car dies or some such need.

Now that you have taken care of the emergency fund and stopped using credit, time to attack your debt with all the determination and will-power you can muster, and get rid of it. Sacrifices will have to be made to get out of a financial mess.

Make a note of all the details pertaining to your debts:

• All the debts on hand
• The names of the creditors
• Interest rates
• Balance owed to each
• Number of payments remaining
• Monthly payments
• Payment due date
• Amount last paid
• Date last paid
• Their addresses and telephone numbers
• Legal action taken (if any)
• If collection agency or attorney is involved, their details

It is now clear what your debts are and how much you owe creditors. Now time to figure out how much you can pay back each creditor and how long it is going to take to clear each debt. It is advisable to limit the credit payments to not more than 25 percent of the monthly earnings. However, if the debts are many, then you can extend it to 30 to 35 percent, as most people generally need at least 65 percent for their living expenses. If more than that is needed, you must try to increase the income and reduce the expenses.

Once it is clear how much money you can keep aside to pay back creditors, it is time for you to decide how much you are going to pay back each creditor per month and how long it will be before all the creditors are paid off. Chart out a clear plan on how you wish to proceed.

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Chart out the debt repayment plan clearly on paper. You can write the creditor’s name in one column, total debt, original monthly payment and the amount you have decided to pay each month in columns. Do the same for all creditors. This takes away a lot of the confusion and makes it easier for you to understand what is happening. Once you have a plan in place, start being frugal in your expenses. You should not use your credit cards or take any more loans, unless in a life and death situation.

Another thing many people do is hide from creditors and avoid calls from them, which can lead to more trouble. Call each creditor and explain to them why you had fallen behind on your payments. Let them know your obligations and how you plan on making their payments and the amount you will pay each month. It is important to be honest. Creditors prefer receiving at least small amounts of money, and get wary when they receive nothing.

There are times when nothing seems to work out and it seems impossible to manage financial problems. If you are not able to solve your financial problems alone, take the help of financial counselors who can help you with budget planning, setting up a debt payment plan and money management. There are several non-profit counseling agencies that are inexpensive. You may want to check out your local churches and credit unions to see if they provide financial counseling. You will have to find a reputed and reliable counseling service and that can be done by checking with the Better Business Bureau to see if the counseling service has any complaints against them.

You must control your spending and stick to your debt payment plan until you have cleared all the debts. If your income increases or decreases, raise or lower the monthly debt payments based on that.

Check out the video our partner site has prepared specially for all of you:

The most important thing is to take action – start now. Your debt needs to be tackled right now.

Thursday, November 27, 2008

Some Money Saving Tips for the Coming Holiday Season

As per my promise here I have come up with some useful tips regarding saving and managing money for the coming Holiday Season and also how to pay off the holiday debts. So people who have already spent a lot over their earnings can have an eye on the tips below:

1. Instead of using the credit cards try to use cash as much as possible or whenever possible for all kind of purchases. For example clothes, foods, monthly payments like mortgage, home rent etc. This will keep the outstanding on your credit cards to a minimum level till you are paying off the holiday debts.

2. Make a chart of your outstanding debts. Put all the credit cards, outstanding on each of them and rate of interests in different columns. This will give you a clear idea about how do you owe on each card. So that you can make your planning regarding paying off the debts.

3. Try and build up a plan to pay of the holiday debts. Here first you need to make sure that how much you can afford towards paying off your holiday debts. Besides always try to seek different ways to cut off your regular expenses which will allow you to contribute some extra money towards paying off the holiday debts. You can restrict having food outside quite often, making phone calls that costs you a lot etc. Also a part time job can fetch you some extra money which might help you to reduce your holiday debts.

4. Always try to maintain or go with the payment plan you have made. Your primary target should be paying off the credit cards which has high rate of interest. Also if you see any possibility to transfer some of your other bills to your card accounts with low rate of interest then always go for it.

5. At last make a plan regarding saving for the next holiday season. A good and proper saving plan for the holiday season can really keep you away from falling into debts. This is what most of the people lack during the holiday time – “PLANNING” and due to that people always spent more than they earn and get caught up by debts easily. So when you know that holiday season is the time you are going to spent maximum, start saving for that purpose. Just go for a holiday account for next year holidays. Calculate last years total holiday expenses, so that you can easily understand how much you will need to save and how much you will need for the next year holidays and start saving accordingly.

