Sarah Palin steps down as Alaska governor

Sarah Palin stepped down Sunday as Alaska governor to write a book and build a right-of-center coalition, but she left her long-term political plans unclear and refused to address speculation she would seek a 2012 presidential bid.

In a fiery campaign-style speech, Palin said she was stepping down to take her political battles to a larger if unspecified stage and avoid an unproductive, lame duck status.

"With this decision, now, I will be able to fight even harder for you, for what is right, and for truth. And I have never felt that you need a title to do that," Palin said to raucous applause from about 5,000 people gathered at Pioneer Park in Fairbanks.

Her first order of business as a private citizen is to speak Aug. 8 at the Ronald Reagan Presidential Library in California. She also wants to campaign for political candidates from coast to coast, and continue to speak her mind on the social networking site Twitter, one of her favorite venues to reach out to supporters.

Free speech was a theme of her farewell speech at a crowded picnic in Fairbanks, as the outgoing governor scolded "some seemingly hell bent on tearing down our nation" and warned Americans to "be wary of accepting government largess. It doesn't come free."

She also took aim at the media, saying her replacement, Lt. Gov. Sean Parnell, "has a very nice family too, so leave his kids alone!"

And she told the media: "How about, in honor of the American soldier, you quit makin' things up?"

She didn't elaborate, but Palin said when she announced her resignation July 3 that she was tired of the media focus on her family and felt she had been unfairly treated by reporters and bloggers.

Friend and foe alike have speculated that Palin may host a radio or TV show, launch a lucrative speaking career or seek higher office in Washington.

Palin hasn't ruled out any of those options, and her political action committee, SarahPAC, has raised more than $1 million, said Meghan Stapleton, a spokeswoman for the committee and the Palin family.

Stapleton said Palin is still deciding what her future will be.

"I cannot express enough there is no plan after July 26. There is absolutely no plan," she told The Associated Press.

Palin's surprise announcement she was stepping down 17 months before the end of her first term pushed her favorability rating down to 40 percent, according to a Washington Post-ABC poll. Fifty-three percent of those polled gave her an unfavorable rating.

Last summer, almost six in 10 Americans viewed her favorably. The latest poll was taken July 15-18.

Nearly 20 ethics complaints had been filed against Palin, and the outgoing governor cited the resulting investigation's financial toll — both on her and the state — for stepping down. An independent investigator looking into the complaints found evidence she may have violated ethics laws by trading on her position as she sought money for lawyer fees, according to a report obtained recently by The Associated Press.

Parnell, 46, of Anchorage, was sworn in Sunday as the state's new governor.

"I'm firmly convinced that Alaska's greatest days are ahead," Parnell said in pledging to continue Palin's policies, which he said "put Alaska first."

Palin received a warm welcome Sunday, both during her speech and as she served food at the annual Governor's Picnic.

Among those present was Donna Michaels, 57, of Fairbanks, who wore a red T-shirt that said: "Palintologist."

The T-shirt defined a Palintologist as "someone who studies Palin and shares her conservative values, Maverick attitude and American style."

Michaels also held a poster board sign showing the front page of the Fairbanks Daily News-Miner when Palin announced she would resign. Michaels altered the banner headline "Palin steps down," replacing the last word with "up."

"She's really not stepping down. She's stepping up to do something bigger and better," said Michaels, who attended the picnic with her daughter and two granddaughters, one of whom who wore Sarah Palin-style eyeglasses.

Larry Landry, 51, of Fairbanks held up a red, white and blue sign that that read, "Quitting: the new American value." The other side read: "Thanks for the laughs."

Landry, a registered independent, said he respected Palin when she ran for governor in 2006, but he felt she changed during last year's presidential campaign.

"She turned into a vicious vixen," he said. "She descended into ugly, divisive politics."

Alaska's first female governor arrived at the state Capitol in December 2006 on an ethics reform platform after defeating two former governors in the primary and general elections. Her prior political experience consisted of terms as Wasilla's mayor and councilwoman and a stint as head of the Alaska Oil and Gas Conservation Commission.

