Federal Reserve Bank – Controlling Mortgage Interest Rates

Homeowners often become very interested in the Federal Reserve Bank system. Every time the board of directors meets, mortgage interest rates are at risk.

Federal Reserve Bank

The Federal Reserve System acts as the central bank of the United States. Created in 1913, the Federal Reserve sets monetary and financial policies for the financial industry and trades currency with foreign countries. The Federal Reserve also acts as the bank for the federal government. When you send a check in with your tax return, it ends up in the Federal Reserve.

The Federal Reserve System is made up of 12 branch offices. The New York office is the primary office with other branches located across the country.

The primary job of the Federal Reserve is to manipulate fiscal policy. The goal is to fine-tune the economy to create a stable, predictable situation in which businesses can function. Wildly fluctuating economic keys, such as interest rates, can lead to chaos. In the late 1970’s, for instance, interest rates shot up into the high teens, causing a major economic slow down.

The Federal Reserve effectively controls mortgage interest rates in a unique manner. Many people mistakenly believe interest rates are actually set by the Federal Reserve. They clearly are not. Instead, the Federal Reserve directly dictates the rates at which one bank can loan money to another. Let’s take a closer look.

Every bank in the United States must hold back a percentage of its monetary assets. Put another way, the bank is forced to maintain a savings account. While this money cannot be loaned to consumers, it can be loaned to other banks. In exchange for the loan, a bank agrees to pay back the loan at an interest rate known as the federal funds rate. The Federal Reserve determines the federal funds rate. When you here Alan Greenspan has increase the rate a quarter point, this is what they are talking about.

You are probably wondering how the federal funds rate could possible impact mortgage rates. While there is no direct link, there is a practical one. Banks universally react to the federal funds rate, particularly whether it was raised or lowered. If the federal funds rate is raised a quarter point, you can expect mortgage rates to move up a bit. The bond market also impacts mortgage rates, which is why you will not see the exact same movement as occurs with the federal funds rate.

The Federal Reserve System makes a major effort to maintain a low profile. Most people, however, feel it is the real power behind the economy, not politicians.

Fed Hikes Interest Rates Again

On November 1, 2005, the Federal Reserve Bank [Fed] raised interest rates one quarter of a percentage point. Since Summer 2004, outgoing Fed Chairman Alan Greenspan has been raising interest rates on a regular basis since hitting its low point of just 1%. Now at 4%, Greenspan is expected to raise rates two more times before exiting office in January 2006. Will the higher rates stave off inflation? Will the new Chairman continue Greenspan’s incremental adjustments upward or will he let rates level off? Speculation is rampant but there is one thing you can know for sure: you will pay more for many of life’s expenses.

A rate hike by the Fed means that you will likely pay more for something including:

Credit cards. Not known for showing much restraint, you can bet credit card companies will continue to jack up interest rates except for their best customers. Rates of 12, 15, and even 21% or more are reappearing.

Mortgage rates. Holders of fixed rate mortgages are fine, but those with variable rate mortgages will pay more. A lot more if they haven’t felt previous rate hikes and their mortgages are due for an upward adjustment. More money to pay mortgages means less money for disposable items.

Car loans. If you need a new car and can still find zero percent financing, then grab the offer. Car loans, personal loans, home equity loans, home equity lines of credit, loan consolidations, will all continue to increase.

Add in high fuel prices, anticipated hikes in medical costs, and Americans are getting squeezed. With the holiday season fast bearing down upon us, retailers will have to slash prices in order to attract customers who are holding a dwindling cash reserve.

For people not holding excessive debt, the Fed rate increase will be have little or no effect on them. For everyone else, the pinch is on!

Fantasy Income

As Einstein said, everything in life is relative, and one’s income is no exception. While the vast majority of the world lives with an income that is below poverty level (eating only one small meal a day), there are others who make up the jet set and fly first class across the planet to share dinner with a friend. Who is happiest? Hard to say, for income ultimately has little to do with happiness. It’s all relative.

The income of many corporate executives boggles the mind. Newspapers refer to these salaries as ‘breathtaking,” “mind-numbing,” “eye-popping,” and “scandalous.” While it takes courage and dedication to be the top person in today’s major corporations, shareholders still have a hard time grasping that the CEO is worth $10 million a year before benefits. No one really knows if these corporate officers are really happy or not.

School teachers have dreams of sharing and shaping the future of the young generations. They put in as many hours as the CEO’s, and in today’s world struggle along with kids against drug and alcohol use, the violence and abnormal sex presented by TV, disintegrated family lives, a multitude of languages, and poverty life-styles. The daunting challenge of a teacher’s work environment would destroy anyone not truly dedicated to teaching. Income counts to a teacher, but it does not control the final choice to teach. Almost every-body agrees that teachers are way underpaid. Their satisfaction comes from nurturing the future the best they can under the circumstances, not from their income. Doctors and dentists have the amazing distinction of not blinking an eye at charging a poor person an entire year’s income for healing or ‘fixing’ them. True, the doctors do have medical school bills and technical equipment to pay for. However, the poor person can experience more pain from the dentist describing the new yacht he bought then he does from having his tooth drilled. When they go home at night, who is happiest? There’s no way to tell. Money doesn’t buy happiness, it’s only a tool.

Although the grass on the other side of the fence always looks greener, following one’s own dreams of creativity and service, and loving your fellow humans just the way they are, remains the most exciting, happiest way to live one’s life. Making decisions based on income alone leads down a pathway of defeat. Loving the income you have right now magnetically can attract more, and the loving adds the happiness.

Family Finance

One of the hardest things that young couples report during their first year of marriage is getting to grips with joint finances. While most are willing to share what they have with their partner, they are not sure on the best way to bring this sharing into effect so that they can share with their new partner, but at the same time maintain financial security and a degree of independence. Some couples resolve this by resorting to separate finances and others find a way to keep things together, but it is generally reported as one of the biggest strains on newly married couples.

As well as this, there is also the problem that many people find it difficult to budget and control their finances. It is one thing to fail to keep track of expenditures when you are single, but when you are married you have more to answer to than just yourself. This is especially true once you have children. If one partner fails to keep control of their spending while the other is forced to worry about finances, it can create an enormous strain on the relationship.

Family Budget

One of the best answers to this dilemma is to create a family budget. This should outline what is allowed for the various expenses, which is to be responsible for what expenses and how much each partner can spend on discretionary expenses. While this may seem like a drastic response that takes away all the responsibility and financial independence from both partners, all it is really doing is getting both parties to sit down together beforehand and work out how much they can afford to spend on what, and then sticking to this. It is about being in control of your expenses rather than letting them have control over you.

Other ways of taking care of difficulties between married couples is to divide out the family expenses depending on how much each partner earns. This way both will feel responsible for the security of the family and will feel like they are an important contributor to the family finances.

Financial Matters

While each partner should have a degree of financial freedom, and also privacy, finances should be discussed openly and with without shame. Past debts or mistakes that one party has made should be put in the past and should be forgotten. At the same time, if one partner shows that they are unable stick to the budgets they have agreed, their financial freedom will have to be taken from them and they should be given a tight leash in financial matters.

Fade The Gap And Make $$'s Every Day In Stocks

Avery Horton “The Rumpled One” is a traders’ trader who makes a great income day trading a very simple day trading method called “fading the gap.”

If you could trade a method that took you less than 30 minutes to perform in the morning for $0.30 to $1 profit with 80% accuracy….would you trade it?

When you can trade 1,000+ shares in a stock that is $300 to $1,000 profit on each successful trade EVERY DAY.

Here are some of the emails I have received from Avery recently:

1) See all the gaps that have filled within 30 minutes

2) Even where the gap hasn't filled, there's money to be made
What I mean by statistics is how many times during the last 100 days a stock has gone up at list $.10, $.20, ... $1.00 or more from open to high:

Mark, I like to keep things simple... 1000 shares * $.12 profit / share = $120. After commissions, I net $100. Basically, this is a $100 bill printing press.

-Avery

See all those filled gaps?!?!?!

You would have made over $1.00 per share on every trade! The QQQQ doesn't count, I just use it to gauge the market. But it, too, filled the gap...LOL!

Compare the middle indicator to before... see how much trading each cross can net you?

It really is simple, Mark. I think you can "feel" it... can't you?

- Avery

Hi Mark:

1) Let's say a trader starts with $25,000 and trades 1000 shares. If the trader nets $100 a day pretax on ONE TRADE, with 22 trading days a month that's $2,200 in about 30 minutes or less per day.

Ok..that’s enough for now. I have picked The Rumpled One’s mind clean over the past week nailing down his “fade the gap method.” I am actually amazed he gave away so much information so freely.

So get you FREE “Fade The Gap Day Trading Method” Now by entering your name and email address. You will need to read your email address in order to go to the download page and access the method.

Get it now and start milking those “daily” profits tomorrow.

Factors to Consider for Borrowing Student Loans

Under the accepted standards of borrowing student loans, it is stressed that you can borrow up to the cost of attendance, as determined by your school, less other financial assistance you might be receiving. Other financial assistance refers to grants, work-study, and scholarships. And, the cost of attendance typically involves tuition, books, fees, room and board, and other miscellaneous living expenses.

Also, the cost of attendance as determined by your school has figures that are meant to apply to a wide group of students. Oftentimes, you may not need to borrow as much as your school allows. Note that it is best to borrow the minimum amount possible so that you can lessen your overall financial obligation later.

