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Paying Down That Mortgage

October 20, 2011 – 10:34 am

Have you ever thought of paying down your mortgage quickly? Better yet have you thought about refinancing that 30 year mortgage loan to a 15 year mortgage loan because today’s mortgage rates on 15 year mortgage loans are at 3.00%? Well you should do something because doing either a refinance or paying your mortgage off early by making extra payments will save you a bunch of mony in the long run with lower current mortgage rates on loans. The money you save can be put into a savings account though current savings rates are very low these days so you won’t earn that much in interest.

The principal (the amount you borrowed) you owe on your mortgage loan goes down over the term of the loan.The mortgage payment cap does not apply to this adjustment.When your loan is recalculated, the 5% mortgage payment cap does not apply, so you could see a large change in your monthly mortgage payment.Most mortgage payment-option ARMs have mortgage interest rates that adjust monthly after the introductory period.

Most mortgage loans that offer an I-O mortgage payment plan have adjustable mortgage interest rates, which means that the mortgage interest rate and monthly mortgage payment will change over the term of the mortgage loan.The unpaid mortgage interest is added to your mortgage loan balance so that you owe more on your mortgage loan than you originally borrowed. Remember that mortgage payment caps don’t apply when your loan is recalculated at the normal recalculation period.

Mortgage interest rate adjustment period.The unpaid mortgage interest is added to the amount you owe on the mortgage loan, resulting in a highter balance.Your monthly mortgage payments during the first year are based on the initial low rate. This means that if you only make the minimum mortgage payment, it may not cover the mortgage interest due.In addition, with mortgage payment-option ARMs you could face negative amortization.

If you have a 30-year mortgage loan with a 5-year I-O mortgage payment, you will have only 25 years, instead of 30, to repay the principal (the amount you borrowed), and your monthly mortgage payment will rise.For example, a 5/1 ARM has a fixed mortgage interest rate for the first 5 years; after that, the rate can change once a year Mortgage interest rates.

To make monthly mortgage loan mortgage payments more affordable, many lenders offer house loans that allow you to (1) pay only the mortgage interest on the loan during the first few years of the loan term or (2) make only a specified minimum mortgage payment that could be less than the monthly mortgage interest on the loan.In contrast, an I-O mortgage payment plan allows you to pay only the mortgage interest for a specified number of years.

Many mortgage payment-option ARMs limit, or cap, the amount the monthly minimum mortgage payment may increase from year to year.To make monthly mortgage loan mortgage payments more affordable, many lenders offer house loans that allow you.

To or pay only the mortgage interest on the loan during the first few years of the loan term. or or make only a specified minimum mortgage payment that could be less than the monthly mortgage interest on the loan.Typical mortgage interest rate adjustment periods for an I-O mortgage loan are monthly, every 6 months, or once a year.

If you’re not comfortable with these risks, ask about another loan product.If your loan balance has increased, or if mortgage interest rates have risen faster than your mortgage payments, your mortgage payments could go up a lot.And be realistic about whether you can handle future mortgage payment increases.

 

After that, you must repay both the principal (the amount you borrowed) and the mortgage interest.Also, as mortgage interest rates go up, your mortgage payments are likely to go up.Any mortgage interest you don’t pay because of the mortgage payment cap will be added to the balance of your loan.If you have a 30-year loan and you are at the end of year 5.

Your mortgage payment will be recalculated for the remaining 25 years.But high house prices may make the dream seem out of reach.With a 30-year mortgage payment-option ARM. At the end of the first 5-year period, your loan is recalculated based on a 25-year term.

Owning a house is part of the American dream.Mortgage payment changes.With a mortgage payment-option ARM, your loan will be recalculated, or recast.The mortgage interest rate on a mortgage payment-option ARM is typically very low for the first 1 to 3 months (2%, for example).The recalculation period is usually 5 years. It can vary depending on the terms of your loan.

Traditional mortgage loans require that each month you pay back some of the money you borrowed (the principal (the amount you borrowed)) plus the mortgage interest on that money.Most I-O mortgage payment mortgage loans and mortgage payment-option ARMs.

Have mortgage payments that adjust once a year.Your mortgage payments may go up a lot–as much as double or triple–after the mortgage interest-only period or when the mortgage payments adjust.Your mortgage payments may not cover all of the mortgage interest owed.Skip to content What is an I-O mortgage loan mortgage payment.

