The Benefits of Refinancing Debt into a Mortgage

Having trouble paying your bills? Getting calls from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or car?

You are not alone. Many people face a financial crisis some time in their lives. But often, it can be overcome. Your financial situation doesn’t have to go from bad to worse. An option is to consolidate or refinance the debt into a mortgage.

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of paying only one loan.

There are several reasons why you should consider refinancing your existing debt:

· Reduce the interest rate and/or convert from a floating rate to a fixed rate loan

· Reduce the monthly payment by extending the loan maturity

· Convert short term debt to long term debt

· Use the equity you built up in your fixed assets to provide cash

· Consolidate debt

· Get out of debt sooner

You may be able to lower your payments and reduce your cost of credit by consolidating your debt through a second mortgage or a home equity line of credit.

To explain how you can use a second mortgage or home equity line of credit to diminish and control debt, we need to explain the two types of mortgage rates and how they can affect your ability to take out an additional loan or refinance.

There are many types of mortgage loans. The two basic types of loans are the fixed rate mortgage (FRM) and adjustable rate mortgage (ARM).

In a fixed rate mortgage, the interest rate, and hence the monthly payment, remains fixed for the life (or term) of the loan. This term is usually for 10, 15, 20, or 30 years. The only increase you might see in the monthly payments would result from an increase in property taxes or insurance rates (paid using an escrow account, if you’ve opted to use an escrow). But payments for principal and interest will be consistent throughout the life of the loan using an FRM.

In an adjustable rate mortgage, the interest rate is fixed for a period of time, after which it will periodically (annually or monthly) adjust up or down to some market index.

Adjustable rates transfer part of the interest rate risk from the lender to the borrower, and thus are widely used where unpredictable interest rates make fixed rate loans difficult to obtain. Since the risk is transferred, lenders will usually make the initial interest rate of the ARM’s note anywhere from 0.5% to 2% lower than the average 30-year fixed rate. Because these types of loans can have very low interest rates, they have been a popular option for people throughout the past few years when the interest rates have been at such low levels. In most scenarios, the savings from an ARM outweigh its risks, making them an attractive option for people who are planning to keep a mortgage for ten years or less.

Now that we have an understanding of the types of mortgage loans, we can discuss how to refinance your original mortgage to consolidate debt.

The amount one can borrow in refinancing from a second mortgage is determined by how much equity is in your home. Equity can be defined as the difference between how much the home is worth and how much you owe on the mortgage. Therefore, a home equity line of credit (known as a HELOC) is a loan that is taken against the equity in your home. The collateral on the loan is your house and, depending upon where you live, local lending laws will regulate how much you can borrow. One of the most popular uses of a home equity credit line is to consolidate high-interest credit card balances, and pay them off before the penalties, interest payments, and annual fees become an unmanageable burden. By using a home equity line of credit, it’s possible to pay off all credit cards, and replace them with a single, easy to manage loan. Another benefit of the home equity line of credit is that it can be paid off gradually, over a long period of time. A home equity line of credit can free you from debt, and help you improve your credit rating at the same time.

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2011
11/18
CATEGORY
Debt Consolidation
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Anger Management Failures

Anger management works fine for managing ordinary anger, but is not successful when it comes to the self-defeating behaviors of problem anger.

Ordinary anger is a response to frustration and impediments to:

o Task performance (the screw repeatedly drops out of the picture hanger before you can tighten it)

o Interest or relaxation (someone is talking while you’re trying to read or a lawn mower wakes you up too early)

o Enjoyment (someone is reading when you would like to talk).

In contrast, problem anger:

o Makes you act against your long term best interest (you bang the picture with the screw driver or shout at the talker to shut up and thereby make it harder to concentrate on reading or make someone irritable by interrupting, which lowers the likelihood that you will enjoy your talk)

Or

o Keeps you from doing what is in your long term best interest (connecting with those you love).

Anger management fails with problem anger because it treats it as an extreme or uncontrolled version of ordinary anger. According to the American Psychological Association, anger management teaches techniques to manage the emotional feelings and physiological arousal of anger. But problem anger is not just a matter of feelings and arousal; it’s set in motion by the drop in self-value that occurs to some people when they are angry. They feel inadequate when the screw won’t turn or devalued when spouses interrupt or unlovable when a loved one doesn’t pay attention.

Instead of doing something that will raise self-value (being nice to someone they love, for example, or finding a better screw driver), they blame their lowered self-value on someone else, which makes them want to devalue in return:

“Look at that jerk!”

“I’m tired of telling you this…”

“What kind of person would say that?”

“I don’t have time for you.”

Due to the high contagion of these kinds of feelings, you don’t have to express them to do damage – we communicate negativity all the time without saying a word. In addition to ruining your health, problem anger inevitably damages social relationships, whether you express it or not, unless you happen to work or live with Mother Theresa.

The formula for problem anger is:

Anger (irritability, attitude, etc.) + Lowered self-value + Blame

Another failing of anger management is that it relies on conscious control of an unconscious motivation. Problem anger is habitual — habits run on automatic pilot, processed in the brain much faster than conscious awareness. You are never aware of most of your resentment or anger; by the time you know you’re resentful or angry, it’s already in an advanced state. Anger management fails with problem anger for the same reason that diets don’t work. By the time you know you’re hungry, you’re already highly motivated to have a hot fudge sundae and unlikely to think of eating a celery stick instead.

