2 Mortgages Comparison

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What Charges You'll Make - If you're going to use the credit card mainly for booking airline reservations and hotels, it might be best for you to get a travel credit card that offers sky miles and hotel points or cashback. If this will be an emergency credit card only, then your main concern may be for a low interest rate credit card with low fees.

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What Amount You'll Charge - If you're going to use the credit card for all your monthly expenses, then you need a card that has a high credit limit and a high cashback percentage.

More info about Interest Rates, Credit Limits, Incentives, Fees and Penalties

Interest Rates - The interest rate (Annual Percentage Rate) APR can either be a fixed rate or a variable rate that is tied to another financial indicator, most commonly the prime rate. With a fixed rate credit card you know what the interest rate will be every month, whereas a card with a variable rate can fluctuate. Of course, even the interest of a fixed rate card can change based on certain events, such as paying your credit card bill late, exceeding your limit, or simply because the credit card issuer decides to change it after providing you ample advance notice.

Credit Limit - This is the amount of money the credit card company will let you charge to the card. This amount varies depending upon the card offer and your credit history. Be sure to get a credit card with an ample limit, because getting close to your max can hurt your credit score. Just remember that you don't have to max out your limit just because it's available.

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Fees and Penalties - Compare common charges such as late fees, overlimit fees, balance transfers, cash advances, and for making payments by telephone. Regarding balance transfers, look for credit card offers with no transaction fees and zero percent interest for at least 12 months.

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2 Mortgages Comparison

By Credit Federal | Published 04/7/2008

A comparison of 2 mortgages from 2 people with identical bad credit histories; one a balloon ARM and the other a 30 year fixed rate.

As the mortgage crisis rolls on, the arguments as to whether or not the federal government should step-in also wage on, as does the finger pointing of blame.

To answer the question as to whether or not the federal government should bail out subprime mortgage lenders; and/or the bad credit people who accepted such loans, let's compare two different loans from two households that have identical income and credit histories.

Mortgage "A" - Rich and Goldie Spendhappy have a six year old child. The Spendhappys choose a 4,000 square foot home in a posh neighborhood. Their mortgage totals $325,000. With no down payment, a 30 year fixed rate mortgage at 6% would cost $1,948.53 per month. The only way the Spendhappys can afford the home is to accept an ARM mortgage.

Mortgage "B" - Buck and Charity Wisespender also have a six year old child. The Wisespenders choose a modest 1,800 square foot home in a typical suburb. Their mortgage totals $160,000. With no down payment, a 30 year fixed rate mortgage at 6% would cost $959.28 per month. Since this amount is less than half of what the Spendhappys monthly payment would be, the Spendwisers can afford this home with a standard 30 year fixed rate mortgage. They don't need to accept an ARM mortgage.

After 5 years, the Spendhappys get bad news. Their new mortgage payments are going to be much, much higher as their ARM adjusts. Their new payments will be well beyond their ability to keep up payments. The Spendhappys are very upset indeed. They didn't understand the ARM program, and they don't want to lose their home to foreclosure. They try hard to work with the lender to either refinance or to negotiate an affordable payments, but they cannot pinpoint exactly who the lender is because mortgage companies don't readily release such information. Eventually, they contact their legislatures for help.

Meanwhile, other people like the Spendhappys are also burdened with ARMs and are falling behind on their payments. They; too, try to negotiate but are unsuccessful. They also contact their legislatures.

What's going on with the Wisespenders during all this? They are continuing to make their monthly mortgage payments.

What's going on in the minds of legislatures? They are wondering how they help the bad credit people who took on ARM mortages, but mainly they're wondering if they should help them at all? And what about the banks that went under who had loaned money to bad credit people who defaulted? Should the banks be bailed out?

But; once again, what about the Wisespenders? They didn't borrow more than they could afford. Instead of getting an extravagant, large home that costs over double what they could afford with a 30 year mortgage, they chose a modest, affordable home and they made all their payments on time. Shouldn't they be rewarded for being wise spenders?

Instead of rewarding wise spenders, legislatures are considering punishment via tax increases on people like the Wisespenders, so they can give money to people like the Spendhappys who don't wisely manage their personal budget. And to possibly share that money with the banks who pushed ARMs.