Mortgage payment option have a built-in recalculation period, usually every 5 years.Lenders have a variety of names for these loans. Remember that with I-O mortgage loans and mortgage payment-option ARMs, you could face “mortgage payment shock.

In addition, most of the adjustments on mortgage payment-option ARMs are limited by a mortgage payment cap, usually 5%.Mortgage payment caps also do not apply if your balance grows beyond 110% or 125% of your original mortgage loan amount.If your loan has a mortgage payment cap of 5%, your monthly mortgage payment won’t increase more than 5% from one year to the next. even if mortgage interest rates rise more than 5%.Whether you are buying a house or refinancing your mortgage loan, this information can help you decide if an mortgage interest-only.

Mortgage loan mortgage payment (an I-O mortgage loan)–or an adjustable-rate mortgage loan (ARM) with the option to make a minimum mortgage payment (a mortgage payment-option ARM)–is right for you.Be sure you understand the loan terms and the risks you face.Whether you are buying a house or refinancing your mortgage loan, this information can help you decide.

If an mortgage interest-only mortgage loan mortgage payment (an I-O mortgage loan)–or an adjustable-rate mortgage loan (ARM) with the option to make a minimum mortgage payment (a mortgage payment-option ARM)–is right for you.Recalculation period.But when the I-O mortgage payment period ends or when your mortgage payment-option ARM loan is recast, your mortgage payments could change a lot.

Lenders have a variety of names for these loans, but remember that with I-O mortgage loans and mortgage payment-option ARMs, you could face Owning a house is part of the American dream.After your loan is recalculated, you will still have the option to make a minimum mortgage payment.

You could find that the mortgage interest you owe increases even though your minimum mortgage payment stays the same each month, adding to your negative amortization.At this point, your mortgage payment will be recalculated (lenders use the term recast) based on the remaining term of the loan.This is known as negative amortization.

The changes may be as often as once a month or as seldom as every 3 to 5 years, depending on the terms of your loan.I-O loans are recalculated at the end of the option period (usually 3, 5, or 10 years); after that you will pay back both the principal (the amount you borrowed) and mortgage interest for the remaining term of the loan the beginning of a mortgage loan.

I-O and option-ARM mortgage payments are likely to be lower than traditional mortgage loan mortgage payments.Mortgage payment adjustments.After that, the rate usually rises to a rate closer to that of other mortgage loan loans.But high house prices may make the dream seem out of reach.

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Understanding Your Financial Statements

October 14, 2011 – 1:32 am

There are many different investments and financial terms to make your head spin. For example, Chapter 7 Bankruptcy- Liquidation of all assets that are not exempt.401 (k) PlanA tax deferred retirement plan that some private corporations offer their employees.A calculation used by the credit card company to determine finance charges along with home loans and other loans. Mortgage rates and the annual percentage yield are taking into consideration when factoring in the total cost of interest on a mortgage.

An organization that administers debt repayment plans for individuals seeking assistance with their credit.Credit HistoryAn individual’s record of paying loans, credit cards and other bills.

A debt instrument or IOU issued by corporations or units of government.Some of the property may be sold by a court-appointed official -a trustee-or turned over to creditors.The history contains a listing of debts, bills submitted to collection agencies, bills paid late, public information such as tax liens and bankruptcies, and a listing of who has requested a copy of the credit report.BudgetA plan developed by an individual for directing and controlling his or her money.

The money you place into the account lowers your taxable income.These items include clothing, food, gasoline, and other goods or services that do not retain their value.Information includes whether the individual pays bills on time or has filed bankruptcy.This could include fire, theft, vandalism, windshield cracking or hail damage.

Some checking accounts pay interest.Cash and cash equivalents include checking accounts, savings accounts, money market accounts, and the cash value of life insurance.Negative information can remain in a credit report for seven years, except for bankruptcy, which will remain for ten years.They take the balance at the beginning of the current billing period and subtract any payments and credits received during the current billing period.Bad DebtCredit used to purchase items that lose value or are no longer around when the bill arrives.

Credit counseling services may be either not-for-profit or for-profit organizations.Credit counseling services may charge a fee that can range from nominal to high.Credit ReportA record of an individual’s credit history that is compiled by credit-reporting agencies.Coverdell Education Savings AccountThis account named after Senator Paul Coverdell (GA) replaces the Education IRA.

