Investor Crisis

By Doug West

The meltdown on Wall Street has taught us all that:

"We Better Learn To Make Our Own Investment Decisions -And Not Let Brokers Make Choices For Us!"

This is a basic fact we have been preaching for years now. Many times investors either blindly throw money at the market or let a broker do it for them. With a little effort you could learn to direct your investment accounts and retirement funds on your own.

In this article we will point you in the right direction, and give you a few crisis tips too.

ETFs (Exchange Traded Funds) are an excellent alternative to mutual funds as an investment vehicle.

There are ETFs that cover every sector of the market. ETFs offer many advantages over mutual funds. Here are a few:

* Tax Advantages - (Even in your non-qualified accounts) ETFs seldom sell any equity positions or create a taxable event. Mutual funds often do this. With mutuals, you could owe tax on part of the funds holdings (the winning stocks they sell at a profit) even though you lost money over all. A double whammy!

* Less Management Costs - Mutual funds were a great vehicle at one time. Years ago, they were HOT, and many fund investors did well. Then they started loading on the fees and costs. Then came the so called "No-Load" mutuals. These too became top heavy with many "Professionals" employed and eating up GIANT parts of the profit. You might think of ETFs as Electronically Traded Funds. MUCH less management costs (in some cases no management costs) and the ease of trading them.

* Diversification - Let's face it, this is what was attractive about mutual funds to begin with. Instead of picking out stocks on your own, you had "Professionals" (with the meltdown we can see that most of them are not too professional) putting together a diversified portfolio for you. With ETFs, you can get the same if not better diversification without the hassle of dealing with a mutual fund giant eating up all the profits.

* Easy To Trade - With true mutual funds you can only get out of a position After the market closes. You can trade ETFs just like a stock in your discount brokerage account. If you were locked into a fund when the market was in crash mode, it was not a good feeling. Had that been an ETF you could have bailed at any time (before the DOW closed down 777 points!)

We could go on with the benefits of ETFs, but you should be starting to see the picture. An even better way to call your own shots with your investments is to trade the index (or indices for plural). We are referring to the mini Dow, the S&P eMini, the mini Russell and others. (there are also ETFs the mirror the indices such as "SPY" for the S&P 500 index)

While we focus on mini-Dow trading, any index will do. With Index trading, you just follow the overall market up, or ride it down with a short position.

While we are on the subject of shorts it would be good to mention that while most US mutual funds are not allowed to short a stock, you can actually buy ETFs that do good with the market is dropping. One such fund is ticker "DUG" which does well when the Oil price is dropping (a tip we gave our readers after the big run up in oil to over $140 per barrel - at the time of this writing it has been dropping since).

You can find other ETFs that do well in falling markets. So, you don't have to short the market (statistics show that 80% or more of investors never do short the market - but are always looking for a upward bull run), you just buy the right ETF and let it do the shorting for you.

By now, many investors see the importance of having a strategy for making money when the market is dropping. Most investors have yet to develop this strategy. We prefer to do it with simple index trades. Whatever you do, find a way to make your own moves and don't depend on someone else to invest your money for you. No one will take care of your money like you will!

*********************************************************** NOTE: To learn more about ETFs visit Yahoo Finance and look under the Investing Tab at the top of the page - then select ETFs www.finance.yahoo.com ***********************************************************

About the Author:

Doug West has been teaching folks how to Index Trade for 5 years. He has also been involved in retirement planning for nearly 20. Get more tips on how to build your retirement income with

New Reverse Mortgage Law Gives Home Buyers Another Option

By Tiag Vanrock

Seniors, sixty two and older, now have the option of purchasing their next home with a reverse mortgage. In fact, the reverse mortgage acts similarly to a traditional forward mortgage in this capacity. The borrower makes an adequate down payment, and the reverse mortgage lender funds the remaining balance, just as a forward lender would.

This comes as a boon to some seniors as financial or credit restraints prohibit them from purchasing their next home. Now they can do so and are not obligated to make monthly payments the mortgage company.

