Common Indexes Used in Adjustable Rate Mortgages

For some, an adjustable rate mortgage is just something that they would never pursue. They’ve heard too many horror stories, and they know far too many people that were just fine until the mortgage adjusted. However, if you dream about the biggest home that you can get into and you really have a stable (and growing!) income, then an adjustable rate mortgage is actually not as evil as people make it out to be. It’s more a matter of being able to truly afford something that’s going to be worthwhile to you in the long run. After all, a home is an investment and if you don’t like where you live, then it takes all of the fun and pleasure out of owning your own home.

Financing your home through an adjustable rate mortgage is tricky, but as the old saying goes — knowledge is definitely power. You want to make sure that you’re always thinking about the road ahead when it comes to your adjustable mortgage, and knowing what indexes are commonly used is going to make that road a lot smoother. Never believe that you just have to go off of what your mortgage broker says. The more information that you can bring to the table when it comes to ARMs, the more well informed your decision is going to be across the board. of course, when you’re dying to own your own home it can be feel like the end of the world if you have to wait, but that’s not the case here. It’s just a matter of looking into the life that you want and going for it full stop.

Back to the topic at hand — what are those common indexes, and why are they important? Well, it goes back to how your adjustable rate mortgage is actually structured. Your payments are based off an index, a margin, the adjustment period, interest rate caps, and even payment caps. There are overall caps that limit how much the interest rate can increase over the life of your loan, but that doesn’t mean that your payments can’t go up significantly. What you’re going to need to focus on here is the index. No, you can’t decide which index your lender will use, but you can ask what index they genera.lly use and shop around for the lender that uses the most stable index. The more volatile the index, the more your payments will fluctuate. This can make planning your house payment very difficult. We still recommend making sure that you use a mortgage calculator to really ensure that you have the maximum amount that your loan could possibly be. With that number you can make sure that you’re not borrowing so much that there might come a point where you can’t make your payments anymore. Even though there are now loan modification programs to help homeowners out, that doesn’t necessarily mean that you’re going to naturally qualify for that type of assistance. This is something that people assumed would be the case for them, only to find themselves feeling trapped and helpless when the loans reset and they had nowhere else to go except to foreclosure.

The common indexes that you will need to look for are below.

Constant Maturity Treasury (CMT or TCM)

This is an index that tracks the weekly or monthly average yields on U.S Treasury securities that have a constant maturity date. Keep in mind that CMT indexes are truly volatile as they indicate the state of the economy — so if you see a mortgage linked to this index, proceed with caution — and make sure that the margin is very low to make up for how volatile this index can be.

Treasury Bill (T-Bill)

These indexes are linked to the results of actions of U.S Treasury bills, notes, and bonds. It’s not as heavily volatile as the CMT indexes, but it can definitely get a little crazy.

12-Month Treasury Average (MTA or MAT)

The Monthly Treasury Average is pretty new, but a lot of people like it. It’s an annual average, which means that it’s pretty steady. It does move about a little more than some of the other indexes, but you will still see enough stability to make it all worthwhile for you in the long run.

Certificate of Deposit Index (CODI)

This is a stable index that is based off the 12 month average of the monthly average yields on CoD rates — the 3-month variety. As you might remember, certificate of deposits are very stable savings tools that don’t grow much, but there’s no loss of principal, either. A lot of ultra-conservative investors like to have them just to make sure that everything is in proper order. Continue reading %s

VA Loans – A Perfect Option For Veterans Looking to Purchase a Home

You’ve joined the service. You’ve served your country. You left the service. Now what? It’s time to buy a home and start the next chapter of your life, and there are resources out there to help you do that. VA loans are available to veterans looking to buy a home for the first time, and they’re definitely a great thing to look into.

As you can imagine, it’s worth your while to look into VA loans because they have a lot of benefits than other types of loans just don’t have.

What is interesting about a VA loan is that it’s actually something that allows you to get a home under the assumption that if you were to default, the VA would repay a loan of the loan they guaranteed for you. Having such a powerful organization as Veteran Affairs behind you means that you’re going to get some pretty nice rates. 100 percent financing is also another benefit that veterans receive from the VA. You don’t have to put down a single cent, which means that you can get a home a lot easier than someone that has to put down 20% to avoid PMI. There is no PMI with VA loans, another benefit that servicemembers get to enjoy.

