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If you haven’t been watching headlines or nightly news broadcasts you may be unaware of the fact that the average house price in 2009 is expected to decline. While this is not necessarily the case for every real estate market in the country, on the whole, house and property values are expected to continue dropping at unprecedented rates. (more…)

photo credit: mrhayata

Experts say that especially in tough economic times like these, lending money within a family is getting increasingly common. But borrowing money from parents or siblings is a risky business and one which The Age thinks should be avoided wherever possible.

If you absolutely feel that lending or borrowing money between you and your family members is necessary, here are some pieces of advice to follow:

• Put the loan in writing. Even if it’s a little awkward to discuss that at the time, it’s better than creating a large dispute later. Where possible, draw the arrangement up as officially as possible.
• Only lend money that you are prepared to lose. You never know what could happen in the future. Apparently a worrying trend amongst parents with adult children is that they are lending them money by remortgaging their houses, and if the adult child is unable to repay the money, the elderly parents lose their house - and of course the relationships between them get very strained.
• Avoid reverse mortgages for this purpose - the reverse mortgage allows retirees to use equity in their home to obtain cash which is repaid when they later sell the house to move into care or when they die. Here the risk of losing a house increases again.
• Be open, honest and up front about every part of the deal, and if you have any doubts at all, say no. Just consider whether your relationship with the family member is more important than money or not. Usually the relationship wins and it’s not worth risking it over money.

photo credit: pfala

If you hit upon hard times and need an urgent, temporary cash injection to pay a bill or get through to payday, the Investing for Beginners blog has five ways you can quickly get your hands on some cash:

• If you have securities (a house, or investments), get a temporary line of credit that is backed by these securities. Weigh the risks first, of course - especially if it’s backed against shares, they could go down and you could get in even bigger trouble.
• Get a second job. It doesn’t have to be forever, and it might even be over the internet from home. But it’ll get you extra cash.
• Try a loan against your 401(k) - but only if it’s an extremely desperate circumstance. Borrowing from your retirement fund is usually not at all advisable.
• Check if you can redeem some rewards points. Most people have a credit card that includes reward points and you can often redeem these as vouchers for various grocery and department stores, so if groceries or other store goods are what you need, this is like getting a form of “cash”.
• Sell your jewelry! We’re not so happy about this one but it’s a valid point - gold is valuable and if you have some excess gold jewelry that you could probably live without, consider selling it off to solve your financial crisis.

It’s easier these days than it used to be to get a home loan. Traditionally, banks expected everybody to start with a down payment of 20% of the value of the home, no negotiating. But today you can even find finance with no deposit at all. That doesn’t necessarily mean it’s a good thing: here are three reasons why saving up 20% of the cost of your home will help you out financially: (more…)

credit: Dan_H

If you’re steadily paying off your mortgage, you often don’t think about changing anything about the loan you have – you just keep paying, month after month, looking forward to the day in twenty years when the house will be yours. But there are some situations when it can be really advantageous to refinance your mortgage.

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credit: tomsaint11

In response to the market dip, many automakers are offering longer loan terms. More importantly, many car owners are biting, extending their loans to seven years or longer.

While these new loan terms may seem like a natural and logical response to today’s financial crush, they may be the downfall of many individuals and car companies. Unfortunately, auto analyst Kevin Tynan says that these practices are bubble-inducing, a dangerous factor in today’s economy, when the bubble is already bursting.
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