How to finance your child's college expenses - stress free!

Finance Your Child’s Education – Stress Free by DJ Nelson -

In 2002, the average annual cost for a public university was $9,338. It is estimated that by 2017, the average annual cost will be $19,413. And that’s just for tuition and credit fees. Let’s not forget about room and board, books, food, clothes and extra activities.

With those figures it mind, it would be wise to start planning for your child’s education today.

You already know about loans and scholarships but those aren’t the only options. You don’t have to go into debt! There are several choices to help you prepare for your child’s future.

529 Plans

A 529 or qualified tuition program is a (federal) tax-free investment plan that allows families to save for their childrens college educations.

Each state has its own 529 plan and you do not have to be a resident of a particular state to invest in that state's plan.

The 2 types of plans include:

Prepaid Tuition Plans – These plans allow you to pay for your child’s in-state tuition at today’s prices. These accounts are low-risk and they are guaranteed to match or exceed in-state inflation. However, these plans are often limited to state residents and the cost may not be covered if your child decides to attend an in-state private university.

Education Savings Accounts- Or college savings plans are investment accounts whose value fluctuates with the market. They can be used at eligible public and private universities- there are no residency requirements. Additionally, some plans have high contribution limits per beneficiary and you can contribute up to $11,000 per year without paying a gift tax.


Savings Accounts

Even if your child only has a few years until it’s time to go to college, it’s never too late to begin saving. Determine where you can cut costs and put that money into a high-interest savings account.

For example, instead of buying 2 video games as a birthday present, buy one and put the extra money into a savings account. What about Christmas and Hanukkah? Sure, it’s fun to open presents but I guarantee that the novelty of those gifts will soon be forgotten and later on your child will thank you for making sure that their education was financed in a stress-free way.

Here is a tip: look for a FDIC insured bank that is based online. These banks offer higher interest rates because they don’t have the operating overhead of having branches. The work the same way as a regular bank except that there is no physical branch. You deposit money through your current checking account and receive monthly statements either via email or through the mail.


DJ Nelson wants to help you jumpstart your child’s future. Open a savings account today. Visit KidsSavingsAccounts.com to open a high-interest, no- minimum savings account in under 5 minutes.

How a second mortgage can be a helpful step to getting out of debt

Many homeowners are taking out second mortgages to get needed cash. Even borrowers with bad credit can come out ahead by using their home equity wisely. Using a home equity line of credit is a fundamental part of The Mortgage Eliminator from Money Principal Group. Here's an article that describes how a second mortgage is a good first step to getting out of debt.

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Second Mortgage a Good First Step by Mike Hamel (from ArticleDashboard)

A second mortgage can be the first step to climbing out of debt, especially for homeowners who have bad credit. A second mortgage is a loan taken out in “second position” on a property that already has a mortgage. There are fixed-rate loans, adjustable-rate loans and home equity lines of credit (also known as HELOCs). Fixed-dollar-amount mortgages are the way to go when you need all the money at once. A HELOC is a credit line that can be drawn upon as needed up to the limit of the loan.

“Bad Credit” Second Mortgages

Your right to credit is guaranteed by the Equal Credit Opportunity Act. You can’t be denied credit based on race, gender, marital status or ethnicity. But how much money you can borrow and how much interest you will be charged will depend on your credit score.

Credit is easy to get and hard to control. Not using it properly will get you a low FICO score from the three major credit bureaus. Generally, a score of 680 or better signifies good credit. Scores in the 680-620 range are still considered good, but will cause creditors to take a second look before lending you money. 620 and lower, and you are in the bad credit range.

Here are some indications that you are in bad credit territory:

- You have to apply for new credit cards to pay off old ones, thus rotating but not retiring your debt.

- You can only make the minimum payments on your loans and cards each month.

- You are at the limit on all your cards and accounts.

- You have to get subprime financing when you need to borrow money.