Apart from contributing a particular amount towards the holiday account, try to save from your regular expenses as much as possible. Restrict unusual expenditures, so that you can save more.

As you all have understood well that due improper planning during the Holiday Season we often overspent and fall into debts. So guys who are currently facing this kind of situation and guys who want to avoid this kind of scenario in future follow the above mentioned tips. It will help you to keep the burden of debt away from your shoulder.

Tuesday, November 25, 2008

Every Policyholders Needs Umbrella Insurance

As we all know that in USA lawsuits are everywhere. Lawyers are demanding lump sum of money these days. Do you have enough of Liability Insurance in case any unfortunate accident happen. Do you have enough liability insurance from your current policies to cover your costs for negligence? Since no one can predict how much a judge may award the injured person, umbrella insurance is not just for the wealthy anymore, but a needed protection for every policyholder.

Umbrella insurance is nothing but one added liability protection above and beyond the limits on homeowners, auto, and watercraft personal insurance policies. With an umbrella policy, depending on the insurance company, one can add an additional 1-5 million in liability protection. This protection is designed to “kick-in” when the liability on other current policies has been exhausted.

Liability insurance is the portion of a homeowners or auto policy that pays for expenses such as the injured persons medical bills, rehabilitative therapy, and lost wages due to the negligence of the at fault person. The liability portion of an insurance policy also covers a legal defense representative if the negligence would happen to land the at fault person in the court room. After adding up all of the medical expenses for the injured and the legal fees of the negligent person, the standard liability in one’s homeowners or auto policy is often not enough.

Almost every state has financial responsibility laws that will hold drivers accountable for bodily injury and property damage resulting from car accidents and the at fault driver could be sued for the damage. Personal assets from the at fault driver could be seized resulting from a lawsuit. Similar laws are also in force for home and watercraft owners.

There is good news. A personal liability umbrella insurance policy can give one added liability protection without a large added cost. Additional liability insurance is often inexpensive, especially compared to the added coverage one gains. Furthermore, liability insurance covers one’s non-business activities anywhere in the world. Having the added protection of a liability umbrella policy is coverage no one should go without.

Monday, November 24, 2008

The Truth About Debt Settlement companies

Debt Settlement industry is one of the largest growing industry in the United States today. But these debt settlement industries are permeated by myths, misinformation and controversy. Now it is my goal to provide truthful, factual, unbiased information to my readers and visitors in order to dispel the confusion and misinformation.

If we create a differentiation between the debt consolidation and debt settlement companies, one forward your monthly payments to your creditors and the other will place your monthly payments to them into a trust account, then forward the money to your creditors when there is sufficient funds in the account to pay a creditor in full.

We read on internet that Debt Settlement companies compelling arguments against the efficacy. They advertise that they can negotiate with creditors to reduce debts by 40% to 60%. Is this really possible? Lets take an example here, If you were a creditor, would you be willing to allow your debtors to pay only one-half of what they owe you? Obviously not.

But what if your debtors refuse to pay you and they were in a position where you could not collect from them by levying their bank accounts, liening their properties, or garnishing their wages. Now would you be willing to take a reduced amount? Your choices are - 50% or nothing. Which are you going to choose?
The truth is - of the thousands of debt settlement companies, there are a few that can negotiate or settle debts by 40% to 60% as advertised. But they charge fees upwards of 15% of your debt.

Your goal as a debtor should be to become “bullet-proof” and you will be in the drivers seat to negotiate with your creditors without paying a debt settlement company to do it for you.

Before ending the post i would like to advise all of you that Stay away from back dated documents, hiding assets off-shore or in trusts, transferring properties to other people, or any other strategies that are not lawful.

What do you think of debt settlement companies? Are they really fake? Do give your feedback.

Saturday, November 22, 2008

Choose a Right Mortgage for your New Home

We all are very much aware that buying a home is one of the major and big dreams of our entire life and mortgage plays a vital role when we are up to buying a home. So while shopping for your new home you always got to know that which type of mortgage or home loan is perfect for you and match your affordability.

Because if the mortgage type you choose does not suit your affordability level then you might be into big risk with the interest rate and other stuffs. So find below few mortgage or home loan types which are normally best suited for everyone.

