Pay Off Your Home Loan Faster And Save A Lot Of Money!

22. April 2010 · Comments Off · Categories: Insurance · Tags: , , ,

You pay the very same sum on your mortgage each month, but a simple exercise that doesn’t change the amount can save you a lot of money. It is an easy but powerful solution that not a lot of people are aware of.

A two week packet is the rule for most people. Because of this, we feel fairly rich at the beginning of this two week period, but hard up at the end. This is odd, since we have similar expenses every month.

We usually spend a bit more when we have the cash in hand, and then have to save when it is mostly gone. The solution to this problem is to budget your funds in general, but budgeting your home loan payment, the biggest single expense for most people will help the problem.

This is an easy idea that will save the home owner substantially, and have the added benefit of paying off the mortgage sooner. For an $80,000 mortgage that has a 30 year term and a 7% interest rate, this easy trick can save as much as $25,000.

Simply pay one half of your mortgage at the beginning of the month, and one half at the end, instead of all at once. (Most people use the second pay of the month to send the mortgage since it will get to the bank by the first of the month.)

This one week earlier payment plan builds up the payments on your principal, so that your entire mortgage is paid off that much sooner. Because of this fact, your total interest bill is less.

The reason for this is that mortgages pay the interest off first, before the principal. So you primarily pay interest, at least at the outset of the loan. But if you up the frequency of your payments, the interest is paid down faster, and then your payment starts to lower your principal. This will cause an early payoff of your whole mortgage!

Some lenders have special forms to do this, but even thoughthey don’t, you can just send in the extra payment; just be sure to put down your account number. Alternatively, you can make copies of your payment form and send them in with the extra payment.

You pay exactly the same amount on your mortgage each month, but because you pay half of it ahead each month, you reap the dual benefit of saving tens of thousands of dollars in interest, and you will pay your mortgage down earlier.

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categories: finance,mortgage,insurance,home loans,finance

Facing The Re-Mortgaging Decision

20. April 2010 · Comments Off · Categories: Insurance · Tags: , , , ,

Conditions are constantly changing to make us think that the home loan we have is the worst one in existence, and we should be looking at a different mortgage.

Yes, as times change, we may want to consider a new mortgage, but make sure you consider all of the factors before you make a new commitment for 5, 15 or 30 years.

If done in a timely manner, refinancing can have a lot of benefits. Depending on the terms (rates and maturity), a new home loan financing can allow you to lower your monthly mortgage payments and pay the mortgage off earlier.

Whether the cost savings are worth it in the long run is what needs to be examined. What are the conditions that make this a good choice?

Fixed rate mortgages are traditionally considered more desirable than variable rate loans, since mortgage rates have traditionally increased. To save yourself from the risk of constantly rising rates, you can re-finance to take advantage of fixed vs. variable rates.

One of the best reasons to refinance is if you have spent the past years fixingyour credit and you may now be in a position to get better terms.

If overall interest rates have changed, do not hesitate to request a re-financing if you have an especially high rate loan currently.

Whether you want to or not, if you have a balloon mortgage, you will have to refinance every five years, and so it may be to your advantage to use this situation to shop around for better terms and rates.

An improved credit situation will automatically qualify you for more advantageous rates and even a longer maturity. If you have become tired of refinancing every five years, this will be welcome.

You may want to consider refinancing if you are currently paying sizeable mortgage insurance premiums and are now in a position to eliminate them.

The main condition to examine, after looking at all of the reasons you may want to refinance, is how much it is going to cost to refinance. You should be able to receive an exact accounting of the closing fees, and then compare that to the costs on your current mortgage.

If these costs exceed or are even just equal to the total savings you can achieve, refinancing your home will not be worth the cost and trouble.

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Expense Scandal MPs Will Be Forced To Pay Back Legal Aid

18. April 2010 · Comments Off · Categories: Insurance · Tags: , , , , , , , , , ,

The expenses scandal was a horrific PR blow to the government and it has been dragged out by three remaining MPs who refuse to pay back their false claims. They first attempted to use parliamentary immunity, which failed, and now they are now facing court. They plan to use legal aid paid for by the tax payer to defend themselves, a move that was condemned by Prime Minister Gordon Brown who declared they will have to pay back the costs.

Political commentators have noted it as a move by Brown to be seen to have a firm stance against expenses fraud in the lead up to the general election, but some legal experts have noted that there may be issues as it is a legal right to aid when defending oneself in court.

60,000 was reportedly stolen by the MPs through false mortgage applications, rent claims and service invoices. But the cost of the prosecution will far exceed that figure, at the expense of the taxpayer the price of preparing their defence is likely to run into six figures even without the cost of the prosecution. There is further risk of the MPs having the case thrown out the Supreme Court which could send the cost even higher.

