Your rates of bank

Dear Terry,
I purchased a car and my contract is a simple-interest loan, but I’m not sure what kind of contract this is. Please help!
— Isla

Dear Isla,
Here’s Bankrate’s definition of a simple-interest loan:

A method of allocating the monthly payment between interest and principal. The interest charged is determined by the unpaid principal balance on the loan, the interest rate and the number of days since the last payment. The rest of the payment goes to the principal. Making early payments or additional payments will reduce the loan’s principal and cut the total interest paid over the life of the loan.

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1. See if your lender will allow a mortgage assumption.
In this sort of agreement, the buyer takes over payments on an existing mortgage. If that loan came with a low rate, assuming the loan could be advantageous. Not to mention, the buyer can save on higher closing costs associated with new mortgage debt.

While banks have traditionally not allowed assumable mortgages and some mortgage experts don’t see that changing — especially on 30-year fixed rate loans — others are seeing some cases of it.

“Most mortgages are nonassumable,” says Patton, but “given the challenged market conditions many areas are experiencing, this may be negotiable with the lender.”

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Heidi Klum is the very epitome of a supermodel — a tall, beautiful blonde with a stellar modeling career, a hit TV show and a successful jewelry line. But she’s also a loving wife to pop singer Seal and mom to three young children.

Thrown into the modeling spotlight at age 18, the now 34-year-old top fashion model is surprisingly down to earth. Growing up in Bergisch Gladbach, a small city near Cologne, Germany, her dad, Gunther, worked for a cosmetics company and her mother, Erna, was a hairdresser.

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The federal government this week predicted that the average national price of a gallon of regular gasoline is likely to peak this summer at a point north of $3.60 a gallon and may hit $4 a gallon.

That isn’t exactly a shocking prediction — a gallon of regular in the Los Angeles area already is at $3.73 a gallon, up from $3.28 a year ago.

So how are consumers reacting?

First, they are driving less. In a survey last month of 1,000 adults, about 64 percent said that gas prices have caused them to alter their driving habits, 19 percent said they have cut back their driving enough to affect their daily lives, and 5 percent said they have stopped driving altogether.

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Dear Terry,
I bought a Lincoln Navigator about eight months ago and drove off with a quarter-tank of gas, as happy as ever. I got a great deal with very low mileage.
However, when I drove in to get gas, I found out my car needed premium gas only. What happens if I use regular? I’ve heard too many stories out there and I don’t know who to believe. Gas prices keep on rising and so do my expenses.
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Dear Terry,
I purchased a brand-new 2008 Honda Odyssey which includes a seven-year basic extended warranty through Honda Financial. I’m paying $560 per month. Is my payment just about right? The total price of the van is $32,000. I don’t have any means of comparing to other people. So please tell me if I’m paying too much interest on that.
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Consistent oil changes
Regular oil changes help keep your engine clean and lubricated, says Deanna Sclar, author of “Auto Repair for Dummies.”

“Oil cuts down on the friction that can literally wear away the parts of the engine,” she says. “One of the most important maintenance-related things you can do is change your oil frequently.”

There is some debate about how often drivers should change their oil. Many car experts recommend getting the work done every 3,000 miles or three months, especially if you often drive in stop-and-go traffic or your car idles for long periods of time.

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Which hurts you more: the skyrocketing costs of food or fuel?

More than four out of 10 (44 percent) Americans consider paying for gas a “serious problem,” while just under two out of 10 (18 percent) say food prices are a major problem, according to a survey by the Kaiser Family Foundation.

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Not surprisingly, the lower the household income, the bigger the perceived problem in fuel costs. Nearly two-thirds (63 percent) of American households with incomes of less than $30,000 consider gas prices a big problem, compared to less than one-third (27 percent) of households with incomes of $75,000-plus.

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Dear Terry,
I’m an international student and 100 percent of my income is covered by my guardian back in my home country. I bought a new car last year through auto finance with a high interest rate. The monthly payment is absolutely killing me, but I have to drive to my school. So, I kept paying the bill every month without any choice.
Since two months ago, I have had difficulty paying the debt on time because of my financial issues. Now, I cannot even afford to pay the loan anymore because my guardian encountered a financial problem and cannot support me anymore. I have to go back to my home country ASAP and I have to return the car to the lender. (more…)

What is the first thing borrowers should do if they are at risk of missing a payment?
If borrowers are delinquent or know that they will be, they need to contact Countrywide immediately by calling (800) 669-6607.- advertisement -

When should borrowers call you — before they’re late with their first payment, or sometime later on (e.g., 60 to 90 days after missing the first payment)?
The sooner Countrywide is contacted, the better the chance of developing a successful home retention plan.

Should a borrower ask to speak with someone specific?

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Interest rates dropping faster than presidential candidates

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Interest rates dropping faster than presidential candidates

For the second time in the past 9 days, the Fed aggressively cut interest rates. Today’s move was a half-point cut, which combined with the three-quarter point cut last week brings the fed funds rate to 3 percent, the lowest since June 2005.

After this morning’s release of the fourth-quarter GDP, which showed growth of just 0.6 percent on an annualized after-inflation basis, a half-point move seemed more than likely.

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Portfolios must change over time to reflect an investor’s needs and goals, but selecting, rebalancing and keeping up the proper mix of investments can be time-consuming and confusing for many individuals. Asset allocation funds aim to accomplish the dual goals of creating diversification and meeting growth or income needs in one fund.- advertisement -

But, as with any investment, these aren’t meant to be put on autopilot. Investors still have to watch the performance of the fund, even if the portfolio was constructed to meet risk tolerance or a target retirement date.

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