It is also important to be familiar with the different types of credit cards.There are two interest rate options for credit card —the fixed and variable. Fixed-rate carry higher interest rates. Credit card grantors issue three types of accounts with basic account agreements:

“revolving agreement” a.k.a. Typical Credit Card Account which allows the payer to pay in full monthly or prefer to have partial payments based on outstanding balance.

• Charge Agreement, requires the payer to pay the full balance monthly so they won’t have to pay the interest charges.
• The Installment Agreement, on the other hand, asks the payer to sign a contract to repay a fixed amount of credit in equal payments in definite period of time.

The most popular credit cards include Chase Manhattan Bank, Citibank, Bank of America, BankOne, American Express, Discover® Card, First Premier Bank, Advanta, HSBC Bank, and MasterCard Credit Cards. There are three main types of credit cards that are common in America. They are travel and entertainment cards such as American Express or Diners Card. These have to be paid in full at the end of the month and are liberal on spending limits. The second major cards are the bank cards such as Master Cards, Visa, GM, and Ford cards sponsored mainly by the banks. The bank defines spending limits, and each offers different terms and conditions. Banks offer a choice of payment methods, either pay the balance in full with no interest or pay a minimum part or some part of the balance with a finance charge. The other major type of card is the retail store cards such as Sears, J.C. Penney, Shell or Mobil.

If you decided to apply for a credit card, there are a couple of things you should do:

• Surf the net and do some research on credit cards. By doing this, you can familiarize yourself with different credit card terms and types. Being a form of borrowing that involves charges, credit cards usually have underlying credit terms and conditions affect your overall cost. Some of the important terms to be understood well include the annual percentage rate or the APR.
  Aside from APR, you should understand outstanding balance, finance charge for each billing period, free period or “grace period,” annual fees, transaction fees and other charges, other costs and feature, and balance computation method for the finance charge like average daily balance, adjusted balance, previous balance, and two-cycle balances.
• Compare numerous credit cards that would best serve your needs
• Apply for the credit card of your choice by filling out a credit card application by visiting a bank representative or through online.

By refinancing an ARM into a fixed-rate one, the risk of increasing interest rates can be eliminated. And if you think the interest rate is going to go down, you can refinance from fixed rate to ARM.

Refinancing lenders often require an upfront payment of a certain percentage of the total loan amount as part of the refinancing process. This amount is expressed in “points”. Each “point” equivalent to 1% of the total loan. Therefore, if the refinance option involves paying two points, then the borrower will have to pay 2% of the total loan amount upfront. If you pay more points, you usually will get lower interest rate.

If you want to know how many you can save with refinancing, try this.

• Before you sell your home, you need to make a good impression for your prospect buyer. You have to satisfy their eyes and nose. You can do this by cleaning the house, freshen up the smells by put scented potpourri, paint the wall, and repair the broken part of your house.
• You could put the “Home for Sale” in your front yard. Don’t forget to put your phone number on it, so a buyer can get contact you.
• You should put a reasonable price, valued by the physical price of your home, environment and location. The better location where your home is placed, the better price you can put. You don’t want to gave high price that might scare the buyer.
• Get familiar with negotiation and it stuffs, such as contract, offer, deal, etc. You should learn to do some offer approaching and all correlated with a legal transaction process.
• Sell your home in a good economic condition and strong demand for houses, which tend to be stronger in June and July. If you sell your home at the right time and a good preparation, you will get the highest price of your home than your prediction.
• You can try selling your home online. Nowadays, about seventy percent of homebuyer starts to search for houses online through the internet. This is absolutely one advantage for sellers to add an advertisement online. To attract buyer put your great home pictures.

• Beautify your exterior
  What you do is just beautifying. The goal is to make your exterior look pretty and fresh to impress your buyer. Just to inform you that the exterior becomes the first impression to overlook a house. There are two sensory organs of a buyer you must impress. Those are eyes and nose. By bringing the garden homelike condition to your house exterior, making it looked pretty and freshening it up. The steps you can do are:
  - Get the grass, trees, flowers, and plants tidy and fresh by mowing and watering it
  - Clean up the curb and entering path and put the potted flower in the sides.
  - Freshen up the smells by put scented potpourri.
  - Clean up all of windows and entering doors.
  - Get rid of equipments out of sights.
  - Paint the walls if necessary.
• Make the Cosy Interior
  After buyer got impression from your house exterior, do some simple works to get the cosiness of your house interior. It aims to make a buyer feel homelike buy entering your house. These are the steps:
  - Clean up the tile floors; scrub it if there are some bad spots.
  - Get rid of spider net from your ceilings.
  - Wash the carpets with a fragrant soap.
  - Get your furniture placed tidily and gets rid of unnecessary one.
  - Brush the closets
  - Clean the garage, basement, and attic
  - Get the windows opened and clean, it will bring freshness to your house inside
  - If you have pets, bath them.
  - Put some fresh fragrance in air conditioner.
• Repairing and Replacing
  Some Repairing and replacement is necessary to do, if there are some broken furniture, equipment, or appliances. Just check out:
  - broken or missing door
  - cabinet handles
  - ceilings
  - ventilation filters
  - broken tiles in bathroom and kitchen
  - faucet
  - wallpaper
  - some furniture

