Credit Card Application Can Be Done Online Mortgage Brokers Can Save You A Fortune Investing In Bonds Versus Forex 1 Mortgage Refinance How
We find ourselves at a time when we can compare credit cards online and go for the one that works best for us without leaving the house. Imagine the decision making that can be done in the comfort of your own home. In just one click of your mouse, you can already tour the choices of credit card service providers then go for the card that is most appropriate for you, your lifestyle and your budget.
The internet is doing wonders to our way of life. This is the only thing you need in order for you to be updated on the various credit card service providers out there. Yes, your mailbox is full of those brochures but at least when you are sitting comfortably in your chair and in front of your computer, you can shift from one homepage to the next. All this information can be obtained just by perusing through site after site of the credit card service providers that are doing their best to lure you in and become a client.
Just remember to go for a credit card provider that has a comprehensive service and teaches you everything you need to know about the credit card as well as the other credit cards out there. There are terms such as bad credit, rebate, rewards, APR, cash back cards, credit business cards and more. A good credit card provider explains to the potential client the meaning of these terms and their relation to the client’s account.
There are so many reasons for one to apply credit cards on the internet. One is its accessibility and convenience. BY just typing three keywords (Credit card offers), you will be able to see page after page of credit card service providers that you would have not known if you just relied on the stuff you get in your mail.
The advantage of applying online is that the choices are right in front of you. However, the deciding factor must be done whenever you feel that you have already seen what you need and have made your final choice. If you feel that a particular credit card service provider can give you what you need at the lowest rate possible, then that is your choice. The procedure is so easy.
Go to the site of the credit card service provider. The terms and regulations are written there in fine print. It helps to print out the information so that you are holding it in your hands. If you also feel that you will need these documents in the future, it’s important that you have copies of your own.
All that is left for you to do is to fill out the information boxes staring right across you. Be truthful and be careful. Careful in the sense that you have to be positive this homepage is not a way for any hacker to get into your personal information.
A sign that the credit card provider is legal is when it sends you paperwork confirming your application days after you filled the questionnaire online. Compare what they have to what you have printed.
The last step in the online credit card application is to wait for the response of the credit card provider. The site informs you how many days it takes.
A mortgage broker is one of several sources that homebuyers can use to obtain a mortgage.
Mortgage brokers work with multiple lenders, also known as wholesalers, to offer loan products to homebuyers.
When you work with a mortgage broker, he does the initial steps of the loan process: completing the application, obtaining your credit report, conducting the appraisal, verifying your employment, etc.
After the broker completes these steps the lender conducts the underwriting process in which your risk as a borrower is determined.
When the loan closes, you will no longer work with the mortgage broker. Instead, you work with the lender.
These wholesale lenders quote brokers a wholesale price for the loan. The mortgage broker then decides the price to offer to you.
The price you are quoted by the mortgage broker often includes some type of markup, usually in the form of points. Each point is one percent of the total loan amount.
So if the mortgage broker charges 1 point on a $100,000 loan, he received $1,000. Keep in mind that the number of points the broker charges is in addition to interest charged by the loan provider.
There really is no systematic way for mortgage brokers to set their markups.
For the most part, you can expect the broker to set the markup as high as they feel they can get away with.
This is why it is vital for borrowers to negotiate the price of their loan as much as possible. Go into the process expecting to negotiate because often the markup a mortgage broker includes isn’t the absolute lowest he or she will accept.
The benefits to using a mortgage brokers are numerous.
You will likely get a much better deal when you work with a broker than you would going straight to the lender, even though mortgage brokers are known for marking up mortgages.
Since mortgages brokers have the luxury of working with several different lenders, they are in a position to give you the lowest mortgage offered.
You might also consider working with an upfront mortgage broker, a variation on the traditional mortgage broker.
An upfront mortgage broker conducts business in a slightly different, and perhaps more ethical manner.
At your request, this kind of mortgage broker discloses, in writing, the wholesale value of the loan as well as his or her markup included in the loan.
There are no secrets when you work with an upfront mortgage brokers – you know exactly what you are paying and how much goes to each party in the process.
Finding an upfront mortgage broker in your area can be done by visiting the Upfront Mortgage Brokers Association’s website found at https://www.coolwebtips.com this website you can locate and contact upfront mortgage brokers in your area.
