Loans Articles
Citi Jobs
Citigroup is slated to cut up to 24,000 jobs while trying to make up for the $18.1 billion write-off that it will be announcing today. Had they consulted with me first, I would have of course warned them that maki.... Keep Reading
Thoughts on the Mortgage "Crisis"
You know what I have to say to you banks who went out of your way to get bad credit people to take out your 30% loans? Have a Merry Christmas! I have no compassion for you and I have no compassion for your clients, who the government is now about to help. If you can't afford a house, don't buy on.... Keep Reading
Bank of America Loans
Bank of America is getting toasted by the loan crunch--they just write down $3b of loans this quarter. This makes me a little bit nervous because my mortgage is through BoA. I fear that they're going to.... Keep Reading
$400 Billion
Mortgage markets are reporting losses up to $400 billion. The good news, if you can take any good news away at all, is that the number is taken worldwide and not just in the United States. .... Keep Reading
Hard Lenders
In light of a recent discussion at work I thought I would quickly address what is referred to as a hard lender today. As far as I know, hard lenders only hang around real estate but I guess there could be more for any really-big-ticket item. If you find a house worth $1m for $600k then these hard .... Keep Reading
Bernake's Warning
According to the Keep Reading
Lower Rates
The Fed announced late yesterday they were going to give back a quarter point. The central bank lowered the federal funds rate to 4.5 percent, as had been expected. I don't think this surprised anyone, neither in .... Keep Reading
Foreclosure Suicide
In some sad news, a man committed suicide after not being able to pay his mortgage. While that is definitely sad what is even more saddening is the fact the police had to be called in to "battle" him. I guess my fe.... Keep Reading
Even More Loan Failures
According to the Financial Times, the loan problems in the US continue to expand outward. First it was home foreclosures and now it has infected credit cards and auto loans. Banks are adding to reserv.... Keep Reading
Mortgages Up (Again)
This is why I don't worry about the home loan debacle tanking the entire market: mortgage applications were up again this week. Well duh. Really, how worried can you be about a market that always has been, is.... Keep Reading
Education Lotto
The New York Times printed an article today that blew my mind. I know Illinois' lottery was set up (or so the story goes) to help fund education. I had always assumed (wrongfully) that this lottery was contribu.... Keep Reading
Law for Student Loan Forgiveness
On Friday, the Washington Post reported that George Bush has signed into law a policy that will allow the government to payback the remainder of stude.... Keep Reading
Homes For Sale
According to the LA Times there are over 5.1 million homes for sale right now. What a glut! I'm telling you right now--invest in real estate, there's no better time. Actually that's not true, wait ano.... Keep Reading
Pay-Option ARMs are the Best
WHAT??!! That's what I said when I read this article in Business Week but apparently the big brains at NYU and Columbia University seem to think so. Wel.... Keep Reading
APR and Mortgage Problems
If the APR number is supposed to help consumers compare mortgage loans, it doesn't do a very good job unless the loans being compared use identical expenses and fees. Even then, the APR can distort the picture. Which is the better loan: a mortgage with a lower rate but higher fees, or one with hig.... Keep Reading
How do I calculate APR?
Despite the best intentions of the Truth in Lending Act, the way lenders quote APR is not completely straight-forward. Calculating the APR for a loan, especially mortgages, is so complicated that specialized software is required, and even then many people in the business don't understand what to in.... Keep Reading
Consumer Credit Protection Act of 1968
The Consumer Credit Protection Act of 1968 (aka the Truth in Lending Act) set out guidelines for lenders that require them to disclose all the costs of financing to the consumer. This is where we get the term annual percentage rate (APR). Any loan or credit extension has to prominently display the.... Keep Reading
Mortgage: French for Death Bet
There are many compelling reasons not to get a mortgage--one of the stranger ones (maybe not so compelling) is that in French, mortgage means Death Bet--that the banks are betting that you can pay them back before you die. Since you practically have to pass the President's Physical Fitness test no.... Keep Reading
Maximum Interest, Minimum Payment
Compound interest is a real problem with credit card debt because the interest rates are so high. Interest rates on credit cards can run to 20%, which means you really, really have to be careful about using this life on credit. Compounding those rates can pile up charges quickly. One of the ways .... Keep Reading
Defeating the Interest
There are ways to work the interest system to your advantage if you are interested in paying down your mortgage more quickly. You can make additional payments--for example, make 13 payments per year instead of 12. Mark the additional payment to be applied to the principal and it will go to reducin.... Keep Reading
Good Interest vs. Bad Interest
Compound interest, when working for us, is a fantastic thing. Unfortunately, when it's working against us, it can be catastrophic. Most commercial loans charge compound interest on their notes or loans; it's how they make their money. It is to their advantage to compound interest as frequently as.... Keep Reading
Fixed and Variable Rates
Banks offer interest-bearing accounts in a variety of formats. Most bank deposits have fixed rates, although the rates may adjust periodically. For example, simple savings accounts and interest-bearing checking accounts usually pay low interest rates. The bank ties the rate to some key interest i.... Keep Reading
