Whole Life Insurance - A Short Explanation

Whole life insurance policies are permanent policies. This means that the whole life insurance policy must be paid on throughout your lifetime. A term policy is different because it is purchased for a set amount of time and when that term is over, the policy has to be renewed with higher premiums or turned into a permanent policy. With whole life, there is no renewal or conversion involved.

While your whole life policy is in force — that is paid for and active — your premiums are locked in at one fixed price. This does not change. The amount you pay in to a whole life insurance policy builds cash value. This means that you make money on your policy. Depending on your choice, dividends may be sent to you directly or they can be applied to lower your monthly premiums. The money you make on a whole life insurance policy is exempt from taxes and will not be counted as income on your yearly income tax.

Whole life insurance gives you the right to withdraw money from the policy while you are alive. You can borrow money against the face value of your policy. Of course, doing either of these will reduce the benefits to your beneficiaries if you do not replace the money before your death.

Flexibility is not part of a whole life insurance policy. The insurance company is in charge of investments; and the face value and premiums cannot be altered by your authorization. You do not have the option of lowering monthly premiums or increasing the face value of such a policy.

If you would rather not be involved with choosing investments for any reason and are fine with the original value of your whole life insurance policy, then this is the type of policy you will want to choose. You will receive modest dividends and your loved ones will be taken care upon your death with a whole life insurance policy.

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Debt Consolidation - How and When to Use it to Settle Debt

If you are struggling with debt, the very first thing you must do is stop using your credit cards. Slice them up and throw them away. Taking on more debt is not an option until you have taken care of your debt problem. Pay off the smallest debts while paying minimum payments on your bigger debt, then start putting more into the larger debts. If you are still struggling, look for help through debt consolidation.

Be cautious when choosing debt consolidation. There are a variety of ways to consolidate debt so be sure to choose the one that suits your needs. If you are a homeowner and have enough equity in your home to cover your debts, look into a home equity loan that has a lower interest rate than what you are currently paying.

If a home equity loan is not an option, start looking into other debt consolidation companies. A good consolidation company can talk to creditors and be successful at lowering interest rates and getting some of them to settle debt for a lower amount. They will either pay off the rest of your debt and then charge you one lower monthly payment plus a fee for their service or they will be the “go-between” that collects one payment from you and divides the money up amongst your creditors. The one payment includes their fee in this case.

To find a reputable debt consolidation company, use the internet to find consumer reports. The Better Business Bureau’s online site may have information on the companies you are considering. Read all the reviews and talk to other people who have used the company. Then, call the company and ask about their services. Make sure to ask them for detailed information on fees you will owe them and exactly which services they offer. A good company will often offer credit counseling. This kind of counseling can not only help you get out of debt but can help to keep you out of debt.

The last alternative to mounding debt is bankruptcy. Because of what this does to your credit report, you should exhaust every other option before going that route. If you cannot do it on your own, an honest debt consolidation firm may be able to help you avoid the consequences of bankruptcy.

Why We Should Call it a Mortgage and Not a Loan!

The most important thing you must realize about a mortgage is that what you believe it to be is actually wrong. They are not for instance a loan, even though the vast majority of people believe they are and often refer to them as a mortgage home loan.

The terms mortgagee (the financier) and mortgagor (buyer), are part of a legal contract (mortgage) which uses the property as security on the debt. More accurately, it is a document that protects your lender’s interest with your property itself and a legal agreement you have provided to a lender.

The mortgage has made it possible for people and companies to buy properties with only a small percentage of the purchase price as a deposit. The following information will give a more rounded understanding of how the whole process operates.

Unfortunately it is our own common use of word like Borrower and Lender that has mislead people into thinking a mortgage is a loan when they should be referred to as Mortgagor and Mortgagee respectively. The security the mortgagee uses is called a lien which is a legal term that stays in force until all monies are repaid.

The property you are buying does in fact become collateral for the finance that has been sought to pay for it and is the protection a mortgagee needs if he is going to continue financing house purchases. Records of this are normally kept in the public records section of the county courthouse or a similar establishment.

