Personal Finance Resources

Have a need to consolidate federal student loans, “fed” up with the rates? The truth is, college is an invaluable asset to have, and the cost to obtain a college degree rises every year, typically at a much faster rate than the corresponding year’s inflation rate. Most families today are unable to pay for college without some kind of financial aid, scholarship or student loans. There are several kinds of student loans, one of them being federal student loans, which obviously, are backed by the government. Federal loans are given at a variable rate, meaning that the interest rate rises and falls with the current position of the economy. Many may not realize the benefits of consolidating your federal student loans as soon as they can. Not only will it save you money every month, but it will also save you a lot of money in the long run as well. You are allowed to consolidate your student loans if the total amount exceeds $7,500 and you have borrowed from more than one lender.

Save Money Every Month

A statistic from Sallie Mae, the largest provider of student loans in the United States, says that loan consolidation can actually reduce your monthly payments by up to 54%. Doesn’t that sound worth it? Instead of making large monthly payments to several different borrowers, make one lower payment every month instead, with the same terms. On top of that, instead of having several different interest rates to pay on with the different borrowers, you’ll have one interest rate of concern.

Combine Several Monthly Payments

This is great for any college student. You have enough to worry about without having to remember a bunch of extra payments to several different lenders. Once you consolidate your loans into one, you will only need to worry about making one payment every month.

Save Money by Lowering the Interest Rate

Remember how I said before the Federal Student Loans have a variable rate? One of the greatest benefits to consolidating your federal student loans is that after the consolidation, the interest rate becomes fixed at the current interest rate, meaning you will be paying the same amount each month. No more rate fluctuations that can dramatically increase your payment. The amount of money you will save from consolidating should be very substantial. The money you save here can really help you to cover your other college expenses. Another great thing about federal student loans is that all interest is tax deductible, saving you money in your tax returns every year as well. The more deductions you have, the better.

As you can see, consolidating your federal student loans can be greatly beneficial to you financially. Look into it today, and start saving money on your monthly payments immediately.

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Xpress Loan Servicing is a company that provides loans to pay for college.  Formerly known as Education Loan Servicing Corporation, Xpress Loan Servicing claims to raise the bar not only when it comes to helping students pay for college, but also sets a new higher standard in loan servicing. They are committed to providing you with excellent customer service as well as effective financial solutions for all of your education loan needs.  One seperation factor is their commitment to ensuring that students retain their good credit ratings through timely loan payments (I’ll explain more in a moment). Xpress Loan Servicing is a company worth considering if you are looking for college money, and here is a list of some of their features:

Borrower Options

Xpress Loan Servicing works to make everything as easy for you, the student, as possible. You can find forms online to cut down on application hassle, as well as eligibility information to receive a loan. Not only that, you can log into your own secure account which will provide you with updated loan information whenever you need it. It’s a great tool, and one that I made sure to have when I was looking at student loans. Not only that, they also provide loan calculators for use at your disposal, and the ability to make your payments online. From what I can tell, they will allow you to set up automatic payments from your bank account at no cost to you, if you like that sort of thing. Personally, I want to be the only one that knows my bank account information.

Payment Deferral Options

Another positive about Xpress Loan Servicing is that if you ever get in a tight spot and think you will have to miss a payment on your loan, they boast that their customer service will work with you to find options to keep you from missing a payment. This could be done through different types of payment deferrals. There are several types of payment deferrals you can use, such as:

• In School Deferment
• Education Related Deferment
• Temporary Total Disability Deferment
• Public Service Deferment
• Unemployment Deferment
• Parental Leave/Working Mother Deferment
• Economic Hardship
• PLUS Borrower with Dependent Student Deferment

• A customer service representative will work with you to find out which deferment you qualify for, and will help to get the deferment approved to keep you from missing a payment. If you don’t qualify for one of them, and still intend to pay your loan in full, then you may still be able to temporarily suspend your payments, delay payments, or pay a smaller amount than previously scheduled through forbearance. 

  Whatever company you are looking at to help you pay for college, Xpress Loan Servicing is one to consider. They really push their customer service as a cornerstone of their business. Loan companies are usually a big hassle, and you usually are picking the lesser of evils, but at least this company puts emphasis on their customer service. If they prove to treat you badly, you can always consolidate or transfer your loan to another loan service company.

