Eloan Information Blog

A COSI Mortgage is a mortgage on which a rate of interest is charged based upon an index known as the Cost of Savings Index.

One of the largest Savings and Loans in the 11th District (CA, AZ, NV) offers a mortgage program tied to its own "cost of savings." Simply put, this Lender borrows money from consumers in the form of deposits, i.e. C/D's, checking and savings accounts, and then lends the money out as home mortgages. Then they place a fixed "Margin" on top of their own Index.

The interest rates in effect on these deposits are the basis for the COSI. The COSI is not based on actual interest paid on deposit accounts, but rather on a weighted annualized rate of all interest rates in effect on deposit accounts as of the last day of each month.

Mortgages:

Some people can’t wait to get rid of their mortgage. So they add extra money to their payment every month. The faster the loan is reduced, the less total interest is owed to the bank. But what’s the hurry? If you’re young or middle-aged, it’s far more important to put the maximum into your retirement plan at work. If you work for yourself put the into a Keogh or SEP-IRA plan. With a house plus financial investments, you’re better diversified.

During the past 30 years, the Standard & Poor’s 500 have earned an average of nearly 14 percent annually, according to Ibbotson Associates in Chicago. Long-term investors have a good shot at earning more money in their stock-owning mutual funds than they can save by paying their mortgages ahead of time. You might have a change of heart, however, when you retire. At that point, your monthly income will probably drop, making a mortgage harder to carry. At that point you can use some of your investment gains to pay off the bank.

Home equity:

How about borrowing against your house to invest in stocks? A home-equity loan is a second mortgage that you can tap at will for anything you want. At this writing, home-equity loans cost anywhere from 8 percent to 12 percent, depending on the lender. Those are variable rates, so they might rise. The more your loan costs, the greater the change that you won’t earn enough in stocks to make the risk worthwhile.

Best advice: Save your home-equity borrowing for other things—for example, home improvements, major home repairs, or college tuition (the interest is deductible if you itemize on your return). You might also use a home-equity loan to pay off higher-cost credit card debt — but only if you truly intend to control your spending. Do not borrow against your home to consolidate your debt if you’re likely to run up your credit cards all over again.

Labels: borrow, maximum, Mortgages, proceeds

They advertise relentlessly on the Internet, radio and elsewhere.
"Refinance your mortgage today! Save thousands of $$ No hidden costs, just great rates! Zero: That's your cost for refinancing!"
In recent months, a growing number of mortgage lenders and brokers have been hawking "no-cost" mortgages, in which the lender picks up the expenses that normally would be paid by the borrower.
And they're popular. Many borrowers see the mortgages as a convenient way to take advantage of falling interest rates while keeping more cash in their bank accounts. The pitch sounds great. Borrowers who get approved for these mortgages can avoid paying an assortment of fees, including legal, appraisal and origination, associated with a mortgage. For a $100,000 mortgage, such costs can range from $3,000 to $5,000.
But that's not the whole picture: Lenders who offer no-cost mortgages often make up for the lost fee income by charging higher interest rates.
For instance, Countrywide, one of the largest mortgage lenders in the country, adds three-quarters of a percentage point to its no-cost mortgages. Instead of paying 7 percent on a 30-year, fixed-rate mortgage, a borrower would pay 7.75 percent. That adds up to $18,400 in higher interest payments over the life of a 30-year $100,000 mortgage.