When you use a mortgage broker to shop for your loan, it is a good idea to shop around with several other mortgage brokers to get a feel for the rates that are being offered.
This is the surest way to receive the best deal on a mortgage.
Investing in bonds and the savings bank is safe as we will see. But if you are adventurous you can make a great deal from Forex.
The article is written primarily for the smaller investor who needs high yield, the man who has between, let us say, $5,000 and $100,000. If the $5,000 investor secures a return on his money not of 3%, or $150 per year, but 12% $600 per year his benefit will be material, not nominal.
If the $100,000 investor receives not $3,000 but $12,000 the difference is great enough to mean complete financial independence.
While theoretically the large investor, the one with $1,000,000 and up, does not need to consider such investments, because his $1,000,000 in the savings bank yields him $30,000 a year, or his investment in tax free bonds at 4% yields him $40,000 a year not subject to income tax, strangely enough this is the type of investor who invests the most heavily in the types of opportunities examined in this book. Some of the very largest aggregations of capital in the world do little other than invest in mortgages at discounts, foreign loans, real estate syndications and investment partnerships.
Strange as it may seem, the person least satisfied with a low yield is often the very wealthy person. If such people invest in the opportunities examined in this book, these opportunities deserve at least a quick survey by the smaller investor. There may very well be a good reason behind the saying that the rich get richer and the poor get poorer. The rich may know how to invest more intelligently with more information available to them.
In a stable economy we might consider high rate investments as desirable but not necessary. But we are not in a stable economy. We are in an economy in which every year our fund of savings is worth less. Dollars in themselves mean little. They have meaning only insofar as they can purchase goods and services. Let us see how this purchasing power of the dollar fared since the end of the war.
With 1947-1949 equal to 100%, consumer prices rose to 102.8% in 1950. If we consider that at this point in history 1950 we have $102 in the savings bank at 3% interest we can get a strikingly clear idea of savings in a period of inflation.
By 1960 in 10 years consumer prices had risen to 126.5%.
Now if the $102 in the bank in 1950 drew 3% interest, after a hypothetical tax of 33%, the owner of the $102 savings account would find by 1960 his account had grown to $122. His interest didn’t even enable him to keep up with inflation. He was actually poorer in 1960 than he was in 1950.
If a person were in the 50% tax bracket 4% compounded annually would amount to the same thing. He would have $122 in 1960, the same amount that the person in the 33% bracket would have with his return of 3%.
Although Forex is much more risky you stand to gain a lot more, but remember that
You should not risk more than you can afford to lose.
1% Mortgage Refinance loans, you’ve probably seen 100 different advertisements, but how is it possible? There is really only one big secret to 1% mortgages: 1% minimum payments are below the interest payable on the loan. Once we’ve addressed this feature, most of the other facets of 1% mortgages are relatively logical. 1% mortgages, which now come in dozens of varieties with start rates from below 1% (some even starting at 0% for a few months after refinance) up to 4% or more, offer astonishingly low payments. Some of them offer fixed rates for 30 or even 40 years, some of them are adjustable from the day you take them out, all of these are basically “1% mortgages” and are extremely popular amongst homeowners today. 1% mortgages and their offspring are being used for debt consolidation, cash flow management, investments, and for tax purposes, and they are being used a lot.
A full 40% of home loans originated in 2005 and 2006 are estimated to be from the 1% mortgage family, with multiple payment options. By its proponents, the success of the 1% mortgage has been hailed as a new era of affordability and flexibility, of an extremely sharp financial tool once available only to the very rich now available to every family in the country. Its opponents tend to think that the 1% mortgage is a bit too sharp for the average homeowner to handle, they fear “Average Joes” could conceivably cut themselves. Despite their division, one thing is certain, the popularity of the 1% mortgage is driven by the relentless pursuit of the American dream. There are more homeowners in the United States today than in any other period in history, and many of those who own homes have only been able to accomplish home ownership, which was once a lifelong achievement, in their early 20’s and 30’s, largely because of the extended availability of these 1% mortgages to normal borrowers.
How much less expensive is a 1% mortgage payment option versus the comparable 30 Year Fixed traditional principal and interest payment?
