Financial Blog

by YoTuT

Buying or Refinancing a Home – Want a Fixed Rate Mortgage That Really Makes Sense?

Has it been ten years since you purchased your home? How many times did you refinance to get a lower interest rate and how much did it cost in equity or out of pocket expense?

Many homeowners have been devastated by our most recent downturn in real estate values, and the lenders have been traumatized as well. Certainly, it is difficult for those who are currently “under water” on their mortgages to have sympathy for the lending hierarchy that created this dilemma for the housing public. Fortunately, signs of recovery are being seen in many locations. Some major cities and their suburbs actually declared an increase in residential sales volume and in sales prices during 2010. Low interest rates and reduced property values have fostered a fluid buyer’s market influenced by basic economic “supply vs. demand” principles.

There is additional exciting, good news. The lending hierarchy is beginning to make adjustments to its mortgage products that really make sense. At the forefront of our new mortgage market generation is the Automatic Rate Cut (ARC) loan offered by a national bank for most locations in the United States. ARC is offering cutting edge of the market interest rates on all of the standard FNMA/FHLMC 30 year and 15 year fixed rate loan programs including conventional, FHA, and VA mortgages. What separates this mortgage from the norm is that at any time interest rates drop more than 1/4%, the loan is recast at the lower rate. This mortgage product   is promoted as “the only loan you will ever need”. Because it is not a refinance, there are no loan fees or closing costs. ARC simply recasts the interest rate. Refinancing creates a new loan and the payment schedule or amortization starts over at year one. The ARC loan does not. If the current mortgage is 5 years into a 30 year amortization, the new rate and subsequent lower payment does not change the term so the loan will be paid off in 25 years instead of 30 years as with the refinance. What a financial break that is for the mortgagee!

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It is very simple. Why didn’t the financial wizards think of this earlier? As did just about everyone associated with mortgage banking, it is with certainty that they probably did think of this solution; however, there are reasons that many creative innovations are not introduced to the public. It has much to do with how the financial markets are structured. The overwhelming majority of standard mortgages are securitized by FNMA and other institutional investors; investments in these loan pools are sold to other investors through investment firms. What makes these investments attractive to end investors is a guaranteed rate of return from the institution creating the security. If the interest rate is on all of the loans in the pool is recast at one time, which could be the case with the ARC loan, the rate of return on investment is reduced and the entity creating the security cannot justify guaranteeing or warranting the return to the end investor. This is an oversimplification, but the bottom line is that certain creative loan products do not fit into the financial market’s structure. 

The ARC loan structure can be applied to standard mortgage products including VA, FHA and conventional programs.  It simply applies an interest rate adjustment when rates drop below the original interest rate. No matter how low the rate is adjusted, the rate never goes back up.

Even if interest rates are currently at their lowest level as some market follower’s project, the ARC mortgage is a great safety net.  As long as the interest rates and loan fees compare favorably with other lenders who do not offer this innovation, it certainly should be a consideration when searching for a mortgage.

More Adjustable Rate Mortgage Articles

ePips Forex trading articles and robots. Mortgage Loan articles for You.

by chrome76

Choosing a Forex Broker – The Common Sense Way

Choosing a Forex Broker – The Common Sense Way

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Home Page > Finance > Currency Trading > Choosing a forex broker – The Common Sense Way

Choosing a Forex Broker – The Common Sense Way

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Posted: Aug 09, 2009 |Comments: 0
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Choosing a forex broker is a difficult process. There are literally thousands of companies competing for your money – tantalizing you with seductive ads, hoping you will trust them enough to deposit your money with them. It gets exhausting trying to decipher the hype from the facts, and the real brokers from the scam artists.

There are 5 essential factors to consider before deciding on a forex broker:
• Credibility
• Low Spreads
• Platform
• Leverage
• Word of Mouth

Credibility. Like most people, I have a 9 to 5 job that pays the bills. I work hard for my money, so I am very careful of whom I trust my money with. I won’t trust my money with a stranger, nor would I trust my money with a forex broker that I’ve never heard of.

When I choose my forex broker, I’m looking for big names. I’m looking for brokers with a long history and sustainability. I want a broker that I know won’t be bankrupt tomorrow or the day after. I will rather pay a premium to trade with a reputable company than risk the chance that I may lose my entire bankroll with an unknown broker.

Remember, forex is highly unregulated, and scammers do exist. Beware of them, and take a look at the CFTC’s advisory http://www.cftc.gov/opa/enf98/opaforexa15.htm. Your forex broker should definitely be registered with the Futures Commission Merchant (FCM) and the Commodity Futures Trading Commission (CFTC). It’s your money! Do your research and due diligence before signing up.

