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Surviving a Layoff

Every month hundreds of thousands of Americans are getting laid off.  With the unemployment rate at 8.5% as of April 2009, millions of families have to deal with the uncertainty and stress from losing their jobs. The good news is that President Obama’s 2009 Stimulus Package (American Recovery and Reinvestment Act) helps people out of […]

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Lost Generation – A Brilliant Palindrome

May 14, 2010 | My Ramblings | Videos | No Comments

A palindrome is a word or phrase that reads the same backward as forward.  Check out the video, it reads the exact opposite backwards as forward.  Not only does it read the opposite, the meaning is the exact opposite. The video is simply brilliant.

The video was created by a 20-year old for the AARP U@50 and won second place.  According to the creator, the video is based on Argentinian Political Advertisement “The Truth” by RECREAR.

My Lending Club Account Performance Update 3

May 13, 2010 | Investing | My Ramblings | 5 Comments

It’s time for another update of my Lending Club Account Performance. The last update was on February 20, 2010.  Since then Lending Club has revamped their website and changed their logo (see below).  The new site is easier to navigate and features different background pictures which I guess is cool!

Since starting to issue loans last August (2009), I’ve earned a total of $1,483.68 in interest, but with and interest plus bonus I’ve earned $2,196.75.  I currently have 456 notes (loans) issued with 14 fully paid.  One note is currently late 16-30 days and 3 are late 31 to 120 days.  One was charged off with a loss of $24.  Calculated net annualized return is 10.83%.  Total payments to date (principal and interest) is $7,050.89.  (See screen shot below)

As notes are paid back I’ve re-invested in new notes to A, B, and C investors using the Build Portfolio feature.  I use the filter option to only list A, B, and C investors and issue $25 notes to each borrower.  Additionally,  I use the Conservative and Moderate portfolios to loan to mostly A and B investors.

I do not review the notes to determine the reason why each borrower want the money.  I’m more concerned about the borrower rating (A, B, C).  Reviewing each note would be very time consuming and there is no way to really determine risk.

According to Lending Club, there are now 35,000 investors and 220,000 members.  Investors have earned an average return of 9.65%.  The company announced last month the closing of a $24.5 million investment and just recently added 5 year notes.  Before only 3 year notes were available. The 5 year notes pay a higher interest than the 3 year notes. I’m not certain if I’ll invest in 5 year notes as yet!

So far so good,   I’m happy with my account performance.  If Lending Club was a profitable entity I’d consider investing more money.  However, for now I’ll take the wait and see approach to see how the company does over the next several months.

Lending Club is offer $25 for free when you sign-up as an investor at no risk.  You can use the $25 to try out P2P lending with no future obligation.  There is nothing for you to deposit and you can lend the $25 immediately.

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Chase Offering $100 to Open Checking Account

May 13, 2010 | Banking | No Comments

chase-100-dollars-cash-bonus

I received another Chase Offer in the mail yesterday and will not be using it, therefore its up for grabs! 

Chase is offering $100 cash bonus for opening a new checking account by June 30,  2010.  To qualify for the bonus you must open a new Chase Checking account with a $100 minimum deposit of new money (money not currently held by Chase or its affiliates).

The bonus will be deposited into your account within 10 business days after the $100 minimum deposit is made.  The bonus is not considered part of the minimum opening deposit. 

The checking account must remain open for at least 6 months or the bonus will be debited from the account at closing.

To open your account visit Chase.com/checking and use coupon code 3758904985404656.  If interested grab this coupon code quickly.  It’s the only one I have!

Get Your Financial Questions Answered Using Mint Answers

May 13, 2010 | Financial Tips | No Comments

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.

Chase has introduced a unique cash back offer for home mortgage.  If you get a new Chase mortgage or refinance, you can choose either a 1% cash back or a 1% payment against your principal balance annually when you sign up for automatic payments on a new Chase Mortgage.  That’s not a bad deal!

 

 

 

 

 

 

 

 

 

 

 

 

 

The 1% Mortgage Cash Back works with any new Chase mortgage or refinance.  The cash back is deposited into your Chase checking account OR applied as a payment against your mortgage principal.

At your loan closing, complete your enrollment in our automatic mortgage payment service with your Chase personal checking account. Your monthly mortgage payment is automatically deducted from your checking account.

For more information visit https://www.chase.com/chf/mortgage/mortgage-cash-back.

Most Common Mortgage Loans

May 7, 2010 | Education | Mortgage Loans | No Comments

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.

Chase has introduced a unique cash back offer for home mortgage.  If you get a new Chase mortgage or refinance, you can choose either a 1% cash back or a 1% payment against your principal balance annually when you sign up for automatic payments on a new Chase Mortgage.  That’s not a bad deal!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The 1% Mortgage Cash Back works with any new Chase mortgage or refinance.  The cash back is deposited into your Chase checking account OR applied as a payment against your mortgage principal.

At your loan closing, complete your enrollment in our automatic mortgage payment service with your Chase personal checking account. Your monthly mortgage payment is automatically deducted from your checking account.

For more information visit https://www.chase.com/chf/mortgage/mortgage-cash-back.

Is Your Debt-to-Income Ratio Manageable?

May 7, 2010 | Education | Financial Tips | No Comments

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.

Chase has introduced a unique cash back offer for home mortgage.  If you get a new Chase mortgage or refinance, you can choose either a 1% cash back or a 1% payment against your principal balance annually when you sign up for automatic payments on a new Chase Mortgage.  That’s not a bad deal!

 

 

 

 

 

 

 

 

 

 

 

The 1% Mortgage Cash Back works with any new Chase mortgage or refinance.  The cash back is deposited into your Chase checking account OR applied as a payment against your mortgage principal.

At your loan closing, complete your enrollment in our automatic mortgage payment service with your Chase personal checking account. Your monthly mortgage payment is automatically deducted from your checking account.

For more information visit https://www.chase.com/chf/mortgage/mortgage-cash-back.

How Much TV and Online Videos Do You Watch?

May 5, 2010 | Videos | No Comments

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.