In recent years, due to general need and national marketing by major financial institutions such as Wells Fargo and Bank of America the reverse mortgage has come into its own. Its major benefit to seniors is to allow the senior borrower to convert the equity in the home into cash to be used at the borrower's discretion.

Reverse mortgage lenders make money from the accrual of interest over time. When the last surviving spouse dies or the borrower chooses to sell the property, the original loan plus accrued interest is repaid to the bank.

The following are a list of steps to purchasing a home with a reverse mortgage:

1. Borrower is to get a reverse mortgage approval letter from a HUD approved reverse mortgage lender. In conversation with the lender the senior will be advised as to the amount of funds necessary for down payment, closing costs, maximum purchase price, and reverse mortgage loan options.

2. Go home shopping and write contract based upon guidelines in the approval letter.

3. At closing the borrower will be required to make a down payment between 25% to 55% of the value of the home.

4. Reverse mortgage lender funds the remaining principal balance. Borrower will have a choice of financing closing costs or paying out of pocket for them.

5. Title company or attorney records transaction and borrower takes ownership of the home.

6. The obligations to the mortgage are as follows: live in the home as primary residence, keep the property in reasonably habitable condition (per FHA guidelines) and pay property taxes and home owners insurance.

In the near future the typical reverse mortgage candidate will continue to be one in need of funds to relieve financial stress. The reverse mortgage purchase, however, will cater to a certain profile and offer a viable financial tool.

About the Author:

Much more info about the reverse mortgage in Texas and everywhere else at The Quintessential Guide to the Reverse Mortgage in Texas. Down and dirty questions answered at Purchasing a Home with a Texas Reverse Mortgage.

Stop Foreclosure - The Loss Mitigation Alternative

By Tomasheus Privetsky

If you find yourself facing foreclosure, there are probably several contributing factors, which have led to your situation. You might have lost your job, suffered an illness (and its accompanying medical bills) or been through a divorce. However you get here, one thing is certain; the bills are piling up and it is getting harder and harder to make ends meet. Even worse is the situation of having an adjustable rate mortgage whose interest rate has skyrocketed, making your payments much larger.

However, while you're occupied by trying to stop foreclosure from happening, you're being constantly deluged with calls, letters and even house calls.

These investors are in the business of buying homes from people who are in danger of losing their homes to foreclosure and then selling these properties for a profit. They know that many people who are facing foreclosure have no alternative other than to sell their home for whatever price they can get.

Should you sell to an investor to avoid being foreclosed on? Maybe, but certainly not as your first option. And only after you exhausted other foreclosure prevention means such as rearranging your loan.

One of the Solutions To Stop Foreclosure Is Lender Mediation

If you have missed a few payments, your credit score will drop dramatically; once this data is on your credit report, it will be difficult if not impossible to get a new loan to refinance your existing mortgage.

However, mortgage lenders would really rather not end up owning your home; this is why every mortgage lender has a loss mitigation department which tries to work with homeowners who are in default on their mortgages to bring them back onto a timely payment schedule. Unlike refinancing your mortgage with a new loan, this loss mitigation process does not require getting a credit approval, putting this alternative within reach for homeowners who are in default.

A Repayment Plan May Still Be Challenging

Loss Mitigation departments are lightly staffed. One of the biggest problems with workout plans is caused by employee overload. At time of high default rates, like we're experiencing now, the employees have too many files to work on. And they have a limited time to process each case. The result is, the lender offers you a 'canned' repayment plan that has too short of a 'catch up' time and too large of monthly payment increase that is not realistic for your budget to sustain.

Because you're between a rock and a hard place you're tempted to take it to keep your home from being foreclosed on. In reality you just set yourself up for a failure. A few months down the stretch, you'll be back in foreclosure again.