  
  Internal Tags: Paying for College Student Loans

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As some of you may know, I live in Texas, and the Texas electricity industry has been deregulated. Thus, Texas electricity rates have become a “shop able” commodity. But why does TXU still get the lion’s share of the electricity market? Because people do not know that they have a choice. I want to address this, and tell you which company I am currently with, why it is so great to go with a different electrical provider, and how much money you can save. I am even going to provide you with a link to be able to shop today’s rate for many different electrical providers.

• Will Another Energy Company Have Blackouts?
  A lot of people have this concern, and therefore do not want to switch. But in Texas, the generation of the electricity is still regulated. Thus, regardless of the provider, the electricity comes from the same power plant, along the same electrical lines, and if there is a failure, you would call the same 800 number to have the lines repaired. So, the only thing that changes is who the bill comes from, how much they charge you per kilowatt hour, and the terms of the contract. So let your mind at ease, each energy company out there provides the same delivery of electricity.
• Making the Switch is Too Much Trouble
  I assure you, it isn’t, just make the call to the new company (some even allow sign ups online), complete the contract within a few minutes, and presto, done. Just make sure that you get all the details like how long the contract term is, how much per kilowatt hour, is it a flat/progressive/average kilowatt hour charge, are there any early termination fees, is there a guaranteed kilowatt hour price, etc. I recommend going month-to-month, at least in the beginning, to try the company out.
• Which Electrical Provider am I With?
  Well, to me, price was the most compelling factor is my choice of electrical providers. After that, I did not want to commit to a one year contract, so I chose Star Tex Power as my provider. At the time, there was only one company cheaper than them, but the name of the company was Amigo Energy. I just couldn’t trust a name like that, so I went with Star Tex Power. One simple phone call, and I was up and running. They also have free online payment processing, which makes the billing very simple.

To sum up, since the deregulation of the energy industry in Texas, electricity rates have been a lot better. If I were you, I would definitely make the switch. You may shop the rates of many providers at powertochoose.org. Sign up for my RSS feed for more great personal finance tips and help to come in the near future! So long for now…

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Have you every asked, Can you get a credit card secured by Roth IRA? How about this one: Can I withdraw funds from my IRA to pay off credit card debt? Well in this post, I am going to quickly cover these requests, and the open it up for any comments or questions you may have.

• Credit Card Secured Roth IRA
  • The short answer to this question is no, the government does not allow you, or any family, etc. to borrow against your IRA, or to benefit in any way from your IRA or Roth IRA account, other than the intended use of the account (ie when your retire, using it for retirement). This includes any type of borrowing, whether it be through a credit card, bank, or anything else. Now you can, of course, withdraw money from your IRA accounts at a (typically) 10% tax penalty to pay any debt you wish. In this scenario I would say you should take careful consideration, and use my credit card debt payoff calculator for assistance in calculating a time line for debt freedom, then weigh that option with the tax penalty that you face.
  • However, the government does allow you to roll over retirement accounts, and gives you 60 days to complete the transaction. So, if you need money right away, and you can repay it within 60 days, you could use the money from retirement to meet the immediate need, and make sure to repay it all when you complete the roll over to the account. This is tricky, so I highly recommend seeking professional assistance on this one.
• Withdrawing Funds from an IRA to Pay Off Credit Card Debt
  • As noted above, this is a viable option. But you must consider what you will be giving up in the long term. In my article, Invest in a Traditional IRA or a Roth IRA?, I compare the difference of the two just based on tax implications, and there is a significant difference in the amount of money accumulated at retirement age. So if you further compound that by withdrawing funds from your IRA to pay off debt, you may be setting yourself up for long term problems. There are other options; one option is to try to pay off debt using debt stacking, another is to seek online credit counseling. Debt stacking can help you accelerate your debt freedom date without contributing any additional monies to your credit cards. I do not recommend withdrawing from your IRA for any reason other than retirement, but if you have exhausted all other options, then consider it with reluctance.

In short, there really isn’t a viable option to borrow, or to secure a credit card with any kind of IRA. Even withdrawing the funds temporarily while rolling over to other fund doesn’t help most people very much. And taking the funds out to pay off debt isn’t a very good option either, because of the long term negative effects. If it all possible, utilize other methods, as mentioned above to get debt free. And lastly, make sure to sign up for my RSS feed, to get the latest and greatest on personal finance and how to reach your financial goals. It’s free, and well worth your time. If you have additional questions or comments, please post them below.

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To apply for a credit card, one needs to now about the way the credit card finances work. Preferably a low interest card should be applied for. This is because whether it is a bank of america card , or any other banks, every bank charges a certain amount for credit cashed. Before venturing into bank loan market on your card, it is advisable to consult a home mortgage consultant, who are used to such requests and their outcomes.

