The Double Edged Sword of Reverse Mortgage Closing Costs

By Mudbrow Vanrock

I wish there were such a thing as a perfect mortgage product. People always ask me, "what is the down side to getting a reverse mortgage? It looks too good to be true".

The truth is HUD backed insured mortgages have higher closing costs than forward mortgages. I always make a point of telling this to my customers as soon as I can.

FHA insured mortgage upfront costs are high for 3 reasons: First, the lender performs an appraisal on the home and charges costs on the value of that appraisal, not the money the borrower is qualified to receive.

The second is FHA charges 2% of the value of the home up to $417,000. And the last is reverse mortgage lenders charge an origination fee .5% to 1% higher than typical forward mortgages.

One doesn't need to have a degree in advanced calculus to quickly figure out that closing costs are fairly expensive.

As far as the origination fee goes, one could make the case that it is not more expensive than a forward mortgage. The difference is forward mortgages build the fee into the rate.

Much of these costs are FHA. In the example above we're talking $8340 just for mortgage insurance. On the surface this seems a bit out of hand, but you must remember, this is the mechanism that allows these same "unhappy with the closing costs" seniors the right to borrow as much as they do.

To put this into perspective, a seventy year old customer with a two hundred thousand dollar home would be entitled to borrow roughly $130,000 with an FHA insured mortgage.

There was once a number of outlets for non-FHA insured reverse mortgages. They exist only as ultra niche scenarios now. The reason is they simply couldn't compete with the FHA reverse. In our example a reverse mortgage customer, using a private product, would receive $100,000 at best.

Why ? Because the FHA insurance, everyone is so unhappy about, allows lenders to feel comfortable enough to lend such large amounts.

The insurance covers the lender in the event that one day more is owed on the home than the home is worth. This is the lender's biggest fear.

Expensive, horrible, bitter FHA insurance hedges the lender's risk, which makes much more money available to borrowers. But in the end it allows so many seniors to solve stressful financial issues.

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Having a Frugal Mindset

By William Blake

Many people confuse being frugal with being stingy. A stingy scrooge saves their money, but has nothing but misery to show for it. Someone who lives with a frugal mindset, however, knows how to make sound financial decisions in an effort to improve their life.

There are always ways to spend your money ? no matter how much you have. You can buy your lunch at work or you can buy groceries to make your lunch to take to work. The frugal person will make her lunch and then save the rest of the money for something else (a vacation, paying off the mortgage early, a spa day as a treat, or a new pre-owned car).

Income tax checks are a great chance to be frugal. You could use the money to put a down payment on a new car or to buy that surround sound system you always wanted. A frugal person will save a portion, pay off any outstanding debts with a portion, and use the rest for a treat that they have desired for a while (maybe a professional hairstylist or a new outfit for business meetings).

Frugal people do indeed save much of the money they receive, but that doesn't mean they don't enjoy their money as well. Even though thrifty people blow money at times in splurges, it is always controlled spending.

Being frugal means spending your money in the best way possible. That means that, before you make a purchase, you will compare products. It means that you will not be afraid to ask questions about something before you spend money on it and that you can be patient if necessary, waiting to make a purchase until the time is right financially.

It takes a special mindset to live a frugal life. You have to understand the bigger picture and be willing to sacrifice a little now in order to gain a lot tomorrow. The trick is that you may not be able to see the gain for some time. It's a walk of faith that in the end it will be better.

If you are interested in living a more frugal life, talk to people who are doing it now. Observing their happiness due to lack of oppressive debts will be inspiring. You can discuss your financial plans with them and ask for assistance and you make your way through life, frugally.

Much more than saving money, living thrifty means that you are prepared to make thoroughly sound financial decisions that will work out for the best good in the end.

About the Author:

Tire of barely keeping up with your credit card payment? Get some simple ways to pay off credit card bill on the Debtopedia website. Get a free copy of my report "Secrets Of Credit Card Debt" at http://www.debtopedia.com

Consolidate Debt? There Are Many Ways To Do It

By John Brennan

Business and household debt in the United States is increasing daily. This increasing debt, combined with a falling economy is putting a severe strain on these same businesses and households. With the average American owning 7 or 8 credit cards it is no wonder that debt continues to increase as we spend more and more money that we actually do not have.

There are way to escape this situation assuming of course you have the will and desire to do so. One such way is through debt consolidation. More and more people are becoming familiar with this approach and many more should be. Instead of continuously robbing Peter to pay Paul debt consolidation makes it possible to pay off debt more easily and hopefully eventually to eliminate it.

