Showing posts with label secured. Show all posts
Showing posts with label secured. Show all posts
Wednesday, November 16, 2011
How Fair Lending Protects Us
Fair lending is an extremely important issue in the protection of consumers and their interests. There is a variety of legislation, both state and federal, that will be in place to make sure that lenders do not take advantage of consumers when they are borrowing money. One of the most important is that they explain the terms of the loan to you properly.
The annual percentage rate, or APR of the loan, which is the total cost of loan including all extra charges and arrangement fees must be clearly disclosed to consumers. They must also tell you of all other charges, penalties and fees that may be due under the loan. They must tell you how often you must make loan repayments, for example if they are monthly, or weekly or on another timescale. They must also tell you for how long the loan will last; this is the lifetime or term of the loan. Then they must tell you how much each repayment will be.
As well as all of these vital details, the lender must also make you aware of any amount that must be paid down, at the beginning of the loan, or at the end of the loan. You must be informed of the ways in which you can repay the loan early and whether such early repayments will incur additional charges. You must also be told how to cancel the loan within a set cancellation period.
It is illegal for any lender to force or coerce you into taking a loan, and your bank, a car dealer, a home lease or any other company cannot force you to take on credit from their company if you think you can get a better deal from someone else. For example, if a car dealer offers you credit to buy a car in his lot, then you can always go to your bank or any other lender and see if you can get a better deal or more favourable terms from them.
If you are thinking of getting short-term loans such as a payday loan then you will have different rights and you should be given a leaflet or brochure explaining your rights. This is the same if you are pawning something in a pawnshop. If you are not given a list of such rights you should go online immediately and find out these rights from federal trade commission and make sure you have not been taken advantage of.
Monday, September 12, 2011
The Pros And Cons Of Prepaid Credit Cards
Observers in the lending industry have estimated that there may be at least 50 million Americans who are not able to qualify for credit. These consumers are usually young, often members of the minority groups and unbanked…and they are faced with the long-standing dilemma of credit: how can I build my credit record if no one will give me any credit at all?
One of the answers offered by credit card companies is a variety of prepaid credit cards, designed for use by specific segments in the market. The prepaid credit cards are meant for that significant portion of the population that cannot meet the qualification criteria for regular credit cards, or who qualified before but have since lost their credit due to repeated defaults and other reasons.
Advantages of Prepaid Credit Cards For those who do not have enough credit history or have had it blemished, prepaid credit cards are an effective way to build or slowly rebuild credit. That may not happen immediately, but it is something to work on over time. The banks that issue prepaid credit cards are also prepared to extend normal credit the moment you are able to show that you have become a worthy credit risk.
For the moment, you may have to make do with prepaid credit cards. You can use prepaid credit cards as you would any other regular credit card to purchase airline tickets, reserve hotel rooms, or order items online.
Prepaid Credit Card for Students
There is a special prepaid Visa credit card for students, which offers a lot of convenience not only for the students but also for their parents. These reloadable prepaid credit cards offer parents several options on how to reload. Parents can add money to reloadable prepaid credit cards by depositing money, by arranging an automatic transfer of funds from their account (a deposit account or their own credit card account), or by online transfer. Using the prepaid Visa credit card is no different from giving the regular allowance to their child, only they do so by electronic means and there is no more cash that changes hands.
The big advantage of the prepaid Visa credit card is that the student is limited to spend only as much money as there is in the card. The parent is thus able to control to some extent the spending behavior of their child. They can use the prepaid credit card anywhere that the credit card brand is accepted.
Prepaid Credit Cards as Gift Certificates
Some prepaid credit cards function like gift certificates. You buy the prepaid credit card for a certain amount, and your recipient can purchase items with it at any of the brick-and-mortar stores or online merchants, and also for mail order items, that accept the particular credit card brand. Your recipient can use the prepaid credit card only up to the amount of money that you loaded on it. This particular version of prepaid credit cards is non-reloadable.
Like any gift certificate, recipients of prepaid credit cards can buy whatever it is they want at any time they want. Unlike a gift certificate that, when it gets lost is lost forever to the recipient, prepaid credit cards may be replaced if it gets lost or is stolen.
