Crosby Finance

There is a lot of talk at the moment regarding the ‘credit crunch’ and how this affects mortgage borrowers, specifically borrowers with bad credit.

Borrowers with bad or adverse credit apply for what is publicly termed as an ‘adverse’ or ‘bad credit’ mortgage. Bad credit mortgages can seem a little confusing; indeed any mention of bad credit can send people running for the hills - but it shouldn’t, from our experience the majority of clients who have impaired credit are in the situation they are in due to no fault of their own (death in the family, made redundant etc). The process of applying for a mortgage with bad credit is pretty much the same as applying for any mortgage as far as the client is concerned, but the rate might be a little higher (representing the additional risk to the lender) and there may be more fees (due to the extra work from the broker and/or lender, most of which the borrower will never see!). There are a multitude of lenders that specialise in bad credit mortgages, these lenders are known in the industry as ’sub prime’ lenders (a prime lender being your local high street bank or building society), ’sub prime’ lenders tend only to deal with mortgage brokers as there is so much to consider when arranging a mortgage for someone with bad credit and, although the terms ’sub prime’ and ‘bad credit’ can sound a little off putting to some, there are some very good products available with competitive rates and terms - if you use a broker who knows what they’re doing.

Specialist brokers tend to get the best results as they deal in this area all the time, there are a number of brokers who will say they deal in adverse credit but, from experience dealing in this industry, its better to use a broker who specialises in ‘bad credit’ rather than one that dabbles, the reason being there are literally thousands of products available, some with very subtle differences and getting the best deal is sometimes just a matter of broker experience in dealing in the ’sub prime’ market. If you are applying for a mortgage with bad credit, the golden rule of thumb is - to be honest with the broker, the truth will out in the end!, remember, brokers are there to work for you not against you and a specialist broker should know which lenders to approach depending on your individual circumstances.

So, whilst there is a lot of talk about the credit crunch and mortgages for the credit impaired, if you need a mortgage or remortgage with bad credit there are a multitude of products available, but, use a broker with no upfront fees and specialises in bad credit - that way you will be getting specialist advice and, if the mortgage doesn’t complete you won’t be left out of pocket.

If you’re anything like me, your salary has an alarming tendency to disappear without you really knowing what it is that you’ve spent it on. You know the basics are covered and you’re not going to starve come month end, but you don’t have much left over to save or see you through emergencies. Many people who used to be in the same boat as me swear by a mysterious solution called a “budget” that cured them of their financial haziness.

Budgets can appear daunting, and for those of us with a relaxed, ‘come what may’ attitude to life, the idea of sticking to a budget can be uncomfortably claustrophobic. Here’s what I have learnt over the past couple of months: budgets do work. It’s a truly amazing phenomenon, but their success is undeniable, and they’re not as difficult to stick to as you might think.

Budgets are also very easy to plan. The first step is to work out what you actually take home after tax has been deducted from your salary. Work from net, not from gross. It sounds obvious but you’ll be amazed at how many people make this mistake. The second step is to categorise your expenses. You may have some regular stop orders that come off every month, and it’s important to know exactly what these amounts are. Keeping an accurate record of your spending is key to making a budget work. I find, however, that it’s quite a good idea to round your expenses up to the nearest five or ten. Always overestimate than underestimate.

After you’ve considered all of your automatic deductions, you need to categorise your other expenses. Your categories have to reflect your lifestyle, as it’s not always possible to generalise according to someone else’s budget template. If you spend a certain amount of money on CDs or DVDs a month, write it down. If you go to movies regularly, include that. You could categorise them all together as “Entertainment” or you could simply create individual categories for “Movies”, “CDs” and “DVDs”. So long as you know what each category entails, you’re ok.

It’s not always possible to know exactly what your expenses for a category are going to be for a particular month. Electricity and telephone bills can fluctuate from month to month depending on usage. In cases like this, look at bills that go back a few months and work out an average cost. I would round up again and work according to that figure. Remember that some expenses are also seasonal and will need to be adjusted accordingly. For example, in winter you may find that your electricity costs go up as you use heaters and electric blankets to stay warm.

