Tag Archives: Guest Bloggers

Get a Act of God Plan

lightning

In light of recent natural disasters around the globe-earthquakes, floods, fires-it seems only to right to recommend having an Act of God Plan, especially if you live in a disaster prone area. Ensuring you have a safety net set up should you get into strife through no fault of your own is paramount to survival, and easy to arrange.

1. Have a Cash Stash

Always have a little amount of cash hidden in your house should you find yourself in a situation where you have no access to money. Flooding will easily cause shortages to cash machine dispensers, and often in a crisis situation many staff will not be working as they’ll be sorting out their own affairs. The only problem with having a wad of cash in the house is the associated temptation. To avoid dipping into the stash when you’re a bit short of money, keep it in a locked up section of your emergency grab bag, and if you’ve already been involved in a natural disaster you won’t need reminding of why it’s important to keep your mitts off.

2. Carry a Credit Card

Even if you don’t normally carry a credit card, it’s a good idea to have one should you find yourself in a sticky situation. Whether you’ve lost your wallet or need to pay for accommodation, clothes or food, having a credit card can make things a little easier in dreadful circumstances. One advantage of having a credit card is their emergency assistance feature-emergency funds can be wired to wherever you are, should you have that function set up on your card.

3. Invest in Insurance

While most of us hate giving money to the insurance companies, it is worth it when you run into problems, be it travel, home or content insurance. The golden key is to read and double read the terms and conditions. Yes, they’re ludicrously boring and often hard to understand, but it will make all the difference when you come to making a claim. Also, talk to someone to clarify their terms if you need to. However, sometimes things happen that you’re just not prepared for so wouldn’t know to ask about, or check. In the Brisbane floods, in early 2011, a number of people who took out flood insurance in good faith were told that their claims would not be awarded because their houses were insured against flooding, not inundation from the river!

4. Emergency Contact Numbers

Pretty much everyone owns a mobile phone these days, and rarely lets it out of their sight. However, when you’re caught in a freak flood and all you think about is hanging on to your nearest and dearest, your phone no longer seems so important. Having a few numbers memorized is a good idea. And while it seems obvious, because most phones are set up to show names not numbers there is little opportunity, or need, to remember other people’s numbers. Just one or two contacts are all you need to let people know you’re safe. They can then contact others on your behalf.

5. Safe Place to Stay

If you’re unfortunate to be caught in a natural disaster, but lucky to be near your family, go stay with them until things start to return to normal. If you live in an area prone to bush fires it’s important to have a substitute home organised prior to fires breaking out, that way you know exactly where to head without having to think about it in an adrenaline fuelled situation. Sometimes things happen that you just can’t plan for, so if you’re travelling in an unfamiliar city and don’t know anyone in the immediate vicinity, head over to any of the disaster relief centres where you’ll be offered a place to stay and support during what could potentially be a terrifying and lonely time.

This article was written by William from Life Insurance Finder. Visit Life Insurance Finder to compare Income Protection Insurance

Credit counseling agency – Questions to ask before hiring

debt consolidation

In case you are suffering from excessive mental tensions and anguish due to the state of your finances and your rising debts, then you must think of ways in which you can come out of the situation. One of the first debt solutions that you should consider is credit counseling. Credit counseling is a debt solution in which you are offered advice regarding how you can get out of your debts as well as how can you stay out of debts and mange your finances well in future. Credit counseling is provided by credit counseling agencies that help you by assessing your financial scenario and then formulating a budget for you. You are to follow the advice that is provided to you by these counseling agencies and if there is no improvement in the state of your finances, then you will be asked to enroll in a debt consolidation program.

It is important to consider certain aspects before you make the choice of your credit counseling agency. You must ask various questions before you choose a particular company so as to ensure that the company is good and will be able to help you out. Some of the questions that you must ask are as follows.

1. What kind of services does the company provide?

You should ideally look for a company that provides you with a wide range of services. These services will include giving you classes on budgeting and managing your debts as well as providing you with the necessary advice which will help you in getting out of debts. The company you choose should provide you with counselors who will assess your finances and as per that make a plan for you that has been specially designed for you. This plan is to help you in resolving all your financial problems. If it is required then a debt counselor may also advise you to enroll yourself in a debt consolidation program.

