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Five Reverse Home Mortgage Scams to Watch Out For

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By all accounts, reverse home mortgage growth is set to explode. Baby boomers are reaching retirement and, for most, home equity makes up the largest part of their nest egg. Reverse mortgages will be the tools that many of these retirees will use to tap into this nest egg for retirement living expenses. The number of new HUD Home Equity Conversion Mortgages (HECM) already has increased more than percent in the first nine months of 2006 over the same period one year ago.

But along with reverse home mortgage growth come increased opportunities for fraud and scams. Reverse mortgages are different from traditional mortgages in ways that make them attractive vehicles for scam artists:

  • reverse mortgages are products specifically designed for and targeted to senior citizens, the population group most vulnerable to fraud;
  • scam artists know that a reverse mortgages provide the senior homeowner with relatively easy access to a sizeable pool of cash; and,
  • reverse mortgages are harder to understand than traditional mortgages making it easier for the scam artist to confuse and take advantage of victims.

In this article we look at some of the tactics scam artists are using and the precautions reverse mortgage borrowers can take to protect themselves.

Scam Tactic One – Downplay Pre-Loan Counseling

An educated borrower is the scam artist’s worst enemy – but it’s up to the borrower to educate themselves and take advantage of counseling and other opportunities to learn about reverse mortgages.

All three major reverse mortgage programs – HUD HECM, Fannie Mae’s Home Keeper and Financial Freedom – require potential borrowers to have counseling with an independent counselor specially trained in reverse mortgages before taking out a loan.

In a recent Detroit-area fraud case, a corrupt lender was able to keep the borrower in the dark about the amount she was eligible to borrow. She thought her loan would be for $61,000 when in fact she was borrowing $103,000. Guess who pocketed the $42,000 difference? A thorough counseling session would have given the homeowner an accurate idea of the true amount she was eligible for. Unfortunately for the victim, the prosecutor in the case says this never happened:

“A counseling meeting explaining the reverse mortgage process was required by Financial Freedom before the loan could be processed. Mr. James allegedly informed Ms. Schultz that he would be able to waive the counseling meeting by just asking a few questions over the phone.”

Precaution: Although counseling by telephone is allowed, it is always best to meet face-to-face with the counselor. If you find that anyone you’re working with in the process suggests that counseling can be done quickly over the phone or otherwise downplays the importance of pre-loan counseling, be highly suspicious.

Scam Tactic Two – Forgery

Forgery is a key part of many scams. In the Detroit case cited above, the lender requested the title company to prepare two checks payable to the homeowner: one for $61,000 which the homeowner received and a second one for $42,000 which the corrupt lender endorsed with a forged signature and deposited into his own account.

In one California case, two con artists – one working as a financial advisor the other a handyman – convinced an elderly homeowner to take out a reverse mortgage to pay for home repairs. The financial advisor opened an account for the proceeds of the loan and forged the victim’s name to gain access to funds.

Another California case reported in the Santa Cruz Sentinel shows how dangerous it can be to sign “unfinished” documents:

Mrs. Sally Scott is 66 years old. While she receives Social Security and pension checks, she still can’t make ends meet. She saw an ad for a “reverse” mortgage – a loan that allows seniors age 62 or older to receive cash by borrowing against their homes and does not require repayment as long as they live there. Seeking a little financial cushion, she spoke to a mortgage broker about a $10,000 reverse mortgage.

When she received the loan papers, she noticed that the loan amount was $200,000. The broker promised that he’d change the figure, but insisted that she sign the paperwork first. Trusting the broker, Mrs. Scott signed.

A week later, she received a check for $200,000. She immediately notified the broker, who apologized for the mistake and instructed her to wire the money back. As it turned out, the account that Mrs. Scott returned the money to belonged to the broker. He disappeared, leaving her with a mortgage in default and no way to repay the loan.

Precaution: Never sign documents with blanks to be filled in or corrections to be made later. Carefully protect access to your checking and other accounts. Review and reconcile checking account and loan statements regularly. If you find something awry, contact your financial institution immediately.

In the Detroit case cited above, the victim caught on to the scam when she received a loan statement indicating the balance of her reverse mortgage (including interest) totaled $131,000.

