Mortgage rates are still too high

Mortgage rates have dropped a lot in recent weeks, which is a good thing. But there’s still a huge spread between mortgage rates and rates on federal debt. Here’s the spread between conventional 30-year mortgages and 10-year Treasuries (10-year because most mortgages get paid off early, when houses are sold, and the average duration is about 10 years.) This spread was historically stable at about 150 basis points, but has been nearly double that lately

Why is the spread so high? Presumably because investors are still seeking the safety of government bonds. But what’s bizarre is that these days the government is the dominant mortgage lender, in the form of Fannie and Freddie, which have been nationalized for all practical purposes.

The persistence of the spread offers one opportunity for quick economic stimulus: declare that Fannie and Freddie are backed by full faith and credit, and if that doesn’t work, have the Treasury borrow on their behalf. This can bring mortgage rates down by more than 100 basis points. By itself, that’s not nearly enough to turn the economy around, but it could really help the economic recovery package.

source nytimes.com

Cash Loans for Unemployed: Designed for Needs of Unemployed People

Getting a loan is very easy if a person has a regular source of income. But same is not true for unemployed people. Lenders in general are reluctant to provide loans to unemployed people. So isn't there any way through which unemployed people can meet urgent requirements? The answer is cash loans for unemployed.

The most important characteristic of cash loans for unemployed is the speed and swiftness with which they are disbursed. These are mostly unsecured in nature which implies no collateral has to be placed against the loans amount. Moreover credit ratings are also not given much attention.

The amount associated with these loans is not much with these loans which can stretch up to $1500 and these are very short termed loans. These loans do what payday loans do for employed persons. As payday loans suffice the employed persons with money between two paychecks so do cash loans for unemployed since they provide money for the brief phase of unemployment.

There are some advantages which need a mention. They are as follows

" Theses loans are available to bad credit borrowers.

" No discrimination is practiced concerning employed or the lack of it which nullifies the general perception.

" These are very swift to avail and in most of the cases the amount is disbursed within 24 hrs.

Repayment is an issue one should not casually deal with. Because faltering in it may prove as a blockade if one requires money from loaning market in future.

Cash loans for unemployed can be found online or in the physical market. However online procedure eases all the process of availing loans as everything can be managed sitting before a computer.

Get More Information Read The Credit Secrets Bible - Secrets Everyone Should Know

Bad Credit Loans: All Your Wishes Come True!

Nothing is permanent in life, including finding yourself in a bad financial situation. You can have a bad credit rating due to several factors, such as loss of job, irregular and late repayments, and credit card debt. In such a situation, bad credit loans are like an oasis in the desert providing the much-needed money for your various needs. Bad credit loans can be used for emergencies due to hard financial circumstances or for leisure. Moreover, such loans are available even to those people who have bad credit or no credit.

Anyone can face credit problems at some time or the other in his/her life and bad credit can happen at any time due to various factors. Even the most financially sound people can suffer from bad credit and if this happens, you should try to get a bad credit loan to tide over your financial predicament.

There are two types of bad credit loans: secured bad credit loans and unsecured bad credit loans. Consumers prefer the unsecured type as they do not have to put up any guarantee, although both the types are popular.

In the case of a secured bad credit loan the borrower has to put up some property like a house as a guarantee against the loan. This is a very risky proposition as the borrower can lose the property in case of default in the repayments of the loan. Moreover, if the borrower does not make payments on time, the interest rates would also go up considerably.

An unsecured bad credit loan, on the other hand, does not need the borrower's asset as a guarantee against the loan. Normally the borrower can get a loan of tens of thousands of dollars. The lender would, however, scrutinize all the credit card bills of the borrower before granting the bad credit loan.

Bad credit loans are offered by many banks, credit unions, business merchants and financial institutes. As such, if you need money for buying a house, a car or for any other financial exigency and if you do not have a good credit report, you can easily get a bad credit loan to fulfill your needs.

Applying for a bad credit loan is not at all difficult and things have become much faster due to the Internet. There is no need anymore to go to a lender nor do you need to stand in long queues to talk to the lender. All that you have to do now is to click on your mouse and a multitude of websites will be available for you to study and decide the one for getting a bad credit loan. Many loan schemes will be available on the net and it is necessary for you to study the terms and conditions of each agency. When you have selected the right agency, you should fill up the online application form. A loan officer will assess your form and will let you know by phone or e-mail about the approval of the loan. If your loan is approved, the money will be credited to your bank account.

