http://www.articletrader.com/ Articles at ArticleTrader en-us http://www.articletrader.com/finance/mortgage/what-is-an-adjustable-rate-mortgage.html http://www.articletrader.com/finance/mortgage/what-is-an-adjustable-rate-mortgage.html Fri, 07 Sep 2007 00:00:00 -0500
Adjustable rate mortgages differ from fixed rate mortgages in that the interest rate as well as the monthly payment will move up and down as market interest rates fluctuate. The rate that triggers all of this movement is usually the Fed Prime Rate.

Most adjustable rate mortgages have an initial fixed-rate period during which the rate does not change; this is followed by a much longer period during which the rate changes at preset intervals.

Home shoppers should understand that, in most cases, adjustable rates start low. In fact, they are often much lower than what is offered through fixed rate programs. This only makes sense because the lenders who offer adjustable rate loans have to have something to entice you into taking the ARM or you would simply go with the fixed rate. This is normal and home shoppers should not be too leery of this tactic, what they should be careful about, however, are the future adjustments to the loan.

For many ARM loans, the initial fixed-rate period can be anywhere from six months long to ten years long. The most common, however, is the one-year ARM, which will have the first adjustment after one year. Another popular ARM is called the 5/1 ARM, which has an initial fixed-rate period of five years, and then the interest rate is adjusted yearly after that. Mortgages that combine a lengthy fixed period with an lengthier adjustable period are known as hybrids. Other hybrid ARM's are the 3/1, the 7/1, and the 10/1.

Home shoppers must understand that once the fixed-rate time period is over (no matter how long or short it may be) the interest rate on the loan will change. This means that the monthly payments will change as well. In some cases, and depending on the type of loan, the change in monthly payment can be very substantial.

Home loan borrowers do have some protection from extreme changes. Adjustable rate mortgages do come with caps. These caps limit the amount by which ARM rates and payments can adjust. This may not be true if you are in sub-prime loan position. Sub-prime lenders can add many different types of fees and can vary their interest rates more than traditional loans are allowed.

There are various types of ARM's available to consumers. Some ARM's allow for a conversion that lets consumers switch from the ARM to a fixed rate for a fee. There are others types of ARM loans that allow borrowers to make interest-only payments for a certain length of time. This helps to keep the first payments low.

Because there are so many types of ARM's you should spend some time looking into them in order to find the one that best fits your needs. You can also speak with knowledgeable real estate agents and lenders to get answers to those questions you may have about adjustable rate mortgages.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Secured Personal Loan and Cheap Mortgages
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/what-is-a-debt-consolidation-loan.html http://www.articletrader.com/finance/what-is-a-debt-consolidation-loan.html Tue, 04 Sep 2007 00:00:00 -0500
A debt consolidation loan is the replacement of multiple loans with a single loan. One of the benefits of a debt loan is that the borrower will often see a lower monthly payment and a longer repayment period. Here is a very simple example of how a consolidation loan might work out:

Let us assume that you have three outstanding loans. The monthly payments are: $75 for one loan, $100 for the second loan, and $125 for the third loan. On a monthly basis you are paying a total of $300 to cover all of the bills.

Using a consolidation loan the new lender would assume those bills for you and then invoice you one single bill per month. In this case, the one monthly payment might be $200, which saves you $100 per month. Keep in mind that as you pay less per month you may also have to pay longer. In other words, it may take quite a bit longer to pay off the full amount than it would if you were to continue paying the three payments separately.

When it comes to debt consolidation loans, consumers have many options and even some special options. Under the special options there are programs for consolidating student loans. With the cost of higher education becoming more expensive the vast majority of students require some type of financial aid. Student loans play a big part of that financing. As costs rise, however, most students and their families find that they need more than one student loan in order to pay the bills. When these separate loans are added up on a monthly basis they can become very expensive. Thankfully, there are many debt consolidation loan programs available for paying off student loans.

Consolidating credit card debt is another popular reason for using this type of loan. Many consumers are finding themselves in trouble with credit card bills that come into the home month after month. By using a consolidation loan, many credit card holders can reduce the amount of real cash that has to be sent out each month. For some individuals and families this is a very important benefit.

Debt consolidation loans have some drawbacks as well. They can be seen by some lenders as a warning sign that a prospective borrower is in trouble. Another drawback is that some debt consolidation lenders will ask that you put up collateral before they grant the loan. Not all lenders will ask this of you, but some may. A lot of whether or not collateral will be needed will depend on the amount of the outstanding loans as well as your own credit history.