With debt consolidation, credit card and other debt can be consolidated into a single loan which generally has more attractive interest rates hence a lower monthly payment than the combined payments of all the debt which has been consolidated. Both time and money are saved, not to mention a reduction of stress and anxiety.

Probably the most commonly used debt consolidation tool is the home equity loan. Here you are effectively making the equity in your home work for you. The collateral you have in your home makes it possible to get a secured loan and a secured loan will almost always feature a lower interest rate, sometimes significantly lower, than will a non-secured loan. If you don't own a home you might wonder if it is still possible to get a debt consolidation loan.

The answer is yes though you may have to work at finding a source. Also a non-secured loan will carry with it a higher rate of interest. Credit card transfers are one possibility but the interest rates, except for the introductory "teaser" rates will generally be higher and can become higher still if you make late payments.

Life insurance and retirement funds are also a way to try. You can ask your credit union to see if they offer loans with lower rates. Finding a good credit union will take some time, but the pay off may be worth it. If you aren't a member of a union you can see if you are eligible. Most employers have offers to join credit unions.

There are also non-profit organizations out there who specialize in helping people consolidate, reduce, or eliminate debt. These organizations will do the legwork for you in negotiating lower rates, fees, and payments with your creditors. These organizations also often have tools available which you can use to help manage your finances.

Debt is not a fun word during any time frame in the world. There always help and ways to get out of debt. Debt consolidation is a tool that has been used for sometime and there are many success stories. The key is not to incur debt at all, however with our society, that is probably not an option. Debt consolidation is the key to getting out of debt.

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To find out exactly how you can get credit card debt management help visit my debt solutions website.

Sixty Seconds to Freedom from Debt

By JR Rooney

Imagine for a second being having no debt -- no more sleepless nights over mounting credit card balances, no more ball-and-chain of debt feeding your anxieties, and no chance of threats from dreaded collection agencies. You can do it! Here's the scoop -- in one minute flat.

0:60 Resolve to spend less than you make! Make it a habit as fundamental as changing your underwear. Realize once and for all that if you can't pay for it today -- you can't afford it.

0:55 Distinguish between Bad Debt and OK Debt. OK Debt has an interest rate well under 10% -- preferably with some tax advantages to boot. In the best case, what you bought with borrowed funds will appreciate in value. Home mortgages and student loans are examples of OK Debt. Automobile loans are on the border: They often satisfy the low-rate piece, but automobiles almost never appreciate in value. Bad Debt is everything else -- from your titanium credit card to the 35% loan from Karl's Kwik Kash.

0:50 Pick a winner. Out of all your cards, pick the one or two major credit cards that feature the lowest annual interest rate. Resolve to use those cards for emergencies only. As for all the other plastic pals in your wallet, remove temptation by taking them out of your wallet. Throw them behind a major appliance, freeze them in a bowl of water, or put them to a shoe box. Do whatever it takes not to use them.

0:41 Gather all the bills from your accounts. Line these up on the kitchen table. Find the minimum monthly payment for each account and then add these up to get an overall monthly minimum. Make a decision to pay this overall minimum PLUS a hefty additional chunk every month -- enough to make a solid dent in the outstanding balance of at least one account. If you can't pull this off, you'll have to make a drastic move to increase your income or lower your expenses. It's harsh, we know, but it's also an inescapable fact.

0:34 Pick the card with the highest interest rate and: Attack! Next, order the latest bills according to annual interest rate charged. Apply the "hefty additional chunk" (beyond the minimum) to the highest rate account(s). Repeat this process monthly until the last stinking card is paid in full.

0:26 Ask for a lower interest rate. Grab a bill from any account charging you more than 14% interest. Dial the toll-free number on the bill and ask to have your rate reduced -- say, to 11%. Tell them that you'd really like to stay with them out of customer loyalty (embellish according to your acting skills), but that you have received offers for much-lower-rate cards. Expect to be made very uncomfortable, but stand firm and remember that, to them, you are both a customer and a profit center. You also stand to save a bundle. The more calls you make, the more persuasive you'll become.

0:18 Be prudent. Be aggressive in paying down Bad Debt, but don't get so ambitious that you risk missing minimum payments on your mortgage, automobile, or any other secured credit account. (Secured means that if you miss enough payments, the bank can show up and take away the item.)

0:12 Commiserate with others. You'll find plenty of emotional support and great ideas by visiting debt relief discussion boards. Help others celebrate their debt-free "happy dance."

0:05 Dance, Fool! You're done when the Bad Debt is 100% exorcised and you can make remaining OK Debt payments with ease, leaving plenty of budget room for savings.