Stop Foreclosure By Hiring Foreclosure Workout Companies

You may be much better off by hiring a professional to handle the loss mitigation process for you. These companies know the ins and outs of the loss mitigation process and often have strong relationships with mortgage lenders nationwide. They have successfully helped thousands of homeowners stop foreclosure.

Firms like these will take a thorough look at your finances and develop a repayment plan, which will meet your budget in order to allow you to successfully get back on track with your payments. These professionals have the inside track on the repayment programs, which may be available from different lenders, they may even be able to negotiate a lower interest rate to help you reduce your payments.

You may think in you current circumstances hiring a company like this could be prohibitively expensive. Not so. Most charge a reasonable flat fee equal to a single monthly mortgage payment. You'll easily get your money back through a negotiated for you deferral of the next loan payment.

How to Cut Your Losses if Loss Mitigation is Not in Your Plans

If stopping foreclosure through loss mitigation isn't in your plans, then it's time to sell your home so you don't have a foreclosure record on your credit. If you have a lot of time before the foreclosure sale, then list your home for sale with a real estate agent. This way you will get more for your property. If you're out of time, now you may have to turn to investment companies that can buy quickly. Just make sure you're dealing with a company that has means and track record to perform and close the purchase fast.

About the Author:

Yes, loss mitigation is an effective solution to stopping foreclosure ofyour home. Start by getting a referral to a reputable lender mediation company to avoid foreclosure.

Consolidation Loan Choices Make Choosing Easier

By Daniel Atolben

Debt consolidation loans were created solely as a means for putting all the debt together, or consolidating it, and lump sum loan is made instead of separate payments to individual creditors. Instead, the bank takes your debt total, and through many different types of loans, can, with the appropriate credit, aid in the immediate repayment of all creditors. The bank pays off the debts, and you pay the bank.

A very good reason to do this is when the interest rate on the loan is a fixed rate that is less than the typically higher rate charged by credit card companies and other creditors, especially if you have recently begun to pay your credit card bills later and later and the fees for such activity are beginning to mount.

A possible consideration for debt consolidation is a straight loan. This is equivalent to a home or car loan, but with no collateral. You are simply borrowing a set amount to pay a specific debt. Again, the rate should be noticeably lower than the interest rate being paid to the credit card companies. Not everyone who applies for a straight loan will qualify. There are serious guidelines to protect the bank from someone who may default on a loan that the bank has no way of recouping without your cooperation. Usually this type of loan is reserved for consumers with the highest credit rates.

Home equity loans are also valuable to a consumer interested in debt consolidation. If your home is worth more than the amount of the loan you are paying for it, the difference may be borrowed from the bank and used to pay creditors. These loans are restricted by the amount of equity in the home, and dependent upon good standing in the first mortgage. Often these loans are separate from the first home mortgage, and the rate may or may not be the same for each loan. As long as the interest rate is lower in the equity loan than the credit card rate, a home equity loan can be a good decision.

A total home refinance is also a possibility. If your home has been paid down considerably or increased in value quickly, and if the rates have gone down enough to justify the fees for refinancing, an whole new home mortgage may be established, with the extra debt added in to the value of the loan.

While escaping from a debt ridden situation can seem like a struggle, debt consolidation loans can be invaluable to a consumer who would like to reduce the number of payments that they make and interest that they pay per month. Consolidation loans stream line the payment process, no matter which method you choose.

About the Author:

Daniel Atolben usually creates reports on issues associated with how to negotiate a settlement with creditors and how to negotiate debt settlement yourself. His abstracts on how to negotiate debt can be found on his website .

Should You Go For A Mortgage Refinance?

By Ned Dagostino

Mortgage refinance is an option most house owners look at from time to time. The big question they ask themselves is: Should I? Well, that depends on the particulars of the case. Generally people go in for mortgage refinance either to save money on the interest they pay, or to consolidate sundry debts. The crucial factors that merit consideration when deciding the 'Should I?' question are noted below for your information.

