Some Common Mortgage Questions and Ways To Get Their Answers

While you’re preparing to secure a mortgage loan, it is quite natural that there would be plenty of mortgage questions that you would want to ask. Before obtaining a mortgage loan, it is always advisable that you get answers to your mortgage questions.

Some Common Mortgage Questions That You Should Ask

Some familiar questions that are posed by mortgage borrowers include the following:

• How the mortgage lenders would assess my creditworthiness?
• In order to take out a mortgage, what is the necessary minimum credit score that I should have?
• Which loan is more beneficial – fixed rate mortgage (FRM) or adjustable rate mortgage (ARM)?
• Can I qualify for a mortgage with less than adequate credit?
• What is closing cost and what is its significance?
• Is it a favorable option to pay discount points so that I can get a lower interest rate?
• What are the factors that determine my monthly mortgage payments?
• For taking out a home mortgage loan, is making a down payment absolutely necessary?
• How can I stay away from prepayment penalties?
• When is it necessary to buy private mortgage insurance (PMI)?
• What is mortgage refinancing and how is it performed?
• How to calculate break-even period and what does it signify?
• Can I qualify for a second mortgage without refinancing the first one?
• What is cash out refinancing and how can it benefit me?
• What would happen if I default on my mortgage payments?

Two Methods of Getting the Answers of Your Mortgage Questions

• Many websites feature forum platforms. Getting answers for your mortgage questions from these platforms is quite easy. You just have to send your queries to them and the community members would provide answers to your queries. There is an “ask questions” section in various websites that helps you get instant replies to your queries no matter if you’re buying a home for the first time or refinancing your existing mortgage. All the replies you’re looking for can be received without much hassle.
• Lenders can also help you with answers to your mortgage queries. However, if you have a specific question, the “ask questions” section of various forums and websites is always helpful. Round the clock assistance is available. In this way, you can understand how difficulties related to mortgages can be overcome and this would help you make knowledgeable decisions in future.

WASHINGTON – The recent indictment of Albert Gonzales, who stole 130 million credit and debit card numbers in one of the worst cases of identity theft in U.S. history, has brought to light the insecurity of debit cards, the Washington Times reports.

Debit cards, which are used more than any other type of plastic payment, are not as secure and can expose users to more losses than credit cards. For thieves, debit cards represent cash.

Some financial experts advise keeping an eye on debit card accounts or asking the bank to issue a separate ATM card. Under federal law, credit card holders are only liable for up to $50 if the card is stolen; debit card holders can be held liable for up to $500 — or for all the funds if not reported within 60 days.

“If you lose your credit card and you report it, it’s the credit-card company’s problem,” said Jay Foley, executive director of the Identity Theft Resource Center. “If you lose your debit card and you report it in the same period of time, the transactions that occur from the time the card was lost and the time you reported it are still going to land on your doorstep.”

Credit card issuers generally use software to help uncover fraud, such as monitoring unusual activity and freezing the account until the credit card holder can be contacted to okay the charges. But the debit card companies do not employ such techniques. Visa and MasterCard offer zero-liability guarantees for credit and debit in most cases. These companies also say that Internet purchases using a debit card is as safe as using a credit card.

Susan Grant, director of consumer protection for the Consumer Federation of America, is calling for more security and legal rights for debit card fraud victims. “When unauthorized debits are made, consumers are in a much more troublesome situation … because the money’s been quickly withdrawn from their account,” she said. “With an unauthorized credit-card charge, you haven’t paid it yet.”

Debit card transactions surpassed credit card usage in 2008. “Consumers are shifting from credit to debit, and that’s fairly pronounced given the credit restrictions and other actions the credit-card-issuing companies have introduced,” said Thomas Goldsmith, spokesman for the Electronic Transactions Association.

Last year, debit card use surpassed credit card use for the first time in history: Americans made 28.4 billion debit purchases compared with 21 billion credit card purchases, according to payment systems newsletter The Nilson Report.
It happened, industry watchers say, because of tighter credit, recession-weary and strapped consumers, wider acceptance of debit cards for small purchases, and a burgeoning youth market that prefers paying with debit cards.

