Are There Ways to Reduce Mortgage Fees?

Most of us can’t afford to pay for a new house in cash. So, we borrow a large amount in order to purchase that beautiful house we’ve been eyeing. This loan is known as mortgage, and the collateral here is the property bought. In case we fall behind mortgage payments, there’s a huge possibility that we will lose our home. When our home is foreclosed, it’s not just about losing a piece of property. It’s also about losing a place that we dearly love.

It is, therefore, very important to be a responsible homeowner, and this responsibility involves paying the mortgage on time. Apart from ensuring that you’re making timely payments, there are actually a number of ways that you can reduce mortgage fees. Here are some ideas that you should seriously consider.

1. Opt for shorter loan terms.

In general, when the loan term is longer, a large amount of your money goes to paying the interest. So, a shorter loan term will allow you to save money. In this case, even if your monthly fees are higher, the total cost of your loan is reduced. Furthermore, you’ll also be able to finish paying your mortgage earlier.

2. Overpay mortgage when possible.

If you get a hefty bonus, don’t go shopping immediately. Instead, use the extra income to make extra payments so that you’re overall loan balance is reduced. Remember that mortgage interest rates are normally calculated on a daily basis. When your total balance is reduced, this means that your interest will also be lower. Another benefit of overpaying is that you also avoid being penalized for late payments. Furthermore, when you overpay your mortgage, you will still be able to access your money in case you need it.

3. Pay mortgage fees on time to avoid costly penalties.

Being a good payer has so many benefits. Obviously, if you pay your fees on time, you avoid getting all sorts of penalties. In case you miss 3 successive mortgage payment deadlines, you risk foreclosure. When this happens, you should talk to your lender about your financial problems so that he would be able to help you out. But keep in mind that your lender still has the right to impose late fees or penalties, and other finance charges, as well as legal fees.

4. Always keep in touch with your lender.

Yes, lenders may have the power to take your home away; however, these people also have the power to help you deal with your mortgage payments. By ensuring that you and your lender are regularly communicating, you avoid any ill feelings and miscommunications that could create more problems for you. In addition, you could renegotiate mortgage terms with your lender or ask him for advice about what’s the best option considering your current financial situation.

5. Look into government programs to reduce mortgage payments.

There are certain government programs that benefit those who are having trouble with their mortgage payments. An example is the program “Making Home Affordable Plan.” Get in touch with your lender and inquire if he knows of any government programs. Don’t forget to ask if you’re qualified or not.

Claire Campbell is a freelance blogger who also experienced some financial challenges when she recently bought her new house. She writes about real estate issues, home improvement, and she also blogs about new homes Airway Heights Washington.

The Ultimate Guide To Understanding Your Credit Score

Most of us once we have joined the adult world will find that we encounter the idea of a credit score at some time or other. Often this is in the form of a credit check that we will get when we try to take out a loan or even when we try to set up bills – sometimes bills as run-of-the-mill as our electricity or our mobile phone contract these days require a credit check before we’re able to go ahead with them.

Credit Scores

Many of us will just ignore it when this happens – until, that is, we find that our credit score is rejected and we can’t take out the contract or the deal that we wanted to which then prevents us from going through with our plans. Of course this is something of a problem and this can then lead you somewhat more interested in finding out what precisely is meant by a credit score and how you can go about ensuring yours is good. Here we will look in more detail at what a credit score means for you, what it means for the bank and what factors are influencing it for you.

What Credit Scores do for Banks and Lenders

To understand your credit score it’s important to think of it from the perspective of the banks. After all your credit score doesn’t exist to make life easier for you – it exits to make things easier for them and thus this is what dictates their mechanisms.

Basically when a bank or lender lends you money, or when you set up a contract or a bill with a company, that company or lender is going to be investing in you. They are giving you money or paying the up-front investment because they believe you are going to have the money you need to pay them back with interest.

As such then it’s important for the banks and other companies to choose carefully when they decide who they are going to lend the money or set up the bills for and as such they have all teamed up with one another to create a rating system for clients. Every time you deal with a financial institution then be it a bank giving you a mortgage or some kind of other loan, you will be rated and that will go towards your ‘credit’ score. Anything that made you a good customer will increase your credit rating, while anything that made you bad for them will damage your credit rating.

