A real Eye Opener! The true cost of your Credit Card!

Author: Diane Cleak

Most people use credit cards, but do they understand the charges involved?

Apparently not. The figures show that 50% of card users only pay the minimum balance every month.

A typical scenario may start with you receiving a credit card offer in the mail: borrow up to $2000 and pay only $40 a month. The interest at 18% ( could easily be higher) but the payment is still only $40 a month. Sounds like a great deal! You've been thinking of buying a new big screen TV for ages, and now you can have it all for only $40 a month. Who COULDN'T afford this, right? Before you sign that offer and run out to purchase your new TV, let's look at the mathematics and see how long it will take you to pay off this purchase at $40 per month, what you'll end up paying in interest, how long it will take to pay off the balance, and the total amount you'll end up paying for your $2000 TV. The minimum monthly payment on most credit cards is usually calculated as a certain percentage (often around 2 percent) of your total balance. Remember, however, that this payment includes interest as well as payments against the principal amount that you borrowed. On the $2000 TV, 2 percent of the balance is $40. At 18 percent interest, your $40 payment would include $30 in interest and only $10 towards the amount you borrowed (18% divided by 360 days = 0.05% per day times 30 days in a month times $2000 outstanding balance equals £30 in interest). If you pay the minimum balance each month (calculated as 2% of your outstanding balance), it will take you over 30 years to pay off your $2000 TV, which will be gone long before it's paid for. What's worse, you'll have paid nearly $5,000 in interest. The $2000 TV will have cost you nearly $7000! To make matters even worse, think of what you would have earned if you had simply put $40 a month into an investment earning a conservative 8 percent for the same number of years (30). Your £40 a month would be worth over $60,000 and you would have earned almost $46,000 in interest on your investment. Many people get caught up in credit card offers that are ""too good to pass up."" The question is: ""good for whom?"" Certainly not good for you! The example of the TV purchase illustrates the extremely high cost of paying the minimum balance on your credit cards. The Independent on Line 19 Feb 2006 confirms this with their statement:- ""Separate studies reveal that a £2,000 credit card debt at an APR of 15.9, repaid at only the minimum 2 per cent, would take more than 28 years to clear!"" USwitch spokesman Nick White said:- ""Today, there's the possibility that some people could finish off paying their mortgage before their credit cards."" ""While low, affordable minimum monthly repayments are marketed as being a benefit to cardholders, this benefit is a big money-spinner for the banks."" It's a real eye-opener!

So do take care,

Diane Cleak www.knowledge2freedom.com

About the author: I am committed to helping people to rid themselves of debt, and to gain understanding of their financial affairs. This is the first step to financial freedom.

Get a No Credit Check Mortgage

Author: Steve Faber

There are many reasons you may need to get a no credit check mortgage. Some of the most popular reasons you may need such a mortgage are having no verifiable income, or having a great income, but poor credit score. You may be young and have no credit history, even if you now have a great job or are a successful new business owner. If you have your own business, especially if it's fairly new, you may have a very high income, but you may not have either the income history or documentation required by most mortgage lenders. The same is true if you did very well in investments at an early age or are a professional athlete early in your career. What are you supposed to do? Unless you have enough cash on hand to actually purchase a property outright, you're going to need a mortgage. Unfortunately, many mortgage lenders won't give you the time of day unless you can verify your income and credit history. If you don't have either, you'll be out of luck.

Fear not, there is hope if you need a mortgage but can't get a credit check first. It won't be as easy as running to a bank or mortgage broker, but you'll be able to get that mortgage and purchase your house. You will probably have to do more legwork to find a mortgage lender that is willing to loan money to you without performing a credit check.

Look at it from your lender's perspective. It is much easier, lees expensive and accurate for them to assess your ability to repay your mortgage if they can check your credit. Any lender is interested in your ability to repay their money. The more difficult it is for them to determine weather or not you can do so, the higher interest rate you'll typically pay for your mortgage. You can still get a mortgage if you don't allow them to run a credit check however.

You may need a larger down payment in addition to a higher interest rate. In some cases they may not give you a higher interest rate, but you may have to have at least 20% down. The larger your down payment is on the property, the lower the risk for the mortgage lender. If they need to foreclose, they stand to have your equity to recover their costs. In addition, experience has determined that the larger your down payment, the less likely you are to default on the mortgage. Again, it's about the lender lessening their risk.

You'll probably have to approach many lenders in order to find those willing to work with you, and to get the best interest rate and fee structure for your loan. In any case this is a good approach to take. You want to be able to compare the loan package from several different lenders, especially in the case of a no credit check mortgage. Lenders know your options are limited compared to a conventional mortgage. That's another reason you stand to pay higher interest rates and fees.