Unknown on the national stage until Republican John McCain tapped her as his running mate, Palin infused excitement into the Republican's presidential bid. But she also became the butt of talk-show jokes and Democratic criticism, especially after it was revealed that the Republican Party spent $150,000 or more on a designer wardrobe for Palin.

Former state House Speaker John Harris, a Republican with sometimes chilly relations with Palin, said he thinks Palin will run for president in 2012, although he has no inside information.

Stapleton said the answer will emerge in the coming weeks.

On Monday, "we'll sit down and say, 'OK, here are your options. How do you now want to effect that positive change for Alaska from outside the role as governor?'" Stapleton said.

Bernanke had to 'hold my nose' over bailouts

Federal Reserve Chairman Ben Bernanke said Sunday that he had to "hold my nose" over last year's taxpayer-financed bailouts of big financial companies but argued that the action had to be taken to avoid a major meltdown of the U.S. financial system and the broader economy.

Bernanke's comments came during a town-hall style meeting in Kansas City, Mo., where he was peppered with several questions about government decisions last year to rescue so-called "too big to fail companies" like insurance giant American International Group, whose collapse would have wreaked havoc on the global economy.

A small-business owner complained to Bernanke that such actions were "hard to swallow," saying he felt like small businesses -- also struggling to survive the recession and all the financial fallout -- were being shortchanged.

"Nothing made me more frustrated, more angry, than having to intervene" when companies were "taking wild bets," Bernanke said. But not acting would have had grave consequences for the economy, he added.

"I was not going to be the Federal Reserve chairman who presided over the second Great Depression," he said. "I had to hold my nose. ... I'm as disgusted as you are. ... I absolutely understand your frustration."

Public television's Jim Lehrer moderated the one-hour town hall meeting. It will air this week in three installments on PBS' "The NewsHour with Jim Lehrer."

At the height of the financial crisis last fall, Bernanke recalled spending nights on the sofa in his office. It was a "perfect storm," he said, where housing, credit and financial problems converged into a major crisis the likes of which haven't been seen since the 1930s. To deal with the crisis, Bernanke said he sometimes had to do things "outside the box."

The financial crisis underscores the need for Congress to enact legislation that will create a government mechanism for safely unwinding big financial companies, along the lines of the process used by the Federal Deposit Insurance Corp. to handle failing banks, Bernanke said.

When asked about the Fed's diligence in protecting consumers, Bernanke acknowledged that "we were late in addressing the subprime lending problem," referring to the risky mortgages and dubious lending practices that powered the housing boom and contributed to its crash. "We have to take some heat for that."

Still, Bernanke made the case -- as he did last week on Capitol Hill -- that consumer protection oversight should stay with the Fed. An Obama administration proposal would create a new consumer protection agency overseeing mortgage, credit cards and other financial products, stripping the Fed of some of its duties. Of setting up such a new agency, Bernanke seemed to soften his earlier stance, saying, "I'm neither opposed to it or in favor or it."

When Lehrer said some people think the Fed is the fourth branch of the government, Bernanke responded, "That's a tremendous exaggeration." He said the Fed's independence from political interference in setting interest rates to influence economic activity is crucial. "You get much better results" for the economy when this is the case, he said. "We're very, very sensitive to this issue."

Asked about President Obama's $787 billion stimulus package of tax cuts and increased government spending, Bernanke said most of the money will flow in 2010 so "it might be a little bit early" to judge its effectiveness. Although big budget deficits couldn't be avoided this year and next, given government efforts to help the economy, Bernanke urged Congress to develop a plan now to bring back "fiscal sanity."

On the economy, Bernanke repeated the Fed's forecast that unemployment will probably top 10 percent this year, even as the economy starts growing again in the second half of 2009. The jobless rate is now at a 26-year high of 9.5 percent. In a "few years" the economy will be back on track and "growing strong again," Bernanke said. "It will take some patience."

The Fed, he said, "has been putting the pedal to the metal" to turn the economy around.

Bernanke's appearance on the program is part of a broader campaign, unusual for a Fed chairman, to reach out to ordinary Americans. In March, Bernanke granted a rare TV interview, appearing on CBS' "60 Minutes."