When setting yourself budget limits, try to be as realistic as possible. Your may have spent a grand and a half per month on groceries for the last six months, but look at what that money bought you. If your list consists of mostly ready-made meals, you may want to consider buying more fresh produce and cooking meals from scratch. It doesn’t take that much more effort to feed yourself and it saves you a great deal of money. Try and set your budget to what you think you should be spending, not what you would like to spend.

An important tip is to always set money aside for emergencies. If you don’t have a medical aid, create a category called “Medical” or something like that, so that visits to a doctor or medication can be paid for if needed. If you don’t use that money every month, let it build up so that if you have a major emergency you’ll have a safety net to fall back on. Also, we’ve heard this piece of advice a lot but not all of us pay attention to it: put money aside for savings. With a smart, practical budget, this can be done.

My last tip for budgeting is to always remember that banks are semi-evil and charge you for everything. Make allowance for bank charges, estimate them and include them in your budget, especially if you have to budget to the last cent. And remember that bank charges go up often and without warning. Keep an eye on your bank statements to keep track of what your bank is charging you.

Don’t be afraid to include categories that allow for treats and special occasions. But keep them reasonable and stick to them rigidly. It’s far better to go without that beautiful dress or new set of golf clubs than to have to dip into your savings to make it through the last week of the month.

Finally, remember that money is better than poverty, if only for financial reasons.

Recommended sites:

http://financialplan.about.com/cs/budgeting/a/GuiltFreeBudget_2.htm

http://www.stanford.edu/~dua/files/quotes.html

When most people retire, one of the first things they think of is protecting the income they have worked all their life for. After all, you want to protect every last dollar you have earned right?

One of the first things that come to the minds of most retirees and seniors are Bank CDs. Many are under the impression that this is the only safe place to put their assets. They also assume that this is the only place they can gain interest on their retirement savings without any risk at all. That assumption could not be more further from the truth. In this article, you are going to be exposed to what can happen to your retirement savings and what the banks hope you NEVER FIND OUT.

Have you ever asked yourself what happens to your hard earned income when it is placed in a CD? Not too long after your income is place into your CD, the bank loans that money to another source. That’s right, it is loaned out! They will make 60 to 70 percent off of your deposit while you’re promised 4 to 5 percent on your assets. 4 or 5 percent that you have to pay TAXES on at the end of the year. Yes, I said TAXES. But after all, your money is FDIC insured right? Sure it is. Does that mean that ALL your money is insured? ABSOLUTELY NOT!! Let me explain. By the way this applies to ALL of your retirement savings at your Bank, NOT just your CDs.

The Federal Deposit Insurance Corp or FDIC only guarantees that 100,000 of your income is FDIC insured. However, certain retirement accounts are eligible to be insured up to 250,000. Now here is the million dollar question many of you want to know. What happens if the Bank FAILS? Contrary to what most people may think, Banks, at times, DO FAIL. Bank failures are rare but they still happen. According to the FDIC, there were 28 bank failures since October 2000!! (See Link http://www.fdic.gov/bank/individual/failed/banklist.html). Even worse, the FDIC DOES NOT notify people when their bank has failed or is about to fail! The only way you find out is when your check/debit card gets denied or you arrive at your bank and it has a new name already.

Well what happens to your money once a bank fails? I will be more than happy to tell you so let me explain. The account owners which are within the FDIC guidelines normally are able to retrieve their money rather quickly. Well, what about those retirees with over 100,000 or those IRAs over 250,000? Those with assets not covered by the FDIC will become creditors to the receivership of the failed bank. “The FDIC will then sell off the failed bank’s assets and pay those account holders who were over the FDIC income limit, from the proceeds of that money. This process CAN TAKE YEARS. YES! It can actually take years to get all of your hard earned dollars back. Some of us dont have years or time on our side to retrieve all of our hard earned retirement income.

There are a lot of worries involved with running your own business. From wondering whether sales will meet expectations to dealing with employees, worrying about bad checks and verifying the age of customers so you aren’t selling adult products to minors, there are many potential problems that could come up any day.