How Loan Rates Are Set
Many factors go into setting interest rates for various types of credit. Lenders have different motivations and different cost factors to consider. Here are some of the factors that go into setting various interest rates: · Cost of money--All lenders must factor the cost of money into thei.... Keep Reading
The Cost of Money
Money costs money. When you borrow money, you pay the lender interest at a rate that involves several parts: · How long you intend to borrow it · How (or if) the loan is secured · How much of a risk you are to default on the loan Based on these factors, the lender will set an .... Keep Reading
Leasing and Loaing
Unless you're a member of my family and are prepared to drive your jalopy for 12-15 years, there is absolutely no reason to waste your time buying a new car. If you're going to take out an auto loan, the least you can do for yourself is taking out as little as you possibly can. By leasing a car yo.... Keep Reading
Why NOT to consolididate your student loans
You can consolidate all your loans with one lender at any time without a consolidation loan if you just want to simplify your payments. If a lower interest rate is your goal, remember that after making 48 payments consecutive on-time payments, you may qualify for an interest rate reduction of 2%(!).... Keep Reading
Rewarding good credit
About a week ago I saw an ad online for a loan company saying something to the effect of "Reward your good credit...take out a loan from us". It was worded with slightly better marketing but you get the gist of it. I can't remember exactly but I think it was an unsecured personal loan. First of a.... Keep Reading
Student Loan Interest Rates
Stafford loans first disbursed on or after July 1, 1995 have a variable interest rate, which changes on July 1 of each year based on Treasury Bill rates, but can never exceed 8.25%. Rates as of July 2002 were the lowest in the history of the student loan program: 4.06% for Stafford Loans and 4.86% .... Keep Reading
Front-end Installment Loans are Bad News
We all need to take out loans. There is almost no way you can go through life without having to suck it up and sign on the dotted line. No one enjoys it, but if you do your research, you can make it slightly less painful. Notice, I said slightly less painful. The title for this section is pretty.... Keep Reading
Credit Reports for Loans
So you have tons of loans. And if you're like me, you have paperwork scattered all around from the intermittent notices that get sent to you. Or, in a similar situation to what happened to me, your lender doesn't send you anything to let you know that your interest is already accruing. I know.... Keep Reading
Looking for Loans
Alright, you need to get a loan. Where are you going to look? Well, you should check with your local banks and mortgage companies. If it is a car loan, you can consult the dealer where you're planning to purchase your vehicle. But man, there has got to be a better place. These rates are ridicul.... Keep Reading
Forgiveness of Student Loans
In a very limited number of circumstances, some student loans can be forgiven without requiring repayment. You might be eligible to have part of your Stafford loan canceled if you obtained it on or after October 1, 1998 and you have taught for five years (full-time) in a low-income school. You can.... Keep Reading
Warnings Signs of Too Much Debt
It's hard to face the fact that you're in over your head when it comes to debt but it's much easier to turn things around when you know the warning signs and act quickly. Just because you're making minimum payments doesn't mean you're in a good position. Here are some warning sings to alert you th.... Keep Reading
Payday Loans and Advance Loan Scams
You need some cash now buy payday is a week away. You write a check for $375 to the payday loan company. They immediately write you a check for $300 and hold your check until next payday. Surprise! They keep that $75 as the fee: a ridiculous 25% interest rate for a TWO-WEEK loan. And the APR fo.... Keep Reading
Credit Insurance
Don't waste money buying any of type of credit insurance from credit card or financing companies. Credit life insurance pays the balance on a loan if you happen to die. Credit property insurance will cover damage to an item that you're buying with the loan's funds. Credit disability insurance mak.... Keep Reading
What Type of Loan is Best for Me?
Home equity loans are best suited for times when you need a lump sum of money. Lines of credit are best if you need the money at intervals, so you borrow only what you need, when it's needed. Lines of credit can be dangerous if you have trouble controlling credit card debt because they are very si.... Keep Reading
Federal Perkins Loans
Most students need several different types of financial aid to pay for their education. Stafford loans simply are not enough to cover rising educational costs. Perkins loans are sometimes available for the right applicants. The college or university decides on the amount of the loan, up to $2k .... Keep Reading
Rehabilitating A Defaulted Loan
Once you've defaulted on a loan, any unpaid interest is computed and the entire balance of the loan becomes due and payable immediately. Once you reach this point you have several options to avoid the extremely negative consequences of defaulting a loan. · You can pay it off as a lump sum. .... Keep Reading
Government-Backed Mortgages
Government loans like FHA and VA loans make home ownership possible for some people who might have a more difficult time qualifying for a mortgage. The federal government insures the loan, which is issued by a regular lender. FHA loans typically require a less substantial down payment than a regul.... Keep Reading
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