A. FRM (Fixed Rate Mortgage): The specialty of this particular type of mortgage loan is you will get a locked in or fixed rate of interest (for example: 6.0%) along with a set monthly installment scheme in this type of mortgage.

B. ARM (Adjustable Rate Mortgage): Adjustable Rate Mortgage is best suited for home buyers who have flexible funds or financial resources to pay off their mortgage. Because here in this mortgage type the rate of interest reacts with the ups and downs in the industry. Means you will have to accept the current rate of interest of the market. Does not matter whether it’s high or low.

C. Negative Amortization Mortgage: If you opt for this type of mortgage loan then you will be allowed to pay a monthly installment which will be not more than the total amount of interest. However the amount of interest which remains unpaid and the balance of the principal amount will rise in this specific type of mortgage loan.

D. Interest Only Mortgage: In this type of mortgage loan buyers generally pay for 5 to 10 years on the interest amount of mortgage loan.

Check out an interesting video by bloomberg on types of mortgages:

So the bottom line is while selecting a loan option for your new home the pros and cons or merits and demerits of that particular mortgage or home loan type needs to be taken into consideration. So that you will not find yourself in any kind of trouble while paying off the loan.

Thursday, November 20, 2008

Its time to know the FCRA

The Fair Credit Reporting Act along with the FDCPA (Fair debt collection practices act) is an American Federal Law which forms the base of consumer credit rights in USA. This act promotes the privacy of information on your file, the accuracy of your report and the fairness of reporting.

Know your rights under the FCRA:

1. Right to know the components of your file:

You have the right to do so giving proper verification of your identity. This will require your SSN. You are entitled to free reports in case of the following:

• Victim of identity theft and you place a fraud alert in your file.
• Legal action against you due to some information on your file.
• You are on public welfare
• As a result of fraud your file consists of inaccurate information.
• Unemployed but contemplating employment within 60 days.
• Entitled to one free annual credit report from each of the three bureaus.

2. Right to know your credit score:

You can ask for your score from the Credit reporting agencies or from ones who calculate your credit score. This comes for a price. However you get to know your score for free if your mortgage lender makes a pull on your report and score.

3. Right to dispute:

If you have found incorrect information on your report you can write to the bureaus and dispute it. They have to investigate into the matter if you provide relevant details.

4. Right to know who used your file against you:

Whoever is using your file to deny your credit or to take legal action against you, has to inform you and provide you with details of Name, address and the agency that is being used for the purpose.

5. CRA deleting invalid information:

Incorrect or invalid information have to be deleted after investigation and within 30 days.

6. Not updating of outdated negative account:

Seven years old negatives and 10 years old bankruptcies may not be reported to the credit bureau.

7. Limited access to your file:

In case you want to provide your information only to few. The FCRA defines who can have valid access to your file namely the creditor, employer, insurer, and businesses dealing with you or landlords.

8. Right to give consent before employer pulls file:

Unless there is a written permission your CRA cannot provide your information to your employer or a potential employer.

9. Limiting the pre-screened offers that you receive:

The pre-screened offers must leave their toll-free for you to call and opt out of their contact. You can use this number as well for the purpose 1-888-567-8688

10. Asking for damage control from violators:

Any violation of FCRA from any agency, you can sue them in the state or the federal court.

It can Make as well as Break You

There is a wrong belief in the minds of people that stock market is a machine by which loads and loads of money can be earned in fraction of seconds. People are actually eking out livings from the stock market. Investors today who have already gained lots of advantages from blue chips look smug and complacent. First time investors often wait for the day when they will also become rich like their counterparts and the new entrants are in a hurry to make it a big someday in the world of share market.

Every tom dick and Harry is aware of the market conditions today. Everyone seems to be making money. People often think if he can do it why not me. If Sam can make out thousands by just investing fifty thousand then there is nothing difficult for me. I will invest one lakh. This is the mind set of new entrants in this stock market business.

This is like beginners buy a book but he forgets to read the disclaimer. They listen to the tips but few tips tip the scale. Technical has nothing to do with engineering, polytechnic or even technology. This is movement in the market and everyone becomes an expert.

