20 Year Mortgage vs 30 Year Mortgage

Buyers with the ability to stretch a little might consider a 20-year fixed-rate mortgage instead of the traditional 30-year, suggests CBS Money Matters’ financial adviser Ray Martin.Martin points out that a $200,000 mortgage with a 30-year term and an interest rate of 4.75 would have a monthly payment of $1,043 and the total interest over the life of the loan would be $175,600.The same mortgage with a 20-year term at 4.5 percent would have a monthly payment of $1,265 with total interest over the life of the mortgage of $103,670.Young home buyers planning to have children will have their 20-year mortgage paid off by the time their kids enter college, a big financial advantage, Martin points out.
CBS, Ray Martin

MORTGAGE RATES DROP TO NEW LOWS

Fixed mortgage rates have maintained recent lows or set new ones for more than two months now, sinking to 4.42 percent on 30-year loans for the week ended Aug. 19. The rate is down from 4.44 percent last week and is the lowest ever recorded since Freddie Mac launched its survey almost 40 years ago. The fixed 15-year average also hit a new low, at 3.9 percent; while five- and one-year adjustable-rate mortgages remained flat at 3.56 percent and 3.53 percent, respectively.
The Wall Street Journal, Amy Hoak

YOU CAN KEEP YOUR GOOD CREDIT DURING THIS RECESSION - IF YOU KNOW THE SCORE

People are having to make tough financial choices today, but many don't have to wreck their credit scores if they know how the system works, according to credit expert Eddie Johansson, president of Credit Security Group."With the same amount of money, you can make decisions that kill your credit score or ones that keep your score - or at least give you the ability to rebuild your score quickly later," he said. "Most people have wrong or little information about how the system works, and that's a big reason scores go down when difficult decisions are made during a recession."Johansson advises major financial institutions and consumers on the FICO credit score model used by most lenders in deciding the borrower's risk and interest rate. He described three common misconceptions that needlessly lower credit scores.Misconception #1: Paying late didn't hurting my credit since I'm caught up now.Johansson said recent late payments are the credit score killers he sees most often. "It's great that you caught up," he said, "but it doesn't change the fact that you paid late. Anything other than 'paid as agreed' on accounts on your credit report hurts your score."Misconception #2: Dollar Amounts Matter in Credit Scores.An example of bad credit score advice here is "pay the highest bill first," Johansson said. "Dollar amounts don't matter in FICO scoring; ratios and recency do. The effect on your score is the same for a $1 late payment as a $1,000 late payment. The fewer late payments on your credit report, the higher your score - regardless of their dollar amounts," he said.Johansson emphasized the importance of paying all your bills on time, every time. However, he says that if you must pay late and want to avoid damage to your score, pay the accounts that report to credit bureaus first. You can find this information by getting a copy of your credit report.Misconception #3: Closing Credit Card Accounts Helps Your Score.If you cancel a card, you may have just thrown away your chance to increase your score by continuing to build on years of positive credit. "Very long term positive account history can really boost your score," Johansson said. "It's best for your score to keep cards open and active, using them for small purchases. Next best is to just keep them open so you can build your score back up quickly by using them later."Don't Make a Bad Situation Worse.In tough economic times, people often buy more on credit than they usually would. The amount they pay in interest on these purchases is largely determined by their credit scores. Poor decisions that lower scores combined with an already tight budget can be very costly, making money problems worse than they have to be. "What we're trying to do," Johansson said, "is help people get through these tough times with as little financial damage as possible. This is best for them, for lenders and for our economy."Johansson emphasized that lower credit scores may be unavoidable for some, and that credit scores are not the only factor to consider. "However," he said, "good credit is an important part of financial security and must be considered when making the best long-term decisions. Having the right information is necessary to make good choices - now more than ever."

Rismedia

SEVEN STEPS FOR SELLING YOUR HOME

It's About the Basics:

Since the housing boom ended and the market began to shift, the phrase “going back to basics” has been tossed around quite frequently. From the way agents handle their business to the way they communicate with clients, the phrase has gotten quite the workout. But what about consumers? They were caught up in the housing boom as well…with homes selling in a day, sometimes a few hours. Getting back to basics seems like something simple that sellers should look at as well. It might just mean the difference between selling within a month and selling within a year. Here are some basic tips from State Farm on selling a home: Set your price carefullyToo high and buyers may not consider it, too low and you're selling yourself short. Agents often give a free home market analysis if you ask. This gives you an idea of how your home compares financially with similar, recently sold homes in your area. The analysis may also include how much you might expect to earn after closing.Don't do major remodelingDon't break the bank preparing your home for sale. Pricey items such as a new roof may be big hits with buyers, but rarely does the buying price end up covering the payout for such costly home improvements. When possible, stick with the simpler (and less expensive) options rather than major remodeling.Make a good first impressionCurb appeal is important. Keep your lawn and other landscaping neatly trimmed, weeded and watered. Check the exterior of your home for signs of wear and damage, such as peeling paint, foundation cracks or loose shingles, and fix what is needed. Clean the outside of the house, including windows. Many people suggest giving the front door a fresh coat of paint for that warm, welcome feeling. In addition, adding a few flowers in the spring and summer, or keeping the walks cleared of leaves and snow in the fall and winter can be inviting to potential buyers.Clean!The obvious seller's commandment: thou shalt clean. Remove all clutter from every room, including closets. Organize your basement and attic. Have a garage sale with all the stuff you don't want to move to your next home! Wipe down and paint walls and trim if necessary. Many people advocate repainting with a neutral color palette to appeal to a wider range of potential buyers. Clean all windows, light fixtures and ceiling fans. Bathrooms should always be squeaky clean. Inspect and make any necessary repairs to the plumbing, heating, cooling and electrical systems. Highlight the bath and kitchen by selecting some attractive new towels, curtains or cabinetry knobs.And keep it cleanMaintain the new and improved interior and exterior of your home until you successfully sell. It's hard, but it's necessary. A professional cleaning service may be able to help maintain the new clean look with occasional visits.Light it upWhen showing your house, provide plenty of light and make your home a warm, welcoming place. Open the curtains to let in the sunshine. In the event of an evening showing, make sure you have ample lighting available in all areas. Fresh cut flowers make a nice addition, and a pleasantly scented house is very inviting.Go awayMany agents and potential buyers would prefer that the seller not be present during a showing, to avoid limiting the buyers' conversation or making them uncomfortable. Children and pets should also be absent or out of the buyers' way during a showing, if at all possible.

Stephanie Andre, Rismedia