Warning! Home finance has blossomed into an incredibly diverse and complicated industry. This is good and bad. There are at least a hundred ways to borrow the money for your next home now. There are also dozens of ways for lenders to take advantage of you, from hidden charges to prepayment penalties and more.

Let your lender explain all the various home loans and home finance options available. However, when you finally decide on a product you like, ask as many of the following as are relevant to your loan. These are the questions that will protect you.

Home Finance - Questions For The Lender

- What is the interest rate?

- What is the APR (annual percentage rate; includes fees, points and mortgage insurance)?

- What is the initial rate (if it is an ARM - adjustable rate mortgage)?

- What is the highest the rate can go to next year (ARM)?

- What are the annual and lifetime caps on the interest rate and payment (ARM)?

- How often is the rate or payment adjusted, and when (ARM)?

- What index is the rate based on (ARM)?

- What margin is added to the index (ARM - it might be the index plus 3%, for example)?

- Is credit life insurance required (this pays off the loan if you die)?

- How much would the payment be without it?

- Can any of the fees or costs be waived?

- Is there a prepayment penalty?

- How much is the prepayment penalty?

- For how long is the penalty in force?

- Are extra principal payments allowed?

- Is an interest rate lock-in available? (guarantees interest rate for a time)

- Can I have the lock-in in writing?

- Is the rate locked in at time of application or time of approval?

- If rates drop, can I get a lower rate locked-in?

- What inspections and/or surveys are required?

- Is a title search and/or title insurance required, and what is the cost?

- Can I get an estimate of prepaid amounts that I’ll have to pay at closing?

- Are there “points,” and what will these cost (discount points to reduce interest rate)?

- What state taxes, local taxes, stamp taxes and transfer taxes will I have to pay?

- Will a flood determination be required (to see if the home needs flood insurance)?

- What other costs will there be?

- Is there anything else I should know?

Lenders may not like getting two dozen questions thrown at them, but you have a right to ask before you agree to a loan. Did you know that a 1% higher interest rate on a $150,000 loan can cost you an extra $30,000 over the years? Home finance can be as important as a good price when it comes to saving money on your home.

Steve Gillman wrote the book: Cheap Homes - How To Save Thousands Buying Your Next House. To learn more about home finance, and to see a photo of the beautiful home he and his wife bought for $17,500, visit http://www.YourCheapHome.com

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Following in the footsteps of many of its high street competitors, Alliance and Leicester has announced that it will no longer accept new customers onto its Online Saver and Direct ISA accounts. The interest rate for the Online Savers account is also being cut from 5.35% to a straight 5%.

Richard Brown of the financial comparison website Moneynet believes that Alliance and Leicester (A&L), in common with its high street competitors, has seen its costs rise as a result of recent rule changes covering things like the way mortgages and general insurance are policed. He added, “Unfortunately it’s the consumer who shoulders much of this additional burden”

It seems to many of their loyal customers that A&L is indeed determined to make their customers pay in an effort to purge costs and boost their profits. These cuts are only the latest of a series of changes that A&L have made during recent months. First to go was the cashback scheme on their Moneyback credit card. The Moneyfacts financial data website pointed out in February, that A&L had increased the APR on their credit cards for all purchases up to 16.9%; as well as increasing penalty fees, and introducing punitive new clauses to current accounts. Other charges have been introduced to their mortgage products, balance transfer fees on credit cards, reductions in children’s savings accounts, whilst The Guardian has revealed some suspect changes that have been implemented to their systems to increase the number of customers who breach their overdraft agreements, triggering penalty charges.

A&L has said that there is no hidden agenda, and that it still leads the way compared with its banking rivals.

A&L however, are not the only financial group to be feeling the pinch. Barclays, HBOS and Royal Bank of Scotland have all warned about credit arrears. An announcement concerning job losses at Scottish Widows, came alongside admissions from their owners LLOYDS TSB that there was, “An increase in the number of customers experiencing repayment difficulties” with their credit card debts and unsecured personal loans. According to Lloyds’ Chief Executive, Eric Daniels, we are currently experiencing, “a slowing consumer environment”.

Recent announcements by the Treasury delivered the worst monthly public borrowing figures since records began in 1993, re-igniting fears over a possible rise in taxes.

Consumers are reducing the amount they borrow on credit cards and analysts predict mortgage lending in the UK will plummet by 10 per cent over the next three years, as the out of control growth in house prices finally stalls.

Independent market analyst Datamonitor claims, lenders who have been enjoying a boom in recent years, will struggle to maintain the momentum and be forced to work harder to secure market share.

Investor Connections, a group of independent financial advisers, has called for an accurate assessment of the UK’s current economic position, after statistics showed the three main asset classes, shares, bonds and property are all experiencing downward trends.

This downturn should spell good news for borrowers and homeowners, as the mortgage and credit industries fight for customers and sharpen up on their competitiveness; however the evidence of Lloyds TSB’s actions seems to belie this. With HBOS forced to criticise the other credit card companies for failing to provide customers with adequate product information, despite repeated requests to do so from consumer lobby groups and watchdogs on the Treasury Select Committee, it looks like the majority of finance companies are currently out to protect themselves and their share-holders, with little regard for their customers.

At a time when UK consumers are proportionately saving less than half of what they were 25 years ago, you might be forgiven for thinking that competition in the banking world would be becoming increasingly cut-throat in order to gain customers’ business, but it seems that the big institutions are instead looking to go down the route of cost reduction to protect their profits. There are savings are out there to be made, but they are savings in costs to be made by the finance companies, at the expense of the consumer, rather than beneficial savings for the customer.

Richard works in Edinburgh for a media company, occasionally writing for the personal finance blog Cashzilla, and drinking too much coffee.

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People are often stunned about the possible profits that can be made in “house flipping”. House flipping describes the process of buying a piece of real estate, fixing it up, selling it and then doing the same process again with a different object. If done right the profits made from such a transaction can go up into hundreds of thousands of dollars. People reading all these stories about the real estate success of others wonder how that particular person was able to work out such a great deal.

If you are interested in house flipping there is a nice trick that will help you to increase profits. It requires to look ahead and to be flexible when it comes to investing money into the next real estate object. Most people doing house flipping buy an object, fix it up, and then sell it. Once the object is sold they move on trying to find the next house to be fixed up for their venture. That’s where the successful entrepreneur in house flipping works differently. While the ‘normal guy’ does not want to spend the time looking for the next object while still working on the current house, the more successful house flipping entrepreneur works on the current house as well as he searches the market for the next AND second next piece of real estate.

By lining up the projects this entrepreneur saves time as well as he shuts down the competition quite early. He can move from one object to the next one seamlessly. He can also book sub-contractors and get estimates for work he does not do himself. As he is not under any time pressure he can get as many estimates for a particular job as needed. This is a critical point as it can mean significant savings down the road.

By planning ahead the more successful house flipping entrepreneur brings house flipping to a more professional level. This separates the beginner from the professional and can mean several thousands of dollars in difference on the bank account at the end of the year.

An additional step to more success in house flipping is to build a network of professionals. By joining forces with a real estate agent who is willing to give up the normal fees associated with buying and selling a house can make a significant difference. The real estate agent also has early access to new objects that get listed on the market. It is easy for this professional to check for low price objects and to notify the house-flipping entrepreneur. Together they can evaluate the object and decide on a certain strategy.

About the Author

Christoph Puetz is a successful entrepreneur and international book author. His small business related website is Small Business Land. Christoph’s own small business is located in Highlands Ranch in Colorado, USA.

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