Also, take advantage of the free credit reports available to you under federal law. Reviewing your credit report each year is also a good way to catch unauthorized financial activities under your name.

Scam Tactic Three – Charging for Free Reverse Mortgage Information

The complexity of reverse mortgages means that it is natural for borrowers to seek assistance and guidance to help them understand the loan process, find a lender or, generally, better understand what they are getting into. Some scammers have seized on this to offer – for a fee – reverse mortgage information and services that are available to consumers at no charge.

For example, some senior homeowners have been contacted by firms offering to assist them in finding a reverse mortgage lender, in exchange for a percentage of the loan. This type of arrangement should always be avoided. According to HUD’s website:

HUD does NOT recommend using an estate planning service, or any service that charges a fee just for referring a borrower to a lender! HUD provides this information without cost, and HUD-approved housing counseling agencies are available for free, or at minimal cost, to provide information, counseling, and free referral to a list of HUD-approved lenders. Call 1-800-569-4287, toll-free, for the name and location of a HUD-approved housing counseling agency near you.

Precaution: Walk away from anyone who offers to find a reverse mortgage lender for a fee. Use the internet to find free information about reverse mortgages or, read one of the several excellent books that have been published in recent years.

If you feel you have need for a professional financial planner to assess your overall situation – including the reverse mortgage decision – find a certified financial planner (CFP) who works on a fee-only basis and who is knowledgeable of reverse mortgages (many aren’t).

Scam Tactic Four – Posing as a Government or Non-Profit Representative

The most popular form of reverse mortgage – the Home Equity Conversion Mortgage (HECM) – is an official program of the U.S. Department of Housing and Urban Development (HUD). However, neither the HECM program nor other reverse mortgage programs are marketed directly to senior homeowners by government employees.

Unscrupulous reverse mortgage salesmen have been known to represent themselves to elderly homeowners as government representatives or volunteers for non-profit organizations.

Precaution: Be sure you know who you are dealing with and what organization they represent. Do not be timid about asking for information such as their home office location and phone number. Use resources like HUD and the National Reverse Mortgage Lenders Association (NRMLA) to check out the company.

Scam Tactic Five – Bundling Things with Reverse Mortgage Financing

Smart consumers know that the best way to shop for a car is to separate the parts of the transaction – purchase, financing and trade-in – from each another. With a bundled transaction, it’s easy for the consumer to be befuddled and not understand the true cost of the overall deal. What appears to be a “great price” on the car may mask exorbitant finance charges or a low trade-in value.

Similarly, a common tactic of scam artists is to bundle reverse mortgage financing with something else such as home improvements, annuities, risky investments, living trusts or other estate planning products.

In one Seattle-area case, elderly consumers were told that living trusts must be purchased in order to obtain a reverse mortgage. In another case, seniors were encouraged to take out a reverse mortgage and use the proceeds to “invest” in truck-mounted billboards.

Frequently, two or more scammers work as a team. For example, in the California case cited earlier, an unscrupulous financial advisor steered the homeowner to a home repair contractor who was party to the scam and who grossly overcharged the victim for repair work.

If you find yourself dealing with someone who attempts to bundle a reverse mortgage with another product or service or steer you to a particular contractor/lender, be highly suspicious. If you feel at all uncomfortable or that the person is using high-pressure sales tactics, walk away.

Precaution: When home improvements or estate planning services are needed, shop for the best deal. It’s best for you to find what you’re looking for rather than them finding you. Homeowners should avoid doing business with anyone who comes uninvited to the door, makes an unsolicited phone call or whose name is found randomly on a flier.

When you’ve found the best deal, then weigh your financing options – including a reverse mortgage. Keeping these decisions separate will protect you from possible fraud and help ensure you get the most for your money.

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Mortgage Post Closing Services: Describing What They Entail

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Could you be interested in mortgage post closing services? They entail strict reviews and audits to ensure compliance and completeness of documents. It is only after total confirmation of documents that the lender can fund the loan. The service provider selected by your company must be very experienced and good at their work. They must know how to correct documents from various origination stages and review them. The only documents that providers of mortgage post closing services could correct are those that have been signed and funded. The work of hired professionals also is to review legal, loan processing and other documentation for regulatory conformity.