Justice secretary Jack Straw said that the government was in the process of enabling legal aid to be means-tested although they would not be able to implement them soon enough for the case of the MPs. Brown argued that the law has changed and although these changes will not take affect until June, it is just cause for the MPs to pay back the money.

Scotland Yard claim the investigation has so far cost them over 500,000 and the overall cost of the case has been estimated to surpass 3million. The MPs will begin trials on May 27th at Southwark Crown Court in London where a spokesman has confirmed that the MPs were granted an application for legal aid. Using the legal aid, the MPs have hired high priced lawyers costing hundreds of pounds an hour but if found guilty, they could face up to seven years in prison for stealing taxpayer’s money.

If you are looking to claim back PPI you could be eligible for a large sum, most people don’t realise they are eligible for a loan protection claim

categories: government, politics,claims, gordon brown, ppi, payment protection, insurance, mortgage, loan, credit, bank

What’s A Better Investment-Paying Down A Mortgage Or Investing the Money?

17. April 2010 · Comments Off · Categories: Insurance · Tags: , ,

Many times, people may receive a windfall or bonus and need to decide the best way to use it and paying down part of your home loan may be one of the choices.

What is involved in this type of decision, to put the funds to use earning more money, or to save money by using it for the mortgage?

Each person’s situation is different, and current investment rates as well as existing mortgage rates will have the most influence upon this choice. Let us say that at your retirement you receive a $5,000 cash benefit and you need to decide whether to put it towards your mortgage or invest it.

Mortgage calculators available on the web can tell you how much you have to pay on your home loan, but let us just use an example of a 6.25% mortgage with a balance of $25,000 and five years left. Using your $5,000 to pay some of it off would save you $100 per month, or a total savings over the course of the mortgage of $835.

In this same example, you can earn 2.5% on a CD, which would yield $657 over five years. In this example, the decision is easy: pay off the mortgage and pocket the $178. But what about the tax benefit you will lose from paying down part of your home loan?

However, you have to look at the big picture because you would lose any tax advantage from the home loan, and you would pay taxes on the investment. Oh, then better to keep the home loan and invest the money; no, if your income bracket is lowered because of retirement.

Taxes are an important consideration, and if you are now in such a reduced tax bracket because you’ve retired, any advantage that a mortgage may give you may be lost. In this case, saving that $178 may be the clear advantage.

Another consideration is that CDs may not pay 2.5%, but rather only 1% or 1 %. This will change your calculation considerably. What should you do? This analysis clearly informs us that each situation is different and you have to do all of the calculations for your own situation.

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Can I Claim My PPI Payments Back?

17. April 2010 · Comments Off · Categories: Insurance · Tags: , , , , , , , , , , , , ,

If you have taken out a mortgage, personal loan or credit it is almost certain that you were sold payment protection insurance from your lender. PPI ideally covers your ability to repay your debt should you find yourself in difficult circumstances such as injured or unemployed, however, the lenders found a loophole and have been selling PPI to customers who were not eligible for the cover or who did not fit the particulars of the PPI they were sold. If you have paid for PPI you may be entitled to claim this money back. What you may not be aware of is why you could be eligible to claim and why the banks could face a huge wave of payouts

There are many people who were sold PPI and were entirely ineligible by their definition, anyone over the age of 65, the age of retirement, would never be entitled to claim PPI as they are likely not to be in full time employment. Anyone who is self employed is considered a financial risk and no PPI policy would cover their ability to make repayments. Anyone with a historical medical condition is unlikely to be able to get PPI cover as they are more likely to be forced off work. Despite this, banks are more than happy to sell PPI to everyone knowing full well it will never cover them if needed.

Banks and lenders have allowed this situation to continue with full knowledge of the consiquences, this is something that has brought great negative attention from financial watchdogs. The government is forcing many of the UKs high street lenders to offer refunds to their customers although some have adopted a ‘don’t ask – don’t get’ policy meaning the consumer has to go on the hunt for their money either alone or with legal assistance.

The first step to claim back your PPI is to send your bank a letter requesting a full refund. The bank will reply with a long winded ‘no’ to which you will need to duplicate your first letter and in addition declare your intent to pursue legal action and support from the financial ombudsman. They will most likely respond with a variety of answers ultimately dismissing your claim, albeit wrongfully, due to your lack of authority. The key is persistence and it will significantly help your chances if you do get the ombudsman involved. Ultimately if all else fails, enlist professional help.