Improving Your Financial Situation

It’s a catch 22 that getting a bad credit second mortgage can lower your FICO score initially, but it can also help raise it in the long run—if you use the money to pay off high interest debts. This new loan doesn’t reduce your debt; it just restructures it to help you get back on your feet financially. An added bonus is that the interest you pay is tax deductible. The IRS says joint filers can deduct all the interest to a maximum of $100,000 on home mortgages.

It’s easy to shop and compare bad credit second mortgages online at reputable sites like www.badcreditsecondmortgages.com/. The no-obligation application process is quick and confidential. Interest rates are still relatively low, but might rise in 2006, so now is a great time to see if a second mortgage is a good financial move for you.


Mike Hamel is the author of several books and the Senior Writer for AIM Techs (www.salesandmarketingllc.com), an Internet marketing company that specializes in improving visitor-to-sale conversions using proprietary software and advanced SEM techniques.

Article on zero/no money down home loans

Zero Down Home Financing - No Money Down Mortgage Loans by Carrie Reeder

Zero down home financing helps you buy a house with little out of pocket expense. Instead of depositing $60,000 to $20,000 to get in your home, the most you will pay are closing costs of a few thousands. No money down can also help you buy a vacation home without completely depleting your investments.

When To Pick A No Money Down Mortgage

A no money down mortgage is a viable option for many people. For one, you can get into a house for about the cost of rent. You can hold onto your cash for moving expenses rather than a large down payment. For those looking to buy a vacation home, zero down helps you keep your assets liquid, not needlessly tying them up in a property.

Choosing Your Zero Down Mortgage Loan

Zero down mortgage loans come with two different terms. The most common zero down mortgage finances just 100% of the home’s price. All closing costs and application fees are still required.

The other zero down mortgage includes fees with the loan up to 3% or 5%. Since the principal is over the home’s value, these types of loans are harder to qualify for. In most cases, you need an excellent credit score and cash reserves.

Skipping PMI With No Money Down

One of the hurdles of a no money down home loan is the additional cost of private mortgage insurance (PMI). Most conventional loans require you to carry this insurance until you reach 20% equity either through appreciation or payments on the loan’s principal.

You can avoid this expense by piggy backing your loans. By taking out two mortgages, one for 80% and the other for 20%, you don’t have to pay premiums. The same lender can carry both loans, or you can choose different lenders.

Finding The Right Lender

To find a lender who offers zero down financing, start by asking for loan quotes for no money down mortgages. With most online sites, you will get a response in minutes on rates and terms. If you have trouble qualifying with a conventional lender, turn to a subprime lender. They offer more creative terms.


View our recommended Home Mortgage Lenders or view all of our Recommended Bad Credit Lenders.

How to understand credit scoring and how it affects your mortgage loan

Understanding Credit Scoring On Mortgage Refinancing or Second Mortgage Loans. by Chris France

For years, lenders have utilized "credit scoring" to determine whether or not an individual is a good credit risk. Credit scoring has recently become a hot topic, due in large part by the mortgage lending industry's willingness to use the process to evaluate one's likelihood of repaying home mortgage refinancing or second mortgage loans. Even insurance companies use credit scoring as part of their underwriting procedure when writing automobile and home insurance coverage.

Credit scoring is a system, based on a statistical program, which awards points for certain factors that help predict who is most likely to repay a debt, such as a mortgage refinancing or second mortgage loan. The total number of points, or score, is what lenders use to determine an individual's creditworthiness. A large random sample of customers is taken, and analyzed statistically to identify characteristics relating to credit risk. These factors are then given a weight based upon how strong a predictor they are of who would be a good credit risk.

Credit scoring models do vary from lender to lender, but most generally include the following factors:

1) Your current amount of debt as compared to your potential total available credit.

2) Payment history on current and previous accounts.

3) The length of your credit history.

4) The number of credit inquiries (each time a creditor pulls credit in response to your application).

5) The number of separate open accounts.