Consumers can find a lot of solid information about the various debt consolidation loan programs available by doing some research on the Internet. Be sure to read the fine print before signing up for any program.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Debt Consolidation Loan and Debt Help
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/what-if-i-miss-a-home-loan-payment.html http://www.articletrader.com/finance/what-if-i-miss-a-home-loan-payment.html Mon, 03 Sep 2007 00:00:00 -0500
Most lenders are not going to foreclose on your home if you miss one payment. They do, however, want to hear from you and they want to work out some payment options so that the delinquent payment will be met.

It is imperative that home owners understand that time is critical when payments are not sent in. The more payments you miss and the longer you wait before you contact the lender the fewer options you will have available. In some cases, if you ignore the lender for too long, foreclosure will be the only course of action that the lender can take. Do not let that happen to you.

You should also understand that missing one payment (in the home loan business, anyway) is not the same as missing two or more. Do the math. If you are behind in two payments, you are probably at least 60 days behind. Once a home loan becomes delinquent by at least 60 days the credit reporting people become involved, the lender becomes nervous, and you begin getting tons of mail and calls concerning the loan. Your name and address may be posted to publications that sell this type of information to third parties. It only goes down hill from here.

When you have to miss one payment on a home loan it should become your major goal to get that payment caught up as soon as possible. If you simply do not have cash coming in to pay the late payment (as well as the current payment) go to the lender and see if they can work something out with you. You might be surprised at how eager they can be to help. They may suggest that the payment be tacked on to the end of the loan or they may ask if you can pay the late payment in installation payments such as one-third of the late payment added to each of the next three monthly payments.

If your financial problem is more long term, you may want to talk to the lender about refinancing. Sometimes you can refinance to a mortgage that has lower monthly payments. This is not always possible, but if it is possible it may make it easier to make future payments on your home.

Of the many options that you have, all of them are going to lessen in value and usefulness the longer you wait before contacting your lender. Remember, once your payment becomes delinquent by 60 days, your options are severely reduced. When the delinquency hits 90 days you may have very few (if any) options left. Most of these problems can be avoided if you simply contact the lender as soon as possible and be willing to work with the lender to make up the missed payment or payments.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Consolidation Loan and Unsecured Loans
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/basic-principles-of-a-loan.html http://www.articletrader.com/finance/basic-principles-of-a-loan.html Mon, 03 Sep 2007 00:00:00 -0500
A consumer loan is simply when a financial institution lends you money with the promise (from you) that you will repay the money. Most loan payments include both principal and interest.

Principle is the amount of money that you borrowed. Interest is the price paid for borrowing money; this is usually expressed as a percentage.

In an interest-only loan, the interest of the loan is paid off before the principal. It is important to understand this because many mortgages are interest-only loans. Using this kind of loan allows the lender to make a faster profit on the loan, and in return it also allows the lender to offer you lower interest rates.

Borrowers should understand that during the first years of an interest-only mortgage the entire monthly payment goes toward interest. Because of this there will be no decrease in the amount of the principle that was borrowed. In some cases, the initial interest-only payments are lower than the principal payments. This allows the borrower, who expects to earn more profit over time, to obtain a larger loan.

Variable Rates versus Fixed-Interest Rates

Aside from interest only loans, you may see offers for loans that are based on either variable rates or fixed rates. Credit cards generally use either the variable or fixed rates systems when calculating the interest.

Variable rate loans are based on the prime lending rate, and then some additional interest percentage is added in order to cover profits for the lender. Whenever the Federal Reserve raises interest rates, your bank will raise your interest as well. If the prime lending rate is low, variable rate loans and credit cards can be especially competitive with fixed rate loans.

Fixed rate loans and credit cards offer you guaranteed interest rates that do not fluctuate. You will know what your payments are each and every month based on the fixed rate percentage of the loan that you took out. This offers consumers more emotional security because they do not have to worry about their monthly bill increasing suddenly.

All borrowers should understand that variable rates are different than teaser rates. Teaser rates are temporary and last only for a limited time, usually three to six months. Once that period of time is over, the rate will go up and so will your monthly bill.

One of the most important principles behind a loan is establishing a good credit history. The fastest way to get a poor credit rating is to not pay your monthly bill or to be habitually late in paying your bill. These activities are usually reported to the three big credit reporting agencies and this information will stay on your credit history record for years to come. If you must take a loan out make sure that you can make the monthly payments on time.

