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How Much Will I Save Refinancing?
How much will I save refinancing is a commonly asked question in today’s real estate market. It is even more important now that the Obama Mortgage Bailout Plan will begin to take effect at the beginning of March. Many lenders are going to get incentives to offer lower mortgages rates for those attempting to refinance. Now that you have the opportunity to refinance at lower rates, how much will you really save?
That question cannot be answered without analysis of your current mortgage loan. A general rule of thumb is to refi if you are going to reduce your mortgage by a full percentage point. You can use the mortgage calculator to determine the exact amount that you will save on your monthly payments by refinancing to a lower rate. Now that the government is encouraging home owners to refinance, it is very appealing to seek out lenders to see if they truly are offering the low rates that are being advertised.
We have all seen the ads for rates under 5% but very few home owners have gotten the chance to lock in at these rates. Now might be the time as lenders will get incentives to offer you these rates. Even if you do get an extraordinarily low rate, make sure to check on all the fees and closing costs included in the contract. Many times, home owners will sign on the dotted line before they realize that they will have to pay up to $1000 in fees and costs. One of your first questions to your mortgage lender should address the cost of fees.
Today is one of the best times in the history of the United States to refinance a house or purchase a new home. If you are one of the lucky Americans who has made it through this troubled financial times unscathed then you will prosper from the subprime crisis. You will get lower prices and lower rates; what could be better? To make this situation even better, you are likely to pay less taxes in 2009 as well.
Please comment below if you have refinanced or plan to refinance in the near future. We look forward to hearing from you!
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President Obama Mortgage Bailout Plan – How Much Will it Save Me?
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Foreclosure Prevention Program: Am I Eligible?
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Where Do I Invest During a Bear Market?
How Much Will Matt Cassel Make for the Kansas City Chiefs?
How much will Matt Cassel make when playing for the Kansas City Chiefs? He will make the franchise tag value of $14.6 million the that New England Patriots placed on him, but he will seek a new deal for the rest of his time in Kansas City. He is hoping to get $75 million over five years which includes $35 million in bonuses.
Doesn’t this sound a bit expensive for a guy that never even started in college? For some reason, this sounds like another bubble ready to burst.
How Much Will R. Allen Stanford Financial Lose?
R. Allen Stanford and his financial firm have been charge by the SEC with an $8 billion civil fraud. The federal judge overseeing the case has put a freeze on all the assets in question. There have already been five courts orders by investors in Florida and Texas asking for an amendment to allow them access to their money. Sadly, this will not happen as the SEC is taking the proper steps to sort through the case.
If investors are filing courts orders against the SEC, then who really knows how many court orders R. Allen Stanford will see. If convicted of a Ponzi Scheme, R. Allen Stanford will lose the entire $8 billion and be faced with the many lawsuits that will come his way. He often made the statement that it was fun to be a billionaire, but now he is going to have to relinquish all of this earnings and then some.
It is likely that he will have to liquidate many of his financial companies as the SEC continues to find more dirt of Mr. Stanford. Stanford Financial will be shut down and MANY individuals will lose a lot of money. There are other companies that R. Allen Stanford owns which many very well assist in paying the lawsuits that come his way.
Overall, it is safe to say that R. Allen Stanford will lose over $1 billion in the next year after many of his properties and assets are liquidated. Sadly, his clients will be the ones that lose the bulk of the $8 billion that is currently frozen. We can only hope that the SEC finds a way to distribute this money properly and punishes only Mr. Stanford and his employees.
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President Obama Mortgage Bailout Plan – How Much Will it Save Me?
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Foreclosure Prevention Program: Am I Eligible?
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Corporate Scandals
How Much Will Warren Buffett Make This Year?
For the 28th consecutive year, Warren Buffett will make $100,000 in annual salary this year. Obviously, there is no way this is how much Warren Buffett will make overall for the year, but that is the set salary that Berkshire Hathaway Inc has paid him for his entire career in his current position. In all reality, Buffett will probably make several billion dollars this year on the companies and investments he owns.