As such then this creates a record that a new lender can look at that shows based on past experience how likely you are to be able to pay any money you borrow back.

Using Your Credit Score to Your Advantage

Credit scores are bad news for those of us who have bad ones and who have failed to pay back our loans on time in the past then, but they are good news for those of us who have been goo with money as it allows us to demonstrate that we’re a good bet and to get better rates and interest.

Note however that it can also be a bad thing to lack a credit rating at all which makes you seem inexperienced and which means the banks won’t have anything to go on. Here then it’s worth setting up some kind of loan, even if it’s only a credit card that you can use regularly, because that way you will then be able to get better rates on your future loans that you do really need.

Matt M is an expert financial consultant associated with leading MNC firms. For more information, you can contact him to find the good credit score range in 2012.

Mortgage Mishaps That Home Buyers Usually Commit and How to Avoid Them

Committing mortgage mishaps causes a lot of home buyers to lose exorbitant amount of money each year due to unnecessary fees and interests. In some cases, these mishaps also result to exorbitant debts, repossession, or foreclosure. If you are planning to get a mortgage to finance the property that you have been dreaming about, make sure that you do not fall prey for the mistakes below to avoid losing a fortune.

 

Not getting finances straight

 

Not knowing your financial status prior to applying for a mortgage is a costly mistake. Before you consider house hunting or applying for a mortgage, know how your current financial position is doing in order to achieve the right kind of mortgage. At the most, you need to have your income and expenditure as well as your assets and liabilities accurately assessed. You also need to know how much outstanding debts you have and make sure that you reduce them to improve your financial position and increase your chances of a mortgage approval.

 

Not checking credit history and score

 

Another major mistake that a lot of home buyers commit when they apply for a mortgage is not checking their credit history and scores. Be aware that more than anything else, your credit history and score will determine if you will qualify for a mortgage or not. That is, if there are errors, omissions and negative entries in your credit report, your mortgage application is less likely to get approved.

Before you apply, it is a good idea to obtain a copy of your credit report and address possible issues that can hurt your chances of securing a loan. If your credit is not in good shape or perhaps you do not have any, start working on it by reducing debts or building your credit.

 

Failing to compare lenders

 

Closing the transaction on the first lender you deal with is a major mortgage mistake that could cost you a lot of money. Although there is a possibility that the first lender you see will give you the best offer, it is also rare. Keep in mind that a mortgage is a sophisticated product that comes in comes in different types. It is also a major financial decision that you will have to keep up with for a long time.

 

Depending on factors like your credit score, cash reserves, down payment, the amount of money you need, etc. one lender can offer a lower interest rate or terms than the other. Hence, if you want to make sure that you will be able to secure a mortgage that will give the best value to your money, learn to shop around to get the best rate.

 

Choosing the wrong type of mortgage

 

There are numerous kinds of mortgages, and it can be quite confusing as to which one to get. So to avoid the costly mistake of securing the wrong type of mortgage, it is vital that you understand your financial needs and circumstances as these factors will dictate the kind of mortgage that will work best for you. It will also be a good idea to get expert advice so as to make an informed choice.

 

Failure to get pre-approval for your mortgage

 

Mortgage pre-approval is entirely different from “pre-qualification.” When a lender tells you the possible amount of money you can borrow in accordance to your current income, debt and the amount of down payment you can afford, you are pre-qualified. On the other hand, pre-approval means you have actually applied for a mortgage, submitted the paperwork and have your credit verified. Once everything is in place, the lender will approve the loan with all the details documented in writing.

 

If have not been pre-approved, chances are, lenders will not prioritize your application and realtors will give you limited property choices as opposed to those who are already pre-approved.  

Financial Wise, a UK-based company, employs expert mortgage advisers west lothian folks can speak with to get the best solutions for their mortgage and protection woes. The article above was penned by one of the company’s regular contributors. 

Are Women Worse Than Men When It Comes to Debt?