Ownership of the property is then yours and cannot be transferred to anyone else until you have paid off the amount required to reverse the lien. So how this works is that the mortgagor (you) owns the property completely even though the mortgagee has possession of the mortgage but not the title.

The mortgage is a surety for the benefit of the mortgagee, so should the debt remain unpaid then the amount owed can be reclaimed by the sale of the property. This process has many names and in the United States it is referred to as foreclosure but this does need to go through the courts.

To ensure that everything is legal and above board, the court will place a ruling on the disposal in a process called judicial foreclosure. I hope this brief introduction has further helped your understanding of an important but often overlooked area of personal finance.

The Hidden Cost Of Increasing Average American Credit Card Debt

On a seemingly daily basis, the amount of debt that the average American owes on their credit cards is increasing. The entire financial world, not just the credit card market, is being affected by this trend. Mortgages, school loans, car loans, bankruptcies, and foreclosures are all affected by the average rate of credit card debt.

Credit card debt consolidation and other even more extreme methods that people turn to in order to eliminate their credit card debt have become more popular as the average credit card debt has gone up. Consider the actual statistics on credit card debt in America to see if the situation is really all that serious.

The Statistics on Average American Credit Card Debt

Here are some of the statistics. The average American credit card is carrying a balance right now of about $1,000. If the cardholder pays nothing more than their minimum two percent payment on that balance each month, they will have finally paid off the entire balance after twenty two long years. During that time, the interest charged to the account will reach $2,300.

On a national level, the average American household currently owes $8,500 in credit card debt. Individuals who have at least one credit card currently average more than $9,000 in debt. These statistics indicate that, since the year 1990, the average amount of debt that Americans owe on their credit cards has increased by 300%.

What about statistics on just interest rates? The average American who has a credit card pays over $1,200 annually in nothing more than interest charges.

That is more than most mortgage payments and rents for a single month. Worried about making the mortgage, this may give you pause for thought.

On average, the interest rate for credit cards is 18.9% and it is going up. Some cards have introduction rates of as high as 23% and as much as 30% for those with damaged credit. 50% of Americans would never tell a friend how much they own in credit card debt, 23% have maxed their cards, 13% are late 30 days on payments within the last 12 months, and 11% admit their cards when into collections.

?How to Calculate the Home Equity Loan Rate in Hawaii

In most cases, homeowners who have decided that they would like to refinance their homes have a very difficult time figuring out just what the home equity loan rate is in their state. The shear number of lending agencies that now exist do not make things any easier. This article will help you learn both the correct and incorrect way to find the home equity loan rate in Hawaii.

By knowing exactly where to look to find the current home equity loan rate in your state, you can prevent signing papers for a loan form a dishonest lender who would charge you twice the current rate. Oddly enough, the first place you should look to find the current Hawaii home equity loan rate is online

Once you know how to find your state’s current home equity loan rate, you can protect yourself from lending agencies that might try to trick you into refinancing your home at an extremely high rate. The place to start in your search for Hawaii’s home equity loan rate is the Internet.

One of the first places anyone looking to find the current Hawaii home equity loan rate should look is online, on the website of the attorney general’s office in your state. The attorney general’s office is required to keep information regarding all interest rates currently being charged in their state.

This information is then made available to the general public, so that consumers can compare the different interest rates being charged by each lender. If you’re looking for the current Hawaii home equity loan rates, then this is the best place to start. By checking the data available on the attorney general’s website, you can be sure that you are not being overcharged by the lenders either in your area or online.

The Consumer Protection Agency

After you have investigated the attorney general’s website, your search for Hawaii’s home equity loan rate continues with the Consumer Protection Agency. This agency keeps track of which lenders are already known to take advantage of borrowers. They also report the current interest rates being charged in the entire United States.

Once you have chosen what you believe to be a suitable lender, check them out in the Consumer Protection Agency database. This will help you feel more secure during the refinancing process, since you will know that, instead of being taken advantage of by a dishonest lender, you are going to be charged the correct rate of interest for your home equity loan.