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That’s right, you may download our free amortization calculator at the bottom of this page. The calculator is based on a typical 30 year fully amortized mortgage, and will show you right down to the penny how much money will be allocated to principle and interest each and every time you make a payment. Here is a preview of the xls spreadsheet:

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You’ll notice that after every article on my page, as well as on the sidebar of this site, there is a link and icons inviting you to sign up for an RSS feed to this site. If you’re a newbie to the whole thing, and aren’t quite sure what an RSS feed is, or how great a tool it can be for you, then you are really missing out. RSS (Really Simple Syndication) is just that, a really simple way to start receiving feeds from your favorite websites for all of your favorite content. Simply put, it’s like signing up for our mailing list, but even better. When one of your favorite websites’ post a new article to their site, you will receive an automatic, real time update of the article, saving you the time of going to each one of your favorite sites to see if anything is new. There are several different ways you can receive these feeds, and you get to choose whatever works best for you.  These are defined in more detail below.

First of all, all RSS feeds are collected by means of a feed reader. A feed reader is software which tracks the different feeds you have signed up for, and allows you to collect multiple feeds in one place or webpage. If you go to http://www.bloglines.com, you can sign up for a free account and have all of your RSS feeds come to that site for you to read at your discretion and in your own time.

Another way to read your favorite RSS feeds: If you’ll notice in the side bar, next to the big orange button, there are many other buttons such as “Add to Google”, “My Yahoo!”, “My AOL”, and “Newsgator”. By clicking on one of these buttons, you can have my RSS feed go directly into your favorite page, or whichever one you use the most. For example, my main email is Yahoo!, and therefore I would add the feed to My Yahoo!, so that whenever a new post was added to my favorite site, I can quickly look at my page and see if there is anything new.

Another great option, and one that I use personally is to receive feeds directly into your email account. To do this, simply click on the orange RSS feed button, and select “Get Personal Finance Resources delivered to my Inbox”, enter your email address and verification, and the feed will be delivered straight into your email. Most people check their email every day, and having it right there is a huge time saver. You can short cut this method by filling in your email address under the section in the sidebar of my website called “Subcribe by Email”.

RSS feeds are great, and quickly gaining in popularity. They mainly started with the blogging community, and its thought that they will really take off in the next few years. Now, instead of spending time surfing the internet,  people will discover the ease and efficency of having their favorite website’s deliver articles directly to them. 

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Part of my plan for generating Passive Income in Real Estate includes property management. But what kind of a property management business plan works? Well, I am going to give you the approach that could be utilized, as well as inform you of how I am going to proceed. I would love to get some feedback on this one guys, as I am still some what new to property management marketing. I am only managing 3 houses currently. The houses that I am managing currently are owned by friends of mine, which I guess is as good a reason as any to get going in a business. Here are the steps that I am taking / considering:

• Continuing to Work Established Contacts
  A couple of friends from Church moved away, and recognized my abilities in real estate through the investments that I have currently made in the area. And with the added bonus of having a realtor license, they felt comfortable enough to use me as their property manager. Already, one has referred me to a friend of his to manage his house. Referrals are fantastic. Also, my real estate broker knows that I am going in to managing property, and she referred to someone who was considering selling his property management company. Unfortunately, he retracted the offer before I was able to act on it. Hopefully he will reconsider in the near future.
• Putting Up a Property Management Website
  This is something I am considering, I may be able rank in the search engines for real estate queries in my specific local. Most of the realtors in my area do not know much (if anything) about the Internet. Many have websites, but I doubt they have much knowledge of Internet marketing. The Internet is very powerful, but here in a small town, I am just not sure how much people utilize the Internet in their search for rental / for sale properties.
• Placing Some Signs Around Town
  This is a cheap and easy way to promote myself. I figure a few small signs around some of the major intersections may attract some attention. Who knows? Again, it is a small town, but maybe that is a good thing.
• Utilizing Craig’s List
  Craig’s List is an unbelievable high traffic, free online classifieds anyone can use to push their business. Very easy, and you can upload 4 images per article. Craig’s List is localized, and thus, you can target your specific market, very good for a property management realtor.

These are just a few steps I know of that are available to me. But again, I haven’t been in this business long. If you have any suggestions, I would sure like to know what they are. Feel free to leave your comments at the bottom of the page, and stay tuned via my RSS feed for more great information on personal finance and real estate investing.

