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Is College Debt Really Necessary? What Parents and Students Should Know

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“Had the people who started Facebook decided to stay at Harvard, they would not have been able to build the company, and by the time they graduated in 2006, that window probably would have come and gone.” – Peter Thiel, co-founder of PayPal.

Ever since I can remember, I was inculcated with the belief that in order to truly succeed in America, you have to get at least a 4 year degree from a prestigious university; even if it means taking on a ton of debt that you may work your entire adult life to pay off.

I also came to believe that if you really want to stay on the top of the heap, then you need to take on even more debt and get a graduate degree, hence my own post-graduate alphabet soup, including law school.

In high schools across the nation, statistics are still being trotted out by guidance counselors to “prove” that young people have no chance of success without that high-priced sheepskin, or that, if they somehow manage to land a job without one, they will never get promoted and will be stuck in bottom-of-the-ladder limbo land for all eternity.

Twenty years ago, the idea that “you have to go to college to make good money” might have been more truth than myth.

Now, though,, the ever-escalating cost of tuition, fees, and books at America’s universities means that post financial collapse parents might want to take another, perhaps more jaundiced view of the entire higher education system even as the old school narrative continues to be shoved down their throats by university marketing departments.

As a financial educator, I have had numerous concerns about my own clients taking on the costly burdens associated with financing their child’s college education. Truthfully, it makes me more than a bit queasy when I see clients raiding their savings and retirement accounts to send Junior to a fancy private school.

This is especially true in a financial system in flux, where, for the first time ever, over 50% of the unemployed and underemployed have college degrees. To make matters worse, there is a bubble on the horizon; large, paper-thin, and waiting for one tiny pin prick to explode it.

This bubble comes in the form of easy-to-obtain student loans that many are finding are not so easy to pay back. A 2012 article on CNN’s website reported that, at a time of record high unemployment for college grads, student indebtedness had reached an average of nearly $27.000.

“… Two-thirds of the class of 2011 held student loans upon graduation, and the average borrower owed $26,600, according to a report from the Institute for College Access & Success’ Project on Student Debt. That’s up 5% from 2010 and is the highest level of debt in the seven years the report has been published.” (1)

Beyond the expense of college there is also the thornier issue of whether most college kids are learning anything of real value that can be applied to the new economy. The education cartel, always in need of fresh blood and fresh wallets, has systematically smeared those who work in the trades as “blue-collar,” or “uneducated,” and thus somehow inferior to those with Ivy League degrees.

Matthew B. Crawford, a fellow at the Institute for Advanced Studies in Culture at the University of Virginia, and author of the bestseller, Shop Class as Soulcraft: An Inquiry into the Value of Work, has posited that the degradation of manual labor and the rise of so-called knowledge-based jobs was wrongheaded and that the future will belong to those who actually know how to do things such as build custom furniture, repair a car, or install heating and air conditioning units.

Says Crawford:

“While manufacturing jobs have certainly left our shores to a disturbing degree, the manual trades have not. If you need a deck built, or your car fixed, the Chinese are of no help. Because they are in China. And in fact there are reported labor shortages in both construction and auto repair. Yet the trades and manufacturing are lumped together in the mind of the pundit class as “blue collar,” and their requiem is intoned. Even so, the Wall Street Journal recently wondered whether “skilled [manual] labor is becoming one of the few sure paths to a good living.”

Crawford also observes that “If the goal is to earn a living, then, maybe it isn’t really true that 18-year-olds need to be imparted with a sense of panic about getting into college (though they certainly need to learn). Some people are hustled off to college, then to the cubicle, against their own inclinations and natural bents, when they would rather be learning to build things or fix things… ” (2)

The Cartelization of Education

We need only look, says bestselling author and trend forecaster Charles Hugh Smith, to the advent of the higher education cartel to see the reason for our obstinate addiction to the “old school” higher education system and the instance that insistence that everyone needs to go to college. There is a lot of money to be made, says Smith, and an elite cadre of cartel bosses who stand to profit by promoting that myth.

“Why does the old style system still persist even though it is already demonstrably inferior? In addition to the financial disincentives, there is another reason: the current system retains a monopoly on assessing student learning and granting credit for demonstrated accomplishment. The schools are able to do this because they have arranged a monopoly on accreditation. This is ultimately a grant of state power.

As a result, modern colleges and universities have collectively become a rent-seeking cartel, an alliance of nominally competitive institutions that maintains a highly profitable monopoly of accreditation. To grasp the power of the cartel, consider a typical Physics I course even at MIT is almost entirely based on Newtonian mechanics, and the subject matter is entirely in the public domain. Only a cartel could arrange to charge $1,500 and more per student for tuition and texts, in the face of far lower cost and superior quality materials, for subject matter that is no more recent than the 19th Century.” (3)

Jeffrey Tucker, CEO of the startup Linerty.me and publisher at Laissez Faire Books, agrees with Smith and maintains that cartelization has ensured that a return on investment in higher education is far from a sure thing for most students and their parents.