If you prefer to consider borrowing student loans to finance your education, just expect that some of the lenders these days have borrowing limits placed on student loans. For instance, the federal government places annual and aggregate borrowing restrictions on federal student loans, and the aggregate limit is usually the total amount that every student can borrow in the span of his or her education. Given this fact, it is then necessary to examine and evaluate the terms of every loan you plan to take on for the annual and aggregate loan restrictions.

Aside from that, carefully and honestly assess your current financial status, including any financial commitments you have made before entering the school of your own choice. Understanding the repayment obligations of every commitment you’ve made is the key here. Note that over time you will be responsible for these prior obligations in addition to any education debt you take on, and your education loans are not given to cover these prior obligations you have.

Finally, consider the realistic determination of your future income. You can perform some research on the current job market and start salaries in the area you plan to pursue. Just note that you will be paying for your education with your future income. So, when choosing a student loan program, be sure to do some investigations on the loans that offer you alternative repayment plans which can assist you in managing your payments, especially early on in your own career.

Factoring Your Way To Liquidity

There are various types of factoring available. These factoring can be in any industry viz. account receivable factoring, asset based lending, business loans, construction factoring, credit card receivables factoring, distributors factoring, equipment, hard money loans, invoice factoring, manufacturing, medical factoring, purchase order financing, real estate lending, staffing, systems, technology, trucking, verdict funding, wholesalers, etc.

Various agencies provide all these types of factoring. Usually their turnaround time is 24 hours. They provide exclusive online and paperless factoring solutions to the small and medium sized businesses. These agencies either provide stated rates for factoring of invoices of a particular amount or they offer a free invoice-factoring quote. Thereafter these agencies approach the factoring companies that purchase the creditworthy accounts receivable at a small discount and convert the invoices in to cash.

With the help of these factoring agencies cash is received in mere 24 hours and no debt is created. Since there is no debt created it increases your credit worthiness which can be used to avail a loan. This also represents a healthy balance sheet and strong financial position. These agencies also offer higher advance rates which ultimately results in factoring lesser invoices but generating all the required money.

Moreover the factors handle the collection in professional manner thus reduces the collection costs. They also help in processing of invoices by generating invoices online. This further means increased paperless work. As a result the turnaround time is much shorter than any other means.

Invoice factoring is also known as accounts receivable financing. This practice helps in solving the immediate cash flow problems for small businesses with immediate infusion of money. They also provide a credit facility to small business owners with complete flexibility. This also provides the working capital to the small or medium business owners. This factoring helps in generating working capital without the need of constant renegotiations. Since there is a considerable increase in the working capital it leads to more sales and expansion of business.

A practice of factoring helps small business owners not only to solve their cash problems but also help in increasing sales. Small business owners can also concentrate on their businesses rather than chasing their customers for payments and cash. Factoring practice helps all kinds of small to medium business owners whether they are a small trucking company or any manufacturers.

As a result of invoice factoring, it not only reduces accounting costs but also helps business owners and manufacturers in increased productivity. This practice if factoring the invoices keeps the businessmen from other time consuming jobs like collection, administration, book-keeping, looking up additional capital or warding off creditors.

Finally the best part of factoring is that the business ownership remains unchanged as in case of loan, etc. Since there is no loss of business equity, the ownership percentages remain unchanged.

Factoring Can Be An Ideal Solution For Start-Up And/Or Growing Businesses

Factoring is one of the oldest methods of business financing in existence. The history of factoring dates back to the days of moneylenders in the middle ages. Factoring has been the working capital facility of choice in Europe for centuries. It has taken on a new life in recent years as a financing method for many businesses in the United States.

Factoring is the sale of accounts receivable, as opposed to borrowing against them as you would do with a bank line of credit. By selling your invoices, you generate immediate cash flow instead of having to wait for your customers to pay.

Companies often find themselves in the frustrating position of having sales opportunities which they cannot accept because of the lack of financing to support those sales. Banks normally cannot provide adequate funding for growth due to internal credit policies and external regulatory restraints. Even if a business can qualify, the bank line of credit may be totally inadequate to support the company’s sales growth opportunity.

Primary advantages of factoring versus a bank line of credit:

• Factoring facilities are much easier to implement compared to acquiring a bank line of credit.

• Factors have more flexibility with regard to documentation and credit issues than banks.

• Factoring can be initiated and terminated very efficiently. When making a first-time purchase of invoices from a business, factors typically take one to two weeks to check the credit ratings of the customers and communicate a discount price.

• The business receives payment in cash from the factoring company after delivery and invoicing a customer. Immediate invoice payment eliminates the sale-to-collection business cycle; thus allowing businesses caught in a cash crunch to obtain fast relief. Turnaround on the sale of receivables is only about 24 hours.

• Factoring is a sale of assets (invoices), not a loan. For businesses that either cannot qualify for traditional debt financing or that simply do not want to incur more debt; factoring is good alternative means of funding working capital.

• Factors purchase all rights in the invoices and the seller has secondary liability for any invoices not collected.

The factors undertake debt collection, but the business remains ultimately responsible to repay any portion of the cash price attributable to an account that went uncollected. Factoring can be an effective solution to funding a short term gap in cash flow for the start-up or rapidly growing business.

Facilitate e-transaction with Internet Merchant Accounts

Anybody familiar with electronic transaction or e-commerce over the internet like purchasing products by paying through credit cards will be familiar with the term Internet Merchant Account.

It is mandatory for every organization to have an Internet Merchant Account to accept payment online. Various companies, MNCs, offer the required software to run and maintain such accounts.

Every organization should have a checking account with any bank in the US to maintain an Internet Merchant Account. If the organization has not obtained a checking account, there are institutions that will help in obtaining an account from the bank. Some local banks do not offer Internet Merchant Account service.

Many banks offer the entire product, Internet Merchant Account, right from receiving the payment online to crediting it to the organization’s official account. The Internet Merchant Account is also useful to individuals engaged in web-based business activities.

The Internet Merchant Account is the second of the three layers that exist between a customer and the organization. The first and last layers are the payment gateway and the website respectively.

The Payment Gateway completes the initial process like screening the credit card, registering its details, the product ordered, accepting the customer billing information and the necessary validation. This Payment Gateway subsequently transfers all these details to the Merchant Bank Account along with the payment downloaded in an electronic format from the credit card.

To enable this transaction, the website selling the product or engaged in web-based business, should be integrated with the Payment Gateway and the Merchant Bank Account. Without integration, an electronic transaction is not possible.

The Internet Merchant Accounts come at a cost. Usually, there are three price ranges for upfront application fee, ongoing fixed rate, discount rate, fixed transaction fee, termination fee and miscellaneous fee. The range depends on the volume of the business the organization or the website can generate. To begin with, start from a low volume generating business as the prescribed fee is lower. There is scope for scaling up the business and changing the range of the account.

It is advisable to visit banks to evaluate the offers for Internet Merchant Account. Banks are flexible when they offer the package for Internet Merchant Account provided the applicants convince them on the volume of business generation.

Information about Internet Merchant Accounts can be obtained from the internet as well as the banks offering such services. These banks also advertise this particular service on the internet since it is one of the most popular e-transactions adopted by various individuals and organizations engaged in e-commerce.

Extension of Short Leases on Central London Properties

Copyright 2006 Nigel Osgood

Facts

• The shorter the remaining term of the lease, the more difficult it will be to sell the property or for potential buyers to raise the finance

• Potential lenders usually require a minimum term of lease at outset of a mortgage facility and, also, require a 30+ years left on the lease at maturity of the mortgage term

• Properties in prime areas of Central London, typically, have leases attached to them with less than 30 years remaining (some have much shorter remaining terms)

• Since the Commonhold & Leasehold Reform Act 2002, it has been easier for an owner of a short leasehold property to extend the term of the existing lease, if he/she has owned the property for two or more years

• Few lenders have identified and responded to this niche lending opportunity; those that have done so, consider the location of the property and the status of the freeholder to be important factors in the mortgage application process

• Quality estate agents and valuers, experienced solicitors and enlightened independent mortgage advisers will all have significant roles to play in this business arena Financing the Extension of a Short Lease

A freeholder will require a monetary consideration in order to extend a lease and there are, essentially, three options for making that payment:

• Pay the premium to the freeholder out of one’s own financial resources

• Apply to one’s existing lender for a ‘further advance’ in addition to the existing mortgage

• Apply to another lender for a re-mortgage to pay off one’s existing borrowing and raise the additional amount required to pay the freeholder

A lending institution will value the property on the bases of its current short lease and also the future increased lease term.

If approved, the mortgage will be based upon the revised lease term and, when the funds are released to the acting solicitor’s client account, the new lease will be executed simultaneously.

Illustration:

An applicant has a 5yrs mortgage of £350,000 on a 15yrs leasehold property valued at £500,000 and he/she can acquire a 90yrs extension to the lease by paying the freeholder a premium of £250,000. The property’s value will increase to £1,000,000 with the new 105yrs lease in place.

A £600,000 mortgage is approved and the £350,000 borrowing is redeemed and £250,000 is paid to the freeholder.

Purchasing a Short Leasehold Property

As, say, a 15yrs lease reduces so does the value of the property decline; a ‘purchase’ application, therefore, challenges a lender more than a ‘re-mortgage’ application.