6) Collection actions including judgments, repossessions, foreclosures, and bankruptcies

Using the statistical program, lenders compare this information about you to the credit performance of other consumers with similar profiles. Therefore, it is usually more reliable than a subjective or judgmental decision, because it is based on real data and statistics. Although it may seem somewhat impersonal, when used properly, credit scoring can allow creditors to evaluate credit applications faster and more accurately than individuals, in an impartial and unbiased manner.

In addition, the home mortgage refinancing and second mortgage loan process has been shortened as a result of the speed in which mortgage lenders can now make decisions utilizing the credit score model.

For more information, please contact your favorite mortgage professional:
PDXLoan.com

Get a pre-approval for a home loan BEFORE you search for and buy a house...

Before You Buy Why Get Pre-approved? by Mark Courage

OK. You’ve made the decision. You’re ready to buy a house. Great! You’ve got that dream home pictured in your head. Now all you have to do is find a Realtor, make your offer and move in. Right? Wrong.

Your first step should be to find a trustworthy mortgage professional. But that’s not the fun part, you may say. Why start with a mortgage professional? In a nutshell, this can save money, time and increase your bargaining power.

Your mortgage broker is going to be able to tell you first if you can qualify to purchase a home at all. Second, if you are in the running for purchasing, he or she can tell you how much home you can qualify for. Think about it. Do you and your Realtor want to run around for a month or two worth of weekends, finally find your dream home, just to find out that you cannot afford it?! That’s a lot of time, and time is money (or at least a lot of wasted weekends). Wouldn’t it be better up front to know what you can and cannot buy, zero in on that, and achieve that wonderful feeling of success? Of course.

Well, you may have already thought of all that. However, did you realize that the seller of your dream home may give you preferential treatment if you’re pre-approved? The seller has a life too and time lines like the rest of us. They want deals that are going to work. They don’t want their home under contract, just to have the deal fall through because the buyer cannot qualify! So, let’s say you make a bid on a house and another party makes a bid at the same time for the same amount. The other bidder is pre-approved, you aren’t. Which bid should they accept? Obvious. Another scenario, let’s say you (not pre-approved) make a bid and another bidder bids slighter lower but is pre-approved. Which bid would you accept?

And one last matter to cover, there are different levels of pre-approvals. The lowest level might be called pre-qualification and this involves the mortgage professional taking your information (income, expenses, etc.), putting it all together and letting you know how much home you can qualify for based on the numbers you provide. Another level of pre-approval is for the mortgage professional to run the loan through automated underwriting (getting more technical, here) to get an approval provided that all your info can be verified. The highest level would be running the loan through a lender and actually doing all the verifications. Obviously, the higher level of pre-approval gives you more to stand on and carries the most weight when bidding on a home. In any case, your mortgage professional should provide you with a letter stating on what level you are pre-approved.


Hopefully by now the picture is clear, call that mortgage professional BEFORE starting your house search. And maybe, just maybe, the process might even be fun.

IS IT REFINANCE TIME?

Is It ReFi Time?

Millions of people are taking advantage of the current opportunity to refinance the mortgage on their homes. Rising home prices combined with falling interest rates have motivated people to convert their accumulated home equity into expendable funds. This frequently works to their immediate advantage, giving them a considerably lower interest rate and lower monthly mortgage payments.

Homeowners can choose either to spend or save the portion of their incomes that are no longer being spent on mortgage payments.

When Should You Refinance?

In some cases, when refinancing, it helps to borrow more than is needed to pay off the earlier mortgage. This gives you the equity from your home, plus extra funds to cover the transaction costs of refinancing. People use the funds for a variety of purposes: to make home improvements, to repay older debts, or to buy goods, services or assets they couldn't otherwise afford.

How much can you save by refinancing? This depends on several factors relating to your present mortgage situation. If your new interest rate is low, it can result in substantial savings, perhaps even thousands of dollars. And when rates rise, having refinanced from a variable rate loan to a conventional loan, you can stand to gain substantially.

