Single people appear to paying less attention to their finances, new research shows.
In a study carried out by Ipsos MORI from Intelligent Finance, those who are living on their own are twice as likely to ignore the Bank of England's monetary policy committee (MPC) decision on interest rates than couples. The MPC is due to meet later this week in the first of its monthly meetings regarding the base rate of interest for 2008.
And should the committee opt to lower interest rates, homeowners may find that pressure on their finances lessens as their monthly mortgage repayments fall. In addition, this may allow consumers to meet other sources of monetary demand, such as personal loans, overdrafts and grocery and utility bills, more comfortably.
Commenting on the figures, Cammy Amaira, director of sales for Intelligent Finance, said: "It seems that the image of the carefree single is certainly true where mortgages are concerned. But regardless of whether you are single or in a relationship, making your money work harder for you by choosing the right mortgage should be a priority. Offset mortgages can give that peace of mind by allowing customers to pay no interest on part or even all of their borrowings - that's a good deal whether rates go up or down."
According to the study, more than half (54 per cent) of single people state that they will not take any notice of what the MPC decide to do later this week. Meanwhile, 30 per cent of those not in a relationship are "fairly" concerned about what will happen. However, just one out of 100 such consumers assert that they are "extremely" worried.
On the other hand, just 28 per cent of consumers who are either married or co-habiting with a partner claim that they will ignore any moves made by the committee. Some 39 per cent are "fairly" apprehensive, with eight per cent "extremely" anxious. However, across all of those holding a mortgage 34 per cent will not pay any attention to the MPC.
Intelligent Finance went on to suggest that opting for an offset mortgage could allow homeowners to make their "money work harder". In taking out such a product against a property worth 194,895 pounds on a 25-year deal, the firm claimed that a couple could save up to 61,389 pounds 87 pence and complete making repayments some five years and three months ahead of schedule.
Despite such indifference by a significant number of Britons, the MPC decision may have a great impact upon many consumers. Research carried out by Citizens Advice last month indicated that a rising number of homeowners on subprime mortgages are developing problems meeting monthly demands for payment. The study also indicated that many more people on low incomes are looking for help in making secured loan and mortgage repayments. For these homeowners, getting a loan for debt consolidation purposes may help to relieve financial pressures.
83792
Tuesday, March 11, 2008
Spend Wisely to Save Money
Have you ever noticed that the things you buy every week at the grocery and hardware stores go up a few cents between shopping trips? Not by much,just by a little each week but they continue to creep up and up.
The grocery stores also have a technique to keep you looking in the wrong place for the best deals. They tend to hide those on the bottom right hand shelf which is the last place you instinctively look.
All it takes for the price to jump up by a lot is a little hiccup in the world wide market, note the price of gasoline as it relates to world affairs. The UK currently pays over $10 a gallon for gasoline at the moment.
There is a way that we can keep these price increases from impacting our personal finances so much and that is by buying in quantity and finding the best possible prices for the things we use and will continue to use everyday, things that will keep just as well on the shelves in our homes as it does on the shelves at the grocery store or hardware store.
For instance, dog food and cat food costs about 10% less when bought by the case than it does when bought at the single can price and if you wait for close out prices you save a lot more than that.
Set aside some space in your home and make a list of things that you use regularly which will not spoil. Any grain or grain products will need to be stored in airtight containers that rats cannot get into so keep that in mind.
Then set out to find the best prices you can get on quantity purchases of such things as bathroom items and dry and canned food.
You will be surprised at how much you can save by buying a twenty pound bag of rice as opposed to a one pound bag but do not forget that it must be kept in a rat proof container.
You can buy some clothing items such as mens socks and underwear because those styles do not change, avoid buying childrens and womens clothing, those styles change and sizes change too drastically.
Try to acquire and keep a two year supply of these items and you can save hundreds of dollars.
Avoid shopping on the first of the month, some stores have been known to raise their prices during the time welfare and Social Security checks come out and when the monthly pay check arrives.
Always make a shopping list and stick to it, those impulse buys can soon add up. It is not an accident that the check out area is full of tempting goodies to add to your shopping cart.