If you’re worried that you’re not going to qualify, don’t. The truth of the matter is that VA loans actually are easier to get than traditional conventional loans. The requirements are a lot easier, which means that you actually have an advocate in your corner that’s going to work with you.

What happens if you come into a lot of money and you want to pay down your mortgage? You won’t have to face pre-payment penalties the way some conventional loan homeowners have to, and you can have a higher debt-to-income ratio than other loans as well.

Refinancing is also easier — everything is already streamlined.

So why don’t people take advantage of VA loans? Fear, mostly. They worry that the limits of the VA loan will not let them get a home in a higher cost of living area. The truth is that VA loan limits have been increased a great deal in a short amount of time, as the department realizes that the costs of homeownership have also gone up.

Since you have so much backing behind you with a VA loan, sellers will do a lot to get your business. This might mean paying 6 percent of the closing costs and other concessions, because they know that your loan is a lot less risky than someone else’s.

Is it right for you? You’ll still need to find a mortgage broker that handles VA loans, but this is pretty easy to find. In fact, if you already live in a military community, most of the real estate outfits will be able to refer you to the right people will no problem.

We thank you for your service and encourage you to seek out VA loans today — it could be the best decision you’ve ever made!

Busy Moms Need PPI Claims Advice Too!

If you’re a busy mother, you already know how hectic day to day life can be. Sometimes it’s just hard enough making choices that benefit the entire family. If you’ve taken out a loan in the last 10 years, however, you have to realize that PPI could be attached to it. Payment protection insurance covers a series of products that were designed to catch you when you “fell” in life. However, analysis of the industry indicates a high number of claims actually turned down. For the average consumer, this means a lot of money literally poured down a drain without any benefit at all. The nature of insurance is such that you want to pay for services and benefits that you can actually use. The last thing that you want is to find that you can’t use a service — without even being told that there was a possibility that you wouldn’t be suitable for the service at all.

That’s money that your children really could have used in the future. This means that if you’re angry and ready to fight back, we understand just how you feel. It’s time to fight back in a major way. It’s time to get the money that was taken from you. It’s time to make sure that you are always thinking about the road ahead in terms of getting your money back, but also doing something worthwhile with the money.


You never know how much your refund is going to be. On top of the interest that will be paid, you probably have more than one PPI attached loan. This means that you could have a lot more money sitting there waiting for you than you might expect. It’s difficult to realize that you have bright options, because there’s really so much going on all the time.

What about getting someone on your side for PPI claims advice? This means that you’re including third parties that can keep you on a straight path. There’s nothing wrong with believing that you will be able to get things done. If you’re not careful, you will find that you are going to run into some serious problems. Let the right legal representation speak for itself. You’ll be able to unlock a whole new world of premiums sent back to your bank account — what a great idea!

Ready to Use Automatic Debit to Pay Your Mortgage – Read This First!

Are you really ready to start paying your bills directly through your checking account? If that’s the case, you definitely want to make sure that you are always able to get the best terms possible in your favor. In other words, if you really want to make sure that you can pay your bills through your checking account automatically, you want to make sure that you stay on top of it. From a purely financial position, the biggest thing that you do not want to do is just to assume that you won’t have anything to think about when you set up automatic payments. If the company makes a mistake and pulls the money at the wrong time, it can end up costing you a bundle in late fees as well as overdraft charges.

Think that account resolution would be a snap? Think again — it’s all what the terms and conditions for that particular mortgage company state. For example, if the payment is set to be due on the 13th of the month, and the terms say that it is allowed to be debited up to 7 days before the due date, then you cannot be upset with them if they debit your account on the 8th of the month. It’s all in the terms and conditions, which means that if you make the mistake of getting the debits wrong in your account, then you will be responsible for any and all fees associated with your mistaken.

