The average 30 year fixed rate mortgage rate dropped to 5.19% this week, down from 5.29% last week. According to Bankrate.com, the previous low was 5.28%, which was available in January and June of 2003. According to Bankrate.com, the last time mortgage rates ever hit this low was in 1956!

To help you visualize what type of savings these low rates amount to, take a look at the following example. A 30 year fixed rate mortgage averaged around 6.77% in late October, 2008. If you were to obtain a $200,000 home loan at a 6.77% rate, your monthly payments would’ve been $1,299.86. With the mortgage rates being 5.19%, that same $200,000 mortgage will cost you $1,096.99. That’s a saving of over $200 per month or $2,400 a year.

The rate for 15 year fixed rate mortgages also dropped to 4.80% from 4.86%.

If you’re thinking about borrowing in anytime soon, make sure that you do not do any of these mistakes that will hurt your credit score:

Closing accounts
If you want your credit score to plummet faster than a c list celebrity’s status, simply close some of your accounts! By closing your account, you’re cutting away at your available credit and also increasing your debt to credit ratio.

The credit scoring system isn’t built around common sense as you assumed. A lot of people think that closing an account that is paid off or barely used is a good thing, but they’re wrong! When an account it closed, the available credit on that closed account no longer adds to your total available credit.

A good chunk of your credit score is determined by the ratio of debt to credit. The lower your debt to credit ratio, the higher your score. As a rule of thumb, don’t close accounts, especially if they have a high available balance. Simply pay off the balance and leave the account open. If possible, keep the account active by making small purchases every now and then simply to report history.

It is a good idea to close accounts only when their available credit is low and if they’re new accounts. It is especially good to close accounts if the above criteria match and the cards have a high interest rate or charge annual fees.

Factors that affect your credit

Not using credit cards
A lot of the credit card companies are closing accounts that aren’t being used. That’s right; they’re taking on a use- it or lose-it mentality. In these economic times, credit card companies are afraid of just letting anybody sit on a pile of credit.

If you have an account that has a lot of history, it is a good idea to keep that account active by using it every so often. If your account gets closed, it lowers your total available credit and could cost your some points on your credit score.

The first method you can use to get a credit report is to contact a credit reporting agency directly. The three primary agencies are TransUnion, Experian and Equifax. You simply have to go to their website and order a copy of your credit report. You can expect to pay anywhere from $15 to $20 for each copy of your credit report and score. Each agency also have a bunch of other credit reporting services that they offer at higher rates. You do not need to get any of those if you’re simply looking to get a copy of your credit report and score.

The second way of obtaining your credit report is by visiting AnnualCreditReport.com. You are legally allowed to get a copy of your credit report from each of the credit agencies once a year. When you go to AnnualCreditReport.com, you simply have to choose which agency you’re going to obtain your report from and follow the instruction. The entire process is free and you do not need to provide a credit card to complete the request unless you would like to purchase your credit score along with the report.

Since you’re allowed one free report each year from each agency, you can constantly check your credit report every 4 months to make sure that everything is normal.

The third way of obtaining a copy of your credit report is by requesting it from one of the credit agencies when you’ve been denied credit. If you apply for a credit card or a loan and are denied credit, the creditor must explain the reason why they denied you the credit, the credit agency that was used to obtain your report, and a chance to obtain a copy of the report.

Within the denial letter, there should be instructions on how you can obtain a copy of your report. Many times you will have to make a written request, but it is also possible to obtain the report online.

There are many ways you can obtain a copy of your credit report. Go visit one of the sites and obtain a copy of your credit report now.

A mortgage is a major financial decision, so before signing on the proverbial dotted line, you will need to understand the loan agreement fully. To avoid any nasty surprises after the closing, it is best to be armed with all the necessary information in advance. Therefore, you should be sure to question each prospective mortgage lender thoroughly before deciding which loan offer to accept.

Interest

One of the first and most important concerns you will need to address concerning your mortgage is the interest rate. The interest rate is an instrumental part in calculating monthly payments for your mortgage, so of course, you will need to know the interest rate. Also, while you are deciding which offer suits you best, ask your prospective lender if they can lock in the quoted interest rate. Most lenders can do this for for a period of time – usually 30 to 60 days. However, be aware that sometimes there is a fee charged for this service. Be sure to get the quoted offer in writing.

