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Archive for December, 2011

Do you want a really nice car but don’t think you can afford it? Do you think you are stuck with a crappy car that barely runs? Think again! You can get a really nice car when you look at executive car leasing and the best car lease deals that are available to you. All it takes is finding good car lease deals for cars that are in the executive class by playing dealerships against each other, or by looking online.

New car leasing deals are not hard to find, all it takes is looking in the right spots for them. For example, you should try looking online for leasing deals. There are many online dealerships that offer excellent deals to those who lease through them. You can even lease some brand new executive cars through online leasers. As well, you can find people who want to transfer a lease to someone else. They can’t afford the lease, but you can, so why not take their lease and begin enjoying a new car at a discounted rate?

Another option is to look at dealerships and see what kinds of terms and rates they can offer you on the lease. Then, take that information and see if you can get other dealerships to lower their rates and costs for you. You will be surprised by just how much you can save by doing this. Dealerships don’t like it, but there is very little that they can do about it.

So, is leasing a car a good idea? The truth is that whether or not you go for executive car leasing, leasing a car is a good idea. Finding the best car lease deals for that executive vehicle is an even better idea! There are many lease deals out there for you to choose from, but you need to make sure you get the ones that are going to work the best for you. Don’t just settle with what you think is the best, because there may be a better one around the corner, or on another website.

Leasing a car is becoming the go-to option for many people in tough economic times. They can get discounted rates, shorter terms and better cars with leasing. Even if they want executive car leasing, they can get it and afford it by finding the best car lease deals online, or in their own city.

The credit score of the consumer is an important factor in any auto leasing decision and process. When a consumer finally applies for a vehicle lease, the leasing company will certainly check on his credit rating. The consumer’s score will determine if the company will approve his application for a lease.

Indeed, if you decide that you want to enter a leasing contract, your credit score has a great say on how your lease and the payments are computed by the company. For example, a contract normally contains the stipulation that you have to pay a certain amount every month throughout the duration of your contract term. The leasing company will have to obtain your credit score in order to determine if you are indeed capable of meeting the monthly payments.

How do they know your capability as a payer using your credit score? The auto lease company simply takes account of your history of payments, any debts that you still need to pay and the credit that you are currently using.

Therefore, it is extremely important for you to keep and maintain a decent credit rating. A good one is above the score of 700. This will qualify your application for a lease or other loan matters. You may begin by getting a report from the company that makes credit scores. If wrong information or figure is contained in the report, then you must immediately contact your creditor in order to correct the information.

Suffice it to say that the history of previous and present payments is the most significant factor that will determine a credit score. Therefore, it will greatly be beneficial for you and your credit score if you develop the habit of settling all payments and debts promptly and on time.

The Federal Government has set aside $75 billion dollars to help struggling homeowners with a loan modification program so they can avoid foreclosure. The goal is to help 5 to 6 million families get a lower mortgage payment so they can afford to stay in their home. This plan is not for everyone-find out if you may qualify for help by learning the formula your bank will use.

Who qualifies for this loan modification program? Here are some general guidelines for eligibility:

Homeowners must live in the property as their primary residence Loan must have been originated prior to January 1, 2009 Not required to be delinquent on payments, but must demonstrate financial hardship now or in the near future Must be able to provide proof of income and have a current mortgage payment that is greater than 31% of your gross monthly income Loan amounts of $729,750 or less for 1 unit properties-higher for 2-4 units

What are the primary features that will be offered to qualified homeowners to arrive at an affordable payment based on 31% of their gross monthly income?

Reduce interest rates to as lower as 2% Extend loan terms to 40 years Principal reduction with the Government sharing in the costs with lenders

What is the formula the lenders will use to determine who qualifies?

Arrive at a target payment by multiplying the gross monthly household income by 31% Subtract the monthly costs for homeowners insurance, property taxes, and any homeowners dues = the new principal and interest payment Using the current loan amount, reduce the interest rate to as low as 2%, extend the term to 40 years and if necessary defer or forgive some principal balance to achieve the target payment If the target payment can be reached using the standard methods of modification, then the homeowner is a good candidate for assistance.

While this loan modification program is voluntary, most lenders and servicers are expected to participate. The Federal government is offering financial incentives in the form of $500 payments to servicers and $1500 to mortgage holders that offer a loan modification program to their borrowers as well an annual payments. In addition, homeowners who stay current on their new modified loan will be given a monetary incentive for each year they remain current, for a total of $5000 at the end of 5 years.