83788
The grocery stores also have a technique to keep you looking in the wrong place for the best deals. They tend to hide those on the bottom right hand shelf which is the last place you instinctively look.
All it takes for the price to jump up by a lot is a little hiccup in the world wide market, note the price of gasoline as it relates to world affairs. The UK currently pays over $10 a gallon for gasoline at the moment.
There is a way that we can keep these price increases from impacting our personal finances so much and that is by buying in quantity and finding the best possible prices for the things we use and will continue to use everyday, things that will keep just as well on the shelves in our homes as it does on the shelves at the grocery store or hardware store.
For instance, dog food and cat food costs about 10% less when bought by the case than it does when bought at the single can price and if you wait for close out prices you save a lot more than that.
Set aside some space in your home and make a list of things that you use regularly which will not spoil. Any grain or grain products will need to be stored in airtight containers that rats cannot get into so keep that in mind.
Then set out to find the best prices you can get on quantity purchases of such things as bathroom items and dry and canned food.
You will be surprised at how much you can save by buying a twenty pound bag of rice as opposed to a one pound bag but do not forget that it must be kept in a rat proof container.
You can buy some clothing items such as mens socks and underwear because those styles do not change, avoid buying childrens and womens clothing, those styles change and sizes change too drastically.
Try to acquire and keep a two year supply of these items and you can save hundreds of dollars.
Avoid shopping on the first of the month, some stores have been known to raise their prices during the time welfare and Social Security checks come out and when the monthly pay check arrives.
Always make a shopping list and stick to it, those impulse buys can soon add up. It is not an accident that the check out area is full of tempting goodies to add to your shopping cart.
83788
Reverse Mortgages and Their Growing Popularity
There seems to be a new phenomenon in the mortgage world known as the reverse mortgage. The ads touting how they can improve quality of life are everywhere and if you're a homeowner, age 62 and over, you receive them in the mail almost daily. Then there are the articles warning that reverse mortgages may be the new mortgage rip off. So what's the truth about this financing vehicle? Is it a God-send for seniors, or something for which older homeowners need to be wary? It can actually be both, so it pays to understand the loan if you or a loved one are contemplating a reverse mortgage.
Reverse mortgages have been around since 1961 and President Reagan signed the legislation to allow HUD to insure them in 1988 on their Home Equity Conversion Mortgage (HECM). So why the sudden stir and what makes this mortgage so unique? The baby boomer population that we've all been hearing that is about to start retiring, begins to do so as of January 1, 2008. What this means is that America will have an unprecedented number of people retiring with many having their main asset being their homes.
Gone are the days of the American worker working to the age of 62, retiring with a pension and social security, then passing by age 70. People are living longer and fewer are retiring with adequate income provided to meet their life needs. The huge appreciation most properties have experienced allows seniors an avenue to augment this growing need for income. A traditional or a forward mortgage, is known as rising equity, falling debt mortgage. The individual pays a payment monthly to pay down the debt thus making the equity higher and the debt lower.
The reverse mortgage operates in reverse of that. In a reverse mortgage, the borrower receives payment(s) from the lender, makes no monthly payments and the debt rises while the equity falls as payments, fees and interest accumulate. The borrowers make no monthly payments and the entire amount is paid in full when the loan is repaid.
Income and credit are not considered in qualification criteria, with the exception of the fact that the borrower cannot be delinquent on a federal obligation. There is no minimum income requirement and there are no minimum credit scores. In fact, many borrowers have been saved from foreclosure with a reverse mortgage. There have been so many myths and misconceptions surrounding reverse mortgages.
Some earlier versions of the product contained provisions for shared appreciation which hurt seniors, but those provisions are not in the HUD HECM loans. All of the government loans are also non-recourse loans, which means that the borrowers or their heirs can never owe more than the property is worth, regardless of how long they live in the home, how much they receive in payments through the years, what future values do or how much interest accumulates.
A reverse mortgage loan can be expensive, so it's not the best option is you are not planning on using the loan, or do not plan to stay in the property. On the other hand, for some, the reverse mortgage is the only way they are able to stay in their homes. The bottom line is EDUCATION. Find an originator who really knows and understands the product. There are so many programs available now and some private or proprietary products that go down to 60 years of age and lower.