If you are facing a difficult debt repayment situation with a number of repayments to manage every month, then it is definitely a good idea to put all your loans under a single 'roof' and deal with a single repayment issue. Just make sure you choose the repayment plan that suits your monthly cash flow. The question of saving per se does not arise here, since you are refinancing for a different purpose.

Most people think that the interest they pay on mortgages is unjustifiably high, and seek ways and means to reduce the interest burden. This is intelligent thinking. The point to consider is whether the market rate is showing every intention of reaching for the sky. If it is, and if your present mortgage is based on the variable market rate, then this is a good time to opt out of the present mortgage and refinance the mortgage with a fixed interest plan, where the interest rate is lower than the average market interest rate computed over the duration of the mortgage.

Whether refinancing is advisable for you depends on your particular situation. Let's consider some situations where refinancing is not a good option.

Many a time, refinancing companies fail to mention what the actual cost of refinancing is. You may think you have hit upon the perfect plan which will save you at least $10,000 over the next 10 years. Only, you find that you have to pay brokerage fees of $1200, a foreclosure penalty of $8000, and some other fees amounting to $1300 to initiate the refinance! So instead of saving $10,000 you actually end up losing (in a manner of speaking) $500! Even if you don't end up 'losing' money the amount of saving may be so low as to be negligible, in which case the whole refinance exercise is pointless and best avoided.

When you consider refinancing, the first thing to do is to survey the market. Find out all the plans and schemes being offered by different companies. Make a comparison chart showing all the salient features and savings of each plan. Don't restrict your survey to just your local companies. Go online and get information on various plans offered in your area.

Find out the total amount you'll have to pay upfront just to kick start the mortgage refinance. Some brokers conveniently forget to mention that brokerage fees will be taken before the refinance kicks in. Financial advisors fail to tell you that you have to pay a penalty when you pay off a mortgage before the maturity period. Forgetting to mention these fees and penalties is not a problem except that these are really hefty amounts we're talking of here. The total upfront costs can wipe out all your expected savings, and, in some cases, can actually make you incur a loss.

Total up all the upfront costs that the refinancing company will take to initiate the refinance. Balance these against the savings you expect to make over the duration of the refinance plan. If the savings is negligible it will be advisable to shelve the refinancing for the present. Consider also the chances of your having to move within the next couple of years. If so, then the refinance will be a waste of money.

Refinancing your mortgage can be very helpful indeed. It can save you quite a bit. You should survey the refinance market very carefully and minutely. Find out all the options available to you. Find out all the fees and charges that will be taken upfront. Compute the savings you expect to make and then deduct the upfront fees to determine whether taking the refinance is a good idea. A wrong decision here, a single point overlooked, can mean ending up losing money with the refinance. Remember, refinancing is a very serious financial decision. The benefits differ from situation to situation, and sometimes even within the same situation.

About the Author:

There are plenty of other refinancing choices available to you besides a basic house refinance. You can refinance just about any loan including your car, trailer, or even a manufactured home refinance can put extra money in your wallet. Go to www.Home-Mortgate-Refinancing-Loan.com to learn more.

What is Earned Income Credit (EIC)?

By William Blake

Taxpayers are always very interested in the various tax credits that they can use to reduce their overall tax payments. The Earned Income Credit, commonly referred to as the EIC, is a tax credit which was established in an effort to help people who earn a low income to live as well as possible in their financial situation.

Set up in the year 1975, the concept behind the earned income credit was that since poor workers were having to pay so much in income taxes that they could never hope to move up the financial ladder they needed to be able to pay less taxes. By means of the EIC, low income families are given back a large amount of the money that has been deducted from their pay because of taxes throughout the year.

As time has passed, the amount that the earned income credit returns to individuals has gone up. Supporters of the EIC assert that the earned income credit does more for low income workers than simply increasing the minimum wage would. This is because people who are awarded the EIC use the money they get back to make purchases that boost their local economy.

Income that is counted towards eligibility for the earned income credit is of three types. Firstly there is wages earned at a job. Wages include tips if you are a server in a restaurant. Any monies that are paid out to you by your employer such as bonuses are a part of this category.