If you are using FICO (the most widely used in the mortgage industry). You should understand how FICO calculate your score. They will look into:

1. Payment history (35%). The better you have good payment history, the higher your score. So tips #1: Do pay your bills in time.
2. Amounts owed (30%). The more amounts you owe, the lower your score. Tips#2: Keep your credit card balance low, and pay your debt.
3. Length of credit history (15%). Longer credit history will have higher score. Tips#3: Don’t open a lot of new accounts.
4. New credit (10%). The more you have new credit, the lower your score. Tips#4: Don’t open accounts that you don’t need.
5. Type of credit used (10%). If you have a mix of credit types like credit cards, mortgage, or auto loan, you will have a slight higher score. Tips#5: If you need it you can apply for other credit types. Don’t apply just to raise your score. Remember it only counts for 10% having mix of credit types.

Another thing you have to know is FICO allows “rate shopping” / applying to many lenders for the same loan to obtain a better rate of interest and other terms like repayment schedule. If you use rate shopping, multiple lenders will request your credit report, even though you’re only looking for one loan. FICO® scores distinguish between a search for a single loan and a search for many new credit lines. You can avoid lowering your FICO® score by doing your rate shopping within a short period of time, such as 14 days.

Fair Isaac Corporation’s uses different scoring methods to rate a borrower’s suitability for three types of credit —mortgages, automobile loans, and consumer credit. It is not unusual for these scores to differ for the same borrower. The FICO credit score range formerly ranged between 300 and 850. A new scoring system now ranges ffrom 501-990. Borrowers can buy consumer credit score from Fair Isaac, and they can choose which agency the data is obtained from.

The higher your FICO credit score, you will have lower monthly payments. So in order to have low monthly payments, you have to increase your credit score. Credit score is calculated by five data categories:

• Payment history (35%).
• Amounts owed (30%).
• Length of credit history (15%).
• New credit (10%)
• Type of credit used (10%)

The lenders (example: Washington Mutual) did not have to worry very much about the risk of default, because they created a bond from bundling these mortgages called Mortgage-Backed Securities (MBS), which they then sold to hedge fund, pension funds, and other financial institution (example: Fannie Mae, Freddie Mac, Lehman Brothers). This is a called securitization – conversion of mortgages or loans into bonds. The idea was to reduce risk exposure and raising new fund. The man behind securitization was an Investment Banker of ‘Salomon Brothers’ - Lewis S. Ranieri. In 1980s Salomon launched MBS.

It is hard to sell MBS because of it’s high risk. So they slice the MBS into smaller bond called ‘tranches’ with various risk level from high risk, middle risk, and low risk. Of course higher risk will have higher returns, but if something went wrong, it will be lost first. Salomon used a special purpose vehicle known as Collateralized Mortgage Obligation (CMO). Legally, a CMO is a special purpose entity that is wholly separate from the institution(s) that create it. Monthly instalment from mortgage was used to pay the interest on these bonds. Lender can also minimize risk by insuring the mortgage to other companies like AIG.

When the Fed raise it’s rate until 5.25% in June 2006, people will pay more for monthly instalment. The rate stays there for a long time, making many people unable to pay the instalment. When these people fail, they will also drag financial institution into trouble. That’s why we have seen many troubled institution like Washington Mutual, Fannie Mae, Freddie Mac, and Lehman Brothers. Every institution buying these MBS and it’s derivative around the world will get into trouble.

This information is used by lenders such as credit card companies to determine an individual’s credit worthiness. Lenders like to see obligations paid on a monthly basis. Credit Score will determine whether lender will provide a loan or not, because it shows willingness to pay debt. Besides credit score, access to credit is determine by income. The higher the income, the more credit the consumer can access. Income shows ability to repay a debt.

These factors help lenders to determine the annual percentage rate (APR), grace period and other numbers of a loan.

Real estate agents are professionals who help in connecting the buyer to the seller. The real estate agents work by linking together the two interested parties and charging a commission for their services. Real estate agents generally calculate their fee as a percentage of the selling price (in case of sales) and as part of the rent (for rentals). People, who want to sell/let their property, leave the details of their property with the real estate agent. The other interested party (i.e. the buyer/tenant), gets access to this information by contacting the real estate agent.

A lot of home seekers (including real estate investors) use the services of real estate agents not just for getting good deals but also getting them quick. Since real estate agents are probably most familiar with the market situation in their region of operation, it makes sense to approach them to get an idea of the going rate for properties in that region. Real estate agents would generally know the prices of various properties of different types and at various locations in the region.

A property seller can possibly get a few thousands more for his/her property by using the advice received from a good real estate agent. A good real estate agent will also analyse the needs of a home buyer/tenant and provide suggestions on what kind of home could be available to them within their budget. So a good real estate agent will not just throw a list of available properties to the buyer/ tenant but will actually discuss their needs and make a suggestion. This, in fact, works in the favour of real estate agent in two ways. Firstly, if the real estate agent is able to sell the house they get their commission and secondly, if they make the buyer happy too they earn a good reputation (and hence more business).