What are some companies with the best mortgage rates?
It is not wise to give a list of companies with the best mortgage rates at any one point in time. Far better, if you are in the market for a mortgage, to find a good mortgage broker local to you. A Mortgage broker is a home loan intermediary who works on your behalf to link your requirements to the best mortgage lender. You don’t pay the mortgage broker, rather they make commission from the savings and loan or other lenders. A mortgage broker does not lend you money but can save you a great deal of money with the best loan for your circumstances.
How to judge a good mortgage broker? The starting point is a mortgage broker who is a member of the industry body. The MBAA or Mortgage Bankers Association of America. This organization requires a minimum level of experience and a minimum certification as well as insisting on ongoing professional development. Best of all MBA members adhere to an ethical code of practice and have professional indemnity insurance.
The Internet is the place to start your search for a mortgage brokers. Try www.mbaa.org where you will find a state map to home in on your area. Call them to see if you can build rapport with them. Compare them on how clearly they respond to your questions. Do they listen or do they push their own agenda mortgage that earns them most commission? Ask around for word of mouth recommendations in your neighborhood. Do their previous clients talk them up?
A good professional mortgage broker will elicit from you the long-term view of your circumstances. Their knowledge will be of a wide spectrum of lenders financial products and home-buying initiatives. They will clearly state the alternate mortgages, fees and charges.
Professional mortgage brokers will use computers to narrow down your options from thousands of mortgages and not just on the best rates. A good mortgage broker will speak to you in plain English, and facilitate the best mortgage for you at the time.
A mortgage broker will show you all kinds of mortgages with genuine savings. Their services are generally free for arranging a typical mortgage but be sure you are aware of any charges. A good mortgage broker relationship will ensure that you get a regular mortgage review and guidance when it comes time to refinance.
The best mortgage rates are to be found through a mortgage broker but remember the lowest rate may not equal the best mortgage.
What is a cash advance loan? Is an installment loan a good idea?
A cash advance loan is money borrowed very short term. Just until your next payday in fact. Cash advance loans are often called ‘payday’ loans. An installment loan is simply money borrowed too but is repaid in time, on time, with an agreed number of scheduled repayments, usually monthly. The term of loan can be anything from a few months to as long as 30 years. A mortgage is a type of installment loan but secured against the borrowers property.
For any loan, whether it is a cash advance or an installment loan is only a good idea when you are sure you will have the cash flow to repay it.
Are cash advance loans a way to avoid a negative bank balance? Certainly they are and there is problem in using cash advance services as long as you are sure of the money coming in to meet the repayment. It is probably better to pay your bills with a cash advance loan than to give your credit score a dent because you failed to pay that bill.
The big drawback with cash advance loans is they are just too expensive. The typical APR is between 350 – 650% according to the Consumer Federation of America. In cash terms this means that a cash advance loan of $100 means a repayment of between $115 and $130. Then of course failure to repay on time will mean a rollover loan and an additional fee every time the borrower has to roll it over. Rollover 3 times and it could cost $160.
Cash advance loans could be a slippery slope to more debt. If you find yourself in need of a cash advance loan there you are also in need counseling from non-profit debt relief organizations. Such advisors can help with cutting your current interest rate charges and your monthly repayments.
So if you find yourself relying on cash advance loans between paydays you should see it as a sign of deeper budgeting problems and look for the services of a certified financial planner who can help you get back on track and avoid the use of credit.
An installment loan is a preferred alternative to a series of cash advance loans and so it is a good idea in this sense. A far better idea than either is to seek out and implement as many money saving ideas as possible.
How do you make a family budget? What are some good places to find information about this?
Type “family budget” into Google, you will find sites such as http://www.familiesonlinemagazine.com/family-budget/2009-family-budget.html. These sites are full of good family budget advice but they tend to assume that you already have the basics in place. If you don’t have a basic family budget here are 6 steps to get you started.
1. Get a calendar with generous writing space for each day, a pencil, an eraser and 2 highlighter pens one green one red.
2. Turn to today’s date in your calendar and write at the top how much cash you have in hand and in your bank account.
3. Go forward to each day in turn and write down how much you expect or know will come in the family budget on that day. Obviously your payday and salary after tax and deductions will be the big amounts.