Then comes the real fun, all these technical aspects go for a toss. Market never had any tops and now they wont have any bottoms too. Each days of the week starts to be as troubled Monday or black Tuesday or woeful Wednesday. This is a den of Stock Market.

It’s nothing but like a pied piper luring the children by the magic flute. Whose fault is it? Share markets? Or yours? Ask yourself. The stock market is not a business proposition; it is a long term growth strategy. It is not a gambling den, but participation in economy of the country. This is not a place where you can double your money in a minute. Keep doubling your money in the next minute and multiplying it in subsequent hours, days and months. Does loads of research, strategies, have patience, perseverance, equanimity of mind and skill. The day you are able to achieve this that day you will the boss of share market.

Sunday, November 16, 2008

Yet Another Collapse On the Horizon

The financial crisis has already tumbled the stock market badly and now it is the time to watch the biggest financial crisis of the year, the collapse on the horizon - this time, the credit card industry. The question is very common today that Is Credit Card Debt Next Big Economic Crisis? The answer might be with you or me and any other individual of the United States. The problems of Credit Card Debt is already affecting some consumer's finances and is the reason for growing talk of a possible credit card bailout. That bailout wouldn't be for the card companies, but rather for card holders.

Federal Regulators are allowing lenders to reduce by as much as 40 percent the amount of credit card debt owed by deeply indebted consumers in a special program. As the economic crisis has deepened and consumers increasingly are defaulting on their credit card debts, write-offs on the loans have mounted for banks and other lenders. The unusual joint request from the Financial Services Roundtable and the Consumer Federation of America highlighted the urgency of the situation that consumers with strong credit records - defaulting at high levels on their credit cards, while banks battered by the credit crisis bleed tens of billions in red ink from the losses.

The Federal Reserve reported recently that consumer credit — basically everything we all owe money on except our houses — rose more than 7 percent last month to $2.5-trillion worth of revolving debt. It’s just like what mortgage lenders were doing before the bust. I personally believe that this could be the next shoe that drops in the credit card market, or in the credit markets in general. Just as homeowners suddenly couldn't pay their mortgages, sending them into foreclosure, credit card holders in a bad economy are struggling to pay their credit card bills. And that could send them into default.

Since many people use credit cards and credit accounts as their source(s) of funding their shortfalls — the average credit card balance alone in the U.S. has recently been reported to be $8,000 per person, it is much higher for many, Personal financial responsibility is sorely lacking. Credit Card companies, on the other hand, will sometimes raise the interest rate on a person’s card simply because that person was late in making a payment on some other debt instrument. Fees can be similarly changed. Credit card companies also engage in a variety of other practices that most of us would agree are somewhat “shady.”

There are already signs of problems. Credit card companies are issuing fewer cards, raising interest rates and lowering credit limits, which can hurt your credit score.

"The best thing people can do is, if at all possible, stop using their credit cards and start paying down the balances, said Kristen Garrett of Advantage Credit Counseling."

Consumer groups are now calling for a bailout of credit card customers. Proposals would change the law, making it easier for credit card companies to reduce the debt of anyone close to bankruptcy. Unlike the Wall Street bailout, the proposed credit card bailout would not require tax dollars. The thinking is that if a credit card company truly believes you're going to file for bankruptcy it would rather collect some money over time, then none at all.

Nearly all the biggest credit card banks have agreed to a temporary pilot program in which lenders would forgive as much as 40 percent of the amount consumers owe, allowing them to pay back the remainder over time, they said. The amount of debt to be forgiven would be determined case by case, depending on the borrower's financial condition; those receiving close to the maximum forgiveness level would be nearing a personal bankruptcy filing.

The most important thing right now is to strike a balance between the lender and the consumer because Americans now are weighed down by around $900 billion in credit card debt, according to Federal Reserve figures.

Thursday, November 13, 2008

Meet the Scam Specialist - Kevin Trudeau

When most people think about Kevin Trudeau, they think scam artist. Well, he has released a new book called Debt Cures. I expect this one to be just as controversial as his previous 'cures' books. I don't believe him and i will advice you the same. He says he can help you cure your debt problems. Many of us are in debt or know someone who is so we are all ears when we hear something about getting us out of debt. But can you trust anything from Kevin Trudeau anymore?

