ZoomCredit Blog

A new and exciting option for homeowners to save money is the mortgage accelerator. It shortens the life of the mortgage in a relatively painless manner by taking advantage of any unspent money from the homeowner’s checking account. In fact, this plan makes so much sense, that it is difficult to believe that this option hasn’t been promoted sooner.

Imagine all of the interest expense that you could be saving by paying your mortgage off earlier than expected. This mortgage plan links your checking account to your mortgage and sets it up for automatic payments toward the mortgage. Then, once a month, this system takes any money that is in your checking account and puts it toward the principal portion of your mortgage.

Of course, you continue to have monthly mortgage payments taken out as well. The point is that you are also making extra payments that come right off the balance of your mortgage, shrinking it a little bit more each month. This is a great plan since it maximizes your money for you by reducing your debt and potential interest costs. It uses the money that is sitting in the bank earning nothing or next to nothing in interest, which is another way to get more for your money.

Plus, since the mortgage accelerator plan does all of the work for you, the only thing that you need to remember is to deposit your paycheck into your account. Homeowners in the UK and Australia have been taking advantage of this plan for years.

Why allow your mortgage balance to continue to stress you? Pay it down and pay it down quickly. Anytime you have a few extra dollars in your pocket, perhaps from an inheritance or just leftover spending cash, deposit it into your account. Watch your mortgage balance shrink and your home equity grow in a few short, painless steps. Set your plan up today and start saving right away.

Many homeowners are baffled by the recent “downturn” in the housing market. Current conditions are unusual enough to get the attention of top economists and even the Bush administration, as banks and companies holding mortgages are playing hot potato, shifting mortgage holdings and even, in some cases, going belly-up.

One of the many ramifications of the change is a rapid rise in interest rates, and what that means for many mortgage holders is prices through the roof.

But wait: isn’t there an index? Homeowners tend to think their mortgage payments will not get bumped up because it hasn’t happened before, but that’s no guarantee.

Holders of ARMs (Adjustable Rate Mortgages) will find that their payments WILL go up by as much as 1% over a month, because since the mortgage is tied to current interest rates, it “floats” along with market conditions.

If you have an ARM, find out how you can alleviate the problem by refinancing. Another alternative is to pull out savings to make a “blanket payment” that keeps you ahead of your payment schedule. But don’t expect your mortgage payments to remain level over time. Be proactive about checking into how market conditions affect your payments, or you could be in for some nasty surprises.

The solution? A change to a fixed-rate mortgage. ConsumerMortgageReports.com reveals that fixed-rate mortgages are holding steady through the volatile market conditions. Try looking at a fixed-rate mortgage option to assure that you won’t get sucked into the machine of unaffordable payments and red tape over unpaid interest.

 By Ken Watkins

In today’s world of failed mortgages and credit card crunch, credit repair is even more important now than ever before. People are looking for ways to improve their credit rating and standing to get the best deals possible. With credit and lending tightening everywhere it’s no secret that getting your credit repaired and in as good shape as possible is crucial to your success.

One of the biggest mistakes people make when starting credit repair is going overboard. Once they have a credit report in hand and they look it over they want to get every negative mark wiped off it. The truth is even if they are all incorrect the chances of them being all taken off is pretty slim. The key is to get the ones remove that can do the most damage to you first. Taking it slow is always best and that way they will be more receptive to you than if you complain about every mistake.

Second, hold back your best documentation as your ace in the hold. Try to settle the disputes in a friendly and quick manner. Only then and if you have to, do you produce the best information you have available. The reason for holding it back is many times you can get it removed without certain documented information. Only use it as a last resort if needed. The credit bureaus tend to not accept it as evidence in another dispute.

Third, be prepared. No one likes to listen to a long winded response why you want something removed. Take your time and before you even get on the phone come up with small concrete sentences to prove your claim. These short responses let you elaborate further if you need to. You will find out the credit reporting agencies are more likely to work with you talk to them with respect and dignity.

If you follow these steps than getting some of your credit repair will be less of a hassle. Once these items are removed from your credit report your credit score will go up. The key is to be calm, but persistent with the credit bureaus and you will see very good success. They have a job to do and that must also be taken into account. Remember they are human too and make mistakes. Work with them and not against them and slowly your credit will get better as these inaccuracies are removed.