His efforts to explain the Fed's actions to get the economy and financial markets back on firm footing comes as the clock ticks on Bernanke's term as Fed chief. His term expires early next year, and President Barack Obama has not said whether he will be reappointed.

The Fed chief, who took the helm on February 2006, has been on the front lines of efforts to battle the financial crisis and end the recession, the longest since World War II.

His aggressive and unconventional actions -- including supporting the bailout of AIG to the tune of more than $180 billion -- have been credited with averting a financial catastrophe last year but also have touched off anger from the public and lawmakers on Capitol Hill about helping financial companies that made reckless gambles.

PTC: A Total Cheat (Chapter 3: Scripts) | NEEDS TO KNOW

PTC: A Total Cheat (Chapter 3: Scripts) | NEEDS TO KNOW

Reverse mortgages can provide extra cash

Many people have seen TV ads featuring actor Robert Wagner encouraging senior citizens to consider reverse mortgages to provide extra dollars for their golden years.

In a regular mortgage, homeowners make payments to lenders. In a reverse mortgage, however, homeowners receive money from a lender and usually are not required to pay it back as long as they live in their homes, according to the Federal Trade Commission.

Reverse mortgage loans, based on home equity, are repaid when homeowners die, sell their homes or no longer live in the residences.

“Reverse mortgages can help homeowners who are house-rich but cash-poor stay in their homes and still meet their financial obligations,” a report from the FTC states.

SouthEast Arizona Governments Organization, headquartered in Bisbee, offers reverse mortgage counseling at no charge, said Julie Packer, the organization’s housing programs administrator. A SEAGO counselor will counsel homeowners at their residences. There is no need to travel to Bisbee for this service.

Packer said reverse mortgages are for senior citizens who have paid off or nearly paid off their regular mortgage.

“It’s not for everyone, though,” Packer said. “It’s kind of like home ownership. Home ownership is not for everyone.”

According to the FTC, reverse mortgage loan advances are not taxable and usually do not affect Social Security or Medicare benefits. Owners retain titles to their homes and are not required to make monthly repayments.

The loan must be repaid when the last surviving borrower dies, sells the home or no longer lives in the house as a principal residence.

There are three types of reverse mortgages: Single-purpose, which are offered by some state and local government agencies and nonprofit organizations; home equity conversion mortgages, known as HECM, which are federally insured, and proprietary reverse mortgages, which are private loans that are backed by the companies that develop them.

Single-purpose reverse mortgages generally have low costs, but they are not available everywhere, and they can be used for one purpose specified by the government or nonprofit lender.

Proprietary mortgages and HECMs tend to be more costly and are widely available — and carry higher upfront costs to homeowners.

In the HECM program, a borrower can live in a nursing home or other medical facility for up to 12 months before the loan becomes due and payable.

There are several features of a reverse mortgage to consider, including the following:

• Lenders generally charge origination fees and other closing costs for a reverse mortgage. Lenders may also charge servicing fees during the term of the mortgage. The lender generally sets these fees and costs.

• The amount owed on a reverse mortgage usually grows over time. Interest is charged on the outstanding balance each month and added to the amount owed.

• Reverse mortgages may have fixed or variable rates. Most have variable rates that will likely change.

• Reverse mortgages can use up all or some of the equity in your home, leaving fewer assets for you and your heirs. A “nonrecourse” clause in most reverse mortgages prevents either you or your estate from owing more than the value of your home when it is repaid.

• Owners retain titles to their homes and remain responsible for property taxes, insurance, utilities, fuel, maintenance and other expenses.

• Interest on reverse mortgages is not deductible on income tax returns until the loan is paid off in part or in full.

• For homeowners at least 62 years old, a reverse mortgage can be used to generate funds to prevent the foreclosure of a regular mortgage.

Packer said anyone considering a reverse mortgage should try to use a local lender or one of the larger, well-known banks, such as Bank of America or Wells Fargo.

She also said to make sure the appraiser is familiar with property values in Graham or Greenlee counties, and does the appraisal with local criteria in mind.

A Guide to Investing for College Students

Investing for beginners is easier than ever before. With access to the stock market as close as your keyboard, you're just clicks away from getting started. Just learn the basics and find the right online tools to help you, and you'll be on your way.