Fortunately, technology can get rid of some of these worries. While it can’t solve your disputes with employees, it can make it easier for you to accept payments with confidence and monitor the age of your customers.

The first and most vital piece of technology for making your business life easier is a credit card terminal. If you’re not accepting credit cards, you really should be. People these days love to pay with plastic, and you’ll turn some customers off by not offering the option.

While you’re looking at merchant accounts and payment processing equipment, see if you can get a card reader that allows customers to put in their PIN numbers as well. This will allow you to accept debit cards, providing even more flexibility for your customers (and lower transaction rates for you).

Next, if bad checks are a worry for your business, you’ll want to look into getting a check reader. This is sort of like a credit card machine for checks. Just insert the check into the reader and the amount of the check is automatically debited from the customer’s account.

You get the payment within 24 hours and it’s deposited directly into your account — you don’t even have to drive to the bank and physically deposit the check! Using a check reader can give you peace of mind because you’ll know before the customer leaves your shop if they can afford the check they just wrote.

A final piece of technology that is a great addition for people who sell tobacco, alcohol or other adult-oriented products is age verification hardware. Electronic age verification is done with the help of a device that looks like a credit card terminal and scans the barcode or magnetic strip on state-issued identification cards.

The machine then tells you whether the person is of age to consume whatever your product is. This takes the guesswork out of reading IDs and is a lot faster than having a person inspect each patron’s identification and do the math to make sure you aren’t selling to minors.

In some ways technology can seem like it makes our lives more difficult, always giving us more to read, watch and do. But in the case of your business, picking up some new technology can certainly make your life a lot easier.

When banking online, some people worry about banking with a bank that might be fishy or could be a scam. In order to avoid this, there are many things you can do to make sure that you don’t fall into a scam trap. Even though you can usually point out a scummy bank from miles, there are always some that cut through the cracks that mange to steal millions from innocent people.

Scams are all over the place. They range from telemarketers to the internet. Nobody likes to hear that they were just taken for a ride and the sole purpose of this article today is to inform you on how you can check to see if the online bank you’re banking with or want to bank with is legit.

The FDIC mark

If a bank is FDIC insured, this is a great sign. The purposes of the FDIC mark it to make sure that your money is insured just in case the bank does go under. Just because there’s a FDIC logo on the banks website doesn’t mean they are insured. Anyone can copy and paste a FDIC logo on their website and call themselves a bank. The best way to find out if a bank is insured is to go to the FDIC’s website at fdic.gov and do a search on the bank. If the bank is insured, you will see the name pop up and it will give you a lot of information.

Check the contact information

When you’re doing your banking online, see what kind of contact information they provide. If the bank doesn’t provide you with a toll free number to call, this is a huge red flag. All legitimate banks will provide you with a phone number to call just in case you have any questions. Also look for contact information. Feel free to make sure the address is legitimate online. It’s always safe to call the number too before banking just to see who’s on the other line. Ask as many questions as possible to make sure that they are real and legit.

Do they have branches?

Obviously if you’re banking with a bank like Bank of America, they are going to be a legitimate bank but some internet banks do have a few branches that not that many people know about. All of this information is usually found on their website with branch locations and addresses. If an online bank does have a branch, you can feel confident that the bank won’t scam you out of your money.

If you follow these three steps, you should be able to avoid any scam online when it comes to your money. Make sure that you take note of the first point and look for the FDIC logo, this is very important. Remember, if you ever find anything fishy regarding an online bank, contact the local authorities as soon as possible because not only will you be saving yourself but also someone in the future that might fall into the scam trap.

If you currently get your CD rates from your local bank, you may want to think of finding a CD rate in a whole another way. If you’re reading this article online, you’re probably already internet savvy in some sort of way and if by some chance you’re reading this article on a piece of paper, you should look for someone that can help you find these great CD rates online.

In today’s technological era, CD rates generally are higher online than they are in a brick and mortar bank. The reason bank’s online are able to keep rates so high are because they don’t need to maintain thousands of branches, employees, etc. When people think of online banks, they may think of a scam or an oversea fishy type deal. Rest assure that most banks online are FDIC insured. If you don’t know if they are FDIC insured, you can simply check for the logo on the webpage, check the FDIC main website, or simply contact the bank.

