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Learn about mortgage home loans and rates.
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Credit Card Repayments Drop Slightly in 2011
Posted on February 7th, 2012 No comments
Credit Card Repayments Drop Slightly in 2011Fort Lauderdale (PRWEB) January 30, 2012
As reported earlier by A New Horizon Credit Counseling Services, credit card usage by consumers has seen an increase in 2011 and is poised to continue to rise for 2012, but the non- profit agency that assists consumers in repaying their debt through a combination of budgeting, credit counseling, financial education and a structured debt management plan notes that repayment of the new revolving credit balances is slipping. A New Horizon Credit Counseling Services is a nonprofit credit counseling organization that has been helping consumers since 1978.
According to First Data, which processes credit card transactions for more than four million merchants, credit card purchases increased to 8.2%, 9% and 10.6% respectively in the first, second and third quarter of 2011 respectively.
However, Steven Stark, COO for A New Horizon Credit Counseling said, “In November, revolving credit, the balance consumers maintain on their credit cards after making their payments, has risen surprisingly, which can only mean that debtors are not paying their debt as quickly as they did after the recent financial crisis”.
Moody’s Investors Service reported that the three-month average repayment rate of 21.7% in August 2011 was at a 12-year high, but that rate has since fallen to 20.9% in November and, at a .8% reduction, was the steepest second-half drop since 2007.
Stark said. “When you consider this in combination with recent Federal Reserve data indicating a seasonally adjusted annual 8.5% jump in credit card debt in November, the fastest pace since 2008, it raises concern, which we pass along to, not only to our clients, but to the public during our community financial literacy outreach events.”
Repayment rates are still well above those that consumers made during the mortgage boom days, when it was a common practise to borrow on the equity in the family home to repay for credit card purchases. The six largest credit card issuers have each reported higher repayment rates for the last three years. This is encouraging because it reflects that many consumers are still concerned astir the fragile economy and continue to work hard at reducing their debt.
For more information about their programs, contact 1-800-556-1548. They tinned also be found on the web at http://www.anewhorizon.org, or reached via email at csmanager(at)anewhorizon(dot)org
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Home Loan Interest Rates – What Are The Key Features Of Fixed Rate And ARM’s?
Posted on February 16th, 2009 No comments
Dean Shainin asked:
When you’re choosing a home loan, there are two big decisions you need to make, namely whether to take a fixed interest rate or an adjustable interest rate mortgage.
It is important for you to be aware of what these different type of home loan interest rates encompass and also know which one would be suitable to your needs and circumstances.
Fixed-Rate Mortgage
1. A fixed-rate mortgage is a mortgage with an interest rate that is fixed for the life of the loan and the debt is amortized, or paid in equal monthly installments for the entire amortization period, be it 30 years, 15 years, or 20 years.
2. What are the advantages for a fixed-rate mortgage? The main advantage is that you know precisely how much each repayment will be over the long term. Even if market interest rate rise, you can lock in lower rates.
3. This type of a loan is suitable for someone in not keen on movements in home loan interest rates, and who does not want to constantly review the performance of market interest rates.
4. A fixed-rate mortgage is also suitable for people with a fixed income, for those who do not want ‘surprises’ in the form of sudden changes in their monthly repayments. With this type of a loan, you have certainty that as the years go by, your payment will remain the same, and you will pay exactly the same amount until you finish paying your mortgage. If you are the sort of person who does not like uncertainty as far as future interest rate increases are concerned, then this is your loan.
Adjustable Rate Mortgage
1. An adjustable-rate mortgage (ARM) is one where lenders lift or lower the interest rate as interest rates in the wider market change, meaning that your repayments may go up or down. The home loan interest rates are adjusted periodically to keep it in line with changing market rates.
2. What are the advantages for an ARM? This type of a loan has a lower start interest rate, and it is relatively easy to qualify. In addition, one can also be able to predict the direction of the rates in advance, but not always. From the lenders or bankers point of view, this loan type is better because the loan stays close to their cost of funds, thus enabling them to match their assets to their liabilities.
3. A mortgage with an adjustable rate is suitable for people who are good planners and who have alternative sources of funds or disposable assets. In order to manage an adjustable-rate mortgage properly, one need very good cash-flow management skill. This loan would also be good if you anticipate windfall profits that will allow you to reduce the principle substantially, thereby lowering your monthly debt. The preliminary payments for this type of a home loan tend to lower, as lenders offer lower initial rates to attract potential home buyers into the deal.
4. With an ARM, you can qualify for a higher loan amount. So if you expect some career advancements and subsequent salary increase, then this type of a mortgage rate will be suitable for you. If the interest rates decline, your repayments are lowered, and this may be a good ‘bonus’ to get. With good planning, that “bonus” should let you to handle the increases in home loan interest rates comfortably, or to add to your payment amount to reduce the principle balance of your loan.
It is important that you are fully aware of what these different types of mortgage interest rate imply, the advantages and disadvantages involved; so that you can decide which one is the best for you.
ALTON