They follow origination and underwriting rules to the letter, making sure missing information, if any, is retrieved. Mortgage closing services also entails data integrity checks so as to generate quality control reports. While doing integrity checks on loan information, service providers also state any possible exceptions. Basically their major activities entail the following. Tracking all documents (trailing document retrieval) associated with the mortgage post-closing is the first critical step. The documents that need to be trailed include assignments, assumption agreements, judgments, tax records, trust deeds, modifications, and UCC (Uniform commercial code) among others.

After the completion of this, issuance of final title policy, lien and assignment take place. The second activity offered during delivery of Mortgage closing services is the assembly of post closing loan package. What this entails is compilation of all loan documents that are usually submitted during the whole origination process. It means therefore that the provider of mortgage post closing services will work together with underwriters, loan officers, loan processors, mortgage brokers, home appraisers, property sellers and any other involved parties. The assembling work is rather tiresome and lengthy and that is why you want it to be done by a big company with many employees.

Another activity includes post closing data integrity audit as aforementioned. The main reason why this audit is done is to tackle possible home loan deficiencies. They verify and address red flags that were raised during the underwriting process. After this, all loans that have been fully approved are registered with a given mortgagee system. This whole process of registering approved loans prevents future assignments on loans. It also saves lenders from incurring future correction and tracking costs or facing document penalties among others. This step of mortgage post closing services also ensures faster execution of loans, zero errors on documentation and an easy closing process.

Mortgage quality control audit is also part of mortgage post closing services. There are automated audit systems used for this task. The service you will be offered in this step include pre-funding, post-closing, servicing, compliance, foreclosure loans, fraud investigation, preparation of the QC plan, cancel or reject, and commercial loans audit among others. It is imperative to make sure that the provider of the post closing service can audit and review the loans you normally process. Many outsourced companies deal with FHA, VA, Fannie Mae, and Freddie Mac among other home loans. Their basic auditing process entails file document review, evaluation of underwriting process, credit risk analysis and third party verification.

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All You Want To Know About Mortgage

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A mortgage is a kind of agreement. This allows the lender to take away the property if the person fails to pay the cash. Generally, a house or such a costly property is given out in exchange for a loan. The home is the security which is signed for a contract. The borrower is bound to give away the mortgaged item if he fails to make the repayments of the loan. By taking your property the lender will sell it to someone and collect the cash or whatever was due to be paid.

There are several types of mortgages. Some of them are discussed here for you –

Fixed-rate mortgages- These are actually the most simple type of loan. The payments of the loan will be exactly the same for the whole term. This helps to clear the debt fast as the borrowers are made to pay more than they should. Such a loan lasts for a minimum of 15 years to a maximum of 30 years.

Adjustable rate mortgages- This type of loan is quite similar to the earlier one. The only point of difference is that the interest rates might change after a certain period of time. Thus, the monthly payment of the debtor also changes. These kinds of loans are very risky and you will not be sure that how much the rate fluctuation shall be and how the payments might change in the coming years.

Second mortgages- These kinds of mortgage allows you to add another property as a mortgage to borrow some more money. The lender of the second mortgage, in this case, gets paid if there is any money left after repaying the first lender. These kinds of loans are taken for home improvements, higher education, and other such things.

Reverse mortgages- This one is quite interesting. It provides income to the people who are generally over 62 years of age and are having enough equity in their home. The retired people sometimes make use of this kind of loan or mortgage to generate income out of it. They are paid back huge amounts of the money they have spent on the homes years back.

Thus, we hope that you are able to understand the different kinds of mortgages that this article deals with. The idea of mortgage is quite simple- one has to keep something valuable as security to the money lender in exchange for getting or building some valuable thing.

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What Insurances Can I Have With My Mortgage?

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Life Cover

Life Cover provides a lump sum if you die during the policy term. This can be used to pay off your mortgage so your family do not have to worry about making any further repayments.

Critical Illness Cover

Critical Illness Cover is designed to insure against critical illnesses which could have a severe impact on your ability to earn a living. It should pay out if you are diagnosed with one of the critical illnesses or disabilities listed on the policy. You could then use the lump sum to repay your mortgage or help pay expensive medical costs. Some policies pay out on death during the period of cover if you are eligible to claim.