The first concept to get to know in beginner investing is compound interest. The same principles of interest that can keep you in debt when you're trying to manage your credit work to your advantage when you invest money. Simply put, it means that the interest you make on an investment is added to your original investment and then reinvested to make even more interest. It's not as complicated as it sounds.

Here's a simplified example. An original investment of $100 with a return rate of 10% that's compounded yearly would make $10 in interest in year one for a total balance of $110. In year two if that $110 achieves the same 10% yield, it would add an additional $11 to the total. Continue to let the money compound over the next 18 years at 10% annually and by the 20th year it would be $672.75. But let it continue to compound for 30 or 40 years and it would grow to $1,744.94 and $4,525.93 respectively. All that without adding any additional money. Wow!

If you've determined that investing is right for you, you should look for an online discount stock brokerage or other financial services company that allows you to open an account with a low minimum balance, or none at all. The company you choose should offer low maintenance and trade fees, while providing you with tracking and investment management tools so that you can easily keep an eye on your investments. But before you sign up, you should know some basic investment terms and products.

There are many other definitions and concepts that you should have a working knowledge of as a beginner investing for the first time. These include:

* 401K - A company-sponsored retirement plan that allows you to contribute pre-tax dollars. 401Ks shelter your interest earnings as you continue to work, so that you'll only be taxed when you retire and withdraw money. 401Ks help to reduce your taxable income each year, saving you money on federal, state and local income taxes
* Bond - When corporations and governments borrow money from investors they are given a bond. The borrower in this case agrees to pay the investor the price of the original 'loan' plus interest at a predetermined later date
* Capital gain/capital loss - The money made or lost from an investment
* Certificate of Deposit (CD) - Typically a bank-issued document that guarantees an investor a specific yield on an amount of money when 'lent' to the bank for a pre-determined period of time. CD terms range from a month to several years
* Diversification - Making investments in different types of funds to help distribute your risk. Some funds are diversified in themselves, and could for instance include stocks from biotech, telecommunications, banking, entertainment and food manufacturing companies
* Individual Retirement Account/IRA - A retirement account that provides tax-deferral or other tax benefits
* Interest - The amount paid by a borrowing party for use of a lender's money. With credit cards you are the borrower, with investments you are the lender
* Mutual fund - A financial product that is managed and marketed by an investment company and can be comprised of stocks, bonds, or other securities products. The investment company pools investor contributions to buy and sell stocks and bonds for the entire group
* SEC/Securities and Exchange Commission - The governmental regulation agency that was established to help protect investors and oversees participants and activities in the world of securities
* Securities - Any type of investment product like a stock, bond, note, etc.
* Stock - A certificate or share of ownership in a corporation
* Trader - One who buys and sells securities like bonds, stocks, etc.
* Yield - The return on an investment as a percentage

If you grasp these investing for beginners basics, you can be investing in no time. Sure growing your investments may take time, but the returns will be well worth the wait.

How to Save Money When You Have None

Learning how to save money when you have none may seem like an impossible task, but we Save is here to help.

Set Manageable Goals

The key to learning how to save money when you have none is to think small. If you're struggling to keep a roof over your head and food on the table, planning for retirement or saving for a child's college education probably seems like an impossible goal. Focus on finding more manageable ways to save money. For example:

* Set a goal of cutting $10 per week from your budget. This can be accomplished by taking the bus instead of driving to work, eliminating a trip to a fast food restaurant, clipping coupons, or checking out movies from the public library instead of going to the video store. Once a week, make a trip to the bank to deposit the $10 in your savings account.
* Empty the spare change from your pockets into a jar whenever you walk through the door. When the container is full, add it to your savings account.
* Have a garage sale, take old items into a consignment shop, or sell collectibles on eBay.
* Spend an afternoon collecting cans from the side of the road to return for the deposits.
* Look for ways to earn extra money to give yourself a bit of a financial cushion. Babysitting or doing yard work for people in your community is a great idea. LoveToKnow Business also has a number of suggestions in the article,Home Based Businesses for Under $ 100.

Ask for Help Learning How to Save Money When You Have None

If you're struggling, there's no shame in asking others for help. Don't let foolish pride keep you from making the most of a bad situation. You can always repay the favor after your financial situation improves.