According to new statistics, couples aren’t exactly opting for ‘honesty is the best policy’ when it comes to their debts: millions of partners are hiding what amounts to £41 billion nationwide of debts from each other via credit cards, overdrafts, and mortgages.

Women claim first prize for the largest sum of debt at £22,500, against £14,200 on average for men, however, men are more likely to cover it up with 1/7 admitting to hiding their debts.

These figures have appeared after it’s become known that women are becoming bankrupt now more than ever before. This heralds a new age of female money mismanagement in the UK after the previous low insolvency figures for women years ago.

Women who are suffering from large sums of debt seem to be in their late twenties or early thirties and have no chance of getting on to the property ladder; nor can they start a pension or put money aside.

According to a separate study, people are less likely to have these money troubles if they live close to their family. It’s thought that this is due to financial and emotional support is close at hand.

So how do you stop going into debt in the first place? Debt is a slippery slope and it’s easy to let it get out of control.

Prevention is the best method, and even though that may sound like common sense, it is often ignored. If you feel yourself getting deeper into loans and other extreme borrowing, there are options available that could help, such as an IVA or a debt consolidation loan.

Create Savings

If you don’t save, you will never have an emergency fiscal cushion to land on if you fall on hard times. Three months of salary, at least, is thought to be the sum you should put aside in an emergency fund. Money attracts money, and if you invest this in a high-interest account, it will increase in value across time, especially as you keep adding in extra funds.

Pay Your Bills On Time

Set yourself up so you are in a position to pay all your bills on time. This will mean budgeting so you have the funds and time-keeping. A great way to deal with this issue is to transfer the value of your monthly bills into a separate account which is set up to direct debits, this way your money goes out on time automatically and it’s out of your current account, so you can’t spend it.

Be Careful With Luxuries

Get rid of all your bad habits: takeaway food, smoking, and alcohol are some great examples. Doing what’s best for your health also works out for your pocket too. Going out partying is not the only way to have fun, and you can save so much money by exploring other ways to enjoy time with your friends.

If you want to buy some new clothes or any other commodity, wait until it hits the sales and snap it up at a reduced price. Leading a less materialist life is exactly how you will minimise your outgoings and stay out of debt trouble.

Starting A Business In Cyprus

If you are thinking about starting a business of your own then you should definitely go ahead and start one in Cyprus. The reason behind this is that Cyprus is now one of the leading countries in the world when it comes to investment and international business company registration.

As part of the European Union, Cyprus, now more than ever has the capacity and the capability to cater to the various needs of businesses. With the great existing infrastructure present in the country, coupled with the less strict laws which are being enforced, Cyprus is the perfect spot for those who want to really get on their way to earning big. The best part is that even if you are a foreigner, Cypriot laws do allow foreign participation up to a full 100%.

Because of the great business and investment climate in the country of Cyprus, many high profile businesses have chosen to invest and start branches in the country. If you are thinking about establishing a business in Cyprus, you will find that most foreign investments in the country are geared more towards the investments and trading sector.

Now, starting a business is definitely no easy task. While signing and accomplishing paperwork may be troublesome, the real task lies in keeping the business up and running most especially during the first few months of its existence.

Here are some tips on how to start your Cyprus business

  • If you can, obtain business training. There are many courses which offer such a thing.
  • Have a good business plan which is realistic and executable given your current circumstances.
  • Understand what your business offers and more importantly, if there is really a feasible market for the business you are putting up.
  • Be aware of your finances and how you will be financing your business in the future.
  • Know the set up of your company, its legal structures and the technicalities involved.
  • Pick out a good location for your business.
  • Set realistic goals which you can achieve and which will motivate you more.

Now, these tips are quite general and can be applied to any kind of business that you want to start up anywhere. If you have already decided to register your business in Cyprus, then you will want to learn about the various steps that are involved in the process.

Here is a rundown of the general process that you will have to undergo for your new Cyprus company

  • Apply for the approval of your business name at the Cyprus Registrar of Companies.
  • After name approval, register the company or partnership.
  • Apply for a business license.
  • Register at the Cypriot tax authorities for corporate or personal income tax.
  • Register for VAT and VIES at the local office.
  • Register for the Social Contributions.