2. How much will they be charging you as fees?

One of the important determinants of choosing a credit counseling agency will be its fee structure. You are taking the help of a credit counseling agency because you wish to get out of debts. If the agency charges you an exorbitant fee, then there will be no use of opting for it. Thus, it is essential that you get the detailed price quote of all the companies that you are considering. This price quote should include the full fees and all this information must be provided to you in writing. Another important thing that you must find out is that if the agency will waive off your fees partly.

3. Will they be providing you with the necessary information?

It is most necessary that the company that you choose provides you with information regarding how they function without charging anything. If the agency is one that will charge you for providing you with information then you must not opt for it.

These are a few questions that you must ask a credit counseling agency in order to make sure that you are in the right hands.

Reverse Mortgages – How Can You Benefit?

Reverse Mortgage

A reverse mortgage is a type of mortgage in which you can release equity from your home in order to help fund your retirement. This can be an excellent tool for helping overcome the gap between the end of your super or pension and your actual bills. Read on for more information about reverse mortgage solutions.

What Are Reverse Mortgages?

Remember all the years that you spent paying off your mortgage? What if you could get that money back? That is, essentially, what a reverse mortgage is. These types of mortgage are only available to those over 60, and they’re meant to be used in order to support your retirement lifestyle. The Australian government is making it so that people are more responsible for funding their own retirements – and this making it difficult for some people as their super and pension aren’t providing the money they need to support their chosen lifestyle. It may not be the extras doing them in, either. It could be something vitally important such as medicines, hospital stays or a new car.

Many people will go the obvious route, selling their biggest asset for more money. Unfortunately, this can often compound the problem as they now need a place to live. The answer to getting the money that you need to fund your retirement while still living in your home is to take advantage of reverse mortgages. As stated above, it’s kind of like getting mortgage payments yourself.

A reverse mortgage is a type of mortgage available to property owners, older than 60 and they’re great for pensioners. These mortgages allow you to release money from your home using equity. These funds can be used as a stream of income or can be borrowed against. Like all money – it can be used for anything you like. You can use it to fund travels, medical needs, home improvements, anything you want.

This is still a loan product, which means there is still interest that you will be charged. However, you aren’t required to make payments on this type of loan. Your interest on this loan will be capitalised, or added to the amount of the loan. Instead, you will repay this loan either when the home is eventually sold. Hopefully, the sale of the house will more than pay off the loan and leave some profit in your hands or the hands of your beneficiaries.

You have a variety of reverse mortgage options if you’re over sixty and you own your home. It’s important that you choose the loan which is right for you, and that will depend on your own personal needs and a variety of other factors.

In order to find the correct solution for you, it’s recommended that you work with a professional mortgage broker in order to help you find the reverse mortgage solution which is best for your needs. These brokers will be able to look at your situations objectively, and they’ll know exactly what solution (or solutions) will be the best fit for your circumstances. They can then take their skill and expertise, along with their access to multiple lenders and hundreds of loans and put it to work for you. They’ll do all the legwork, finding the loan which will give you the highest amount of money with the lowest interest rates.

Do keep in mind that a reverse mortgage is still a loan, and it will have to be repaid at some point in the future. While it might not be you who will be doing the repayment, you still want to make sure that you don’t burden your survivors too much. If at all possible, it would be nice if they walked away from the sale of your home with some little bit of profit, or maybe even found a way to keep the home they may have grown up in. Keep this in mind when you’re looking into reverse mortgages, and your mortgage broker will be able to find you the best possible loan solution to help you and your family get through your retirement gracefully.

Eight Strategies for Paying Off Your Mortgage Early

mortgage

Every homeowner dreams of the day they can burn their home mortgage note because the entire balance has been paid. There are some limitations for new mortgage loans that carry early pay-off penalties, but most banks will assist the homeowner by answering questions concerning the best methods to pay the balance down more quickly. Work directly with the lender and avoid anyone who promises to make the payments on your behalf. Embrace one of more of the following strategies to work toward financial freedom by eliminating that last long-term debt.

1. Pay extra principal – Additional principal payments of $25, $50, or $100 each month paid consistently throughout the year will shave years off the entire mortgage balance. Pay the full mortgage amount each month and add an additional $50 consistently for one year. Each time the statement arrives, compare the values against the previous statement. Highlight the outstanding principal amount and keep all of the statements together. If doubt of progress arises, look back across the previous statements and note the progress. Some mortgage statements also have a projected date when the final payment will be due this date should change as the principal amount decreases.

