Will Mortgage Rates Go Up or Down?

In May 2009, Interest rates were at their lowest. 4.75% was indeed a historic low.  If we look at national averages for June 2009, the interest rates are swinging around 5.75%.

Mortgage Trends for July 2009

If we look at trends, Interest rates for fixed mortgages are climbing up all over United States. This pressure on mortgage rates is mainly external.  As some news reports suggest, The major players in US Debt market , are still not satisfied with the economical and fiscal measures taken by US Govt.  This adds pressure on interest rates and liquidity situation in housing market is still very bleak. 

It’s  Still A Good Time To Get Mortgage Refinance

Those borrowers who have decided to refinance, as well as those who are passing through the process of refinancing, should take the decision keeping in view the current market conditions and interest rates, the current conditions of housing market are indicating that the borrowers should not refinance at this stage. So what should they do? Should they quit and try again later?

I don’t think so that the only solution is to quit. Here are a few things that you should take into consideration before giving up on a mortgage refinance.

We might say that the rates are higher than they were, But they have not reached their peak,they’re still relatively low.

It’s All Relative

As once said by a very smart man, in the form of a mathematical formula, “It’s all relative.” Now this statement seems to be more true in the area of mortgage interest rates. Last month a full point rise like we’ve seen has been a part of conversation among the media people, they talked about this depressing stuff like a “stillborn housing recovery.”

How Much Can You Save by Refinancing?

You can use  a loan calculator in order to compare the payment at 4.75 percent on a $300,000 mortgage to the payment at 5.75 percent on same size home loan . The monthly payment for the home loan at 4.75 percent will be $1,187. Whereas the monthly payment for the home loan at 5.75 percent will be $1,473 per month. So no doubt there is a significant difference between the two, but consider this:

Last year the average mortgage rate at this time was 6.8 percent.These days mortgage Rates are swinging on nature of news. Call it good luck or bad, there seems to be no lack of news these days. There are news going on about home price, politicians talking, Treasury auctions, stock market gyrations, number of jobless persons, government programs, and inflation fears. And nowadays, mortgage rates are moved by news.

Can Mortgage Rates Go Down Again?

Of course they can!

What type of news could move the rates towards lower values? Long-term Treasury bond rates are being watched by experts, it is the closest of anything. In the past the treasury bond rates had been at two percent, and they rise as the mortgage rates do rise, they have doubled since the mortgage rates have raised. That jump was initiated when Chinese politicians remarked  negatively about the long-term prospects for the American economy.

Two Important Factors to Watch

The two interlocked factors i.e. the Treasury bonds and world sentiments about the progress and condition of the U.S. economy might play the most effective role in moving mortgage rates. These two factors are considered to be the most viable source of good news that could pull the mortgage rates back down.

Conclusion or Confusion

Despite of these facts, I still think borrowers who have given up on a mortgage refinance will not be able to take advantage of any good news that does move rates even lower. But still the million dollar question remains; Will the good news for economy move the mortgage rates up or down?

 

 

Top 10 Debt Consolidation Companies To Help You In Debt Settlement

If you have many loans to repay or paying any single loan with a high rate of interest then it is time when you should decide about consolidating your loans. Consolidation works in two ways; it not only helps you eliminating the bothers of maintaining many loans at a time, but also helps you in reducing the cost of borrowing.

There are many banks and institutions offering to consolidate your loans. The primary choice for consolidate loan should be the existing bank, but if the terms are not good to you then the second option is to look for some other lenders who can help you.

It is really a difficult task to list lenders. Preferences and choices can be different; it all depends on a number of considerations. The list presented here is not a comprehensive one however it will include all the esteemed names who are in this business for many past years and succeeded in establishing clientele.

1 – Federal  Credit Union

Federal Credit Union is a ‘Non Profit United Way’ organization. This organization helps families and individuals to avert debt problems, bankruptcies and all kinds of legal proceedings. It is one of widely known and esteemed consumer debt management companies.

2 – Consumer  Credit Counseling Service

Consumer Credit Counseling Service is a free registered charity. CCCS is employing professional financial counselors who provide free, confidential advice and financial support to their clients both individuals and families, regarding any issue creating debt related problems for them. CCCS in affiliation with Housing and Urban Development (HUD) delivers consolidation services including credit support.

3 – Amalgamated  Credit Counselors

Amalgamated Credit Counselors is a debt management company providing personalized debt consultancy and consolidation services to their customers.

4 – American  Debt Consolidation

This debt management company renders personalized credit management services to clients but at a minimal cost of borrowing.

5 – Consolidated  Client Services

Despite being newly entered to the field of debt consolidation, consolidated client services proved to deliver high quality credit facility and debt management service.

6 – Credit  Solutions of America

They offer clients with excellent and speedy credit service, settling each part of their credit related problem.

7 – Debt  Management Credit Counseling Corp

It is a nonprofit debt consolidation and credit counseling organization. Professional counseling experts working there offer excellent debt management plans to relieve debt tensions.

8 – Debt Guru.com

This is an online domain for the American Credit Foundation providing wonderful debt management programs for people who are having tough time due to their debt situation.

9 – FH  Financial Services

This Service can be an ideal deal for those seeking either a complete liability or the debt management solution meeting all their needs yet costing them minimum with fast payback period.

10 – Bills.com

The Company can offer quick solutions to dig you out from all your debt management problems.

There are different opinions on the Debt Consolidation services delivered by these above mentioned firms. The readers using this information should adopt cautious approach, while contacting the above listed companies.

Disclaimer: It should be noted that I as an author of this article deny of any connection with any of the companies mentioned here.