Accident, Sickness & Unemployment Cover

Accident, Sickness & Unemployment Cover is a short-term income-protection policy. It pays you a tax-free monthly sum for up to 12 months if you are unable to work due to an accident or sickness or if you become unemployed through no fault of your own. Policies are available that protect you against all of these events or just cover you for accident and sickness only, or unemployment only.

This type of insurance is expensive so to reduce the cost you can choose to have a ‘deferred period’. Then, in the event of a claim, you will not receive any benefit for a period of time at the beginning. This deferment could be for 30, 60 or 90 days for all three types of claims. You can also have a longer deferred period of 180 days for accident and sickness cover. To help you decide which deferred period is best you should take into consideration such things as any savings you may have and any sick pay you get from your employer.

You can choose the amount of monthly benefit you wish to receive up to 65% of your gross monthly income. Gross income is your wages before deductions have been taken such as income tax and National Insurance contributions. Of course the higher the benefit you require the higher the cost of the insurance. Cover provided by some companies may be limited due to individual circumstances.

Just as an example, Accident, Sickness and Unemployment Cover typically costs £4.71 a month for every £100 of monthly benefit. This is based on a 36-year-old customer choosing £850 of accident, sickness and unemployment monthly benefit with claims paid after a 30-day deferred period.

The cost of this insurance depends on a number of factors including your age, your occupation and where you live.

A number of companies offer short-term income protection and other products designed to protect you against loss of income.

Buildings Insurance

This covers the structure of the home such as the roof, walls, windows and permanent fittings.

Contents Insurance

This covers household goods, personal possessions and valuables within the home.

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Tips to Choosing a Mortgage Broker

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When you’re searching for a new home, you go through a number of properties to find that perfect match for you and your family. Once the excitement settles, it’s time to secure your financing.

You have two choices, you can approach your bank and hope that they are offering loans right now or you can approach a mortgage broker, someone who specializes in property financing and works with a host of leading banks, financial institutions and credit unions to secure you the best deal available to meet your budget.

When you first start looking for someone to help you secure the financing you need, it’s advisable to speak to family and friends that have recently purchased property in the area. They may be able to recommend an experienced broker that they dealt with, who secured them their financing. Word of mouth is usually the best way to find the best of the best.

Another option is to search online. You will be welcomed by hundreds of mortgage brokers who all want to assist you in getting the finance you need to secure your new home. If you choose online, there is some additional research you will have to do to ensure you will be working with someone who has experience and knowledge in the industry and has a good reputation with their customers.

There are a number of different brokers out there, some will be tied to certain estate agencies, some will work independently and some will work for large lending centers that are working closely with a number of the leading lenders in the country. Try and steer clear of the first two, rather go with the one that can work alongside a large number of banks and financial institutions to find you the money you need in the shortest period of time.

The mortgage broker should be focused on finding you the best possible deal. They may present you with a number of offers, enabling you to choose the one you feel meets your specific requirements.

One of the most important considerations is that they have extensive industry experience and an excellent reputation. You want your mortgage broker to work for you, they should provide you with all the information and advice you need, also providing you with outstanding customer service. This is so important as a first time buyer when you are unsure about the processes that lie ahead.

Determine if they charge any upfront fees. Some mortgage brokers will charge fees for their efforts. Ensure you are aware of the percentage they charge and how the payment is to be made. Is it upfront? Do you have to pay it straight away? This may reduce your down payment slightly, so take this into consideration.

Always do your own research as well, don’t rely on what they tell you. Even if you have chosen to use a mortgage broker because they can secure the best deals, approach the banks and find out what they are offering right now. Don’t settle for the first offer that comes you way, by doing some research, you can ensure you find the best mortgage with the best interest and terms to suit your budget.

Never assume your loan is secure. Ensure everything is provided to you in writing. This should be the offer from the lending institution, the mortgage broker’s fees and anything else imperative to your decision.

With everything in writing, you are set to go ahead and place an offer on your new dream home with the confidence that your financing should be approved within the shortest period of time.