• "You can do the math," said Chuck Small, a financial adviser with ACH Investment Group, an investment advisory firm in Raleigh, N.C. "You'll be paying thousands of dollars more over the life of a mortgage."
  Still, no-cost mortgages make sense for borrowers who don't plan to stay in their homes for longer than four years, said Gordon Miller, president and founder of DNJ Mortgage, a firm that specializes in no-cost mortgages.
  For instance, a borrower who gets a $100,000 mortgage at a 7 percent annual interest rate will save $51.11 a month in interest payments compared with someone who gets the same mortgage (without fees) at 7.75 percent. That, in monthly savings, is attractive; but it would take 39 months, more than three years, to recoup $2,000 in fees associated with the conventional mortgage.
• 
  "For some people, especially those that are worried about losing their jobs, three years is an eternity," said Miller, who began doing no-cost loans 14 years ago. "They would rather keep more cash in their bank account and pay slightly higher (interest payments)."
  For people who already own a house, the no-cost option eliminates the fees associated with refinancing, in which one mortgage is replaced by another with a lower interest rate.
  Since July of 2000, mortgage rates have fallen more than a full percentage point, from 8.26 percent to 6.96 percent, on a 30-year, fixed-rate mortgage, according to Bankrate.com of North Palm Beach, Fla., which surveys the nation's largest lenders each week. Many homeowners want to take advantage of those falling rates without paying thousands of dollars in fees each time they refinance.
  "Theoretically, with a no-cost mortgage, you could refinance every time rates fall no matter how small the reduction (in interest rates)," said Randolph Straughan, a loan officer with First Financial, a Charlotte, N.C., mortgage broker.
  The growing popularity of no-cost mortgages is a major reason that Americans are on pace to refinance $1.07 trillion in mortgages this year -- a record, according to the Mortgage Bankers Association in Washington.
• 
  But borrowers should watch out for scams. Often, the companies who promise to waive fees for mortgages are really just rolling those fees into the cost of the mortgage, ACH Investment Group's Small said. The borrower may not realize this until closing, when he or she discovers that a 100,000 mortgage has increased to 103,000.
  A borrower who doesn't read the fine print can end up paying interest on those extra dollars over the full life of the mortgage.
  "Just remember," said Small, "that mortgage lenders aren't in this business for charity
  

Labels: debt, financial, investments, stock, tax-deductible

When you purchase ,, you are, in effect, purchasing a term life insurance policy whose benefit amount is the same as your morgage balance. That is a very important factor to remember: The death benefits of a morgage life policy will always be exactly equal to the remaining balance of the morgage. This means that after you've paid off half of your morgage, your insurance benefits will have also dropped by half. The premiums, however, are balanced over the entire term, and will not change.

• Why not Buy Term Insurance?

• Term insurance, which simply pays out the death benefits to your survivors, may indeed be the better choice. One reason to consider term life rather than morgage life insurance is that the death benefits do not decrease over time. If you are insured for $500,000 and have a morgage for the same amount, your survivors will receive that amount, and have the option to pay off the morgage, but may also invest the money instead, and use the interest to continue paying the mortage. Furthermore, if upon your death the morgage balance is only $300,000, the insurance policy will pay out $500,000, leaving your loved ones with $200,000 over the amount morgage life insurance would have paid out. Another advantage a term life policy offers is its relative stability when compared to morgage life. Most banks will require you to re-negotiate your insurance policy if the morgage is transferred to a different property or refinanced. Since you will be older at that point, your premiums will most likely be increased. A term life policy remains valid until the specified term runs out, provided you keep paying the premiums, which do not change for the length of the term.

  Morgage life insurance offers you the convenience of unified morgage and premium payments, but that convenience may come at a higher cost than you are willing to pay. Your bank will generally only have one insurance policy, which may not be ideal for your unique situation. An insurance broker, who can help you shop around for a policy, will have a much wider selection to offer you, increasing your chances of getting a better price. You can begin by requesting a free, no-obligation term life insurance quote, and our expert insurance agent will be happy to assist you.

Labels: 000expert insurance, insurance, morgage, morgage life insurance premiums$500, morgage payment

Main Points of Virgin Credit Card

• 0% balance transfers for 13 months (subject to 2.98% balance transfer fee, max £50 charge)
  0% on purchases for 3 months
  Earn 1 Virgin credit for every £1 you spend
  Discounts on your Virgin mobile bill
  Free purchase protection
  Protection against fraudulant use of your card
  Free travel accident insurance (not to be confused with travel insurance!)
  Typical APR 15.9% variable
• Our Assessement
• The Virgin credit card has been a market leader for over a year now and it's popularity shows no signs of waning. The introductory offers of 0% on balance transfers for 13 months* and also 0% on purchases for 3 months is one of the main attractions of the Virgin credit card. [*2.98% handling fee applies]

Labels: $$, balance, card, credit, fees, max, points, virgin

• Insurance comes in several flavours but the main sales pitches tend to be for credit card Payment Protection Insurance (PPI). These policies are designed to pay out if the card holder is unable to meet repayments due to sickness, an accident or losing their job. The plan is often offered on a card application form as a simple box to be ticked.

• 
  

• Good Credit Customers Lose Out

  Card holders who pay off their card in full every month will still pay the PPI premium – on a balance that they then clear! Obviously, PPI insurance is designed to click in when card holders cannot make a payment, but for low users of cards with savings and a stable income at present, it is a waste of money.