Prepaid Credit Cards for Travel There is a prepaid credit card designed for travel. These reloadable prepaid credit cards can be purchased in lieu of travelers’ checks or cash. In a way, it combines the best features of a credit card and a traveler’s check because of its convenience and security features. Should you lose the prepaid credit card while you are on travel, you can easily obtain an emergency replacement, both for the prepaid credit card and some cash.
Prepaid credit cards for travel are accepted all over the world, and also allow you to obtain currency from ATM machines. When you need to reload and you are already traveling you can arrange for the reload by phone or online. Apart from the fact that it is a prepaid credit card, you can use it exactly like a regular credit card. That also means you enjoy other benefits just like a regular card — reimbursements for lost luggage of up to $1,000 per cardholder if your luggage is lost; zero liability if your prepaid credit card is used fraudulently after you lose it or have it stolen from you; purchase security up to $500 per claim for any items you buy with prepaid credit cards, which subsequently gets stolen or damaged for certain reasons.
Generally, you can purchase prepaid credit cards of all the major credit card brands at their participating retailers. You don’t have to worry about not having acceptable credit because prepaid credit cards are made available without need of a credit report or a bank account. The only qualifications you need to have are that you have reached 18 years of age and that you must be able to present a valid identification issued by government.
Disadvantages of Prepaid Credit Cards
There are a few things about prepaid credit cards that may not be as convenient as the regular credit cards. For one thing, you load only so much money onto it. You will need to keep track of the balance on the prepaid credit card because not all of the merchant terminals where you use the card may be able to help you determine it. However, there are procedures that tell you how to determine your balance, and you will these detailed on the back of the prepaid credit card and in the instructions accompanying it.
The process of reloading your prepaid credit card may be a little inconvenient to some. If you’re using cash, you would have to visit the participating outlet where you bought your reloadable prepaid credit cards. The more convenient way will be reloading online.
There are also the charges. Prepaid credit cards impose an application fee, the amount of which varies with the issuer, and there is also a service charge that you have to pay monthly. You also have to pay for transaction fees, charges when you transfer funds to top up the balance, when you replace your prepaid credit card, and many other fees. To be sure about the fees, you should read closely the fine print on the prepaid credit card account.
Prospects of Prepaid Credit Cards
Prepaid credit cards do not provide credit; it is your money that you’re using. You are asked to pay other charges, so it is not for free. You are paying for the convenience and security of carrying plastic instead of large amounts of cash. People with bad credit will be able to act as if they had a regular credit card and enjoy the convenience of one.
Issuers of prepaid credit cards realize that it is a good way to monitor the credit behavior of the cardholder. A prepaid credit card would be a source of information that indicates to the credit bureaus and issuing lenders about how you as the individual cardholder use the card to pay your bills such as utilities. If these consumer data could be formatted in such a way as to provide the basis for a statistical model on probable future behavior in spending, then this could become the foundation for building a credit history.
You would benefit, because by using prepaid credit cards you are rebuilding your credit. The prepaid credit card issuers would benefit, too, because they would be making previously unproven customers bankable. More people could then qualify for regular credit, and that would mean tremendous incremental revenue for the lenders.
Monday, May 2, 2011
First Time Buyers - Working Your Way Up The Property Ladder
You’ve moved in, you’re paying your mortgage; you’re ready to finally breathe out…Congratulations! You are now a homeowner, and should be enjoying the change. Now you’re firmly on the property ladder, you can start to make the most of your new status.
With sound judgement and a little luck, the next move you make will be up the way. While the economy is stable and house prices continue to rise, your property will be gaining value year on year. The difference between what you paid and the new value is your ‘equity’, and if all goes according to plan, you should make a bit of profit when you come to sell your house.
However, you don’t have to sell up to take advantage of your equity. Second mortgages and remortgaging are covered elsewhere in the guide, and show how you can take advantage of your property’s worth. Meanwhile, sound management of your investment covers two areas:
Tend Your Finances
Keep an eye on the market. If your circumstances change, you may want to change mortgage too. Make sure that you have some kind of insurance protection in place, like payment protection or salary cover. This means that if you suddenly lose your job or fall ill, your mortgage payments will be covered and you’ll have one less thing to worry about. You may also want to take out contents insurance – which can cover your possessions against accidental damage and loss as well as theft or break-ins.