Self-employed earnings are also eligible for the earned income credit. If you own your own business but the money you earn with it is not enough to sufficiently care for your family, you may be able to receive the EIC. Any and everything your business earns can be counted.

Any money earned by one of your dependents can also be used to obtain the EIC. For example, the money that your teenage son or daughter makes while working summers or before and after school can be counted by you in order to get the earned income credit. This is true even if they have not earned enough to have to file for taxes themselves. The combined total of your income and your children's will be used to determine your EIC.

The money that your investments earn for you is counted as income by the IRS, as is money you collect because of unemployment. These sources of income may reduce your chances of getting the earned income credit. For example, if your investments earn you more than $2,800 in one year, you are disqualified from the EIC.

Sadly, many tax filers are not even aware that they qualify for the earned income credit. Many people think they don't qualify or just are not aware of the EIC. Some people do not earn enough to have to file their taxes, but still qualify for the EIC. Be sure to check into the EIC so that you don't miss out on this opportunity.

About the Author:

Tire of barely keeping up with your credit card payment? Get some simple credit card tips on the Debtopedia website. Get a free copy of my report "Secrets Of Credit Card Debt" at http://www.debtopedia.com

The Advantages of Debt Consolidation

By Chad Obenken

There are many advantages to securing a debt consolidation loan when you have bad credit, not the least of which is alleviating the anxiety and stress that accompany an unmanageable level of personal debt. As the level of debt in your life creeps up to an unacceptable level, depression and physical health concerns are not uncommon. Debt consolidation can be the light at the end of the tunnel that will restore you to sanity and good health.

In addition to improving your credit score, debt consolidation can relieve the pressure you may be facing from one or more collection agencies, which have been known to use stress-inducing methods to achieve their goals. If you could roll all of these stressful obligations into one manageable monthly payment, you would begin to feel human again, and with each successful payment, you would feel your dignity restored. At the same time, you would be protected from harassment by the collection agents.

There are specialized debt consolidation loans for people who have fallen into a bad credit situation. As your financial situation deteriorated, most likely you defaulted or were late on several of your loan payments, and each problem payment has a detrimental effect on your credit score. After enough of these problems, you would not be able to qualify for a regular debt consolidation loan, due to your poor credit rating. This can leave you between a rock and hard place, financially speaking.

These debt consolidation loans for bad credit would accept your application even with a low credit score, pay your bills on time every month, and in the process, increase your credit rating a little bit with each payment. In a year or less, you would regain not only your credit rating, but your financial reputation and self-respect.

The companies that offer debt reduction programs would negotiate with each of your creditors to get your credit terms revised to the best possible interest rate and repayment schedule. They can often negotiate down any late payment fees or penalties that are due on the account. This creates a win-win situation for everyone. The creditor gets paid, and you end up with a lower monthly payments and a restored credit rating. Each month, you would pay the consolidation company one payment that is lower than the sum of all the payments that were due before. This allows you to get out of debt as fast as possible while at the same time giving you more available cash to spend living rather than paying to credit card late fees and interest.

So, don't let the depression related to over-indebtedness keep you from getting a consolidation loan today to begin improving your financial situation, stress level, and mental health.

About the Author:

Chad Obenken pens for the most part for http://www.creditenio.com , a web publication covering information on consumer debt counceling . His work on credit card debt settlement and settle credit card debt are published on his website .

How to Know if You Qualify for Today's Best Mortgage Rates

By Mortgage Wizard

Equity The amount of equity you currently have your is a large factor when determining if you qualify for the best mortgage rates available. The recent sales in your area determine the current market value of your home. Within the past 3 months what have the houses surrounding your home sold for? Home prices are being driven down in most areas by all the recent foreclosures. Lenders judge home value based on what they could sell your home for if they ended up having to foreclose. (Measures to properly value your home are used to protect the banks in case they end up with your home. But in reality, they do not want that to happen.)