4. Then look at each day in turn and write down how much you expect or know you will spend on that day. Obviously automatic payments for mortgage and utilities will be the big amounts. But don’t forget to add in the money you spend on your credit cards and how much you pay off your balance each month.
5. Do the math. On any given day you can have up to 4 figures on your calendar budget. Top figure is your cash figure (including bank balance) brought forward from yesterday. Second figure down is any income due that day. Third figure down is any spending that day. Add the top 2 figures, subtract the third figure and write the new cash figure at the bottom of the column. Carry this figure forward to the next day.
6. Do this for the next 12 months. Remember to include any quarterly, six monthly or annual payments or income. Where you don’t know the exact figures use your best estimate.
If you struggle to keep your spending within your income then now is the time to look again at every expense. Ask yourself; ‘did I use too low an estimate when I budgeted for utility expenses’? If you found it hard to budget because these bills vary from month to month, now is a good time to think about a budget payment plan. With this you pay a set amount each month. Some months you pay for more than your usage, but over a year things will balance out while you have better control over your budget.
What are some good companies that provide debt consolidation loans? Are these loans a good idea? How do you choose a debt consolidation company?
Put simply debt consolidation loans are just larger loans that pay off several other smaller loans. They can be very helpful in helping people to reduce their overall debt repayments but debt consolidation loans also have their downsides. They are helpful in circumstances where the debtor is trying to keep up with several different loans and can simplify things down into one monthly statement and one, hopefully lower, monthly payment.
Also, you’ll find that your monthly debt payments decrease if you use a debt consolidation program that stretches your payments out over a longer period of time. This means that you’ll pay out less each month and you can free up some cash.
A tempting (and sometimes successful) strategy is to use a debt consolidation program to manage various high-rate revolving debts. As an example, you might have numerous credit card balances with high interest rates. With a debt consolidation program, you might be able to get a handle on that debt and lower the interest rate (APR) that you’re paying. In general, credit cards have higher rates and secured loans (such as home equity loans) have lower rates.
Debt consolidation loans do not get rid of your debt. Sooner or later you will have to cut down your spending and funnel all your resources into debt repayments. The big downside of debt consolidation loans is that you may feel as though you are dealing with your debts when in fact you are simply stretching out the time period for repayment.
Another big downside of debt consolidation is that you will probably end up paying more in interest with debt consolidation loan over the full lifetime of the loan than you would with your current debts. The upside is that you can more easily manage your cash flow now and if this is part of a long term plan to become debt free then that is a good thing.
Debt consolidation loans are just like any other product and you should shop around to find the one that best meets your requirements. Check out your
local credit unions or your current bank in the first instance. These are reputable sources and will give you a fair deal, and you should be communicating with them anyway about your debts.
The Internet is a helpful place to look for debt consolidation and checkout ‘person to person’ loan sites. Try to avoid unasked for junk mail offerings.
Look for advice on managing your credit and maintaining your credit score because loans are most difficult to come by just when you need them most.
What Can I Do With My 401(k) If I’ve Been Laid Off?
It’s a complex World isn’t it? They say the recession is global now and that means you are not alone when laid off. So don’t take it personal but do take a key decision on your 401 (k). Basically you have 3 options.
1) Do nothing and leave your 401(k) funds in your ex-employers plan.
2) Take the money and run.
3) Roll your contributions over into another qualified individual retirement account (IRA).
If your employer gives you the necessary information to properly choose your options, then good! If he doesn’t however, be sure to call the fund administrator and get the facts.
A really important thing to know is whether you are fully ‘vested’. The money you paid out of your monthly salary is always yours, but your employers’ contributions will depend on your tenure. If you’ve been at this workplace for years rather than months then you’re most likely 100% vested.
Lots of people take option 1 and leave their 401(k) with their ex employer fund because it is the easy thing to do. However it is probably not the wisest course of action. Your former employer will no longer want the trouble and costs of administering your account. You may be billed for it. You will no longer be entitled to the support of the fund administrators. You will not be able to take out loans against your 401(k) either. Finally there is always the danger that you may lose track of your account, especially if you move a long distance away.
There is a big penalty to pay if you take the cash from your 401(k) account. Your employer will automatically take 20% for the IRS before sending you your check. Failure on your part to place your funds into another qualifying IRA within 2 months of withdrawing will also make you liable for tax and a 10% early withdrawal penalty. Only people older than 59 years and 6 months are exempt from this.