It is likely that, after two years of ownership, the purchaser will apply to increase the lease as in the preceding scenario; a lender cannot include that factor when considering a mortgage application for a purchase of a short leasehold property.

Again, using an existing 15yrs leasehold property and a 5yrs mortgage as an example, it is unlikely that a borrower would opt for a ‘capital and interest’ facility, given the likely repayments. An ‘interest-only’ mortgage product is not attractive to a lender because of the fact that the reducing lease is likely to have a declining value.

The answer can be a hybrid of the two loan types i.e. a mortgage that is part ‘capital and interest’ and part ‘interest-only’ in order that a lender’s exposure re. loan/value is not impaired.

Illustration:

A lender is prepared to lend 70% of the purchase price/valuation and requires that the exposure is no more than 70% of the declining value at anytime throughout the mortgage term.

Purchase price/valuation of 15yrs leasehold = £500,000 Valuation of the property with 10yrs remaining = £350,000 Loan term is 5yrs

The lender is prepared to structure a loan on the basis that enough capital is repaid over the five years in order for the exposure to be no more than 70% of the declining value.

In this scenario, £350,000 would have been lent at outset (70% of £500,000 value) and after five years the borrowing would be reduced to £245,000 (70% of £350,000 value).

As the mortgage was for a five years term, the borrower would have to pay off the outstanding £245,000 at this time, having sold the property or from his/her own cash resources or having extended the lease and re-mortgaged.

Summary

The processes of purchasing, re-mortgaging or extending the leases of short leasehold properties require the services of knowledgeable and experienced advisers.

There is a slowly-increasing awareness of the market opportunity by a few of the more forward-thinking and flexible lending institutions.

A huge amount of prime Central London property is short leasehold, owned by highly reputable freeholders that have embraced the enfranchisement Act.

In future, those potential buyers of short leasehold properties or those wishing to extend their existing leases can do so knowing that professional and experienced support is available to them.

Exotic Mortgage

With real estate prices ever on the rise, first-time home buyers are facing more difficulties in buying a home. Who ever thought they'd buy a $500,000 starter home?

Mortgage lenders have acknowledged the problem by creating new and innovative mortgage products, mostly designed to lower the borrowers' payments in the first few years of the mortgage. Many of these products allow borrowers to buy homes that they traditionally couldn't afford, but they aren't without risk.

The latest and most exotic mortgages out there include:

1. The 40-Year Mortgage
2. The Portable Mortgage
3. The Interest-Only Mortgage
4. The Negative Amortization Mortgage
5. The Flex-ARM Mortgage
6. The Piggy Back Mortgage
7. 103s and 107s
8. Home Equity Line of Credit
9. Loan Modification Mortgage
10. Short-Term Hybrids

1. The 40-Year Mortgage

This is similar to a 30-year fixed rate mortgage, except the payment is being stretched over an extra 10 years. The lender will charge a slightly higher interest rate, as much as half a percentage point.

A 40-year mortgage gives you lower monthly payments than a 30-year loan, while allowing you to lock in today's interest rate. If you buy a $300,000 mortgage at a 6.25% interest rate, you could be saving $95 each month in payment.

But by extending the length of the mortgage, you are increasing the amount of interest paid on the loan. For a $300,000 mortgage, a home buyer will spend an additional $170,030 in interest with a 40-year mortgage.

These mortgages are best suited for first-time home owners who don't plan to live in the home for more than a few years. If they can't afford the higher payment of a 30-year mortgage, the 40-year may give a good start to home ownership.

2. The Portable Mortgage

E*Trade has a program called Mortgage on the Move. It allows a home buyer to lock in a low interest rate and then take the rate with them to their next home in a few years. A second mortgage can be used if the buyer needs to borrow more money for the new home.

When interest rates are low - and looking to rise - locking in a rate for the next 30 years is attractive.

But interest rates for portable and second mortgages are higher than for standard loans. You may be looking at paying ½ to ¾ a percentage point more than on a typical 30-year fixed-rate mortgage.

This product is good for those who know they will move in a few years, but still want to lock in a low rate.

3. The Interest-Only Mortgage

With an interest-only mortgage, the lender allows the borrower to pay only the interest for the first so many years of a mortgage. After the grace period, the loan essentially becomes a new mortgage with the interest and principal being stretched only the remaining years. For example, you may pay no principal for the first ten years, and then pay the principal and interest for 20 years.

This gives you a smaller monthly payment during the interest-only repayment period, and during this time, all the money being paid is tax deductible.

But if home prices don't rise, your equity won't build during the interest-only years. When your principal-payment period begins, the monthly payments will jump significantly. Most of these loans feature variable interest rate, which puts you at risk for even higher monthly obligations.

This type of mortgage is great if you know for sure that your income will rise significantly in the next few years. Interest-only loans are also a good fit for professionals who receive large bonuses as part of their pay. They can pay interest during most of the year and then put the bonus towards the principal.

4. The Negative Amortization Mortgage

This interest-only type of mortgage allows a buyer to pay less than the full amount of interest. The difference between the full interest payment and the amount actually paid is added to the balance of the loan.

This gives you the option of a much smaller monthly payment during the first years of a loan.

But, this is probably the most risky mortgage available. If the value of your home falls, you will easily be upside down in your load. You would owe more money on the house than it is worth.

These loans are great for those with large cash reserves who need to make lower payments during certain parts of the year, but can pay off the difference in large chunks at other times.

5. The Flex-ARM Mortgage

This is a cross between a hybrid ARM, which offers a low fixed interest rate for the first five to seven years and then adjusts annually, and a negative amortization loan. Each month you receive a coupon that gives you four possible payment options: negative amortization, interest-only payment, 30-year fixed and 20-year fixed. The homeowner decides how much he wants to pay.

The bank handles all of the calculations for you. But if not used wisely, you could owe more on your mortgage than your home is worth.

A Flex-ARM is good for those who prefer to have options. The borrower should have large cash reserves for when the mortgage payments enter the later part of the loan. Like interest-only loans, they are great for those who receive bonuses during the year.

6. The Piggy-back Mortgage

This is actually two mortgages, one on top of the other. The first mortgage covers 80% of the property's value. The second covers the remaining balance at a slightly higher interest rate.

In most cases, borrowers choose a piggy-back mortgage because it allows them to put less than 20% down and still avoid paying private mortgage insurance. The money that would be used towards private mortgage insurance is now tax deductible as interest paid.

Homeowners should expect to pay a higher interest rate on a second mortgage. The rates you pay vary greatly depending on your credit score. Since the borrower has very little equity in the home, there is the fear of the home losing value and the borrower owing more than they can sell it for.

Piggy-back mortgages are a good fit for young professionals with reasonably high salaries, but no savings.

7. 103s and 107s

You may not need to save for a down payment at all. You could borrow 3% or 7% more than your home is even worth.

These loans give you the option of borrowing money needed for closing costs and moving costs. You can include it all in the mortgage.

The interest rates for these mortgages are high. You run the risk of negative equity if your home loses value.

If you have large cash reserves that work better for you in the stock market than in investing in your home, you may want to look at this type of mortgage.

8. Home Equity Line of Credit

These aren't just for those who own a home! They are commonly known as HELOCs, and they can finance an original home purchase using a credit line instead of a traditional mortgage. HELOCs are variable-rate mortgages tied to the prime rate. If you use this mortgage as your first mortgage, all of the interest is tax deductible. You simply make a down payment, and the HELOC pays the remainder. You can usually use one for up to 90% of the home's appraisal value. For a higher interest rate, you may qualify for 100%.

HELOCs can offer more attractive interest rates. You can also use the equity you build in your home at any time.

HELOCs are usually structured for 10 to 20 years, instead of 30. The interest rate is variable, which means that your payment can rise at any time.

If you want to pay off your home quickly, but need the ability to access your equity at any time, you might consider a HELOC as your primary mortgage.

9. Loan Modification Mortgage

This mortgage allows you to change your terms whenever you want, all you have to pay is a $1,000 closing cost for every million dollars borrowed. No paperwork is necessary; all you have to do is make a phone call.

You can expect to pay about 3/8th of a percentage point higher interest rate.

People who like to follow interest rates can call and have their rate changed when interest rates are down. But borrower's must take into consideration the closing fees charged each time they modify their mortgage. Many customers with this type of mortgage have financial planners who manage the mortgage.

10. Short-Term Hybrids

These mortgages are much like traditional hybrid ARMs with fixed-rate periods and then interest rate that floats. But the fixed portion on a short-term hybrid is for a very limited time, for example, six months to a year. Lenders offer very competitive rates on these mortgages.

The interest rates are very low for the fixed portion of the loan, making the initial monthly payments relatively small.

But six months or a year is not a very long period of time, but rates can change dramatically in just that amount of time.

People who plan to flip a house or move in a very short period of time are good candidates for a short-term hybrid ARM.

Exchange Rates - Keeping an Eye on Them

Keeping an eye on currency exchange rates is essential when traveling if staying within a budget or if just not wasting money is of concern to you at all. What does exchange rate mean? Typically, using the US dollar as a guide, other currencies would be worth more or less than a dollar for exchange of value. For instance, a Canadian dollar might be worth 85 percent of an American dollar, or 85 cents. Then when comparing a US dollar to the British pound, it a pound might be worth two US dollars. The fluctuating exchange rate means that, depending on market conditions, one day a pound might be worth two dollars, and the next day a pound might be worth two and a half dollars, and the next day worth one dollar and ninety cents.

