Having their own home is one of the most important things in the lives of families all over the world, and American families are no exception. We all dream of our own property, without rents and landlords and all of those problems which go along with living in somebody else’s house or on an apartment.
When we compare the situation which we have today with the situation from the start of the last century, we can say that it is easy to acquire a property in modern United States. Several factors contributed to this, but most important are the creation of Federal Housing Administration in 1934 and the introduction of loans which are known as mortgage loans.
With the help of these loans, more that two-thirds of Americans now have a house, and this says a lot about the quality of this idea and the efficient nature of these loans. Mortgage loans are basically loans which the banks issue for clients who are buying a real estate, and usually this property is used as a guarantee. This guarantee is called a collateral, and in case that the clients are unable to pay their debt and default the loan, the banks can seize the house. The official term for this action where the hose is repossessed by the bank is foreclosure.
The term mortgage comes from the French law, and it means “death pledge”, which means that the loan is alive until it is completely payed out, or until the bank seizes the property. The usual period of mortgage loans is 15 or 30 years, and although these two options are by far two of the most common solutions, the clients can use other periods as well, and mortgage loans can be granted for periods of 10 or 20 or even 40 years.
Mortgage loans are usually consisting of four basic elements, and those parts are: the down payment, principal, interests and collateral. The down payment is the amount which the client needs to deposit before gaining access to the full amount of the loan, and most banks accept the down payment which takes 20% of the purchasing price of the property. This means that you need to loan 80% of the asking price for the home, and that you have to have the rest already on you account. Principal is the part you have to lend, or those 80% which were already mentioned. Interest is a small charge which the bank uses as a fee for their services, and it is usually calculated as a small percentage of the total amount. However, the better your credit rating – the lower the interest rates. The final part of a mortgage loan is the collateral, which we already discussed earlier.
Mortgage loans are the perfect option for those couples and young people who are not capable of producing large sums of money at once, but who would like to invest and buy a home for themselves, and who can later pay the loan in small monthly installments without too much problems.
It is crucial for college students to know that in order to launch themselves as a financially responsible individual, they must establish credit. With a limited budget, they can still do this and starting when they are young will only help them in their future.
While opening a checking account will not report on a credit report, it will indicate that the individual can handle their finances independently. At this point in their life they will begin employment and will have an account in which to deposit their earned income.
College students are a prime target for various credit card companies, therefore vendors will often be on campus sites urging students to apply, often enticing them with a free gift. It can be difficult to turn down such a generous offer, so the student wants to first ask the representative some questions as offers can differ dramatically.
The student wants to ask what their interest rate is. If it is a low introductory rate, ask how long it is for and when the rate ends. Also ask what the credit limit will start at (some limits may start as low as $100.). Obviously the individual with no credit history will not be approved for a very high limit, but be sure to ask. Ask if the card has an annual fee, if so what is the amount and does it automatically go on the card as a balance before the card is activated.
Another option to establish credit is to become a co-applicant on an account already established by someone (preferably a parent or other relative). If you do become a co-applicant this means that you are equally responsible for paying the bill by the due date. This account will also report to the credit bureaus, thus giving the first time credit card seeker a credit history. However it is critical that the bill is paid on time as late payments will not only report on your newly established credit report but the report of your guarantor (the person who enabled you to become a co-applicant). If you miss one payment, make sure it gets paid so the account becomes current and remains current. Aside from late payments reporting there are usually fees added to the account, bringing your balance due up more.
Once you have that credit card, keep balances low and do not obtain more credit than you need or can realistically handle. It may be tempting to open more accounts, particularly if a department store is offering a discount on the first purchase you make with their card, but you do not want to open too many accounts (many department store cards offer high interest rates which may start around 20%). Try to stay away from charging more on your existing card until you have paid the balance off first.
Having good credit is of high importance in today’s world and it will remain with you throughout your life as it will make a difference in whether you get approved for a cell phone, apartment rental or mortgage, auto insurance and more.
Recent studies have revealed that the number of older Americansstruggling with credit card debt has increased when compared to the young people. In a research findings provided by the AARP Policy Institute and Demos entitled “In the Red: Older Americans and Credit Card Debt,” it was discovered that older American and specifically those over 50 years, are in more credit card debt than their counterparts under-50 years.
The old age is such a crucial period in life when the aged persons should be managing their finances very carefully. This is age when the working group retires to enjoy the remaining part of their life. However, this retirement period can be faced with problems especially if the aged persons are struggling with debt.
According to the report, it shows a complete reversal of the state of credit card debts about four years ago when it was the opposite. The main question is why seniors are finding themselves in such high levels of debt than the young people. Although there are factors that may contribute to this phenomenon, it seems that seniors are carrying a burden that may not be theirs.
Some are using the cards to support their adult children who should actually be supporting themselves financially and not relying on their parents. Loss of employment is one contributing factor as a quarter of these seniors is reported to be losing their jobs. What this means is that they are now using their retirements savings to pay for credit card balances something that may make things worse.
About 25 percent of the seniors are assisting their family members to settle their debts including paying for tuition fees for adult children. In the study, it was found out that more than 5 percent of student loans borrowed were granted to persons over the age of sixty. These are not students but they are actually borrowing to support their adult children.
