I had no idea that there is plenty of income to be made being an insurance broker. I remember back 15 years ago, I was sold an insurance policy that was a ten-year payment plan that would cover me for life as long as I continue to pay the premium (guaranteed not to increase for life). Did you know that the my insurance agent has made money off of the policy that he sold me and still to this day, continues to do so.

The only issue there is if there are no leads provided him to sell insurance to. He could be a health insurance broker or any type of insurance agent, no leads means no income. But now, I hear that there are companies out there that specializes in Insurance Marketing . I am unsure about the market conditions but if ever insurance agents experience a lull in leads, I’m sure they could go to these types of sources to get leads.

They start you off with a $200.00 USD worth of free leads. What could be bad about that? Residual income is good, only if you have the sales that will support your residual income right? I believe that insurance agents would be very happy to know that these services actually exists and that they can turn to Insurance Marketing to increase their revenue. What a good way to find leads.

Millions of Americans are using home-equity loans and lines of credit for splurges. That’s risky. But for better investments, these loans can make sense.

Bankers love it when you borrow against your house. That’s reason enough to be wary of home-equity lending.

Yet millions of Americans are buying lenders’ pitches that our homes are a good source of funds for whatever our little hearts desire, from Super Bowl tickets to exotic vacations to investments in stocks and bonds. That lust for cheap cash has turned home-equity lending into the fastest-growing, and very profitable, area of consumer loans.

Mainstream home-equity lending soared 33% last year according to SMR Research, with new borrowing at nearly quadruple the level of just five years ago. The amount we owe on home-equity loans and lines of credit, $719 billion, now exceeds the balances on our Visas, MasterCards and other general-purpose credit cards.

Those figures don’t include home-equity lending to people with troubled credit. So-called subprime mortgage lending rose 60% last year, said SMR vice president George Yacik, to $516 billion. Although the figure includes first mortgages, Yacik said most subprime home lending involves home-equity loans and lines of credit.

Good for banks, risky for consumers

The risk to lenders from all this debt is quite low. The amount banks actually lose on home-equity lending overall is about 0.15%, Yacik said, compared to more than 3% on credit cards.”There’s no bad debt to speak of,” Yacik said. “(The borrower’s) home is at stake, and they have to be deeply extended not to pay their bill.”

Rising home prices mean that banks can get their money back even if they have to foreclose, and troubled borrowers typically sell the home or refinance before that happens.

The low default rate masks the real problem with home-equity lending: Most borrowers are using the loans and lines of credit to fritter away their long-term wealth on short-term spending.

“I recall one computer magazine a couple of years ago that recommended that people get home-equity loans or lines of credit to purchase computers,” said Andrew Analore, editor of Inside B&C Lending, an Inside Mortgage Finance publication. Then there was the recent Associated Press article about fans calling mortgage lenders to finance Super Bowl tickets, on top of the more usual borrowing to fund big-screen TVs to watch the game.

“That kind of stuff can be problematic,” Analore said, “because people sometimes don’t understand that their house is on the line if, for some reason, they are unable to pay for their new computer or big-screen television.”

Understand loan types

Solid statistics are hard to find, but lenders believe a third or less of home-equity borrowing is used for anything that could be considered an investment, such as home improvements or education. The rest goes for debt consolidation, vacations or purchases of assets that quickly depreciate, such as cars.If you’re thinking of literally betting your house with a home-equity loan or line of credit, you should clearly understand how these loans work, when to use them and how to get the best deals.

First, the basics. There are two types of home equity lending, loans and lines of credit:

• Home-equity loans are installment loans, like regular mortgages and auto loans. You’re given a certain amount of money which you typically receive all at once and pay back according to a set schedule, over time. Home-equity loans usually come with fixed rates and fixed payments.

• Home-equity lines of credit, by contrast, work more like credit cards. You’re given a credit limit that you can borrow against, and paying down your debt frees up more credit that you can potentially spend. Home-equity lines of credit have variable interest rates that are typically tied to the prime rate.