Other interest rate concerns include the annual percentage rate (APR) and whether the loan is a fixed rate loan or adjustable rate mortgage. The APR includes the cost of interest and other miscellaneous fees charged over the period of the loan, so be sure to get an itemized list of what is included in the APR calculation. With a fixed rate mortgage, you keep the same interest over the life of the loan, but with an adjustable rate mortgage, the interest rate can adjust either up or down annually by a specific margin quoted by the lender. If you do not like surprises (increased payments) when interest rates are on the rise, then an adjustable rate mortgage may not be for you.

Down Payments

Many lenders are now allowing zero down payment as an incentive to help make home ownership more affordable to the masses. However, you should know that opting to include or not include a down payment will affect your mortgage. Choosing a small down payment or no down payment option will boost your monthly payment, because your lender will require that you carry private mortgage insurance (PMI) for a loan for which you pay less than 20 percent of the principal as a down payment. This helps the lender minimize their losses should you default on your mortgage. Ask lenders you are considering how your down payment will affect your mortgage loan.

Documentation

When you are considering a new mortgage, your lender will need lots of documentation to help prove that you are worthy of the risk. Typically, you will need income statements, employment records, your social security number, and information about the home you want to purchase. To be sure that you have everything you need, ask your prospective lender for a list of information you will need to supply. Be sure to have all documentation in order to avoid delays or surprises.

Payment Terms

You will need to ask each lender you are considering about the payment terms of the mortgage. For example, is automatic draft required or can you simply mail in the payment? Other things you may want to inquire about include grace periods and late fees. While considering payment terms, you should also ask lenders about their policy concerning paying off your mortgage early. Make sure that there is no substantial prepayment penalty for doing so.

Points

Points are another concern when you are choosing your mortgage lender. Many lenders will allow you to lower the interest rate on your loan if you pay points in advance. One point is equal to 1 percent of the loan principal. Each point you purchase lowers your interest rate by a certain amount. Be clear about which points you are inquiring about, as some lenders also charge loan origination points.

Closing Costs

There are also closing costs associated with many mortgages. For each lender you are considering, ask about getting an estimate of the closing costs for the loan. They are required by law to provide you with one within three days of your application. Closing costs can include some fees that you are not aware of, so make sure you go over each item thoroughly. If you are participating in a program that pays your closing costs, make certain there are no other hidden costs you are not aware of.

Time to Close Loan

Of course, last, but definitely not least, how long is it going to take to process your mortgage loan? This can be a time consuming process and can be frustrating if you are anxious to get into your new home. Therefore, be sure to ask each lender how long the process will take – they can usually give you a pretty decent estimate. Sometimes, the process is fairly quick taking only two weeks or so, but it can also take up to eight weeks.

If you keep these things in mind when you are searching for just the right lender, you are sure to be satisfied with the overall process.

You have probably seen advertisements for touting very attractive interest rates, and in many cases, these rates may seem just too good to be true. Sadly, most borrowers will not meet the stringent criteria for these mortgages.

However, you should not let this fact discourage you when you are searching for the perfect interest rate on your new property. There are steps that you can take to help you lock in the best possible interest rate on your new mortgage.

One of the best things that you can do to ensure that you are receiving the most attractive interest rate on your mortgage is to make sure that your credit is in top shape. Mortgage lenders rely heavily on your credit history when considering whether or not to approve your loan and if approved, what type of interest rate you will be charged on your mortgage.

You should be open and honest about your credit history, because if problems are discovered later, your loan may not be approved. If you have credit issues, seek credit counseling with one of the many free programs available. Also, a past history of poor credit does not necessarily disqualify you for a mortgage – they are many programs available to help you achieve your dream of home ownership. You will just need to be diligent about cleaning up your credit and managing your finances.

Of course, after insuring that your credit is in the best shape possible, you will need to do your research and shop around for the best mortgage rate based on the type of loan you are trying to secure. For this , you will need several lenders to provide you with a ‘good faith estimate’. Using this information, you can compare the costs of each loan.

Another option to consider to help lower the cost of your mortgage is paying points. Points are an upfront fee quoted as a percentage of the total loan amount. By opting to pay points int advance, you can lower your interest rate by several percentage points in many cases. One point is equivalent to 1% of the principal on the mortgage. If you are considering paying points to lower the interest rate on your mortgage, then you should think about how long you plan on owning your home and your immediate financial situation.

