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May 22, 2012

Hard times for the interest only mortgage

Mortgage lenders are definitely making it harder for you to obtain a mortgage.
Especially when compared to the boom years when criteria was probably too
relaxed. It is a hard market to research at the moment because lenders are
constantly moving their goal posts as to what is required to obtain a mortgage.

One of the big changes in the market is that lenders are requiring large deposits
to allow you to go onto an interest only mortgage. Historically interest only
mortgages were available to everyone disregarding deposit levels however over the years this has changed. Over the last couple of years it has been pretty
standard for a 25% deposit to be required to go onto interest only however
these levels have increased by some lenders to 50%.

A repayment mortgage will guarantee that the mortgage is paid off by the end
of the term however an interest only mortgage is only paying the interest so at
the end of the term the mortgage amount owed will still be the same. This is a
big concern for mortgage lenders as at the end of the loan they will want the
mortgage to be repaid and is one of the reasons why there has been a reduction
in interest only mortgages.

To take out an interest only mortgage you have to prove that you have a
method to repay the mortgage through an alternative investment vehicle
such as an ISA. These checks are also becoming stricter to ensure that your
investment vehicle is realistically going to be able to pay off the mortgage.

This is just one way in which finding the right mortgage has become more
complicated due to the changes in criteria. There are also many other factors
such as employment status, proof of income, affordability and credit status.

It is wise to get advise if you have any doubt about whether or not you are
applying for the right mortgage because a mortgage broker can ensure that you
are not wasting your time and credit checks applying for a mortgage that you
may not be able to obtain. They can also ensure that you are getting the best
deal on the mortgage market.

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Is Credit Card Insurance All It’s Cracked Up to Be?

“The ability to pay your debt is important for your financial security. However, what happens if you are not able to make your payments? Succumbing to a disability could put you out of work for a long period of time. Your property could be destroyed in a bad storm before you finish paying for it. Credit card insurance could be something worth looking into.

Credit Card Life Insurance

If you die, your credit balance will be paid off. This can help relieve your family of at least one of your debts upon your passing. Without insurance, your family will be asked to pay your debt for you. You should be aware that you may already be covered if you already have life insurance through another provider. Therefore, it may not be worth carrying.

Credit Card Disability Insurance

Those who become disabled will have their current balance paid off. Keep in mind that future purchases will not be covered under this policy. Also, you will need to carry a policy for any of the credit cards that you currently have. However, this may be a good policy to have if you are really concerned about your credit score.

Credit Card Property Damage Insurance

Items that are damaged or stolen will generally be covered under the terms of this type of policy. The downside to this coverage is that many different policies offer this coverage as well. Your homeowners policy will cover the cost of anything damaged or stolen from your property. Renters insurance will generally cover this type of damage if you rent an apartment. Avoid this extra coverage if at all possible.

Other Pitfalls Of Credit Card Insurance

There are a a few other pitfalls of credit card insurance policies. The biggest pitfall is that there are many exclusions. You really have to read the fine print before agreeing to a credit card insurance policy. Another pitfall is that you are almost conned into buying a policy. One common tactic is to offer you a free 30-day trial. However, it is very difficult to cancel the policy after the trial is over.

Do yourself a favour by avoiding credit card insurance if at all possible. There are plenty of other policies that will offer you the same coverage for less. Purchasing a life insurance policy should cover your credit card debt as well as other debts you leave behind. Private medical insurance should help you cover your bills if you are ever out of work due to a medical issue. In other words, there is already coverage available to you if you are ever sick or injured. Go with that instead.

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May 21, 2012

Bulls vs. Bears

Are you a Bull or a Bear? If you are a sports fan you may think I am talking about either of the professional sports teams in Chicago, but you would be wrong! What I am actually referring to is the type of investor you are when it comes to investing in the financial markets. For those of you that don’t know, the financial markets are classed as being either a bear market or a bull market, depending on the current economic state. A bear market occurs when there is a steady decline in the stock market and investors are less confident about future prospects of stocks causing their prices to continue declining. A bull market occurs when the opposite is happening, investor optimism and confidence would be high and the stock market in general would be on an incline/resurgence with prices steadily rising.

At this current moment the world financial markets are definitely in what can be classed as a bear market, as stock prices are low and investor confidence is at an all-time low. This of course is because of the global recession that we are currently facing, which appears as If it will remain this way for the near future. Investors are really suffering because of this, as all but the sharpest and most diligent investors have pulled out of the markets and have turned to saving. This lack of confidence in the markets has spread to include prospective investors, some who have never even traded stocks before, many of them are busy looking for alternative methods of investing so than can make their money grow. The trouble with this is that the percentages currently being offered as a return on investment are so low that most end up leaving their money with their banks as the interest rates are often similar to what is being offered alternatively.

Now this is not to say that there is no money to be made in the financial markets, as there are still many investors making excellent returns daily! In fact some investors would tell you that investing now while the market is ‘bearish’ is a very smart move, which makes sense if you think about it. You see at the moment stock prices are really low and now would be the perfect time to capitalise on it. Say for instance you were looking for a long term investment; all you would have to do is research some into established companies that have relatively low stock prices, once you are satisfied that you have found the right company, purchase some of their stocks and wait. The key here is patience, as your stock might drop below the value you initially paid for it but rest assured that once we get out of this recession and the stocks start performing normally, you should make some significant profit! I can’t stress enough how important being patient is within a bear market, as the best returns can be had by keeping hold of stock that successfully makes the transition from a bear to a bull market.