Unlike credit cards, however, home-equity lines of credit usually aren’t open-ended. For the first 10 years or so, you can draw as much as you want from your credit limit, and you only need to pay the interest charges. In the next stage, however, the “draw” period ends and whatever debt you have left is “amortized,” which means you need to start paying principal and interest to retire your debt. (Some lenders let you renew your draw period, but eventually the debt has to be paid off.)

With either type of borrowing, you’re pledging your home as collateral. If you fall behind on your payments, the lender can foreclose and take your house.

When to use these loans

A home-equity loan is generally the best choice when you know exactly how much your purchase is likely to cost and you need several years to pay it off. A major home-improvement project, for example, might be a good candidate for a home-equity loan.A line of credit may be a better option for shorter-term borrowing, or when you want to be able to tap your home equity to cover emergencies.

You also might consider a loan, rather than a line of credit, when you want to lock in a low interest rate in a rising-rate environment, like we have now. In recent months, the rates on lines of credit have been ratcheting up with each Federal Reserve hike.

The gap has narrowed considerably from a few years ago, when lines of credit averaged more than two percentage points less than loans. When the gap is that big, it may make sense to take the risk of choosing a variable-rate line of credit over a fixed-rate loan.

5 tips for smart borrowing

Here’s how to know if you’re getting a good deal:Compare the rates. The rate you’ll be offered on a loan or line of credit depends heavily on your credit score — perhaps too much, according to one banking regulator. Julie Williams, acting head of the U.S. Comptroller of the Currency, said in December that home-equity lenders were relying too much on “risk factor shortcuts” like credit scores, which reflect consumer’s past credit performance but that don’t factor in how well they’ll handle a big increase in their debt.

If you have an excellent score of 760 or above, you should be able to win a home-equity line of credit for half a point below the prime rate, said Chris Larsen, CEO of E-Loan. A good score of 700 to 759 should win you a rate equal to prime. (To see current rates on lines of credit and loans by credit score, visit the Loan Savings Calculator at MyFico.com.) People with mediocre to poor credit can pay 1 to 5 points over prime, or more.

Avoid the fees. If you have decent credit, you shouldn’t have to pay any application or appraisal fees to borrow against your home. (Make sure the lender isn’t tacking fees onto the loan amount, and that you’re not paying a “broker fee” if a third party is helping to arrange the loan.) You may have to pay recording fees, which should be minimal, and an annual fee on your credit line.

Know the tax rules. Home-equity borrowing is often touted as superior to other consumer debt because you can deduct the interest. But that’s not always true. You have to be able to itemize, which most taxpayers can’t do because they don’t have enough deductions.

If you have excellent credit, for example, you might be able to get a new car loan for a fixed rate that’s actually lower than what you’d get on a variable line of credit. Unless you’re able to itemize, the fixed-rate auto loan is clearly the way to go.

Also, know that even if you do get a deduction, the tax break is limited to interest on loan amounts of $100,000 or less; if you’ve borrowed more, the interest you pay on amounts over $100,000 can’t be deducted.

Know what you’re risking. A home can be a good way to build long-term wealth — as long as you’re not constantly draining it away. Every dollar of equity you borrow is a dollar that can’t be used to buy your next home when you’re ready to trade up, or to fund your retirement when you’re ready to downsize.

Be particularly wary of using home equity to pay off credit cards or other short-term debt. Often you’ll just wind up deeper in debt because you haven’t addressed the basic overspending problem that got you into trouble in the first place.

Also, don’t assume that using equity to pay for home improvements or education is always a slam dunk. Not all home improvements add value and it’s easy to go overboard with student-loan debt, as well. It’s up to you to set reasonable limits on your borrowing and to make sure that what you’re buying is worth the wealth you’re committing.

In general, you don’t want the term of your borrowing to last longer than what you’ve purchased. If you use home-equity borrowing to buy a car, for example, try to pay off the balance in a few years — and definitely before you trade in for a new vehicle.

