Posts Tagged ‘housing market’

Should You Be Worried About the Economy?

Thursday, February 25th, 2010
If you are worried about gas, try carpooling.

If you are worried about gas, try carpooling.

If you follow the news, chances are the state of the economy may have you a little concerned. Bad news is rampant, the housing market is shaky and doom appears to be around every corner. While there are some definite problems with the economy right now, that doesn’t necessarily mean that you need to start panicking. Smart money management is always important, but if you find that you are overly worried about the state of the economy, there are a few steps that you can take to shore up your financial defenses and stop worrying.

The first step is to take a hard look at your mortgage payments, car payments and any other loans that you may have. If they are calculated under a variable rate, now is the time to start allocating a little extra each month to ensure that you have enough to keep up with the payments. If your mortgage payment looks like it is going to be too high, act quickly by negotiating with your bank for either a payment deferment or even a refinance. No one wins in a foreclosure situation and most banks will be willing to work something out with you.

The second step is to think about consolidating your credit card bills if necessary. If you are paying on multiple cards that all have high interest rates, you could be wasting a lot of money each month. Take advantage of a low or no interest card that will allow you to transfer those high balances into one. Just make sure you read the fine print to see how long the interest rate will remain low. Or use Loanio to receive a loan from lenders, this is easy and painless to do. This not only helps you save money on high interest fees, but you can also save time by paying only one bill every month.

Next, you can take a look at what you’re spending and how rising prices are affecting you. For example, the cost of gas right now has many people worried. You may find that you’re spending more to get to work than you may make for the day, or the ratio may have changed dramatically. If this is the case, consider setting up a carpool with other workers to save money, or you may even be able to arrange to telecommute. There are many ways that you can reduce your monthly expenses and free up more money to handle the rising cost of necessities.

This is also a good time to think about setting up an emergency fund. This is a very beneficial type of savings account that can tide you over if you run short during the month, or if you end up with a personal crisis on your hands. When you have the security of a savings account, emergency fund or other means of income, you’ll be in a much better position to weather any economic storm.

While the economy has been better, there is certainly no need to start panicking right now. Simply follow smart money practices, and you’ll be in a position where you can withstand whatever comes.

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Originally posted 2008-10-28 20:01:41. Republished by Blog Post Promoter

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Mortgage Interest Rates Start To Change

Wednesday, February 3rd, 2010
Mortgage rates are changing - what should you do?

Mortgage rates are changing - what should you do?

There was big news within the mortgage industry recently as interest rates finally went back below 6%. The reaction was mixed, but the rate did prompt many people to rush to refinance their homes. For those that are stuck with variable rate mortgages, the current situation in the housing market has been volatile to say the least and many consumer advocates have been pushing the need to refinance if at all possible.

This has not been easy for many, especially since interest rates were quite high until this week. Every small drop helps however and the current resurgence for refinances could help bolster the struggling housing market. While much damage has been done, there is still light at the end of the tunnel, despite the decision to take over Freddie Mac and Fannie Mae, two of the US’s biggest lenders.

While there is hope for some borrowers, those in a subprime position may not find it easy to refinance their homes, in spite of the drop in rates. Banks are shying away from this sub-set of borrowers and the specter of foreclosure still looms for many. For those that are unable to refinance, there are steps that can be taken to avoid foreclosure, but they must be taken quickly.

The first step is to determine how to free up enough cash to handle increased mortgage payments. For those that did not plan ahead for a switch to a variable rate, the shock of a much higher payment was a rude awakening. Although thousands knew that their fixed rates were only short term, there was a general lack of awareness of how this would affect them personally.

If you have been switched to a variable rate mortgage and are struggling to make your payments, foreclosure does not need to be the first option. In many cases, the difference in payments can be as small as $50, or as high as several hundred dollars. For those that are living above their means, simply curtailing some additional expenses can free up the funds necessary to make those higher payments.

Other options include getting a second job on a temporary basis until the rates do drop to a point where payments become livable again. For those that do not have the time for this option, selling a car, or other household items may be the best solution.

Today’s news was heartening to many and does show that rates may be on the way back down, at least temporarily. If you can get a refinance plan on a home loan, taking action now may be beneficial. If you cannot seek this type of assistance however there still are plenty of other options available that can help you keep your home, until the economic outlook brightens again. Housing changes and rate fluctuations are normal, and riding out the storm is typically the best solution.

