Finance Roll

People have financial setbacks for a variety of reasons. For some of us, our whole lives seem to be one big financial setback, while for others of us, we've gotten it together, and then one day (it seems), our finances fall off track. This article will tell you how to get on track, whether setbacks have been a lifelong event or a recent occurrence.

The first thing you should know is that not having enough money and having financial setbacks does not happen in a day. Rather, it is the result of mental, emotional, and physical habits being performed over and over again. Some of these habits were given to us by our well-meaning parents, others are just our own "stuff". In any event, once you see that you have a financial problem, the solution is to...

Stop, Drop, and Roll

Sound familiar? It should, because that's what we were taught to do, as children, in case we ever caught fire. When your money goes up in smoke, it is like a torch has been set to your finances and you must put that fire out fast!

Stop

The first thing is to stop-stop worrying, stop crying, stop buying extra snacks and clothes to make you feel better, stop complaining, stop using prayer as your only plan of action, stop assaulting yourself by calling yourself names, stop making excuses, stop pretending not to care, stop "forgetting" to deal with it. Just stop and be.

Drop

In this place of stillness, think about what you have dropped that was working for you. Was it a certain habit, routine, or action that you've recently neglected? What about a certain philosophy that you gave up? Has the money clutter re-accumulated (i.e. bills lying around the house, not honoring your payment schedules, financial arguments with your significant other, letting people owe you money, etc.)? Have you slipped back into the panic-and-poverty mindset? Have you dropped an important support person in your business?

Now, from this place of stillness, think about what you need to drop. Is your schedule too full for you to enjoy life, so you compensate by buying things or ignoring your accounting? Are negative people taking a toll on your self-esteem, and thus on your financial point-of-attraction? Do you need to drop a client? Do you need to drop an expense? Do you need to drop a particular self-limiting belief?

Roll

Roll out a new plan. Write it in three short paragraphs. Anything else is too complicated.

In paragraph one, write out the things you have dropped that you will get back or re-establish, why, and by when (give an actual date). If you can't get the exact thing back, find a suitable replacement.

In paragraph two, write out what you will drop, why, and by when.

In paragraph three, write out the possible blockages to dropping, as well as all the solutions you can come up with, so that if you experience resistance, you know what to do.

Now, post your plan where you will see it. Make several copies if need be.

And remember: Never stay in a house (financial or otherwise) that is on fire. Always stop, drop, and roll!

Copyright © 2010 Freedom Speaks Ink. All Rights Reserved.

Many borrowers think they have found the perfect loan - the 125. But you should be cautious when considering this product.

A 125 loan is named for the amount of equity you can pull out of your home, which is usually 125%. Some of the loan is secured by your home and some of it isn't, making it a mixed loan type. The portion that is unsecured causes your interest rate to be higher than with a fully secured home equity loan.

Many borrowers turn to 125 loans because they can simply make one payment to their lender instead of several payments to many lenders. The single payment is often lower than the total of all the payments it replace, due to differences in interest rates. The rates are often much better than credit card rates, but if you roll other loans in, such as student loans, you may actually be raising some rates on your debt.

For example, you may have a car loan with a balance of $11,000. You have an interest rate of 8.5% and 4 years left of payments. You roll the note into your 125 loan, which has a rate of 11.5%. You've actually raised your interest rate.

If you roll in a credit card with a $12,000 balance and an interest rate of 19%, you are lowering your rate. But you will be looking at upwards of ten years of payments.

The real danger comes in when borrowers take out a 125, roll over their credit card debt and then go out and max out those cards again. This is called reloading. You now have double the debt to repay. You are in a worse situation now and are risking losing your home.

When you take out a 125, you have to be dedicated enough to cut up each credit card right then and there. This will help you avoid temptation.

You may be saying, but wait -- I get to deduct the interest on a 125 on my income taxes. Yes, you are saving 28 cents for every dollar you spend. Doesn't make a lot of sense. Plus, the amount of interest on the loan above the value of your home is not tax deductible. If you deduct it, it will bite you in the taxes.

You are also now upside down in your home equity. You owe more than your home is worth. You can't sell it until the value of the house increases or you pay off the loan enough to reduce the balance below the value of the house. That takes around five to 10 years in most cases.

If you are forced to sell your home, you will probably have to pay money at closing just to get it off your hands. You are paying to sell your home. If you plan to stay in your home for a long time, you may not need to worry about this as much.

But keep in mind that the unexpected happens. When you open yourself up to a lot of debt, you are putting your future at risk. Taking out a 125 loan to get rid of the debt isn't necessarily your best option. It certainly isn't the easy way out, as you may have been told. It is the same debt, just new place. Be very careful, it's your house on the line this time.

As a new year scrambles to roll out the carpet for you, isn't it time to ask yourself if those words still echo down your memories-the time when Grandpa said: 'You're really gonna be somebody. You'll make a dent. You'll be successful.' Or have those words withered out of memory's ground? Connect with that big picture unless you want to leave your life to careen to a dead end story! Stop sending out that press release about what you're going to do while leaving it to amnesia to pay the bill. If you discovered an inner streak of non conformism, a propensity for risk taking and been a beaver for a new opportunity, hungry to be different, then it's time to fulfill Grandpa's prophecy.

Replant the plant. It's time to think of your full potential, saddle up and blaze fresh, new trails. Walk away from the treadmill, break rank from the mundane where you know you're just going to be a square peg in a round hole all over again. Get ruthless. Make the new year a year of beginnings, renewing the pages of your individual history. Become more of what you really are and seize the day! We've all had career missteps but change has to start now. The past should not hold hostage the future. As the new year rings in recall Grandpa's words again.

Here's an avenue: become a problem solver instead and start preparing for an anyday future personal financial hostage crisis.

To your future,

Cally Rao

Over the last 20+ years of helping people like you, and families like yours, find, qualify for, and own the home of their dreams, often with little or no money down and even with less than perfect credit, I have observed the spending habits and life styles of a large cross section of Americans. I have counseled first time home buyers, young upwardly-mobile professionals, generals, officers and enlisted personnel of all ranks and services, construction workers and DOT COM Millionaires. For decades, most middle class Americans felt like they were simply "Living the American Dream". What Does That Mean, you might ask? Was this Fact or was it Fiction?