You need to work with an expert, not just a loan officer from a brokerage or a bank who was doing sub-prime loans last month and is doing reverse mortgages this month. Unlike forward mortgages, fees and rates are regulated by HUD so everyone is on an even playing field, and companies like All Reverse Mortgage Company often have many more programs available to us as we are not limited only to just the few products that just one bank has to offer. Lastly, talk to your family.
You're spending the equity that would normally be the inheritance left to other family members and this can be an area of concern more often to the senior homeowner than to the family members themselves. Most family members we've talked to don't have the means to take care of their own family expenses as well as those of their parents and senior relatives, so they are extremely happy that their loved ones have a way to age in place and dignity.
83768
Reverse mortgages have been around since 1961 and President Reagan signed the legislation to allow HUD to insure them in 1988 on their Home Equity Conversion Mortgage (HECM). So why the sudden stir and what makes this mortgage so unique? The baby boomer population that we've all been hearing that is about to start retiring, begins to do so as of January 1, 2008. What this means is that America will have an unprecedented number of people retiring with many having their main asset being their homes.
Gone are the days of the American worker working to the age of 62, retiring with a pension and social security, then passing by age 70. People are living longer and fewer are retiring with adequate income provided to meet their life needs. The huge appreciation most properties have experienced allows seniors an avenue to augment this growing need for income. A traditional or a forward mortgage, is known as rising equity, falling debt mortgage. The individual pays a payment monthly to pay down the debt thus making the equity higher and the debt lower.
The reverse mortgage operates in reverse of that. In a reverse mortgage, the borrower receives payment(s) from the lender, makes no monthly payments and the debt rises while the equity falls as payments, fees and interest accumulate. The borrowers make no monthly payments and the entire amount is paid in full when the loan is repaid.
Income and credit are not considered in qualification criteria, with the exception of the fact that the borrower cannot be delinquent on a federal obligation. There is no minimum income requirement and there are no minimum credit scores. In fact, many borrowers have been saved from foreclosure with a reverse mortgage. There have been so many myths and misconceptions surrounding reverse mortgages.
Some earlier versions of the product contained provisions for shared appreciation which hurt seniors, but those provisions are not in the HUD HECM loans. All of the government loans are also non-recourse loans, which means that the borrowers or their heirs can never owe more than the property is worth, regardless of how long they live in the home, how much they receive in payments through the years, what future values do or how much interest accumulates.
A reverse mortgage loan can be expensive, so it's not the best option is you are not planning on using the loan, or do not plan to stay in the property. On the other hand, for some, the reverse mortgage is the only way they are able to stay in their homes. The bottom line is EDUCATION. Find an originator who really knows and understands the product. There are so many programs available now and some private or proprietary products that go down to 60 years of age and lower.
You need to work with an expert, not just a loan officer from a brokerage or a bank who was doing sub-prime loans last month and is doing reverse mortgages this month. Unlike forward mortgages, fees and rates are regulated by HUD so everyone is on an even playing field, and companies like All Reverse Mortgage Company often have many more programs available to us as we are not limited only to just the few products that just one bank has to offer. Lastly, talk to your family.
You're spending the equity that would normally be the inheritance left to other family members and this can be an area of concern more often to the senior homeowner than to the family members themselves. Most family members we've talked to don't have the means to take care of their own family expenses as well as those of their parents and senior relatives, so they are extremely happy that their loved ones have a way to age in place and dignity.
83768
Brits Need 'Financial Workout'
The majority of Britons are in need of a "financial workout", new research shows.
Figures released by Abbey Banking, some 99 per cent of people could manage their various monetary products - such as mortgages, loans, current accounts and credit cards - more effectively. In comparison, just one per cent of consumers are handling all aspects of their money well. According to the financial services firm, the lower a score is the better capacity for money management it reveals. On the other hand, a higher tally reveals that there is room for improvement. Overall, the typical Briton scores 43. However, it appears that men are more capable of managing their money then women.