If you're in need of food assistance, consider the following resources:

* Angel Food Ministry allows people in any income bracket to purchase boxes of deeply-discounted groceries once per month. The basic box contains enough food to feed a family of four for one week.
* Pregnant women in a low-income bracket and those with children under the age of five can get milk, juice, cereal, and other necessities through WIC. The program also offers nutrition advice, free dental screenings, and assistance with family planning needs.
* The Supplemental Nutrition Assistance Program allows people with low incomes to purchase the food they need. You do not need to be married or have a child to qualify.
* If you're really in a bind, community food pantries provide temporary assistance with groceries. In most cases, all you need to receive help is proof of your legal address.
* If you have children in school, they may be eligible for free or reduced-price meals. Some schools also have programs that allow kids to sign up for a bag of groceries to take home on the weekends.

Other forms of assistance for how to save money when you have none include:

* Medicaid provides medical insurance for low income individuals and families who fit into an eligibility group that is recognized by federal and state law.
* The State Children's Health Insurance Program (SCHIP)offers coverage for children in families that earn too much for Medicaid, but not enough for private insurance.
* The Find a Health Center site can help you locate a clinic with a sliding scale fee system if you are uninsured and don't qualify for Medicaid or SCHIP coverage.
* Wal-Mart's $4 prescription program can help you pay for some of the medications you need, regardless of your income. Many other stores also have similar programs.
* LIHEAP provides assistance with heating costs during the winter months.
* Toys for tots provides Christmas gifts for needy children.

Facebook seeks new finance chief as Yu leaves

Facebook said Tuesday that its finance chief has left and that it is seeking a successor with "public company experience," a move that will feed speculation that the social networking titan is preparing for an IPO.
Gideon Yu, who had served as chief financial officer since 2007, departed for undisclosed reasons.

Co-founder Mark Zuckerberg has repeatedly said that an IPO was possible for the privately held Palo Alto company in the future, but always cautioned that such a move was not imminent.

In any case, investor appetite for initial public offerings has evaporated because of the depressed economy. Only one U.S. company went through with an IPO in the first quarter, according to Renaissance Capital, while many more are waiting for the climate to improve.

Yu had previously served at Yahoo as treasurer and at YouTube, helping negotiate the sale of the video site to Google in 2006. He had also briefly worked at Sequoia Capital as a venture capitalist.

Facebook's recruitment of Yu was part of a broader effort to bring experienced hands into the company, including former Google executive Sheryl Sandberg as chief operating officer. Relative old-timers at the 5-year-old company have been leaving over the past year, including co-founder and lead engineer Dustin Moskovitz; Adam d'Agelo, the chief technology officer; and Matt Cohler, an early executive.

Facebook has continued its phenomenal growth and is approaching 200 million users globally. Although it has struggled at times to capitalize on its user base through online advertising, it has made significant progress, according to a person familiar with the matter.

Facebook has turned in five consecutive quarters of profits, under the accounting formula of EBITDA, or earnings before interest, taxes, depreciation and amortization, according to the source. Revenue is expected to increase at least 70 percent in 2009; the company is expected to be cash flow positive in 2010.

Venture capitalists have poured money into Facebook in several rounds of funding. In 2007, Microsoft bought a 1.6 percent stake for $240 million, which valued the site at $15 billion.

Many investors now call that valuation excessively high.

E-mail Verne Kopytoff at vkopytoff@sfchronicle.com.

Government Tax Foreclosure Properties

Investing in government tax foreclosure properties may be a lucrative investment. When a property owner fails to pay federal or state taxes, the government can place a tax lien on the property. This lien supersedes all other types of liens on the property so if the property owner does not repay the lien, the property is auctioned off.

How Tax Foreclosure Happens

Government tax foreclosure can occur whenever a property owner does not pay property taxes or income taxes. The Internal Revenue Service may place a lien on a home after failure to pay tax debt. When this happens, all creditors receive notification by the government that the lien is in place. This motion gives the IRS the right to all property - including the land, buildings and even an individual's car - as well as all accounts receivable in a business situation.