So in truth option 3, rolling over to a new IRA, is the best option. You will be required to make up the 20% deduction but you can get this back through your next tax return. If you are fortunate enough to find another job more or less immediately you can do a direct rollover from your old 401(k) to the new one. Simply notify your old employer of the address and they will forward a check without fuss, taxes or withholding charge.
If you are not so fortunate and have to find an IRA you will have to take an ‘indirect’ rollover. The check made out t o you for 80% of your entitlement. I.e. minus 20% withheld by the employer and now with the IRS. You can reclaim this amount but you are still subject to the 10% early withdrawal penalty and taxes.
What are some of the best books for beginning investing?
Investing Online for Dummies, 5th edition by Kathleen Sindell is a book full of plain English explanations about how to invest on the Internet. The terminology is simple for beginners and there are loads of references to other sites and authorities. Great for younger novices who know little or nothing about investing, this book helps get you through all the finance jargon. Just a little word of caution though, be sure to get the latest edition as some of the data on online companies may be a little out of time, which is to be expected because the Internet is evolving all the time.
Investing for Dummies, 5th edition by Eric Tyson. I repeatedly go back to this book because of its incredible breadth of explanations of investment strategies including stocks, bonds, Treasury bills, mutual funds, bank accounts, individual retirement accounts, real estate, private companies and on and on. It is nicely written, simple but not simplistic, compared to the other “dummies” books.
I find money talk soporific mostly, but this book lays down the essentials in a refreshingly easy to read format. I have read it from cover to glossary but I will always go back and refer to it through my investing years ahead. If you are considering investment from home, invest in this book first. It’s a mine of investing nuggets. A terrific bargain!
The Small Investor: A Beginners Guide to Stocks, Bonds, and Mutual Funds by Jim Gard. I found the chapter on ‘investing or gambling; what’s the difference’ to be particularly insightful. A great extra that the author has included and that is very useful is the “Recommended Further Reading” at the conclusion of each chapter. It gives you somewhere to go to next in order to delve deeper into the subject. The level of detail is just right for a beginner in investing. This book is ideal for anyone thinking of dipping his or her toe in the murky financial waters. Financial planners and bank managers should consider giving copies of this book to all their customers.
Early to Rise: A Young Adult’s Guide to Investing by Michael Stahl. This book was not for me but my daughter (17) studying business said she read it in two sittings. It is full of real market applications and reasonable sound investment advice. It is couched in terms that young people like her could relate to. The small touches of humor make it less like most investment books. This one is a must give to the kids.
What is a Coverdell Education Savings Account? What’s the difference between this and a 529 plan?
A Coverdell Education Savings account is simply what it says it is. A savings account aimed at a special outcome, namely to help people under 18 to pay for education. The account has special incentives to encourage parents to save for the education of their children. This means ALL children, including those with special educational needs.
There is an annual cap on the amount that can be saved in a Coverdell Education savings account, in any one-year and that is $2000. The cap is the same no matter how many accounts parents open. The deposits are NOT tax deductible but the withdrawals are, as are the interest payments. The distributions have to be fully spent on eligible education items in order to attract the tax deductions. The benefit lasts until the young person is 30 but can then be rolled over for a younger family member.
The Coverdell Education Savings account is a federal initiative while the 529 plan for educational saving are state based plans aimed at encouraging saving for education too. 529 plans also give good state income tax breaks. Just like your contributions to the Coverdell plans the 529 deposits are not deductible on your federal tax return, your interest earnings are tax-deferred at both state and federal levels, and withdrawals to pay for the beneficiary’s college fees are not subject to state taxes.
The 529 plan contributions just like the Coverdell education savings plan, is not deductible from your federal tax return. You, the parent of the educational beneficiary have more control over the 529 account than the Coverdell education savings account. There are just a few circumstances where the nominated young person has rights to the deposits. The parent has the sole say when deciding over when to withdraw and what the withdrawals can be spent on. Most 529 plans will let you reclaim the money on your own behalf at any time you wish without problem.