When you are considering acquiring a new mortgage, you should keep in mind that rates are constantly changing and rates that are quoted one day may not be available the next day. You can avoid missing out on an attractive interest rate by requesting a rate lock on the rate quoted. Rate locks are normally good for 30 to 60 days. This enables you enough time to shop around and check out other interest rates, and if you decide to go with one of the first lenders you research, the rate you want is still available. You should be aware, though, that some lenders charge for this service.

When you are comparing mortgages with the same terms (i.e. 30 years) but with vastly different interest rates, make sure you understand the reasons why the interest rates are so different. For example, a fixed rate 30 year mortgage will be more expensive than a 30 year mortgage that has a balloon payment due in 7 years.

You will also need to be sure that you fully understand all of the fees associated with your mortgage upfront. Often, there is somewhat of a trade off between the loan fee (points) to acquire the mortgage and the interest rate on the loan. As discussed earlier, the more points you buy initially, the more your interest rate is reduced.

If you remember to keep these things in mind when shopping for your new mortgage, then you will not have a problem finding a mortgage the best interest rate.

I really believe that gift cards make great gifts. As a matter of fact, every year, thousands of people go to retailers like Best Buy, Target, Circuit City, Walmart and others to get gift cards. These gift cards make great Christmas presents for many reasons. This year, 75% of shoppers will buy a gift card. Last year, a whopping $18.5 billion was spent on gift cards alone. While they might seem like the perfect gift for anyone, there could sometimes be hidden issues accompanying them.

To protect yourself, your money, and the gift card recipient, make sure that you consider the following when purchasing gift cards:

Fees:
Many gift cards nowadays come with many different fees. Fees can range from a few cents to a couple of dollars. There are fees for inactivity, fees for checking balances, and fees for certain transactions. Before you purchase the gift card, try to identify the fees. Be especially wary with debit gift cards. They have the highest associated fees out of all gift cards.

Price:
When buying gift cards, try to buy directly from the retailers and not from the credit card issuers. Retailers typically don’t charge fees for purchasing their cards. Credit card issuers, on the other hand, do charge fees for purchasing gift cards.

Protection:
Many gift cards do not offer protection if the card is lost or stolen. Before you buy a gift card, find out if there is some sort of protection available. The last thing you want to find out is that little Jimmy lost his card with the $20 you put in there. Also find out the fee for getting a new card.

Also, keep in mind that 5-10% of all gift cards purchased are never put to use. As a matter of fact, my wonderful girlfriend has yet to redeem a $50 gift card for Gap. Although the numbers are slim, there is still a slight possibility that your present won’t be used.

There is nothing wrong with giving gift cards as a holiday gift. Just make sure that you’re careful when you purchase your card. The last thing you want to do is purchase a card with a high fee, high price and no protection plan.

Merry Christmas.

When you are turned down for a loan, you are given the opportunity to get your credit fixed; being turned down for credit can become a good thing. Whenever you are turned down for credit, you are getting a hint about your current credit status and/or financial state.

The first thing to do when you’re denied credit is to figure out exactly why you were turned down. The law obligates credit issuers to send you a letter shortly after denying you credit. This letter describes which factors played a roll in the denial. In that notice, you will also receive instruction on obtaining a free copy of your credit report from the credit bureau the credit lender used to obtain your credit report and process your application.

Although you can go ahead and request a free copy of your credit report from the notice of denial, the process can be rather lengthy. The best thing to do is go ahead and request one of the three free credit reports that you’re allowed to get. In case you don’t know, every American is now entitled to three free credit reports per year, one from each of the three credit bureaus. You can get a free copy of your credit report once, every twelve
months through www.AnnualCreditReport.com or you can purchase a copy online in just a few minutes. Which ever you choose, make sure that you also request a copy of your credit score. For a few extra dollars, you can see your actual credit score. This credit score will enable you to see how lenders see you.

Once you receive a copy of your credit report, it is extremely important to peruse it. Examine your credit report for any red flags. Collection accounts, late payments, and bankruptcy fillings can all lower your credit score and make you appear as a risky borrower to lenders. If you do have late payments, collection accounts, or bankruptcy
fillings that are accurate on your credit report, you can expect them to be expunged from your credit report in about seven to ten years. If the red flags aren’t accurate, you can fight it off by filing a dispute to have your credit report fixed.

On top of looking for errors, you should also take a close look at your credit score. Your credit score plays a big role in the lender’s decision process. Nowadays, your online credit score should come with an analysis that tells you the factors that are impacting your score and credit. Some even come with calculators that show you how your score will be affected in a number of scenarios. For instance, you can see how high your credit
score will increase if you paid off your debt on time for the next year, or how high it will increase if you paid off your entire revolving credit balance.