The tax lien can be removed from the property if the property owner satisfies his taxes due, which often includes fees and interest, or the IRS accepts a bond submitted by the property owner agreeing to pay the debt. When this fails to happen, the property enters foreclosure. Within a period of six months the property is seized and sold, liquidating it to pay the required taxes owed by the owner.

A similar situation happens when the property owner does not pay property taxes. The county or other government collecting property taxes place the tax lien. When the tax debt remains unpaid, the property is sold at local auction to repay the owner's debts.

Throughout this process the property owner receives several opportunities to become current on not only their tax debt, but also their mortgage payments or other liens on the property. To avoid foreclosure, these debts must be paid prior to the court ruling to sell the property. That ruling usually takes place up to 30 days prior to the auction of the property.
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Investing in Government Tax Foreclosure Properties

Purchasing government tax foreclosed properties is an option for investors. These properties are not often sold through standard procedures, but are auctioned off at local sales. Investors should do their homework to learn as much as they can about the property before investing in it.

* Be notified of properties entering government foreclosure. Watch local newspapers and court reports for notifications of foreclosures in the area.

* Arrange to view the property prior to the auction. This may be possible if the property owners have moved out.

* Be prepared to make a sizable down payment on auction day. A minimum of 10 percent down is often required to be paid either in cashier's check or through a letter stating funding availability.

* Know the market value of the property. Some investors work with real estate agents or research online to learn the value of the property prior to the auction to ensure they do not pay too much for it.

* Do not be outbid. Many auctions result in several bidders. In some cases, individuals are not permitted at the auction themselves. Rather, their real estate agent must handle the negotiation for them. Ensure your real estate agent is a HUD approved agent to ensure this is possible.

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Tips for Government Foreclosure Purchases

There are plenty of options available for those who wish to invest in government tax foreclosure properties. In many cases, these properties are highly valuable since the property is well cared for by the previous owners. In other cases, the property is in a state of neglect. For those hoping to buy an affordable home, these properties can be an ideal investment.
The following are resources for locating government foreclosures available throughout the country. Local and state governments may offer their own website or may mail out auction notices to those registered to receive them.

* HUD: The U.S. Department of Housing and Urban Development offers guidance on purchasing HUD homes, or homes acquired by HUD due to foreclosure. Property listings are available at the website.

* ForeclosureDeals.com: Use the services at ForeclosureDeals.com to locate government foreclosures going to auction.

* RealtyTrac: RealtyTrac is one of the largest online resources for foreclosures, including government tax foreclosures. Search for available properties nationwide at the website.


Initial Author: Sandy Baker
Recent Contributors: Tamsen Butler

Getting the Best Mortgage Rates

Making sure that you get the best rates available is extremely important when taking out a home loan. The amount of money that you pay in interest can significantly impact the total amount of money that you pay over the life of your loan. Because homes are meant to be an investment as well as a place to live, it is important that you pay as little as possible to reap the full benefit of ownership.

However, getting the best mortgage rates isn't easy. You will need to have a good credit history to qualify for prime rates. A down payment, verifiable income, and a steady job are also contributing factors.

But qualifying is only half the battle. Mortgage rates can vary dramatically from lender to lender. You will need to shop around of you want the best deal.

The steps below will guide you through the entire process and provide you with the tips you need to secure a fair mortgage rate.

Step One: Your Credit
By law, you are entitled to one free credit report each year. It is very important that you take advantage of that right and pull your credit report before applying for a loan.

To get your report, go to the central site that has been established by the three credit reporting bureaus: Annual Credit Report.com. Here, you will be able to get instant access to your credit report at no charge. If you don't want to use the online form, you can also request your report by phone or by mail:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281
1-877-322-8228

Once you have a copy of your report, look it over carefully for mistakes or negative information. If there are any blemishes that may be dragging down your credit score, do your best to get them fixed immediately. The better your credit score is, the better your chances are of qualifying for the best mortgage rates.

Step Two: Your Finances
f you are interested in applying for a mortgage loan, you will need to prove to mortgage lenders that your finances are in good order.

To start, you will need more money coming in than going out. Lenders will take a good hard look at your debt-to-income ratio and they will need to see that you can afford to take on the expense of a mortgage loan.