As you can see, there is not much fuss and hassle for the registration of a Cyprus company.

With all the various benefits that come with owning a Cypriot company, it is definitely a wise financial move on your part to be able to own one for yourself. Go ahead and start planning for your Cyprus company today!

Evgenios Erotokritou is a Barrister at law and has broad experience in Cyprus company registration matters, banking, corporate and international tax planning.

7 Financial Practices to Improve Your Financial Health

7 Financial Practices to Improve Your Financial Health

Everyone has their own personal goal for their finances, and each of us desires to improve our financial health. Fortunately, there are 7 great financial practices that you anyone can follow to take care of both of these!

1. Spend Less
Spending less money seems to be the most difficult rule for people to follow. Your main goal should be to know you are making the money you are worth making, but to not spend every dime of that paycheck when it comes in! You can’t get ahead if you still spend more money than you make! You MUST cut back to save anything. There will always be time to spend, but there won’t always be time to save.

2. Budget
You will never know where all your money is going unless you create a solid budget. You can’t try to save, unless you know where your money is going and what is coming in every single day. No matter what your salary is, a budget is the best way to take control of your money and improve your finances!

3. Credit Card Debt
Credit card debt can be one of the major ways people get in trouble financially. They are so easy to pull out of your wallet and use instead of counting cash. The problem is that when the bill comes in, you may struggle to pay the money back. Most people have good intentions of paying them back, but aren’t able to. Avoid using credit cards at all unless you have an emergency.

4. 401K
If your employer offers it, always take advantage of a 401K plan. Sign up as soon as you can and contribute as much as you are able. If you work for a company that does not offer a retirement plan, consider taking out an IRA.

5. Savings Account
A good savings plan is the best way to be financially healthy. Try to always put 5 – 10 percent of your income into a savings account before you pay your bills. Having an automatic deduction out of your paycheck into a savings account is the best thing to do, to ensure that this actually happens. This money will build up more than you imagine over time.

6. Investments
Always invest some of your money into something. If you are taking advantage of a retirement plan and a savings, you still should think of investing in something, even if it’s small. $50 could turn into $75, which could turn into $100 in a few months!

7. Employment Benefits
Always try to take advantage of expanding your benefits with your employer. This means the 401K, flexible spending accounts and dental and medical insurance, even per diems. As long as it’s legal, spend it! For everything the employer offers, take them up on it so you can lower your taxes and expenses that you pay out of pocket.

These financial practices are the BEST ways to ensure financial health for your future. It’s never too late, so start today!

 

Roger Haley writes about finance, business & credit reports.  He recommends frequently monitoring your own credit report at www.creditreport.org.  A good credit rating can save you a lot of money and making sure it is accurate is an important step to obtaining a healthy financial life.

Business Finance: What is a Merchant Cash Advance?

Finding suitable financing for business needs is one of the most challenging aspects of running any business. Whether for start up, operation, new equipment, or expansion, qualifying for a bank business loan is extremely difficult – and sometimes even impossible – for businesses that cannot satisfy the stringent qualification guidelines. So, what do you do when you need money for your business and cannot go the traditional route of the business loan? You might want to consider a merchant cash advance. What is a merchant cash advance? Here is what you need to know:

Merchant Cash Advance Basics

Merchant cash advances are a type of loan – just not the type you get from a bank. When you obtain a merchant cash advance for your business, you are basically taking out an advance against future credit card sales. This means that you pay the advance back by giving the provider a share of credit card payments your business processes until the advance, plus the premium and/or interest, is repaid. This method of repayment is an advantage, in that you will be paying less in slow months.

About Merchant Cash Advance Providers

Providers of cash advances are companies that specialize in this type of lending. They generally target retailers, restaurants, and service businesses, but you may even be able to get a merchant cash advance if your business falls outside of these categories. You can easily find a number of merchant cash advance providers with a quick Internet search.

How Much Will a Merchang Cash Advance Cost Your Business?