Knowing all this, why would anyone even consider buying a book on how to get out of debt from a former scammer? Is this just another one of his scams? If this book can give me just one tip to help lower my interest rate or waive a late fee or over the credit limit fee then it will be worth it. But i was so very wrong.

As far as the free money that Kevin Trudeau talks about so much in the infomercial, I will still be skeptical about that one. Why would the government give me free money to pay my bills? They do give money to people that are going to use it to help other people - teaching literacy, starting businesses, etc. But not giving away free grant money just so you can make your credit card payments for stuff you probably should not have bought in the first place.

In the last commercial, he promises to help you reduce your credit card payments, lower your interest rates, get you access to some free government money, help you avoid bankruptcy, and eliminate some of your debts. How does that sound? Would you be interested?

Seeing as more and more people are having debt and credit problems lately, and the banks and credit card companies are raising interest rates on us all the time for no good reason, this book should appeal to millions of people. I should know, I'm one of them. I bought Debt Cures back in the end of 2007.

I want to get out of debt just like most people. I know I don't like having to worry about having enough money each month to pay all my bills, especially my credit card bills. I don't want my credit score to go down because I made one late payment after 24 or 36 on time credit card payments.

Kevin Trudeau hits on all of our fears about debt and promises to give us all the answers we need inside his Debt Cures book. The book does have some useful information about credit and debt. The convenience of having it all here compiled in one book will save you time and energy searching for it all over the internet or at your local library.

The good thing about Debt Cures, or any other personal finance book is that you can easily compare the costs versus the benefits of spending $30 or $40 on a book like this.

The average American has over $6,000 in credit card debt. At a minimum payment of 2%, or $300 a month, you could save hundreds each year in lower interest charges and late fees and other fees the credit card companies like to add on to your bill.

If you're on the fence about buying this book because of Trudeau reputation, then again, I would recommend not buying it directly from him. Having read the book, there is not much in it that would cause you to worry about getting into any legal trouble by applying some of his debt reduction methods. He is not the first to write about them.

If you want to get out of debt, like millions of other people, Kevin Trudeau has delivered a worthwhile book to provide you with some much needed help.
Check out an interesting video about Kevin Trudeau and his book: I m sure you will like it.

I would really like to thank my friend Adam Smith from squidoo. Without his contribution this article wouldnt have been so successful.

Before you sign out just have a look here: It is now more easier for you to apply for credit cards. Credit card marketplace that offers online credit card applications for low interest, balance transfer, rewards, gas cards and more.

Monday, November 10, 2008

Do You Want To Eliminate Your PMI ?

Let us quickly understand first what is PMI? PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. This insurance protection is provided by private mortgage-insurance companies. It enables lenders to accept lower down payments than they would normally accept. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a home without a 20% down payment.

The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.

If you didn’t put down 20 percent in cash on your home, you’re probably paying private mortgage insurance. Now its upto you weather you want to cancel it or regain it. The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years before you may apply to remove it.

First start contacting your lenders. Ask if the lender has specific steps that must be followed when canceling PMI. Typically, you’ll need to jump through several hoops before they let you drop it. You’ll need to have your home appraised to make sure you’ve reached the magic 20 percent in equity. Expect to pay anywhere from $300 on up for that appraisal.

If you’ve built up the necessary equity, you’ll need to send your lender a letter formally requesting that they drop PMI, and reduce your monthly payment. A new law on the books requires lenders to automatically cancel your PMI once you’ve reached 22 percent equity based on your original home loan and sales price. Lenders typically make the process of dropping PMI more cumbersome than it needs to be. Just be tenacious, and keep a copy of all correspondence. Sooner or later, your persistence will pay off, and you’ll be able to start using your PMI savings to pre-pay your mortgage, or invest for your retirement.

Check out what our friend wants to tell you regarding PMI :

To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of canceling the PMI on your loan is to refinance and to get a new loan without PMI.

Friday, November 7, 2008

Insure Your Best Friends - Your Pets

Anyone who owns a pet is aware of how much they can enrich your life. They sometimes cheer you up like nothing else can and help chase the blues away. However, the fact of the matter is that pets, like human beings, do get bruised, hurt and injured. If you can't afford to get them treated, watching them suffer will break your heart. So, if you want to spare yourself and your pet some pain and anguish, it's advisable to invest in an insurance policy.