Look After Your Home
You should be paying buildings insurance, which covers the fabric of the building including its structure. If you live in a flat or shared building, there may also be factor’s fees to pay. (Sometimes your buildings insurance is covered by the factor.) If you notice any problems, such as leaks or damp patches, investigate them straight away. Problems left untreated can become much worse, and could affect the value of your property. Get a tradesman in to ascertain the source of the problem, and give you an estimate of the cost. Check with your insurance company whether they will cover the bill – policies often come with lots of loopholes and clauses
Consider Resale
When planning any home improvements or redecorating, bear in mind that you may want to sell your property at some point. For any alterations to the fabric of the building, check with your local authority to see if you need planning permission or a building warrant.
With sound judgement and a little luck, the next move you make will be up the way. While the economy is stable and house prices continue to rise, your property will be gaining value year on year. The difference between what you paid and the new value is your ‘equity’, and if all goes according to plan, you should make a bit of profit when you come to sell your house.
However, you don’t have to sell up to take advantage of your equity. Second mortgages and remortgaging are covered elsewhere in the guide, and show how you can take advantage of your property’s worth. Meanwhile, sound management of your investment covers two areas:
Tend Your Finances
Keep an eye on the market. If your circumstances change, you may want to change mortgage too. Make sure that you have some kind of insurance protection in place, like payment protection or salary cover. This means that if you suddenly lose your job or fall ill, your mortgage payments will be covered and you’ll have one less thing to worry about. You may also want to take out contents insurance – which can cover your possessions against accidental damage and loss as well as theft or break-ins.
Look After Your Home
You should be paying buildings insurance, which covers the fabric of the building including its structure. If you live in a flat or shared building, there may also be factor’s fees to pay. (Sometimes your buildings insurance is covered by the factor.) If you notice any problems, such as leaks or damp patches, investigate them straight away. Problems left untreated can become much worse, and could affect the value of your property. Get a tradesman in to ascertain the source of the problem, and give you an estimate of the cost. Check with your insurance company whether they will cover the bill – policies often come with lots of loopholes and clauses
Consider Resale
When planning any home improvements or redecorating, bear in mind that you may want to sell your property at some point. For any alterations to the fabric of the building, check with your local authority to see if you need planning permission or a building warrant.
Wednesday, March 9, 2011
First Time Buyers Beware
Although it’s a big undertaking, buying your own home is one of the wisest moves you can make. Rather than pouring money away on rent, you will effectively be investing in your property with every mortgage payment.
You will also become a ‘homeowner’, which should please your bank manager no end. You may find offers of loans and credit suddenly become a lot more frequent, and when you’ve just moved into a new home it can seem tempting to borrow money to kit the place out. But be careful! Most repossessions happen in the first year of the mortgage, when people find they have overstretched their finances and can’t meet the repayments. These are a few factors you’ll need to consider before you move:
Fees and Stamp Duty
You’ll find there are quite a few extra costs involved here – solicitors fees for conveyancing are normally a percentage of the cost of your mortgage, plus there are other charges involved. Check with your solicitor what his or her bill will be. Stamp duty is a tax that applies on property that costs over £100,000. If you’ve used a mortgage advisor, there will be another fee to pay, probably of a few hundred pounds.
Surveys
These can prove costly – each survey will set you back around £150 to £200 pounds. Sometimes the surveyor will ask for a report from a specialist – for example, a timber professional – that could cost the same again. If there are problems with the property that need to be remedied, you may find a portion of your mortgage withheld until the work is carried out. This is called a retention, and means you’ll have to find the extra cash yourself.
Moving Costs
You could move your entire household in the back of your car, but it’s not the ideal option! Hiring a van or removal men can be quite expensive – but it might make moving less stressful.
Insurance
Remember you will need to pay buildings insurance as a condition of your mortgage. You may also choose to take out payment protection in case there’s a sudden change in your circumstances. This means your payments will be covered for a set period of time, to give you a chance to get back on your feet.