If you have any questions about your loan or the interest that is being charged ask the credit person to explain it to you in detail. They are happy to do this. As a general rule, try to keep your non-mortgage debt payments below 10-15% of your monthly take home pay.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Unsecured Loan and Consolidation Loan
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/what-is-a-secured-loan.html http://www.articletrader.com/finance/what-is-a-secured-loan.html Fri, 31 Aug 2007 00:00:00 -0500
A secured loan is a type of loan in which you must put something of value into the deal as collateral. The item of value that you put up as collateral can vary. It might be a certain amount of cash, a home that you own, a car that you own, stocks, or bonds. It might also be a less traditional type of item such as a piece of expensive artwork, jewelry, a thorough bred horse. In some cases you may have to put up more than one item to cover the cost of the loan. The type of items that you can use will be determined by yourself and the lender.

The reason that you are required to post collateral is that in the event you do not pay off the loan or you miss too many payments the lender can take the item from you as payment for the loan. It is very important that consumers understand the gravity of this type of loan. You can lose you home, your car, your cash, or other collateral if you do not adhere to the conditions of the loan. In most cases, the legal documentation associated with the collateral will have to be turned over to the lender. This might include the title to your car, the ownership papers of a property, or the article of jewelry. To be perfectly frank about it, lenders hold these items in case the borrower disappears on them without repaying the loan amount.

For secured credit cards, borrowers are almost always required to deposit a certain amount of cash into an account that the lender has access to. In general, but this will vary from lender to lender, the amount of cash that is deposited is the amount of credit that will be assigned to the secured credit card. In other words, if you put in $500 of your own cash, you will have access to $500 of credit on the card. Do keep in mind, however, that each lender has its own policies regarding the credit limit that is assigned to cash deposits. Some of your cash deposit may also be used to pay fees or other charges. You should always research the total amount of your deposit that will be used in fees before you sign up with any secured credit card company.

Any consumer who is considering a secured loan should be careful. There are many lenders who are fair and honest and are offering a service that many individuals need, but there are also many other lenders who are looking to charge you as much as possible in the hopes of maximizing their profits. There is simply no reason that you have to work with companies that charge exorbitant fees. You can do a lot of research on the Internet to get a better sense of what is available in secured loans of all types.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Compare Cheap Loans and Secured Personal Loan
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/how-can-i-change-my-credit-limit.html http://www.articletrader.com/finance/how-can-i-change-my-credit-limit.html Tue, 28 Aug 2007 00:00:00 -0500
Your credit limit is the maximum total amount that you may use on your credit card. This total amount includes everything including purchases, balance transfers, cash advances, fees, and finance charges. This is a pre-set limit and if you go over this amount you may have to pay a penalty fee. When you increase your credit limit you are able to purchase more without incurring penalties. It is that simple.

Here are some tips to help you get a higher credit limit on your credit card.

First, you should ask your card issuer to send you any literature that they may have concerning their policy on requesting a higher limit. Some companies do not have this in writing, but many do. When you read the literature you can assess whether or not you can meet the added requirements.

Second, you should understand that much of the decision on whether or not you will get the higher limit will be based on how well you have paid your bills so far. If you have not been prompt on your past bills, the card company may assume that you will not be prompt with the higher level.

Another issue that you should examine is timing. If you only received the card a few months ago and have already maxed it out chances are the bank or card issuer will want to wait before allowing you greater limits on your credit line.

When you have a card that is already maxed out, it is a good idea to make sure that you make prompt payments for at least six months (or longer) before asking for more credit on the same card.

If you know in advance that you will want to increase the credit limit on a particular card, use that card regularly and make your payments on time. This shows the company that you are using the card and that you are credit worthy.

The size of your payments will make a difference as well. Whenever possible, pay the outstanding balance on your card a few times. This shows the bank or issuer that you are on top of your finances. Try to avoid only making the minimum payments as this may cause the company to wonder if you can make higher payments with a higher limit.

Try to never have to make late payments. The card issuer will certainly look at how often you make late payments and this will not help your case when asking for a higher credit limit.

Perhaps the best way to get a higher limit is to simply use your current card wisely and to make your payments on time. This means more to the issuer than you can imagine.

Keep in mind that if you are already struggling with credit card debt, having more access to credit may be very harmful to your financial future. Many people believe that if they can only borrow more, they can get out of debt trouble. For the most part, this does not work. If you truly need and can afford a higher credit limit, then ask for it. With a good history of past payments you will probably get it.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at bank charge refund and 0% balance transfers
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/how-to-use-a-secured-credit-card.html http://www.articletrader.com/finance/how-to-use-a-secured-credit-card.html Mon, 27 Aug 2007 00:00:00 -0500
What is a secured credit card?

A secured card is a credit card that requires you to deposit a certain amount of money into a savings account, money market account, or certificate of deposit. The minimum amount usually ranges between $200 and $500 but this will vary from one company to another. Your deposit is considered your security and some card issuers will even allow the deposit to earn interest.