As there is no asset to guarantee an unsecured loan, it is normally in the form of homeowner loans or tenant loans. Moreover there is greater risk to the lender in the case of unsecured loans as there are no assets which the lender can claim in case of default by the borrower. It is for this reason that lenders normally charge a very high rate of interest for unsecured loans.

Before choosing a bad credit loan, it is better for the borrower to shop around a bit in order to find a very good deal. Moreover, it is advisable to consult a specialist who can guide you properly and give valuable suggestions so that you are successful in your quest for a loan.

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six super mortgages

There is no such thing as the best mortgage, or even the best type of mortgage. On this website and others you will find contradictory articles and advice debating the issue. Some people think tracker mortgages are the best thing since sliced bread (myself included) while others believe that fixing now is the right course of action (and they are wrong).

Ultimately, it doesn’t matter what any of us think, because the right mortgage is the one that suits your needs, your attitude to risk and your financial circumstances.

There is absolutely, categorically, in no way whatsoever a best mortgage.

However......

There are some good deals within their categories and below is a selection of six of my favourites. I can guarantee that Fools will be able to find some deals with lower rates than my choices. In some cases I have gone for a good balance of rate, loan-to-value and upfront fee to suit those with more modest mortgages. Those products with incredibly low rates are probably more suitable for large loan borrowers, or they are only available to people with a whopping deposit.

There’s a mix of fixed, trackers and discounted rates, none for those with a bad credit history (that’s a whole other feature) but a few self-cert deals.

They are all available at time of writing but in the current market they may not be about tomorrow.

The tracker
My pick of the bunch. HSBC has a lifetime tracker at 5.99% (0.99% above Base Rate).

It comes with no arrangement fee and unlimited overpayments are allowed. Plus it’s portable and is available to those with just a 10% deposit. It also has no early repayment charges. What more could you want?

Well, if you want a similar deal at a slightly lower rate, Woolwich’s fee-free lifetime tracker is currently 5.89%. However, you need a 40% deposit to secure this one.

The discounted variable rate
Again HSBC leads the field on discounted variable rates with its 5.69% two-year discount, reverting to a (current) rate of 6.25%. Available to up to 90% loan- to-value this is suitable for first-time buyers or those with little equity in their property and comes with a teeny weenie £249 fee. If you want an even better rate and you can afford to pay a fee of £2,499, HSBC is offering a two-year discount at just 4.99%, or one at 5.49% with a £999 fee.

The short-term fixed rate
First Direct’s two-year fixed rate of 5.98% is a good rate but with a high-ish fee of £1,499 plus £499 booking fee. It’s available to those with a 20% deposit and is an offset mortgage so customers can use savings and current account credit to offset against their mortgage debt. The bank also offers a slightly higher rate -- 6.39% in exchange for a much lower fee of £399 plus £99 booking fee.

Market Harborough Building Society has a great two-year fixed rate, low fee deal. Its 5.99% two-year fix is available up to 80% loan-to-value on mortgages up to £300,000 with an arrangement fee of £749.

The long(er)-term fixed rate
Fixing for the longer term at today’s high rates is an option that few borrowers will currently be comfortable with, but if that’s what you fancy my money is on Leeds Building Society’s low rate five-year fix at 5.99%. Available to those with a 20% deposit it carries a £1,499 fee and is available on mortgages up to £250,000.

If you have a small deposit still but want a long-term fix, Britannia Building Society’s five-year rate of 6.74% goes up to 90% loan to value, with a low fee of £499.

The large loan
Stealing the march on large loans at the moment is a Charcol exclusive at just 4.99% -- that’s right, under 5%. This loan is targeted at extremely high-net-worth borrowers -- £500,000 minimum to £5m. In addition it comes with a stinger of a fee, 2.75% of the loan, which will amount to tens of thousands of pounds. But if you are borrowing big, it could be worth it for the excellent rate. Another stipulation is that you need a 35% deposit.

For a large loan with a much smaller fee Bank of Scotland has a three-year tracker at 6.19% with a fee of just £1,499. It is available to those with a 25% deposit or more on loans over half a million pounds, and must be arranged through a mortgage broker.

The self-cert deal
Self-cert deals, for those who cannot or prefer not to have to prove their income, are much more expensive than mainstream deals.

Bank of Scotland’s five-year tracker is competitive at 6.69% up to 75% loan to value, and comes with a fee of £999 of the loan, which is not bad at all for self-cert lending.

