Toledo being in the top five for affordable housing

Good news for the local housing market. When it comes to getting the most for your money, Toledo is in the top five on a national list.

We talked to a realtor and a mortgage broker. They both say they weren't surprised by the ranking. They say your days are numbered to cash in on the great deals.

If you are looking for a good deal on a house Toledo is one of the best markets in the country. According to a study by the National Association of Home Builders, the Glass City comes in at number four in the entire country when it comes to the most affordable housing markets in large metro areas.

Jill Perry Smith from Welles Bowen Realtors says, "In 2007, the average price of a home was in the mid 120's. You certainly are getting more value than in previous years."

Rich Rucker is the managing broker at Faith Mortgage. He says the big inventory of homes on the market along with the low mortgage rates and the good deals put the American dream within reach for most people.

"Ultimately home ownership builds wealth. Most wealthy people got there by investing in real estate. Now the average Joe can come in and be a part of that."

While Toledo has some of the most affordable housing in the country, the local real estate market has been slow. Most experts say that trend will likely continue this year. So which city topped the affordable housing market list? Indianapolis followed by Youngstown Ohio, Detroit, Toledo and Lansing. The least affordable housing market in the US is Los Angeles. Good news for the local housing market. When it comes to getting the most for your money, Toledo is in the top five on a national list.

Source: http://abclocal.go.com

Should you save or pay down Debt?

Should you be putting money in savings or investments at the same time you're paying off a loan?

That's one of the most frequently asked questions we get at Kiplinger, and the answer isn't always obvious. Even if you have run up a balance on a high-rate credit card, you may hear a nagging voice in your head urging you to keep plowing money into savings for retirement, college for the kids or a new home.

The simplistic solution -- to invest if you can earn a higher interest rate than you're paying on your loans -- can be downright dangerous. That became clear when, in the late '90s, a wave of questionable advice suggested that homeowners actually create more debt to invest in the booming stock market -- by pulling out some equity via a cash-out refinancing or home-equity loan. Then came the bear market.

The best answer lies in separating good debt from bad debt. It's almost always a good idea to get rid of credit card and other high-interest loans before you start setting aside cash. However, you probably don't want to accelerate mortgage or student loans at the expense of saving for retirement.

Begin by making a list of all your debt and the interest rates on those debts to prioritize which ones you should pay first, says Deena Katz, president of Coral Gables, Fla., financial planners Evensky, Brown and Katz. Then look at your alternatives for saving and investing and, if necessary, reset your priorities.

Step 1: Pay off the high-interest debt

If you have high-interest credit card debt, tackle that first. It doesn't make sense to start saving or investing until you've paid off this debt. You'd have to make more than 20% after-tax return on stocks, bonds or mutual funds to make them a better investment than paying off a credit card with an interest rate above 15%, says Clark Randall, a financial planner with Lincoln Financial Advisors in Dallas.

There is one exception to that rule of thumb: If your employer offers a 401(k) plan and will match your contributions up to a certain level, fund it up to that level -- even if you have credit card debt -- because you're getting a 100% return on your investment, says Randall. Contribute more than the match level once you've paid off your consumer debt.

If you're drowning in debt, liquidate assets such as stocks and use your savings -- but not a 401(k) or IRA -- to pay off your credit cards. If you're in dire straits, you can borrow up to 50% (no more than $50,000) from a 401(k). Although you pay yourself back with interest, you give up tax-free compounding, and you will have to pay back the loan immediately if you leave your employer.

Step 2: Identify the good debt

For the most part, it's usually not a good idea to pay off your home mortgage unless you have a lot of extra cash. After all, Uncle Sam refunds part of your interest payment if you itemize your deductions on your tax return.

Use your money instead to invest in liquid assets. However, Randall recommends paying off your mortgage (and any other debt you might have) by the time you retire so you can get by on less money.

Don't be in a rush to pay off student loans, either. The old rule that allows a tax deduction only for interest paid during the first five years of repayment is ending. Qualifying interest on student loans can be written off no matter how long it takes to pay off your loans.

However, you can ease the burden of repaying your loans. Thanks to recent legislation, you can now shop around for the best terms. For example, lenders may offer a rate reduction if you elect to have your loan payments automatically deducted from your bank account. And some lenders will knock more off your rate after 24 or 36 months of on-time payments. Compare deals at ConsolidationComparison.com.

Step 3: Save and invest

Once you've eliminated high-interest consumer debt, start saving as much as you can. The best place to begin is a 401(k). The next best option is an IRA.

In addition to putting money into a retirement account, you need cash that's readily available in an emergency so you don't have to rely on credit cards. (If you are paying down your credit card balances and still paying high rates, it is probably better to keep paying off the cards and borrow from them in case of an emergency, says Katz.)

Set aside enough money to tide you over for three months if your paycheck suddenly stopped. If you have less-than-steady income, such as from a commissioned sales position, or a job that has more exposure to economic fluctuations, consider setting aside six months' income.

Sock it away in a high-yield savings account or money market fund on a monthly basis until you reach your desired amount.