The simplest method of claiming back your PPI is to use a legal agency as they will be skilled and experienced. This will be much less effort for you and much more effective than pursuing the matter yourself, most likely resulting in success. Many solicitors are no win no fee so there is no disadvantage to using them.

There are many companies that offer or specialise in PPI claims and they are fully capable of taking control of everything you need for your loan protection claim

categories: loan,PPI,insurance,bank,mortgage,payment protection insurance,lawyers,soliciters,claims,refund,repayment,lawsuit,sue,finance

Term Life Insurance Online – What To Look For

14. April 2010 · Comments Off · Categories: Insurance · Tags: , , , ,

A ‘term life insurance premium’ is referred to as the previous rate you are required to pay to ensure coverage of your term life insurance policy. Unlike whole life insurance policies, term life insurance ensures ‘guarantee coverage at fixed premiums for the individual’s life time’. Term life insurance premiums are thus essential in providing full coverage of what is insured to the beneficiary. Today term life insurance premiums are cheap and affordable as compared to variable or whole life insurance. As a matter of fact, ‘its’ prices have significantly dropped over the past decade in this competitive market’. What factors affects term life insurance premiums?

First of all, term life premiums are simply the total amount of money that you are expected to pay to ensure the full effectiveness of your term insurance policy. Basically it’s part of the contract that you are expected to uphold by all means with your carrier. So long as your payment is in effect, you are guaranteed that your coverage will be intact and in effect for however long you desired. You can pay your premiums in a variety of ways and you can be discounted when you pay for longer amounts lets’ say on a yearly basis. If you desire this annual method of payment then you can apply for it through the application procedure.

Three factors that affect your term life insurance policies are: length of term, the amount of coverage, and the time age of enrolment. The longer you wait to purchase a term life insurance, the higher payments you will have to bear. Thus the key is to choose the perfect ‘blend’ between coverage amount and term length. ”You can play around with these factors when you run your term life insurance quote via the free engine”.

Another important factor that affects your premium amount is your overall pre-existing conditions and health. These factors can affect not only your ‘ability to qualify’ but also the pricing of your term life insurance. Conditions such as overweight and smoking can affect your pricing since the premiums are mainly catered to the ‘health class’ -for example, ‘Standard’ and ‘Preferred’. There might be available premium options for you to choose from if you have health problems but they would be for lower amounts.

When you are young, you will tend to receive lower rates because people in their youth are more often than not, healthier. If you get quotes when you are older, be prepared for higher quotes.

Term life insurance premiums are essential in ensuring full efficiency of your term life insurance policy. You are required to pay these premiums whether on a monthly or annual basis so your insurance policy would be in full effect. You do not want to withdraw from paying your premiums, because that would mean you have wasted your money since you wouldn’t be gaining much in the long run. It is wise for you to get online term life insurance quote so you would have a variety of companies who have suitable premiums to match perfectly with your needs.

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Would You Like to Have Mortgage Points Explained to You?

07. April 2010 · Comments Off · Categories: Insurance · Tags: , , , ,

When you obtain out a mortgage, you will hear discussions about points. There are two types: origination fees (the cost to obtain the loan) are calculated in points, but points may also be required to reduce your mortgage rate.

This second kind of points are called “discount points” because they lower the rate on your loan. That rate is calculated by the lender based on your credit rating, among other factors. What is important to know is whether it is worth paying the extra points to lower the interest rate on the entire mortgage.

If a borrower is willing to pay points to bring the mortgage rate to a “par” rate (the best rate available, usually available for the most credit worthy borrowers), or at least closer to the par rate, he will save a great deal of money over the long term, even though he has to put up more money now.

Well, first of all, you should ask to see if your seller will consider paying these points. This frequently occurs in a competitive real estate market when sellers have to make the sale as attractive as possible.

But if you are paying the points, let’s calculate the costs. If you were given a mortgage at 6% on a $100,000 home, should you pay 2 points to lower it?

On a 30 year mortgage, two points will lower the mortgage to 5.5%. Not significant, but how much difference does that make in the long run? The cost of 2 points on a loan of $100,000 is $2,000. What will be the savings over the life of the mortgage?

Any loan calculator you can find on the net will calculate your payments. Total interest at 6% is $115,838.19; total payments is $215,838.19; mortgage payments will be $599.55.

If you paid the 2% point fee of $2,000, your total interest paid on the loan at 5.5% would become $104,404.04 and you total loan amount would be $204,404.04, with a monthly mortgage payment of $567.79.

Did you save with this choice? Of course! The savings in interest are $11,434.15 and your monthly mortgage payments have been reduced by $31.76! Now you know why many mortgagees are willing to pay points.

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categories: mortgage,broker,investment,insurance,lender

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