Priming the Pump

In most cases, you’re primed for bouts of problem anger long before an obnoxious event happens. For example, suppose you’re driving down the road at a baseline level of anger, that is, with no attitude of entitlement, resentment, superiority, pettiness, sarcasm, victim identity, or enmity of any kind. Suddenly an obnoxious event occurs, like someone flipping you the finger and shouting something about your mother as they speed by your car. If you’re at baseline to begin with, that might get you about 30% aroused, which is no big deal. Your response will likely get no worse than sarcasm – you might think, “What a jerk.” That kind of anger dissipates in a few minutes and is forgotten about completely within a couple of hours – you’re not likely to remember it ever happened.

But if you get into the car resentful about something at home or at work, you’re already about 30% aroused at the start. So that same obnoxious event hits you at a higher level of arousal and pushes you to a 60 or 70 percent level, which is where you begin to get aggressive – you’ll shout out or want to tailgate that sucker – with a hair-trigger mechanism for escalation, should there be any negative response to your aggression. Add caffeine, nicotine, anxiety, or a startle response to the mix, and the adrenaline can easily go through the roof. This kind of anger will stay with you in various degrees for the whole day, and you’ll get pissed every time you think of the incident.

The roller coaster of problem anger

The jolt of energy you get at any level of anger works like an amphetamine or “speed.” You get a big spike of energy and confidence, and then you crash. When you get angry, you get depressed, once all the adrenalin washes out of your blood stream. And that’s just the physiological response to the amphetamine effect. If you do something while you’re resentful or angry that you’re ashamed of, your depressive mood will get worse.

Anger Junkies An addictive trap is sprung when the energy surge of anger is used frequently. You get angry and feel energetic and confident, only to crash with little energy and creeping self-doubt. (Maybe I shouldn’t have grounded by kid till he’s 42?) You get angry again to feel energetic and confident, only to crash yet again into low energy and self-doubt. In no time at all, anger will seem necessary to escape depressed mood, even though it inevitably means more depression. In other words, the brain will look for excuses to get angry and turn you into an anger junkie.

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2011
11/18
CATEGORY
Anger Management
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Top Ten House Alarm and Home Security Devices

A man’s home is his castle, as the saying goes. But homes today don’t normally feature ramparts, drawbridges, moats and six-foot thick stone walls to keep out unwanted visitors. Today, a house alarm, and preferably a managed home security system, is needed to ensure your home’s security. Not only does installing a home security system improve the safety of your family and possessions, but it can also decrease your home insurance costs. The Top Ten House Alarm and Home Security Devices list highlights ten devices and features of home security systems that can make your house a safer place.

The Top Ten

10. Talking Devices help you to understand the status of your home and monitoring as well as program the system. Some security systems feature talking master control panels, key pads or remotes. The talking feature may not result in great conversation, but it will help you understand your system a little better.

9. Some home alarm systems include extras like Key Fobs and Remotes to control the system at a distance. Somewhat similar to a car’s key fob, home security key fobs include buttons to activate and deactivate the house alarm system. Some even include a “panic” button that activates the house alarm and alerts the proper authorities in the event of an emergency. Remote controls are similar and often larger. The features of remotes vary greatly and can include a full key pad, a talking feature and a panic button as well.

8. Yard Signs and House or Window Decals advertise your home’s protection. The Greenwich Study of Residential Security found that homes without alarms were 2.7 to 3.5 times more likely to be burglarized, and that the most effective deterrent was the alarm monitoring company’s yard sign (SIA Research Update, Security Industry Association, October 2001). Some choose to post the signs to deter possible break-ins without actually installing a home alarm system. While this effort will lower the odds of an attempted burglary, a yard sign alone cannot fully protect your home.

7. A Back-Up Power Supply is important in maintaining home security even during a power outage, when the risk of break-ins and looting is increased. Your home alarm should be effective even when your power is not. The easiest to maintain back-up power supplies use standard size batteries. Look for a model that uses rechargeable batteries to lower your maintenance costs.

6. Smoke Detectors add another layer of protection to your home, especially when they are integrated into the home alarm system. Not only do smoke detectors indicate a fire and give you time to escape safely, but when included in a home security package, they automatically notify the managing company and the fire department. Some systems even integrate the power supply to the smoke detectors. That means you don’t have to change the batteries ever!

5. Wireless Systems protect your home without adding extra cords to trip over or extensive installation of in-wall cords. In wireless house alarm systems, each sensor or keypad communicates with the master control panel via radio frequencies or existing wiring in your home. A burglar will never be able to disarm the system by snipping the wires. This ensures the system is fully integrated and monitoring all parts of your home without using up your outlets or creating an obstacle course of wires for you.

4. Extra Key Pads are also important. Exterior mounted key pads can provide secure keyless entry to your family. Some systems also offer remote control key pads which are lightweight and portable. A home alarm system that features a security code with a key pad increases the security of your home. A monitored system can also lock down entry after several repeated, failed attempts at entry which indicate a possible break-in attempt.

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2011
11/18
CATEGORY
Security
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