Fixed rates come in at around 7.39% and Bristol & West offers a five-year fix at this rate with a 1.5% fee. Again you’ll need a 25% deposit. The lowest self-cert rate I could find was a two-year tracker at 5.99% from Nationwide brand The Mortgage Works (available through brokers) but comes with a whopping 2.50% fee and you need a 50% deposit.


source http://www.fool.co.uk/news/property-home/mortgages/2008/07/17/six-super-mortgages.aspx

Is Your Credit Score Costing You A Fortune?

While some surveys show that 9 out of 10 consumers are unaware what their credit score is, I'd like to quickly share with you how your credit score could be costing you a fortune (in more ways than you can imagine).

We all know a low credit score will make everything in the world of finance more expensive because of higher interests rates from lenders due to being considered a greater credit risk (i.e. higher interest rates on cars, homes and credit cards). While this may be considered common knowledge by some, it's truly devastating effects are understood by few.

For example. If you purchase a $200,000 home on a 30 year fixed mortgage at 8% interest instead of 6% (because of your credit score); that 2% is going to end up costing you a total of $96,934.11 over the term of the loan. Now, think about how many extra years you'll have to work to pay off $96,934.11 because of an extra 2% in interest?

The part few people talk about is all the other areas in life where a low score will increase your cost of living on an annual basis. For example. In addition to paying more for a car, home and credit cards, a low credit score will most likely have you paying more for the following as well:

1.) AUTO INSURANCE. As many as 92% of the 100 largest personal automobile insurers use credit information to underwrite new business, according to a 2001 study by Conning & Co., an insurance-research and asset-management firm.

2.) HOMEOWNERS INSURANCE. It's thought many insurance companies see a correlation between low credit scores and increased property insurance claims. Therefore, a low score will result in a higher rates.

3.) LIFE and HEALTH INSURANCE. Customers who are unable to pay their monthly insurance premium thereby pass along that increased cost to the insurance company whose stuck with the bill (resulting in a loss for the company). Since customers who pay without lapse are more profitable it is felt by many that a low credit score now even affects a monthly life and/or health insurance premium negatively.

One of the more shocking areas where a low credit score will you cost you is in the area of employment. It's estimated as many as 42% of employers now do credit checks on applicants before hiring them (according to a 1998 survey by the Society for Human Resource Management).

While many employers claim they only do it to verify information on your application (such as where you live and where you have worked etc.) we can both assume they are taking the liberty to have a peek at how you handle your financial affairs as well. According to the Public Research Interest Group (PIRG) as many as 79% all credit reports contain errors, 25% of which are serious enough to cause the denial of credit (according to a 2004 report).

And that's all the more troubling in light of the increasing impact a bad credit report can have, says Ed Mierzwinski, director of PIRG's consumer program. "It's outrageous that the credit bureaus are claiming their scores are accurate enough to take people's lives and screw with them like this".

The "CREDIT SECRETS BIBLE"
has been in print since 1994 and is published by Consumer Publishing Group. For more information visit: "CREDIT SECRETS BIBLE"

Facts You Should Know BEFORE Considering Credit Counseling or Debt Consolidation

There is one topic which every time I write about it seems to generate some hate mail while at the same time spawning a flurry of wonderful praise from consumers. Of course, the hate mail is always from a few people that happen to own these "certain types" of businesses I discussed and those businesses of course are Credit Counseling or Debt Consolidation companies; of which many "claim" to be non-profit organizations.

You'd almost have to be an ostrich with your head stuck in the sand to not see or hear at least one advertisement a day from a Credit Counseling or Debt Consolidation Company. However, you can expect this to change and change soon. Since this is a topic which tends to "stir up" the owners of these businesses, I am going to take a different approach by NOT sharing my opinion, but rather, the opinion of others. I will start with the news media and the Internal Revenue Service:

"(NPR News, May 15, 2006). The Internal Revenue Service is revoking the tax exempt status of some of the largest credit counseling agencies in the country. An IRS investigation disclosed that the firms solicited business from people seriously in debt and that they didn't provide counseling or consumer education, as required.

Prodded in part by a congressional oversight committee and consumer advocates, the IRS began investigating dozens of credit counseling agencies -- most holding non-profit status -- two years ago. IRS Commissioner Mark Everson says the companies "poisoned an entire sector of the charitable community."

Everson says in many instances, companies were organized merely to funnel business to loosely affiliated for-profit companies. Many of the firms spend millions of dollars on commercials that urge anyone with debt to call them to solve their financial woes. And because tax-exempt organizations are not bound by the federal do-not call list, the firms were able to randomly call consumers, pitching their services under the guise of a non-profit counseling service.