Students should take the burden of their loans so that they can repay when employed after completing their college studies. When these expenditures are coupled with other expenses like medical, home repairs, car repair, rent, utilities, mortgages and insurance, the senior is left in a very difficult financial situation.
These are some of the reasons why the debts are high with a good number of the seniors now dipping into their retirement kit to repay credit card bills and balances. The worrying thing is that if the seniors place themselves in debts, this could dangerously harm their financial security including their retirement funds.
The old age comes with a lot of problems because this is an age when the health of a person deteriorates because the body does not have vibrant immune system. Many chronic diseases crop up during this old age. This means that their financial resources should be used wisely in order to prevent cases of financial bottlenecks and unnecessary borrowing at old age.
People aged 50 and above are carrying a combined credit card balance of about $8,278 on all their credit cards and this is more when compared to the under-50 population, which shows a combined credit card balance of $6,258. There is need for the seniors to be educated in their financial security and how they can maintain it. Many seniors are dying with less than $10,000 in their bank accounts.
One potential way to save would be to look at a zero percent credit card offer or getting a lower APR, which may help in reducing your annual interest expenses and saving of hundreds of dollars per year.
Payday loans are a loan that are pretty useful for obtaining a short-term, small credit for immediate financial use. While it is one of the most common forms of loans, some people are still not well-acquainted with this loan type.
The number of payday or auto-charge loan companies is increasing and their loan services are accessible online through the web. They are very easily available and in your reach. When you apply for payday loans, it will take a few days for your application to process online. The process has become easier and you are no longer required to attach the supporting documents for the lending institutions to check.
It is highly important for people to make sure they are capable for paying back the loan as soon as they get their salaries. This is what will help them with the credit rating eventually.
So before we reveal the other benefits, let’s first see how a payday loan works.
Payday loan is a relatively simple process of acquiring a small scale loan for a short-term basis. You can connect with a payday lender who will almost instantly transfer the small amount to your account. But against the promise that the amount will be returned as soon as the next salary is received. This requires agreeing to have your account debited automatically by the lender when your account is credited with the salary.
This is (in most cases) a risk free loan business since there are postdated checks or agreement of automatic debit involved in the process. This also minimizes the credit checks necessary for loan transfer.
Payday Loans for Credit Improvement
It is important to understand that if payday loans are dealt with smartly, they can benefit you in a number of ways. First, they are available for your financial assistance as soon as you need them and are not very expensive. Moreover, the loan term is also short and falls between two weeks to one month.
While the loan will appear on your credit report, it will also positively show how you have been paying off your payday loans and other minimum credit card bills for the month. This will improve your credit score and prevent penalty charges and rates ballooning in your credit account.
Payday loans are considered beneficial as well as convenient as they can be obtained immediately. This loans does not even harm your credit report. For the consumer, it is a total win-win situation. He or she is not only able to meet the immediate financial obligations (such as payment of bills and credit cards) but these loans are also helpful in saving you costly finance charges.
If you are acquiring payday loans to avoid delayed credit card payment, it is indeed a smart step. A delay in the payment of your credit card will show on your credit profile for the next five years whereas the payday loan will be resolved within a month. Therefore, using payday cash loans for preserving your credit rating is a great way to keep your credit history clean and financially healthy.
Managing finances can be fairly demanding for anyone who isn’t really accustomed into managing their own finances. Top it off with a difficult situation the majority of population reaches at least once in their lifetime and it is the perfect recipe for failure. Therefore, it doesn’t surprise that many people reach out the option of getting a payday loan in order to get out the financial situation. However, there are certain things that you should know about getting a payday loan for you get one. So make sure that you read the following advice, since it might help you.
What Is A Payday Loan?
As with all loans, payday loan is that is the best day for the loaner. If you are thinking about getting a payday loan, make sure that you are aware that the interests are usually incredibly high and that each time that the loaner checks your bank account, you will be paying the Returned Item Fee which will cost you $34. It can be fairly difficult to pay off a payday loan precisely because of this fee, which keeps increasing it. However, if you are determined to get a payday loan, of course you can, just like sure that you have thought about the possible outcomes.
Why People Get It?
People get payday loans because it is easy to get them. It’s easy to get them because they are not particularly affordable for good for the people who are getting the loan, and are particularly good for the banks, because it manages to get them the most money. In addition to that, reasons for getting the payday loan differ from person to person. It is not easy to say way someone as determined to get a payday loan, even though they are aware of all the disadvantages that a payday loan implies.
Why Should You Avoid It?
As it has been previously mentioned, it’s in your best interests to avoid entirely getting a payday loan. Namely, this is used to high interest rates and the Returned Item Fee, which can make it rather difficult to play of payday loan. This is precisely why, the best strategy to deal with the payday loan is to avoid entirely getting one. In fact, there are numerous financial solutions to each problem, and you should not instantly reach out for potentially the worst one.
How To Deal With A Payday Loan
If you have an existing payday loan that you don’t know how to deal with, perhaps it would have been for the best that you hire a professional. Professionals will make it easier for you to play off a payday loan. Since they can make your Returned Item Fee smaller and they can plan out how to return the loan. Still, the best way to deal with a payday loan, works from hiring a professional, is to carefully think through whether you need a payday long before you get one and the strategy of how you plan to return it.