When it makes sense to cancel the credit card

A year ago, President Obama signed the Credit Card Act, a long-overdue reform law. However, most of the consumer protections, such as limiting when interest rates can be raised, banning universal default and double-cycle billing, and limiting access to credit cards for college students and other minors, only took effect in late February.
I've gotten plenty of e-mails from people frustrated with their credit card companies. The litany of complaints range from reduced credit limits to higher fees and interest rates to the issuer closing their account. The natural instinct in most cases is to cancel the credit card. But in almost every case customers hesitated for fear of damaging their credit score.
My answer is always the same: Cancel the card.
Credit card issuers blame the new regulations for their actions, and it's true that they can't continue some profitable business practices that relied on taking advantage of consumer naïveté.
The primary culprit, however, is that credit card issuers are under financial pressure. Defaults and late payments are hurting the bottom line. The business is also less profitable as many folks struggle to pay down their credit card debts, avoid interest charges and use their debit cards instead. Credit card issuers are hoping that enough customers will pay a higher fee or a steeper interest rate to avoid damaging their credit score.
Here's the thing: A competitive capitalist economy is a wonderful system in many ways. It gives the consumer choice. You don't have to do business with any one credit card issuer or company. You shouldn't have to pay for its business mistakes and you shouldn't be hostage to the algorithms of the credit scoring business. There are plenty of credit unions, community banks, independent banks, online banks and other credit card issuers that might offer a better deal. I'd shop around. That's the real power a dissatisfied customer can exercise.
Remember, the key to a good credit score is paying your bills on time over time. What's more, a closed account doesn't always nick a credit score and, even if it does, the effect is temporary. And most of us aren't taking out loans so frequently that the credit score is vital all the time.
Again, pay your bills on time, don't assume a lot of debt, and your credit score will take care of itself.
That said, closing an account can matter to your finances if you're in the market to borrow a lot of money, say, for a home or a car. Or perhaps it's time to change apartments or you're thinking about changing auto insurance companies. In that case, it's a reasonable precautionary move to pay the new higher fee or accept the steeper interest rate charge just to keep your credit score pristine.
But I'd still shop around for a better deal and, as soon as you've closed on the loan or changed insurance company, I'd cancel the card and do business with an issuer offering better terms. It's better for you and it rewards companies doing better by their customers.

How to Keep America From Turning Into Greece

Greece, in the throes of a debt crisis, is running a deficit near 10 percent. The United States is also running a deficit near 10 percent. So the headline is inevitable: Are we Greece?

We're not.

Paul Krugman produces this graph of the countries' short-term deficit projections

Now, that's short-term. Before you interpret those shrinking red bars as evidence that we're in the clear by 2012, remember that the United States' projected pain is slated to begin later in the decade, when health care inflation hitches a ride on the retirement of tens of millions of baby boomers, sending the government's Medicare responsibilities soaring into the 2020s.

We're not Greece for a lot of reasons: we control our own currency, we're more productive, we have a much stronger economy and while we suffer from tax avoidance like many countries, Greece faces epic shortfalls.

But we are like Greece in the simple respect that we've conditioned the electorate to expect more services and fewer taxes ad infinitum. And We the People consistently elect politicians who promise to preserve that imbalance. I've been asked a few times to produce something like a dream budget for America 2020. Here's a start:

1) Institute a revenue-neutral VAT with off-sets to employer payroll taxes to make it slightly progressive, but grow the VAT to 8 or 10 percent over the next five to ten years. (I'd also entertain arguments for a carbon tax, but I'm less sold on Pegouvian taxes as dependable money machines and we'll need a dependable money machine before we "solve" the medical inflation conundrum.) Eliminate the mortgage interest deduction. Broaden the corporate income tax base by eliminating loopholes especially on repatriated income, but lower the rate.

2) Raise the retirement age for Social Security, indexed to longevity. It's important to do something with Social Security before Medicare because it's easier to move the full retirement age than to put a straitjacket around medical inflation. Tweaking this entitlement would be an important signal to international investors that we can be serious about our deficit drivers. (We should be open to other SS adjustments, like raising the taxable income ceiling.)

3) Put a freeze on discretionary spending -- not on each department, but the whole thing, to allow for flexibility. Keep PAYGO. Convene a commission on defense spending to find costly weapons programs to cut, bases to sell, and other savings.

In the next decade, we'll need to work out Medicare, which is a hydra of at least three heads: tax rates, benefit levels and organization, and medical inflation. It's a beast. And fodder for another article.

How to avoid credit repair scams

If you're looking for a legitimate operation to repair your bad credit, proceed with caution. In a sea of credit repair companies, you'll find a lot of pirates.
It's best to try to improve your credit on your own, but if you're intent on working with a company, do your homework, says Clarky Davis, who writes the Debt Diva blog for CareOne Credit in Columbia, Md. "Check with the Better Business Bureau and your state attorney general to see if they've had any complaints registered against them."
Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling in Silver Spring, Md., says there are several tactics that scammers might use to try to improve your credit. One common scheme has scammers swapping your current Social Security number for a new one to give you a clean financial slate. But your Social Security number will connect them to all your accounts.
In another scam, they inundate credit bureaus with questionable "dispute" claims. The move would clear the claim from your file for up to 30 days, just long enough to snare better loan terms or a credit card. These plans are unethical, and they fail to repair the poor money habits that pushed you into serious debt in the first place.
Perhaps even more common is the do-nothing strategy. Schemers promise results, collect a fee and do nothing. And when a skeptical buyer checks in to see why he hasn't seen a change in his credit score, the credit repair firm has vanished.