Investing in Real Estate with a Solok

The Solo 401(k) for investing in real estate but it is perhaps the best kept secret.

“It is a powerful tool that most people don’t know about but should. There are at least four distinct advantages over an IRA (Individual Retirement Account),” says Jeff Moormeier co-founder of IRA Association of America, an alternative investment educational institution.

Moormeier teaches a program to real estate agents, CPAs, and investors on investing using the Solo 401(k). He says the advantages make this method of investing superior to a standard IRA.

He lists the following as the top reasons to set up a Solo 401(k) plan.

You can get money into a Solo 401(k) plan faster than IRA or SEP/IRA. You can use mortgage financing as leverage without triggering Unrelated Business Taxable Income. You can defer income into a Tax Free Roth account, inside the Solo 401(k). Getting money into a Solo 401(k) plan faster is a huge benefit. Let’s use a scenario to show the actual numbers: You have $100,000 of earned income, and you operate your business as a corporation with no employees.

“The maximum profit-sharing plan is 25% of earned income, which amounts to $25,000. Plus the maximum salary deferral is $15,000 and if you are over the age of 50 you may defer an extra $5,000. This is called a catch-up provision. In this example the total new money deposited into the Solo 401(k) is $45,000,” explains Moormeier.

“In the more common SEP account, the maximum contribution on the same income is $25,000. There is no employee deferral or catch-up provision in a SEP. The difference is $20,000 per year of additional money that may be added to a Solo 401(k) vs. SEP,” says Moormeier.

Many people are used to contributing to an IRA or a 401(k) plan, but not as many understand that they can actually have a 401(k) that can buy investment real estate with the money. In addition, you are able to borrow on a non-recourse basis to finance the purchase, thereby creating leverage in your retirement account. If you have leveraged property in an IRA there is a tax known as Unrelated Business Taxable Income. When the same transaction transpires in a Solo 401(k) this tax doesn’t apply.

“Now, what I am about to tell you, in my opinion, is far and away the greatest tax benefit the government has ever given us — as of January or February of this year the $15,000 salary deferral and the $5,000 catch-up provision can now go into a Roth account inside of this 401(k) plan and grow tax free. Tax free verses tax deferred growth is a monumental benefit to the Solo 401(k)” explains Moormeier.

He says the current Roth contributions have income limits.

“In other words if you make too much money you are unable to contribute to a Roth IRA. As of now regardless of your income, you are able to contribute to a Roth inside a Solo 401(k),” says Moormeier.

The IRA Association of America, online at iraaa.org, is where you can get the help you need to start a Solo 401(k) plan. Moormeier and co-founder Jeff Nabers have joined together to help people understand and make use of Solo 401(k) investing.

“We’ve created a company that helps you think. Quite frankly, there just aren’t a lot of tools out there to help people keep it all straight,” says Moormeier.

“We now offer a turnkey 401(k) package. We handle everything including determining eligibility, establishing the administration paperwork, opening a bank account, and handling your rollovers,” says Jeff Nabers, founder of IRAAA.

This 401(k) package will also soon be available directly through the many local IRAAA branches opening in early 2007. Remember, if you plan to have the Solo 401(k) plan help you by reducing your taxable income, then you will need to establish your plan by December 31 in order to claim a 2006 tax deduction. In 2006, if you are over the age of 50 you can contribute up to $49,000 for each participant, and jointly you and your spouse can deduct up to $98,000. If you are under the age of 50 you can contribute up to $44,000 for each participant, and jointly you and your spouse can deduct up to $88,000.

———————— Phoebe is writer, speaker, and author. She is the Director of Business Development for Quality Service Certification and a trainer in customer service for the real estate industry. She is a Realtor with The Guiltinan Group, a division of Prudential California Realty.