• Read the Fine Print

  Wise card holders NEVER tick the protection box before reading the fine print, and with PPI policies, there is an awful lot of fine print. Card holders should check that their particular employment position is covered by the PPI; many self-employed people have taken policies only to discover that they are excluded. If in doubt, ring the underwriters and check; better to talk through it now than when under the stress of financial difficulties when making a claim.

• Time is Money

  PPI policies usually have a finite payout term of twelve months, but the policy should have paid off all outstanding debts during that time. The irony is that the card holder must still make the PPI payments during this time to keep the policy active, even though it is paying out against the balance.

• A Quick Example

  Barclaycard PPI costs 79p for every £100 of outstanding balance, and pays out 10% of the balance total due from twelve months from the time of the claim, but only up to a maximum of £1,500 per month. On death, a balance of up to £15,000 can be paid off.

  Closer examination of their nine page pdf of policy details reveals interesting details such as:

• The policy does not apply to the over 70s
• If you miss more than three premium payments the policy is void.
• For self-employed people

• Seeing Double

  Card holders should check that any PPI policy does not overlap with any other income protection plan they may hold. There is simply no point in paying for the same cover twice, as an income protection plan would allow balances to be paid off as normal.

• Cover All

  A stand alone policy for all cards is offered by Paymentcare, which also charges a low 0.65% premium, a faster repayment schedule of six months rather than a year, and no premiums during a claim period.

  Save for a Rainy Day

  A PPI policy only covers the debt on the card on the day the claim is made. Rather than pay the 1% as an insurance premium, smart card holders might prefer to put 1% of the balance into a high rate savings account, let it grow with interest, and use that money as an emergency balance payoff sum if required.

• Firstly you need to make sure you get a rate and the features that suit your needs. You certainly do not want high standard interest rates or ridiculously high charges for withdrawing cash, or other, hidden fees. Another apparently enticing feature is a low monthly minimum repayment (MMR). This is not a financially healthy choice as the MMR can be less than the interest due on the card, so your debt will continue to mount up – even if you spend no further money on your card! Don’t get a credit card with an MMR of less than 2.5%. The mounting debt will only benefit the card provider – not you in any way. If ever there’s a possibility that you might have to pay the MMR, because of your difficult financial circumstances, then choose a card with an MMR of 4% or 5% - the highest you can get. In a survey carried out in summer 2006, the following were some of the more popular card providers with cards having an MMR of only 2%:The AA, Barclaycard, Cahoot, Co-operative Bank, Egg, Goldfish, Halifax, Lloyds TSB, Marbles, Morgan Stanley and Smile.
• Common Credit Card Mistakes With credit cards now outnumbering people in the UK you would be right to assume that not everyone in this country uses their credit cards either correctly or wisely. But what are the most common mistakes that credit card holders make when using their credit cards?
• In the circumstances that you have a weak credit rating and an outstanding credit card balance, you would be sensible to apply for a 0% balance transfer card. These make interest-free credit easy. If you can’t pay your credit card bill off in full, then a transfer to a 0% balance transfer card is a good way to bring your outstanding bill down to zero. These first came into being over six years ago, and have changed a lot since then. It is important to know what you getting into, how much the transfer fee is, how long the zero percent interest lasts, and critically, to avoid making any other purchases on the new card, because they will NOT be at zero percent.
• Quick Balance Transfer Guide Balance transfers allow card holders to transfer the money they owe to their existing credit card to another, usually at a special rate of interest. The new credit card company pays off the old credit card debt and transfers it to the new card. This article will tell you how to play the game.
• Another way that card companies make money is to get you to take out payment protection insurance. It is a waste on money – avoid it. It can increase the cost of your credit card spending by about 9.15% each year – and that’s even if you pay off your credit card bill in full every month. This insurance is supposed to meet your monthly repayments if you have an accident or are sick, or unemployed and cannot work. It would also pay off your balance if you were to die. Sadly, the true cost of providing this insurance is only around 3% of your bill – not 9.15%. Avoid this type of insurance.
• 
  Payment Protection Cover For Your Credit Card - Is It Worth The Cost? Payment protection cover states quite clearly what it is but what are the ins and outs of the policy and is it worth considering taking out payment protection cover on your credit card. Just possessing a decent credit card that will not rip you off is not the full answer of course. It is up to you to control your spending. In this debt-ridden society that Britain has become that is difficult. Ultimately people have to be responsible for their own actions – and their own spending.
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• Consumers once were hard pressed to get credit in the wake of a bankruptcy. Times have changed: After bankruptcy, credit card offers now flood mailboxes
• The risk-to-reward ratio has shifted in favor of credit issuers, resulting in new credit offerings for the recent bankruptcy filers. Experts say there are several reasons. • Due to a 2005 change in bankruptcy laws, it has become tougher for borrowers to refile quickly. That removes some of the risk for lenders that decide to extend credit to consumers with troubled credit histories.• A lack of usury laws in states where major credit card issuers are headquartered means the sky is the limit for interest rates. Under the industry's risk-based pricing model, issuers are free to charge very high rates to the riskiest consumers. • Card issuers send out so many card offers that some just slip through to recently bankrupt consumers.• Complex risk-based pricing enables issuers to extend credit profitably to certain consumers who are emerging from bankruptcy.
• Law change shifts risk
• Credit card issuers pushed for the 2005 change in bankruptcy laws to ostensibly eliminate what they saw as abuse of the bankruptcy system as a means of relief from consumers' debts. But the law changes also means that consumers have less opportunity to use bankruptcy as an escape hatch for credit card or other debt.
  "The most important changes are they expanded by two years the amount of time you have to wait in between filing for Chapter 7 bankruptcy and that will have a huge impact on creditor's willingness to extend credit," says Stephen Elias, bankruptcy attorney and author of "How To File for Chapter 7 Bankruptcy."
  The table below shows how the new law has lengthened the time between refilings. The extra time varies, depending on which chapter in the bankruptcy code was used for the old filing and the new one: Chapter 7 bankruptcies dismiss (discharge) debt, while Chapter 13 bankruptcies create a three- to five-year court-supervised repayment plan for debt.