The question has become very common these days, "Is pet insurance worth it?" If you're not that well off financially, investing in a low cost policy may absolve you from dealing with hefty vet bills and emergency procedure expenses. If you're affluent it doesn't matter either way. I know many people who feel that investing in pet insurance plans is totally unnecessary and wasteful as their pet may remain fit and fine throughout his lifetime and you'll wind up paying premiums for no reason. But this is being very optimistic. There's no telling when your pet may become the victim of a disease or meet with an accident.

Let me explain all of you why this pet insurance so important?

Here are some very important reasons that i have collected from an Insurance Agent:

Injury or Disease

As we know that pets love to play outdoors and if your pet is outdoors most of the time, the odds of it meeting with an accident are greater. Who knows, it may swallow something it's not supposed to or may stumble and fall. If your pet decides to be adventurous and saunter off by itself, it also runs the risk of getting run down by a passing vehicle. Besides, there are certain conditions like arthritis and cancer which are prevalent in certain breeds. The cost for treating such conditions can be outrageous. Your best bet may be to invest in a basic insurance plan that covers these treatments.

Routine Check-Ups

Your pet has to be taken to a vet for wellness checks at least twice a year. Infact i would suggest that this has to be done throughout your pet's lifetime. Even if you can afford it at the moment, there's no way of knowing what the future holds. A loss of employment or any other unforeseen conditions can change the equation. So, it's best to invest in a cheap policy to take care of routine checks and minor treatments.

Liability Suits of your Pets

Many times it happens that your pet maybe very friendly with you, but they are not the same with other humans or pets, if your pet suddenly flies off the handle and harms another individual or pet, you may have to bear the expenses for their treatment and can even get threatened with liability suits. So, the most feasible way to deal with these expenses would be to get an insurance policy.

You might have Multiple Pets

If you own more than a single pet, you'll have to take care of pet care expenses for all your pets. This can send your household budget flying through the roof. There are many insurance companies that offer discount pet insurance plans for all your pets. If you own multiple pets it may be wise to invest in one of these.

Getting the cheapest pet insurance there is may not be the best plan in the world. There should be a trade off between cost and coverage. If you're still asking, "Should I get pet insurance?" Take a look at your pet and your bank balance and decide whether it is worth it or not.

Wednesday, November 5, 2008

Easy Steps for Buying a Home

A home of one’s own is like a dream come true. Buying a home could be a good investment if the market is on the rise. It gives you many benefits other than being an owner. There is reduction in income tax payments through tax deductions on mortgage payments and property taxes and along with that you get a steady source of cash flow with the growing equity in your home, not to mention the freedom and independence of your own home.

Buying a home should be planned carefully and this involves a step by step procedure.

Personal review: The first step is to determine your financial position and fix a budget accordingly. Your current income, monthly expenses, credit report, down payment that you are ready to put along with the closing costs will help you to do this calculation.

Finding a lender: This is one of the most important factors that should be considered. The lender is the best guide in determining things like how much mortgage you may get and give a pre-approval for the mortgage. Make sure to work with an honest and professional lender to avoid complications during the entire loan term. You may have to shop for a while for lenders, comparing costs and interest rates, and negotiating for a better offer.

Get a mortgage pre-approval: Only a mortgage pre-approval will give you an estimate of how much you may afford. A seller will always want to see a buyer who is financially ready for the purchase and in such cases the pre-approval gives you an added advantage.

Start searching for a home: It is always wise to take the help of an experienced real estate agent while looking for a home. The price of the house is essential for you to consider. Apart from this, the location of the house, the kind of house (new/ resale/ build new), its probable resale value are some of the other factors to be considered. Discuss with your real estate agent and make an offer to the seller. Remember to get a home inspection which tells you about the condition of the property.

Get the loan underway: As soon as the seller agrees to your offer, write a contract and start following through the loan. Contact your lender and ask him to start processing the loan as early as possible. If you have been pre-approved, most of the work is done and the loan will be processed quickly.

Get prepared for Closing: This is the final step in buying a home. On the closing date, the ownership of the house will be officially transferred to you. There would be several other up-front costs involved in the process which you have to pay at closing.

