If and when you decide to become a homeowner, your house will likely be the biggest purchase you ever make, so it’s a good idea to learn all you can about the various mortgage lending options out there. After all, educating yourself about various types of loans is perhaps the best way to keep yourself from being victimized by a predatory lender.

Life of the Loan

Fixed-rate mortgages come in a variety of lengths: 15-year, 20-year, 30-year and even 40-year, though 15-year and 30-year tend to be the most common. Naturally, each has advantages and disadvantages.

• 15-Year Mortgage: These loans have the obvious advantage of being short—you’ll own your home in the shortest amount of time possible, assuming you make all your payments on time. Plus, you have a good chance of having both a lower interest rate and less time for the interest to accrue, meaning your loan will be significantly less expensive. The m

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Mint.com and WallStats.com have teamed up to create a tongue-in-cheek visual representation of some dangerous predatory lending products common in America today. The image is titled The Shaft: How Some Companies Prey on the Poor.

The graphic helps depict the reality of some benign-seeming products—and highlights how susceptible many lower-income Americans are to terrible credit products, and how these financial fixes often lead to personal bankruptcy.

Payday Loans

Most people who enter payday lending shops expect the transaction to be a one-time event—which is understandable, because that’s how they’re often advertised. In practice, though, many people find themselves trapped by such loans. Here’s how:

• You take out the initial loan by post-dating a check to be cashed on your next payday. For this service, you pay a “fee,” which can be viewed as an interest rate (usually around 30 percent of the amount borrowed).
• If you have money to pay the loan in full in two weeks, you’re square.
• If you don’t have enough money to pay the amount you borrowed plus the fee, the loan “rolls over” for another two weeks. For this, you pay ano

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In a detailed report on the current state of the foreclosure crisis in the U.S., msnbc.com examines some of the issues currently troubling America’s real estate market and what these problems could mean for the future.

How the Foreclosure Crisis Started

During the real estate bubble, mortgage lenders eagerly underwrote home loans because credit was easy to come by. But:

• Many loans had adjustable rates, meaning that monthly payments would adjust (usually upward) after a certain period of time.
• These loans seemed like a good idea because home prices had risen steadily and people assumed they’d continue their upward climb. When the higher payments kicked in, many borrowers figured, they’d refinance or sell their home for a profit.
• The rising prices were part of a bubble. When

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Tags: Foreclosure Problems, Problems

Hard economic times are not limited to American families right now – many states, too, are finding themselves in precarious financial situations. California is notorious for its budget shortfalls, and, according to nbc.com, Illinois has joined the ranks of the nearly bankrupt.

Perhaps unsurprisingly, the problems plaguing state governments aren’t that different from the ones that cause financial distress at a more localized level. Here’s a look at how we as individuals can learn from the states’ mistakes.

• Don’t resist change. At the state level, it takes time and energy to alter policies that are draining finances without offering much benefit. For individuals, this often isn’t the case. So if you realize your debt is getting out of control, recognize that you’ll need to make concrete and permanent changes to improve your finances.
• Accept the hard truth. Many state politicians are unwilling to raise taxes or lower spending, because they’re worried they won’t get reelected if they do. Luckily, you aren

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Tags: States

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Reasons Why Kmart Filed Bankruptcy in 2002

by: BMA Editorial Team B . Read full post…

Tags: Bankruptcy, Bankruptcy 2002