A currency will be either free floating or pegged. A pegged currency is fixed by the government relative to the value of another currency. For example, the Hong Kong dollar in the 1980’s was fixed or pegged relative to the US dollar and always worth a set percentage of the currency it was pegged to. A free floating currency is allowed to fluctuate in value relative to all the other currencies on the foreign exchange market. When discussing currency people also refer to the nominal exchange rate, and the real exchange rate. The nominal rate is the rate at which a currency of one country can be traded for the currency of another. The real rate is the rate at which goods and services of one country can be traded for the goods and services of another. If, for example, the price of a product increases by ten percent in the US and there is a ten percent appreciation in the Canadian economy against US currency, the price of the product would remain constant for Canadians despite the US price increase. This is of course assuming that no tariffs are involved.

As a practical matter exchange rates will change from country to country and can be used to make travel and tourism more attractive in certain countries at certain times, so if there are several countries you’d like t visit and you have a flexible schedule, keep an eye on the exchange rates. If a person is a visitor in New York City it is easy to see how people in other countries follow this rule. At certain times the city of New York will be flooded with visitors from Germany, France, the UK, or Japan. The reason for this is quite simple. When the exchange rate favors the Japanese or the Europeans, then visiting America becomes much cheaper for them than at other times. If for instance, one thousand Euros, due to a favorable exchange rate, will purchase twelve hundred Euros in value, then they have a net twenty percent gain and a twenty percent cash incentive to visit the US. In recent years this exchange rate has usually worked in favor of Europeans, but in years past it worked in favor of Americans. For instance, before the Euro became the standard currency of Europe, Italy used lira, Germany the deutsche mark, Switzerland the Swiss franc, Austria the schilling, and France the French franc. In the early 1980’s the exchange rate was five French francs to the dollar, two and a half Swiss francs to the dollar, one thousand lira to the dollar, and two and a half schillings to the dollar on average. The German mark was fluctuating, anywhere from 1.7 marks to the dollar to 2.5 marks to the dollar, so when the dollar was worth 2.5 marks Americans would be ahead to trade in their dollars for marks. When the rate was 1.7 they were better off not spending German marks.

Keeping an eye on exchange rates will always benefit the traveler. Even if you are just crossing the border to visit our neighbors to the North in Canada or the South in Mexico, knowing what the normal value of the other nation’s currency is, and planning your trip for when the fluctuation is in your favor will increase spending power.

Everything About Private Money Loans

What is private money used for?
Private money is generally used as a bridge: a way to get from point A to point B. It is generally a short to medium term solution (1-6 years), and there is

nearly always an exit strategy going in. It is used for all types of real estate secured financing: commercial retail, restaurants, hotels/motels, marinas,

elder care facilities, industrial, agricultural, raw land, land development, construction, rehab, multi-family, single family homes, manufactured homes, and

floating homes. For a list of our loan programs. Some providers of these loans are www.rocklandcommercial.com, www.californiaprivatemoneyloan.com, and

www.interestratepolice.com

What are the interest rates?
Private money rates generally range from 10 to 15%. The rate is determined by looking at a combination of factors: (a) LTV ratio, (b) strength of borrower,

(c) condition/desirability of property, (d) actual cash-in or real equity contributed by borrower. Typically our rates fall in the 12-13% range. A list of

our loan guidelines may be found here.

What fees are involved?
Private lenders charge a loan fee generally equal to 5% of the gross amount of the loan. We also charge a doc prep fee ($500 or more, depending on the size

of the loan), a property inspection fee ($500 or more, depending on the location of the property), and a collection account setup fee which is based on the

size of the loan. There are no hidden junk fees.

Can the fees be paid from the proceeds of the loan?
Yes, if there is enough equity in the project. This is frequently the case.

Is there a pre-payment penalty?
Generally there is a 3-6 month minimum interest clause for our loans. With a 3 month minimum interest clause, for instance, it means that if a borrower

repays a loan in 3 months or more, there is no penalty. If the borrower repays the loan, for example in 2 months, then the borrower will have to pay an extra

month's interest out of escrow at closing.

Why would anyone pay those kinds of rates and fees for a loan?
There are many reasons whey a borrower would choose to use private money over a cheaper institutional option. For example, professional real estate investors

like to use private money when buying because they are able to make offers which are not constrained by long timelines and numerous rigid conditions. Often

times speed is a very significant factor in completing a profitable transaction and in those cases it often makes sense to pay for a short-term private money

option rather than loose the deal. Frequently the condition of a property won't allow for the initial financing with conventional money, and in those cases

private money may be used. Often the type of property is a factor: banks don't like lending on raw land and lots, but private money lenders are more inclined

to do so. Cash leverage is another factor. Fairfield Financial, for example, loans based on the true value of a property, not the purchase price, so

sometimes we lend 100% of the total acquisition cost for a property. The structure of the deal may be a factor. Most private money lenders allow the buyer to

establish their equity through the mechanism of a seller carry back; banks won't do this. The list goes on and on.

What is the most common use for private money?
Most common loans are probably construction, rehab, and land development loans. We have an entire FAQ devoted to these loans: see the Rehab and Construction

Loan FAQ.

How fast can private money loans close?
In a matter of one or two days, but more typically, you should figure on 1-2 weeks. (Keep in mind that it is only possible for the lender to move quickly if

the borrower, broker and other third parties are moving quickly as well.)

Is an appraisal required?
Some private money lenders require them. Evidence of value is a critical part of the private money loan process. However, it is in my opinion that a good set

of comps is just as effective in establishing value as a good appraisal. Many of our borrowers are professional investors, and i feel that they are qualified

to perform the value analysis. This allows us to streamline the process. However, it is important to note that putting together a god set of comps is hard

work.

As a mainstream mortgage broker, I don't see much of this type of thing. Why should I be interested in private money?
To be perfectly frank, it is my belief that mainstream mortgage brokers are being squeezed out of the industry. Lenders are ramping up their operations to

better provide online loan sourcing directly to borrowers. We saw a similar thing in the travel industry over the past years. The travel agents that have

survived, and even thrived, are the ones who effectively established niches within the industry. It is my belief that the same will be true for mortgage

brokers. Plain vanilla loans can be easily processed in an assembly line fashion which easily translates to the world of the novice and a web browser. Niche

lending, on the other hand, tends to be a hand-crafting of sorts, and cannot be easily automated. Look at private money. There are no absolute rules. Many

factors must be considered in making a decision and frequently those factors are intangible. Ultimately a high degree of thought work and common sense is

involved. Private money will always be a people process. So if you tell me, "I am not interested in private money because I don't do unusual loans," I say to

you, "You might want to reconsider."

As a mortgage broker bringing A transaction, how do they get paid?
It is simple. The broker brings the lender a borrower. The lender prices the loan to them. (Think of yourself as a wholesale buyer.) You price the loan to

your client, adding your fees as appropriate. You stay involved in the loan (or not) as you choose, and prior to closing, you submit a fee demand to escrow

and receive a check directly from the title company.


How do I go about doing a private money loan? Go to one of these providers and call a representative: www.rocklandcommercial.com,

www.californiaprivatemoneyloan.com, and www.interestratepolice.com

There are basically four steps.

First, run the concept by them. You may call and discuss the loan with them, or you may e-mail a summary, or you may use our online loan submission engine,

which will walk you through the process. If they like the project concept and feel that the numbers are acceptable, they proceed to the next step.
They review a complete loan packet. They ask that this be sent via overnight mail or delivered to the office (fax copy is not acceptable).
If all this checks out, They ask the borrower for a deposit (generally $500). This should be in the form of a cashier's check or money order. They provide a

conditional loan commitment letter at this time.

If the property checks out, They draw up the documents and close the loan through escrow.


Is the deposit check refundable?
If they close the loan through escrow, the deposit is applied as a credit to the loan fees. If they don't close the loan because (a) the borrower does not or

cannot perform or (b) the project upon inspection is "significantly" different than as represented, They keep the deposit to reimburse us for our costs.

Otherwise, if they fails to perform for any reason, they return the deposit to the borrower.


What needs to be included in a private money loan package?
A private money loan packet is generally fairly straightforward. For a list of our packaging guidelines, please visit: www.rocklandcommercial.com,

www.californiaprivatemoneyloan.com, and www.interestratepolice.com


Written by Jeff Chaney an experienced private money originator from Manhattan Beach, CA that lends nationwide. He can be reached at 800-572-4080

Evaluating Balance Transfer Offers on Credit Cards

When looking to get a new credit card, there are many things to watch out for. Whether this is your first card or you’re simply looking to transfer your balance of an old card onto a new one, there are many items you’ll want to beware of, including how long your 0% interest will be. One of the main issues of transferring your balance is what happens when you apply purchases onto the same credit card you transferred a balance on.

If you are in the market for a credit card to transfer a high-interest rate balance, there is one particular thing you’ll want to watch for. For example, a credit card company may claim to have a 0% interest rate for 6 months on a balance transferred from another card. This, in fact, is quite common. However, the catch is simple when explained.

Use this card for any purchases and you’ll be paying an interest rate of approximately 16.9% interest on your purchases. The 0% interest does not apply to any purchases you normally use a credit card for and if you have your transferred balance on the card, as well as purchases, your repayments will go toward paying off the balance transfer first. Therefore, you’ll be accruing interest on the purchases and have no way to repay them unless you pay off the balance transfer first.