The average man receives a financial fitness rating of 41, with their female peers scoring 46. Research by Abbey indicated that just 26 per cent of males do not have a competitive rate of interest on their mortgage, while just under a fifth (17 per cent) do not shop around for insurance. In addition, an estimated 61 per cent do not have at least three months' worth of income to a savings product.
However, women could be putting themselves under further financial strain as a quarter fail to look for a good deal on insurance cover. Meanwhile, 70 per cent lack enough savings to maintain their standard of living for a three-month period. Some 31 per cent, the study showed, have an uncompetitive mortgage deal.
Abbey also indicated that Wales and the south-west of England are the most effective regions in the country in terms of managing financial products, with a score of 42. Those living in the north of England, however, have the lowest rank at 46. The company pointed out that more than a third (35 per cent) of people from this area have an uncompetitive mortgage rate, with 41 per cent receiving less than one per cent interest on their current account.
And if such data is applied to financial management as a whole, it could be possible that many people, both men and women, do not have competitively-priced borrowing products, in which a low-rate loan may prove to be helpful in reducing pressure on their finances.
Commenting on the figures, Steve Shore, director of banking for Abbey, said: "Less than a third of people score less than 30 which suggests that the majority of the population could do with a financial workout. But with so many deals out there, it really needn't be strenuous. Why not start with your bank account - nearly three-quarters of the population are settling for an interest rate of less than three per cent, yet there are deals out there like Abbey's that pay eight per cent on in-credit balances."
Consumers worried about their ability to manage their money may wish to choose a low rate loan, in addition to other competitive financial products, to help ease pressures on spending. Last month, research conducted by Lloyds TSB indicated that 74 per cent of people believe that prices have increased during the past year. In addition, some 81 per cent think that costs are set to rise over the next 12 months. For many, a low cost loan may be an effective source of financial assistance.
83705
Figures released by Abbey Banking, some 99 per cent of people could manage their various monetary products - such as mortgages, loans, current accounts and credit cards - more effectively. In comparison, just one per cent of consumers are handling all aspects of their money well. According to the financial services firm, the lower a score is the better capacity for money management it reveals. On the other hand, a higher tally reveals that there is room for improvement. Overall, the typical Briton scores 43. However, it appears that men are more capable of managing their money then women.
The average man receives a financial fitness rating of 41, with their female peers scoring 46. Research by Abbey indicated that just 26 per cent of males do not have a competitive rate of interest on their mortgage, while just under a fifth (17 per cent) do not shop around for insurance. In addition, an estimated 61 per cent do not have at least three months' worth of income to a savings product.
However, women could be putting themselves under further financial strain as a quarter fail to look for a good deal on insurance cover. Meanwhile, 70 per cent lack enough savings to maintain their standard of living for a three-month period. Some 31 per cent, the study showed, have an uncompetitive mortgage deal.
Abbey also indicated that Wales and the south-west of England are the most effective regions in the country in terms of managing financial products, with a score of 42. Those living in the north of England, however, have the lowest rank at 46. The company pointed out that more than a third (35 per cent) of people from this area have an uncompetitive mortgage rate, with 41 per cent receiving less than one per cent interest on their current account.
And if such data is applied to financial management as a whole, it could be possible that many people, both men and women, do not have competitively-priced borrowing products, in which a low-rate loan may prove to be helpful in reducing pressure on their finances.
Commenting on the figures, Steve Shore, director of banking for Abbey, said: "Less than a third of people score less than 30 which suggests that the majority of the population could do with a financial workout. But with so many deals out there, it really needn't be strenuous. Why not start with your bank account - nearly three-quarters of the population are settling for an interest rate of less than three per cent, yet there are deals out there like Abbey's that pay eight per cent on in-credit balances."
Consumers worried about their ability to manage their money may wish to choose a low rate loan, in addition to other competitive financial products, to help ease pressures on spending. Last month, research conducted by Lloyds TSB indicated that 74 per cent of people believe that prices have increased during the past year. In addition, some 81 per cent think that costs are set to rise over the next 12 months. For many, a low cost loan may be an effective source of financial assistance.
83705
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