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Should I have a realtor license? Is it expensive? In this edition, I would like to answer these questions, and further illustrate why I have and maintain a realtor license. I remember reading an article stating that 1 in 52 people in the state of California have a realtor’s license. That’s about 2% of the population. Rather unbelievable to some, but to me, seems quite appropriate. Especially in very high housing costs areas, such as California, New York, Florida, Chicago and other areas, the expense of paying a realtor to sell your house is insanely high. A quick bit of math, if you owned a $500,000 house, and hired a realtor for the typical 6% fee, that would be $30,000!

Now let’s take that figure home (bear with me, I live in Texas), where I obtained a realtor license for less than $800. But Jeffry, realtors are professionals, and I don’t know anything about selling a house! Who said the typical realtor knows anything about selling a house?! Many don’t, and furthermore, the ones that do know how to sell a house are the realtors that know the most people.

The realtor game is simple, put a sign in the yard, add the house to the local MLS (multiple listing service), maybe run an ad in the local paper, and wait for a buyer. The good realtors will fax an information sheet to all the other local realtor shops, to fish for another realtor that is under contract to work with a potential buyer. Another thing a good realtor will do, is advertise and run an open house, to get some activity going with the other realtors in the area. Sounds difficult doesn’t it? Not to me.

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Mortgage brokers sometimes speak of an 80/15/5 mortgage, but what is it exactly? In just a moment, I am going to show you exactly what it is, and how you can use it as a tool to leverage your money buying a home, or investing in real estate. There are many folks out there that do not have the appropriate cash to put down 20% on a home to get a conventional mortgage. This created a situation for potential home buyers, and thus the mortgage industry was created.

In recent years, mortgage companies had relaxed their criteria for lending money, and were granting no money down loans to people with bad credit, who had no business owning a home. These were sub-prime loans and carried too much interest expense for the buyer. So recently, there have been many foreclosures and mortgage companies along with banks have been tightening their policies on lending. In short, they want to see some money down before lending. However, with an 80/15/5 mortgage, you can setup a loan at prime rates with only 5% down.

Many mortgage companies even today will lend a straight 95% loan to buyer. So why hassle with the 80/15/5 mortgage? Because by getting two mortgages from the lender, you are able to avoid paying Private Mortgage Insurance (PMI), and you have to opportunity to select a shorter payoff on the second loan. The 15% second mortgage has a much smaller balance than the first mortgage of 80%, and the repayment period can be set to anywhere between 5 and 20 years, typically. So this means that you could select a 5 year payoff on the second mortgage, and your total mortgage payment will decline sharply after the first 5 years of payments. So to sum up, you would save the PMI payment, and in 5 years have a much lower total monthly payment. Let’s look at a quick example:

Now these payment figures do not include taxes and home owner’s insurance, but as you can see, the difference in the payment between an 80/15/5 mortgage and a 95% mortgage is $167.64. Now bear in mind, the 95% mortgage requires PMI, which was not included in this calculation. So if the PMI was say, $35 per month, then the payment difference would go down to $132.64. So after 5 years, the second mortgage would be paid off, and the payment would go down to $452.41 per month. This is the benefit of the 80/15/5 mortgage. On the short term, you are able to bypass PMI, and down the road, you will be able to cut your mortgage payment. Sound good?

Now if the lender does not want to approve the 80/15/5 mortgage, there is another option you can explore. When making your offer to the seller, have him give you a second mortgage to cover the 15%, and you can achieve the same result. You may have to pay a little more in interest on the second mortgage, depending on your negotiating skills, but in the long run, you stand to save a lot of money, without much of a difference in payment at the start.

Creative finance in real estate investing is very necessary if you are looking to get into properties with little or no money down. The 80/15/5 mortgage is just one way to obtain a new property without putting much money down. Questions? Comments? Leave them below in the comment area, and I will answer them ASAP. You may download the xls spreadsheet here:

80/15/5 Mortgage Example.xls

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There are a number of cheap loans available in all banks. Getting such banking loans can be the ideal way to raise capital for a home business. Perhaps starting from a loan is not an ideal beginning, but such fast equity loans had evolved for this purpose basically.

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Ever heard of a lease-to-purchase-house? Most of us would say we have. But many folks would say that a residential lease purchase agreement is simply a rent-to-own contract. While this is true, it only describes a brief overview of what a lease purchase contract is all about. Although the real estate market remains strong here in Texas, lease purchase agreements are still a highly viable way to buy into properties, as well as sell them. But lease purchases are not limited to Texas only, they can of course be done in other states. Let’s take a look at a typical scenario revolving around the lease purchase contract:

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