Her articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, and Rancho Santa Fe Review in San Diego. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. She is also the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success available at Barnes

What a Home Equity Calculator Can Tell You

The Internet has become literally filled with lending agencies and banks offering all kinds of different loans. This has led to the appearance of countless online tools that claim to be able to help you figure out exactly what to borrow, how much they will have to pay, and any other possible detail associated with getting a loan.

Despite this array of online tools, many people do not know they exist or at least do not know how to take full advantage of them. Home equity calculators are an example of one such tool.

A home equity calculator is an extremely valuable tool for anyone who wants to learn how much equity they have accrued in their home, how much they want to borrow, and how much their payments will be once they have added the balance of their home equity loan to their current mortgage.

Learning to use a home equity calculator is an essential part of making a good decision about getting a home equity loan. You should do so right away if you are seriously considering take out such a loan. It may not seem like the powerful tool that it is at first, but you will soon come to know just how tremendously a home equity calculator can help you when it comes to your mortgage.

Calculating Your Worth

The most important thing that a home equity calculator can tell you, is just how much equity you have built up in your home that you can borrow against. This is calculated by subtracting the amount of your original mortgage that you have left to pay, from the current appraised market value of your home. Most lenders will allow you to borrow up to 85% of the difference, depending on your credit history.

The handiest home equity calculator will offer you the ability to calculate this amount even if you haven’t had a recent appraisal done on your home, by offering you options to choose from that will estimate your home’s current value. These options will take into account your geographical location, the square footage of your home, as well as the age of your home.

You feed these statistics into the home equity calculator, and it will give you an approximate value of your home based on the current market average.

Mortgage Approvals Hit All Time Low

The amount of new mortgages approved for people looking to buy a home in the UK dropped to just 33,000 in July, adding to fears of an imminent recession.

Figures from the Bank of England (BoE) reveal that the volume of mortgage approvals was reduced by 71 per cent year-on-year to the lowest recorded, as lenders opted not to lend to buyers. The credit crunch has forced mortgage lenders to take stock of the money that they are lending and the new BoE figures are seen by many analysts as another blow for the economy.

Adrian Coles of the Building Societies Association told the BBC: “Activity in the housing market continues to be depressed and the approvals figures suggest this is likely to continue for some time. Recent falls in property values have been widely publicised, reducing potential buyers’ confidence and keeping them out of the market.”

The collapse by specialist lenders other than banks and building societies, such as those specialising in sub-prime mortgages, is also illustrated by the BoE figures. In July 2007, such lenders gave out 32,000 mortgages for house purchase; in July 2008 they lent just 2,000. Meanwhile, building societies across the UK approved just 7,000 homeowner loans, compared to 24,000 by the major banks.

The Bank also said that mortgage lending rose by 3.231 billion pounds in July, more than predicted yet only 33 per cent of the increase seen in July 2007.

However, no matter the decline, building societies have seen that their inflow of cash from savers has continued its growth, with savings accounts in building societies having a total of 1.435 billion pounds in July, compared to 723 million pounds 12 months previously.

Only last week, the latest research from Nationwide found that UK house prices saw an annual double-digit fall for the first time since 1990 - with prices 10.5 per cent lower in August than a year ago. The new BoE figures could increase the pressure on the Bank to cut interest rates in order to help the housing market and the wider economy. However, when the monetary policy committee meets this Thursday (September 4th), it is likely to maintain interest rates on hold at five per cent for the time being.

Howard Archer, an economist at Global Insight, told Reuters: “Although we predict the BoE to cut interest rates in the next quarter, we believe it is unlikely to be chopped before November when there is likely to be more proof that the deepening economic slowdown and increased unemployment are diluting underlying inflationary pressures.”

In August, the BoE chose to maintain the base rate of interest at five per cent for the fifth consecutive month, after a 0.25 per cent cut in April. Its decision meant that consumers’ abilities to handle other spending costs - in areas such as personal loans, credit cards and transport costs - did not come under further pressure.

Forex Trading Software - The Expert Advisor

The Expert Advisor is a very sophisticated trading software tool. Each one is built upon a specific set of rules, sits on your trading platform and executes your trades. Actually, it is a robot.