The amount that you deposit into the account is your credit limit. You should understand that sometimes the limit will be for the full amount that you put into the account but with some companies your limit may be a percentage of the total amount that you deposited.

A secured credit card is not a debit card. This is important to understand because if full payments are not made each month, interest will be charged on the outstanding balance.

Who should consider using secured credit cards?

If you have no credit history at all, using a secured credit card can be a good way to begin establishing your credit. Many young people who are just starting out may choose this as an option.

If you have bad credit, you may wish to use a secured credit card to help you improve your credit score. In addition, a secured credit card may be the only source you will have for obtaining a credit card. There are some transactions that require the use of a credit card. This might include car rentals or hotel reservations. If you need to make those types of transactions and cannot get an unsecured credit card, this might be the only way you can get a true credit card.

What to look for in a secured credit card:

Interest Rate: Do not be fooled into thinking that because you have no credit history or a bad credit report that you have to settle for exorbitant interest rates. Make it a point to shop around for the lowest rates that you qualify for before you apply for a secured credit card.

Fees: Pay close attention to any fees that will be charged to you or to your account once it is opened. There are some companies that will charge ridiculously high fees that will reduce your initial deposit before you even use the card. Stay away from those companies. Look for companies that have no fees whatsoever or for those companies that charge a small one-time fee to set up the account. Annual fees for attractive secured cards typically range from $20-$35.

Scams: It is sad to say that there are companies out there who are in the business of ripping people off. They prey on the vulnerability of those who may be in a credit crunch. Some of the things they do include promises of getting you "quick credit" for a price. Another popular scam is to ask you to call a 900 phone number for "secrets" to getting a credit card or credit repair. Your phone company will charge you a high rate for using a 900 number and you never get the information that was offered.

The best advice to avoid secured credit card scams is that if it sounds too good to be true it is. Use your common sense and do not be taken by these crooks.

Credit Improvement Issues: Even with a very good payment history on your secured card it can takes many months before you begin to see improvement in your credit record. You have to be patient when repairing bad credit. You also have to be smart. Make sure that the company that issues the secured credit card to you will report your good payment history to the three big credit reporting agencies. Not all companies report and if they do not report you are simply wasting your time.

Keep in mind that they will also report your bad payment history if you do not pay on time. Be careful and make your payments on time each and every month.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Secured Loans and Credit Cards
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/what-are-credit-card-rewards.html http://www.articletrader.com/finance/what-are-credit-card-rewards.html Mon, 27 Aug 2007 00:00:00 -0500
When you are shopping for a card that offers rewards one of the first things you need to decide is whether you want points or cash back. Points are usually redeemed for airline tickets, show tickets, and such. While points are a fine idea for some people, many others find that points are something of a hassle to keep track of.

Cash back or rebate programs are another type of credit card reward. Many people prefer this type of reward program because it is very easy to keep track of and to use. You do not have to worry about figuring out what the points are or how to redeem them when you choose the cash back reward. The cash back amount that you accrue per month is added to your account until you use it.

If you wish to use a point based reward program you should check on the restrictions that may apply. In some cases, you may not be able to use your airline rewards when you want to use them. There may be blackout dates or seating restrictions. You should also know about and understand any redemption fees that may apply.

If you have a particular brand or hotel or airline that you use a lot you may want to see if the company offers a credit card. This is only a good idea if you plan to use the reward points with this company brand. If you are a loyal customer to this brand and truly use the points that you earn this can be one of the most generous programs available.

One issue that you should keep in mind about credit card rewards is that they only really pay off if you pay off your balance on a regular basis. If you do the math on this you will see that the rewards rarely pay off more than what you will have to pay in interest when you carry over a balance.

You will want to see if the credit card imposes any rebate caps. You may find some companies that limit the amount of your benefit either by using a cap on points or on air miles. Some may limit the amount of cash back you can get. Whenever possible try to use a company that has no caps on rewards.

Shop for a reward card that has no annual fee; there are many of these available today. In addition, make sure you look into any expiration dates on the rewards that you will earn. Some companies will expire your points after a certain amount of time.

Lastly, you want to make sure you keep up to date with the company's policies. It is not uncommon for some credit card companies to lower their rebate rates (or increase them from time to time). This information should be available either online or in your monthly billing statement. It may also come as a newsletter within the statement. Take the time to look for it and read it carefully.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Credit Card Rewards and Debt Consolidation Loan
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/credit-card-types-unsecured.html http://www.articletrader.com/finance/credit-card-types-unsecured.html Fri, 24 Aug 2007 00:00:00 -0500
First, what is an unsecured credit card? An unsecured credit card is a card (and credit line) that does not require any security deposit from you. These unsecured credit cards are generally intended for those people with a fairly good credit history.