Buffett made over $10 billion in 2007, but that was prior to the steady decline in the stock market. Most of his holdings are in publicly traded companies which have taken a tumble over the last 13 months. Even with the steep decline in the stock market, Mr. Buffett will still make well over a billion dollars solely in dividends and investing in companies he deems successful.
He has made some bad financial decisions by buying Goldman Sachs at $123 a share and GE in the mid $20’s but Buffett is a long term investor and believes in the United States economy. It will be very interesting to answer to the question “how much will Warren Buffett make this year?” $100,000 in salary, we do know that!
President Obama Mortgage Bailout Plan – How Much Will it Save Me?
We are getting closer and closer to seeing the effects of the Obama Mortgage Bailout Plan, March 4th. Many of you may be asking, “how much will it save me?” Well, that is determined by how much you make and how much your current mortgage payment is. If you have a mortgage payment that has been a struggle to make over the last year and your income has not increased, it is likely that the Mortgage Bailout Plan will save you a significant amount of money.
With the new Obama Mortgage Bailout Plan your mortgage payment will only be 31% of your income. To put that into numbers, here is an example. If your mortgage payment is currenly $1700 a month and your monthly income is $4300 before taxes, you will only be expected to pay 31% of $4300 which is $1333 a month. You will save $367 a month and $4404 a year! To calculate how much your new mortgage payment will be just multiply your monthly income by .31. This is a rough estimate, but should be very close to your new mortgage payment.
If your mortgage payment is less than 31% of your current income, you will not see an immediate savings. You will have the oppotunity to save in the long run by refinancing. Mortgage rates are at historical lows and many borrowers do not have access to these rates because lenders are being so strict in their lending practices. The Obama Mortgage Bailout Plan is giving lenders incentives to be more lenient with their lending practices so more Americans will have the opportunity to refinance at lower rates.
So, if you have done well financially and stayed ahead with your mortgage payments, apply to refinance and see what offers you get. You could get as much as a whole percentage point dropped from your current mortgage rate. This would save you MUCH more than the $4404 a year that the previous example illustrated.
Overall, the Obama Mortgage Bailout Plan should save most Americans some money in one way or another. If you do not own a home, this is the time to buy as the government is urging you to make your first home purchase by giving you an $8,000 tax credit and many incentives to move into that first home. For more information on saving money on your mortgage stay tuned to the Church of Cowherd.
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Obama Mortgage Bailout Plan Benefits You?
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Obama Stimulus Check – You Will Get This through Lower Taxes
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Foreclosure Prevention Program: Am I Eligible?
75 Year Stock Market Chart
The chart above is a depiction of the stock market since 1900. Many people have been searching for a 75 year stock market chart and we have done better. It has been 75 years since the great depression so that is why the searches are so strong. So, here you go, a 109 year stock market chart. You can click on the image to enlarge it to zoom in on actual bull and bear markets.
Where to Get Stock Picks
Where to get stock picks is extremely important if you want to outperform the market. There are several sites on the internet that offer great stock picking advice. We, at the Church of Cowherd, offer stock picks based on the economy and long term trends. We will never claim to offer the best short term stock picks as the market can be very volatile and make sharp moves either way. So when you search where to get stock picks, we hope you end up at the Church of Cowherd.
How to Invest Using Stock Charts
Using stock charts could greatly increase your investment gains over the long term. Many novice investors do not even look at them no less learn how to invest using stock charts. Short and long term stock movements are greatly affected by stock charts and technical analysis. The pure psychology of trading stocks based on stock charts is quite mind boggling. Seeing a stock bounce off the 50 day moving average for no other reason than it is a line is something amazing to behold; especially if you are long that stock. So how do you invest using stock charts?
There are many chart programs available, but the easiest and best stock chart website on the internet is just that – stockcharts.com. To make it even better, its FREE! You can find all the information you need and then some on this site. You even have the ability to change the background of the charts you create. For even more information, you can become a member to the site, but that will not be needed for a new investor using stock charts.
