CashBuzz

By John Campbell

When you’re finally ready to take the plunge into homeownership you should do your homework so you can make an informed decision when choosing the mortgage that’s right for you.

There are several different mortgage options available to you. Whatever mortgage you ultimately decide to go for, the decision should be yours. Don’t let pushy realtors or mortgage brokers push you into a mortgage that you don’t want. You’re the one who should be calling the shots, not them.

Mortgages that may be available to you include:

Traditional Mortgages - These are the most common mortgages available and often present the lowest risk to homeowners. With a traditional mortgage, you typically pay a 20 percent downpayment on your new home and acquire a mortgage to pay off the remaining balance within 15 or 30 years. The interest rate you agree to pay when the price of the loan is locked in will be what you pay at an annual ...

By John Campbell

Tired of receiving stacks of credit card offers in the mail every week? If so, you’re not alone.

Millions of consumers receive a barrage of credit offers in their mail on a regular basis. If your credit is excellent, some of these offers may seem very tempting. Zero percent balance transfers, high credit limits and lots of other perks may be in the offering. If your credit isn’t so good you may still receive numerous credit offers without all the bells and whistles you would demand with excellent credit.

When you receive unsolicited credit card offers that you don’t want or need you may end up filling your garbage with junk mail on a regular basis. Besides the annoyance of receiving stacks of junk mail every week, unsolicited credit card offers can potentially put you at risk of being a victim of fraud. If a thief steals an unsolicited credit card offer from your mailbox, the thief could apply for credit in your name. If the ...

By John Campbell

Beware cash advance companies that charge upfront fees for cash advances or payday loans. So-called companies that engage in this practice are often outright scammers. If you send them your hard earned money you’ll get nothing in return.

Legally, cash advance companies are prohibited from requiring potential borrowers to pay up front in order to get a loan or line of credit. Keep that in mind if a lender ever asks for you to pay before you can receive any funds. These “fees” can be cleverly disguised as “application fees,” “processing fees,” or insurance to protect the lender in case you can’t pay back the loan. With cash advances, the high interest rate you’ll pay when it comes time to repay is all the insurance a lender will ever need.

Beware of ads promising “guaranteed” loans or lines of credit regardless of your credit situation. These are often bait used by scammers to lure ...

By John Campbell

Home equity loans can be very risky propositions. If you have any problems paying off the loan, your home could be in danger of becoming the property of the lender.

Anytime you use your home as collateral, you’re taking a risk. How much of a risk depends on your own personal financial situation. If you think making a home equity loan payment could ever be a potential issue, you should avoid getting one.

Even if you’re relatively certain that a home equity loan can help you out and be easily paid off along with your other bills you still need to be very careful. Unscrupulous lenders and even outright fraudsters can turn some much needed cash on the side into a financial nightmare for you if you don’t know what you’re getting into.

The first thing you need to watch out for are lenders making wild and outrageous claims that sound just too good to be true. If a lender promises to finance any loan regardless of your ...

By John Campbell

If you’re currently having state and local income tax deducted from each paycheck, the refund you’ll receive next year may be a nice financial boost. If you’re married or own property, your refund may also triple or quadruple in size.

If you really need the extra rebate funds as soon as possible, many tax preparing services offer “instant” refunds or tax refund anticipation loans. Unfortunately for consumers, these are typically glorified cash advances. Both the states and the federal government need time to process your completed tax returns and may send you your final rebate check weeks or sometimes months after you file your return. Tax preparers offering instant refunds are actually offering a short-term high interest rate loan based off of the expected refund amount. These loans create another revenue stream for tax preparers and cost consumers a portion of their rebate checks.

Making matters worse, if your ...

By John Campbell

Beginning credit users rarely have access to a large line of credit. Many credit card companies typically offer anywhere from $500 - $2,500 credit lines for consumers without extensive credit histories.

If you’re just beginning to build a credit history, chances are your credit score will be low. Without an established payment history, creditors won’t be able to determine the likelihood of you paying off your debts in a reasonable manner. Because of this, your first lines of credit may be very small.

Let’s say, for example, you’re given only a $500 line of credit for starters. It may be tempting for you to max out the card very quickly. This isn’t a good idea. Even if you don’t have much credit you should use no more than 30 percent of your available credit. For $500, that’s $150. Using no more than 30 percent of your available credit and making all your minimum required credit card payments on time will ...

By John Campbell

Speculation is rampant that the so-called “housing bubble” has popped. Despite the dot-com bust in the ’90s, severe trade deficits, a falling dollar, 9/11 and the costly War on Terror, the prices of homes and real estate increased at unheard of levels in the first half of this decade.

The explosion in real estate prices created the ideal conditions for a financial bubble. To stimulate buying as prices rose beyond what many consumers were willing or able to pay for housing, lenders have offered many creative mortgage options to generate sales. Adjustable rate mortgages (ARMs), interest only mortgages, 1 or 2 percent mortgages and option ARMs are some of the most common alternatives to traditional 15-year or 30-year fixed rate mortgages offered today. As first time homeowners, speculators, and investors flocked to get these non-traditional mortgage loans, home prices have continued to surge. The only problem is that, with the economy ...

By John Campbell

Never trade-in an automobile you still owe money on if an auto dealership agrees to pay off what you owe but won’t put the agreement in writing. Otherwise, the dealership won’t be under any legal obligation to pay off your trade-in.

That’s right. You’ll still be held fully responsible for making all remaining payments on the vehicle you just traded in unless you have a signed agreement stating that the dealership will pay off what you owe. Even a signed agreement is no guarantee that the dealership will pay off your old loan in a timely manner. You may also be responsible for any late payment penalties if the dealership takes its sweet time in paying off your loan. To avoid this you should also get the dealership to agree, in writing, that your loan will be paid off in no more than 7 - 10 days.

Without a signed trade-in payoff agreement, you’ll have no recourse in a court of law if an auto dealership fails to uphold ...

By John Campbell

If you owe thousands more than your current vehicle is worth at resale, trading it in today may not be in your best interest. Your primary goal should be to minimize the amount of cash you’re upside down in your current auto loan before getting into another one.

Since you probably won’t get the full trade-in value of your vehicle from a dealership you may want to get a new vehicle from, you should consider a few alternatives. Perhaps the smartest thing to do is just wait to trade-in your vehicle until you can at least get what you owe on it in trade. If you’re paying a high interest rate on your current auto loan you may want to look into refinancing the loan. As long as you don’t stretch out the term of your next loan beyond the amount of time remaining on your current loan term, you’ll be able to get out of being upside down faster than you will currently.

Of course, a refi may not be possible depending on your ...

By John Campbell

No automobile lasts forever. At some point you’re probably going to want to get rid of your current vehicle and trade it in for another one. If you owe more than your own vehicle is worth when you’re ready to trade it in you may want to reconsider your decision.

There are many valid reasons for wanting to trade in your current vehicle. Maybe your vehicle is an unreliable lemon. Your warranty may be at an end and you’re facing the prospect of costly repairs if your vehicle breaks down. You may also want a vehicle with better gas mileage as gas prices continue to skyrocket.

The problem with trading in a vehicle you’re upside down on is that you’re going to be fully responsible for paying off your old vehicle when it’s traded in. If you’re applying for another auto loan your remaining balance on your old loan will probably have to be rolled over into your new loan. If your current loan has any prepayment ...