The typical American household carries four credit or debit cards. Which should be in your wallet, and for what should each card be used?

Brian Riley, research director for the TowerGroup, says consumers should pick the card that’s the best fit for their specific needs: convenience, low interest, fraud protection, rewards or even as a help in taming your inner spendthrift.

First step, though: Consider cash for the purchase. Cash is the simplest transaction and comes with no strings, fees or delayed costs.

Debit card pros and cons

Some considerations when using a debit card:

•Make sure the funds are there. A $6 sandwich can wind up costing $46 if you don’t realize your checking account is flat-lining. Most merchants no longer reject a card if you have an inadequate balance; instead, you incur a hefty overdraft fee.

For example, Bank of America charges $35 for each overdraft above $5. Spokeswoman Anne Pace says fees will be capped after a consumer makes 10 overdrafts in a single day; overdrafts totaling less than $5 carry a smaller fee of $10. Wachovia charges $22 for the first overdraft in a 12-month period, then $35 for each subsequent one, says spokeswoman Richele Messick.

Messick suggests debit customers can avoid fees if they keep track of expenditures and link checking accounts to savings accounts, credit cards or lines of credit.

•A security breach could mean trouble. “I do think there are a lot of advantages to using debit cards as far as restraining spending, but there are a lot of risks of having debit card information stolen,” says Ronald Mann, a Columbia University law professor who wrote Charging Ahead: The Growth and Regulation of Payment Card Markets.

“If there’s a problem with a credit card, I simply put that card aside and use a different card until things get worked out. With debit, it’s a much more serious event,” Mann says.

Federal regulations limit liability for most consumers who are defrauded, but your debit account could be inaccessible for up to 10 business days after you report the fraud, says Gail Hillebrand, senior attorney for the non-profit Consumers Union’s West Coast office.

If your credit card is lost or stolen, you typically won’t be on the hook for more than $50. If an unauthorized user gets your card number but not your card, your liability in most cases is zilch. Both Visa and MasterCard promise “zero liability” and quick resolution for any fraud committed over their transaction networks, including debit transactions. Some merchants use other networks.

•Usage fees. Some banks and merchants charge fees of 50 cents or a $1 for debit card use at certain stores.

•Account blocks. Some merchants place blocks on debit accounts for purchases that aren’t completed immediately: hotels, vehicle rentals and gasoline purchases, for example. That could keep you from using the debit card for other purchases.

•Prepaid debit and gift cards. Look out for fees — activation fees, non-use fees, ATM withdrawal fees, retail fees and reload fees. Also, many of these cards aren’t covered by federal regulations.

What about credit cards?

The major difference between credit and debit cards — when the money actually leaves your bank — accounts for the positives and negatives. Some considerations:

•They offer free short-term borrowing. If you pay the balance in full on time, you get an interest-free loan.

•Delayed payment raises the price paid. The $6 burger that ballooned to $46 with the debit card overdraft? It could do the same — or worse — over time on a credit card if you don’t pay the balance at month’s end. High interest rates and late-payment penalties can add up.

•Charges can be denied. If you use your card to purchase something that didn’t turn out the way you had hoped, you can dispute the charge. Some credit cards even carry insurance on purchased items.

“It’s the best method for ordering online or ordering something that you can’t evaluate until you bring it home and plug it in,” says Consumers Union’s Hillebrand.

•They tempt you to buy more than you can afford. “You have the best consumer protections on the payment method that creates the most risk to your household budget,” Hillebrand says. “The biggest danger with credit is going into debt — and that’s a danger that’s highly overlooked.”

•Be careful with rewards. Some credit card companies offer rewards programs to keep customers charging — although some issuers recently instituted fees for delinquent card holders who wish to remain eligible for rewards. Hillebrand advises consumers to rethink rewards.

“The basic problem with rewards programs is that they are designed to get us to use our credit cards more than we really should,” she says. “If you’re at any risk of not being able to pay it off at the end of the month, the rewards are not worth it. And, in this economy, we’re all at risk.”