Mint.com has launched a new service called  Mint Answers to help you learn how to save and do more with your money .  You can ask questions such as “Should I buy or lease a new car?”, “How should married couples divide their money and expenses?” and “What retirement account is best for me?”

Answers are provided for free from a panel of professional advisors and from other users.  Questions are grouped by topic, Budgeting, Debt Management, Future Goals, and Savings. The forum is open to anyone, with answers screened by the MintLife editorial staff and ranked by other users based on the usefulness of the response.

“Because of the recession, people are talking more openly about money, a once-taboo topic,” said Aaron Patzer, general manager and vice president of Intuit Personal Finance and founder of Mint.com, citing results from a recent Intuit Money Matters Town Hall Survey. “Mint Answers helps them make informed decisions about their finances. They get real-time access to experts and peers to answer their money questions.”

For more information visit Answers.Mint.com.

If you are in the market for a mortgage, you’ll soon realize that there are several different types available.  The question is which one is right for you.  (Note. You can use a mortgage calculator to compare loans.)  Some of the most common mortgages are as follows:

Fixed-rate mortgages are the most popular because it protects homeowners from increased payments and is very straightforward.  With this mortgage our monthly payment and interest rate stays the same for the entire term of the loan which makes it easier to budget.  Most loans are taken for 30 or 15 years, however, other fix terms are available.

FHA mortgage loans are fixed-rate mortgages back by the Federal Housing Administration (FHA), which is government agency.  FHA loans maybe a good option for first-time buyers.  FHA loans allow lenders to offer lower down payment options, however, with the lower down payments require mortgage insurance.  Additionally, lower the lower the down payment, the higher your monthly payment will be.  So be careful to review the extra costs when considering a FHA loan.

Adjustable-rate mortgages (ARM) have an interest rate that adjusts periodically, usually every 6 or 12 months. When the loan adjusts, the payment will adjust with market interest rate movement. Most lenders also offer a “hybrid ARM,” also known as a “fixed-period ARM”.  This is a mortgage with an initial fixed period of 1, 3, 5, 7, or 10 years, and has an adjustable rate and payment after the fixed period. Fixed-period ARMs are often named by the length of time the interest rate remains fixed.  

A 3/1 ARM, means the “3″ is for a three-year introductory period, during which the interest rate remains fixed. The “1″ means the interest rate will adjusts once per year after the introductory period.

Introductory period rates are lower during the introductory period, which can mean a lower starting monthly payment. However, when the introductory period ends, your rate will go up or down depending on the market rate. When considering an ARM, you should carefully consider your ability to handle potential increases to your rate, and consequently, your monthly payment.

ARMs caps are available in 2 options. Adjustment caps limit how much your rate can go up or down in any single adjustment period, which limits how much your loan payment can change when it adjusts. Lifetime caps have a maximum interest rate over the entire life of a loan. You should find out what the caps if you’re considering an ARM, and then determine to see if you can handle rate increases.

Interest-only mortgages (I/O) are mortgages that contain an interest-only payment option during a set period in first years of the loan, often the first ten years. Interest-only mortgage payment options can be available on ARMs or fixed rate loans.  During the I/O period, borrowers can delay making principal payments and make monthly payments that include only the loan’s interest. After the interest-only period ends, however, if interest-only payments were made (you can choose to make regular principal + interest payments during the I/O period) your monthly payments will significantly increase when your required monthly payments start to include principal, plus interest.

Adding any unpaid principal from the first 10 years to the principal due on the remaining years of the loan plus interest due on the remaining portion of the loan can result in what is commonly referred to as “payment shock.” You should carefully consider payment shock when considering an I/O payment option. Interest-only mortgages start with monthly payments that include only the loan’s interest.

After this initial interest-only period ends, however, the monthly payments can significantly increase when these payments then start to include the principal. This is called amortization. When an interest-only loan starts amortizing, the monthly payment amount increases, as you begin repaying principal in addition to interest.

A good measure to determine if your debt is getting out of control is determining what your debt-to-income (DTI) ratio is.  If your DTI ratio is close to or higher than 36% then you should be working to reduce it.  Lenders use DTI to determine if a potential customer can afford to take on extra debt.  The preferred maximum DTI varies among lenders, however, 36% is often used as the maximum.

