MilesEdge Platinum Visa Card

Card issued by FIA Card Services, NA.
Up to $1,000,000 in travel accident insurance.
Auto rental insurance.
Extended warranty protection.
Various travel and emergency assistance services.
Medical referral services.
Legal referral services.
Lost luggage recovery.
Emergency airline ticket replacement.
No liability for unauthorized Internet transactions.
Optional personal photo on card.
Discounts on auto rentals.
Optional Mini Card.
See website for additional benefits.
*See website for complete terms and conditions of card usage and application disclosure. *Terms and Conditions

APR (Purchases): Intro Rate - 0% for six billing cycles. Goto rate is variable risk based rate between Prime + 4.99% and Prime + 12.99%
APR (Balance Transfers): Intro Rate - 0% for six billing cycles. Goto rate is variable risk based rate between Prime + 4.99% and Prime + 12.99%
APR (Cash Advances): 21.99% Variable* minimum 19.99%. (P+15.99)
Finance Configuration: Average Daily Balance (including new purchases)*
Annual Fee: $19
Additional Cardholders: $0
Grace Period: 20 Days (Min.)
Minimum Credit Limit: $500
Maximum Credit Limit: N/A
Late Payment Fee: $19 on balances up to $100; $29 on balances of $100 up to $1,000; and $39 on balances over $1,000
Over-The-Limit Fee: $35
Cash Advance Fee: 3%, $10 minimum
Balance Transfer Fee: None

Reward Program Details:
Points per Dollar in net purchases: 1 Point
Bonus Miles: 1,000 upon first use
Miles Expiration: Up to 5 years (points expire on the last day of your Billing Cycle that closes in December of the fourth calendar year in which they were earned).
Yearly Limit on miles you can earn: 75,000 points

*See website for complete terms and conditions of card usage and application disclosure. *Terms and Conditions
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DID YOU KNOW?

	Reverse mortgages are another good concept in the world of mortgages. A reverse mortgage is a mortgage that works in the reverse way i.e. you receive payments rather than make payments. With reverse mortgage, you keep adding to your debt rather than reducing it. Reverse mortgage is an option that is available to older people generally to people who are over 62 years old. Of course, the assumption is that you have enough home equity in the house that you want to use for reverse mortgage. Moreover, a person can avail of reverse mortgage only if he/she is living in the house that he/she wants to get a reverse mortgage on. So a reverse mortgage gets you regular payments and as you receive these payments you build a debt. But when do you pay the debt that is build through reverse mortgage? Well, the reverse mortgage loan isn’t required to be paid back until you live in that house. So, the reverse mortgage loan is to be paid back when you either stop living at the house (whose home equity you are using to get the reverse mortgage) or you sell the home or you die. Reverse mortgages really come as a boon to older homeowners. The cash generated by parting with some of their home equity (to get the reverse mortgage) can help these old home owners in generating cash for various purposes e.g. the cash thus generated could be used for financing home improvements, or the cash could act as a supplemental retirement income or it could be used for paying off a current mortgage or it could be used for covering some health expense etc. Also, the income generated from reverse mortgage is generally tax free. Moreover, once you payoff the reverse mortgage loan partly (or fully), the interest portion of the loan may qualify for income tax deductions (this further adds to the list of benefits from reverse mortgage). You must check the fee and other expenses related to reverse mortgage before you go for one. In fact, you should do a good research by getting reverse mortgage offers from various mortgage lenders before you select the offer that gives you the best returns (as you would for a normal mortgage). Moreover, since the title of the house remains in your name, you would be expected to pay the property taxes, insurance and other expenses that you incur on your house. All in all, reverse mortgage is surely a good option for older homeowners.

I heard the news about another interest rate hike and thought it was about time to look into refinancing my mortgage. I contacted my mortgage company first.

"I am interested in a fixed mortgage rate." I said.

"May I ask why that is?" The broker asked politely.

"I don't want to deal with the risk of rising interest rates. At my age, I cannot afford the risk.”

"Looking at your last ten years of history, you have done pretty well with the adjustable rate. In fact, you had paid less in interest than most people with a fixed loan. May I suggest that we look at some adjustable rates, which are even less than the rate you’re paying and with caps you don’t have to worry about the interest rate hikes. I think we can save you a few hundred dollars off your monthly payment."

At this point the broker took a breather so that I can say, "No thank you. I am only interested in a fixed rate mortgages." "I don't understand. Are you not interested in saving money?" He asked before launching into a lecture that had a mix of economy 101, budgeting 1, a dash of fortune telling and a healthy and totally unrealistic optimism of future trend in interest rates.

When he was done I explained to him that I recall the 18%-19% interest on mortgage loans in the early 1980's that he seemed too young to remember. I pointed out that on a $100,000 loan, the 18% interest is $1,500 per month on the mortgage interest alone. If you have a $200,000 loan the interest alone would be a back-breaking payment of $3,000 per month.

I knew he thought I am out of my mind thinking about an 18% mortgage interest rate in today’s environment. At the end we ended the phone conversation without any resolution. The gap in understanding wasn’t about fixed rate mortgages vs adjustable rate mortgages (ARM). The gap was in age, experience, expectation, hopes and fears; a gap too wide to bridge.

To understand this gap, let’s look at the adjustable rate mortgages. This type of mortgage loan is usually lower than the fixed rate and the lower rate means lower payment that in turn means easier qualification.

When lenders are considering your mortgage loan application, they look at what percentage of your income is available for repaying their loan. With an income of $5,000 per month, a $2,000 loan payment is 40% of your income and a $1,000 payment is 20% of your income. The closer you get to $1,000 or 20% of your income, the easier it is to qualify for the loan. This easier qualification appeals to younger people who are just starting and those with income limitation.

Adjustable mortgage rates appeal to young people with an innate optimism, hopes of increased income and the high possibility of moving to a different home in a short period of time. They need to look at what they can afford to pay and cannot worry too much about the distant future. To them anything is better than renting which is absolute waste of money.

There are also those older individuals who have suffered from some set back in life and do not enjoy a high credit score or do not have a very high income. Since a poor credit score increases the interest rate a bank offers to potential borrowers, a fixed rate may be too high for these individuals to consider.

Let’s take a look at some terms that help you understand ARM better.

Margin - This is the lender's markup and where they make their profits. The margin is added to the index rate to determine your total interest rate.

ARM Indexes - These are benchmarks that lenders use to determine how much the mortgage should be adjusted. The more stable the index is the more stable your adjustable loan remains. Consider both the index and the margin when you are shopping around.

Adjustment Period - Refers to the holding period in which your interest rate will not change. You will come across ARM figures like 5-1 that means your mortgage interest remains the same for five years and then it will adjust every year.

Interest Rate Caps - This is the maximum interest a lender can charge you.

Periodic caps - The lenders may limit how much they can increase your loan within an adjustment period. Not all ARMs have periodic rate caps.

Overall caps- Mortgage lenders may also limit how much the interest rate can increase over the life of the loan. Overall caps have been required by law since 1987.

Payment Caps - The maximum amount your monthly payment can increase at each adjustment.

Negative Amortization - In most cases a portion of your payment goes toward paying down the principal and reducing your total debt. But when the payment is not enough to even cover the interest due, the unpaid amount is added back to the loan and your total mortgage loan obligation is increased. In short, if this continues you may owe more than you started with.

Negative amortization is the possible downside of the payment cap that keeps monthly payments from covering the cost of interest.

As you compare lenders, loans and rates remember Henry Moore who said, "What's important is finding out what works for you."