Furniture and Renovations
While not necessarily essential, re-furnishing your new home should be enjoyable! Make sure, however, that you are not overstretching your budget.
You will also become a ‘homeowner’, which should please your bank manager no end. You may find offers of loans and credit suddenly become a lot more frequent, and when you’ve just moved into a new home it can seem tempting to borrow money to kit the place out. But be careful! Most repossessions happen in the first year of the mortgage, when people find they have overstretched their finances and can’t meet the repayments. These are a few factors you’ll need to consider before you move:
Fees and Stamp Duty
You’ll find there are quite a few extra costs involved here – solicitors fees for conveyancing are normally a percentage of the cost of your mortgage, plus there are other charges involved. Check with your solicitor what his or her bill will be. Stamp duty is a tax that applies on property that costs over £100,000. If you’ve used a mortgage advisor, there will be another fee to pay, probably of a few hundred pounds.
Surveys
These can prove costly – each survey will set you back around £150 to £200 pounds. Sometimes the surveyor will ask for a report from a specialist – for example, a timber professional – that could cost the same again. If there are problems with the property that need to be remedied, you may find a portion of your mortgage withheld until the work is carried out. This is called a retention, and means you’ll have to find the extra cash yourself.
Moving Costs
You could move your entire household in the back of your car, but it’s not the ideal option! Hiring a van or removal men can be quite expensive – but it might make moving less stressful.
Insurance
Remember you will need to pay buildings insurance as a condition of your mortgage. You may also choose to take out payment protection in case there’s a sudden change in your circumstances. This means your payments will be covered for a set period of time, to give you a chance to get back on your feet.
Furniture and Renovations
While not necessarily essential, re-furnishing your new home should be enjoyable! Make sure, however, that you are not overstretching your budget.
Friday, September 24, 2010
Buy To Let -The Pitfalls
Title:
Buy To Let -The Pitfalls
Word Count:
398
Summary:
Taking on a property in addition to your home can be a time consuming and complex matter. Before you become a landlord (or lady), make sure you’ve thought it through!
Keywords:
mortgages, buy, let, home, rent, accomodation, price, market, sell, loan, secured
Article Body:
Taking on a property in addition to your home can be a time consuming and complex matter. Before you become a landlord (or lady), make sure you’ve thought it through!
Tenants
While you may be lucky and find the perfect tenant by chance, it’s a good idea to interview potential tenants first. You can ask for references from previous landlords or employers to reassure yourself that they are trustworthy and solvent. While students provide a large part of the tenant market, bear in mind that young people are not always as responsible as they should be!
The property
When looking for a property to buy, try to focus on suitable areas where you are likely to find a ready supply of tenants – close to a university, for example, or in a city centre near businesses are safe bets for students and young professionals looking to rent. Check out local transport links and shopping facilities too. You should also consider the resale aspects of the property – you may not want to keep it forever, and a large part of your investment is the equity of the property. This is called capital growth – sometimes it may be worth buying in a more downmarket location where the rent will be lower, if you consider that property prices are likely to rise. If, however, you want to maximise your income, the more expensive areas of town might bring you higher rent. Leasehold properties are subject to ground rent.
Agents
A letting agent will charge around 10% of the monthly rent to take care of finding tenants, and if you want a full management service to minimise the work you do, expect to pay around 15%. It’s advisable to choose an agent that is a member of the ARLA – check www.arla.co.uk for details.
Tax
You can make tax deductions for the maintenance of your property, including general ‘running costs’ like insurance, cleaning, and agents fees. Home improvements are not tax deductible, nor are initial costs of furniture and fittings. However, you can claim a wear and tear allowance of 10% of the rent you receive.
Mortgage
Often a buy to let mortgage is assessed on the anticipated rental income from the property – the rent potential. Expect to pay slightly higher interest rates, and provide a larger deposit on the property. Lenders usually require 20% to 25% of the value of the property.
Buy To Let -The Pitfalls
Word Count:
398
Summary:
Taking on a property in addition to your home can be a time consuming and complex matter. Before you become a landlord (or lady), make sure you’ve thought it through!
