interest Tag

11 Feb Mortgage Bankers Want Your Home, Not Your Money

Congress is considering changes to the Bankruptcy Code that would allow the same judicial modification of home mortgages that is currently allowed for vacation homes, business property, and other assets. Letting families keep their homes by reducing principal and interest to market value would let tens of thousands of homeowners resume making their mortgage payments, halt many of the 46,000 foreclosures that are taking place each week, and stop the glut of foreclosed homes on the market that are continually ratcheting housing prices downward. But surprise, surprise, the Mortgage Bankers Association opposes these changes. Why? Let's look at the facts.
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31 Jan Are Credit Card Offers Of Zero Percent A Good Deal?

Have you received an offer for 0% financing from your credit card lately? A careful look at the terms of such offers reveal the continuing traps of the finance industry on consumers. Time for some grade school math and a different way of looking at the world.

Consider the offer of zero percent for six months. Free money, right? Such offers usually contain a service fee of 3% of the money advanced. So a consumer who takes advantage of a $1,000 offer will pay $30 for the privilege. A three percent fee is equivalent to a 6% annual interest rate. ($1000 x 6% for one year 6 months = $30) That is to say, if you borrowed one thousand dollars for six months at six percent, you would pay thirty dollars in interest. It is one and the same.

An offer at 2.99% for the same time is not the same. If you borrowed the same $1,000 for six months, you would only pay $15.00 in interest. Which is the cheaper deal, 0% or 2.99%?

The real problem is what happens after the "special" deal ends.

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26 Jul Credit Unions: Lots Better Than Payday Loans

Payday loans are horrible.
  • Interest rates as high as 1,500% per year (that's One Thousand Five Hundred percent per year, and yes, we've seen them this high).
  • Wage withholding.
  • Repayment terms that lock you into an endless cycle of borrow and pay that you can never get out of.
  • Abusive collection practices.
So why do people borrow money from people like this on such outrageous terms? Because, as one blogger put it, "When the landlord is pounding on the door demanding rent, the kids are crying because the kitchen is empty, and the electric company is hauling the meter out of the house for non-payment, what would you do?" Well, what can you do other than using a payday lender? The answer? Check with a credit union.
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