For most middle class American families, living the American dream meant consumption not savings, with the thought that "he who dies with the most toys wins". Has this always been a bad thing? My answer, of course, would have to be that it didn't use to be! So, what changed you might again ask? Millions of Americans are now facing the daunting task of paying out more than they are taking in every month, How did this happen to them, and how could they have been so foolish? The truth for many is that they were paying their bills, were putting a little away for retirement, had good credit and were living the American dream. Others were simply living from refinance to refinance. They were paying off their deficit spending with the paper profits from the appreciation of their homes, and who can blame them? They weren't doing anything different than their deeply indebted government? These same Americans are now facing the realities of a collapsing economy and restricted credit. So what happened to the responsible people, the individuals and families with stable jobs, 401Ks, and good retirement programs? Many of these hard working responsible Americans have watched as good paying jobs have been systematically shipped over seas. First it was an outsourcing of manufacturing jobs. This was followed by factories, and entire industries moving overseas. Next came the loss of the white collar and technology jobs. This was followed by a virtual dismantling of America's manufacturing base through sweetheart trade deals. Last, but not least was the creation and issuance of a Worker Visa Program sponsored by your government. It was designed to import "Cheap Foreign Labor" that under cuts the remaining good paying jobs that were available to the middle class. This practice endorsed has been widely supported by the Corporate Elites of Business such as Bill Gates of Microsoft fame. They have even gone so far as to state there are No Qualified American Workers and have embraced the concept of Globalization as long as it supports their corporate profit agendas and have ignored and scoffed at this virtual destruction of the American economy.

You see, it has become a Global Environment for Big Business. Profit is everything, and the loss of American Jobs, income, retirements and even homes is simply below them. Let them eat cake rings out from the Heights of Corporate America and the Secret Halls of Political Power.

So Why All the Rhetoric; Is, this an article on Debt Reduction, or an Economic and Political discussion? The Answer is appropriately yes on all counts. You see, to properly embrace this problem you must understand its root causes and the fact that you are in it alone. "The Best Government Money Can Buy" will not bail you out. That Bail Out was reserved for Wall Street...not "Main Street". The 700 Billion Dollar Bailout was all the Graphic Proof needed by "Main Street" and a root cause of the Populist backlash that is now swelling against Wall Street, Corporate America, and Our Very Halls of Political Power.

Now I need to ask you some questions? Are you spending more than you're making? Are you on the debt treadmill with no end in sight? Do You Feel Trapped or Beaten?

Are you Mad? Don't Get Mad...Just Get Even!

This article is a first step in your process of understanding the problem, embracing the problem and creating a Strategy to "Help You Get Even" This is not a Bean Counters approach to debt reduction but a Strategy Session that helps you separate Facts from Fiction. It will help you define and focus on the specific steps you need to take to achieve your own measure of financial freedom and the Key to your "XTREME" Financial Makeover!

Stop the Madness!

What ever you are presently doing with your finances...STOP! Stop the Madness Now!

Isn't it a Fact that you didn't get in this position by making good choices...so stop whatever you are presently doing and look at all the ways you might be able to save money and reduce your monthly debts. When credit cards are maxed or out of control; if you're paying double or triple the minimum payment and seeing no real change, extreme debt calls for extreme actions. Spending is an addiction to many even when it's used to cover basic expenses.

What is Fact and What is Fiction? What Really Works To radically reduce your debt? Remove emotion from the buying decision and replacing it with good old common sense.

Fact: You must create a budget if you are to understand where you are and where you want to be. You have to create a plan, and a budget is simply spending your money with intention. When you create a budget, you are spending on paper, on purpose, before you go shopping or leave the house, your budget is your road map to your financial destination.

Fiction: I don't have time to work on a budget.

Fact: Debt is not a tool: It is a method used by banks to earn money. This consumer debt does not Benefit You!

Fiction: Debt can be used as a tool to leverage your assets and help you create prosperity. In spite of expert commentary by a host notables, it simply doesn't work that way for the rank and file.

Fact: Actual debt reduction solutions begin when you come to grips with your spending habits. True debt help is not easy, and it starts with your understanding. Start using cash or debit cards only. Put your credit cards in a locked drawer, Lock the keys in your safe deposit box.

Fiction I can solve my debt problems by simply moving things around, like switching our balances to low-interest cards. I can fix my debt problems with a simple phone call to a credit counseling service. These services will never correct the real problem, which is your behavior. Companies promising quick fixes are usually scams and can cause almost irreparable damage.

Fact: Debt consolidation is like using a band aid on an infection! It simply gives the illusion of fixing the problem. You can't borrow money to reduce debt! Debt consolidation is not only dangerous, but it is contagious. It treats the symptom leaving the habits that caused it unchecked.

Fiction: Debt consolidation is the solution to my problem.

Fact: Being covered in debt is more common than ever before, and being buried in debt is rampant.

The average person has between six and 10 credit cards; the average household carries about $10,000 in credit card debt. My personal small sample of mortgage customers indicates numbers many times this amount. In fact, I rarely see numbers this low, even for a single person.

Unfortunately, many Americans are simply in Denial. With today's classic credit denial being, that I have to charge because I can't live on what I'm making. They are watching their debt continue to spiral out of control. To make matters even worse, these same individuals typically have no Emergency Fund. You need at least one month's total cash flow in the bank for an emergency. They also won't have a retirement account because there is simply nothing left over at the end of the month to save. You have too much debt when you are switching your balances from card to card and at your current rate of payments if it will take more than 4 to 5 years to have all your debts paid off! Making your minimal monthly payments is not handling your debt. I ask you, is this, the American Dream?

Fiction: If can handle my debt, how can it be too much?

A Dirty Little Secret

You are a creature of habit. The longer you have been in debt, the more comfortable you are with it, and the harder it is to get rid of it! Money problems are primarily solved by lifestyle changes. To get out of debt, you must make hard choices that change the way you have been living. Real Change...means life style changes not just rolling debt from one card to another. It requires that you "Stop the Madness Now"!

Fact: Credit management services take a fixed payment from you and spread it around, to all your cards and usually to the satisfaction of no one. If you stick with this method long enough you may get out of debt, unfortunately your credit will be trashed.

Fiction: I know who can save me...I'll hire a credit counseling or debt management service!

Fact: Pay off your smallest debt first. This will create more cash flow which you can use to accelerate the pay off of the next smallest debt and so on and so on! Always pay your essential services first before any bills are covered as it does little good to be debt free living under a bridge or in a home with no utilities. Be sure to evaluate the options available to you regarding the settlement of high balance credit cards at less than the full amount. The same applies to renegotiating your mortgage through a Loan Modification Agreement from your lender. Sub Prime, High Interest Rate and A.R.M. loans are prime candidates for this form of relief. Stick to your guns...This Is All About You!

Fiction: I should pay off the debt with the highest interest rate first or I better pay these guys first because the squeaky wheel gets the grease.