If you are looking to purchase a home or refinance your existing home into a lower rate or different loan program the amount of equity you have in the property is one determining factor for what loan programs you qualify for and if you can get the best current market rate.

Income "Can they afford the new payment if we give them a loan?" This is the first question the bank is going to ask themselves before they agree to extend you a mortgage. You need to be able to document your current income and your income for the two years prior to show you have a history of sustained or increased income. The banks look at your current debt to judge your ability to handle your loan payment. If your loan is under $417,000 they want to make sure that your income is double your monthly debts. (excluding utilities and other miscellaneous debts that do not get reported to the credit agencies. If your loan amount is over $417,000 the same rules apply but they look to see that your debt is at or below 45% of your income.

Assets When determining if a borrower has the capacity to be able to repay a mortgage loan on time liquid assets are taken into account. Most banks like to see that anyone they lend to has a between 2 and 6 months of mortgage payments saved up somewhere in accounts they have access to. This provides a buffer for stability in case someone is between jobs or an unforeseen bill comes up one month. Lenders like to know that someone has enough money saved to be able to overcome unforeseeable events such as paying for car repairs in the event of an accident. Without any assets saved up a person could be forced to reallocate money that typically is used for their mortgage payment for something else.

Credit Score Your credit score is analyzed from the three major credit reporting agencies. (Transunion, Equifax, and Experian) You are given individual scores from each agency and lenders will use your middle score as a barometer for rating your credit reliability. Most of the best loan options are available for consumers with 720 middle scores and higher. Your credit score is like a life report card that allows companies that extend credit to make sure that the people they are lending money have the willingness and ability to repay them. This reporting/measuring tool becomes very important when a company is determining whether or not to lend you hundreds of thousands of dollars.

Your home financing is the largest financial decision you may make in your entire life. If you are qualified for the best rates on the market find a company that is upfront and will the value in your ability to show credit worthiness and start a working relationship with them so they can help you achieve your goals.

About the Author:

The Mortgage Wizard writes informative articles about mortgage financing to educate consumers. Here is a resource to see daily mortgage rates online that are below the national averages and geared towards qualified borrowers.

Why Not Live Better By Managing Your Debts?

By Bob Hobson

Debts are a common thing. Many people acquire a loan for something important. Mortgage loans are also ordinary, as they enable people to be able to purchase their dream houses.

If you have debts and are looking for the best solution for it, here are good tips to follow so you can manage that debt and continue living life as you do.

1. Take a careful look at your debts. Have a look through all of the billing statements you've received and the amount of money your creditors are asking for. If you see any incorrect information, be sure to dispute it right away. After this, figure out how much of your money needs to go to each creditor - include interest and other charges in this computation.

2. Come up with a plan. You need to decide how quickly you want to pay off your debts; then see if you may be able to pay them off a little quicker than this. The earlier you can pay off your debts, the cheaper it will be, since less interest payments will be assessed.

3. Draw up a monthly budget. Once you've figured out how much your monthly debt obligation is, the next task is to come up with a budget for your monthly expenditures. Make repaying your loans and other debts your number one priority after covering vital expenses like housing and utilities.

4. Keep your spending under control. If it turns out that your income is less than your monthly expenses, then see what purchases you can either reduce or eliminate entirely - remember; needs first, then wants.

5. Maximize your savings. If you have some money in the bank, try to determine how you can use it best to pay off your debts. Check which of your savings accounts is the lowest interest earner. Maybe you can use that to compensate a loan with a much higher rate of interest.

6. Search for additional payment sources. You can get a part time job or set up a home business to further augment your financial obligations. There are also government funds that you can possibly get. These are all going to be helpful for you.

Follow these six tips and you are sure to be free of debt in no time. The main idea in managing debts effectively is setting proper priorities. Once you've mastered that, you are bound to be successful.

About the Author:

Is it timeto consolidate debt? If you are looking for debt solutions check out www.livingoutofdebt.com