Keywords:
mortgages, buy, let, home, rent, accomodation, price, market, sell, loan, secured
Article Body:
Taking on a property in addition to your home can be a time consuming and complex matter. Before you become a landlord (or lady), make sure you’ve thought it through!
Tenants
While you may be lucky and find the perfect tenant by chance, it’s a good idea to interview potential tenants first. You can ask for references from previous landlords or employers to reassure yourself that they are trustworthy and solvent. While students provide a large part of the tenant market, bear in mind that young people are not always as responsible as they should be!
The property
When looking for a property to buy, try to focus on suitable areas where you are likely to find a ready supply of tenants – close to a university, for example, or in a city centre near businesses are safe bets for students and young professionals looking to rent. Check out local transport links and shopping facilities too. You should also consider the resale aspects of the property – you may not want to keep it forever, and a large part of your investment is the equity of the property. This is called capital growth – sometimes it may be worth buying in a more downmarket location where the rent will be lower, if you consider that property prices are likely to rise. If, however, you want to maximise your income, the more expensive areas of town might bring you higher rent. Leasehold properties are subject to ground rent.
Agents
A letting agent will charge around 10% of the monthly rent to take care of finding tenants, and if you want a full management service to minimise the work you do, expect to pay around 15%. It’s advisable to choose an agent that is a member of the ARLA – check www.arla.co.uk for details.
Tax
You can make tax deductions for the maintenance of your property, including general ‘running costs’ like insurance, cleaning, and agents fees. Home improvements are not tax deductible, nor are initial costs of furniture and fittings. However, you can claim a wear and tear allowance of 10% of the rent you receive.
Mortgage
Often a buy to let mortgage is assessed on the anticipated rental income from the property – the rent potential. Expect to pay slightly higher interest rates, and provide a larger deposit on the property. Lenders usually require 20% to 25% of the value of the property.
Thursday, September 23, 2010
Buy To Let - The Pitfalls
Taking on a property in addition to your home can be a time consuming and complex matter. Before you become a landlord (or lady), make sure you’ve thought it through!
Tenants
While you may be lucky and find the perfect tenant by chance, it’s a good idea to interview potential tenants first. You can ask for references from previous landlords or employers to reassure yourself that they are trustworthy and solvent. While students provide a large part of the tenant market, bear in mind that young people are not always as responsible as they should be!
The property
When looking for a property to buy, try to focus on suitable areas where you are likely to find a ready supply of tenants – close to a university, for example, or in a city centre near businesses are safe bets for students and young professionals looking to rent. Check out local transport links and shopping facilities too. You should also consider the resale aspects of the property – you may not want to keep it forever, and a large part of your investment is the equity of the property. This is called capital growth – sometimes it may be worth buying in a more downmarket location where the rent will be lower, if you consider that property prices are likely to rise. If, however, you want to maximise your income, the more expensive areas of town might bring you higher rent. Leasehold properties are subject to ground rent.
Agents
A letting agent will charge around 10% of the monthly rent to take care of finding tenants, and if you want a full management service to minimise the work you do, expect to pay around 15%. It’s advisable to choose an agent that is a member of the ARLA – check www.arla.co.uk for details.
Tax
You can make tax deductions for the maintenance of your property, including general ‘running costs’ like insurance, cleaning, and agents fees. Home improvements are not tax deductible, nor are initial costs of furniture and fittings. However, you can claim a wear and tear allowance of 10% of the rent you receive.
Mortgage
Often a buy to let mortgage is assessed on the anticipated rental income from the property – the rent potential. Expect to pay slightly higher interest rates, and provide a larger deposit on the property. Lenders usually require 20% to 25% of the value of the property.
Tenants
While you may be lucky and find the perfect tenant by chance, it’s a good idea to interview potential tenants first. You can ask for references from previous landlords or employers to reassure yourself that they are trustworthy and solvent. While students provide a large part of the tenant market, bear in mind that young people are not always as responsible as they should be!