Fact: Bankruptcy is a life changing and gut-wrenching experience. An experience that continues on long after the gavel has fallen.

Fiction: I'll just file bankruptcy and start over. It's Just That Easy"!

Your debt reduction hit list! What You Can Do Starting Today!

Extreme debt calls for extreme measures and "Xtreme" debt reduction means reducing the cost of everything we do and whenever the possible negotiating the balances on outstanding accounts. Ask Yourself How Can You Lower these monthly expenses.

-Living Expenses including the home that we live in.

Can you move to a more affordable home, rent out a room/basement, cut utilities by being more energy efficient?

-What car we drive and how many we have.

Selling a vehicle saves a payment, insurance, gas, And maintenance. Many people have started to car pool or commute during the recent gas crunch and are loving it

-Vacation or play time expense.

What are you doing spending money on toys or trips when you can't get out of debt?

Sell the motorcycles, boats, snowmobiles, and sports cars. Dump the premium cable package and every other Play Time Diversion.

-Public, or home school, can easily save you about $5,000 a year and that's for elementary and high school tuition! Private Schools are simply not in the budget!

- Negotiate a reduced pay off on your large high balance credit cards. I'm sure you have seen the ads on T.V. offering this option. You don't need an external service to do this. This option is available to those who are delinquent or find that their financial status has changed. If your house is now worth less than it was when you bought it, and you can't sell it because you don't have any equity, renegotiate your mortgage by working with tour lender to avoid foreclosure. A more affordable payment might also mean the ability to pay off your other obligations quicker.

Pay Cash: people who pay with cash spend less and even tip less. They save money because it's harder to part with the green than throw out the old plastic. No More Big Spender For You! Shift your priorities, scale back, modify your lifestyle choices, and did I Say...Pay cash or debit only!

Consider those little extras that you don't need. A Starbucks a day is about 5 Bucks. A pack of cigarettes is another 5 Bucks. A sit down lunch 20 bucks! Thirty bucks a day times 360 days in a year is $10,800 and that's after tax.

Go for a hike, walk around a lake, or go for a bike ride. Inexpensive and healthy options to saving money.

Sell Something: Have a garage sale, sell that extra car, motorcycle, boat, snowmobile etc. Do you really need those musical instruments you haven't played in the last ten years? What do you have to sell? Retirement Accounts: Don't Even Think About It! Don't cash in your retirement accounts...you're going to need them later.

This article is but the first step in your understanding of how you got to where you are at today. It is a glimpse of the choices you can make to rectify your past mistakes, and a clear vision of how you can look at your future! Don't Get Mad...Just Get Even!

Now on to the steps:

• Clip coupons. You can save up to $20 to $30 every time you shop. That leads to big time savings. Use your local papers to find coupons or go to the myriad coupon sites on the internet to find them. This is one of the easiest ways to save money each month.
• Buy Groceries on sale. But only items that are on sale. Base your meals and snacks around sales. You'll be surprised at how little your grocery bill can be. You'll save a good $50 a month by doing this.
• Get rid of your landline phone. Only use your cellphone. You can now get all services from your cell phone provider as your landline. And then some.
• Only buy generic items at the store. Generic items are just as good as name brand and they are a lot cheaper.
• If you smoke, roll your own cigarettes. This may sound silly, but you will save a ton of money by not buying name brand cigarettes. This may sound like a pain, but look at the money you'll save. The same goes for drinking beer. Drink domestic rather than import.
• Share rides. If you share a ride to work, or bike, instead of driving everyday you can save at least $50 a month if not more. And it's good for the environment to boot.
• Plant your own garden. In the summer you won't have to buy vegetables and most likely you'll have enough to give to friends and neighbors.
• Cut out the daily Starbucks, or don't eat out more than once a week. If you are eating out all of the time, that could mean $50 a week for lunch, maybe $100 on the weekend eating out at restaurants.

So there is a start. You probably know other ways.

No Success Without a Budget

Effective credit repair is a multi-dimensional process. Your credit report is just the final outcome. If you want to repair your credit you need to start with your finances. You must develop a budget. A budget is a powerful personal financial tool, and you can't succeed without it. Get a pen and paper. Get serious. List every expense you have, from essential to entertainment. You should examine your checkbook and your credit card statements. Whatever you spend money on should be included.

You Must Plan to Save

Compare your income with your expenses. This can be a wake-up call for people starting a credit repair program. If you are spending more than you earn, credit problems are guaranteed. But this exercise is not about getting your expenses to match your income - there is a bit more to it; you must organize your budget to allow 10% of your income to be deposited into a savings account. If this seems difficult you should reevaluate your priorities. Life brings surprises, and without a cushion the first unexpected expense can undo your credit repair efforts. If you want to succeed you need to save.

The Details of Credit Repair

It's time to roll up your sleeves. Get all three of your reports and examine them individually; treat each credit bureau report as an individual project. This is not just about identifying obvious derogatory information. There are many factors that affect your credit scores, and you can't afford to miss anything. Some of the most important and often neglected issues include duplicate accounts listings, understated high credit limits, erroneous open dates, multiple collections for the same account, and derogatory information reporting beyond the seven year limit.

Consider a Credit Repair Service - Or Read a Book!

The majority of problems that depress credit scores are FCRA compliance violations like those listed above. If you feel lost hire a competent credit repair service, or take the time to read a good book on the subject. One of the great misunderstandings about credit repair is that you only need to identify unfamiliar data and send dispute letters to the credit bureaus. This is of little use and may leave you worse off than before. But this is not to say you can't repair your own credit. Just take the time to learn to do it right. One of my favorite books on the subject starts with a very valid warning to "do nothing until you have read this whole book".

Credit Repair Clean Up Time

Once you have identified every item that is not in compliance with the FCRA it's time to clean up the mess. If you hire a credit repair service this will be handled for you, but if you are doing it yourself there are a few things you should know. The credit bureaus are not in the business of cleaning up errors on your report. There are over 200 million Americans with credit files at each of the credit bureaus, and billions of transactions reported to each bureau every week. The credit reporting system is not perfect. In fact over 75% of all credit reports include errors.

Understanding Disputes

Without FCRA enforcement, the credit bureaus would do nothing to rectify this problem. Correcting errors is inconvenient for the credit bureaus, and they have made a science out of minimizing dispute related costs. The FCRA is designed primarily to protect consumers from life altering errors that are generated by the credit reporting system, but it also very even-handed and crafted in such a way as to insure that regulation does not overly disrupt the credit bureaus ability to operate profitably. Fair enough.

