The Road Block To Your Investing Success

Worried about your stocks? Blame it on Wall Street. Investors today face a barrage of conflicting information and exaggerated return claims from what most people consider the “market” -; the S&P 500 or the Dow Jones Industrial Average. But these indexes only comprise about 12 percent of all U.S. stocks. The reality is that these … Continue reading The Road Block To Your Investing Success

Worried about your stocks? Blame it on Wall Street.

Investors today face a barrage of conflicting information and exaggerated return claims from what most people consider the “market” -; the S&P 500 or the Dow Jones Industrial Average. But these indexes only comprise about 12 percent of all U.S. stocks. The reality is that these stocks can’t be predicted with any consistency, especially long-term.

In the complicated world of financial services, you’re being misled.

Wall Street advisors employ a strategy of “active marketing,” which is the continual development of new products designed and marketed as the latest and greatest solution to investors’ fears and concerns. There is an addiction factor at work here; active marketing feeds our desire to roll the dice. This rolling of the dice takes the form of stock picking, market timing and return chasing, activities otherwise known as active management.

The alternative is to “super-diversify” your portfolio with a wide array of unrelated investment choices and assets. This strategy allows you to own the market as a whole, rather than just a few of its components, thereby increasing your return and reducing the risk.

Based on Nobel Prize-winning research known as Modern Portfolio Theory, the application of this theory into a properly diversified portfolio – what I call a “Market Return Portfolio” – consists of no-load institutional asset class mutual funds you normally don’t see in many portfolios. Choices such as micro-cap, small cap international, emerging markets and value stocks can lead to more consistent long-term returns equal to or somewhat greater than the market at large.

Another important aspect of proper portfolio management is finding the right firm to work with. Look for one that is independent, uses a fee structure whereby the firm is paid directly and only from clients, and uses a market return approach. The right strategy, managed by the right help, can truly bring wealth without worry.

In some sense, worry-free investing isn’t really possible. People will always worry about taking care of their families and they’ll always worry about their country’s economy. Yet true “wealth without worry” means not having to track the daily movement of the market, saving time and energy for more important things in life.

Investors’ confidence should be put not in an adviser or their own stock-picking prowess, but rather in the economic miracle we call capitalism. By tracking market movement over the past seven or eight decades, we see that the market goes up more than 80 percent of the time.

The expansion of capital markets is inevitable -; and a windfall for market return investors.

Refinance: Should you?

For the moment, interest rates remain an excellent bargain. They hover near historically low levels, but as they begin what many experts predict will be a steady, continuous rise, many consumers are rushing to refinance and lock in those great rates. Several key economic indicators are pointing to an increase in the cost of borrowing money that will probably continue over the long term. And financial analysts predict an end to those record-breaking low rates we have enjoyed for the past few years.

As interest rates go up, so will the monthly payments of those borrowers who have adjustable rate mortgages. And lots of us have those, because they proved to be a great tool for taking advantage of the rising prices of the recent real estate bull market. One of the most compelling reasons to refinance right now is to switch from those adjustable rates into loans with more predictable fixed rates. Consumers who lock in lower rates now by refinancing into fixed rate loans will save money, especially as rates on adjustable mortgages climb.

Others have debt on credit cards and other loans at high interest rates. And it is good idea to get out of those loans and into less expensive ones, too. If you currently own a home with equity, you can take out a second mortgage or home equity loan to pay off other high-interest loans. For example, if you have a credit card with 10 percent interest, and you refinance to a home equity loan at 7 percent, you automatically save 3 percent.

Use that kind of strategy now to lock in low rates and pay off all high-interest car loans, bank line of credit notes, and department store charge cards. By consolidating those debts into one single low-interest payment, you can pay off an entire basketful of high-risk loans and refinance your personal debt into a single and easy to manage second mortgage payment.

Of course there are also many homeowners who took out loans to buy property back when interest rates were higher than they are now. Those people can refinance to low rates while they still have the opportunity, and save money every month from now on, for the remaining life of the loan. By simply lowering your interest rate by one or two points, it is possible to save tens of thousands of dollars over 20 or 30 years.

When you convert to lower rates, it immediately shrinks the amount of your monthly payment. And with a fixed rate loan, your interest rate will never go up, for as long as the loan exists. Pay on it for decades, if you like. Regardless of what happens to prevailing rates and adjustable rate mortgages, your loan will remain the same. By acting now to refinance, you can reward yourself far into the future, particularly if interest rates do continue their steady rise.

Of course if you are fortunate enough to have a fixed rate mortgage that you got at an attractive rate, there is no need to refinance. You can sit back and relax, while others rush around trying to put their financial affairs in order while there is still time.