The court approves a repayment plan that allows the individual to pay off a default during a three-to-five year period, rather than surrender any property.The contributions are taxed but the earnings used to pay education expenses are not.Checking AccountAn account which allows the holder to write checks against deposited funds.

Caveat EmptorLet the buyer beware.Compound InterestInterest computed on the sum of the original principal and accrued interest.Not all companies charge an annual fee.Debts can be discharged through Chapter 7 only once every six years.The resulting total is used to compute any finance charges.

The finance charge is figured on this average balance. An auto insurance coverage that covers damage to your car from a collision or roll over, regardless of who is at fault.Contributions to the plan may be made through payroll deduction.Account TheftOccurs when thieves use stolen personal information to access an individual’s existing accounts, such as bank and credit card accounts.

Both types of bankruptcy may remove unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs and debt collection activities.Invested assets include the money invested in stock market, mutual funds, and retirement portfolios that include individual retirement accounts.

Automobile Comprehensive CoverageAn auto insurance coverage for damage/loss to your vehicle caused by something other than a collision or roll over.Annual Percentage Rate (APR).

This is the fixed or variable interest rate you will be charged if you carry a balance on your credit card.Bankruptcy (personal)Debts are discharged because that person is not able to repay debts.Both types provide exemptions that vary by state and allow people to keep certain assets.Use assets include real estate, personal property, automobiles and other things an individual may own.It allows parents to make a contribution into the account with an annual limit.

CompensationFull package offered by employer to employee that includes salary or wages and employer-provided benefits.Annual FeeAn amount charged to the credit card holder regardless of whether the card is used.There are Internal Revenue rules and guidelines that apply to this account.AssetsEverything that an individual owns, including cash and cash equivalents, invested assets and use assets.

Credit bureaus that gather and sell credit-related information about individuals to creditors, employers, landlords, and other businesses.Co-signerAn individual with an established credit record who agrees to make the payments on a loan if the borrower does not.The total unpaid balance for each day in a billing period is divided by the number of days in the billing period.

Liability insurance pays for someone else’s financial loss when you are held responsible.Assets may be liquidated to pay creditors, depending on the type of bankruptcy filed.The employer usually matches a portion of your contribution.Generally considered the option of last resort, a bankruptcy stays on an individual’s credit report for 10 years.

A certificate from a bank stating that the named party has a specified sum on deposit, usually for a given period of time at a fixed rate of interest.Also known as straight bankruptcy.403 (b) Plan

A retirement plan similar to a 401 (k) plan that is offered by certain tax-exempt organizations, public schools, such as universities, certain ministers, and some charitable organizations, rather than corporations.Exempt property may include automobiles, work-related tools, and basic household furnishings.Average Daily Balance MethodA calculation used by the credit card company to determine finance charges.Early withdrawal penalties apply to CDs

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Retire Young by Saving Your Money

June 19, 2011 – 4:42 pm

Everybody wants to retire sooner than later in life. Many people look forward to retiring early because they took the financial steps needed to save for retirement. There are many other people who feel frightened about retirement and what they would do during this time. Making the safest investments in certificates of deposit will work best for you but current CD rates are low so don’t expect any large returns at this time. CD rates are expect to remain at these depressed levels for several more years, 1 year bank CD rates on average yield under .50%.

The biggest concern most people have when saving and investing for retirement is will they have enough money to last them until death. There are so many people who have no idea how much money they need before they can finally retire. When you invest in certificates of deposit a CD calculator monitorbankrates.com/calculators/cd can show you your return on investment by calculating the interest you will earn on your certificate of deposit.

That is the million dollar question, how much money will I need to retire with current CD rates where they are? If you are at the age that you are ready to retire hopefully you saved enough money and at this point should have your money in investments like certificates of deposit which are insured and there is no risk to your principal.

The important thing for you to do is to decide whether you are financially ready for retirement. Some people have started saving specifically for this point in their lives at a young age like in your early 20s. Another way to save money is by lowering your expenses like your insurance expenses. Compare rates by shopping for the best auto insurance rates monitorbankrates.com/insurance/how-to-find-the-best-auto-loan-rates-4475 homeowners insurance or combine both to save money.

These people saved by investing in retirement savings account and invested in mutual funds. These people have taken the financial steps to retire younger than those who haven’t.

ome of these people retire in their 50s or even their 40s. They were able to find an investment opportunity that gave them excellent returns on their money.

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