So how do you determine your debt-to-income ratio?  You first have to determine what your monthly payments are to service your debt.  For example, let’s assume your monthly debt is as follows:

Car loan = $300
Mortgage = $1,100
Credit cards = $500
Other debts = $400
=============
Total debts = $2,300

Now let’s assume you earn $60,000 per year, which equates to $5,000 per month.  You debt-to-income ratio is $2,300 divided by $5,500 which equals 0.46 or 46%.  This is very high and a person in this situation needs to take quick action to reduce their debt.

So what can you do to reduce your DTI ratio?  You can take the following steps:

• Increase your monthly payments to service your debts. Applying extra payments to the principle will lower your overall debt faster.
• Stop taking on additional debt.  The more debt you take on, the higher your DTI ratio.
• Delay large purchases until you have more savings. The larger your down payment, the lower your monthly cost, thus decreasing your DTI ratio.
• Calculate your DTI ratio monthly to determine if you are making progress.
• Earn extra income by finding a new job or additional work (part time) to pay down your debt faster.

Keeping your DTI ratio at a manageable level is one of the foundations of good financial health.  A manageable DTI ratio also gives you peace of mind that you can handle your financial responsibilities and will help you qualify for credit to purchase things your really want like a new home.

The Economist has released a very interesting video (see below) about how dominant TV is compared to online videos. Yes people are viewing online videos more than ever on sites like YouTube, but TV still dominates even though competition within TV is extremely competitive.

Have you ever wondered how other people handle their finances?  Now there’s a website named Bundle.com to help your find out how other people handle the same decisions so you can learn what works and what doesn’t.   The site gives you statistics of how Americans save and spend their money from big cites to small towns.

Bundle.com compiles data from the U.S. Government, from anonymous and aggregated spending transactions from Citi, and from third party data providers.  See video below.  To test it out, visit Bundle.com.

A couple days ago my family and I visited the 16 year old son (I’ll call him Matt) of a close family friend in the hospital who was hit by a car while crossing the street. Matt suffered broken bones and a damaged spine. The damage to his spine has made him a quadriplegic.

As I starred at Matt, I realized that I could have easily been his situation. When I was 16 years old I too was hit by a car while crossing the street. I recall when I was hit by the car, the first thoughts that came in my mind was I would die or be paralyzed. Luckily I only suffered broken bones.

Meeting Matt for the first time, I felt an intense sorrow for him. Anytime I would hear of someone becoming a quadriplegic, I would think to myself it has to be one of the worst misfortunes a person could encounter. I recalled the life of Christopher Reeves.

Barring a miracle, Matt will miss out on so much of what life has to offer. I can’t imagine the physical and mental pain a quadriplegic must encounter. His parents will have to take care of him most likely for the rest of his life and will encounter a huge financial impact.

His parents will have to modify their home, purchase a new vehicle to transport Matt and his equipment, purchase a special wheel chair and bed, lifting equipment to get him in and out of bed, a respirator that helps him breathe, not to mention the medical bills.

When I was hit by the car about 25 years ago I learned at an early age how quickly life can change. I often think about all the people who were killed as a result of 9/11. They got up that morning thinking that day would be like any other, only to find out that it was their last day.

It’s imperative that we appreciate what we have and be cognitive not to take anything for granted because within seconds it can be taken away.

I will be praying for Matt and his family!

Uncle Sam has released images of the upcoming new $100 bill (see pictures above).  The new bill will be released on February 10, 2011 and is the most widely circulated.  The old $100 bill will still be good, but will eventually retire by the new one.  

The new $100 bill shows phrases from the Declaration of Independence and the quill the Founding Fathers used to sign. The rear has a new enlarged vignette of Independence Hall showing the back instead of the front of the building.

New security features have been added to the new $100 bill to prevent counterfeiting which includes:

• The Blue 3-D Security Ribbon on the front of the new $100 bill contains images of bells and 100s that move and change from one to the other as you tilt the note.
• The Bell in the Inkwell changes color from copper to green when the note is tilted, an effect that makes it seem to appear and disappear within the copper inkwell.
• Portrait watermark of Benjamin Franklin
• Security thread
• Color-shifting numeral 100