The IRS investigations are also likely to affect consumers, thanks to a new bankruptcy law that requires consumers considering bankruptcy to get counseling before they are allowed to file. The IRS wants to ensure that only legitimate non-profit agencies are doing the counseling. In addition to the actions announced Monday, the IRS is sending more than 700 compliance letters to the rest of the credit counseling industry .

Since almost all Credit Counseling and Debt Consolidation companies claim a non-profit status, I feel most consumers are easily sucked in with their skepticism and defenses at bay. After all, when most of us hear the word "non-profit" the first thing we usually think of is a church or homeless shelter.

From the NPR article and the actions of the IRS, I think it's fair to assume that many of these "non- profit" organizations have been operating under a scenario similar to that of a wolf guarding a hen house. However, this doesn't mean all credit counseling and debt consolidation companies are bad but... you do need to know the truth about how they operate and their limitations.

The first thing you want to understand is these companies are ALL more interested in making money off you than they are in preserving your credit rating. The bottom line with either credit counseling or debt consolidation is that it absolutely ruins your credit. I can just hear the companies arguing this with a consumer right now, telling them nonsense like "It helps your credit since it tells creditors that you're working on your situation and not just running away from it." Listen... if one these places tells you that than watch out. Why? Because they will lie to you about other things as well!

One of the first actions these programs usually requires you to do is for you to CLOSE all your revolving credit accounts. You then make payments to the organization and they take care of everything for you. What this says to all your creditors (as well as anyone considering giving you credit) is that you are so out of control with your finances that you can't even manage paying everyone back on your own. Therefore, you're hiring someone else to do it for you!
99% of the time these companies will claim they can negotiate with your creditors and get interest rates reduced thereby saving you money. While this is true, what's also true is you can easily negotiate these same rates as well as they can by just calling your creditors yourself.

You'd be amazed at how many of your creditors would love to hear from you (especially when the chips are down!). Not too mention, any money the counseling company was to save you would more than likely be sucked back up by their monthly fees (usually around $500 to $1,000 per year).

This brings us into a whole other dynamic of their business model. Because these companies always make their money off of monthly fees paid by the consumer, the longer they can keep those monthly fees coming in the more profitable their business will be. It's for this reason that most consumers who sign up with these companies usually find themselves on payment plans with the lowest monthly payment possible (which turns out to also be the LONGEST payment plan as well). Not surprising is it?

Am I against Credit Counseling and Debt Consolidation companies? Absolutely not. After all, there are millions of people in America who will never be able to manage their finances. Credit to them is a destructive addiction much like alcohol or drugs and they will never be able to control it.

Instead, it will always control them. We've all seen these people. Every time they are extended credit shortly thereafter they are in financial trouble (usually blaming it on some external factor). For these people I think these credit and debt counseling programs can be a good thing (as a ruined credit report is not a hindrance to them but actually an asset). It keeps them out of future financial trouble by forcing them to live their lives on a "cash and carry" basis; which is ultimately conducive to a better standard of living down the road.

On the other hand. If you're good with your finances and have control with credit but went through some type of hardship beyond your control in the past (i.e. divorce, job loss etc); then the services of these companies will never be for you. You will do far better and preserve your credit rating by taking matters into your own hands. Reason being is that you understand your credit rating is a powerful tool that can help you move ahead faster, help others and help yourself as well as create the life you want. It all comes down to self management. We all know that those who cannot manage themselves will ultimately be managed by others. Credit is no different. When you learn to manage it well, you are the master and it is the servant.

If you care about your credit and want to benefit from it in the future, then you will never rely on a credit or debt counseling service to help you get out of any trouble you find yourself in.

Instead, you'll look inward and get yourself out while preserving your credit rating the best you can. Credit and debt counseling is for people who are "ok" with throwing their credit rating in the trash so they can have "someone else" manage their payments for them (since they are unable to manage them themselves). And again, as far as negotiating interest rates, you can do just as good as them or better. If you don't believe me just call any of your creditors and straight out tell them your situation. You will quickly find you don't need to be afraid of them. They just want to get paid like the rest of us.

The "CREDIT SECRETS BIBLE" has been in print since 1994 and is published by Consumer Publishing Group. For more information on the "CREDIT SECRETS BIBLE" you may visit:

Killing Credit Cards With A Loan

Thanks to a worldwide credit crunch and mounting bad debts, banks and building societies have started to curb their lending. They have withdrawn thousands of mortgages, increased interest rates on personal loans and credit cards, and started to reject far more applications for credit.