Finding special CD rates online isn’t that hard at all. It will probably just take a few minutes of your time when you’re looking for that rate online. Below are the steps you’re going to take in order to find high special rate CD rates via an internet bank or a local bank branch that has online capabilities.

Find the top ten online banks

When you start your CD search, you’ll want to frequent some blogs, website or forums. On these websites, you’ll generally get a good idea on what banks work for people and what banks don’t. From there, you’ll either want to write down the top ten banks you’re interested in or simply start a word processing sheet with the banks listed on there.

Check for FDIC mark

When you’re looking for your special CD rates online, make sure that the bank is legitimate before you even apply. You’ll want to go to the FDIC’s website (fdic.gov) to make sure that the bank is FDIC insured. I highly recommend that bank is insured if you bank through them. It’s also helpful to call up the bank to get answers if you may have any questions. Most banks, if they want your service will be more than happy to help you out over the phone.

Take action!

When you have the top banks written on a piece of paper, go to each of their websites and subscribe to their e-mail newsletter. By doing this, you’ll be alerted with special rates associated with their bank. This way if any good rate does come by, you can grab it before too many people do and the bank lowers the rate.

Finding special rates aren’t that hard. It just takes a little bit of time and research. You’ll find that each website you frequent, they usually have a “special rate” section which you can click on and explore. When you do find the right rate, the website will tell you exactly how to sign up. From there, you’ll be able to save even more money on your money.

If you are thinking of giving an instant cover to your vehicle before it is too late then wrap it with the insurance scheme named as instant van insurance plan. Insurance should be considered as indispensable when you purchase a vehicle. This is because the risk and cost of any loss or damage to this valuable property will be transferred to another party i.e insurer. The insurer will compensate the loss of this car.

Usually, such rider is available against a little amount of money known as premium. And this premium rates vary from insurer to insurer because of the market is under the clouds of competition. The premium is affordable and can be paid in mode, half yearly and yearly. Moreover, if you miss any premium then you can renew the policy by paying an extra fee. A minimum amount is charged as late fee on the basis of the total premium.

As, you are looking for an instant insurance cover, thus, all the processes are formatted in a short and simple manner. Instant van insurance plan is free from complexities and are offered through online. Before applying through the online application method, you should always accumulate the required details. The details are related to the registration of the vehicle, owners name and correspondence address.

So, you can easily give a protection to your valuable property at a cheap rate. And still if you have doubts left then compare the insurance quotes that you can afford. The instant van insurance plan enfolds every income group.

The future of Northern Rock, the beleaguered UK bank still remains uncertain after the deadline of 4 February 2008 for bids from interested parties.

The UK government is seeking to convert the estimated GBP25 billion of loans into bonds which will be sold in the open market. In order to make these bonds attractive, the government will guarantee them.

It has now emerged that in addition to requiring a fee for the guarantee, which could be as much as GBP400 million, the UK government is insisting that the guarantee is limited to 3 years. This means that the bonds will only have a 3 year life, and at the end of that time they will need to be replaced by alternative funding.

In practice, Northern Rock will have to seriously downsize, if not decimate, its mortgage portfolio. It can only achieve this target by actively encouraging mortgage holders to migrate to other bank and building society lenders.

Due to the severity of this requirement by the government, one of the bidders, Olivant, has pulled out.

This leaves 2 proposals on the table for Northern Rock.

The offer from Sir Richard Branson, of the Virgin group, is considered to be the front runner. Virgin’s offer is complex and involves merging Northern Rock into Virgin Money.

Northern Rock currently has 420 million shares in issue. Existing shareholders will be asked to subscribe to a rights issue and purchase 6 new shares at 25 pence for each share they currently hold. This equates to GBP1.50 x GBP420 million which equals GBP630 million of new money.

Total shares held by existing shareholders will then be 420 million times 6, which equals 2,520 million, plus the original 420 million, which equals 2,940 million shares.