Is it fair to the Wisespenders, who didn't purchase a home larger than they needed nor more costly than they could afford, to be forced via taxes to help bail out irresponsible people like the Spendhappys? No, it wouldn't be fair.

So what would be fair? How could people like the Spendhappys be helped without punishing people like the Wisespenders? Instead of giving free money to people who have ARMs they can no longer afford, perhaps legislatures should force lenders to convert the loan to a fixed rate mortgage, even if it means a 50 year payment program versus the standard 30 year plan if that's what it takes to make the monthly payment affordable.

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2 Mortgages Comparison - by <a href=http://creditfederal.com>CreditFederal.com</a> <div style="text-align: left; font-family: Verdana;">A comparison of 2 mortgages from 2 people with identical bad credit histories; one a balloon ARM and the other a 30 year fixed rate. As the mortgage crisis rolls on, the arguments as to whether or not the federal government should step-in also wage on, as does the finger pointing of blame. To answer the question as to whether or not the federal government should bail out subprime mortgage lenders; and/or the bad credit people who accepted such loans, let's compare two different loans from two households that have identical income and credit histories. Mortgage "A" - Rich and Goldie Spendhappy have a six year old child. The Spendhappys choose a 4,000 square foot home in a posh neighborhood. Their mortgage totals $325,000. With no down payment, a 30 year fixed rate mortgage at 6% would cost $1,948.53 per month. The only way the Spendhappys can afford the home is to accept an ARM mortgage. Mortgage "B" - Buck and Charity Wisespender also have a six year old child. The Wisespenders choose a modest 1,800 square foot home in a typical suburb. Their mortgage totals $160,000. With no down payment, a 30 year fixed rate mortgage at 6% would cost $959.28 per month. Since this amount is less than half of what the Spendhappys monthly payment would be, the Spendwisers can afford this home with a standard 30 year fixed rate mortgage. They don't need to accept an ARM mortgage. After 5 years, the Spendhappys get bad news. Their new mortgage payments are going to be much, much higher as their ARM adjusts. Their new payments will be well beyond their ability to keep up payments. The Spendhappys are very upset indeed. They didn't understand the ARM program, and they don't want to lose their home to foreclosure. They try hard to work with the lender to either refinance or to negotiate an affordable payments, but they cannot pinpoint exactly who the lender is because mortgage companies don't readily release such information. Eventually, they contact their legislatures for help. Meanwhile, other people like the Spendhappys are also burdened with ARMs and are falling behind on their payments. They; too, try to negotiate but are unsuccessful. They also contact their legislatures. What's going on with the Wisespenders during all this? They are continuing to make their monthly mortgage payments. What's going on in the minds of legislatures? They are wondering how they help the bad credit people who took on ARM mortages, but mainly they're wondering if they should help them at all? And what about the banks that went under who had loaned money to bad credit people who defaulted? Should the banks be bailed out? But; once again, what about the Wisespenders? They didn't borrow more than they could afford. Instead of getting an extravagant, large home that costs over double what they could afford with a 30 year mortgage, they chose a modest, affordable home and they made all their payments on time. Shouldn't they be rewarded for being wise spenders? Instead of rewarding wise spenders, legislatures are considering punishment via tax increases on people like the Wisespenders, so they can give money to people like the Spendhappys who don't wisely manage their personal budget. And to possibly share that money with the banks who pushed ARMs. Is it fair to the Wisespenders, who didn't purchase a home larger than they needed nor more costly than they could afford, to be forced via taxes to help bail out irresponsible people like the Spendhappys? No, it wouldn't be fair. So what would be fair? How could people like the Spendhappys be helped without punishing people like the Wisespenders? Instead of giving free money to people who have ARMs they can no longer afford, perhaps legislatures should force lenders to convert the loan to a fixed rate mortgage, even if it means a 50 year payment program versus the standard 30 year plan if that's what it takes to make the monthly payment affordable. </div> This article provided courtesy of <a href=http://creditfederal.com target=_new>www.CreditFederal.com</a>, a personal credit resource of good or bad credit credit cards and loans.

Credit Tip: Need a high limit for Christmas credit card charges? If you have bad credit, consider a personal loan by refinancing your mortgage. Even if you have cash to buy Christmas presents, we recommend using a prepaid card to make purchases because it's safer than carrying cash.