I see this as only the beginning of an even harsher clampdown on credit, as lenders tighten up their lending criteria and improve their risk management. Thus, I believe that now is an excellent time for us to wean ourselves off our credit habit. In particular, I think it's high time that we abandoned ‘plasticmania' -- our addiction to spending on credit cards.

For the record, we have around £55 billion of outstanding debt on our credit cards, which comes to exactly £2,200 per household. However, this is only an average, and millions of credit-card users have far higher balances. Indeed, some visitors to our Dealing with Debt discussion board owe £50,000+ on their plastic. Ouch!

Credit cards are useful for short-term borrowing, especially if you avoid interest by paying them off in full every month. However, because of their high interest rates, they are an expensive way to borrow over periods exceeding a year. (Unless you use a 0% credit card, of course!)
Thus, if you're looking to borrow over several years, then a personal loan is usually a much better bet than a credit card. This is because interest rates on personal loans are considerably lower

article source http://www.fool.co.uk

Over half of UK repossessions in sub-prime sector

According to a recent report over half of repossession order that are brought in the UK come from sub-prime lenders, who are lenders that specialise in giving credit to those with bad credit or no proof of income.

Sub-prime lenders have come under fire in the past because of the high rates of interest that they charge on loans to consumers that already have financial problems.
A spokesperson from one sub-prime lender said: “It should come as no surprise that those lenders dealing with borrowers with past credit problems are likely to have to deal with more cases of default amongst their borrowers. Comparing lenders like GMAC-RFC with high street lenders is a bit like comparing apples and pears.”

However, the lenders are quick to point out that not all of the orders actually result in repossession, with one sub-prime official stating: “The figures are based on possession claims hearings and are therefore not representative of actual repossessions, which are a lot lower. Of proceedings started, where solicitors become involved, five out of six are resolved without having recourse to repossession.”

In a recent study of twelve hundred recent orders that went through the courts it was found that 10% of these were brought by two sub-prime lenders, GE Money and GMAC-RFC

The TRUTH About Credit Repair...

Have you ever wondered what companies send you when they claim you can erase bad credit overnight? How about those ads that say you can get any major credit card without a deposit or a credit check?

Ads abound almost everywhere these days (online and off) selling books, systems and secrets to help you fix your credit. Many of these programs have claims which read like the covers of supermarket tabloids:
"In 3hrs my credit score jumped from 580 to 676!"...
"Erase bad credit and smash your debts with just 2 Magic Letters!".

Are these types of claims ALWAYS too good to be true? The answer is "Yes and... no".
While many people would love for you to believe the only thing that can fix bad credit is time; in reality... nothing could be further from the truth. The fact is, time is only one factor which can fix a credit report, but it's a far cry from being the only factor. How can I back this up? Easy.
Under a consumer protection law known as the Fair Credit Reporting Act (a.k.a. the FCRA) the only negative information which can remain on your credit report is not what is accurate... but what can be proved as accurate under the FCRA. What's this mean to you?
It means any negative item on your credit report can only remain there if it is accurate and CAN BE PROVED AS SUCH under the guidelines of the FCRA. This undisputable fact presents consumers with both good news and bad news.

The good news is that through the FCRA your credit score can most likely be improved dramatically in a very short period of time with only a modest amount of effort on your part.

The bad news is that while the actual "work" will take very little of your time, it is vital that you have good information on "how" to go about it. This is the bad news; 9 out of 10 courses on restoring your credit will do nothing more than lead you into snake pits because they will provide you with what the industry refers to as "Boiler Plate" dispute letters. These are nothing more than form letters and... quite frankly (more bad news) the Credit Bureaus and Creditors will laugh at you if you try to use them.

While I agree with the Federal Trade Commission (FTC) that "Anything a Credit Repair Clinic can do for you legally, you can do for yourself at little or not cost"... the key element you need for success is the latest inside techniques and procedures to get the results you want. This involves strategies such as "Proof of Contract", "Constructive Notice", "Challenge of Procedure" or"Restrictive Endorsement" and many others.

All these terms may "sound" impressive but they are really quite simple. In the end, it is nothing more than a method of communication which exercises your consumer protection rights, gets the results you want and raises your credit score.

The "CREDIT SECRETS BIBLE" has been in print since 1994 and is published by Consumer Publishing Group.For more information visit the "CREDIT SECRETS BIBLE"