Unfortunately, this is why the majority of these companies offer cash backs and rewards. They want you to put purchases and increase your balance. In this particular case, they make a lot more money from you, while you spend years trying to pay it off.

Does this mean this is the death of the 0% balance transfer offer? No, it does not. To get around this, you’ve simply got to be aware of the fine print within each particular programme. If the offer states that it is 0% interest on balance transfers, cheque for how long it will remain 0% and what the interest rate will be once the time is up. You’ll also want to know and evaluate what the minimum transfer balance is. Most credit cards are approximately £100. You must decide at this point if you believe the balance will be paid by the time period is up and if not, can you handle the interest rate.

The next step is to keep this card only for this balance transfer. Do not put any purchases or draw any cash from this card, no matter what kind of offer they give you for rewards or cash back. If you can do this, the 0% balance transfer will be beneficial to you.

Another thing to watch out for on credit card offers is if there is a handling fee. There are some companies that will charge a one-off 2% fee for balance transfers and they also put a minimum charge of £2 and a maximum of £50. While there are still some offers that will not charge a handling fee, they are becoming rare.

When looking to use a credit card for a balance transfer, it is very important to read the fine print on each and every offer before you make a decision. Look at what the interest rate will be and after what time period, as well as any handling fees involved. Evaluate each 0% balance transfer offer and go with the one you feel would work best for you.

Euro Impact on the East European Countries and Banks

Prague, 15 June 2001 (RFE/RL) -- The German central bank (the Bundesbank) estimates that more than one out of every three German marks circulates outside of Germany -- signifying billions of marks. The banks says the majority of them are in Eastern Europe and the territory of the former Soviet Union.
Because of the mark's stability, and Germany's role as a place of employment for Eastern European workers who send their money home, the mark has evolved into a de facto second currency in the lands to the south and east of Germany's borders.
Montenegro and Kosovo have even adopted the mark as legal tender. Other countries have pegged their currencies to the mark through currency boards. Bosnia uses a unit of exchange called the "convertible mark," which trades on a one-to-one basis with the German mark.
But the mark -- along with the other currencies of the European Union's 12-nation euro-zone -- is about to disappear.
On 1 January 2002, more than 250 million people in Western Europe will begin exchanging their national currencies for the euro. Older currencies and euros will circulate together until the end of February. After that, the national currencies will no longer be used.
That does not mean the currencies will be worthless. Central banks will continue to exchange them for euros for several years to come. But for all intents and purposes, Western Europe's national currencies -- including the mark -- will cease to exist.
Hans-Werner Sinn of Germany's Ifo economic research institute has looked into all aspects of the coming changeover. He says Eastern Europeans, like their counterparts in Western Europe, will eventually have to exchange their marks for euros.
"Clearly, these Deutschemarks [German marks] will no longer be useful in the long run. So people will have to bring the Deutschemarks in to their respective banks and exchange them into euros. That will have to happen in the spring of next year [by the end of the February deadline]."
Antti Heinonen, the director of banknotes at the European Central Bank, or ECB -- the institution that is coordinating the switchover to euros -- says that the change should not cause many problems for most Eastern Europeans.

But the currency's first challenge -- in Eastern Europe at least -- will be to replace the mark in people's minds and mattresses.

ETFs Unplugged

Is your financial advisor missing a critical piece to the ETF?

Exchange-traded funds (ETFs) are great investment tools but most have a flaw that investors and advisors usually miss. Let’s take a look under the hood and introduce some new and innovative ETF products.

Essentially, ETFs are nothing more than an index fund that trades like a stock. Because of their simplicity, flexibility, low cost and tax efficiency they are growing fast. Last year the Barclays iShares family of ETFs brought in more new money than the Fidelity mutual fund machine.

Diversification

Unfortunately, many investors and advisors are building portfolios of ETFs without looking inside the box and seeing where the money is going. One of the chief goals of a portfolio is diversification and many ETFs are not very diversified. This is because the companies in the ETF are weighted by size – specifically by the market value of its outstanding stock. This can result in an unwise concentration of risk and uneven performance.

The index fund community’s preoccupation with market cap weighting may have a strong theoretical basis but to me it is contrary to common sense. To be blunt, I pay very little attention to it while building global portfolios for clients.

Most investors would agree that just because a company is bigger doesn’t mean that it is a better investment. Let’s look at the most well known index – the S&P 500 index. Many investors think that investing in the S&P 500 means that their money is being divided equally between 500 companies. This is far from the truth. Because the companies are weighted by size, 22% of your investment is going to the ten largest companies in the index and 60% of your investment is going to the largest 50 companies in the index.

Unequal Weighting, Unequal Returns

This is why I have been advising clients to invest in the Rydex S&P 500 equal-weight ETF (RSP) which weights each company in the index equally. In 2003 the equal weight S&P 500 ETF beat the S&P index by 11%, in 2004 it beat the index by 5% and year-to-date it is up slightly while the S&P index is down.

In my book, “The New Global Advisor”, I ask readers a provocative question. If you wanted exposure to the dynamic biotechnology industry, would you prefer to primarily invest in a few large well know biotech companies or would you prefer to spread your investment over thirty biotech companies? If you’re the former, you might invest in the iShares Nasdaq Biotechnology ETF (IBB) whereby 25% of your investment would go to three companies. For those that prefer broader exposure including some small cap companies, I have discovered a new family of ETFs called Powershares.

The new and innovative Powershares family of ETFs essentially creates its own indexes based on rules-based quantitative analysis that they refer to as “intelligent indexes.” This seems to me to be more useful than blindly following market cap weighted indexes. There are two Powershares that I particularly like at this point.

Two I Like

The first is the biotech Powershare (PBE) that contains 30 biotech companies. If its holdings were weighted by market cap, two companies would account for more than 60% of its holdings. Instead your exposure is spread among 30 different companies with no company accounting for more than 5% of the total. 30% of your exposure is to large cap companies, 26% is to mid-cap companies and 43% is to small cap companies.

The biotech Powershare is an aggressive position so don’t get carried away. I think it is a smart play on the tremendous opportunities for capital appreciation in the biotech industry which is showing some momentum after trading sideways since early 2004. The annual fee is only 0.60%.

The other Powershare that I like is the International Dividend Achievers Powershare (PID) that contains 42 ADRs traded on U.S. exchanges. I am usually not a big fan of ADRs since they usually trade at a premium to the underlying security but they do offer some comfort to investors since they meet U.S. reporting requirements and can be easily purchased on U.S. exchanges. The ADRs in this Powershare have to pass a stiff test: five fiscal years in a row of increased dividends. Again the top holdings are no more than 5% of the total index and so you get great diversification.

A Better Way to Get Global Diversification

One problem with the most widely used international index, the MSCI Europe, Asia & Far East Index (EAFE) is its concentration in Japan and the United Kingdom which account for almost 50% of the index’s total value. Meanwhile exposure to promising countries such as Ireland and Hong Kong are less than 2%. Last year, this Powershares index beat the MSCI EAFE index by 7% and companies in the ETF averaged a 29% return on equity. The index is re-balanced quarterly and has an annual fee of 0.50%. Right now 67% of the companies in the index are large cap, 20% are mid-cap and 13% are small cap companies.

Getting the right blend of ETFs takes some time and effort. Remember that all ETFs are not equal so choose carefully.

E-Privacy – Fact or Fiction?

The Law Governing "Spyware" or "Malware"

The EU E-Privacy Directive (2002/58/EC) is aimed at modernising existing law in the area of e-privacy. Its focus is on the dangers of so-called “spyware” which, in extreme cases, can allow third parties access to your machine, storing knowledge of all kinds of information from the software on the system to user names and passwords. In essence, it allows someone you do not know to gain access to your confidential information, store their own information and also trace your activities.

Facilitate Disabling of "Spyware"

Whilst it seems that prior consent is not required from you in order to this, under the Directive a business must allow people to notify them that they do not want it. In simple terms, they must make it clear how to disable it. Furthermore, companies can only use such software for legitimate purposes and with the knowledge of the user.

Effectiveness of the Law

The problem with this is that the main offenders are people who will have little respect for the law and therefore policing it as a problem in the same way that the legislation allowing people to opt out of unsolicited marketing calls (the telephone preference service) has not been very effective due to the large use of such sales approaches by companies that are less than legitimate.

Best Practice

Our view, as solicitors representing the interests of businesses rather than individuals whose rights need protecting, is that even without the Directive the best practice is not to use spyware unless there are very compelling reasons to do so which add value to the end user in some form or other. It is not rocket science: the company wishing to acquire a good brand reputation will want to adopt a higher standard even than required by law if it is serious about building its brand.

Alternative Remedies

As an aside, for the more extreme cases of the use of spyware or “malware”, the Computer Misuse Act 1990 covers unauthorised access to computer material amongst other things and already makes this a criminal offence.

Core obligation

Under the Directive, service providers (ie. businesses) must inform individuals of the risk involved if they allow the spyware into their system. In essence, the bottom line message is: be transparent.


http://www.kaltons.co.uk

Enjoy Rewards Programs With The Chase Platinum Credit Card

JPMorgan Chase and Co. is a leading banking as well as financial provider. Chase offers its customers both small and large business banking, investments and insurance as well as personal banking facilities.