The majority of forex traders fail as a result of the human emotions of fear and greed. When trading with an Expert Advisor - a purely logical tool - the emotions are removed from the trading decisions.

Many times, in an effort to grab that last pip of profit, a trader will hold on to a trade even when logic dictates an exit. On the other hand, a trade is often exited prematurely due to fear, and profits are left on the table. The Expert Advisor trades with a plan, regardless of outside influences, and does this 24 hours a day when the market is open.

The Expert Advisor watches the market for you and will execute trades based upon predefined parameters. Unlike a human, it is also capable of monitoring indicators, support and resistance levels, and many other factors in multiple timeframes and making immediate decisions.

There are many Expert Advisors on the market today, and the prices run from OK to ouch. One must be sure to do some research and get answers to questions such as; are they timeframe or currency specific? Do they follow trends or attempt to predict them? How do they handle risk management? Do they recommend a 2-4% risk or something lower, such as 1-3%? Do they support stop losses? How do they handle take profit levels? Do they ride downturns and only exit trades once they’re in profit?

There are alot of questions to be answered prior to purchasing your Expert Advisor. You need to be sure that it will run on your trading platform, and that you can run multiple EA’s on one account. If you have a mini account, be sure that your EA of choice isn’t only for regular accounts.

Prior to installing an EA on your trading platform, there’s one more thing to think about. What happens if your computer dies, or the power in your area goes out? Remember that the EA handles your trade, and resides on your computer, but open trades are in the hands of your broker. In this case, you would have an unmanaged open trade.

If you’re in an area that has frequent power failures, you might want to look into opening a VPS (virtual private server) account. If you run your trading platform on a virtual desktop, you don’t have to worry about power outages or crashing computers. Your trading platform will continue to run wtihout you, and it can be accessed from any location.

Expert Advisors are definitely helpful tools. Do your homework and conduct some in-depth research before making your purchase and your experience should be a good one.

Owning A Business Credit Card

If you are a business owner than you know well that a business credit card is not an optional thing; it is nothing less than a requirement if you want to be able to do business. Not every vendor or supplier is willing to extend you a line of credit or offer a revolving account to your business. When you need to order supplies online for your business or make the logistical arrangements for business trips (like renting a car, for instance) it is essential that you have a business credit card for your company.

How does one go about obtaining a business credit card? There are a few different ways that you can do this - the most common is to get a business credit card through the bank which your company does their banking. In many cases, they will reward your customer loyalty by extending you a favorable interest rate compared to other credit card issuers. You can also look online; there are quite a few websites which let you compare the offerings from different credit card providers in one place. Of course, as a business owner you likely receive many offers in the mail as well - so a business credit card provider could be waiting in your mailbox.

Before applying for a credit card for your business from any provider, you should first check the fees and the interest rates on offer from each company. Some companies will charge you annual rates to use their card - these can be very expensive. Interest rates are equally, if not more important; a lot of providers will charge a low introductory interest rate and then raise it later. You should be aware of the length of this introductory period and know what the rates will be after this introductory rate has expired.

Also check fees like late fees, over the credit limit fees, and if you are an international traveler then check on how much fees will impact your overseas purchases. Another thing you may want to consider is if there are any reward programs with the credit card you are considering. This can be very helpful as many business credit cards offer products that can actually be helpful to your company.

For example many reward programs offer a cash back incentive in which they give you a certain percentage of your annual purchases back to you at the end of the year. Others allow you to accumulate air miles on your purchases and this can be very helpful to those that regularly travel. Many companies offer several different types of reward programs to business owners so find one that actually gives something back to your company.

As a business owner, you musty also be aware that you will personally be liable for the business credit card and any costs associated with this card. You will have to provide your own information along with that of your business when applying for the card - income, social security number and so on. This is basically co-signing for your business in the event that your business cannot cover the expenses of the credit card on its own. However, if you have a good credit history, being approved for a business credit card should be no problem.