A successful homeowner will understand what paperwork will be needed to submitted to their lender and, just as importantly, how to complete their paperwork properly so the loan modification application is processed quickly. You can use the very same formula your lender will use to pre-qualify yourself and adjust your budget before the bank reviews your application. Do you know how to figure your own debt ratio and determine your new target payment? This is critical so that you can make any necessary adjustments to your monthly budget in order to fit into the approval guidelines.

If you feel like you would like some help to make certain that you have prepared your application correctly, take advantage of a software program designed to mimic the federal guidelines. All you have to do is input your own monthly income and monthly expenses and all the calculations are done for you automatically. Your debt ratio, target payment, new interest rate, disposable income and all the other critical figures are immediately calculated. This helps you to fine tune your application so that you have the best chance of qualifying for assistance with your mortgage. Avoid mistakes and save hours of time and frustration-get it right the first time.

I’m kind of tired of all the opinions about variable annuities. From all I’ve seen, the “expert advice” goes either strongly for or against the product. If the believers were correct, every sales office would have a line down the street but if the non-believers were correct, every insurance company would be shut down because of fraud.

I know that sounds extreme but it really does show you the difference in the type of advice you are bound to get. So if you are familiar with my work, you’ll know that I try to be objective and provide solid evidence as to the pros and cons of various products.

It’s been a long time coming but I’ll tackle the variable annuity debate in this article. Before I go further let me state that I’m not overwhelmingly for or against variable annuities and there are times when they work great and others when they are completely inappropriate.

Pros

Guarantees:

Death Benefit- This allows the heirs of the contract to inherit the full principal balance in the event that the contract owner passes away while the contract is in force and the account has lost value

Income- This allows the contract owner to lock in a predetermined level of future income regardless of account performance.

Principal- This allows the contract owner to recover the principal investment or the highest contract value achieved regardless of the account value at time of surrender.

Tax Deferral: Taxes are deferred on the growth of assets inside an annuity giving the contract owner the added benefit of greater compounding. Many critics suggest that excessive fees mitigate tax deferral benefits. If tax deferral is the sole focus of purchasing an annuity, expensive optional riders can be waived so that total fees will run no higher than the average mutual fund.

Unlimited Contributions: Retirement plans have contribution limits. If you ever come in to a larger sum of money, much of it will not be eligible for allocation in a 401K, IRA, etc. Annuities have no contribution limits.

Cons

High Fees: Many annuities have optional riders that push the overall fees to 3% or more. Plenty of products allow an investor to elect out of the options but some don’t. If you are purchasing an annuity with high fees, there had better be compelling reasons to do so.

Limited Investment Choices: Asset allocation options are limited within an annuity. Some contracts have predetermined portfolio balances and others will list a limited number of available mutual funds.

Surrender Charges: As with all annuities, variable products have surrender charges so your money is tied up for a specified period of time except for the usual 10% annual free withdrawal. Be positive that the surrender schedule works with your investment time horizon.

Immobility: The combination of investment limitations and surrender charges means that your money is much less mobile than it would be in an equivalent securities account.

As you can see, the analysis is pretty simple. If you are looking at the prospect of a variable annuity just weigh the pros vs. cons to figure out if it works for you. Unfortunately, most of the cons seem to kind of be deal breakers if even one is intolerable. That supports my thought that variable annuities have specific uses for a small class of investors. It either works for you or it doesn’t. Make sure to seek solid advice from an open-minded advisor.

If you are thinking about Refinancing a Home Loan you should be sure of the benefit that you will achieve before proceeding. To assist you in your decision of whether to refinance or not, here are 7 benefits that can be achieved when Refinancing Home Loans.

7 Benefits of Refinancing Home Loans:

• Lower Repayment – Extra Cash in your Pocket

If you obtain a replacement home loan with a lower interest rate and at least the same loan term you will prove your cashflow as your new home loan repayment will be less than your current repayment. If you negotiate a new loan term longer than your existing loan term, this will also lower your repayment. By choosing an Interest Only Loan Repayment, this will also lower your monthly repayment as compared to that of a Principal & Interest Loan Repayment.

• Shorter Loan Term – Own your home sooner

You can request a shorter loan term with larger repayments or retain the same loan term and make larger repayments and/or make more frequent repayments. This will enable you to be mortgage debt free in a shorter time and/or create equity in your property quicker. A Mortgage Reduction Plan can also effectively shorten the time it takes you to pay off your homeloan and significantly reduce the overall amount of mortgage interest that you will pay.