• Refinancing isn't just for mortgages. By refinancing today, the typical auto refinance customer saves over $1,000 over the life of the loan!Auto loan rates are now at their lowest point in years. Even if you purchased an auto as recently as a few months ago, you may be able to save by refinancing now. And with loan periods from 36 to 72 months, you can make sure you get the loan that you need.
• Lower interest rates are the one positive resultof our current recession. With the economy struggling, the Fed cut short-term interest rates 11 times during 2001 in an effort to avoid recession. This has pushed auto loan rates to their current lows. These low rates have allowed some borrowers to purchase cars thatthey previously could not afford, and others to save thousands by refinancing.
• This great savings opportunity may soon disappear!The economy is showing tentative signs of recoveryand analysts do not expect the Fed to cut rates any further. In fact, mortgage rates have already begunto rise

• The E-LOAN online loan brokerage grew from the brick-and-mortar brokerage Palo Alto Funding Group. Chris Larsen and Janina Pawlowski founded the company in 1992, changed the company's name to E-LOAN in 1996, and launched the online service in June 1997. Their goal was to streamline the clumsy loan process, providing a choice of lenders and eliminating loan agent fees, passing the savings along to the borrowers.
• E-LOAN went on to become a lender itself, the leading online mortgage originator. They grew their customer service group to nearly 300 employees and developed an electronic version of nearly every facet of the loan process. The company has partnered with other leading online companies to provide a full array of services to people looking for mortgages, auto loans, and business loans.

• Understanding your credit reports is one key to figuring out the loan process. When E-LOAN launched, it provided consumers with free individual credit reports, but the three major U.S. credit bureaus forced them to stop distributing the reports. The E-LOAN site still has fantastic information about how credit reports work. It breaks down the levels of credit (excellent, high risk, etc.), tells how scores are determined, and explains what factors influence fluctuations in your score.
• If you are moving to a new residence over 100 miles away for a job, take advantage of E-LOAN's relocation services. Not only can you get additional discounts on your loan, but the speedy E-LOAN service saves you time with quick turnaround on your application. To qualify for relocation benefits, you have to be a transferred employee of a corporation who is seeking to finance a primary residence at the new job location.
• Look under E-LOAN's Marketplace and you'll find a variety of home services and products from companies partnered with E-LOAN. If you're looking to buy a new house, the Demographic Data is especially helpful, providing you with analysis of neighborhoods, reports on school quality, and area crime alerts.
• Loan applications for different products are not interchangeable. For example, if you applied for a mortgage through E-LOAN, you must re-apply for an auto loan, filling out a new application. Different products' applications are not tied together, but luckily the applications are short and simple to fill out.