For a $500,000.00 Mortgage:
1% Minimum Payment: $1200.00
Normal Loan Payment: $3000.00
Cash Flow / Savings: $1800.00
It’s easy to see why the 1% mortgage refinance is so heavily marketed as a way to cut your mortgage payment in half. In the above example, the 1% mortgage minimum payment option is 60% less than a typical, traditional principal & interest loan payment. 1% mortgage minimum payments are usually 50% lower than even the highly lauded Interest Only payment mortgages, and most loans in the 1% mortgage family include the ability to pay more than just 1% if need be.
So How Does it Work?
In fact, 1% mortgages are more than just the 1% start rate. They have a fully indexed rate as well, which is the true amount of interest due each month. When making a 1% mortgage minimum payment, the borrower is not paying all of the interest due, which is seen by some as a good thing and some as a bad thing. Let’s examine some of the commonly perceived benefits and caveats of 1% mortgages:
Commonly Perceived Benefits of the 1% Mortgage Family:
1. Extremely Low Monthly Minimum Payment: As we’ve seen in our example, the minimum payment option is less than half of the typical traditional mortgage payment.
2. Flexibility to Control Your Own Money: Unlike a traditional mortgage, which requires a payment to principal each month, 1% mortgages allow borrowers to take the power into their own hands to make principal payments when they want to, e.g after a bonus or a particularly good year.
3. Separate Cash Flow from Equity: While many personal finance pundits laud the benefits of building home equity, the reality is that investing home equity yields a 0% return on investment on a month to month basis. In the above example, paying the traditional principal and interest payment forces the borrower to invest $1800 more each month in their home, money which is locked up entirely in the equity of the home. Home Equity is illiquid, meaning all this money locked in equity cannot be accessed unless the home is sold or refinanced. The bank won’t cut a check each month for the borrower’s home equity in a traditional loan. With a 1% mortgage minimum payment, that $1800 difference in payments is money in the borrower’s pocket, to invest or spend at their discretion. By deferring interest using a 1% mortgage, the borrower has full access to money that normally would be locked up until they sold the property. That $1800 per month adds up to over $100,000.00 in cash over 5 years on a 1% mortgage, and it’s available every time your paycheck does not get used up paying a huge traditional mortgage payment each month.
4. Maximize Debt Consolidation: Using a 1% mortgage refinance to pay off all of your other creditors, such as credit card companies and high interest rate lenders, means that you can save even more money than with a 1% mortgage refinance alone. Since you aren’t throwing high interest money at your creditors each month, the cash which you save by making the 1% mortgage payment actually goes into your pocket, your savings, your investments, or wherever you need it most. That’s ultimate control. Let’s say that in our $500,000 1% mortgage example above, we rolled in $30,000 of credit card and other high interest debt that have a monthly minimum payment requirement of $1,000. By using a 1% mortgage refinance to pay off those debts, total monthly savings using the earlier example would be over $2800 per month, $1000 from the debt consolidation plus $1800 from the difference between the traditional loan payment at 6% and the 1% mortgage minimum payment.
5. Turn Equity into a Tax Deduction: First, the 1% mortgage payment is 100% interest and therefore should be 100% tax deductible in most cases. Secondly, One of the most attractive benefits of 1% mortgages is the additional tax deduction available on deferred interest. What this means is that borrowers can realize a tax deduction on interest they did not have to lay out the cash for, and choose the time at which this deduction is realized, which can be a huge savings upon liquidity or refinance. For real estate investors, this is a huge advantage as it can often wash out the capital gains consequences of selling a property. Disclaimer: We do not dispense tax advice, and you should consider consulting a CPA.
6. Easy Qualification: Normally, to qualify for low payment mortgages, borrowers are required to have exceptional credit. However, 1% mortgage refinance loans are routinely available to borrowers with credit scores as low as 620, and if they are borrowing less than 80% of the value of their home, scores can even be in the 500s provided there are no late mortgage payments reported on their credit file. The borrower’s income can be stated, and sometimes no income or employment documentation is required at all.
7. Enhanced Protection from Foreclosure: Because the minimum payment option is so low, the cash savings each month so high, and the loan is so flexible, the 1% mortgage family offers homeowners a low minimum payment option which they have a much higher likelihood of paying should they suffer an interruption of income or become disabled.
8. Biweekly Payments: A popular way to maximize the benefits of the 1% mortgage refinance is to elect to make biweekly payments (which are available on select 1% mortgages). This optimizes the loan to coincide with most borrower’s payment cycles and reduces any possible negative effects of deferring interest.