Keep some headroom. You should try to keep a cushion of at least 20% equity in your home. If your combined mortgage and home-equity borrowing exceeds that amount, you’ll pay higher interest rates. You’re also cutting yourself off from an important source of funds in an emergency.

“Very few families are good at savings. In effect, their home equity is their ‘rainy day’ fund,” Analore said. “It’s the only source of capital that many people will be able to tap in an emergency. And it won’t be there if the home has already been leveraged to fund short-term consumption.”

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If you are thinking about a home equity line of credit, you might also want to consider a traditional second mortgage loan. A second mortgage provides you with a fixed amount of money repayable over a fixed period. In most cases the payment schedule calls for equal payments that will pay off the entire loan within the loan period. You might consider a second mortgage instead of a home equity line if, for example, you need a set amount for a specific purpose, such as an addition to your home.

In deciding which type of loan best suits your needs, consider the costs under the two alternatives. Look at both the APR and other charges. Do not, however, simply compare the APRs, because the APRs on the two types of loans are figured differently:

• The APR for a traditional second mortgage loan takes into account the interest rate charged plus points and other finance charges.

• The APR for a home equity line of credit is based on the periodic interest rate alone. It does not include points or other charges.

Disclosures from lenders
The federal Truth in Lending Act requires lenders to disclose the important terms and costs of their home equity plans, including the APR, miscellaneous charges, the payment terms, and information about any variable-rate feature. And in general, neither the lender nor anyone else may charge a fee until after you have received this information. You usually get these disclosures when you receive an application form, and you will get additional disclosures before the plan is opened. If any term (other than a variable-rate feature) changes before the plan is opened, the lender must return all fees if you decide not to enter into the plan because of the change.

When you open a home equity line, the transaction puts your home at risk. If the home involved is your principal dwelling, the Truth in Lending Act gives you 3 days from the day the account was opened to cancel the credit line. This right allows you to change your mind for any reason. You simply inform the lender in writing within the 3-day period. The lender must then cancel its security interest in your home and return all fees–including any application and appraisal fees–paid to open the account.

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Before entering into a plan, consider how you will pay back the money you borrow. Some plans set minimum payments that cover a portion of the principal (the amount you borrow) plus accrued interest. But (unlike with the typical installment loan) the portion that goes toward principal may not be enough to repay the principal by the end of the term. Other plans may allow payment of interest alone during the life of the plan, which means that you pay nothing toward the principal. If you borrow $10,000, you will owe that amount when the plan ends.

Regardless of the minimum required payment, you may choose to pay more, and many lenders offer a choice of payment options. Many consumers choose to pay down the principal regularly as they do with other loans. For example, if you use your line to buy a boat, you may want to pay it off as you would a typical boat loan.

Whatever your payment arrangements during the life of the plan–whether you pay some, a little, or none of the principal amount of the loan–when the plan ends you may have to pay the entire balance owed, all at once. You must be prepared to make this “balloon payment” by refinancing it with the lender, by obtaining a loan from another lender, or by some other means. If you are unable to make the balloon payment, you could lose your home.

If your plan has a variable interest rate, your monthly payments may change. Assume, for example, that you borrow $10,000 under a plan that calls for interest-only payments. At a 10 percent interest rate, your monthly payments would be $83. If the rate rises over time to 15 percent, your monthly payments will increase to $125. Similarly, if you are making payments that cover interest plus some portion of the principal, your monthly payments may increase, unless your agreement calls for keeping payments the same throughout the plan period.

If you sell your home, you will probably be required to pay off your home equity line in full immediately. If you are likely to sell your home in the near future, consider whether it makes sense to pay the up-front costs of setting up a line of credit. Also keep in mind that renting your home may be prohibited under the terms of your agreement.