Merchant cash advances are relatively expensive, especially when you compare them to traditional bank business loans. This is because providers know that businesses who must rely on merchant cash advances for funding are in a tight spot and likely have little to no other options when it comes to business financing. You can expect to pay a premium of 30 percent or more of what you borrow – sometimes even upwards of a 60 to 200 percent APR! For this reason, a merchant cash advance is not something to enter into lightly, and may even be thought of as an option of last resort.

What Does it Take to Qualify?

Qualification is based on your cash flow as a merchant. You will have to present enough documentation to prove an average monthly income, and the amount you borrow will be based on that amount.

You should consider all aspects of a merchant cash advance before you decide whether or not it is right for you. While there are many advantages to this type of loan, those advantages come at a considerable cost. Do your research, and keep in mind that a merchant cash advance can be a useful tool for growing your business, if you use it wisely.

About the Author: Tommye Bruess works in a small New York coworking office and loves helping small business find financing, learn to save money, and promote their businesses.

Investing 101: What Does It Really Mean to Build Wealth?

As much as many of us would like the win the lottery, the odds of it happening are approximately 1 out of 14 million. So, don’t count on it. A more realistic scenario if you want to be rich, or at least financially secure, is to build wealth over a long period of time.

Defining Wealth

In financial market terms, wealth is how many revenue-generating assets you hold altogether, not just how much money you have in your checking at any given time Income is also not the sole determination of wealth. You may make $100,000 a year, but unless you’re saving every penny of it, you’re not building wealth. Owning a nice home isn’t considered wealth because it has expenses like a mortgage, property taxes, insurance, etc. Additionally, the housing market tends to fluctuate so you’re not likely to get out of it what you paid into it. However, if you own a home and you rent it out for more than you’re paying for it that is investing to build wealth because you are producing income and someone else is essentially paying off your mortgage. Simply put, every profitable investment you make or asset you purchase that brings in regular cash flow brings you one step closer to building true wealth. Your goal should be to build enough wealth that you can not only retire comfortably, but leave something for your family as well.

Diversification

If you want to build wealth, you have to diversify your investment portfolio. The stock market can be pretty volatile, but many people have literally made a fortune by day trading. The best approach to utilizing the stock market for building wealth is to buy stocks that have a stable long-term history. As investment guru Warren Buffet once said, “If you don’t feel comfortable owning something for 10 years, then don’t own it for 10 minutes.” That holds true for other types of investments as well. Other types of investments like certificates of deposits and quality bonds are also great ways to build wealth. Even a savings account and/or a 401k plan are investments; although, in the case of savings accounts the current low interest rates as of September 2012 make them a very low-yield investment.

Budgeting

It is a good idea to live a little on the lean side while you are young so that you can invest more into building long-term wealth. Create a budget for yourself and eliminate any thing you spend money on that you can reasonably live without. Limit your entertainment expenses. Take advantage of sales and clip coupons. Once you’ve mastered the art of living on a budget, take the money you have saved, study the best stocks to buy, and invest it. If you can increase the amount you are investing on a yearly basis, you will build wealth faster and the longer you do it, the more of a nest egg you’ll create.

Building wealth takes patience and discipline. You can’t approach it with a get rich quick mentality. Don’t try to live fast and die young financially. Look at every thing from a long-term potential. Any short-term sacrifices you have to make will be well worth it in the long run. Remember you want to enjoy your golden years, not suffer through them.

About the Author: Carey Huegel is a personal finance adviser who recommends proper wealth management and budgeting over excessive spending and waste. The more you prepare now, the better your future. She herself loves studying the stock market, value stocks, and hedge funds.

What Day Trading Markets are Best for New Investors?

Most financial experts do not recommend day trading for new investors because mastering day trading markets require a lot of experience. Keeping that in mind though, everyone has to start somewhere, right? Here are 4 of the best places for new investors to enter the day trading market.

Scottrade

Scottrade provides a lot of research tools that novice investors are sure to find handy. Another nice advantage is that they only charge $7 per Internet transaction. Other advantages the company provides are that there is no minimum deposit and uses can make an unlimited number of online trades. Most other trading sites don’t have these features. Additionally, there is no requirement for maintaining a minimum funding level in your account. If you are looking to start day trading and don’t have a lot of money to invest upfront, Scottrade provides a nice inexpensive way get your feet wet.