Both savings plans are national. In other words, even thought the 529 is a state initiative the saver can spend the money in any state in the country. Both plans are ‘set up and forget’ until you need them. Establishing the plans is an easy enrollment process with automatic deposits. During the lifetime of the plan you do not have to do anything with it. The money management of both accounts is done by both the 529 plan and the Coverdell and not by the depositor. Plan funds are professionally invested. So the question is not which plan you should take up but rather what stops you doing both.
First Time home buyer credit explained
I am buying my first home, how do I qualify for the first time home buyer credit? What things should I know when purchasing my first home?
If you are looking to take advantage of the first-time home buyer credit, the first thing you need to know is that time is running out. First-time home buyer credit is only available on home sales closed before July 1, 2009.
Having got that clear to begin with now what exactly is the ‘first-time home buyer credit’? First and foremost it is a tax credit. This means that it will be paid back to you by the government because you paid it in the first place through your taxes. The first-time home buyer tax credit is up to one tenth of the price you pay for your first home. But there is a ceiling on the amount of this credit and that is $7500. A single person (or a married person who files their tax return as though single) buying a house has the tax credit capped at half this amount
The best way to think of the first-time home buyer credit is as a loan. Most importantly, because this is what makes it worthwhile, is that it is an interest free loan. Yes you have to pay it back, but it is really easy to do this. Two years after you get the money you start the repayment installment plan. The repayments will be taken in tax deductions and means $500 every year for 15 years.
If you sell your house you would of course be required to repay the outstanding balance from the proceeds of your sale. If you didn’t make any money on your sale you would not be required to repay the balance. If you die before the tax credit is paid back in full the debt dies with you.
The aim is to help people on lower incomes to own their own homes so if you earn over $75,000 gross (modified and adjusted) the tax credit begins to reduce. For couples the earnings threshold is $150,000. Over $95,000 for singles and $170,000 for couples and you can forget the first time home-buyer credit altogether.
A word of caution is to never borrow more than you can afford to repay. This is the basic cause of the financial crash of 2008 with the so-called ‘subprime’ real estate loans.
Where can I do my taxes online for free?
This year I filed my tax return online for the first time. I still can’t believe how easy it was. The best thing about doing my taxes online was that it was that it was completely free. The second best thing about it was that I took my time and did it early morning because that’s when I think best. But you can do it at any time day or night.
Once I did my taxes online I actually had a refund in my bank account by direct deposit in under two weeks. It is a little worrying to put all my personal information on the Internet but because I used the ‘.gov’ site I was reassured that only the Fed had it and they keep it safe. The IRS.gov is always open for business 24/7. This is the important Internet address.
http://www.irs.gov/app/freeFile/jsp/index.jsp
Once you are on the IRS site there are 5 steps to doing your taxes online for free.
1. Find the “Free File Home – Your link to Free Online Filing” page. At the bottom look for and click on the “I Will Find a Company” . Then have a look round for a ‘Free File company’ such as, FileYourTaxes.com, average1040.com, or Easy-eFile.com.
2. Check out whether you are eligible to use these sites and whether you are eligible to file your taxes online for free. The sites layout the eligibility criteria on the first page.
3. At this step you have to leave the .gov site and go to your chosen free filing company site to start the filing of your return. Make sure you have ALL of your financial information to hand. This makes filing your return much quicker.
4. Once you have started to file your return you may be told that you are not eligible to do it for free. The free sites are obligated to tell you the fee that will be charged up front. Do not continue with your filing until you have gone back to the .gov site to look for an alternate free site (or a lower fee). Or go to IRS e-file Solutions for Taxpayers for more alternatives.
If your income was greater than $56,000 you can still use the forms tool documents for free and do your tax return and file it online.
5. Use the ‘free’ company’s software to fill in your e-files and your income tax returns. The company sends your returns on your behalf to the IRS using a safe system. You’ll get an electronic receipt, which you should keep safe.
Cool Stock Market Games, Fantasy Trading
I remember back in the day, a really cool stock market game that I used to play. It was a DOS game, and it wasn’t pretty (graphically speaking, remember this was before windows), but damn was it fun! I’ve been looking everywhere for some free games where you can practice investing, and I’m certain there has to be some other cool games out there. For now, I present you with this cool game that is completely free, that you can actually earn real money playing.
I’m looking for other games if anyone is willing to share. I’m certain there has to be some other ones out there, and if someone can help me remember which game I used to play back in the day, I would sure love to get a copy of it.