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STAR Servicer – Total Achievement and Rewards Program for Mortgage Servicers

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As the fall out continues with the countrywide 50 state investigations, lending servicers who are responsible for bill collection of mortgage payments and other aspects of mortgage servicing for investors, it has come to the attention of the government how badly these companies are run. Fourteen companies have been under review and all of them have been found to violate foreclosure laws. Fannie Mae and other government agencies have been discussing how to best improve our mortgage servicing and lending here in the United States. Fannie Mae has come up with a performance program to help assist mortgage servicers’ to get it right and to stay within the boundaries of the law. This ultimately will help ensure the health of our housing economy and help support the housing recovery.

Not only will servicers be facing no procedures, they will also be facing harsh fines as a group entity. These fees could total over 20 million; however, this is just an estimation of what they could be paying for violating foreclosure laws.

Fannie Mae on Wednesday announced the STAR (Servicer Total Achievement and Rewards); the program is designed to better assist and will help examine how the servicers help homeowners avoid foreclosure. The goal of this new program is to set clear expectations and specific measurements to help Fannie Mae and servicers increase focus on avoiding foreclosure.

As more and more news comes out about how servicers’ have violated foreclosure laws, this program is an ongoing effort to hold servicers accountable. So how will this work? Each servicer will be given a servicer performance scorecard, which in turn will provide feedback on a monthly basis. With this program it should help servicers see where they need improvement and overall performance. Top ranking servicer’s will become eligible to receive monthly incentive awards and recognition. Also, top ranking servicer’s performance will be made public in an annual scorecard. Many believe this program will help gear better customer service to home owners, help with the housing recovery, and keep the servicers on the right track.

This will also help the federal government to set guidelines and regulations in place for the mortgage servicing industry. As the mortgage industry and bank industry is reviewed by the government to find a solution and to prevent another financial crises,it seems many changes are going to happen over the next few months and years. As we wait and see if the HAMP program and other federal programs will stick around, it is good to know servicers will now be regulated better in hopes of making the homeowner ship experience safer for everyone.

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Foreign National Mortgages: Things To Keep In Mind

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A foreign national mortgage refers to a loan for non-us residents. Even the government can issue loans to non-residents of the States. Let’s find out more.

First of all, if you are in the States legally, you can apply for the loan. However, for illegal residents, there are zero chances of success. The reason is that main lenders always require ID before reviewing an applicant. And these requirements include visas, work permits, green cards and social security numbers as well.

Rules for the resident foreigners

Generally, it’s not difficult for non-us residents to look for a mortgage. There are two primary categories that they fall in:

1. Permanent residents: they have green cards and the rights to live in the States with all the long-term residency rights

2. Non-permanent residents: Generally, your residency rights are based on your employment.

Regardless of which category you fall in, you can apply for a mortgage. However, you may need to put in a little more effort if you are not a permanent resident.

Permanent vs non-permanent

If you are a non-permanent resident, you may have to show a proof that you will live in the country for at least another three years. If your visa or work permit has fewer than 12 months of expiry date, your lender can find out how likely you may be to stay.

FHA loans are designed for non-permanent residents. According to the rules, if you have a renewed visa or work permit, you can be a good candidate for approval.

Refugees or those in the asylum

If you have been in the asylum or have the refugee status, we have good news for you. With this status, you have the right to work, and you have greater chances of getting a mortgage approval. So, this is important to keep in mind.

Non-resident foreign buyers

If you have no right to live in the USA, you may still be eligible for the loan. However, you may have credit score problems to face. Actually, lenders have concerns as how they can enforce a debt in case of these non-residents.

So, you can’t get the type of deals a resident or citizen can get. In fact, you may have to make a down payment up to 50% to get this type of loan. Aside from this, the mortgage rate can be quite higher unlike the rate charged to a resident.

Welcome to the States

Immigrants were the founders of the States. Therefore, American has always been quite welcoming to immigrants.

Typically, lenders make their lending decisions based on the risk factors, such as the financial resources, down payment size, and creditworthiness of the borrower. As far as determining the best deal is concerned, you can be on the level playing field irrespective of the citizenship status you may have.

Long story short, if you are non-resident in the United States, you can still apply for a mortgage but you need to meet the requirements set by the lender. Hope this helps.