Mortgage Interest Rates 101

Many things affect mortgage rates – which is why they fluctuate. So it pays to understand a little about how mortgage interest rates are generated. The more you know about the economic factors that change rates, the more prepared you are to find the perfect home loan at an interest rate that’s perfect for you as well.

Market Conditions
When the Federal Reserve Board raises or lowers rates, there is usually an impact on the rate you will get for your fixed rate home loan, although it’s not as direct as it may seem. The Federal Reserve adjusts federal funds rate, which is the rate at which banks lend to each other. When federal funds rate decrease, we spend more, which can actually increase inflation. Mortgage rates tend to be longer-term rates that are affected by concerns about inflation, as well as other economic indicators like job growth. So it’s more accurate to say that mortgage rates are indirectly affected by the Federal Reserve Board, and more directly affected by what happens every day in active public markets. The market sets the interest rate, and then a margin is added to the index to determine your final mortgage interest rate.

Timing
Since interest rates change daily, the longer a lender locks in a rate, the higher the risk that the market will move against them. Therefore, you pay more (in points) for a longer guarantee. If interest rates appear to be on an upswing, it makes sense to lock in your rate. If they are steadily dropping, it makes sense to float your interest rate so that you can take advantage of a shorter lock-in period, saving you money.

Points
You can often receive a lower mortgage interest rate by paying extra points – mortgage costs that are up-front rather than built into the interest rate. Each point equals one percentage point of the total amount of the loan. For example, one point on a $100,000 loan is the equivalent of paying $1,000 to ensure you get a lower interest rate that saves you money over the life of your loan.

Credit and Payment History
A less-than-perfect track record may make you seem like a high credit risk, which means you’d only be eligible for higher mortgage interest rate loans. If you find yourself in this position, don’t worry – we have loans that could still help you make your dream a reality.

Credit and Payment History
A less-than-perfect track record may make you seem like a high credit risk, which means you’d only be eligible for higher mortgage interest rate loans. If you find yourself in this position, don’t worry – we have loans that could still help you make your dream a reality. Learn more about Bad Credit Loans.

Debt-To-Income Ratio
Your monthly debt obligations are calculated against your current income. The higher the ratio, the higher the risk which could mean a higher interest rate.

Loan-to-Value
The loan-to-value is the amount you need to borrow versus the value of the home you want to buy. The more equity you have or the more money you give as a down payment decreases a lender’s risk, often resulting in a lower rate for you.

Property Type
Lender risk plays a big part in your rate. For instance, a loan for a single-family home is less risky than one for a multi-family home because there are fewer variables. The less risk, the better the rate.

Occupancy
If you plan on living in your new home, you will probably get a better rate versus a loan on a rental unit, which carries more risk for the lender.

Loan Amount
The amount of money you borrow could affect the interest rate you get.

How Do I Invest For My First Home?

Buying your first home may be too overwhelming. There are a lot of facts to know about and things to consider before finally making a decision. And its not just any simple decision to make. Its one that will affect your life entirely as your home will be your shelter for the rest of your life, or at least most of it.

Thus, once you have decided that you will be buying a new home, you have to do your homework. Research on the things you have to know about buying a house. Learn the ins and outs of the housing market so you will not be easily fooled by the people you deal with. Remember, these people do everything for them to earn a lot. They can entice you so much into buying in an impulse. So it would be better if you have some knowledge about what youre getting into.

Other than the research work, the most important thing you have to consider if you want to buy your first home is where to get the funds to pay for the house. There are several ways that you can do to start saving up for your first home.

If you have a Roth IRA account, you can use that to save for your first home. If you qualify as a first-time home buyer and planning to purchase a home not less than five years from now, you can avail of the five-year plan of Roth IRA. This plan allows you to withdraw your earnings before age 59 without paying any taxes, penalties or charges.

Another way is through personal savings. This has been an old and tested method of saving for anything. And it requires strict discipline and commitment. If you are earning a regular salary, you might want to consider having the bank automatically deduct a certain percentage of your salary once you receive them and transfer it to your own savings account. This way, you will not be tempted on spending all your salary and forget about saving. Also, you should try to avoid making frequent withdrawals with your savings account. The reason you opened it is so you can save for something that you want, like a home. As much as possible, try to gain access to your savings account only when there is sufficient funds to pay for the home you wish to buy.

When you are thinking of buying a new home, try to determine your target date. If you plan to purchase a house 2 years from now, or less, then putting your money in more conservative investment tools is the way to go.

However, if you are not planning to buy until five years from now or even more, then you can be more aggressive and start investing on higher yielding investments which tend to perform better over a long period.