2. Reduce other expenses – Choose one or two seemingly frivolous expenses that can be eliminated from the monthly budget until the mortgage is repaid. Those expenses can be reinstated once the goal is reached. Add the entire dollar amount from the saved expenses to the mortgage payment every month. Continue to monitor the monthly progress reported on the mortgage statements.

3. Make extra payments – Whenever the budget will allow, make an extra full payment throughout the year. Monitor the drop in the principal amount reported on the monthly mortgage statement. The entire extra payment will be applied to the principal without any money being applied to the interest due on the loan.

4. Pay one additional payment annually – Commit to making one extra mortgage payment with the calendar year. If $1000 is paid against a 30-year mortgage every year, the mortgage term will be shortened by four and a half years. All the interest that would have to be paid for that part of the loan is saved and will add up to more than $40,000.

5. Switch to bi-weekly payments – Make two half payments within the month. This is a great option for those who are paid bi-weekly. Twenty-six payments will be made in the calendar year which means that thirteen full payments are made instead of twelve. This method will reduce the mortgage term by six years on a 30-year mortgage. Progress is made, but the extra payments are spread throughout the year to make budgeting easier.

6. Treat a 30-year like a 15-year – If the current mortgage has a 30-year term, calculate the 15-year payment schedule and pay accordingly. The additional funds will be applied directly to the principal and will reduce the term of the loan by half. This method is beneficial when unexpected expenses require a reduction in the mortgage payment for one month. Since the 30-year payment is actually due, a lower payment can be made without paying any penalty. The higher payment can be made in subsequent months.

7. Apply tax refund to mortgage – Whenever a tax return is received for overpayment of income taxes, apply the entire refund to the outstanding principal amount on the mortgage. Readjust withholdings for the next year and apply the amount saved each month.

8. Sell an asset and apply the funds – Unused assets are a source of funds that can be applied to an outstanding mortgage. A boat that sits on its trailer can be sold, and the funds used to pay down the mortgage balance. Consider the goal of living a debt free lifestyle when considering which assets can be sold to contribute to the project.

Many mortgage calculators exist to aid in creating an accelerated repayment plan. If emergencies arise, simply reinstate the plan when other obligations allow. When the mortgage is paid off, set another large goal to work for or reward the entire family with a once-in-a-lifetime vacation.

Matt is a freelance writer for Money Choices, an Australian website where house buyers can compare a range of refinance home loans from various Australian banks. Click here to visit their website.

How to Interpret Your Credit Card Statement

understanding credit card statement

By: Guest blogger Mark

Understanding a credit card statement is important if a credit card is used regularly to spend money and budget is being followed. For someone who has been using a credit card for an extended period of time, reading the statement is old hat, but for someone who is new to using a credit card there are some features of the statement that need to be explained. Understanding the fine print, both on the front and back of the statement, is important to fully understanding the charges within the statement. The statement for each credit card company varies slightly but for the most part there are common elements in each of the statements. There are several key pieces of information that must be examined when each statement is attained that will help the individual better understand their account.

APR – On the front of the document the first piece of information that needs to be examined is the Annual Percentage Rate, or APR. This is the amount of interest that will be paid on an annual basis. The APR is an important factor in calculating the amount of money going into the credit card. The higher the rate, the more money it will cost in the long run to use this credit card. Interest rates of each credit card can be compared on a variety of websites available online.

Minimum payment – Another pivotal piece of information that must be looked at is the minimum payment due. This is the minimum amount of money that must be paid on the credit card during each billing cycle in order to remain in good standing with the credit company. This amount is typically determined as a percentage of the new balance. The minimum payment must be made by the due date in order to protect the individual’s credit reputations. Late payments have a negative effect on an individual’s over all credit score, which reflects poorly when trying to take out a loan for a house or other large item.

New Balance – The new balance on a credit card is the amount of money that is still unpaid or owed by the cardholder and will be a number present on the statement. This can be determined by starting with the remaining balance from the previous month and subtracting any payments that were made on the balance. To calculate the amount owed the new charges and miscellaneous fees accrued during the most recent billing period must be added to the previous amount.