The Credit Bureaus Have Rights Too

The credit bureaus will process your disputes, but they will also exercise every right they have to ignore your request. A competent credit repair service will manage your disputes in a way designed to produce optimal results; the factors that influence the willingness of the bureaus to process a request include the clarity of the request, the number of items disputed, and the timing of repeated disputes. If you are repairing your own credit and want to succeed you need to understand the legal rights of the credit bureaus and to manage your disputes accordingly.

Rebuilding For Credit Repair Success

There is a lot of satisfaction in cleaning up your credit report. But the credit repair process is not complete until your credit scores qualify you for the best possible financing. Remember that credit is a means to an end; it must be usable. If your credit repair efforts have left you with little or no open credit, it's time to rebuild. The easiest way to build new credit is with secured credit cards. Secured cards can be very powerful tools, but it is crucial that you keep your balances down. The ideal is to keep the balance below 20% of your high credit limit. Many people let their balance approach the limit and wonder why their credit scores are so low. If you do it right you will be amazed at the results.

Copyright © 2007 James W. Kemish. All Content. All Rights Reserved.

While the world of smart phones might have more options today than ever before, nothing quite compares to the iPhone. Sure, there are other models out there that try to provide the same ease of surfing the web from a hand-held device, but none manage to pull it off in the same way. And from the very beginning and the first generation of models to improvements made with the iPhone 3G logic board that changed the user experience for the better, Steve Jobs and company have been all about providing the best smartphone experience out there.

The only shortcoming of the Apple experience, however, is the fact that every six months or so, users feel a bit short-changed when the subsequent model of anything, not just a phone, comes out with even more bells and whistles. While this should be old hat to anyone who is familiar with Mac products, it can be torture for those who yearn to be early adopters every time around. But that can be a bit difficult with the price of electronics, especially smartphones, making simply ditching something recently purchased a bit prohibitive just for the experience of upgrading.

Fortunately, there are ways to use old models to finance new ones. Even if you're using a somewhat defective cosmetically former front-line Apple model, it's possible to profit in a significant way. After all, an iPhone 3G logic board that is in working condition is a highly sought-after piece of equipment for those in the business of repairs. And since so many people are still investing in 3G models and have the interest in keeping phones in working condition rather than upgrading to the latest model that's been rolled out, they are likely to look for the chance to get things fixed up before heading towards a new model.

Why go the route of selling a phone for parts rather than simply getting it fixed up? Because it's important to think of which investment works better for your lifestyle and temperament. Those who count on smartphones for status in work situations, anyone who is on the road for business a lot, and all of those who have a fully-functioning smartphone with the cosmetic wear to make selling it used a bit unrealistic should consider selling for parts. After all, an iPhone 3G logic board in good condition can net Apple fans who are selling their phones enough money to make an upgrade far more reasonable in price. And if a phone has a functional logic board, chances are that it also has other parts that can easily be sold.

For those who are new to the game of selling old models for parts, looking towards the world wide web is the best first step for making money. There are plenty of sites that specialize in purchasing parts, so finding the best offer for an iPhone 3G logic board shouldn't be difficult at all. Those who are fortunate enough to live in a city where there are other repair people than those at the Apple Store might also consider popping in to see if there is a way to sell in person, rather than dealing with the net. Whether in real life or on the web, those in the business of repairs will appreciate being able to avoid ordering a part from the factory, as it means saving a decent chunk of money and still making a profit on fixing up someone else's phone.

In a media storm of: "big bad corporations shelter billions in offshore tax havens", one would think that you either have to be a "big bad corporation" or a "money-grubbing 1%'er with an overwhelming penchant for hiding money" in order to have an offshore bank account. Nothing could be further from the truth. Nearly anyone can and should utilize the services of an offshore bank.

Why would you want to keep your money in an offshore account you say? One of many reasons could be concern for domestic bank stability, and unless you've been under a rock for the last several years, you are likely more than a little weary of domestic bank stability. And as of January 2013, the FDIC is rolling back coverage on individual accounts to a cap of $250,000. This is likely not an issue to most of us, but what's the bigger picture here? What does this say about the solvency of the FDIC? How many near-simultaneous bank failures will it take to bankrupt the FDIC completely? What other policy changes are there that could; in the event of multiple bank failures, effect your hard-earned life savings?

You've heard about diversifying your assets, between stocks, cash, and hard assets such as gold and silver, but what about diversifying your banks? I'm not talking about opening an account at your local Savings and Loan and an additional account down the street with Citibank, I'm talking about diversifying your banks in different countries. Don't worry, I'm not suggesting you head out and convert half of your life's savings to Icelandic Krona, you can keep your money in US Dollars, just don't keep those US Dollars in a US Bank. Think about it, you wouldn't keep your entire life's saving in one company's stock, or one mutual fund with one investment company would you? At least I hope you wouldn't! (Bernie Madoff Investment Securities ring a bell?)

Many international banks offer great lines of product with fantastic rates of return designed specifically to attract depositors with US dollars that just don't exist domestically. Many of these programs are only available to account holders. Even if your credit rating has taken a beating in recent years, you may still be eligible for mortgage financing from your offshore bank when domestic banks won't even look at you. Granted, the money may be pricey and may have steep equity requirements, but when no domestic lending institution will even give you the time of day... any financing is better than no financing.

There are inherent risks with having your money in an offshore bank so take your time, do your homework. Just as you wouldn't put your money in a domestic bank that appears unstable, or is on the FDIC list of troubled banks, you probably would be well served to stay away from banks like the First National Bank of the Democratic Republic of the Congo. No matter what fantastic rate they offer you! Find a good bank, in a good jurisdiction. Want to know why Swiss banks look so attractive to wealthy account holders? You would think from listening to the talking heads on the major network nightly news programs it would be hiding money... think about that one for a moment: Would you consider a place that has been demonized on the nightly news year-in and year-out; and that is known by absolutely everyone, a good hiding place for money? So what makes you think these wealthy account holders aren't using the same logic? They didn't become wealthy by making mistakes with their cash, that's for sure. The number one reason for using a Swiss Bank is simple: they're really good at banking. In fact, they've been doing it for longer than the US has been the US, and are rock-solid stable. In fact, when was the last time you heard of a Swiss bank failure, collapse or a call for a bailout of the Swiss banking system?

And what about staying out of trouble with the IRS? Guidelines change all the time, so be sure to check, recheck and understand them thoroughly before sending your money to a foreign bank account. If you follow the guidelines, do your homework and report your offshore holdings, you can enjoy your offshore account hassle free for many years to come!