Having verifiable income and money in your savings account is also important. Lenders will want to see that you have the money for a down payment, or at minimum, money for closing costs. If you need to get together funds quickly, consider having a garage sale, picking up a second job, or selling a few items on Ebay.


Step Three: Finding a Lender
Though the first two steps are essential if you want to get the best mortgage rates, the last step is of almost equal importance. The lender you choose will determine how high or how low your [Mortgage Loan Rate | interest rates] are.

If you want to find just the right lender, you will need to shop around. Ask friends and family for a reference, speak to your local bank, and go online. Get quotes from at least three different lending institutions prior to making any decisions.

The mortgage process can be very exciting, and while it can be tempting to accept the first approval that comes your way, it will not help you get the best mortgage rates. Take your time and be smart. Your home purchase may be one of the biggest investments you ever make.

Initial Author: KarenS

Mortgage

Learn the Basics About Mortgages

The first step to a suitable mortgage is to learn about different Types of Mortgages. Many lenders willingly provide this basic information, but the best option often depends on the current Mortgage Interest Rates. Adjustable Rate Mortgages, for example, may be a good option when interest rates have the chance of falling, resulting in lower payments and substantial savings. When those same interest rates are increasing, however, home buyers may find themselves faced with overwhelming Mortgage Payments that could lead to repossession or foreclosure. Most lenders are happy to provide Mortgage Quotes, but they may require fees or written commitments, something that savvy buyers strive to avoid when comparing different lenders. It may be wise to also investigate Mortgage Insurance to protect the significant investment about to be made, and depending on the potential down payment, such insurance may be required.

By learning the basics about mortgages before first approaching a home builder, lender, or realtor, buyers will not be misled by industry jargon and cleverly-phrased contracts or agreements. Once having mastered the definitions of mortgages and their assorted components, buyers are ready to move on in the home buying process.

When It’s Not Your First Mortgage

Even if it’s not your first mortgage, it is important to refresh your knowledge before approaching lenders. Mortgage Interest Rates change according to the health of the economy and new policies may be available that you are unfamiliar with. Commercial Mortgages differ significantly than residential or personal property mortgages if you are looking to invest in a business, and depending on your credit, you may need to investigate Bad Credit Mortgages as well. Home Equity Mortgage Loans are available to help individuals consolidate debt or procure a large lump sum for significant expenses such as a new vehicle, educational expenses, unexpected medical fees, or other charges, giving home owners substantial financial power even if they have not paid off a first mortgage yet.

Your Mortgage for You

The key to finding the right mortgage is finding one that works for you. Every home owner’s individual circumstances vary, and the type of mortgage, interest rate, or lender that works for your friend, neighbor, co-worker or sibling may not be the best choice for your financial needs. By carefully investigating how loans work and what the differences are between Types of Mortgages and Mortgage Lenders, you can choose the option that best fits your financial situation and future plans without jeopardizing your credit, your home, or your sanity.

Adjustable Rate Mortgage Interest Only Bad Credit

ype "adjustable rate mortgage interest only bad credit" into any search engine and you will be bombarded with plenty of lenders willing to take a look at your loan application. Before leaping onto the interest only ARM bandwagon, however, you should first consider if this mortgage product is really the best fit for your needs.

Bad Credit and Mortgages
If you have several dings on your credit then you can safely assume that you will pay a higher interest rate and more fees for a mortgage loan. This is because you are a higher risk to lenders, based on your credit history. Factors on your credit report which make you a high credit risk include:

* Late payments
* Overextended credit lines
* Excessive credit accounts in relation to your income

If you aren't sure what the status of your credit score is then you should pull a copy of your credit report before your apply for a mortgage loan. It may turn out that you have better credit than you thought…or you may have such bad credit that you may decide to rent a while longer while you diligently work to improve your credit score. You can check your credit score at one of the three major credit bureaus:
You should never apply for a mortgage loan without first checking your credit report to make sure everything listed is accurate. Errors can transform an average credit report into a bad credit report.