If you are one of the many victims of identity theft, it is extremely important to respond in a timely manner, and that does not mean whenever you have time. It means now! By reporting identity theft to the credit bureaus and law enforcement quickly, you make it easier to have the negative information removed from your credit report.

Once you receive the denial letter, you can use it to see if its reasons for denial of credit matches with the information on your credit report. If it does match, will have a head start on fixing the issues that are making it hard for you to obtain credit. If the reason and your credit report don’t match, there could be other factors that played in lender’s decision. The lenders could have rejected your request for credit due to your income, length of time
at your present residence, errors in the application, state restrictions, or homeownership status. The best way to find out the exact reason is to call the lender’s customer support for more information.

The denial letter includes instructions on how to obtain a free copy of your credit report from the bureau that was used to make the decision regarding your credit request. You are entitled to receive one copy of your credit report every time you are denied credit. This free credit report that you’re entitled to does not affect the three free reports you can get per year; every time you get denied for credit, you are entitled to a free report. Don’t let this free credit report go to waste. Go ahead and request the free credit report. Use that free credit report to see if any changes were made to your credit report since the last time you got your copy.

Give yourself, and your credit a few months before applying for credit again. It takes time for credit scores and credit, overall, to improve. Once your credit has improved and you feel confident that you merit that loan or credit card, go ahead and apply again. If you know you’re not ready to apply for a loan or credit card due to your credit, by all means, don’t. Every time you apply for a loan, your credit is hurt a little bit due to the inquiries. It makes no sense to apply for multiple loans if you know you’re not going to get approved. It’s only going to end up hurting your credit in the end.

If you’re in dire need of money now and you cannot get a personal loan, you can try other ways of getting the money. Credit cards, emergency loans, savings, family, and friends are all viable options for obtaining cash.

In the end, remember that being turned down for credit isn’t always a bad thing. It is an eye opener and a chance for you to improve your credit and your finances. It’s a wake up call to make better financial choices and to be in charge of your finances.

Tip 1. Review your credit - The worst thing you want to do is buy a car with a bad credit score. Before you decide to buy your car, make sure you get a copy of your credit report. If you have a high enough credit score, you might qualify for special dealer incentives and lower interest rates. If your credit score isn’t up to par you should take a few months to improve your credit score. The money you will save by buying with a higher credit score is worth waiting a few months. Someone with excellent credit, a score ranging from 720-850 can get a car loan for as little as 5.1% APR. In contrast, someone with the absolute worst credit score of 500-589 can pay as much as 15.8% in APR.

Tip 2. Purchase a used car - Yes it’s true, the unique smell of a brand new car is very aromatic. But, at the same time, you can save a whole bunch of money by simply buying a used car. When I talk about a used car, I’m not talking about some old beat-up clunker. I’m talking about a car that’s barely used; a car that almost new. You can save a lot of money by simply buying a car that’s a few months to a year old. As soon as a car is driven off the lot, it loses money. Be smart and purchase a car that is used.

Tip 3. Get a CARFAX history report - It is important to check out a car’s history. Nowadays, most dealers will include a free CARFAX history report for the car you’re buying. If a free history report isn’t included, don’t be cheap. Pay the $20 fee and order your CARFAX history report. In the CARFAX report, you will find valuable information about the car you’re about to purchase, such as: number of owners, its recent locations, accident reports, and “lemon” indicators. The last thing you want to do is purchase a flood vehicle.

Tip 4. Get a good loan - The best way to purchase a car is with cash. If you’re like the majority of car buyers, you will have to take out a loan. Look around the internet for a good loan. There are thousands of banks, online lenders, and credit unions that are willing and ready to give you the loan you need to purchase your car. Visit sites like Bankrate.com to find lenders and their rates. Once you’ve found a good deal, always make sure to put down as much money as possible and to choose the shortest loan period. You don’t want to pay for a car for the next five years. Once you’ve been approved, take the paper work to the car dealership. The rates you get from a bank or online lender is almost always lower than that you would’ve received from the dealer’s financing office.

Tip 5. Research! - With the internet on your side, you have no excuse for not negotiating and getting a good deal. Before you step foot inside a dealership, make sure you have done your research. Find out the car’s MSRP, Kelly Blue Book price, and its other details. When you go to the dealership, make sure you bring this information along with you. Car salesman will often try to get the most money out of a buyer simply because they go unprepared to bargain.