About the Author:

JR works for a Debt Collection Agency. If you do not have the means to pay your debt it is best to try and settle with the Collection Agency

How to Raise Credit Score in 30 days or less

By Marcus Duke

If your credit score is low and you need to purchase a home or buy a car or open a credit account you may find that these privileges are extremely difficult with less than perfect credit scores.

A bad credit score does not have to be a permanent fixture on your credit report. You can greatly improve your credit score by making simple changes to your credit report which in turn will improve your credit score in the long term.

So, here are several important tips that can help you to raise your credit score back up so you can have an easier time:

Here are 5 easy steps that will help you to raise your credit score quickly and easily in less than 30 days:

When your payments are overdue or late your credit score can suffer greatly. Paying your bills on time is good practice. This one step alone can change your credit score in a positive way.

Tip #2 - Get Current on Missed Payments - If you have missed payments in the past, make sure that you get current on them as soon as you can.

The only way to be current on your bills is to first make arrangement to pay off outstanding debt.

2. If you have outstanding bills it's a good idea to contact the companies and make arrangements to make these bills current.

3. One of the biggest mistake many people make is not informing there creditors of financial hardships they may be facing due to illnesses and in some cased death in there immediate family circle.

Tip #4 - Keep Balances on Credit Cards Low - If you have credit cards, then you need to keep the balances on them low.

5. Everyone faces hard times from time to time.

Tip #5 - Avoid Just Moving Your Debt - Many people merely move around their debt instead of paying it off, which will not help you out when wanting to know how to raise credit score. Instead of moving your debt to another card, you should be working to pay it off instead. This is the way that you can lower that score.

About the Author:

If you are looking to get good credit quickly, Marcus teaches how to get good credit in thirty days time on his website at Credit Score Rating Guide, You will Learn Getting a higher credit rating

Real Estate investing and bad credit reports

By Doc Schmyz

Creditors and bankers approve or disapprove loans based on your credit worthiness. In some cases it also will determine your credibility to certain employers or landlords.

A good credit rating allows you to be able to apply for loans and/or credit cards easily. It will also mean that you will have more chances of getting certain jobs that may require a background check.

Having bad credit can reduce the opportunities of things. You may get approved for a loan or for a credit card but with a higher interest rate. You are considered a "at risk" customer because the creditors are not sure if you will pay your bills. If you are trying to apply for an apartment complex the landlords may take a look at your credit score to determine if you will be able to pay your rent. Not to mention that most look at the report and will use it to form an opinion about you character.

These are just some of the many reasons as to why having a good credit score is very important in today's world. However, what do you do if you happen to have a bad credit score? If you have bad credit it is important to fix the problem as soon as you can. Here are several ways to do just that.

First, you must stop your bad credit before it gets worse. So how do you do this? You pay your previous overdue debts as soon as possible.

Secondly, you can raise your credit score by opening a new savings or checking account. You should also apply for a secured credit card. This secured card will have a lower limit and a higher interest rate however,by paying the monthly credit card bills on time you will be able to see a significant rise in your credit history report.

Follow these steps you will eventually start to see a good credit rating. However, your past credit history will remain on the "books". This does not expire for 5 to 7 years. You must remember that it does take time to raise your credit rating. You must be patient and diligent to see a change. It is far easier to destroy your credit then to repair it.

That is why it is very important to make positive reports for your creditors. They then will pass those on to credit reporting agencies. Remember to pay your loans and credit cards on time in order to get a good credit rating. By doing so you will eventually end up with a good credit score and history. Never miss out on a future financial opportunity when they come your way.

About the Author:

Doc Schmyz has worked with investors all over the US. He built a free free website shares Real estate investing information for all over the US. Find Real estate investing information by state

Credit After Bankruptcy

By Matt Douglas

If you have filed bankruptcy you should expect your credit will be severely damaged. However there is hope, you can take action to remove your bad credit and by building some positive credit you can have a high score.

The truth is that this mark does not have to remain on your credit for 10 years. To remove it we suggest:

1. Dispute the listing with the bureaus directly.

You can do this yourself or hire a service to dispute the mark on your behalf. Did you know that the bureaus do not check public records when they investigate an item? Public records are where this mark is recorded and where the bureau would find verification.

Congress passed the Fair Credit Reporting Act and this says that the bureaus must remove any item on your report that can not be verified. People frequently ask if credit repair is legal. It is not only legal but this act explicitly says any mark you do not feel is accurate can be disputed. There will never be any legal ramifications for filing a dispute with the bureaus.

We suggest before you dispute the bankruptcy you double check to make sure any negative accounts are reported as "included in bankruptcy." This is because once the bankruptcy is removed from your report you will dispute each listing on the basis that it says "included in bankruptcy" yet there is no bankruptcy on your report. Additionally it is rumored that removing a bankruptcy is easier after 2 years have expired.