Buying and selling based on stock charts is known as technical analysis. The more experienced you become at this, the better you will be able to predict future stock directions. The most important aspect of technical analysis is the moving average. The most common moving averages are the 50 day moving average and the 200 day moving average. If a stock is trading above its 200 moving average and the 200-dma is uptrending, the stock is thought to be in a bull market. The 50-dma is a shorter term predictor, but stocks can often get strong bounces off this line.
Notice on the chart above there is a red line and a blue line that represent the moving averages. The blue line represents the 50-dma while the red line represents the 200-dma. Also notice the Family Dollar Stores stock hold both the 200-dma and 50-dma several times in a period of six months.
The fact that FDO has found support at the 200-dma proves that this stock is in a current bull market. What makes this chart even more promising is the fact that the stock is currently holding support above the 50-dma even during a steep decline in the overall stock market.
What is important to note is that one should not invest solely in stock charts alone. Do some research and invest in companies you feel will do well in the current economy environment. If you cannot think of any, we offer many stock picks on this website to help you out. After deciding on a stock, you can easily predict the short and intermediate term movements based on a stock chart.
If you see an uptrending 200-dma that has held support several times, that stock is likely to head higher. If you see a stock that is WELL above both the 50 and 200-dma, you might want to wait for the stock to come back to reality and test those important support levels. Many investors get burned by buying stocks that are 25% above both the 50 and 200-dma. That means that if the stock starts to retract its gains, you are going to lose a large chunk of your investment before it even finds a support level.
We will continue to produce more assistance on how to invest using stock charts in the future. Please feel free to ask any questions you many have on technical analysis or stock charts as a whole.
GE Cuts Dividend to .10 a Share; Should I Buy or Sell?
Beginning in the third quarter of 2009, GE plans to cut it’s current quarterly dividend from .34 to .10 a share; 68%! Cutting the dividend will save the bluest of blue chip stocks over $9 billion next year. Shares of the largest builder of jet engines and turbines were down 5% to $8.51 on February 27th. It is almost unbelievable that GE shares are under $10. GE has not traded under $10 a share since September of 1995.
GE Capital, GE’s financial unit is the main cause of the decline and subsequent dividend hike for this company. Many are predicting that Moody’s will drop the current “AAA” credit rating that GE Capital maintains. GE makes everything from washers and dryers to locomotives, but saw it’s financial sector take a huge dive during the credit crisis. The parent company of GE is feeling the pains of the subprime and credit crisis. Exposure to real estate and mortgages could ultimately cause the GE stock to go under $5 a share.
With the dividend being cut and the stock falling over 84% since its bull market high in September of 2000, is now the time to buy or sell? If you are looking to get the type of returns that GE produced through the 1990’s then you are looking at the wrong company. Saddled with GE Capital, this company is going to have to raise money to pay off all the bad financial endeavors that it took during the housing bubble. It will take many years to pay off and eventually get rid of this unit.
If you have been a long time shareholder of GE then it might be worth it to hold on for the short term to regain some of your losses. The stock market has halved itself in 13 short months, so it is unlikely that there is much risk to the downside. That being said, it is also highly likely that you will not see major gains in this stock for many years. If you are looking to make a quick buck, it is advisable to get out of GE stock. If you are looking to hold onto an American icon that has great value right now, then holding onto the GE stock is probably right for you.
If you are not a shareholder of GE, there are many investments out there that would provide a better return. As noted, GE is going to have to find a way to pay off the poor decisions of GE Capital. Like many other American companies, GE got too big and thought it could play the commerical finance game. Sadly, this is the cause of the steady declines. If GE had been adamant about creating consumer appliances and electrical services, they would not be in this hole right now. The argument could be made that they would not have climbed as quickly as they did in the late 1990’s without the financial unit, but if the entire investment disappeared, then what was the point?
Overall, there are many better opportunites out there in the current economic environment. The stock market is trying to put a bottom in at S&P 740 and the overall outlook is extremely pessimistic by analysts. This is a great sign that we could be entering a very strong cyclical bull market. You do not want to miss the gains of a cyclical bull market as stocks often increase over 30% a year during these period.