Low Spreads. Unlike your discount stock broker who charges you a fixed dollar amount per trade, forex brokers make their money from the spread. This is also where the unsuspecting forex trader can go broke.

The spread is the difference between the BUY and SELL price, and is measured in pips. For example, if the EUR/USD pair is 1.2810/1.2813, there is a 3 pip spread. When you buy the currency, you will buy it at the asking price of 1.2813. If you were to sell it at that precise moment, you will lose 3 pips (around 30 dollars in a regular lot) because the market is only willing to buy it at the bid price of 1.2810. This means that the currency pair must gain 3 pips for you to break even.

This is why a lower spread is desirable since you will need less movement of the currency before you start profiting. The typical spread ranges from 3 pips to 6 pips.

Platform. The platform is the software that your broker uses and you should be comfortable with the software since this is what you will be using to make trades. Most brokers have their proprietary software, and most offers advanced charting features, real-time quotes, and fast execution.

There are two types of platforms: web based, and client based. Web based platform like Easy-Forex are convenient since you can use it without ever having to download or install the software. The best part is you don’t have to be on your own computer to make a trade. You can trade while vacationing in the South of France sipping on a rum and coke.

Client based software will require you to install the software on your computer, but is generally slightly faster once everything is up and running. Installation is usually pretty straight forward, and the broker’s customer service will be more than happy to help you if you run into any trouble installing it.

Leverage. Everybody loves leverage. Leverage gives us control to more money than we can reasonably expect to accumulate on our own. It probably gives us control to more money than we should have access to. With 1:100 leverage, you can trade 100,000 dollars worth of currency with just 1000 dollars. Now that’s impressive.

However, leverage is a double edged sword. It is powerful if you know how to use it properly, but can easily destroy you if it is misused. Remember what Aunt May said to Peter Parker, “With great power comes great responsibility”. Make sure you use leverage responsibly.

Know what your broker offers in terms of leverage. Typical leverages are 1:25, 1:50, 1:100, 1:250, and 1:400. Usually it is nice to have the option to use high leverage, as long as you know what you are doing.

Word of Mouth. This is the most important factor of all. When it all comes down to it, it doesn’t matter whether one broker has a slightly better spread than another, or they use cutting

Book Review: the Little Book of Common Sense Investing, J. Bogle

John Bogle summaries and explains a lot of our thinking here at Enterprising Investor Forum. He starts with Buffett’s famous story about the Gotrocks, explaining how Wall Street is effectively stealing investor funds and preventing them from adequately compounding good returns.

He details why the low-cost index fund solution is the best way for most investors to allocate their savings and shows this in a very simple and concise manner.

Like Warren Buffett, he maintains that investing is all about common sense and that investors should not fall victim to fads and fashion and understand that despite being simple, investing is far from easy. We should forget notions of consistently trying to ‘beat the market’ or ‘beat the street’… it is simply not possible and effectively a zero-sum game.

Investors will do very well for themselves if they can match market returns over the long-run and should not fall victims to excessive expectations.

Complete video at: fora.tv John Bogle, founder and retired CEO of The Vanguard Group, holds the managers of mutual funds liable for the financial crisis. He blames the “sea change” in the nature of capitalism — from “traditional owner’s capitalism” to a “new and virulent manager’s capitalism” — for the crisis. —– The Seventh Annual John M. Templeton, Jr. Lecture on Economic Liberties and the Constitution considers the social, cultural, and moral causes of the current financial crisis in the United States. In doing so, the Lecture revisits basic lending principles and examines our nation’s skyrocketing debt, our lack of savings, and basic understanding of economic principles within the household, as well as corporate America, and the effects of our political and legislative effort to reduce discriminatory credit practices. – National Constitution Center John Bogle created Vanguard in 1974 and served as Chairman and Chief Executive Officer until 1996 and Senior Chairman until 2000. The Vanguard Group is one of the two largest mutual fund organizations in the world. Vanguard comprises more than 120 mutual funds with current assets totaling more than trillion. Vanguard 500 Index Fund, the largest fund in the group, was founded by Mr. Bogle in 1975. It was the first index mutual fund. In 2004, TIME magazine named Mr. Bogle as one of the world’s 100 most powerful and influential people. In 1999, Fortune designated him as one of the investment industry’s four “Giants of …
Video Rating: 4 / 5

Avoid Forex Scams With Common Sense These 7 Great Tips

avoid forex scams with common sense and research

Forex trading is like a vast ocean full of dangerous loan sharks swirling swallowing inexperienced investors. This is the dog-eat-dog, everyone to make as much money as possible with the least effort possible, and if it means a dishonest person can make money on you, then it be. But how can you avoid scams Forex?