So, don't give up in your search for a no credit check mortgage. There are lenders that will make your dream a reality. Weather you work with a mortgage broker, or other service that looks at mortgages from several lenders, you probably have to compare what you are offered from multiple different lenders. They key to getting a great mortgage is to get out there and look.

About the author: Do you own a small business? Doing great, but haven't the history to back it up yet? Maybe your credit plain sucks, but you still need a place to live, don't you? Maybe you'd rather buy a home instead of throwing money away every month for rent. To discover how to get a mortgage with bad credit, or no credit go to the

no credit check mortgage guide.

Indiana Follows The Lien Theory Of Mortgages

Author: John D. Waller

An interesting dispute in the United States Bankruptcy Court for the Northern District of Indiana resulted in a March 27, 2007 opinion by Judge Harry C. Dees, Jr. about a borrower's attempt to transfer ordinance citations, fines and other property-related liabilities to a lender. The issue was whether a mortgagor's/borrower's unilateral execution and recordation of a quit-claim deed effectively transferred the real estate to the mortgagee/lender. Although the case involved residential property, the rules and holding are equally applicable to commercial real estate and business borrowers. The lesson of Phillips v. City of South Bend, 2007 Bankr. LEXIS 1503 (N.D. Ind. 2007) is: a borrower simply can't unload its real estate-based problems onto a secured lender without some kind of agreement or consent.

The facts. The City of South Bend pursued a residential property owner for nuisance violations related to property, which was in disrepair and had documented unsanitary conditions in the yard. Potential fines and penalties were around $5,000. Citifinancial held a mortgage on the property. The borrower/mortgagor, in an apparent effort to avoid municipal liability, executed and recorded a quit-claim deed purporting to abandon the property and transfer title to Citifinancial. Citifinancial, however, never ""acknowledged transfer of the property"" or took ""responsibility for maintaining the property."" Id. at 3. Citifinancial ""did not accept the transfer"" (although it is not entirely clear how Citifinancial manifested that non-acceptance). The borrower did not enter into any kind of written agreement with Citifinancial, and Citifinancial ""took no action at all"" with regard to the property. Id. at 14. There was no written consent by Citifinancial or any activity demonstrating consent, such as the physical possession of the property. Evidently, Citifinancial simply ignored the quit-claim deed.

Indiana mortgages, generally. Indiana follows the ""lien theory"" of mortgages. This means that a mortgage creates a lien on property but not title to it. Mortgagees do not have an ownership interest in the real estate. Id. at 15. Title to property cannot be transferred to the mortgagee unless there is a foreclosure and sale (or a deed-in-lieu of foreclosure). Indiana defines ""foreclosure"" as a legal proceeding that terminates a mortgagor's interest in property. Id. ""The right to possession, use and enjoyment of the mortgaged property, as well as title, remains in the mortgagor, unless otherwise specifically provided, and the mortgage is a mere security for the debt. Id. So, secured lenders holding Indiana mortgages merely have liens as security for their loans.

Transfer is a two-way street. In Phillips, the borrower executed and recorded a quit-claim deed in order to surrender the property, but no foreclosure took place. The Court held that the borrower could not compel the mortgage holder to accept the surrendered, quit-claimed property and that the borrower continued to be the owner of the property, with all the rights and obligations. The City properly enforced its property maintenance codes against the borrower, not the lender, as owner of the property. Id. at 15. The unilateral execution of a quit-claim deed in an effort to surrender the property to mortgage holder, while clever, ultimately accomplished nothing from the standpoint of avoiding liability.

Impact on commercial cases. Phillips impacts the handling of commercial foreclosure cases as well. A corporate borrower in possession of commercial real estate collateral could decide, in an effort to avoid certain liabilities related to the ownership of the land (such as public nuisance fines, utility charges or maybe even real estate taxes), to dump these problems back on a commercial lender simply by quit-claiming the property and surrendering possession. A secured lender may, for a variety of reasons, not want the property, particularly by quit-claim deed, until the property is run through a foreclosure. In that case, according to Phillips, the secured lender should take every possible action to show that it has not acknowledged or accepted transfer of the property or otherwise consented to ownership. Don't sign any paperwork indicating you are the owner. Avoid physical presence on the premises. Make sure there are no communications with the mortgagor/borrower other than with statements that unequivocally demonstrate you do not want title to the property at that time (unless through a deed-in-lieu of foreclosure with a supporting agreement). That way, if and when you want to liquidate the collateral or become the owner of the property, you can do it on your own terms and avoid the potential liability found in Phillips.

About the author: John D. Waller is a partner at the Indianapolis law firm of Wooden & McLaughlin LLP. He publishes the blog Indiana Commercial Foreclosure Law at http://commercialforeclosureblog.typepad.com. John's phone number is 317-639-6151, and his e-mail address is jwaller@woodmclaw.com.