Some Benefits Of Refinancing

Refinance a home mortgage is a big decision and should be approached with careful consideration of the potential costs and benefits. Clearly, when interest rates on mortgages fall below the rate on your existing loan, it's time to consider refinancing. This is the time to evaluate your potential after-tax savings from lower monthly payments, and compare it with the after-tax expenses of refinancing. These expenses include mortgage fees or points, application fees and appraisal fees. As the loan is repaid, the savings from your lower interest payments begin to accumulate. The savings due to refinancing must be discounted at the present rate and compared with the transaction or closing costs.

If you're considering refinancing your home, you need to evaluate your current interest rate. If your new interest rate would be more than 5/8% lower than your current interest rate, it is well worth refinancing. But if you want to keep your closing costs as low as possible, see that your new interest rate is at least 1% lower.

Why Refinance?

Most people who refinance do so to save money, but there are other reasons to do so. If you refinance your existing loan at a lower rate of interest, you can end up with a lower monthly mortgage payment. This can save you funds in the long run.

Debt Consolidation

In many cases, you can clear all your outstanding debts and replace them with just one low-cost monthly outlay. Refinancing your home to consolidate your debts (such as a credit card balance or a student loan) can save you money in the short run and the long run, because you'll be paying on a low-interest loan rather than a high-interest one.

Tax Advantages

If you have lower interest rates, it means smaller interest deductions on Schedule A. You are allowed to deduct interest on a debt of up to $1 million incurred to buy your primary residence and one more home. Also deductible is the interest on up to $100,000 of home equity loans for these two residences. If you refinance a mortgage, the interest on this loan is deductible to the limit of old mortgage plus $100,000.

The interest charges you pay up-front, or points, are really interest that's pre-paid and must therefore be deducted proportionately during the tenure unless you have purchased or improved your existing principal property.

If you have bought investment real estate or a vacation home, you can deduct points proportionately over the loan term. If you have refinanced a mortgage on which you already had been reducing points proportionately, you could be eligible for a tax bonus. Now you can subtract any part of the points for the mortgage already paid off that you had not yet deducted since the year of refinancing.

The precise moment to refinance a home is complicated to figure out. However, it is undeniable that such a moment will arrive, probably several times over the course of a 30 year mortgage. Just be prepared to act when the time comes.

Basics of Home Buying

Here's an article "Basics Of Home Buying," that can help first-time homebuyers with the basics of home buying.
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The most important investment you will ever make is probably the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.

Know Your Wants And Needs

Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:

- Location (in a particular city, school district or neighborhood)

- Size -- how many bedrooms and bathrooms

- Parking -- a 1-car garage or 2?

- Style -- 2-story house or ranch style home?

- Heating -- central heating and/or air conditioning?

Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:

- high-traffic area.

- high noise area (airport, train station or highway in close proximity)

- maintenance -- major repairs needed

As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.

Get Your Credit Report In Order

Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt. Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.

Research Your Home-Buying Options

Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?

A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.

Get Pre-Approved For A Loan

You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.

Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.

Find A Good Real Estate Agent

It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.

It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.

To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.

These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.

New Ad Targetting CNNW

This is the small ad I am testing by running in Christian News Northwest, a publication targetting the Christian and Church Market in Oregon and SW Washington. It is a small publication, but with a very specific target and large circulation, my goal and intention is to see how well it works.

If you or someone you know is interested in the program mentioned in the ad, please call the 800 # in the ad and use the extension # 11 to reach the free recorded message.

I will be available to call back respondents and I'll conclude the AD campaign (for February) by February 21st, but may extend the offer until the end of the month.

I'll post more information to indicate how well it works.

In the meantime, click on the link above (on the Headline New Ad Targetting CNNW) and you're free to download the PDF file of the AD. The AD is © 2006 Ed Bisquera & B2 Creative Consultants, LLC.