… even if the teen does everything right-every test trained for and taken five times, every activity listed on the portfolio, a high GPA, top of the class, early applications and admissions-you are not home free. You are going to spend six figures, but there is also a high opportunity cost: you remove your child from remunerative work for four years, and this is after four years of no employment in high school. That means both lost income and lost job experience. College is costly in every way. (4)

Citing what economists refer to as “inelastic demand,” Tucker writes that the cartel is exceptionally aware of, and deliberately contributes to, parental unwillingness to forego a four-year college education for their children, even if it means putting themselves in the poor house.

“Parents would gladly step in front of a bus to save their children, so facing debt and financial loss for a few years seems just part of parental obligation. This is why, in economic terms, the demand for college is relatively inelastic: Parents keep paying and paying no matter how bad it gets,” he argues. (4)

I see a lot of angst concerning this issue among my own clients. As the parent of a high school student, I understand it. The idea of college “no mater what” is so ingrained in our thinking that when a child tells us they are considering postponing college or even not going at all, parents tend to panic.

However, the stakes are higher than ever before and the potential for damage to the parents’ own financial well-being is enormous, not to mention the contribution education debt makes to our national economic malaise.

Parents and students need to ask themselves honest questions about the value of a traditional four-year degree, what the potential return on that investment will be, and whether or not there are viable alternatives.

Student Debt and Wall Street

As of this writing, current student debt stands at around $1.2 trillion dollars, more than the entire gross domestic products of some nations, including Canada.

After what we’ve discussed in previous chapters, it should come as no shock to you that many banks have turned these college loan obligations into (surprise, surprise) “investments” and are busy shopping them on Wall Street as subprime debt.

The market for these educational loans is relatively small compared to the market for home loans, so I doubt that it will be as massive a bubble as we had during the housing market.

However, if the Fed continues to hold interest rates down, investors might be desperate enough to snap more of them up. Then we could have another potential economy-damaging event on our hands.

Teresa’s Takeaway: Alternatives to Traditional 4-Year Degrees

Many of my clients are able to fund their kids’ education without incurring any debt due to their diligence in creating and maintaining their own private finance system using specially-designed insurance policies. In fact, I set up many of these policies that have as their express purpose the funding of a university education.

That being said, however, I never think it is a good idea to spend money simply because you have it available.

If you are a young person considering college or graduate school, do your research and question your motivations. Before saddling yourself or your parents or grandparents with a lot of debt- consider alternatives to four-year colleges, such as online degrees, community colleges, and trade schools. Ask yourself if what you really love and want to do

Find out if what you want to do really does require a college degree in the first place. Amazingly there are lots of high-paying jobs that don’t require 4-year degrees.

Look into local and community colleges, where your expenses are often a fraction of what private universities charge.

If you’re a recent high school graduate, take a year to “cool off,” work, save and travel. Gain a better understanding of yourself, your strengths and weaknesses. Learn what you have to offer to the world. Contribute to the global conversation in a meaningful way as a volunteer.

A bright spot in all of this is the fact that there are some great alternatives to the traditional sheepskin; alternatives that might actually broaden a students’ understanding of the world and give them skills that are needed in the new economy without bankrupting mom and dad.

Bestselling author James Altucher, a longtime proponent of re-thinking college, provides a few real alternatives to college.

Altucher suggests that some college prospects might be better off taking their college savings and starting a business.

He also suggests traveling to a country such as India and immersing your self in a culture completely different than your own.

You will learn what poverty is. You will learn the value of how to stretch a dollar. You will often be in situations where you need to learn how to survive despite the odds being against you. If you’re going to throw up you might as well do it from dysentery than from drinking too much at a frat party, “he writes. (5)

For even more ideas of what to do instead of college, check the resource section of this book for a link to Altucher’s report “40 Alternatives to College.”

References:

(1) Report CNN Money “Average Student Loan Debt Nears $27,000”

(2) Crawford, Matthew B. Shop Class as Soulcraft: An Inquiry into the Value of Work

(3) Smith, Charles Hugh, Higher Education Cartel, Meet Creative Destruction, Sept. 9,2013

(4) Tucker, Jeffrey A.”Is There A Viable Alternative to College?” The Freeman, July 2013

(5) Altucher, James “8 Alternatives to College” The Altucher Confidential. January 8, 2011

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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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