Photo Credits: 1

Originally posted 2008-10-07 05:12:06. Republished by Blog Post Promoter

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Should You Pay Off Your Mortgage Early?

Monday, January 4th, 2010

With the trouble in the housing market, those that are financially stable are left wondering whether now may be a good time to pay off their mortgages. There are some definite pros and cons to early payment, and this strategy is one that must be carefully considered before taking action. Let’s look at a few of the considerations that should be thought out ahead of time.

What are the pros and cons of paying off the mortgage?

What are the pros and cons of paying off the mortgage?

Pros

1. Interest rate fluctuations no longer matter.

For those with variable rate mortgages, the past few months have been incredibly stressful. It’s not easy to put your finances through this kind of wringer and in many cases, for those with high interest rates and burgeoning payments, paying off a mortgage early, or at least paying it down, may have many benefits.

2. Freeing up monthly income.

If your mortgage payment is taking up a large chunk of your monthly finances, paying off that loan early can help free up income that can be used for other things, such as paying down debt, or simple living expenses. For those that are finding it hard to make ends meet, dipping into savings to get rid of that high fee loan may not be a bad idea.

3. Lack of worry.

Once that mortgage is paid off, you never have to worry about interest rate changes or problems with the bank. For many people, this kind of peace of mind is more than worth the extra expense of paying off a mortgage. If you are concerned about financial stability in the future, this course of action can provide some relief.

Cons

1. Loss of tax benefits.

Since you can write off the interest that you pay on your mortgage each year, losing this ability can have a big impact on how much tax you pay. For those in a high tax bracket, this may be the straw that breaks the camel’s back. Consider carefully the tax implications that you can face by paying off that mortgage early.

2. Initial expense.

Paying off that mortgage, especially if it is still quite large, could mean that savings may have to be used. In addition to that initial expense, you might also have the loss of extra income if that account was earning interest. In most cases, this would be slight, but for those that rely on additional streams of income, this can have an impact.

3. Penalties.

Most banks will charge a penalty fee if you pay off a mortgage early, or even prepay a large chunk of what you owe. Always read the fine print before you decide to pay early to see just how much you will have to end up paying in extra fees. These may be quite large, so it is vital to take this into consideration.

Any major action requires a good deal of thought beforehand and paying off a mortgage early is no exception. Always take the time to read the fine print and ask your financial advisor about any additional implications you may be facing.

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Originally posted 2009-01-06 05:23:11. Republished by Blog Post Promoter

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Child Savings and Investment

Wednesday, November 25th, 2009
Children cost money - are you ready?

Children cost money - are you ready?

Having children is not a cheap proposition these days, especially when you consider long term costs. The older your children become, the more they are going to end up costing in the long run. High education prices, for example, continue to soar making it nearly impossible for you to put your children through school. The housing market is also becoming nearly impossible. All of these things seem really far ahead when your child is young, but if you do not start saving up now you may find yourself really short in terms of capital and income when you finally do need the money to get things going.

Surveys are luckily suggesting that people are beginning to understand this concept. Child savings and investment plans are absolutely vital if we want to be financially prepared for everything that goes into rearing our children from beginning to end in the future. When we first have children, they are expensive enough, and keeping them in diapers is hard work. Little do we know at that point however, how many thousands of dollars will have to go into their educations, keeping them clothed and fed, and putting a roof over their heads for the next eighteen years or so. If you want to be prepared financially for everything that is involved in raising your children to adulthood, then you need to begin planning as far ahead as you can using child savings and investment planning to make sure that you have enough money in the future.

You should not start saving when your children are young, but rather before they are even born. If you know that you plan on having children some day, begin saving the day that the decision is made. Even if you change your mind later, the money will still go to good use, so it is better to plan ahead and be safe than to be sorry in a few years when you do not have the savings you need to afford the education of your children.

When it comes to planning for your child’s future, planning ahead is always best. The sooner you begin to plan, save and invest, the better off you will be when you finally need to utilize that money. If you do not take the time to plan ahead, you may run into a point where you do not have the capital you need to take care of your children properly. Imagine trying to send your children to college and finding that you lack the capital to get them there, as well as the credit score to obtain the lending that is required. Can you imagine the disappointment that your children will have if they cannot go to the school of their dreams? Nip that risk in the bud as early as you can by planning early, saving and investing often, and working hard to create a good life for your children long before you ever have to.

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Originally posted 2008-11-27 05:01:07. Republished by Blog Post Promoter

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