Buying a home with no money down can help you stop paying rent and start building equity. With so many programs out there for first time home buyers, you can find a loan that will fit your budget. Before signing any paperwork though, look at all your lending options. With online lenders, you can often find better financing than with your neighborhood bank.

What Buying a Home With No Money Down Can Do For You

A no money down mortgage can help you buy a home with little out of pocket expense. No money down can mean either no down payment or no closing costs paid up front. In either case, your rates and fees will be higher. But without the obstacle of thousands due at closing, you can get into a home easily.

Finding A No Money Down Mortgage

Many lenders, even sub prime lenders, offer no money down mortgages. The best source for loan quotes is online for easy access. You will want to look at the APR which will include closing costs. Even if those closing costs are rolled into the principal, you will be paying for them.

Most sites will have the options to check for a no money down loan. It will usually be a check box. If the option isn't available, send an email requesting a quote. Typically no money down loan rates are a couple of points higher than traditional loans.

Improving Your Home Loan Odds

No money down home loans increases the risk for financial companies. However, you can offset that risk be proving that you have the means to make payment. Large cash assets are what lenders are looking for. So you might consider increasing your savings account or CODs while applying for a loan.

Other factors, such as the housing market, your income, and credit history, will also affect your application.

Other Mortgage Options

While you may want a no money down mortgage, keep your options open. You may find a better deal by being willing to put down at least a small down payment. You can always tap into that equity with a second mortgage.

The other option is to finance your home purchase with two mortgages, usually held by separate financing companies.

I read several blogs on finance and budgeting, and the one thing they all say is that you must track what your money is doing. I have been doing this for quite some time, and I have developed a pretty good spreadsheet that has evolved over the years. I am planning on fixing it up and giving it away to everyone that signs up for my newsletter, so make sure you stop over at the box to the right and leave your name and email so you get it as soon as it is ready!

As a lead in to the release of my spreadsheet, I thought I would give you five ways you can work on getting your financials in shape for the new year.

Track Your Income and Expenses

Surprise! I bet you didn't see that coming. Seriously though, you can't hit a target you can't see. By keeping a spreadsheet (or money management program like Quicken) with all of your up to date finances in it, you can stop areas such as overspending before they get out of hand. This can also be a great motivator when you see those debt balances start dropping! Once you get a look at my spreadsheet you will notice that it tracks a lot of things such as your current ratio, income, expenses, taxes, debt, debt ratio, net worth, etc. Taking the time to update these numbers each payday really makes a difference.

Review Your Spending Habits

This is a bit of a tedious exercise, but a very useful one. For one month, write down everything you spend money on and I mean everything. If you buy a coke from the machine write it down. One of the ways I have found that is easiest to do this is to save every receipt and drop them into a box at the end of the day (if you don't get a receipt write it on a small piece of paper). At the end of the week, assign each receipt to a major category. The first month you should not vary your spending at all, just capture everything. At the end of the month, take some time and review what you spent your money on, and look for areas that might be out of control. Everyone has them, it might be the amount of money spent on eating out, or clothes, or just entertainment. After you have found your hot button, the next month whenever you are about to purchase in that category ask yourself if you really want what you are about to buy. You will find at the end of that month you will have probably reduced spending in that area. The next month, make a game out of it. See how much you can cut your spending, and at the end of the month take what you saved and actually save it. If you can continue tracking what you spend like this, you will drastically change your habits. Unfortunately most people drop this pretty quickly (me included).

Start Saving

I know everyone out there knows they should be doing this, but for some reason not many people act on it. I think the problem is that most people do not think they have any money left. So start off small. Find a place where each night you empty out your pockets or purse of all the change you collected during the day and keep it in a jar. Make that jar off limits, after all, how much money could be in there anyway? Once the jar is full, take it to the bank and put it into an account. Notice I didn't say count it, NEVER count it. The reason is that in reality there is much more in there than you think, and if you count it you will spend it. Just take the jar to the bank and tell them you want to deposit it, the worst that will happen is they will want you to roll it which you can do at the bank. Once you have done this for a couple months, then along with the change, start putting the dollar bills in there as well.

Stop Charging

Once again, this is some pretty common sense stuff that most people have problems with. If you do the math, your credit cards are sucking more out of your budget than you think. If you are only paying the minimum payment on a credit card, it will take you more than 10 years to pay off the balance if you pay on time. Don't even think about being late! The best way to do this is to get rid of them, cut them up, shred them, burn them, just get rid of them. If you want to keep one in case of emergencies (I don't really advocate this unless it is a charge card such as American Express that has to be paid off in full each month) then put a freeze on that one card, literally. Freeze it in a block of ice in your freezer and thaw only in case of emergency!

Set Financial Goals

Finally, set some goals in the financial area of your life. This isn't all about saving, find some ways to make extra money. There are plenty of ways out there where you can make a little extra money. One that I have come across that sounds good is West at Home. I have not tried this, but essentially you work as a call center agent from home when you want to work. If anyone has tried this or does on account of this post, let me know about your experience. Saving and cutting costs isn't near as fun as making more money, so go figure out how! As always write down your goals and make sure they are measurable.

So there you go, that should get you started in the right direction for the New Year. If you have some other tips on how people can make and save more money this year, please share them below!

For nearly 30 years, I have represented borrowers and lenders in commercial real estate transactions. During this time it has become apparent that many Buyers do not have a clear understanding of what is required to document a commercial real estate loan. Unless the basics are understood, the likelihood of success in closing a commercial real estate transaction is greatly reduced.

Throughout the process of negotiating the sale contract, all parties must keep their eye on what the Buyer's lender will reasonably require as a condition to financing the purchase. This may not be what the parties want to focus on, but if this aspect of the transaction is ignored, the deal may not close at all.

Sellers and their agents often express the attitude that the Buyer's financing is the Buyer's problem, not theirs. Perhaps, but facilitating Buyer's financing should certainly be of interest to Sellers. How many sale transactions will close if the Buyer cannot get financing?

This is not to suggest that Sellers should intrude upon the relationship between the Buyer and its lender, or become actively involved in obtaining Buyer's financing. It does mean, however, that the Seller should understand what information concerning the property the Buyer will need to produce to its lender to obtain financing, and that Seller should be prepared to fully cooperate with the Buyer in all reasonable respects to produce that information.

Basic Lending Criteria

Lenders actively involved in making loans secured by commercial real estate typically have the same or similar documentation requirements. Unless these requirements can be satisfied, the loan will not be funded. If the loan is not funded, the sale transaction will not likely close.

For Lenders, the object, always, is to establish two basic lending criteria:

1. The ability of the borrower to repay the loan; and

2. The ability of the lender to recover the full amount of the loan, including outstanding principal, accrued and unpaid interest, and all reasonable costs of collection, in the event the borrower fails to repay the loan.