This is a question that lenders, banks and everyone else in the finance industry probably get more than any other question. The answers vary depending on many different factors and situations. Every case can be different so let’s take an overview about when you refinance.

Seasoning Period - This is a clause that is usually put in by lenders when you first sign the contract. It basically stipulates how long you must stay in the home before you become eligible to refinance. It is usually 1-3 years.

Early Payoff Penalties - This is something that happens many times and people don’t even realize it. By paying off early, lenders sometimes add fees or fines to the contract so they can get back some of the money they don’t receive over the life of the loan.

Closing Costs and Fees -  If you decide to refinance you will most likely have closing costs and fees that you will need to take into consideration. These fees can really add up, depending on many factors. So get the numbers before signing any paperwork.

Before considering any refinancing, look over the big picture and crunch the numbers. Many factors that people don’t consider are: the future of the economy, job status, and where they want to be 5 or 10 years down the road. Don’t rush into any refinancing without talking it over and looking at every available option. Rushing into decisions is when you can make a costly mistake. Talk it over with people you trust; then make an informed decision. Refinancing, if done properly, can be one of the best things you do. Bad decisions, though, can haunt you until the loan is paid off. The decisions you make now will effect you for many years to come.

Being in debt is painful, stressful, and takes a toll on every aspect of your life. The average American owes over $8,500 on their credit cards. If you have a spouse, it’s entirely likely you owe almost $20,000 at an average interest rate of 18.9%. You’re spending hundreds of dollars a month just to stop the interest from growing, often with little or none of your payment going towards your principal. How can you dig yourself out of the hole? You need a plan.

�
Step One: Stop the bleeding. 

The first thing you need to do is introduce a moratorium on all credit card spending. Just stop. It’s tempting to pay a few hundred dollars above your minimum payment and then charge it right back up again as soon as you notice you’re running low on money. Don’t do it. Your primary objective has to be to pay down your debt.

Through some joke of the universe, as soon as most people start to pay down their debt, an emergency comes up that requires a significant outlay of cash. It seems like the only way to get the car fixed is to put the bill on your credit card. Find another way. Imagine the credit card never existed - you’d find a way to pay your mechanic. This is the time to start getting creative and finding different ways to pay for things.

�
Step Two: Start paying. 

Figure out what you can afford to pay each month towards your debt. Once you’ve done that, there are two commonly accepted ways to pay down credit card debt. Choose the one you feel most comfortable with.

The first is to organize your debts by interest rate, disregarding their balances. Make the minimum payment on each debt except the one with the highest interest rate. Take all of the rest of the money you’ve allotted and apply it to the highest interest rate card. Keep doing that every month until the highest interest rate card is paid off. When that happens, do the same again, using the new highest rate card as your priority. This is the cheapest way to pay down your debt, because you will eliminate your high interest rates first and are left paying debts with lower ones.

The second way to pay down your debts is to organize them by balance. In this case, instead of putting the majority of your money towards the high interest rate card, you put it towards the card with the lowest balance. Many people prefer this option because it offers the psychological benefits of seeing cards get paid off quickly. If you only have a $500 balance on one of your cards, you get the satisfaction of seeing one whole debt paid off quickly, even if another card has a higher balance at a higher APR.

Do not spend a lot of time thinking about which way to go. Pick the one that seems best to you and start.

Step Three: If all else fails. 

Sometimes your debt is unmanageable. If your spouse is sick and you just lost your job and you’re having a hard time paying for groceries, finding several hundred dollars a month to pay down your credit cards is not reasonable. If this is the case and you’ve tried to make payments but can’t do it, speak to a professional credit counselor or debt consolidator as soon as you know there’s a problem. The sooner you start getting your debts taken care of, the sooner you can get on with the rest of your life.

Step Four: Start thinking. 

The statistics for second bankruptcies in this country are mind-blowing. Common sense would indicate that once someone had been in a financial situation so hopeless that their only remaining option was bankruptcy, they’d do anything they could to avoid it again in the future. Unfortunately, this is often not the case.

Even if you don’t end up declaring bankruptcy, this is the time to seriously think about what got you into an unmanageable debt situation in the first place. Sometimes it really wasn’t your fault - medical bills, divorce, and job loss are often the catalysts that create financial hardship. If the issues were rooted in poor self-discipline, bad spending habits, or an inadequate budget, spend some time soul searching to realize what happened and how you can avoid it in the future.