The property
When looking for a property to buy, try to focus on suitable areas where you are likely to find a ready supply of tenants – close to a university, for example, or in a city centre near businesses are safe bets for students and young professionals looking to rent. Check out local transport links and shopping facilities too. You should also consider the resale aspects of the property – you may not want to keep it forever, and a large part of your investment is the equity of the property. This is called capital growth – sometimes it may be worth buying in a more downmarket location where the rent will be lower, if you consider that property prices are likely to rise. If, however, you want to maximise your income, the more expensive areas of town might bring you higher rent. Leasehold properties are subject to ground rent.
Agents
A letting agent will charge around 10% of the monthly rent to take care of finding tenants, and if you want a full management service to minimise the work you do, expect to pay around 15%. It’s advisable to choose an agent that is a member of the ARLA – check www.arla.co.uk for details.
Tax
You can make tax deductions for the maintenance of your property, including general ‘running costs’ like insurance, cleaning, and agents fees. Home improvements are not tax deductible, nor are initial costs of furniture and fittings. However, you can claim a wear and tear allowance of 10% of the rent you receive.
Mortgage
Often a buy to let mortgage is assessed on the anticipated rental income from the property – the rent potential. Expect to pay slightly higher interest rates, and provide a larger deposit on the property. Lenders usually require 20% to 25% of the value of the property.
Monday, August 30, 2010
Borrowing – Your Options Explained
When you approach a lender to ask for a loan, you can expect a certain formula. Mortgages are a particular type of loan – they usually involve larger amounts, are spread over a longer period, and are secured on your house. As is clear from looking at any of the financial pages at the weekend, there are thousands of different mortgages out there. However, you can use these general rules to get an idea of what to expect when you apply for one.
How much can I borrow?
Providing you have a regular salary and have been employed for a certain period of time – usually six months to a year – a lender is likely to offer from three and a half times your annual salary. This will be dependent on your providing a cash deposit – usually 5 or 10 percent of the total amount needed to buy your house. Certain professions, such as doctors, are sometimes offered more than this – up to five times their salary, but this depends on other factors too.
How much will my repayments be?
Again, this depends on many different factors. The interest rate will affect the amount you pay every month, as will the size of the deposit you can provide and how much you are borrowing. Some mortgages offer special rates for the first few years. In the current economic climate and as a very general rule, you can expect to pay between 0.5% and 0.75% of the total cost of your house every month. This means for a mortgage of £100,000 your repayments might be around £500 to £750 every month.
Can I change my mind?
While many mortgages have a ‘tie-in’ period, meaning that you are bound to keep your mortgage for a certain period, you will normally be able to change lenders or pay off your mortgage if you choose to. However, you may find you have to pay penalties. Generally speaking, it’s best to make sure you will be happy sticking with your mortgage for at least the next couple of years before you sign up.
When approaching a lender, be prepared to give them information about your finances and employment. They will usually want to see proof – for example, bank statements and wage slips to verify your income. They will also probably want to know about what financial commitments you already have, such as outstanding loans.
How much can I borrow?
Providing you have a regular salary and have been employed for a certain period of time – usually six months to a year – a lender is likely to offer from three and a half times your annual salary. This will be dependent on your providing a cash deposit – usually 5 or 10 percent of the total amount needed to buy your house. Certain professions, such as doctors, are sometimes offered more than this – up to five times their salary, but this depends on other factors too.
How much will my repayments be?
Again, this depends on many different factors. The interest rate will affect the amount you pay every month, as will the size of the deposit you can provide and how much you are borrowing. Some mortgages offer special rates for the first few years. In the current economic climate and as a very general rule, you can expect to pay between 0.5% and 0.75% of the total cost of your house every month. This means for a mortgage of £100,000 your repayments might be around £500 to £750 every month.
Can I change my mind?
While many mortgages have a ‘tie-in’ period, meaning that you are bound to keep your mortgage for a certain period, you will normally be able to change lenders or pay off your mortgage if you choose to. However, you may find you have to pay penalties. Generally speaking, it’s best to make sure you will be happy sticking with your mortgage for at least the next couple of years before you sign up.
When approaching a lender, be prepared to give them information about your finances and employment. They will usually want to see proof – for example, bank statements and wage slips to verify your income. They will also probably want to know about what financial commitments you already have, such as outstanding loans.
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