In nearly every loan of every type, these two lending criteria form the basis of the lender's willingness to make the loan. Virtually all documentation in the loan closing process points to satisfying these two criteria. There are other legal requirements and regulations requiring lender compliance, but these two basic lending criteria represent, for the lender, what the loan closing process seeks to establish. They are also a primary focus of bank regulators, such as the FDIC, in verifying that the lender is following safe and sound lending practices.

Few lenders engaged in commercial real estate lending are interested in making loans without collateral sufficient to assure repayment of the entire loan, including outstanding principal, accrued and unpaid interest, and all reasonable costs of collection, even where the borrower's independent ability to repay is substantial. As we have seen time and again, changes in economic conditions, whether occurring from ordinary economic cycles, changes in technology, natural disasters, divorce, death, and even terrorist attack or war, can change the "ability" of a borrower to pay. Prudent lending practices require adequate security for any loan of substance.

Documenting The Loan

There is no magic to documenting a commercial real estate loan. There are issues to resolve and documents to draft, but all can be managed efficiently and effectively if all parties to the transaction recognize the legitimate needs of the lender and plan the transaction and the contract requirements with a view toward satisfying those needs within the framework of the sale transaction.

While the credit decision to issue a loan commitment focuses primarily on the ability of the borrower to repay the loan; the loan closing process focuses primarily on verification and documentation of the second stated criteria: confirmation that the collateral is sufficient to assure repayment of the loan, including all principal, accrued and unpaid interest, late fees, attorneys fees and other costs of collection, in the event the borrower fails to voluntarily repay the loan.

With this in mind, most commercial real estate lenders approach commercial real estate closings by viewing themselves as potential "back-up buyers". They are always testing their collateral position against the possibility that the Buyer/Borrower will default, with the lender being forced to foreclose and become the owner of the property. Their documentation requirements are designed to place the lender, after foreclosure, in as good a position as they would require at closing if they were a sophisticated direct buyer of the property; with the expectation that the lender may need to sell the property to a future sophisticated buyer to recover repayment of their loan.

Top 10 Lender Deliveries

In documenting a commercial real estate loan, the parties must recognize that virtually all commercial real estate lenders will require, among other things, delivery of the following "property documents":

1. Operating Statements for the past 3 years reflecting income and expenses of operations, including cost and timing of scheduled capital improvements;

2. Certified copies of all Leases;

3. A Certified Rent Roll as of the date of the Purchase Contract, and again as of a date within 2 or 3 days prior to closing;

4. Estoppel Certificates signed by each tenant (or, typically, tenants representing 90% of the leased GLA in the project) dated within 15 days prior to closing;

5. Subordination, Non-Disturbance and Attornment ("SNDA") Agreements signed by each tenant;

6. An ALTA lender's title insurance policy with required endorsements, including, among others, an ALTA 3.1 Zoning Endorsement (modified to include parking), ALTA Endorsement No. 4 (Contiguity Endorsement insuring the mortgaged property constitutes a single parcel with no gaps or gores), and an Access Endorsement (insuring that the mortgaged property has access to public streets and ways for vehicular and pedestrian traffic);

7. Copies of all documents of record which are to remain as encumbrances following closing, including all easements, restrictions, party wall agreements and other similar items;

8. A current Plat of Survey prepared in accordance with 2011 Minimum Standard Detail for ALTA/ACSM Land Title Surveys, certified to the lender, Buyer and the title insurer;

9. A satisfactory Environmental Site Assessment Report (Phase I Audit) and, if appropriate under the circumstances, a Phase 2 Audit, to demonstrate the property is not burdened with any recognized environmental defect; and

10. A Site Improvements Inspection Report to evaluate the structural integrity of improvements.

To be sure, there will be other requirements and deliveries the Buyer will be expected to satisfy as a condition to obtaining funding of the purchase money loan, but the items listed above are virtually universal. If the parties do not draft the purchase contract to accommodate timely delivery of these items to lender, the chances of closing the transaction are greatly reduced.

Planning for Closing Costs

The closing process for commercial real estate transactions can be expensive. In addition to drafting the Purchase Contract to accommodate the documentary requirements of the Buyer's lender, the Buyer and his advisors need to consider and adequately plan for the high cost of bringing a commercial real estate transaction from contract to closing.

If competent Buyer's counsel and competent lender's counsel work together, each understanding what is required to be done to get the transaction closed, the cost of closing can be kept to a minimum, though it will undoubtedly remain substantial. It is not unusual for closing costs for a commercial real estate transaction with even typical closing issues to run thousands of dollars. Buyers must understand this and be prepared to accept it as a cost of doing business.

Sophisticated Buyers understand the costs involved in documenting and closing a commercial real estate transaction and factor them into the overall cost of the transaction, just as they do costs such as the agreed upon purchase price, real estate brokerage commissions, loan brokerage fees, loan commitment fees and the like.

Closing costs can constitute significant transaction expenses and must be factored into the Buyer's business decision-making process in determining whether to proceed with a commercial real estate transaction. They are inescapable expenditures that add to Buyer's cost of acquiring commercial real estate. They must be taken into account to determine the "true purchase price" to be paid by the Buyer to acquire any given project and to accurately calculate the anticipated yield on investment.

Some closing costs may be shifted to the Seller through custom or effective contract negotiation, but many will unavoidably fall on the Buyer. These can easily total tens of thousands of dollars in an even moderately sized commercial real estate transaction in the $1,000,000 to $5,000,000 price range.

Costs often overlooked, but ever present, include title insurance with required lender endorsements, an ALTA Survey, environmental audit(s), a Site Improvements Inspection Report and, somewhat surprisingly, Buyers attorney's fees.

For reasons that escape me, inexperienced Buyers of commercial real estate, and even some experienced Buyers, nearly always underestimate attorneys fees required in any given transaction. This is not because they are unpredictable, since the combined fees a Buyer must pay to its own attorney and to the Lender's attorney typically aggregate around 1% of the Purchase Price. Perhaps it stems from wishful thinking associated with the customarily low attorneys fees charged by attorneys handling residential real estate closings. In reality, the level of sophistication and the amount of specialized work required to fully investigate and document a transaction for a Buyer of commercial real estate makes comparisons with residential real estate transactions inappropriate. Sophisticated commercial real estate investors understand this. Less sophisticated commercial real estate buyers must learn how to properly budget this cost.