This however is not the only way to make money in a bear market. A prospective investor can also start doing financial spread betting with one of the leading companies, such as Cantor Index by short selling to make profit on their investments during a bear market. This would be where you make a short term prediction/bet as to the way in which a stock/market will go, for example you can bet that a particular stock will continue falling in price and if it does you will make money however if it rises you stand to lose more than you bet initially.

Bulls vs. Bears

Here are three tips to help you be successful in the stock market;

1. Research; The most important factor, you have to do thorough research before investing. Make sure you have sufficient knowledge of the markets before risking any of your money.

2. Split up your investments. Do not attempt to use all your investment funds to purchase one stock, as you might have predicted wrong, and your investment can become worthless quickly. Many positive returns from many small investments are better than no return from one investment.

3. Try not to sell unless necessary. Keep hold of stocks as long as you financially can whether they are performing or not. Try to set cut-off limits, so that you will have predetermined the level of profit or loss that you would be comfortable leaving the market with.

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May 20, 2012

Warning Signs for Home Buyers

Owning a home can be a very rewarding and fulfilling experience. Many Americans are determined to secure their finances in order to achieve their dreams and become homeowners. There are several steps prospective homeowners can take in order to make sure they are ready to make that life-changing decision.

Firstly, prospective homeowners should do research into the housing market, the location of interest, and determine what time of house and property would best suit their needs. Additionally, homeowners should determine if they are financially prepared to cover the costs of purchasing a house. Another important step before purchasing is to have a full inspection of the house. This step is expensive and can be saved for serious home buying considerations. However, there are several warning signs homeowners should keep an eye out for while they are searching for their dream home.

1. State of the Neighborhood – Potential home buyers should take a glance at the houses that surround the house of interest. They should take note of the curb appeal of other houses, the state of their upkeep, and even if there are a large number of other homes for sale nearby. It is also possible to research the amount of local crime reports in the neighborhood. It doesn’t hurt to contact the neighbors on the street to get their impressions of the neighborhood also.

2. Odor Problems – While walking through the interior and around the exterior of the house, buyers should take note of any strange odors they may come across. Smoke and pet odors are removable over time, but can take quite a bit of effort. If the house smells of mold, there is a chance of potential water damage. Additionally, if the house is covered with air fresheners, the seller may be trying to trick the buyer by covering up any lingering odors.

3. Ceiling Stains- If there are water stains on the ceiling, there is clear evidence that something may be leaking and causing water damage. This is a potential red flag for bathroom plumbing issues. The bathtub may require recaulking, pipes may need to be replaced, or the tiling may require repairs. Either way, this is a potentially expensive undertaking if it is not caught before purchasing the house.

4. Faulty Wiring- When inspecting the inside of a house, buyers should test each and every light switch and outlet to make sure they are in working order. Faulty electrical facilities can be extremely expensive to repair. Wiring problems are hazardous and can cause fires and electrocution.

5. Foundation Problems- When checking out the basement and the exterior of the house, buyers should take note of any sloping, bowing, or slanting in the ground and yard. Cracks at the base of the house are clear indicators of foundation problems and can cause water runoff to flow into the basement.

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May 18, 2012

The Cost of Mis Sold Investments

Many ordinary people have recently discovered that they may not have the nest egg that they’d planned for in their retirement. Having put away regular monthly installments into investments and other savings plans, people have now discovered that these investments could be worth a lot less than they’d been led to believe. Mis sold investments are likely to cause a lot of heartache
and financial difficulty in the years to come, as people have to come to terms with the fact that they might not have sufficient money for their retirement and they could well have to rethink their plans for the forthcoming years.

With the issue of mis sold investments now coming to the fore, there is some hope for people who were given inaccurate information when they signed up to long-term investment plans. Compensation claims are being investigated and there is at least some hope of recompense for those who genuinely took out investments based on misleading information. Many people put away regular savings for their retirement, or as a means of paying off their mortgage or saving a nest egg for retirement. Without in-depth personal financial knowledge, people will have relied upon the advice offered by financial advisers, banks and other institutions in order to come to a decision about which investments to choose.

It is because this advice was – in certain circumstances – ill thought-out, or the specific investment inappropriate for the circumstances of the individual at the time, that a mis sold investment bond, or other investment product, will now come under scrutiny. It is hoped that genuine cases of mis sold investments will now be rectified to a certain extent, as individuals can make a claim for
compensation and hope to recoup their losses.

Many people will have been relying on the expected return on their investment in order to fund their retirement. The knowledge that this pot of money might no longer be available can put huge financial and emotional stress on an individual or a couple and this also needs to be taken into consideration. The situation needs to be rectified, not only on behalf of the customers who have
been mis sold investments, but also in order to ensure that financial institutions and individual advisers are seen to be held to account for any inaccurate or misleading information that they have given to customers in the past regarding the investment of their money.

With the issue of mis sold investment now out in the open, it is hoped that the message is getting through and that anyone who believes they have been misled will be able to come forward and receive more information about their investment and whether they might potentially have grounds for a claim with regards to their product. When a lifetime of savings could potentially be at stake, it’s imperative that people are now given the opportunity to check up on their finances and to have some peace of mind that their money is safe and their retirement fund will be sufficient for their needs over the years.

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