So, if you’re really serious about doing automatic payments, especially for something as important as your mortgage, there are a few things that you will need to pay attention to. First and foremost, you must read the terms and conditions associated with your payments. While it’s true that this point was just addressed, it truly does bear repeating. Your contract terms will specify all the important information, including what type of fees would be associated with the automatic debit service, if there are any fees for the service to begin with. In order to encourage people to actually make their payments on time, some mortgage companies simply give a slight interest rate discount. Don’t overlook this discount at all, since it can help you save a little bit of money over the course of a year. In fact, some people save so much money that it actually adds up to a full mortgage payment at the end of the year — how cool is that?

Shopping for a Home in the UK in 2012 – You Need To Read This First

A lot of guides online over seem to cover buying a house in the US, as if that’s the only place in the world where people dream about owning their own home. The truth is that many people in the UK really want to own their own home, and it’s just a matter of making sure that you start looking at all of your options in a way that gives you the most chance possible to own the home that you really want.

Buying your first home or flat is something that takes some planning and determination, but it can come true for you if that’s what you want to do. When you go to think about owning you a home, you need to figure out where you want to buy your home. As they say in real estate, location truly is everything. Most of your home’s value isn’t going to be just determined about what amenities that your home has, but also what amenities are going to be available in the location that you really want to live. If you’re buying a house with your partner, you need to start thinking about making a list. Keep this list with you — you’ll need it when you start thinking about going around the area you desire. Having a printed list with you can make it a lot easier to rule out properties that just aren’t suitable at all. You will need to still make sure that you keep an eye on everything going on with your home, in order to really ensure that you get exactly what you want.

You also need to think about your budget — total up all of the money that you can use as a deposit. If you’re not going to move around too much, then buying a home makes even more sense. You will always have a home base to go back to, even if you wanted to travel for a while. There will be set-up costs that come into play when you’re talking about owning your own home.


Don’t forget that you’re going to want to also talk to a good mortgage broker or even a mortgage advisor for your mortgage advice. They can look at all of your financials and help you figure out how much money you can borrow to buy the house.

Keep that point in mind — you are borrowing money from someone else in order to make your dream of owning a home a reality. Don’t go into it thinking that you can automatically refinance. That’s only going to set you up for financial problems if you aren’t able to refinance the way you would expect. This means that you really have to look hard at the numbers. You might not want to borrow the maximum amount that the mortgage broker says for this reason.

Talking to real estate agents in the area will also give you more information on where you want to live. If it’s an up and coming area, then you should invest into it early before it gets too expensive to live there. This is also a great way to make sure that your house will appreciate in value the longer you live there.

Trying to find a property solicitor might be the hard part. It falls under the topic of conveyancing, which is something that can take up a lot of time. You will need to make sure that you start thinking about the agreements that need to go into place in order for you to own a home. Many young people in the UK want to buy a house with their friends, which is a great way to own something amazing for the rest of your life. However, you really do need the property solicitor to write up agreements that say exactly who owns what when it comes to the house. This is even more important if you are married and trying to buy a home. You really don’t want to leave any of this to chance — if it has to go before a judge, things can really get complicated and costly. It’s better to know where you stand now so that in the future if things don’t go your way, you can make a clean break rather than an unfortunate one.

So what happens when you really find the house that you want? You will need to make sure that you make an offer to buy the property, but make sure that it’s conditional. Unconditional offers might get you noticed faster by the seller, but they often lead to problems down the road. It’s a lot smarter to really make sure that you focus on the type of offer now. Even though it might take longer, a conditional offer means that you will have time to survey and inspect the property.

If the estate agent has the property on the market and your offer is accepted, you will want to have them take the property off the market immediately. That way no one else can try to put in a competing offer. Continue reading %s

How Prepaid Cards can help You manage Finances Better

Financial management can be a frightening concept for many people. While the temptation to spend is everywhere, you can stay in control of your money with the use of a prepaid card. Here are some ways how prepaid cards can help you manage your finances better:

No Credit Checks

If you’ve already had a credit card application turned down, the last thing you should do is keep applying for credit. Continuing to apply for credit has the potential to further damage your credit rating, but a prepaid card takes that risk away as there are no credit checks involved. Continue reading %s

Buy to Let Mortgages Prediction in 2013

There is a vein of positivity running through the buy to let mortgages market. According to research carried out by CHL Mortgages, 71% of landlords and buy to let mortgages holders feeling upbeat about the future of the buy to let sector in 2013 and a third plan to expand their portfolio in the near future.