Conclusion

Concluding negotiations for the sale/purchase of a substantial commercial real estate project is a thrilling experience but, until the transaction closes, it is only ink on paper. To get to closing, the contract must anticipate the documentation the Buyer will be required to deliver to its lender to obtain purchase money financing. The Buyer must also be aware of the substantial costs to be incurred in preparing for closing so that Buyer may reasonably plan its cash requirements for closing. With a clear understanding of what is required, and advanced planning to satisfy those requirements, the likelihood of successfully closing will be greatly enhanced.

A fast secured loan is generally going to cost you more than a secured loan that takes longer. While it will cost you less than an unsecured loan, the fact that you require it quickly generally puts up a red flag in the mind of the lender and that will cost you more.

A lender who thinks, why is this person not prepared to pay for this short term crisis on her or his own? is a lender who thinks the consumer is ill prepared to repay the fast secured loan as well. The higher the lender risk, the higher the rate.

One of the riskiest of the fast secured loan family is the title loan. Just as with payday loan, a car title loan is secured and fast and is marketed as a loan for emergencies. The reality is much grimmer, however, in that it is often the trap that puts the poor into an even worse cycle of debt.

A typical fast secured title loan charges well over 100 percent in annual interest, has to be paid within 30 days and is for considerably less than the cars value.

The worst case scenario for this type of fast secured loan - and happens far too often - is that the borrower loses her or his only transportation, and the means to get to and from work. Which, of course, considerably worsens the financial situation that brought the borrower to the title loan provider in the first place.

Most of these fast secured title loan providers will only lend money on a car that the borrower owns free and clear. Most target consumers that have bad credit, that are low income, that are elderly or military.

The way this fast secured title loan is written the consumer does not see the reality of the interest rate and the ultimate cost. While the consumer looks at the 30 day paperwork and sees that she or he is paying back 125 percent of what she was originally lent, the fact remains that figured on an annual basis this brings the interest rate to an annual 300 percent.

What happens more often than not, however -which makes it even worse for that debt-ridden struggling consumer - is that she or he is still badly in debt. The lender helpfully offers to roll over the debt for another month. As of the end of the first month, then, that consumer who borrowed 600, at that alleged 25 percent, owed 750.

Rolling it over puts another 150 on the charges. So now that same 600 has now put the consumer into debt with that lender for a total of 900. What now happens is the consumer is going to struggle even more mightily to pay that back. Each month she or he does not do so 150 is added to the cost.

Unpaid for one year, that original 600 fast secured loan could end up costing that consumer 1800. If a consumer cannot come up with 600 on her or his own, what are the chances she or he can pay 2400 back at the end of the year? The fact is that many cannot - and, for 600, they lose their vehicle.

While we are not suggesting that a fast secured loan is a bad thing, we are saying that the faster you need the loan the more wary you should be about the lender you choose.

A debt consolidation loan is one that takes your existing credit balances and rolls them into a new loan. Usually, the payment on the debt consolidation loan is considerably less than the total of all the individual payments you have been making. These can sometimes be a good way to regain control of your personal finances, but there are some points you should consider first.

Before you take out a debt consolidation loan, see if there is another way to handle your personal finances. Can you reduce expenses and make larger payments on existing debt? Could you and/or your spouse take a second job for the express purpose of paying down debt and restoring order to your personal finances? Are there other ways to raise cash, such as the sale of a boat that hasn't been in the water for years or a vacation cabin you never use?

You also need to know how much the monthly payment on your debt consolidation loan will be. While it is normally less than your total payments, if it is still out of reach of your personal finance picture, you are not doing yourself any favors by taking one.

If your personal finances can be restored, and debt eliminated, in a relatively short period, you might want to stay with the debts you have. For example, if your financial problems are due to paying for a child's last year of college, you can probably survive without incurring a debt that may have a longer repayment term than you currently have.

You will also have to exercise control over your personal finances if you take a debt consolidation loan. Old habits will have to be changed, or you can quickly wind up in even worse circumstances than you started with. One example is when people take out a debt consolidation loan, pay off their credit cards, and then run their balances up again. Now they not only have the same payments they couldn't afford in the first place, they also have a payment on the debt consolidation loan to deal with. If a problem with your personal finances has been chronic, no matter what you did, you need to be sure that you are willing and able to change your spending habits before you take out a debt consolidation loan. Otherwise, your personal finances will continue to be a shambles and your debt load will keep increasing until there are no options left except bankruptcy.

If you take out a debt consolidation loan, it is a good idea to close as many accounts as you can. Keep one bank card for emergency use only, and close the others. Expect to be deluged by enticing offers from the department stores, who want you to reverse your decision and keep the account open. They may offer you huge discounts on your next purchase if made with their card or several months of no payments and no interest. Stay strong, and follow through on your commitment to regain control of your personal finances.

A debt consolidation loan is not for everyone, or a solution for every situation. But for many people, it is the best way to restore some sense of order to their personal finances. It can also bring peace of mind to others, and that is something that cannot be bought.

Tough economic times require a steely determination to survive and a good deal of guile when faced with a significant amount of debt and a dwindling salary. There are millions of people all over the world feeling some sort of financial squeeze and most are racking their brains for a solution to the problem of keeping their heads above financial water.

Christmas time is a period where being a little short of cash for whatever reason can cause problems. You want to buy presents and so on and find it difficult to reconcile this extra demand on your finances. It is totally normal to feel this way.

But, what if you had a life with no money worries where you were the master or mistress of your own financial destiny. No mortgage, credit cards, car loans, store cards and so on. Close your eyes and really believe for a second that scenario is your situation.

You will let your mind and imagination runaway with you and see yourself buying that special item that you have always wanted like a car, a piece of art, a holiday, a new tv whatever you have always wanted you now have.

Really feel the emotion of having enough money to do what ever you wish in your life with no worries whatsoever.

The old adage 'money can't buy you happiness' is absolutely untrue because it does.

If you have been following this article your imagination should have given you a wonderful feeling of what life in the future could really be like for you and you loved ones.

There are many ways that you can get more money like buying a winning lottery ticket or a deceased relative leaves you a large amount of cash that you never knew they had. these type of things do happen but the odds are heavily stacked against them happening to you. That is not negative just the plain truth. You need to find a way of making just a little extra money at first by attracting money with little effort. This is hard to do but it becomes a lot easier when you know exactly how to do it. So its up to you do you just want to cross your fingers and hopes into an attractive business idea and wait for the money to start rolling in.

It may work for you but those sorts of opportunities tend to be the stuff of fantasy and what you really need is reality. There are very few of the world's wealthiest people who have got money this way. They understand that you have to learn how to attract money and work hard at doing it too.