Virgin proposes that there will be 6,600 million shares. The current shareholders will hold 2,940 million while Virgin will hold 3,660 million. This means that the existing shareholders will see a dilution of their combined stake to 45%, while Virgin holds a majority 55%.

Virgin will purchase 2,600 milllion shares at GBP25 pence which equals GBP650 million. In addition, they will receive a further 1,000 million shares as Virgin Money will be merged with Northern Rock. This values Virgin Money at GBP250 million and most commentators consider this a highly inflated figure.

What this means is that Virgin is acquiring Northern Rock for a cash payment of GBP650 million. When one considers that Northern Rock has some GBP100 billion of assets, is one of the top 5 UK mortgage lenders with a market share of 20 percent, this seems a most attractive deal for Sir Richard Branson.

Many consider the Virgin bid to be favoured by the UK government. Indeed Sir Richard just happened to be with the Prime Minister as part of a UK trade delegation to China in January 2008, and he has a longstanding relationship with the Labour Party which was nurtured during the Blair years.

The Virgin group is a private entity and not listed on any stock market. As such its financial structure is opaque. Sir Richard is a persistent self publicist, and a shrewd and ruthless operator. He does have an informal, beach bum appearance. Unlike most beach bums from the Caribbean, Sir Richard owns his own private island of Necker . Concerns have also been expressed at his non UK status for tax purposes and the likelihood that very little tax will be returned to the exchequer if and when Virgin sell the revamped bank in several years time.

In fact Mr Vince Cable, a Liberal Democrat MP, has made reference to Branson’s past unlawful behaviour in that he allegedly evaded purchase tax in 1971 and agreed to pay penalties in order to avoid a criminal prosecution.

From the viewpoint of shareholders, the Virgin offer is unattractive. Many shareholders bought their shares 1 year ago when they were priced at GBP12. Due to the adverse publicity, the shares are currently just under GBP1.

Many shareholders are incensed that Branson will be purchasing shares at just 25 pence. Even in the current and extraordinary market conditions, the shares are quoted at around 4 times this figure. The Virgin proposal also expects shareholders to subscribe to a rights issue based on a purchase of a further 6 share at 25 pence for each existing share held. This would raise GBP630 million.

The new money provided by existing shareholders is only slightly less than the GBP650 million which will be injected by Virgin. However, Virgin acquires a 55% controlling stake in the company.

Although the UK government have provided major funds for Northern Rock, it should be remembered that from a legal standpoint, the company is owned by the shareholders, and not the government. The shareholders have already flexed their muscles at the Extraordinary General Meeting of 15 January 2008 at which a resolution was passed to limit the authority of the Directors to issue shares. Clearly, any rescue plan for Northern Rock would need the approval of existing shareholders. At present, there appears very little chance of the shareholders handing over the company to Sir Richard Branson.

The response to this exercise of shareholder power by the UK government is lamentable. They issue repeated threats to nationalise the bank if shareholders are uncooperative. These threats are empty gestures as the spectre of nationalisation haunts New Labour, and the record of public ownership in the UK is, as elsewhere, unimpressive. Talk of temporary nationalisation, as a way of cheating shareholders of their rights, demonstrates the cynical disregard of the government for UK company law. This is a measure which would certainly meet with a legal challenge from shareholders.

The alternative proposal is an internal rescue plan. Some GBP500 million of new funds would be raised from a rights issue. This is feasible as existing shareholders are far more likely to subscribe additional funds to this proposal which effectively safeguards their interests rather than give funds to a company which is being handed to Sir Richard Branson.

On 10 February 2008, several banks have offered to securities around one half of the loans provided by the government to Northern Rock. This means that the UK government would need to guarantee some GBP13 billion of bond issues as opposed to GBP25 billion. On balance, this move will weaken the Virgin bid.

For those who live in the fast-paced world of today there is now a credit card that meets your needs. If you don’t have the time to wait for credit card approval then an instant approval credit card might be the route to take. A lot of people don’t have the time or patience for the dated method of applying for a credit card. Traditionally you have to fill out an application, mail it in, and wait for a letter advising you if you have been approved for a line of credit.