Interest Paid – The finance charge is essentially the cost of doing business with the credit company. This is the money paid to the lender for using their credit. This finance charge is indicated on the each monthly statement and it is the interest that is paid on the unpaid balance of the account. The way in which this charge is determined varies with each credit company and the way in which it is determined affects the amount of money that the individual will be charged. The most commonly used calculation method is the average daily balance, which calculates the monthly finance charge based on the amount of debt on the account each day.

Fine print – The back of the credit card statement should not be ignored. There is a lot of fine print on the back of the statement and can present quite a headache. Although these paragraphs are not the most interesting read ever, there are many important details that can affect whether the individual is a successful credit card holder. One of the most important pieces of information that can be found on the back of the statement is the information about the Cash Advance Fee. This is a charge that the credit card company charges the individual when the card is used to take a cash loan from a bank. Generally there is an allowed amount of money that can be withdrawn using the card and the fee the credit company charges is a percentage of the loan amount. It is important to recognize this information on the back of the card in order to not break the fine printed rules of the credit company.

Understanding a credit card bill is the first step towards being a successful credit card holder. It is important to take the time to review the information on the statement and make sure that everything on the state is in line with the contract that was signed. It is also important to notice and verify any changes on the statement compared to the previous statements. An error can always occur and it is the responsibility of the cardholder to recognize these errors. Understanding finances is difficult but taking the time to learn a little about a credit card statement could save a lot of money in the long run.

Mark writes about finances at CreditCardCompare.com.au, an Australian website based just north of Sydney.

Features to Keep Your Mortgage Flexible

first home

Many people do not have a complete understanding of how different features work that are in place to help them pay off their home loans quicker than the standard 30 year term. Learn what you can do to help you manage your mortgage with some handy home loan features you may not be aware of.

Thankfully, most mortgages for home owners today have quite a few features for the loan that are made to help them pay it all off and manage the home loan successfully and positively. Unfortunately, too many homeowners have little to no knowledge of these features, or the ones they might benefit quite a bit from and which ones to choose.

Discovering Mortgage Features for You

Many people find that the best way to find out how you can benefit from home loan features is to talk with your mortgage broker. These professionals are going to be able to help you sort through all of your available options, features and loan products as part of their professional assessment service to you. Any excellent mortgage broker should be able to help you understand at least the most popular features, a few of which are explained below:

Valuable Mortgage Features

Extra Repayments

Having the option to make extra repayments on your home loan in addition to the minimum loan repayment amount. Paying amounts that are beyond the minimum of what you are required to pay to keep your loan status in good standing is what qualifies as extra payments. You can make extra repayments regularly by changing the amount that the bank withdraws from your account, or you can make them intermittently whenever you have money available to do so.

Redraw

One of the nicest benefits about this feature is that you are able to access these additional payments when you need them. Many people find security in making extra repayments because they have funds on standby available to save for any reason that may arise in the future. You might be charged for that withdraw, so be sure that you are aware of all of the terms and conditions that apply to your home loan.

Professional Package Discounts

A professional discount package is when a home owner receives discounts on a variety of products and services from the home loan lender by paying a single annual fee. These might include things like waived valuation fees, interest rate discounts, discounted insurance products, waived monthly and application fees and many others as well.

Interest Only Periods

With interest only periods, homeowners just pay the interest on the home loan that is due each month and not the principal itself. The benefit is that repayments are kept to an absolute minimum, but there is no possible way to pay off the loan unless extra payments are made. These interest only periods may be 5 years, 10 years or even 15.

Loan Portability

This mortgage feature will allow you to move your home loan onto another property. Normally this is given to people when they sell their home and buy a new one. Usually, in most cases for this home loan feature to be executable, the settlements have to happen within the same day, which would all let home owners avoid having to re-apply for a new home loan when they move to a different house!

Repayment Holiday

This is a valuable feature that can be used when a home owner’s financial circumstances change. Normally this would be due to the arrival of a new baby, a lay-off from a job or any other circumstance that results in a decrease in income for the family. Usually this home loan feature will let home owners reduce or eliminate the amount of payments that are made for up to six months, which does add interest to the loan.

This article was written by William from homeloanfinder.com.au. Visit the HomeLoanFinder website to compare variable home loans and home loan interest rates today.