If I said you needed a desire and by that I mean a focused desire to have more money you probably wouldn't know how to do that either. It's something that you also need to learn. It may work for you but those sorts of opportunities tend to be the stuff of fantasy and what you really need is reality. There are very few of the world's wealthiest people who have got money this way. They understand that you have to learn how to attract money and work hard at doing it too.

A laser targeted inner belief is what is needed to reach your financial goals and you can learn this very easily. The secrets of 'working' also need to be learnt and absorbed into the mind of the new financially savvy you, this skill alone will put you way ahead of other people.

Would you agree that if you set out to do something then you should do it well and see it through to its conclusion? No starting with the best of intentions and losing focus along the way. This crucial thought process can be easily learned as well.

What about industry, ambition, energy and perseverance? Qualities for success and money that you must have ingrained in your mind and fully understand.

Do you have the ability to help yourself? Do you have the brutal determination and awareness to end a money making project if it isn't working or would you stubbornly carry on regardless even if it wasn't working out and you knew it?

Focus is what you need to get money and as much as you want too. You will also need plenty of inner drive and focus as well as steely determination to succeed. It's better to be a master and King of one money attracting activity than having too many ideas and projects on the go and achieving with none of them. Deviate from what you are about to learn and fail.

Each and everyone of the skills mentioned so far and their attributes you will need to practice and understand to become wealthier and it's the people who read articles like this and do nothing that will lose out. Everything I have mentioned is a skill and discipline that you can easily learn and they are all contained in one simple free book. as we are concerned about making you richer the good news is this book is free.

P. T Barnum's classic book 'The Art Of Money Getting-Golden rules For Making Money' is a classic money motivation course that has been used by many of the world's most financially successful business people including the likes of Donald Trump and Sir Richard Branson. They attribute this old manuscript as an integral part of their money making learning and success. Branson started his empire in a telephone box in the UK and look at him now.

I really want you to embrace this book. In it Barnum sets out in easy to follow short chapters a total blueprint for making money and very specific instruction on how to do it. It comes in an audio book format, so no reams of paper and wearing out your printer either. Start 2011 with a real desire to get more money and improve your finances forever. this is an opportunity to learn how to get money and keep it and protect your future. Just go to my website and help yourself. You can download it instantly and it will work on your computer, iPod, Mp3 player and any other audio devices that you may have.

Remember to become successful at whatever you choose to do, you are going to need do something - take action and do it now as inaction is your greatest enemy.

Claim your download now of P. T Barnum's 'The Art Of Money Getting' at: http://www.selfhelpaudiolibrary.com/offer

Owning home during the last three years has been like fall into a gold mine. Values have just gone up, up and away.

If you are a homeowner you just can't stop smiling. The size of your home's equity may be matched only by the latest Power Ball total. But what about the first time home buyer or those who have a burning need for more space - the move up buyer?

Wages gains have not matched the increased real estate prices and that is putting new buyers in a tight spot. The law of market forces indicates that with fewer people able to buy a home there will be less demand and home prices will begin coming down, right? Wrong!

The building industry and booming home equity growth are about the only things driving the fragile U.S. economy. The government must keep the housing market healthy or risk being booted out of office. Bush is keeping the ball rolling just as Clinton did before him. Keep the voters passive in their snug new homes.

Enter the 40 year mortgage.

An ad in the financial section of a major city's newspaper shouts "Ask About Our 40 Year SmartChoice Mortgage!" The advertisement goes on to say you have your choice of an adjustable rate of 1%, or a fixed rate of 1.75% for 5 years.

Look what that means. You can stroll in and borrow $400,000 for a monthly payment of just $1,012 with zero closing costs! Hurray, everyone can again afford to buy a home. Yeow, this ad even says they will loan you 107% of your new home's value.

Shouldn't we get a little nervous when we see that kind of ad? Won't the 40 year loan allow people who really can't afford a home to shoulder that financial burden? And if we may be a real estate bubble as some claim, doesn't this make buying highly leveraged real estate down right dangerous?

Until now forty-year mortgages have been rare because lenders couldn't sell the darn things to investors through the government-sponsored enterprises Fannie Mae and Freddie Mac. Those 40 year loans had to be held by the lenders, tying up their money for a long time. Now that's changed.

Both Fannie and Freddie are passing out cash for those babies like they are running their own money printing presses. Wait a minute, the government IS running the presses. Some would say, just like Parker Brothers prints Monopoly money.

It's easy to see that the primary advantage of a 40-year fixed-rate mortgage is to make monthly loan payments more affordable and avoid the risk of an adjustable rate mortgage. The 40-year fixed rate also appeals to buyers with small down payments.

Now stop and look at the numbers. You will see that the difference in payments may not be that significant. Take a $200,000 mortgage financed for 30 years at a fixed rate of 5.75%. It would have a monthly payment of $1,167.15. Stretching the loan term by an additional 10 years (40-year mortgage) only reduces the monthly payment by a little over $100 to $1,065.78.

There's more: Some of benefit of those lower monthly payments is offset by the higher interest rate that comes with the 40-year loan. Rates on a 40-year fixed are often one quarter to one half of a percentage point higher than a traditional 30-year fixed-rate mortgage. Loans with longer terms carry higher rates because of the added time frame where a default may occur and because lenders require compensation when their money is locked up for the longer time.

One of the benefits of the recent increase in homes values is that homeowners turned much of their equity into cash through refinancing. Homeowners spend that cash and that money keeps our economy going. With 40-year loans real estate equity grows at a snail's pace a home's value appreciates at a normal rate of 3% to 5% yearly. For the first-time home buyer who plans to eventually move up to a larger home, this slow pace of equity accumulation is a liability.

Now add zero closing costs to the mix. In most areas, closing would run about $2,000 in fees to refinance a $200,000 mortgage. Appraisal - $300. Settlement Fee - $300. County recording fees - $400. Underwriting fee - $300. Processing fee - $200. Title Insurance - $750. The list goes on.

Without zero closing cost programs, the home buyer would have to wait until interest rates reached a level low enough to justify the closing costs. Remember that closing costs must be low enough to allow the buyer will recoup those costs in a reasonable period of time. If he plans on being in the home for five years and it takes seven years to recapture the closing costs it's a bad deal. We must admit homeowners don't see to be very concerned about such things.

No body gets something for nothing, especially with mortgage lenders. A zero cost loan program is financed by a loan with a slightly higher interest rate. You can juggle the numbers all you want, but the borrower always pays and the lender always earns.

The 40-year mortgage will allow our economy to keep rumbling along this bumpy road for at least a short trip. Let's hope we don't wind up at a dead end.