What happens when you don’t have the luxury of time to get approved for a credit card? This is where an instant approval card comes in handy. Companies that offer instant approval credit cards provide an online link to their application. No more filling out your application by hand and sending it off in a stamped envelope. Now with a click of your mouse you can access the application, fill it out, and submit it.

Not only do you get rid of the time consuming forms and submissions, you can also say goodbye to waiting to be informed of your approval status. After submitting your application for your instant approval credit card you will be notified in minutes of whether you have been approved or not. Going through an instant approval credit card does not diminish your options on what type of credit card you can apply for. Credit card companies offer a variety of choices in addition to this hassle free method. You can choose from gas credit cards, rewards credit cards, or cash back incentives. This is an option that doesn’t have any downfalls. You are able to be approved instantly and still have many of the choices with regular credit cards.

Such cards offered through the instant approval method are the Chase Visa® Platinum Card, Discover® More (SM) Card, Chase Free Cash Rewards Visa Card, Discover® Open Road(SM) Card, Blue from American Express, Chase Freedom Cash Visa Signature Card, Blue Cash from American Express, American Express Preferred Rewards Green Card, Clear from American Express, and Miles by Discover® Card. Talk about a multitude in credit card options. You still maintain the same selection without having to have the patience on waiting days or even weeks for some type of notification in the mail.

So what if you aren’t approved for a credit card through cards with instant approval? You still have opportunities, just possibly through a different type of credit card. The days of getting declined and experiencing the despair of not being able to benefit from a credit card are over. Many of the companies mentioned above have come up with a solution to being declined. When you seek a credit card through instant approval you will know immediately if you are declined. If so you may want to seek a prepaid credit card. You can be instantly approved and in the case of many cards offered can even benefit from some of the rewards credit cards or those that offer cash back incentives, all through a prepaid credit card.

A payment protection policy is taken out by those who have credit repayments to make each month and who wish to protect those repayments. A policy can be taken out to cover against being unable to work if you should have an accident or get ill, or become unemployed through no fault of your own.

However, there are certain conditions that could mean a policy would not benefit the individual. Due to the exclusions present in all policies designed to safeguard payments, you have to check the cover thoroughly before taking it out. Those individuals who suffer from a pre-existing illness, are of retirement age, only work part-time or are self-employed would certainly have to read the small print very carefully. The cover can be valuable and give a much needed income, but only if the policyholder meets the set criteria. It is also worth nothing that statistics show that only 4% of those who take out a policy actually claim on it. Furthermore, 25% of those who do make a claim find their claim rejected by the provider.

You should also make sure that you are not covered for being unable to work by some other means. Around 85% of employers will actually offer much more than the statutory sick pay they have to pay out. Those who are extremely lucky will find their employers will pay out a full wage for a certain period of time. This of course means if you are able to get back to work quickly you would not need a protection policy.

If you believe protection cover would benefit you then go with a standalone provider for a quote. Protection products can be extremely expensive but by choosing to shop around for your quotes with an independent provider you can save as much as 80% on the premiums. While you can take cover alongside the loan at the time of borrowing this could mean you would pay five times more than you would if you shopped around.

The high street lender can play many tricks when it comes to offering protection. Some will work out how much the insurance would cost and then add this onto the amount you are borrowing. This means that instead of quoting you a monthly premium for the cover you will be paying interest on it. On the other hand, a standalone provider will give you a quote for monthly premiums. This is based on the monthly amount of your debt and your age at the time of applying. In some cases the savings you make are immense.

Another huge benefit of going with a specialist provider for your protection quote is that they are more ethical. They will ensure that consumers have access to the FAQs regarding a policy and will explain the technical jargon in plain English, which takes the confusion out of buying a policy.

The majority of policies offered by an independent payment protection specialist will begin to provide the policy holder with a tax-free income from between the 30th and 90th day of being incapable of working. The policy gives peace of mind and allows the individual to relax and concentrate on getting well without financial worries. The pay out would last between 12 and 24 months depending on the terms set out by the provider. You can find the terms and conditions in the key facts that are supplied by the provider on their website before signing up for cover. This makes comparing and deciding if a policy is value for money so much easier.