Find Below what our Financial Adviser, Mrs Martin wants to say regarding buying a home:

You should never hesitate to take necessary help from the real estate agent or your lender. If required you may also approach an attorney and consult him. You will feel comfortable about the transaction if you understand every step involved in the process as you are making a long term commitment and spending a major amount of money.

Tuesday, November 4, 2008

Understand Your Home Equity Line of Credit

Let us quickly understand this broad term, "home equity line of credit" first. A home equity line of credit amounts to an arrangement where a borrower's home acts as protection/collateral for a loan. This means that your home becomes a source of credit to finance home improvement projects, education, retirement programs, and other big ticket items. In maximum number of cases your bank or lending institution will allow you to draw upon a fixed amount of equity. This number is always based on a percentage of the appraised value of your property minus the rest of the money you owe on your mortgage.

Let me explain you this with an example. For instance, let's say that your home is worth around $200,000, and your equity line of credit allows you to access 50 percent of that value. Does that mean you can take out $100,000 worth of credit against your home? Not quite -- you have to subtract out how much you have left to pay on your house.

Always keep in mind that once the period during which you can draw your equity closes, you have to pay back the loan. It is a compulsion. This can happen all at once or over a fixed amount of time. Understand the conditions properly by which you need to repay the money before you start taking out an equity line, since the arrangement can have long-term consequences for your family's financial plan.

Now you will ask me is there any danger using the home equity as a kind of credit card? Absolutely -- if you fail to pay back the balance you owe plus your interest, you can get into creditor trouble and potentially lose your house or at least go into foreclosure. Trust me you might be able to get a better rate on your equity line of credit than you could by applying for standard consumer credit cards.

Check out what wants to air about home equity line of credit:

I would like to conclude by advising you that always figure out various financing options before you institute paperwork for your equity line of credit, and take into account whether or not you might be moving in the next few years, since that may impact your rates and potential refinancing options.

Monday, November 3, 2008

Whom to Blame for the Credit Crunch?

Credit Crunch has become the hottest topic today of all times. Most of the country is beginning to feel the presence of the housing crunch and credit crunch right now. I don't think that there is a single entity to be blamed for this economy massacre. So who can we blame for the credit crunch? Maybe the brokers, the government, our banks, the borrowers, the market condition which we call these days the sub-prime market or even the wall street and last but not the lease our ridiculous expectations. Let me discuss this in details so that it will be easier for everybody to understand.

Can we blame the Banks?

As we all know the 1st thing that comes to our mind when we are thinking of banks are the home loans situations because they are ultimately the one who has to come up with the money that the borrower will use to purchase a home. I don't know weather all of you know this or not that out of total home loans given half of them are given directly from banks and the other half involves the middleman or the brokers. Many banks have been working more closely with borrowers in recent years, but many loans are still outsourced to the brokers.

Can we blame the Government?

People believe that the government does not do enough when it comes to policing the industry while others say that the government does more than enough and should hold no blame. Different people have different views on this matter. What we do know is the government is partially responsible no matter which side of the debate you take.

Can we blame the Brokers?

Brokers are just dealers in the better suit if we compare the drug market to the real estate market. Everything is almost common as in they find customers, they find loans, and they make a commission off of the sale paid for by the lender. Mortgage brokers are involved in half of the home loans distribution as we discussed above making sure that the borrower has the money to pay the loan back, and they must also make sure that the property holds its value in the event that a foreclosure occurs or a loan is defaulted on.

Can we blame the Wall Street?

I personally feel that, Wall Street firms are responsible for purchasing home loans from banks. Then they bundle these loans into packages for other investments depending on the level of risk involved in the leans.

Can we blame the Borrowers?

These people are the final buyers and they are the people who are actually using the home loans. Responsible borrowers would match future payments to future income, but irresponsible one will never do this. The demand for borrowers has never been as high as in the most recent years, so lenders are coming up with all kinds of new ways to entice borrowers into taking up loans even when they cannot afford them.

Can we blame the Sub-Prime Mortgage Markets?

Sub prime mortgages are helping many of us. Sub-prime mortgages are making it easier for people to get the homes that they want even when they cannot afford them, even if they do not have the financial stability to keep up with the payments. Sub prime mortgage loans definitely should share a large portion of the blame, but who is to blame for them? No one has the answer yet.