Chase Manhattan has come up with the Chase Platinum Credit Card that offers its privileged cardholders significant rewards programs and maximum value.

Benefits Of The Card

If you are on the lookout for a credit card that comes with a low interest rate and a good rewards program, then the Platinum Visa Card is suitable for you.

The card has a 0% introductory annual percentage rate (APR). The introductory offer on APR usually continues for 12 months but ultimately it depends on your balance transfers, purchases and credit background. With the termination of the introductory period, a regular APR of 14.24% sets in. The card comes without any annual fee and provides a flexible rewards program.

The card gives you the opportunity earn one point for spending every dollar on purchases. Your points can add up to 60000 each year. The points are redeemable for a time-period of five years from the date of accrual. You have the liberty of converting your points into select merchandise or can ask for cash back. You also have the scope of trading in your points for gift cards or for meeting travel expenses.

Other Benefits

The Chase Platinum Credit Card offers a free of interest grace period that lets you pay your full bill per month. The card further allows certain platinum benefits, like free online access in order to let you make monthly payments, view your account, available credit and outstanding balance.

The cardholder must keep in mind that the credit card makes use of a costly method of computing balances and is thus unsuitable for the cardholder if he/she plans to carry a balance. Even if you desire to carry an occasional large revolving balance, the card will not be appropriate for you, as the card uses the “Two Cycles Average Daily Balance” method for determining the finance charges. This costs more in comparison to the “Average Daily Balance” method that is used by most of the other credit card issuers.

The free travel services of the credit card include $500000 Worldwide Travel Accident Insurance and auto rental insurance. The facilities of the Chase Platinum Credit Card are convenient for dependable consumers seeking a decent credit card with an excellent rewards program.

Added Advantages

The Chase Platinum Credit Card like most of the other credit cards, offer its customers different Internet account related services, no liability for unauthorized transactions, and extended warranty for purchases.

The card also provides emergency card and cash replacement, lost and stolen card reporting, a financial statement at the end of the year and other facilities to the cardholder. However, it is essential to go through the restrictions, exclusions and limitations that are applicable.

Enjoy Quality Services With The Citi Platinum Select Credit Card

One of the largest banks in the world, the Citibank was founded in 1812. It is one among the nine business entities, which is operated by the Citigroup.

Citibank has come up with a number of advanced financial services and products for its worldwide clientele. Citi Platinum Select Credit Card issued by the Citibank is credit card with all standard features and allows you great purchasing power.

Significance of the Citi Platinum Select Credit Card

If you have a good credit and are on the lookout for many quality services and benefits from the Citibank, then the Citi Platinum Select Credit Card is perfect for you.

The 0% introductory rate, which continues for the initial 12 months, is certainly a boon for the cardholders (and is applicable on both balance transfers and purchases). The regular APR of 10.99% is slightly above the average but still less when compared to other reward cards. The credit card features no annual fee.

The credit card comes with many platinum cardholder advantages like fraud protection services, travel accident insurance and auto rental insurance.

Benefits Of The Card

The Citi Platinum Select Credit Card gives you the provision to gain free access to your account information online, which allows you to view your previous statements, your current billing statement and your unbilled activity.

The cardholder can also make payments towards the Citi Platinum account online, and can conveniently check all his/her expenses each month via his/her online account manager. There is a dedicated customer service that you can avail toll free for providing answers to all your queries.

The credit card boasts of offering certain highest security measures that is available for all the credit card users. You can also get your photo placed on the face of your credit card in order to ensure that no one else uses your card in a retail establishment.

If someone somehow gets hold of your card number and attempts to use your card for purchases, etc., over phone or online, you will not really have a genuine reason to worry, especially because you are well-protected under the $0 liability policy of Citibank. Your personal information is protected and you do not pay for any unauthorized charges to the card.

The Bonus Points

The other advantage of having the Citi Platinum Select Credit Card is that whenever you purchase bus, train or plane tickets using the credit card, you will gain a maximum of $1 million in travel accident insurance at no additional charges. This benefit covers you, and your family members, including your dependent spouse and children. Supposing your travels involve the renting of a vehicle, then you will earn automatic coverage after declining the car rental company’s collision waiver insurance.

Other perks on offer are the various Internet account related services, lost wallet service, medical and legal referral services, emergency card and cash replacement, and many more.

Encrypted Email -- Users Unknowingly Put Banking Data at Risk

PGP is one of the most common methods of protecting financial data that customers submit through banking and financial websites. PGP provides excellent data encryption, but many users leave sensitive PGP-encrypted data vulnerable without even knowing they’re doing so.

Banks, credit unions and other financial institutions use PGP to encrypt sensitive data, such as a loan application, before sending it through email. PGP makes the data is nearly impossible for anyone other than the intended recipient to decrypt. Unfortunately, after receiving the data the recipient often unknowingly creates an opportunity for thieves to steal the data.

Recipients decrypt PGP protected email messages to read the sensitive contents. Security-savvy users know to that after reading the message they need to either permanently delete the encrypted message or to save it in its original encrypted state. But a large number of users in financial institutions that we’ve worked with don’t do either. Instead they save the decrypted version of the email where thieves can easily access the information. In fact, Microsoft Outlook prompts users to save encrypted messages in a decrypted form whenever they close a decrypted message. Since neither Outlook nor PGP warns users about the danger of saving the message, most users click “Yes” and save the decrypted message.

When decrypted, the data is vulnerable to attack by viruses, malware and computer hackers. Some executives dismiss the threat by touting the protection that their firewalls and intrusion prevention systems provide. Firewalls are almost useless when PCs are infected with data harvesting viruses or malware, so relying on firewalls to protect data stored on PCs is akin to putting a lock on a screen door.

Even when firewalls do manage to keep PCs free of any viruses or malware, what happens when the bad guy is someone inside the organization?

According to the FBI, insiders – employees, contractors and business partners – commit nearly 70% of all data theft crimes. They steal data directly from the corporate network or they steal the computers & hardware that store the data. Sometimes they even “buy” the data by purchasing decommissioned computers that organizations sell to employees. A firewall will do nothing to protect decrypted data stored on the PCs that these attackers gain legitimate access to.

We’ve implemented a safer way to protect data submitted through websites. Using MemberProtect, our clients have eliminated the decrypted data theft risk. MemberProtect does not rely on email delivery and instead stores data inside a uniquely-encrypted database. Administrators control who can access the secure web-based viewer to see the data submitted through their websites. MemberProtect decrypts the data to allow viewing, but unlike Outlook, MemberProtect always re-encrypts the data when the user is done viewing it.

MemberProtect also creates an audit trail that auditors and security administrators can use to see who has viewed, modified and deleted data. It also tracks logons, attempted logons and user interactions with the protected system. MemberProtect stores this audit login a separate encrypted database to prevent log tampering by system administrators or other insiders. When integrated with intrusion detection systems, the system can perform a degree of self protection by severing connections with suspicious clients and immediately notifying administrators of suspected hack attempts.

If your budget cannot support a system like MemberProtect (approximately $3,000 to $5,000 for implementation on a bank website), then PGP is still an acceptable security option, but it’s critical that you train all users to:

Never save decrypted messages
Never share their PGP pass phrase
Always make a backup of their private key since if this key is lost, the messages cannot be decrypted

Emini Futures S&P 500 And NASDAQ 100 : Basic Trading Info

What are Index Futures?
Future contracts originate from commodity trading. A future contract is an obligation to buy/sell a certain quantity of commodity at a specific date for a specific price determined at the outset of the contract. Future contracts are frequently used for hedging risks and also for speculation.

For example, with the recent hike in oil prices, an airline company which uses a lot of fuel might want to hedge it's exposure to oil prices through the purchase of oil futures. If the price of oil is $60 now and is expected to go up to $70 within 3 months, the airline would hedge its exposure by purchasing the 3 month future contracts so long as the agreed price is less than $70.

Oil prices now $60
Expected oil price in 3 mth's time (by airline) $70
Price of 3 mth oil contract (by oil producer) $68
Actual price 3 mths later $65

Let's assume the airline can find an oil producer willing to sell oil 3 month later for $68, the company would enter a futures agreement with this oil producer for delivery of a certain quantity of oil in 3 month's time. If the price of oil falls to $65, the airline still has to purchase at the agreed price of $68. But what propelled the airline to enter the futures contract in the first place is its expectations of future oil prices going up to $70 in 3 months and buying at a price below $70 (3 months later) seemed reasonable to the company.

Index futures are cash settled, there is no physical delivery of commodity as in the case of wheat, corn, etc. Although index futures can also be held for the long term, the time span we are concentrating on is a day. We are using the index futures as a vehicle for speculation and not for hedging as in the case of the airline company.

What is the Emini S&P 500 and NASDAQ 100?
NASDAQ 100 and S&P 500 index futures is listed on the Chicago Mercantile Exchange (CME) and trades on the Globex electronic system. CME acts as the counter party for each trade, hence if you short futures, CME will be taking the long position and vice versa.

NASDAQ 100 Emini contracts is actually one fifth the size of their larger counterparts, the NASDAQ 100 index futures. Each point of the index will represent $20 and the minimum fluctuation ( tick size ) is 0.5 points which is equivalent to $10.

S&P 500 Emini contracts is actually one fifth the size of their larger counterparts, the S&P 500 index futures. Each point of the index will represent $50 and the minimum fluctuation ( tick size ) is 0.25 points which is equivalent to $12.50.