Source: http://washingtonpost.com

Bond Isurer MBIA braces for a change

MBIA on Tuesday became the second bond insurer to replace its chief executive this year, bringing former chief Jay Brown back to replace Gary Dunton. Ambac, the second-largest financial guarantor after MBIA, last month named Michael Callen to take over for the retiring Robert Genader

To Read More: money.cnn.com

Understanding Purchase Points, Interest Rates, and Fees on your Mortgage Loan

Not only do you have to understand what type of mortgage you should choose, you have to understand the costs associated with your mortgage. All of these costs will be paid upon closing your mortgage.

Purchase Points

Purchase points, also known as a "buy-down" or "discount points," are an up-front fee paid to the lender at closing to buy-down or lower your interest rate over the life of the loan. Each point is equal to one percent of your total loan amount. If you have a $100,000 loan, one point would equal $1,000. The more points you buy, the lower your interest rate, but the more money you'll need at closing.

How do you decide whether you should buy points and if so, how many? Well, the decision should be based on how long you plan on living in your home and what you can afford to pay each month toward your mortgage. If you plan on living in your home for more than five years, it's probably a good idea to purchase points. The longer you live in your home, the more you can save on interest over the life of the loan.

Interest Rate

When you get a mortgage, you are charged an interest rate. This is the rate which the lender charges you for using their money to buy a home. It determines how much your monthly payments will be. Generally speaking, the higher the interest rate, the higher your monthly payment.

Mortgage interest rates change constantly, daily, even hourly. If you speak to a lender and are quoted a specific interest rate, that's not to say you'll necessarily get that rate when you close on your loan. Not unless you formally lock-in that rate with the lender. Locking in an interest rate will guarantee you get your loan with a particular interest rate. Lenders will allow you to lock in for 15, 45 or 60 days. But the longer you lock in, the more expensive it will be, since it's more of a risk to lenders.

Fees

There are always fees associated with getting a mortgage, these fees cover the cost of processing and underwriting the loan. These fees can include charges for ensuring the title to the home is free and clear; paying for a land survey; or paying for a home appraisal which gives you the estimated value of the property (lenders require an appraisal to close on your mortgage).

Deciding which mortgage to get may depend on what each lender does because different lenders may charge different amounts. Some may charge lesser closing fees to lure you in, but may charge you a higher interest rate, which means you may pay more in the long run. But everyone has different needs. You may or may not be able to afford to pay more at closing and are willing to pay more over the long term.

Before it comes time to close, do your homework, make sure there are no hidden fees, and ask your lender lots of questions so that you understand all the costs involved with your mortgage.

Source: http://realestate.yahoo.com

Tips on Remortgaging your current Home Mortgage Loan

Is your current Home Mortgage loan stressful?

Remortgaging can be a very effective means of saving lots of money, but in order to efficiently make use of it you must become aware not only of its advantages but its possible downsides as well.

In order to ensure that remortgaging is indeed worth your while, it's absolutely essential that you fully evaluate any potential savings you'll enjoy against all costs associated with the deal. Listed here are a few things to keep in mind as you're considering your remortgaging options:

• Most lenders offer a wide variety of remortgage products, such as discounts, fixed rates, capped rates, cash-backs and flexible deals, to name a few. If there's anything that you don't understand, ask questions. Be sure that the new lender or advisor explains the pros and cons (and the fine print) of each deal that interests you. Remember, there are no silly questions; it's your hard-earned money that's at stake.

• While it's rarely wise to remortgage directly to a new lender's standard variable rate, if you're initially getting a discount, fixed or capped rate it's likely that you'll have to pay their SVR when the mortgage deal runs out. Therefore – even though SVRs vary over time – comparing a lender's current rate with that charged by other lenders may give you a clue as to how competitive the new lender truly is.

• Many mortgage lenders apply early redemption charges (which are penalty fees charged by lenders to encourage you against remortgaging and also to boost their profits in case you do) to certain deals; for example, they're quite common on fixed rates and discounts. The ERC is usually equivalent to several months' worth of interest on the loan, and can easily run into thousands of pounds. You could be charged an ERC if you pay off your existing loan or remortgage with a new lender within a specified period of time. So before you agree to remortgage, check to ascertain if ERCs apply in both your existing and proposed new deals; and if so, the amounts.

• Be sure to compare arrangement fees. With competition the way it is, many lenders are so keen to attract your business that they've developed special remortgage deals that charge no fees. Therefore, you might not have to pay for the valuation or even the legal fees for your remortgage. But shop carefully; remember to evaluate the entire mortgage deal.

• If you're suffering from the effects of bad credit, you can certainly still find a lender to work with. Remortgaging may offer you two major benefits: lower monthly payments, and the opportunity to consolidate your debts into one lower-interest loan. A bad credit remortgage can also help you to improve your credit rating by clearing your other debts and making timely payments on your new loan. However, keep in mind that although the interest rate of your remortgage deal may be lower, your total interest payments will be greater due to the longer length of the new loan.

• Remember, you're free to remortgage your current home mortgage loan as many times as you like, and as often as you like. But be aware that each time you do, you could be charged ERCs as well as arrangement fees. Nevertheless, you should at least evaluate your mortgage every year or two to determine if remortgaging would save you money. If you find that it will, shop wisely!

Remember to always shop around and never let fear get in between your decision of a home mortgage loan. If you lack the credit qualifications, seek free legal help that will assist you in making the best credit decisions.

Source: http://financialweb.com