1. Be informed

It\’s your money and it is your responsibility to be at all how, why and in Forex trading. You would not willingly hand over your money to a person walking with you in the street and says he will make you famous, would you? No, you must request identification and qualification.

2. Remember the golden rule

You\’ve probably heard someone say: “If it sounds too good to be true, then it probably is.” This is a very good saying to live. Do not talk to your hard earned money by brokers who seek to convince you that you can turn a small sum of money in a huge using their services.

3. Listen to your suspicions

If you feel as if someone tries to rip you off, then do not allow them to take your money. Always run checks on people that you plan to do. You can contact your country, the consumption of authorities or the function that saves the brokers and traders in equities and foreign exchange markets. Discover the company that works for the person and contact the company to see if they are telling the truth.

4. Do not be pressured

There is no rush. The sooner dishonest broker can make you part with your money, the greater the risk that you will lose. Do not listen to the stories of the “next big thing” to happen in Forex trading. It might tell you that it is about to be an opportunity to make huge profits, but you must act now or you\’ll miss. Refusing to go with the times and you\’ll soon see if he asks unnecessary pressure, or is prepared to wait for you to be comfortable.

5. Avoid companies that would not guarantee

The fact is, there is a risk in any kind of actions or actions of negotiation, as well as Forex trading. Stay away from companies that make the following types of claims:

• “We promise to recover all losses you experience.”

• “Nothing to lose, your investment is always safe.”

• “Even with a deposit of $ 5000, you never lose more than $ 200 per day.”

No one can guarantee if these statements deal with anyone who tries to make unrealistic promises to you. It\’s your money at risk.

6. Avoid companies that predict or guarantee big profits

Do not be tempted by companies that claim they can guarantee huge profits for you. They tend to make statements such as:

• “Make $ 1,000 a week, every week.”

• “Our company offers the most successful Forex trading in the state.”

• “We guarantee a minimum of 30% rate of return on your investment in your first two months.”

These statements are likely to be fraudulent and you will lose your money very quickly.

7. Find your broker, do not let them find you

Brokers and companies who are seeking your business are usually a small dollar. The best way to find a company that is deemed safe and is to contact the authorities concerned with licensing and ask for a list of companies in your area. Never respond to e-mails that promise huge incomes for small investments or that require you to register for \’free\’ documents, the \’free\’ accounts or “free” under negotiation. Forex traders will be considered when you need it and there will be no conditions.

The best way to avoid losing your savings to realize that nothing is free. Note that you must invest your time and your money and you need to know what is about Forex trading before you go ahead and invest in this sector. Does this mean that every product or offer is a lie? Not necessarily. You just have to be cautious. For instance, if you are interested in using an automated forex trading program, test it first with a demo account, if it is succeeding, use it with a small budget for several weeks before using it with a full budget. Learn commons sense, and practice it when you are investing in the forex to avoid forex scams.

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For Florida homebuyers the FHA home loan just makes good sense

FHA Mortgage Loan for Florida Homeowners

Take the proper Steps to Get Your FHA Mortgage today

 Other FHA loan Advantages Include:

Minimal Down Payment and Closing Costs.

Down payment less than 3.5% of Sales Price Gift for down payment and closing costs allowed. No reserves or required. FHA regulated closing costs. Seller can credit up to 6% of sales price towards buyers costs.

Easier Credit Qualifying Guidelines such as:

Minimum FICO credit score of 540. FHA will allow a home purchase 2 years after a Bankruptcy. FHA will allow a home purchase  3 years after a Foreclosure. 

Easier Debt Ratio & Job Requirement Guidelines such as:

Higher Debt Ratio’s than other home loan programs. Less than two years on the job is allowed. Self-Employed individuals o.k.

Apply for an FHA mortgage at

www.FHAmortgageFHAloan.com

For Florida first time home buyers and other borrowers, the FHA home loans can have key advantages:

Easy Qualification – The FHA loan insures lenders against loss for loans made to properly qualified FHA home loan borrowers. So you’re likely to find FHA mortgage loans with terms that make it easier for you to qualify.

Minimal Downpayment Requirements – FHA mortgages can work with as little as 3% down and those funds can come from a family member, charity, or your employer. Although the FHA loan does not have a zero down mortgage option yet, you will find that your 1st Continental Mortgage loan officer can point you to many Downpayment assistance programs that work well with Florida FHA home loans.

Less than A-1 Credit is Okay – The Florida FHA home loan program exists to expand the pool of home buyers. Even borrowers with prior bankruptcies or mortgage lates get approved every day for FHA mortgages to buy or Refinance homes in Hillsborough County or any of the other Florida counties we serve. The FHA loan program uses credit quality, not credit score!