Remember to use these tips the next time you purchase a car and you will save hundreds, if not thousands of dollars on your next car.

By filing on time, you will avoid the IRS’s 5% monthly “failure-to-file” penalty. For each month that you don’t file, you will be charged 5% of your total tax obligation, up to a staggering 25%. After that, you will face a “failure-to-pay” penalty of 0.5% each month for the remainder of your tax balance.

If you do end up owing Uncle Sam some money, you’re in luck. The IRS offers a number of payment options for those who are unable to pay their entire tax bill at once.

Pay by Credit Card

Believe it or not, you can pay your tax bill with your credit card. The IRS has awarded two companies, Link2Gov Corp. and Official Payments Corp., with contracts to accept credit card payments on their behalf. Thru these two companies, you can pay your tax bill using your Visa, American Express, MasterCard, or Discover credit card. Both companies accept paper and electronic filers via phone or the internet.

Although paying with your credit card might seem ideal, you must be aware. The service does come with a price. Generally, these companies charge 2.49% of your entire tax bill or a minimum of $1, which ever is greater. If your entire tax bill was $3,400, expect to pay an extra $84 in fees.

When paying with your credit card, make sure that you can pay off your credit card bill in a timely matter. The longer you hold on to the balance on your credit card, the more you will end up paying in interest charges.

Start a Payment Plan

If your tax bill is greater than your credit card’s available credit, you can make monthly payments to Uncle Sam. The IRS will give you up to three years to pay off your entire tax bill as long as you don’t have any previous balances. On top of that, they will even allow you to choose your payment day and the payment amount. To enroll in the installment program, attach form 9465, Installment Agreement Request, to the front of your tax return.

Negotiate a Deal

When all else fails; you can’t pay with a credit card, or with a payment plan, it is time to play lets make a deal with Uncle Sam by making an Offer in Compromise or an OIC. An OIC is basically a lump sum payment lower than your original bill. The IRS offers OIC in hopes of getting some type of tax payer money sooner rather than after costly collection attempts.

Remember, negotiating an OIC with the IRS should be your last alternative. If you think that an OIC will simply get your tax bill reduced, think again. Not everyone who applies for an OIC will be approved. To even be considered, you must prove that you have no possible way of paying your entire tax bill. The IRS reviews your financial situation and future potential income to determine whether you have a reasonable payment offer.

If you believe that you may qualify for an OIC, you will need to file two separate forms: Form 433-A, Collection Information Statement and Form 656, Offer in Compromise. Along with these forms, you will also have to submit a $150 application fee along with Form 656-A, Offer in Compromise Application Fee Instruction and Certification.

This fee is waived for people who have little or no income if the claim a poverty exception when filing form 656-A. Make sure that you send in the application fee with your payment, if you don’t the IRS has the right to deny your application. If everything is submitted as required, there is still a possibility that you won’t get accepted for an OIC. If you aren’t accepted, you simply lose your $150 application fee. If you are accepted, the $150 go toward your tax bill.

Owing Uncle Sam a little bit of money once April 17th rolls around isn’t terrible. There are many options available to pay your IRS bill if you ever end up owing. The worst thing that you can do to yourself and Uncle Sam is not pay. By not paying, you will only worry yourself and accumulate more debt.

Federal student loan consolidation can make it a lot easier for many students to stay on top of their loan payments. The current interest rate on student loans for July 2005 to June 2006 is 5.3% for Stafford loans and 6.1% for PLUS loans. These numbers are definitely higher than the rates that were being offered last year.

What should you do since the rates are high for this year? The choice is up to you. You can either go with an independent consolidation company or you can gamble. If you lock in your rates according to this year’s rates, you might miss out if the rates decrease next year.

Requirements for Federal Student Loan Consolidation

The most common mistake made is extending the current loans. A lot of people really believe that by extending their current loans, they will save and receive the same perks as consolidating. An extension will really increase the overall amount of interest pay, while consolidation may reduce that same amount. Besides the lower monthly payments, student loan consolidation offers many more benefits. Discounts are offered to people who have a balance exceeding $10,000, and lenders give a small percentage discount to anyone who makes a certain amount of consecutive payments.

In order to qualify for a student loan consolidation you typically must have $7,500 or more in student loans. If your credit is bad, your chances of being approved for consolidation will decrease.