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Many of the costs of setting up a home equity line of credit are similar to those you pay when you buy a home. For example:

• A fee for a property appraisal to estimate the value of your home
• An application fee, which may not be refunded if you are turned down for credit
• Up-front charges, such as one or more points (one point equals 1 percent of the credit limit)

Closing costs, including fees for attorneys, title search, and mortgage preparation and filing; property and title insurance; and taxes.

In addition, you may be subject to certain fees during the plan period, such as annual membership or maintenance fees and a transaction fee every time you draw on the credit line.

You could find yourself paying hundreds of dollars to establish the plan. If you were to draw only a small amount against your credit line, those initial charges would substantially increase the cost of the funds borrowed. On the other hand, because the lender?s risk is lower than for other forms of credit, as your home serves as collateral, annual percentage rates for home equity lines are generally lower than rates for other types of credit. The interest you save could offset the costs of establishing and maintaining the line. Moreover, some lenders waive some or all of the closing costs.

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If you decide to apply for a home equity line of credit, look for the plan that best meets your particular needs. Read the credit agreement carefully, and examine the terms and conditions of various plans, including the annual percentage rate (APR) and the costs of establishing the plan. The APR for a home equity line is based on the interest rate alone and will not reflect the closing costs and other fees and charges, so you?ll need to compare these costs, as well as the APRs, among lenders.

Interest rate charges and related plan features
Home equity lines of credit typically involve variable rather than fixed interest rates. The variable rate must be based on a publicly available index (such as the prime rate published in some major daily newspapers or a U.S. Treasury bill rate); the interest rate for borrowing under the home equity line changes, mirroring fluctuations in the value of the index. Most lenders cite the interest rate you will pay as the value of the index at a particular time plus a “margin,” such as 2 percentage points. Because the cost of borrowing is tied directly to the value of the index, it is important to find out which index is used, how often the value of the index changes, and how high it has risen in the past as well as the amount of the margin.

Lenders sometimes offer a temporarily discounted interest rate for home equity lines–a rate that is unusually low and may last for only an introductory period, such as 6 months.

Variable-rate plans secured by a dwelling must, by law, have a ceiling (or cap) on how much your interest rate may increase over the life of the plan. Some variable-rate plans limit how much your payment may increase and how low your interest rate may fall if interest rates drop.

Some lenders allow you to convert from a variable interest rate to a fixed rate during the life of the plan, or to convert all or a portion of your line to a fixed-term installment loan.

Plans generally permit the lender to freeze or reduce your credit line under certain circumstances. For example, some variable-rate plans may not allow you to draw additional funds during a period in which the interest rate reaches the cap.

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More and more lenders are offering home equity lines of credit. By using the equity in your home, you may qualify for a sizable amount of credit, available for use when and how you please, at an interest rate that is relatively low.

Furthermore, under the tax law–depending on your specific situation–you may be allowed to deduct the interest because the debt is secured by your home.

If you are in the market for credit, a home equity plan may be right for you. Or perhaps another form of credit would be better. Before making a decision, you should weigh carefully the costs of a home equity line against the benefits. Shop for the credit terms that best meet your borrowing needs without posing undue financial risk. And remember, failure to repay the amounts you?ve borrowed, plus interest, could mean the loss of your home.

What is a home equity line of credit?
What should you look for when shopping for a plan?
Costs of establishing and maintaining a home equity line
How will you repay your home equity plan?
Lines of credit vs. traditional second mortgage loans

What is a home equity line of credit?

A home equity line of credit is a form of revolving credit in which your home serves as collateral. Because the home is likely to be a consumer?s largest asset, many homeowners use their credit lines only for major items such as education, home improvements, or medical bills and not for day-to-day expenses.

With a home equity line, you will be approved for a specific amount of credit–your credit limit, the maximum amount you may borrow at any one time under the plan. Many lenders set the credit limit on a home equity line by taking a percentage (say, 75 percent) of the home?s appraised value and subtracting from that the balance owed on the existing mortgage. For example:

In determining your actual credit limit, the lender will also consider your ability to repay, by looking at your income, debts, and other financial obligations as well as your credit history.

