The Dangers of a Debt Consolidation Loan
For many people a debt consolidation loan implies convenience - the convenience to pay one single bill instead of 20 or 30 odd bills in a month.
It also implies hassle-free consolidation of all existing liabilities under one umbrella. What’s more, if the interest rate is supposedly lower than existing ones, what could be better than a debt consolidation loan?
The fact is: Convenience alone is no guarantee that you will incur savings.
Most of the time a debt consolidation loan will promise you a lower interest rate than your current liabilities. There is always a catch in the agreement of the debt consolidation loan. To know if the interest rate is truly lower than current rates, be sure to check interest rates on each of your existing liabilities. Then check this with the offered rate on the debt consolidation loan. If it really is lower, the next thing you need to check is if this is a promotional rate or not. Many banks will try to lure unsuspecting customers by offering a debt consolidation loan with a low interest rate. This is usually a promotional rate and ceases after the promotional period ends. Be sure to read the fine print of the agreement very carefully to check what the interest rate changes to after the promotional period. Chances are the rate will be much higher than even normal rates!
Shop around, hunt for the best deals, and do your own research. This way you will not only learn about promotional schemes on the debt consolidation loan but also find ways to negotiate and bargain your way through. Credit unions often tend to provide more attractive rates than banks.
Also, be very careful about the secured versus unsecured debt consolidation loans and don't sign over your house when agreeing to a "secured" debt consolidation loan or else you may find yourself without a house some day.
No Wind Coverage? Would You Take That Risk?
A small but growing number of homeowners are taking an extreme approach to insurance against hurricane winds: They're going "bare" — doing without the coverage entirely.
While the option of doing without wind coverage is generally limited to people who don't have mortgages — banks typically require borrowers to carry insurance — even a slender increase in those going uncovered could have broader repercussions in the wake of another major storm. A drop in insurance payouts could leave storm-struck areas with fewer resources for rebuilding and shift some of the burden to taxpayers. That more individuals are opting to go without coverage also underscores the breakdown of the insurance system in coastal areas.
Some insurance agents say they are seeing an increase in the number of clients who have taken the plunge of going uncovered or discussed the option.
We're curious on this… would you take the risk (if given the option and you were not dictated or made to have wind coverage by your mortgage) of going without this coverage just to shave a few bucks off of your premiums? We'd love to hear your comments on this by clicking the comment link below and telling us what you think.
The Myrtle Beach Real Estate Market - Boom or Bust?
Almost every day, we see on the news about how more and more people are getting stuck in the foreclosure trap in real estate.
People are losing their homes. This is serious stuff. It’s downright painful and devastating to countless 1000’s.
Does that mean we are in for a boom or a bust in real estate?
Is one person’s pain, another’s gain?
We'd love to hear your thoughts and comments. Just click the "comment" link below and tell us what you think.
Home Price Slump Through '08
Home values and housing sales will take an even bigger hit than previously forecast and will not recover to their earlier levels throughout all of 2008, at least, according to the latest economic outlook from the National Association of Realtors (NAR).
While the NAR sees gains in prices in 2008 from the current weak levels, it projects that the median existing home price will be $224,600 in the fourth quarter of next year. That would still put the price slightly below the record price reading of $225,000 in the third quarter of last year.
The trade group now says it expects a 3.7 percent decline in existing home prices in the third quarter of 2007 compared to a year earlier, which is worse than the previous forecast of a 2.2 percent decline. And the fourth quarter should see prices down 1.3 percent from a year ago, rather than the 1 percent drop that was previously forecast.
The weakness in prices is being fed by the slowdown in sales, which has resulted in a glut of homes on the market. And that slump in sales is now expected to be worse than the group's earlier estimates.
The group is now forecasting an 8.6 percentage drop in the pace of existing home sales this year, which is not only worse than its previous estimate of a 6.8 percent decline but also would top the 8.5 percent drop seen in 2006. While the group believes existing home sales should rebound 5.8 percent in 2008 that would still leave the volume of sales more than 11 percent below the record sales of 7.1 million seen in 2005.
Will an Interest Rate Cut Help?
Economic growth has slowed enough to prompt a reduction in interest rates from the Federal Reserve, and economists see a nearly one in three chance of recession in the next year, according to a Reuters poll of economists.
Housing is already in recession and paralysis has overtaken many areas of lending. In the poll, in which 114 analysts took part, the median of 78 forecasts was for growth to ease to a 2% annual rate in the fourth quarter before picking up to 2.3% in the first quarter next year.
The median forecast of 66 economists who gave an estimate put the chance of recession in the next 12 months at 31.5%.
Will the Fed cutting interest rates help at this point? What do you think? Is it too little too late? We'd love to hear your opinion. Click the comment link below and tell us what you think.