Lower Cost Over the Life of the Loan – The Florida FHA home loan rates are extraordinarily competitive. FHA’s lower risk to the lender means a better rate for the borrower.

Safeguards for Borrowers Who Get Behind – The Florida FHA loan mortgages also allow the lender more options in helping borrowers who fall behind keep their homes are get current again: special forbearance, workouts, even free mortgage counseling. Further, HUD can allow the lender to take past due payments and move them to the end of the loan and in some instance will actually pay your past due payments for you. Options to save your home you’ll never get from a conventional loan! In an uncertain world, this is another excellent reason for you to get an FHA mortgage.

Options for Manufactured Housing – Under certain conditions, you can even finance a Mobile Home or manufactured home using a Florida FHA mortgage loan. Call 1-800-570-0448 to get pre-approved for a Florida FHA loan for manufactured housing or just use our quick application to learn more!

FHA Loans Are Fully Assumable – When you are ready to sell your home, you can offer buyers FHA financing! All FHA loans can be assumed by qualified buyers.

These are just seven of the many good reasons to apply for an FHA mortgage. Call 1-800-570-0448 to speak with a friendly Florida FHA loan specialist now!

The FHA program has evolved since it started in 1934 and now has options for HUD insured loans that fit a variety of different borrowers and situations.

 Purchasing a Florida home is one of life’s major landmarks and for some, it is even a dream come true. At FHAmortgageFHAloan.com we understand the importance of this decision and it is our goal to make your acquisition into home ownership memorable. Regardless of whether this is your first Florida home or your third Florida  home purchase we will do our best to ensure that getting you into your new Florida home is a pleasant and memorable experience.

When you begin to seriously consider purchasing a new Florida home it is important that you follow some simple steps to make sure that the Florida home process goes smoothly.

The first thing you should do is an analysis of your debt to income ratio. This important step will let you know what type of Florida home you can afford and how much your current obligations will allow you the apply for  based on your monthly income and expenses.

The next important step in purchasing a new Florida FHA home loan is to get pre-approved for an FHA  home loan. The peace of mind that comes with knowing that your FHA mortgage loan and credit report have been approved will allow you to shop for your new FHA home with confidence. And when you find a Florida home and are ready to make an offer the fact that you have already been pre qualified for your FHA loan amount will give the seller confidence in you as a serious buyer.

About FHA Mortgage Loans

FHA guarantees eligible Florida home  loan applicants the ability to obtain FHA home loans with 3.5% down payment. FHA mortgage  loans can be fully assumable. FHA mortgage loan limits apply depending upon where the Florida home is located 

FHA mortgage loans provide for  low down payments and the easiest qualifying guidelines to make it easier for Florida homebuyers  qualify! FHA home loans are popular with Florida first time home buyers but are equally liked by  moving up buyers and Florida homeowners looking for a  Florida Rehabilitation loan. With an FHA Mortgage  loans you can borrow up to 96.5% of the purchase price of the Florida home.

The advantages of a FHA insured mortgage product to a Florida first time home buyer are many. A Florida homebuyer may apply for an FHA mortgage loan to purchase a Florida home with little money out of pocket. FHA home loan insurance permits FHA mortgage lenders to make mortgages for Florida first time homebuyers without risk. 

With an FHA home loan here are no income limitations or minimum  credit score requirements when FHA insured mortgage. This is why FHA loans are among the easiest mortgage loan to qualify for and almost  anyone can qualify as long as they have a reasonable credit history and can afford the monthly FHA mortgage payments. You can also combine FHA home loan programs with many Florida first time homebuyer down payment programs.

FHA Streamline mortgage Refinancing

The FHA mortgage has permitted FHA streamline refinances on FHA insured  home loans since the early 1980′s. The FHA streamline refinance  refers only to the amount of documentation and underwriting that needs to be performed by the FHA mortgage lender, and does not mean that there are no costs involved in the transaction.

The basic requirements of a “streamline FHA mortgage refinance”  include:

The FHA mortgage loan  to be refinanced must already be insured by  FHA. The refinance is to result in a “lowering” of the borrower’s monthly principal and interest payments. No cash may be taken out on mortgages refinanced using the “streamline” refinance process. The FHA mortgage to be refinanced should be current (not delinquent).

FHA mortgage Lenders may offer FHA streamline refinances and include the closing costs into the new FHA mortgage loan amount. This can only be done if there is sufficient equity in the Florida. FHA Streamline refinances can also be done without appraisals, but the new FHA home  loan amount cannot exceed what is currently owed, that is  FHA closing costs may not be added to the new FHA mortgage with those costs either be paid in cash or through the premium rate as described above.

Texas Mortgage Info: How your mortgage person structures your loan is more important than the getting a low rate. www.mylendingplace.com
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