Free From Broke

A Personal Finance Blog for Regular Folks

Debt

Debt. It can be used wisely to help free up money to build wealth, but most of us struggle with debt. Take a look at articles that help you deal with debt and eliminate your bad debt.

What is Mortgage Amortization and How Does it Work?

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Paying off a mortgage is an overwhelming task.

A mortgage is a big debt—almost as big as your house—so the best most of us can hope to do is to shorten the term by prepaying as much of the loan that we can as quickly as we’re able.

Why should we want to do that?

Owning your home free and clear is a good place to be.  You’re living in your home with no mortgage payment and that’s when saving money and life in general get easier.

But there’s something more.

The cumulative interest on mortgage loans makes your loan balance even bigger.

A mortgage of $200,000 will require nearly $350,000 in monthly payments over a 30 year period.  Anything you can do to shorten the term can save a lot of money.

What is Mortgage Amortization?

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Contemplating Marriage? Love Is Not All You Need

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The Beatles famously sang, “All you need is love, love, love, love is all you need.”

So many of us buy into this simplistic belief and think that love conquers all.

Many of us rush into marriage and ignore the red flags that are before us, thinking problems will work themselves out after we are married.  The sad truth is that marriage often serves to amplify problems, not solve them.

Kathy Chu of USA Today puts it perfectly when she states,

“If love is the tie that binds couples together, money is often the wrench that pries them apart.”

Maybe in the past arguments about money in marriage could be blamed on societal pressures for people to marry early and for the expectation of the wife to quietly allow her husband to make the financial decisions, but those days are long gone in our society.

Now, women often make more than the men they marry.
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Alternatives to Foreclosure

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If you are concerned that your home might become a foreclosure risk, you are probably casting about for other options.

Foreclosure can impact your credit score, and make it difficult for you to purchase a home in the future — at least for the next two to four years.

When you are trying to avoid foreclosure, you do have some options.

However, it’s important to realize that you will have to meet certain requirements in order to qualify for some of these options.  Additionally, some of your foreclosure alternatives will impact your credit score, even if it isn’t impacted as much as it would be with a foreclosure.

Here are some of your alternatives to foreclosure:

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Mortgage Plan to Help Homeowners – $26 Billion Settlement with Big Banks

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If you’re wondering when help will arrive for your underwater home, on February 9th, 2012, a giant step forward was taken on your behalf.

The Obama Administration announced a settlement with five of the largest banks, Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial, and attorneys general in all states with the exception of Oklahoma.

The $26 billion foreclosure settlement brings to a close the litigation surrounding the use of robo-signing in the foreclosure process and may provide much needed relief for many of the nation’s underwater homeowners.

Background

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Obama Mortgage Relief Refinancing Plan – A Tax on Big Banks and More

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We Can’t Wait

That’s the new slogan that the Obama Administration is trying out, presumably thinking of the campaign as Obama approaches the full force of election season.

In Las Vegas, one of hardest hit housing markets in the United States, Obama said, “we can’t wait” for an increasingly dysfunctional Congress to do its job and provide relief for the millions of Americans underwater on their mortgages.

Obama went on to say that the housing bubble was the greatest cause of the current economy and that millions of Americans have continued to responsibly pay their mortgage even though their home is worth less than the value of the loan.  In his recent State of the Union address, Obama laid out a plan to help underwater homeowners.

Here’s how the mortgage relief plan would work. [Read more…] about Obama Mortgage Relief Refinancing Plan – A Tax on Big Banks and More