Globex opens from 16:30(EST) on weekdays and 18:00(EST) on Sundays and public holidays. The closing time is 16:15(EST) on all days. However, there will be a scheduled maintenance of Globex from 17:30 till 18:00 (Monday through Thursday, nightly). I know the timings can be quite complicated, however as day traders, we are mostly concerned with trading when the market is opened as we have to capitalize on the higher liquidity available. I do not recommend entering trades after market hours, due to low volume which leads to slippage. The time span you have to concentrate on is really the market opening hours from 9:30 till 16:15 (EST).

More information regarding the contract specification of the Emini can be found on CME's website.

symbols for the S&P 500 and NASDAQ 100 Emini index futures. Both the NQ and ES emini contracts have expiry months in March, June, September and December which are denoted by the letters "H", "M", "U", "Z" respectively. Hence NQ05Z will represent the NASDAQ 100 emini contract with expiry month in December 2005. Similarly, ES06H will be the symbol for an S&P 500 emini contract with expiry month in March 2006.

March H
June M
September U
December Z

Emini Futures Day Trading : Fundamentals And Simulated Trading System

Fundamental Analysis
Fundamental analysis is a methodology for analysis of a company as a viable stock that you want to hold for long term. Fundamental analysis is more widespread in the world of investing since you are going to hold your companies for 10 to 20 years, you do not wish that your companies go bankrupt the next day. Some of the common ratios used are P/E ratios (price earnings ratios) which measures the relative price of the stock to the earnings of the company, the EPS (earnings per share), the debt equity ratio and tons of other ratios.

Although I have spent considerable time studying such ratios I discovered that you do not really need such information to be successful in day trading. I repeat, fundamental analysis plays a marginal role in day trading. In fact, most of the time, I don't follow it at all. If you still have reservations about ignoring fundamental analysis, I recommend trading ETFs (exchange traded funds) such as QQQQ which mirrors the movement of the NASDAQ 100. In essence, you are actually trading the index like a normal stock. Indexes usually have a huge number of stocks in them, making them less susceptible to company specific news. However if you are paranoid, then you might still want to follow the news of the major companies in the index.

here is no lack of information and no end to analysis. Knowing the fundamentals might seem cool when you discuss company so and so over a cocktail party, but it will not help you rip money off Wall Street in day trading. Being able to remove fundamental analysis from the decision making process is also one of the reasons why I recommend trading Emini index futures.

Paper Trading: Don't Ever Underestimate it!
Paper trading refers to trading with virtual money, you do not use real money. You jot down in your notebook when you bought at what price and why. When you sell, you record in your notebook again why you sold and calculate the profit or loss associated with the trade.

If you cannot make money by paper trading, you can forget about making money in real trading. Always test a new trading idea with paper trading first before using real money. Also start with paper trading after a long period of break, to help you get back in touch with trading.

Although there is very little difference between paper trading and real trading in Emini, real trading is subjected to slippage and psychological factors come into play when you are using real money. Do not underestimate the impact of psychological factors on your trading. After you have a reasonable method and money management techniques, it is the psychological factors which will determine whether you make a profit or loss.

Some traders have created software to paper trade. You hit the buttons like you are doing real trading but only virtual money is involved and no real cash is used. The system will record down the time, price, symbol and the position opened or closed. This saves you the trouble of keeping a paper record.

Emergency Payday Advance Myths Debunked

Need instant cash? Apply for a payday loan. Quite a simple solution, isn’t it? While the popularity of pay day advances is growing, so are the myths surrounding them. If you are applying for payday loans for the first time, it could turn out to be a bit intimidating. However, if you look at these loans analytically and objectively, you would realize that these offer numerous benefits over other loans. So it makes sense to know the facts and the advantages that they offer and not get taken in by the false assumptions that are made.

The rate and fee for pay day advances

You might have heard that in order to get an emergency payday advance, you need to pay high fees. Well, this is a myth. If you look at these loans in relation to other alternatives that are available, you would realize that these turn out to be more economical. Comparatively, even the charges for a bounced check or for a late payment are much higher than what you would need to get a payday loan. So it makes more sense to apply for a payday loan than to pay late charges or the charges for a bounced check. Also, in most cases when you apply for a long term loan, the interest is spread out over a period of time. As a result, you might feel that the interest rate is low, but if you calculate properly, you would realize otherwise.

Another myth is that a pay day loan company can charge any rate of interest or any fee. This is not true. The fee has to be in compliance with the applicable state or federal law. So, there are no chances of a customer being duped into paying higher fees.

Getting information about the loan and the lender

Most pay day advances lenders have their own website where all the information regarding the loan, the application process, the fees, the repayment of the loan, and so on, is accessible. Over and above that if you have any queries, all that you need to do is contact the lender and all your doubts would be clarified. In case a lender refuses to give you the requisite information, you can always get an emergency payday advance from another lender.

Criminal prosecution

Many people wonder if there are chances of criminal prosecution in situations where they are unable to payback the loan in time. The fact is that there aren’t. None of the payday loan companies can press criminal charges against you in case you are unable to pay back the loan. At the same time they can seek civil remedies to collect the due accounts.

At the same time, this would also imply that you would not get a loan from the same company in future and it might also spoil your chances of getting a loan from other companies. So ideally, make it a point to pay back the loan in time or else apply for an extension.

Emergency Pay Day Advances - Help When You Need It

A lot has been said about pay day advances in the past few years. Most think of it as a boon-helping you get through the maze of bills and exigencies that crop up at the most inconvenient hours imaginable. Yet others bad mouth it and consider it another debt trap. Well, no matter what your personal opinion about advance payday loans, they have been around for quite some time. It is rather obvious that any service arises out of a need. If the payday services have been around this long, surely, they can't be all bad, can they? For one thing, they are absolutely legal. For another, they have proved useful to quite a few in times of need, which is why they have survived the critics in the first place.

According to certain studies, many emergency payday advance customers use pay day advances regularly, and in fact, disagree with the government limiting the number of times a consumer can obtain payday advances!

In any case, one one thing is for sure-- no matter how well you plan, there are times when emergencies of a financial nature crop up that you just cannot ignore. Credit card bills, for example. Overlook that due credit card amount once, and it comes back looking like a huge green monster, thanks to the big, scary thing they call 'compound interest'! So would you rather avail of that really convenient, easy to procure advance payday loan? Or would you rather pay the compound interest and let your credit history suffer? The answer is quite obvious.

Want a clean credit history? Payday Loan can help

For those don't know yet, there are three major credit bureaus in the U.S., namely, Equifax, Trans Union, and Experian, who are the 'big brothers' in the credit realm and keep a track of all your credit history. So, whenever you default, it shows up in their records. Consequently, anyone who takes his financial health seriously, would not like to have a bad credit history or a poor loan score. Since 'previous credit performance' forms a chunk of your credit score (around 35%), pay day advances can be crucial in helping you keep your credit score looking good.

Of course, one needs to remember that pay day advances are meant to be very short consumer loans, not a way of life! They make a lot of sense if you take in account, the entire picture, and use them only to tide over short term emergencies. The advantages a payday loan can offer can have more long term advantages you can imagine!

Emergencies-Are you prepared?

A young man got into a car accident resulting in many bedridden months in the hospital and $100,000 of debt in hospital bills. Pathfinder’s “Mastering Your Money” series originated from this true story. The young man decided to pay off his debt in small amounts each month instead of filing for bankruptcy. When he was released from the hospital, he got a job, generated a modest income and stuck to his plan of paying his doctors $5 each week. He calculated with each payment how long it would take him to get out of debt. The result: he learned how to manage every penny he made.

Your overall financial wellbeing has less to do with your income than the strategies you put in place and honor. We are stewards of our money. In my opinion, we have an obligation to honor our money by treating it as best we can. It doesn’t matter how much you’re making, if you have a leak somewhere, the money will run out. Prepare for life’s emergencies. One of Robert Kiosaki’s quotes from last weekend that I took away and believe to be true: “The way you do anything is the way you do everything.” Do you cut corners? Do you plan ahead? Are you disciplined? Hard working?

Speaking of discipline and preparing for emergencies…one of Pathfinder’s principles is—When you track your money, you can control it. Do you avoid balancing your checkbook? Do you blame employees and others because you don’t make enough. Blame the kids, your boss, your investment partners? Don’t think you’ll ever have an emergency? Statistics say you will, and you’ll need an emergency fund. Keep at least six months of living expenses liquid, so you have half a year to gain control over your emergency situation.

Email blasting from shared hosting

Sending large volume of emails from shared hosting is always a problem. Shared web hosting is not designed to allow 10,000 email sending at once. However, there is always a trick for this. See the pros and cons before we doing it.

First of all, email spamming is bad, and if you are sending unsolicited email or marketing letters to anyone in your mailing list. Consequences is that your hosting account will be suspended. Your domain name and IP address could be blacklisted as well. As it’s a shared IP address, the hosting company will not want to take any risk, and shut you down whenever they smell that your launching email broadcasting to the whole world.

Now you had realized the consequences that you will get yourself into. Now, what if you are running a forum of 10,000 members, and you would like to email inform them about forums upgrade etc. What should you do, how to email to them at once if your shared hosting only allow 50 or 100 email sendings limit per hour??