Many home equity plans set a fixed period during which you can borrow money, such as 10 years. At the end of this “draw period,” you may be allowed to renew the credit line. If your plan does not allow renewals, you will not be able to borrow additional money once the period has ended. Some plans may call for payment in full of any outstanding balance at the end of the period. Others may allow repayment over a fixed period (the “repayment period”), for example, 10 years.

Once approved for a home equity line of credit, you will most likely be able to borrow up to your credit limit whenever you want. Typically, you will use special checks to draw on your line. Under some plans, borrowers can use a credit card or other means to draw on the line.

There may be limitations on how you use the line. Some plans may require you to borrow a minimum amount each time you draw on the line (for example, $300) and to keep a minimum amount outstanding. Some plans may also require that you take an initial advance when the line is set up.

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We’ve gone over how to obtain Auto Loans even if you have bad credit. Loan companies are willing to give you that second chance at rebuilding your credit. And now that you know that, it’s time to look over new cars. Yes! It’s time to get excited about it.

A website could provide you a plethora of choices in used and new cars. And if you like riding cars to begin with, some have a contests going on where you can submit your photos with your most outstanding ride. They will pick the top three entries and feature your story on an online article and send you a free t-shirt to go with it! How about that?!

Financial freedom is not out of reach. Specially with the help of loan companies and promotions provided by http://www.theautofinder.com/. You can save money not just on your auto loan but also on your cheap auto insurance as well.

While you’re visiting the site, you can pick out the car that you want, or the dream car that you’ve always wanted. It provides step by step instructions and it’s fun to obtain the knowledge about loans and insurance from the site as well.

Obtain a car loan within minutes! You can choose whether you have bad or good credit on which application suits your needs. The site provides buying tips, so you don’t jump into purchasing a car blindly, and even consumer alerts to let you know what you should be aware of before you buy a car. It’s time to get going - - you have all the tools you need yeah?

This is something new to me. I never heard of Endowment Policies. Apparently it is a type of Life Insurance and I had no idea you can sell it! Endowments are modifications of whole life. Like whole life, part of the premium goes to build up a cash value fund. An endowment policy generally has a higher premium than a whole life policy for the same amount of insurance because more of the premium is devoted to building cash value. The endowment is designed to terminate and pay out the cash amount at a designated time, such as after a prescribed number of years (for example, 20 year endowment, 30 year endowment) or at a specific age (for example, endowment at 60, endowment at 65).

If you carry one of those and you need cash or looking to invest somewhere else that is safer or more secure, you can sell your policy. Of course, this is advisable only if you are certain that you have somewhere else to place the money that would provide you the biggest bang for your buck. I had a 10 year endowment before and I sold it to pay off credit card debts. To me, it was worth it because it eased me from financial burden.

So how about you? Where would you put your Endowments?

Have you ever thought about your dream vacation? Eversince I was a child, I have always been fascinated by other countries and hoped to visit all of them when I grow up. Somehow, I have partly completed that dream. I have been to several countries in Asia, and Europe. But one of my desired and long-awaited dream is to visit Russia. It has become very expensive in Europe now that the dollar has dropped significantly but I may just apply for a loan to fulfill this vacation.

Most of my trips were paid for directly and in cash. I figured, this time I can pamper myself and not worry about the payment for another month or so. Applying for a loan for vacation is not usually advisable unless you have the equivalent cash to back it up. If you are not in this position, you shouldn’t take out a loan for a vacation or for anything that is pleasurable because believe me, this can come back and haunt you.

I can say this because I have enough money saved to pay for the trip in cash, but I want to take out a loan so that I can keep my cash in the bank while I visit the Kremlin or St. Basil’s Cathedral. And ironically, I want to visit Lenin’s Mausoleum when I visit Russia. It just seems fascinating to say the least.

I am ready to go and pay my visit. Just a few more months and I’m there.