Adjustable Rate Mortgages
Adjustable rate mortgages can be tricky because you are really taking a gamble with which way interest rates will go after you secure the mortgage. Although some mortgage experts herald ARMs as a fantastic way for people to obtain larger loans than they would qualify for with a fixed rate mortgage, you need to take into consideration the fact that your monthly payment can increase exponentially after the initial fixed rate period. If you aren't ready to pay a substantially higher amount monthly for your mortgage payment then a significant increase can throw you into financial peril.

Of course a smaller monthly payment is always possible if interest rates fall, and this would be a welcome surprise for borrowers

Interest Only Mortgages
An interest only mortgage involves payments going toward the interest on the loan and not the principal balance, which effectively means that even though you make payments each month you never touch the actual balance that you owe on your home. If you buy a house for $150,000 and for five years only pay interest, then you still owe $150,000 unless you make additional payments toward principal.

Why do people apply for interest only mortgages? Paying only interest allows you to pay substantially less per month than you would if your payments were being applied to both interest and principal. Although this system may work for borrowers who will diligently apply extra payments toward the principal balance, it is not generally suggested as a long-term loan because the time will come when the amortization expires and you still owe a considerable sum.

Combine Adjustable Rate Mortgage Interest Only Bad Credit
When you combine all of the factors, you're looking at a risky mortgage loan. Here is why:

1. Bad credit loans have higher interest rates and higher fees.
2. Adjustable rate mortgages have the potential to have higher monthly payments later in the life of the loan.
3. Interest only mortgages can have higher fees, and payments don't go toward principal unless you make extra payments.

Although it isn't realistic for some potential applicants, a much better idea is to:

* Take the time to fix your credit before applying for a mortgage loan, because this will result in lower interest rates and less fees.
* Apply for a fixed rate mortgage with the shortest amortization you can afford, because this will avoid any rude surprises from sudden interest rate increases.
* Choose a mortgage loan which allows you to pay toward principal with each payment, and make an effort to make additional principal payments when possible.

Not everyone is in the position to be able to secure an ideal mortgage loan, but regardless of your credit history you should still take the time to find the best mortgage loan possible.

Mortgage Refinancing "an Introduction"

Life is about trading up. Climbing the corporate ladder, upgrading out of that clunker you drove in college, and moving out on your own-all these involve trading in one situation for a better one. You can trade-up mortgages, too.

A mortgage refinance is the process of taking out a new loan, and using the proceeds to pay off your old one. Generally, you'd do this to make a change in the structure of your debt in order to get more money, a lower monthly payment, or a shorter pay-off schedule.
Why refinance?

You'd trade-up your mortgage for the same reason that you'd trade-up your job, car, or living arrangement-because circumstances change. What you need out of a mortgage today may be different from what you needed five years ago. Refinancing can achieve one or more of the following objectives:

1. Lower your monthly payment. You can reduce your monthly payment by refinancing to a lower interest rate. Have market rates dropped since your old mortgage was funded? Has your credit improved? Has your home increased in value? Any one of these happenings could mean that you'd qualify for a lower rate.

2. Shorten your pay-off term. Paying off your mortgage loan in 15 years rather than in 25 can save you tens of thousands of dollars in interest over the life of the loan. If you can afford the higher monthly payment and plan to stay in the home indefinitely, it's well worth it.

3. Optimize your loan structure. Your current loan structure may no longer be suitable for you in the future. Maybe you bought your home with an adjustable-rate mortgage (ARM) and your initial fixed-interest period is about to expire. Perhaps you have a fixed-rate mortgage, but you'd like to take advantage of the more flexible option ARM. Discuss your objectives with your lender to determine the most appropriate loan structure for you.
4. Consolidate your debt. If you're carrying a lot of credit card debt, you can lower your monthly repayments through consolidation. To do this, you'd take out a mortgage loan large enough to pay off all the debts on your cards plus the balance on your old mortgage.

5. Fund large, one-time expenses. You can raise the funds you need by doing what's called a cash-out refinance, where you'd take out a loan that's larger than your current one. As soon as you pay off the old loan, the excess funds can be used to pay for home improvement projects, college tuition, your daughter's wedding, long-term care expenses, etc.

Essentially, your mortgage is a financial tool that might need occasional sharpening. As life throws you new circumstances, trading up that mortgage may be one way to manage change.