Nearly all unsecured credit cards will come with a credit limit. This is the total amount of credit that you can charge to the card. If you go over that limit, you may be penalized. The actual amount of the credit limit is determined by the card issuer and it does not have to be same for every person. In other words, one person may have a limit of $500 while another may have a limit of $5000.

There are some important issues associated with an unsecured credit card that consumers should understand. A few of those issues include:

The Grace Period: You should read and understand the grace period that applies to each of your credit cards. The grace period is the amount of time that you have to pay your balance before the card issuer begins charging you interest on the balance. If you pay your balance in full before the grace period ends you will not be charged interest. Each company has its own amount of time for grace payments so be sure you read each company's policy.

Annual Fee: Before you apply for an unsecured credit card see if the company charges an annual fee. This is a yearly fee that is charged to your account or may have to be paid in advance. Annual fees are more often associated with secured credit cards but you may see them with unsecured as well.

Balance Transfer: Your unsecured credit card may offer what is known as a balance transfer. A balance transfer is when you have an existing balance with another company and you transfer that balance over to the new card.

Why would you do this? If the new card has a substantially lower interest rate you can save money.

Annual Percentage Rate: Of particular interest to anyone who plans to apply for or use an unsecured credit card is the APR that is associated with the card. This is the amount of interest that the company will charge you if you do not pay off the full balance within the grace period allowed. As you might imagine, the lower the ARP, the less you will have to pay in interest charges.

Finance Charge: Your unsecured credit card may include finance charges that are above and beyond the APR. Finance charges are most often triggered when you take out a cash advance. Again, make sure you understand these charges before you use the card for purposes that trigger added finance charges.

Gold or Platinum Cards: These cards usually carry a higher credit limit and may come with some extra benefits or reward programs. These are nice to have but make sure you are not paying extra for something that you will not use.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Credit Card and Unsecured Loans
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]> http://www.articletrader.com/finance/credit-card-fraud-how-to-protect-yourself.html http://www.articletrader.com/finance/credit-card-fraud-how-to-protect-yourself.html Thu, 23 Aug 2007 00:00:00 -0500
Keep It Close: You should never let your credit card out of sight unless it cannot be helped.

Tight Lips: Never give your credit card number out over the phone unless you are certain you know who you are talking to or ordering from. The best advice for phone orders is that you make the call. This assures you that you are talking to the people who are at the number dialed. If someone calls you, do not give out your information. There are no legitimate companies who call and ask for credit card numbers.

The same holds true for emails. Legitimate companies do not email customers requesting credit card information. This type of credit card fraud has become a global problem. This same type of credit card fraud might ask you to go to a website to verify personal information and card information. Do not go there. This is known as phishing (pronounced fishing).

Sign It: Make it a habit to always sign the back of your credit card the moment you get it.

Shred It: If you get credit card applications that you are not planning to apply for shred them immediately. This can help avoid future credit card fraud should someone take the application from your trash bin.

Secure Sites: When giving out information on a website, make sure the site is secure. You should see a small lock icon on secure pages.

Protect the PIN: Keep your PIN in a place that is not near the credit card. Do not write your PIN (Personal Identification Number) on the back of the card.

Record: It is a good idea to write down all of your credit card account numbers and the expirations dates. You should also include the contact phone numbers and addresses of the card issuer. Keep this list in a very secure place where no one else can get to it. Use it in case of fire or flood damage to your home.

Be Prompt: One of the best defenses against credit card fraud is to open your statement as soon as you get it. Look for any unauthorized charges. If you find unauthorized charges report those charges immediately to the credit card issuer.

Be Tidy: Anything with your credit card information on it should be destroyed as soon as you no longer need it. If you cannot destroy it, place it in a secure box.

Cut the Carbon: Carbon copy paper is not used much anymore but you still see it in some places. Make sure you get the carbon copy from the vendor and that you either destroy it or secure it.

Notify: If you are planning to move, notify the issuer in advance and make arrangements for your mail delivery during the transition. You do not want your statements arriving at the old address. You should also contact the Post Office.

If you suspect credit card fraud, contact the issuer immediately. Most companies have a toll free phone number you can use for this. Keep in mind that in cases of credit card fraud much of your liability is determined by how fast you contact the issuer.

According to federal law, once you have reported the loss or theft of your credit card, you are not responsibility for unauthorized charges.

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Peter Kenny is a writer for The Thrifty Scot, please visit us at Best Credit Cards and Bank Charges
Visit http://www.thriftyscot.co.uk

Source: http://www.articletrader.com ]]>