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Tips To Choose a Mortgage Lender

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No matter how rich you are emergency situations can crop up at any time. Thus, you have to consider taking a loan either from an individual or from a financing company or a bank. Most of the people of now like to opt for the latter options rather than going for the first option. This is because the financing companies or banks are more reliable than a person. But the high interests that are charged on the loans are really a burden. So, a better alternative that you can look for is mortgaging your property against the loan you take. This will relief you from being taxed with high charges and you can pay the loan amount at your convenience within the time limit that the company has offered you. To choose a proper loan lender you can follow some of the tips that we have provided in this article.

Prepare a List

While you consider risking your personal property, why plan everything in haste. Some companies would try to persuade you to take quicker decisions by offering attractive rates but let them be as they are and take your time to take your decision. Research well and make a list of the companies that you find.

Check the Terms and Conditions

Not only choosing the company but knowing the terms and conditions through which the loan to be completed are important. Remember that you are risking your property for money and the slightest carelessness in this respect can cause you to lose your money.

How Quickly They Respond

The next thing that should be your determining factor is that how quickly they respond to your queries. Emergency situations don’t give you a lifetime opportunity. A delay can make the problems to increase. So, instead, you should go for the ones that respond quickly to your needs.

Compare and Choose

After you check with several companies you can compare the interest rates and also the time period they are allowing you to make the repayments. You also have to ensure that the company that you are thinking of dealing with should have a good reputation in the market. Check their client reviews and the years the company has been in the market. If you find that the company is a genuine one then you should go ahead with finalizing the deal with the company.

We hope that just by reading this article you have got an idea about choosing the mortgage provider. This will help you in choosing a better lender for your needs.

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Credit Card Processing: How the System Works

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Establishing a merchant account for your business enterprise is the wisest financial decision you will ever make for the growth, expansion and success of your business. Once you’ve set up a merchant account, you can accept credit and debit cards payments from your clients for your products and / or services. You can also arrange to accept online and mobile banking payments for your products and / or services.

A merchant account opens up new avenues for your business; therefore, giving your business many more opportunities to flourish. But, have you ever understood how the credit card processing system works? Have you tried to perceive the complexities of the players involved in the process and the intricacies of the system?

While it is not entirely essential for you to know the inside and outside of the card processing system because your Merchant Service Provider will do the needful for you; it is good for you to acquaint yourself with the system on a general basis.

The Participants Involved in a Card Transaction

A typical credit or debit card transaction involves the following players:

• The customer

• The merchant

• The payment gateway

• The customer’s credit card issuer

• The credit card interchange

• The processor at the acquiring bank

• The merchant’s acquiring bank

The Route the Money Takes from the Customer to the Merchant

Let’s take an example to understand how the card processing system works.

Suppose that a customer walks into a clothing store and she finds a bag that catches her eye. She immediately proceeds to the payment counter and makes a payment of $100 towards her purchase with her cards.

The cashier at the merchant’s store accepts the cards and uses a card swiping machine to set the process into motion.

• The $100 amount makes its first stop at the payment gateway where the payment is first authorized with a minor deduction in the amount.

• Now, $99 travels to the appropriate processor and after a minor deduction is submitted to the card interchange as $98.5.

• Once the transaction gets a clear at the interchange, it moves on to the issuing bank with a further deduction where the issuing bank verifies the availability of funds in the customer’s credit / debit card.

If the transaction is declined, it makes its journey back to the customer from here.

• If the transaction is approved, $98 reaches the processor at the acquiring bank, just one step closer to the merchant account.

• Once authorized, $97.5 gets deposited into the merchant’s account, which is now at the merchant’s disposal.

(The figures and fees involved in card processing are based on the number of players in the process, merchant type, card type and risk factors)

In the present age, quite a number of payments are made electronically, especially with the extensive use of credit and debit cards and online funds transfer. Although typical card processing takes seven participants, the entire transaction amazing takes a maximum of five seconds for approval.

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5 Tips to Consider When Refinancing Your Mortgage

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Here are 5 tips to consider when refinancing your mortgage.

Is it the right move?