Try to also look for some assistance. According to a survey done by the National Association of Realtors, 23% of first-time home buyers get their down payments as gifts from relatives or friends. However, if this is not possible for you, there are banks, charities and local government institutions that provide assistance to first-time home buyers. There are some that offer to lend 3% of the purchase price as part of the down payment. This borrowed money can be paid when the buyer refinances or pays off the loan, or sells the home.

Also, it is always a good practice to keep your bills updated to improve your credit rating. Having a good credit report lowers the interest rate charged on your mortgage. As early as possible, try to clean up your finances so when the time comes that you will apply for a mortgage, you wont have to deal with higher interest rates.

Buying your first home requires a lot of preparation. This is not a simple investment to make. The decision to buy a home is something that will affect you for the rest of your life so better be prepared as early as possible.

Home Equity Loans After Bankruptcy Choosing A Low Rate

Home Equity Loans After Bankruptcy Choosing A Low Rate Lender

After a recent bankruptcy, your loan options are limited. Those needing quick cash for home improvements, wedding expenses, or college tuition may be unable to secure the necessary funds. However, if you own a home, getting approved for a home equity loan following a bankruptcy is a realistic option.

Understandably, banks and credit unions are reluctant to approve an unsecured loan or credit card application. Because home equity loans are secured by your property, lenders are more equipped to take a gamble. However, if the loan cannot be repaid, you will lose your home.

Benefits of a Home Equity Loan

Homeowners obtain home equity loans for various reasons. In fact, some apply for these loans in an attempt to avoid bankruptcy. Home equity loans are perfect for debt consolidation and paying past due utility bills. The interest rates are typically lower than credit cards and most consumer loans. Thus, homebuyers are able to payoff debts, improve credit, and save money at the same time.

Some prefer home equity loans because they do not involve closing costs. Refinancing an existing mortgage is great for obtaining a lower rate and receiving cash. However, because a new mortgage is created, homeowners are required to pay closing fees, which could amount to thousands of dollars.

Home Equity Loan Lenders

Getting a low rate on a home equity loan following a bankruptcy will require work. Homeowners must be prepared to research various lenders and negotiate a good finance package. To begin, submit a loan application through your existing mortgage lender. If your payment history is acceptable, the lender may consider this when approving your application. Thus, you may avoid paying a higher rate.

If your lender offers you a seemingly unbeatable rate, do not stop here. Continue to obtain quotes from other money sources. Shopping around for home equity loans online is popular. Mortgage websites make it very convenient to get approved for a loan without leaving your home. Simply submit your loan application and wait for a reply. Within a few hours, lenders will contact your with their best offer.

After obtaining at least four offers from home equity loan lender, compare each offer. What are the terms? Interest rate? Monthly payments? Subsequently, pick the lender that offers the most desirable mortgage package.

Bad Debts Personal Loans To Help You Achieve Your Goals

Bad Debts Personal Loans To Help You Achieve Your Goals

Loans are an essential thing these days for many people. Loans cover every financial eventuality that one can possibly come across in ones life. But previously it was not that easy to get loans for the people let alone people who have bad debts to their name and therefore have poor credit history.

In that case the people can take the help of the personal loans. These loans are specifically designed to help people in need and people with bad debts previously can also use these loans.

Personal loans can be used for a variety of purposes few examples where personal loans can be used are, for business purposes, debt consolidation, and home improvement or for educational purposes. Personal loans are available for every need.

People with bad debts can go for personal loans can go for it and choose between any form of loan available i.e. secured personal loan or unsecured personal loan. The only difference between these loans is that with secured loans the borrowers are required to provide a security to the creditors and in unsecured loans it is not a requirement.

Other advantages of going for secured loans are that they are available at lower interest rates with option for the borrower to choose his own repayment plan also they are less riskier than unsecured loans. The only disadvantage with secured loans is that they are available to the people who can provide creditors with assets as collateral.

Previously the personal loans were almost impossible to find for people with bad debts to their name but with so many creditors willing to provide loans, loans are available easily. All you need to be aware of is your credit score, which represents your financial credit worthiness. A score, which is considered bad, is one, which is below 600. For people who do not know their credit score can get their score evaluated by any of the credit rating organizations of UK namely,
Transunion
Experian
Equifax
Things such as loan period and loan history are taken into consideration for calculating the credit score.
Taking a personal loan would not only help in the purpose for which it is taken. It also is the best way of improving ones credit score. It gives you a chance of improving your credit score if you follow your repayments properly. Which further help in getting loans easily.

All you need to do to apply for these loans is to go online and submit your details to a creditor and then just wait for the loan decision.

If you are a person with bad debt and you want a loan desperately. You now do not need to worry any more as personal loans are their to help you with your financial worries. With much easier terms and conditions.