E*Trade Financial

The E*Trade Financial website is incredibly simple to navigate and has sections for new investors, Experienced Investors, and Active Traders. They also provide training tools. Their initial prices are slightly higher than Scottrade, but the prices go down after you make a certain number of trades per quarter. Probably one of the website’s biggest benefits is that it provides access to other assets such as bonds, mutual funds, options, futures and more so that you can diversify your investment portfolio.

OptionsXpress

OptionsXpress is also a multi-investment site like E*Trade that offers one-stop investment shopping. OptionsXpress is a 4+ star broker according to Barron’s Magazine. Barron’s has rated the company the best online trading site for the last four years. They also offer broker-assisted trading for no additional fees, which is particularly helpful to new investors. Another great feature is that the website offer the chance to speak with a live chat representative or get your questions answered over the phone.

Merrill Lynch

Trading with Merrill Lynch costs more than most other websites, however the company’s reputation in the financial world is practically impeccable. Additionally, the higher trading fees encourages investors to pick their stocks wisely and avoid impulse buys. The website also offers investors the opportunity to get advice from expert brokers. The Merrill Lynch brand definitely carries some clout in financial markets. They may not be the cheapest company for day trading, but they are considered one of the best. Many investors consider the higher costs of using the site well worth paying because of the company’s reputation for sage advice.

Not all online trading sites are created equal. You may have to try more than one before you find the right fit for you. It is also important to note that using a good trading site helps reduce risk, but it doesn’t eliminate it. No matter which site you choose, you should tread lightly with day trading until you’ve successfully established yourself.

About the Author: Lidivina Rouzer loves studying the finance industry. She’s currently reading Porter Stansberry research and studying the successful methods used by professionals she admires.

The Influences Over Exchange Rates

Currency exchange rates influence domestic prices on all imported items a consumer can buy. While individuals have little influence over those exchange rates, a solid understanding of the three basic elements that determine foreign currency rates can save buyers significant amounts at cash registers.

Definition

Exchange rates are, in essence, how much of one country’s currency it will take to purchase another country’s currency. Each currency exchange rate is always noted in comparison to another country’s, and that comparison is known as a currency pair.

For example, the United States dollar is scripted as USD. The Australian dollar is noted as AUD. The pairing of the USD against the AUD is written as USD/AUD with a ratio, such as 1:1.23. This ratio means it costs one US dollar to purchase 1.23 Australian dollars. If written in opposite format, AUD/USD 1.23:1, it would cost 1.23 Australian dollar to purchase a single United States dollar.

Relative Value

Each currency pair is different, and one rating against a currency does not automatically influence the original currency’s exchange rate to a third country’s exchange rate. US-to-Japan might be USD/JPY 1.87:1, but Japan to the euro, JPY/EUR, might be 1:1.47.

Influences Over Exchange Rates

There are three primary influences over currency rates, and each factor might have additional sub-categories that have either broad or narrow applications.

The first influence is a country’s political climate. If there is unrest in a country or in a region, expect a change in a country’s currency value. Such things as riots or a high number of demonstrations. The political climate that is calm and optimistic increases a currency relative value against another’s.

The second influence is the national economy. If prices are low, foreign trade is advantageous and unemployment is low, the economic environment promotes low inflation and a high currency value.

The third primary factor in currency rates involves the trading environment or market impression. Foreign exchange trading activity either feeds or starves an exchange rate. The national central banks may determine a daily starting rate for that country’s exchange rate, but the currency traders determine the validity of that price: If the starting rate is not in fair accordance with the impression traders have, the price of that currency will fall: It’s not as valuable in trading as the currency of another country. It will take more of that bad-impressioned country’s money to buy foreign goods or foreign currency.

Because the import costs increase, consumers within that country usually find prices for those items increasing. Sometimes, the price differential is high enough that the importing country releases more currency into circulation to provide money to pay for those imported goods. When a nation’s currency exchange rate is high against the exporting country, expect prices to rise, perhaps prompting a domestic product purchase instead.

Written on behalf of http://www.besteuroexchangerate.com/where you can find the latest rate and useful guidance on currency exchange.