When conditions are right, financially and economically, you might be considering a refinance of your mortgage. Before you jump into what seems like a good idea, it’s best to know exactly what the refinancing process is, and just what it entails. You should know that when you are going to refinance, it involves starting the loan application process right from the start, as if you are buying a new home. Will you be taking the loan with a new lender, setting up a new deal, or should you shop around and see what’s on offer from other loan providers? The best person to lead you through what is now a veritable minefield of lenders, is your mortgage broker. They are far more up to date with what’s on offer than if you spent hours scouring the internet looking for the best deals.

Why Refinance?

What are your reasons for refinancing? There could be a variety of reasons. Lower interest rates on offer? A difference of a point or two in the rate may seem small when you look at it, but that couple of points can save you thousands over the years because your repayments will go on for 15 to 30 years for a typical mortgage.

Another reason some may decide to refinance is to get a shorter term, which also saves thousands of dollars. For example, things have never looked rosier personally, and both you and your partner are working, and your income is higher. So, a change in your financial situation can be used to save money on higher monthly payments. Conversely, you might be after a lower monthly payment or have that fixed rate changed to a variable rate, or vice versa.

Refinancing Costs

There are some obvious things to look at when considering refinancing. One of the first things is the actual cost of refinancing. Look at the fees you will be paying and divide it by the months of your mortgage and see whether there is a saving as a result of the refinancing. Sometimes you are ahead straight away, other times you might have to work out when you will hit the break-even point.

Penalties

Are there any penalties in your mortgage terms and conditions that apply if you pay out the mortgage early? Lenders do NOT like mortgages paid out early. Remember, when you refinance, you are paying off one loan and applying for another completely new loan. Add any penalties to your total costs for refinancing and calculate that break-even point again. Be certain that you are not losing money overall when you refinance.

Your Equity

An important factor in this whole process is to work out the equity you have in your home. A negative equity is when you owe more on the home than what the house is worth. If you have been in your home for a number of years, the annual increase in your home’s value will stand you in good stead. But if this is a refinance taken out after only a short time into your mortgage, price fluctuations may have worked against you. If your lender is offering less than the equity, you will not be able to get the refinance, unless, of course, you have the money to pay the difference. Current markets indicate an overall rise in prices, but there have been some downward movements as well over the year and that may have had a negative effect on your home’s value.

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Get Over from Your Credit! Credit Debt Management

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Credit arises when you spend without paying. And how it is done? Yes, you are right, it’s through credit cards. Here, we are going to discuss how can we control that small plastic card which can make us happy with its service and can lead us to bankruptcy if goes out of control. Credit debt management can suggest us the way to get back that control and maintain it.

Credit card handling tips which you can follow for efficient credit debt management:

o Use your credit cards wisely; this will help you build a good credit history.

o Reviewing of credit card bills helps you pay them on time simultaneously finding errors (if any) in the bill.

o Get your credit report and analyze it. Contact credit rating agencies if there is any mistake in the report regarding credit card or any other debts.

o If you are already having balances on your credit cards, don’t apply for more cards.

o Get your balance transferred to a card with lower interest rate, if you use more than one credit card.

o If you are late on payments to another creditor, your credit card company can raise your

interest rate. So, always pay your bills on time for all your debts.

o Special cards such as gas and petrol cards, departmental store cards or rewards cards carry higher rates as compared to normal cards, so avoid them

o If your credit debts are getting out of hands, contact credit debt management agencies for help.

Along with the measures specified above you can take the help of credit debt management companies. You can search among numerous credit debt management companies available online along with the services they offer. These services include credit counseling, credit card education and credit card debt consolidation services. Under a credit card debt consolidation service, you make a single monthly repayment to these agencies for all your credit card bills. Further, this agency pays your creditors from that amount at negotiated amounts. Yes for getting this service, you will be charged with a certain percentage of the total debt payment for credit cards.

You can enroll for a credit debt management agencies within 15 to 20 minutes. After the enrollment the consultants from these agencies will contact you with the services and credit debt management plan while discussing your credit card spending with you. The services of these agencies will continue till all your debts are in control or you have decided you withdraw voluntarily from this service. A credit debt management besides erasing your debts can also erase your stress due to credit cards.

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