• Money for a Lifestyle Expense – Borrow More, Enjoy Now

If you have equity in your property you may be able to increase your current homeloan giving you access to extra money to pay for a holiday, wedding, education expense, home improvement and/or purchase a motor vehicle. This is generally a cheaper option than accessing money via a higher interest rate credit card or personal loan.

• Money for Investment – Borrow More, Build Wealth

Similar to the Lifestyle Expense Benefit but you are accessing money to be used for investment purposes i.e. purchasing shares or collectibles, depositing into managed funds or supplying a deposit for an investment property. Interest on the investment portion of the loan may be tax deductible and if so, this may result in a reduction in the overall amount of personal tax payable effectively increasing your cash flow.

• Lower Loan Costs, Financial Services Costs and Interest Rate – Economy of Scale

The larger the loan amount the more likelihood of receiving a lower interest rate along with extra Home Loan Package Benefits like No Loan Setup Fees, No Ongoing Fees, Discounts on Fixed Interest Rates and other Financial Services i.e. Bank Account Fees, Household Insurance, Credit Card Fees, Financial Planning & Investment Fees. This can be achieved by combining 2 or more home loans into 1 larger home loan or Loan Package and often at no cost or very minimal cost.

• Reduce your Total Monthly Debt Repayment – Consolidate Debt, Improve your Cashflow

By combining all debts i.e. Homeloan, Credit Cards, Store Cards, Personal Loans etc into a single homeloan you will effectively reduce the interest rate of the short term debts to that of the homeloan. The resultant monthly homeloan repayment will be lower than the combined monthly repayments of the individual debts thus lowering your total monthly outgoings and leaving you with more cash in your pocket at the end of the month.

• Certainty in Managing Cashflow – Control of your Money, Peace of Mind

By converting a Variable Rate Homeloan to a Fixed Rate Homeloan you can protect yourself from the damaging effects of rising interest rates by locking in the interest rate for a set period of time, giving you certainty in managing your cashflow as well as peace of mind and more control of your money.

As you can see, there are many benefits to be had from Refinancing Home Loans and it is very important to understand how you can fully reap the benefits from Refinancing a Home Loan before attempting to make a decision.

Nationwide news channels are filled with reports on the Obama stimulus plan and focused mostly on the 75 billion allocated by Obama’s administration for Mortgage Relief. Obama’s plan focuses on keeping up to 9 million people from foreclosure. Helping these homeowners avoid foreclosure is vital to stabilizing home prices and ultimately the economy.

The plan is pretty simple, give incentives to mortgage lenders for getting out of their seat and helping homeowners facing foreclosure. Something they should of done a long time ago. Many homeowners facing foreclosure have become drenched in debt, their debt to income ratio has far exceeded the guidelines for getting a mortgage in the first place. This can be attributed to predatory lending at which time the loan was originated, however; most homeowners are dealing with lower income due to job loss. Mortgage payments are typically the bulk of a homeowners debt.

Obama’s plan focuses on cutting mortgage payments to acceptable levels, which they have designated as 31% of the homeowners total income.

The other part of the plan would help homeowners which have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners that are upside down on their mortgage, owing more than their home is worth, can refinance with a special program. Normally equity or LTV (Loan to Value) is a major factor in refinancing. The bank or lender is willing to take more of a risk if you have equity in your home. They believe homeowners are going to fight tooth and nail to keep their mortgage if it has 15-20% equity. Homeowners that are upside down on their mortgage currently have no options for refinancing into a lower mortgage rate. Their mortgage rates in many cases have adjusted and they are stuck with an inflated mortgage payment and declining home values. Removing these restrictions is estimated to help up to 5 million homeowners reduce their mortgage payments.

Keeping mortgage rates low for homeowners that can refinance and new homebuyers is key to stimulating the economy and keeping banks afloat. Mortgage rates may be reduced another .5 percent to a new historic low of 4% for a 30 year fixed mortgage. Overall the mortgage relief plan is solid, but it is not very clear how deep this crisis runs. The government has funneled billions of dollars into banks such as Bank of America, but they know little about the damage done to their balance sheets. From the sign of the banks declining market value and need for more bailout money it is safe to say the government may be in for a big surprise when they get a in depth look into the banks they have been assisting.

Waiting on mortgage relief for foreclosure relief from the government is not something recommended by most in the financial industry. If you are struggling paying your mortgage now you should see foreclosure help immediately.