Personal Finance

Mumbai, May 9 (PTI) Bank depositors, who have locked in money for tenure of less than one year, could be the major losers and earn negative interest rate on their fixed deposits if high inflation persists over a longer time.
A study of interest rates, offered by different public sector banks, revealed that all of them are currently offering six per cent to 7.50 per cent interest on deposits for duration of six months to one year. Whereas, inflation has spiralled to 7.61 per cent as of April 26.

Indian insurance companies clocked slower growth in ULIP - Unit Linked Insurance Policies in 2007-2008. An article in Hindu by Radhika Menon shows that the contribution of unit linked plans has fallen in terms of premium as well as policies for LIC and ICICI prudential. LIC's growth fell from 118 percent to 5.8 percent while ICICI prudential's growth fell from 99 to 58 percent.

When you are considering taking up a mortgage plan, you just might be thinking of getting an Adjustable Rate Mortgage (ARM) or an Interest-Only Loan. This is because these two are the popular among mortgage plans these days. But there are considerations to remember when you are choosing between the two of these popular choices. To choose between the two of them, you would need to know certain aspects of these types of mortgage plans as thoroughly as possible.

PMI stands for Private Mortgage Insurance and is required by lenders when the borrower puts less than 20% of the principal as down payemtn. Simply put, PMI is the insurance you are buying to help your lender recoup their full investmnet in case you default. PMI only benefits the lender and not the borrower in all cases.

The biggest gotcha to be aware of is the fact that the lender doesnt automatically cancel the PMI even if your LTV ( Loan to Value ) falls below 80%. New laws now require lenders to stop this at 75% LTV, but thats 5% way past the LTV required. So watch out.

Refinancing a mortgage is the act of taking out another mortgage plan in order to pay off the present mortgage plan that a person has on his home. This may sound a bit complicated, but it actually is not. In fact, refinancing your mortgage is indeed a reasonable move for a lot of people. If you know the ropes, you can even end up saving thousands of dollars more than you would by just continuing your current mortgage.

Start positively! Planning to buy a home means you have graduated in life. After that tough search if you have found a house perfect for your family, with a perfect neighbourhood and in close vicinity of good school you might opt to send in your teen son etc., the happiness you derive is immense. Now before going any further you need to know one important thing.

How much can you afford ?

Adjustable Rate Mortgages are those that have an interest rate which simply with time, often once in 6 or 12 months' time period. Using a financial index and a margin the rate of interest is adjusted at these intervals. This financial index is used to check the general interest rate trends.
Advantages of Adjustable Rate Mortgages

Money Saver

Mortgage is a legal device used in securing the property. However, it is also used to refer to the debt secured by the mortgage. They are widely used while purchasing realties where the individual buys a property without paying everything upfront. A person seeking money puts the property as security against the loan/debt for the rest of the value of the property.

It is a fact that there is nothing free in the world of credit. A borrower should always remember that free loans are non-existent and even if a company or agency claims one it is going to be with some hidden fees. The lender deserves to be paid for the work he/she does no doubt; however, a thorough understanding of the concept of origination points and discount should keep the borrower from paying too much for your mortgage loan. So stay warned, though. The term Points offer several meanings in the credit world.

If you have got a plan to purchase a home or renovate your existing one, you will be looking for a mortgage. There are many types of mortgages available in the market. Check if fixed rate mortgage is what you are looking for. Fixed Rate Mortgage is a kind of mortgage where in the borrower always pays the same interest rate on his mortgage for a committed time period of the loan and is not affected by the general interest rate.

Mortgage (pronounced mor-gij) is a word derived from Latin where mortus means deed and gage means pledge. That’s how mortgage is a secured loan. So like all other loans it has to be repaid with interest as per mutually decided terms. These terms specify the amount of payments, the frequency of payment, and the duration of repayment. Payments are usually made monthly.

When you go to a mortgage lender expect these questions to be fired at you and be prepared to answer them confidently. Questions like the purpose of the mortgage, employment history, credit check etc. will come up and you should be ready to tackle them.

When a mortgage lender comes to offering their service, remember that ball is in your court and fire him with all doubts even the ones that may sound silly to you because you will be paying for the mortgage in the coming years. So stay informed of things and in control of the things. You should know your next step before you put the first one. So when you meet the right mortgage lender, you may fire him with the questions in these areas.
How much is the interest rate offered with the mortgage?

Each of us does come to a point in our lives where we need to supplement our existing finances for a specific need. Particularly so when we plan to buy a new home and we require additional finances. Since buying a new home is a long-term financial commitment one needs to carefully plan it. Several mortgage programs ask for some down payment. To put down an initial amount say about 20% of the sale price of the home is very difficult for the salaried class people although buying a house is a great financial bet in today circumstances with several tax incentives offered for the house owners.

Buying a dream home is a daunting task for majority of people, especially so for those who have limited finance options. But thanks to different mortgage programs, there is definitely one for everyone.

Closing is the last part of loan seeking and it is a time when the lender formally makes a borrower formally eligible for the loan sought after verifying and signing documents submitted by the seeker.

Credit Report and Credit Score of an individual will determine if he is credit worthy or not. The mortgage lenders or loan lenders first check a loan seeker's credit report and score to judge if a person is worthy taking a loan or not. This credit report and score are given on request by the credit bureau.

Mortgage lenders have a responsibility to give a loan seeker what is called a good faith estimate of the closing costs. This estimate is a must and one must thank the Federal Real Estate Settlement Procedures, Act for this.

Acceleration clause : A clause in the mortgage deed that allows the mortgagee to demand payment of the outstanding loan balance under certain circumstances such as where the mortgager has transferred title to another individual without informing the lender.

Amortization : A scheme of repayment where the money paid consists of two portions, one toward the interest and the other toward part of the principal.

Appraised value : An opinion of a property's fair market value, based on an appraiser's knowledge, experience, and analysis of the property.

Cash back credit cards are considered to be lucrative credit cards as they provide some monetary benefit to the owners of these credit cards. Cash Back Credit Cards As soon as a Cash back credit card owner makes a purchase of goods and/or services, he is entitled to a certain predefined ratio of the cash spent back to his account.