First, check with your hosting provider, inform them you require to send out 10,000 emails from your website, and request them to give you the highest email sending limits. Let say now they set it to 500 emails per hour. And you will require to split your mailing list into 20 group and send them out each hour. That is a good beginning.

What if you are given only 100 or less email limit per hour. You will require to setup 100 groups. That is lots of work to do. Not to worry, some engineering work will solve this. First, insert all your email address into mysql database. Create a php file that pull out 100 emails and uses phpmail() to send them out one after another. By this you have the script that fetch 100 emails at a time. Then from cpanel use the crons job to schedule this script to run every hour, by that you will have 100 outgoing emails per hour.

Your email will keep sending out each hours, and make sure you not sending repeating to same recipient, they will going nuts receiving tons of email. After email sent, remove from mysql database. It’s the safest thing to do.

Good luck to your email marketing effort, and this is the best solution you can have when using shared hosting.

Eleven Money-Saving Auto Insurance Tips for Senior Drivers

Following a few simple tips and taking these measures will ensure that you are getting the lowest rates possible on your auto insurance policy.

1. Avoid more Accidents, Pay Close Attention at Intersections. Auto accidents involving seniors often occur at intersections. Make sure to look ahead if you plan to quickly change lanes after an intersection. Pay attention to protected left turn lanes with their own arrows, and always keep your tires pointed straight ahead when stopped, so that a rear-end accident doesn't push you into oncoming traffic.

2. Follow the flow of traffic, Drive at the at or near the speed limit. Driving too slowly can be just as dangerous as speeding, especially when entering or exiting interstates or freeways. It can also trigger dangerous "road rage" in less patient drivers. You don’t have to be Mario Andretti, but keeping to the right and following the flow of traffic is the safest bet.

3. Many violations include failure to yield right-of-way, improper turning or incorrect lane changes, so keep current on the traffic laws relating to new traffic designs.

4. Sit high enough in your seat so that you can see at least 10 feet in front of your car, advises the National Highway Traffic Safety Administration. If your car seat does not adjust to allow this, add a cushion. This will make it easier to see pedestrians and bike riders, and reduce problems from oncoming headlight glare at night.

5. Do not wear sunglasses or tinted glasses when driving at night. For many older drivers, night vision is reduced, so safety dictates not driving at twilight or after dark.

6. Make sure you learn how to operate a New Car. Things like Anti-lock brakes, for example operate differently in slippery situations. If you have never driven a car with anti-lock brakes, sure to get training on proper use.

7. Senior drivers can refresh their skills and knowledge -- and get a discount on auto insurance in many states -- by taking a refresher driving course, such as the eight-hour "55 Alive" course offered by AARP. More than two-thirds of states mandate auto insurance policy discounts for such courses, and many insurance companies offer the discounts voluntarily.

8. Look for cars with rear-view mirrors that automatically dim and filter out headlight glare.

9. Air bag technology has become more advanced, with sensors that deploy air bags based on the weight of the occupant, reducing air-bag-related injuries. Some new cars also have side air bags in the seats or door frame that offer better protection.

10. Consider fit and comfort in your new car. Seat belts that comfortably fit over your shoulder and low on your lap will keep you safer. Automatic transmission, power steering and power brakes require less physical effort.

11. Last but definitely not least, Check to see which companies offer specific ‘Senior Discounts’ While shopping around for the best auto insurance rates is important, which insurance company you choose might depend on how they treat senior drivers. You'll get their best rates if you're healthy and drive a safe, modern vehicle.

Eight Rules For ETF Success

Managing a global portfolio of exchange-traded funds (ETFs) is a great way to build a diversified portfolio with exposure to equities around the globe. Fortunately, you need not be a rocket scientist to do this, but many investors fail to observe some basic guidelines, and it can get them into real trouble. Follow these eight steps and sleep easier.

1. Liquidity Comes First: Before you even think of building an investment portfolio, you should set aside about six months of income in a “rainy day” account. This could be put into a money market fund or U.S. Treasury securities. Having this money set aside will ease your mind and allow you to be more open and creative with your global portfolios.

2. Separate Portfolios: You should separate your core conservative portfolio from your growth portfolios. With the core conservative portfolio, your top priority is capital preservation, and growth is a secondary consideration. Your growth portfolios are more speculative, with capital growth as the primary goal.

3. Really Diversify Your Portfolios: You need positions in your portfolios that are likely to offset each other as unexpected events and market movements become a reality. This is not accomplished with different sectors of ETFs or a mix of small-cap, mid-cap and large-cap ETFs. Rather the goal is to have some investments that are on both sides of risks.

For example, if the U.S. dollar declines, have some investments in precious metals or denominated in other currencies, such as Switzerland or Australia or Singapore ETFs. If inflation heats up, have some investments that hedge this risk such as timber, gold or Treasury inflation-protected bonds (TIPs). If political events or policies in one country take a turn for the worst, it is helpful to have investments in other well-developed countries to offset any loss of value. You get the idea, spread your risk and avoid having one ETF account for more than 5%-10% of your core portfolio.

4. Be Careful Which Countries You Pick: You need some guidelines to help keep you from getting carried away and having too concentrated a position in a particular country or region. In particular, take a good look at the following: 1) the stability and overall political and corporate governance; 2) the legal environment, respect for contracts, low levels of corruption, due process and rule of law; 3) the macroeconomic environment including fiscal discipline and currency strength; and 4) political risks that could affect financial markets.

Keep in mind that the quality of the countries you choose to invest in is the primary but not the only factor. The price or valuation of a country’s stock market is also extremely important. Oftentimes, the best time to buy into a country’s stock market is when it is beaten down, but there are signs that its economic and political problems will sharply improve. If you have a long-term perspective, you might consider annuities specially structured for ETF portfolios.

5. Minimize Company Risk by using our “buy countries, not stocks” strategy. Instead of trying to pick the best three stocks on the Tokyo Stock Exchange, why not just minimize company risk by buying the iShares MSCI Japan Index, which tracks the Nikkei 225 and spreads this risk across 225 Japanese companies.

6. Monitor ETF Country And Company Exposure: Be careful to look under the hood of ETFs to see where your money is going. For example, let’s look at the iShares MSCI Emerging Markets ETF. It invests in 26 different countries, so it is natural to think that you will get broad exposure to all 26 countries. You would be wrong: 50% of your investment in this fund is going to four countries: South Korea, South Africa, Taiwan and China. In addition, incredibly, 7.5% is going to one company, Samsung Electronics of South Korea.

The same is true for the MSCI Europe, Asia and Far East index. It contains 21 developed countries, but 48% of the money you invest would go to just two: Japan and the United Kingdom. Meanwhile, less than 1% would go to Singapore and Ireland! Country specific ETFs such as the new iShares FTSE/Xinhua China 25 Index can also have a fair amount of concentrated risk. Although the China ETF tracks a basket of 25 companies, the largest five companies account for nearly 50% of your exposure.

7. Cut Losses With A Trailing Stop-Loss Policy And ETF Put Options: We have all been there. You buy a stock or fund, and it appreciates in value rapidly. Then it stumbles and begins to decline. What do you do? Should you buy more, let it ride, or sell? Save yourself a lot of pain and agony by following a simple rule. If a position ever falls more than 20% from its high, sell it immediately and reassess the situation. If you invest in an ETF with a sizable downside risk, why not spend a few hundred dollars to purchase a put-option as an insurance policy?

8. Rebalance Your Portfolio: At least annually, you need to make some changes so that you are not overly exposed to countries that have higher risk factors and volatility. One way is by selling some shares of your winners and increasing exposure to under performers. This accomplishes another goal, locking in gains and taking some money off the table. Remember, only a fool holds out for top dollar, especially in the more volatile emerging market countries.

Building your portfolios with low-cost, tax-efficient ETFs is a smart strategy, but don’t set it on auto pilot.

For more information call 877-221-1496

E-Currency: If Forest Gump Was Here, This Is What He Would Be Doing

So you want to learn currency exchange huh?

You heard about it and now you decided you want to become the Donald Trump of investing, somehow you know you can pull this off and become the next big thing.

Well it's quite possible to earn a very good living doing exchanges, but you have to know how the system works before you start seeing the money.

One system that is one of the internet's best kept gems is E-Currency Exchange. The money that is being moved through the internet in every single daily purchase needs to be backed up in gold. This is were you come in.

When you invest your money in e currency exchange your money acts as a backup or insurance that the money being exchanged has real physical money. This transactions are happening everyday, and when you provide that backup you earn a percentage proporcional to the amount you are investing.

E-currency exchange has been around for a few years but it hasn't been until recently people are starting to catch up to the beauty of this system. Is actually a very safe way to generate an income once you understand how to work the system to your advantage.

You can actually see how much money you're going to make even before start your transaction. These transactions are also called 24 hour periods. You generate around 1.5% to 4% of daily interests for your money. At first that may not sound that impressive but that is daily compounded interest, so if you were to leave your money working for you and check back in a month an a half, you would find that it has doubled. That is the beauty of currency exchange.

Another great thing about this system is that, like anyone who is generating a nice income doing this can tell you, it requires no more than an hour a day to manage once you’re setup. This means more time for lifestyle and living the way it should be lived.

I highly recommend anyone who is serious about investing to learn how to work this system. There are two ways: The easy way and the "do it yourself" way. I recommend to take the first one. Learn how the system works from a e currency exchange professional and you could make some money within two days. There are even some really good programs were everything is through video and all you do is watch and do what you see.