2. Once you have removed the initial mark, you can start disputing each negative item.

You will be able to challenge the mark on the basis that your report does not show a bankruptcy. Therefore each item should be deleted by the bureaus upon investigation.

3. Open a new revolving line of credit such as a credit card. This will help you build some positive credit on your report.

By making your on time monthly payments you will create a positive payment history. Additionally keep your monthly balance at 25% of your available limit because this will show the bureaus that you do use your card and use it responsibly. This will improve your ratio of available credit to debt, a very important factor when your score is calculated.

It might not be the most ethical to dispute items you know are accurate on your report. However is it ethical for lender to charge you 30% interest rate for missing a payment, no matter how long you have been a model customer?

In sum you don't just have to live with bad credit. You can remove the items and you can do it today. You can create a high score for yourself by removing the bad items and building positive marks. This will save you; on interest rates, embarrassment from a low score, and give you the purchasing power you deserve.

About the Author:

For free credit repair letters used to dispute your credit report or for more credit repair tips visit us.

Looking for Good Credit Repair Software? See What Others Think

By William Blake

Bad credit is a common problem and there are thousands of people out there looking for help. Credit problems are a very private matter and most people don't want to make it public that they are having trouble. That is why credit repair software has become so famous. The advertisements are everywhere for latest and best in credit repair software that can help people turn their bad credit around.

With the right credit repair software a person can turn his own credit around without having to seek outside help from professional credit counselors or credit repair agencies. Some people have a lot of debt and feel that their situation is hopeless. But that is never the case. With the right program anyone can get their credit back on track.

The best way to find credit repair software that is worth looking into is to see what other consumers think about software they have tried. Some software is provided free of charge. Some you have to purchase. The best aren't always the ones that cost money. But you have to do your homework to make a wise choice.

What Does Good Software Offer?

Good software will be user friendly and have good user support should you have any problems. When you are reading reviews you want to check to see what consumers say about these to aspects of the software. Also you want to be sure that its users were successful in turning their credit around and improving their credit scores. Once you get the opinions of other consumers see what the professionals think.

Consumer Reports

The experts also make their reviews on products and these can be found easily in consumer reports online or in books. When it comes to good credit repair software you wan to know what the computer experts think about the quality of the program. You also need a financial advisors opinion on what the software has to offer. These to points of view will help you choose the best software.

The credit repair software reviews by experts may be filled with jargon and sayings you don't understand, but you should still be able to get a good idea of which programs are worth your money and which aren't.

About the Author:

Are you tired of barely keeping up with your credit card debt? Learn some simple ways to pay off credit card bill on the Debtopedia website. Visit http://www.debtopedia.com for a free copy of my "Secrets Of Credit Card Debt" report.

Credit Repair - agency credit repair

By Daniel Fox

The majority of Americans have errors and other unverifiable information on their credit reports that could be dragging down their credit score. Odds are good that your credit score is lower than it should be. The unfortunate thing is that odds are you will be yet another one of the millions of Americans who will continue to suffer with an unfair credit score because you will do nothing to repair your credit.

Most Americans want to believe the credit reporting system works; that people earn their bad credit and there is nothing they can do about it but wait for seven years. But study after study shows the credit reporting system frequently does not work. This is why the Fair Credit Reporting Act and other consumer protection legislation give you the right to do something about it - the right to make sure your credit score is as good as it can be.

The credit bureaus at the center of the credit reporting system are not official organizations. So now you are asking yourself, how do they ensure this information is correct? If a creditor reports something that is wrong, how do the credit bureaus make sure it doesn't end up on your credit reports? The answer to both of these questions is: they don't. Your creditors report information, the credit bureaus record it, and for most people, the story ends there. Instead, they are massive, for-profit corporations that collect personal information from your creditors and make money by selling this information in the form of your credit reports.

Nobody at the credit bureaus or in the government is going to make sure your credit reports are accurate. The way the credit reporting system is set up, there is only one person who will ever bother to check up on your credit reports - and that person is you. You are the missing, and ultimately the most important, piece of the credit reporting puzzle.

Making sure your credit score is where it should be is your responsibility and repairing your credit reports is a task you will have to initiate because no one out there will do it for you. It is your right and your responsibility to dispute the questionable negative items in your credit reports and the sooner you start, the better. You can work to repair your credit on your own or you can enlist the help of a credit repair law firm like Lexington Law.

Whether you attempt to repair your credit on your own or with the help of a credit repair expert, by taking an active role in the credit reporting system, you can ensure your credit score is as good as it can be and that you have the advantage over the millions of people out there with bad credit who haven't taken action to do anything about it.

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