Commonly Perceived Caveats of the 1% Mortgage Family:
1. Artificially Low Payments: Because the minimum payments are so low compared to traditional mortgages, many pundits fear that people who would normally not qualify for home ownership can now own a home. The fear is that new or “low income” homeowners could “get in over their heads” by buying more house than they can truly afford. Ultimately, it is up to the borrower to decide how much they can afford.
2. Deferred Interest: Often referred to as negative amortization, this concern is commonly cited by journalists as a “negative” because the loan balance may increase over time if the minimum payment is always selected. However, this perspective does ignore the advantages of dramatically increased cash flow in the borrower’s pocket each month and the tax benefits of deferring interest. Of course, the borrower can choose for themselves whether they want to spend their money paying interest to the bank or if they would rather put the difference into their own pockets.
3. Depreciation: If the value of the borrower’s home falls dramatically, and other factors force the borrower to sell the home while the value is low, the borrower may wind up owing more than the home is worth. This is a valid risk over short periods of time for all types of mortgages, not just 1% mortgages. Even a traditional principal and interest mortgage does not pay off enough principal over the first 5 years of its life to offset a dramatic short term decline in home values. The risk of property values declining is a real risk of owning property, period. However, history tells us that residential real estate appreciates consistently over any given ten year period in the past 50 years.
4. Too Easy To Qualify: This may not seem to be a disadvantage to most borrowers looking to purchase or refinance a home, but there are those who believe that borrowers should be forced to document significantly more income and assets to qualify for these types of loans. A lot of this sentiment is an outgrowth of antiquated conceptions of 1% mortgages as a “Rich Man’s Mortgage”, which used to require significant net worth to obtain, and some of it is attributable to equally antiquated “one size fits all” notions about mortgages. Your perspective will likely depend on whether or not you are in a position to provide extensive documentation of your income and assets in support of your loan application.
Many of the criticisms of 1% mortgages revolve around the adjustable rate variety of these mortgages, which like all adjustable rate mortgages go up and down with the rest of the market. However, in most 1% mortgages, the minimum payment stays fixed and can go up or down only 7.5% per year. So if your payment in Year 1 is $1000.00 , in Year 2 it can go no higher than $1075.00. Because the rate on the loan can change more or less than the minimum payment, which is extremely low, the loan can result in the deferral of interest if only the minimum payment is made. Many of the amortization issues which are seen by critics of 1% Mortgages as their key detractor have been recently resolved by the introduction of fixed rate minimum payment loans to the 1% mortgage family.
Fixed rate 1% mortgage variations, the latest additions to the 1% mortgage family, have fixed interest rates from 3 to 30 years or more. The minimum payment option is generally available for the first 5, 10, 15 or in some cases 20 years of the mortgage, at which point the 1% mortgage payment recasts or readjusts to the interest only payment or the full principal & interest payment. During the fixed period, the loan payment and interest rates of fixed 1% mortgages are utterly predictable and can be defined down to the penny. Many borrowers who would prefer a fixed rate can benefit significantly from the 30 year fixed 1% mortgage, which actually carries a minimum payment of 1.95% and a fixed rates in the 6% to 7% range for 30 years.
While there are those in the journalism community who believe that 1% mortgages have too much power for your average homeowner, ultimately the decision is in the homeowner’s hands. Make a high payment to the bank each month, or put the money in their pockets. And homeowners seem evenly divided, as refinances into loans from the 1% mortgage category are projected to represent over 50% of all refinances in 2007. Traditional mortgages are not a one size fits all solution, and neither are 1% mortgages, but with low minimum payment options, excellent debt consolidation capabilities, significant cash flow and tax advantages made possible by deferring interest, and flexibility to control your finances or insulate yourself from interruptions in income or disability, 1% mortgages continue to post significant growth across the country. Whether or not a 1% mortgage refinance is right for you should be determined by performing a detailed analysis of your personal financial situation with a home loan professional who has extensive experience with 1% mortgage products. As always, we welcome your calls and emails..
|bank, broker, brokers, card, cards, credit, economy, home, information, interest, investor, loan, minimum, mortgage, mortgages, payment, person, process, provider, providers, savings, service, tax, upfront, wealth building, work, year|