However 56% of landlords and investors told CHL Mortgages researchers that they would be holding off on buying or selling any properties for the next year or until the current economic uncertainty is resolved. And with the government’s austerity plans now proposed to continue well into 2018 – an increase of more than 3 years on the original 2015 prediction – when this stability will occur is anyone’s guess.

Buy to Let Mortgage Rates in Crisis

There is talk of buy to let mortgages UK being linked to EU regulations, which stipulate that buy to let mortgage rates must be based upon an individual or company’s declared annual income, as opposed to the rental income capabilities of the property in question. Many believe that this could signal the end of the buy to let mortgages market as, under EU regulations for people seeking a mortgage, buy to let rate assessments will have to fall in line with residential mortgage rates.

Market Increase for Buy to Let Mortgages

Despite recent difficulties, the Council of Mortgage Lenders has reported that buy to let mortgages now comprise 1/8th of the total number of residential mortgages – an all time high. And with rents having increased throughout 2012, with this trend looking set to stay on course for 2013, now seems like a good time to invest in buy to let property if one is able to raise the necessary financing.

Hot off the press are the new Leeds Building Society buy to let rates and reduced rates on its 10 year fixed range of buy to let mortgages. A two year buy to let mortgage at 3.55% is now available from LBS with up to 75% LTV, no higher lending charge and 10% capital repayments allowed without penalty for each year. In addition, Phil Coombes, Head of Intermediary Sales at LBS, has been quoted saying, ‘We believe it’s a very good time to lock into a low fixed rate and have reduced rates on our buy to let deals by up to 0.7%’.

Is the Time Right for Buy to Let Mortgages?

Since this issue has experts so divided, the best choice for people looking to purchase buy to let mortgages seems to be – as always – to obtain expert financial advice before making a decision either way. Property is a great investment and buy to let mortgages are plentiful, but the financing options for obtaining such a mortgage are still murky. For more information visit www.themortgagebroker.co.uk, for up-to-date advice about buy to let mortgages, rates and financing options.

A Guide to Being Self-Employed at Christmas Time

Christmas time is difficult enough for people who work full-time. It can be even tougher on those who are self-employed because they have limited income and little time on their hands.

But there are some steps that a self-employed person can take to make the holidays more enjoyable and less stressful. These steps include:

•    Make a Budget

Make a gift budget before the holidays and stick to it. Decide how much you are willing spend on gifts and don’t spend more, no matter how tempting it may be.


•    Only Use Your Personal Accounts for Gifts

Never use funds from your business account or your business credit card to pay for gifts for family and friends.

•    Budget Your Time

Carefully budget the time you have off; even give yourself more time off if possible. A good way to create more time is to do your Christmas shopping during the week, when the stores are less crowded.

•    Delegate Christmas Chores

Don’t let friends, family, and others rely on you for all the Christmas-related chores. Many people with full-time jobs assume that the self-employed have plenty of time on their hands. Make sure that this misconception gets dispelled.

•    Have Some Christmas Fun

Take time to relax and enjoy the holidays. Remember, spending time with family and friends is more important than buying them gifts. Your time is usually the most appreciated gift you can give, and the cheapest.

•    Consider Your Customers and Clients

You must remember your customers and clients during Christmas. They’re people too and they will appreciate a card, a gift, or an invitation to a Christmas party. Christmas is always a good time to build a stronger relationship with existing clients and to reach out to new ones.

•    Treat Everyone Equally

If you do give gifts or send cards to customers, try to treat everybody equally. Don’t send certain clients a better or fancier gift.
Christmas does not have to be a stressful time for the self-employed. Just follow these simple tips and you should be able to manage your business and your budget.

For more useful advice for the self-employed, including tips on choosing the right IT contractor accountant, visit Nixon Williams.