Thanks to The Digerati Life for this post. If you're considering refinancing, you'll find this information helpful:

Many homeowners who are struggling to keep up with their monthly mortgage payments think of refinancing when interest rates go down. When you question some lenders about refinancing options, you can expect to start receiving e-mails and telephone calls almost everyday.

There are a number of reasons why people resort to refinancing and one of them is to make the most out of reduced interest rates. The borrowers have the opportunity to reduce their monthly mortgage payments if the interest rates go down. If they want to reduce the refinance loan term, they might have to pay higher monthly payments, but they can still save on interest costs. By shortening the loan term, they can pay it off faster.

Before you refinance, you'll need to observe interest rate fluctuations. As rates go down, so do a slew of other rates, such as savings account rates and credit card interest rates. This is actually a good thing for the housing loan market, but you'll need to keep an eye on a moving target. Of course, the goal here is to try to lock in the lowest rate that you come across. You can do this more than a month ahead of closing, which is basically the final step when you refinance. If you’re not able to do so, you can lock in a rate even five days prior to closing.

Like getting your first mortgage, you’d have to apply for a "new loan" to refinance your existing mortgage. If you remain with the same lender, you might save some money and time since there are reduced formalities. Realizing the extent of competition out there, it’s beneficial for your lender to provide you a good offer. Nevertheless, there are a lot of lenders who are eager for your business and you can shop around, not only for reasonable rates, but also to save money on fees. The procedure which involves closing with one lender and starting with another lender, usually generates a range of fees that can frequently accumulate, so get a list of all probable fees. Request a quote that incorporates the correct fees.

If you’re thinking about living in your home for quite a number of years, then it’s better to make the most of low interest rates. Just like when you took out your original loan, you can also buy points that are a type of prepaid interest. If you have additional cash on hand, this might be helpful. Every point is 1% off the overall loan amount. By paying points, you can reduce your interest rates.

You can also go for a cash-out refinancing where you can refinance with an amount that is higher than what is outstanding on your current mortgage; the difference between your new loan and your old loan is the amount of cash you get to keep. This is basically a technique that will allow you to obtain some money as a tax-free loan on the difference between the present home value and its value from the original mortgage. For instance, if your mortgage balance is $100,000 and your current property value is $300,000, you can refinance for $175,000 and keep $75,000 as tax-free money minus the fees and transaction costs. As per Freddie Mac, one of the leading secondary mortgage market players of the country, almost 60% of borrowers who refinance do this for the aim of cashing out.

The Digerati Life is a personal finance site that offers tips and resources on credit card and debt management. Check out the site’s review of best balance transfer credit cards and 0% APR credit cards.

Now that debt settlement is becoming a more popular option for getting out of debt, so are the scammers. And since most people don't really understand how debt settlement works, getting scammed is a lot easier.

DON'T just sign up with the first company you see on TV without doing your homework!

And don't let yourself get ripped off if you decide to use someone to settle your credit card bills. Think of it as you "hiring" them to perform a service for you. And when you hire someone, you're careful, aren't you? Well, if not, you should be.

Most of the debt settlement horror stories occur because people have no idea what they are getting into. Shame on them!

Know what you are getting into. Learn how debt settlement works. And look for these top 5 warning signs that you should avoid a debt settlement company:

1. Sounds too good to be true - yes debt settlement works. But it takes time. And different creditors look at settlement differently. So if any company promises results that sound too good to be true, watch out!
2. Vague answers your questions - like the old TV commercial, an educated consumer is the best customer. If the settlement company simply want to sign you up and won't answer your questions clearly, then move on to the next one.
3. Want you to send money before you sign (or read) paperwork - you MUST read AND sign paperwork before sending any money. This is your contract. If something goes wrong, and you don't have any paperwork, you're in trouble.
4. Too many BBB complaints - OK, the Better Business Bureau doesn't like the business of debt settlement, and some companies get D or F grades simply because they are in the industry, even with just a few complaints. But if the company starts getting up to 10, 20, 50 compaints, it's a good idea to turn and run.
5. No screening process to see if you are actually a good candidate - no, not everyone can benefit from settling credit card debts. If you are close to bankruptcy, if you have the means to pay on time, if you don't have enough cash to make the settlement payments, then you may need to seek legal advice instead!

If you come across any of these warning signs, STOP!

And look for another company to settle your debts. There are lots of good ones out there. Here are our reviews of the top debt settlement companies we've found (and yes, we get credit for referring you).

If you find out that credit card debt settlement is NOT right for you, here are some other ways to get the debt help you need.

So what do you think is a high credit card interest rate - 10%? 20%? 30%? What about 79%?

You see, over the past few months, the banks have been preparing for the new credit card rules. You know, the rules that prevent them from "gouging" us consumers. So how are they preparing? By "gouging" us now, BEFORE the new rules go into effect!

I had one of my cards go from a 14% interest rate to a 30% interest rate - for no reason. I wasn't late. Don't have a high balance. Haven't gone over the limit. And have had the card for at least 5 years.

So to reward me, the bank raised my interest. I know, they're a business, and they need to make money. But DOUBLING MY INTEREST RATE!? That's not good business no matter what industry you are in.

But that's nothing compared to what one bank is offering. Get this - they are offering a credit card with a 79.9% interest rate!

NO, it's not a typo. 79% interest!

OK, this is not a card designed for the average consumer, it's for someone with past money problems who needs to re-establish credit. So, nobody is forced to use a card with interest rates this high.

But the simple fact that this is even a real card make the banks look exactly like the greedy fools that encourage people to get into debt and STAY in debt.

What can we do? Simple - stop relying on banks.

• Get your debt under control.

• Start your own business or get a part-time job to make extra money.

• Stop buying those things we don't really need.

• And stop buying those things we really can't afford.

• Create your own emergency savings account to borrow from when money is tight.

As long as we give up our financial control to credit cards, we're at the mercy of the banks.

So, in 2010 do what you can to take back that control! What do you think? Let us know in the comments section below:

If someone left you a message by mistake, thinking you were their child, and said they would send you grocery money because you were struggling - but it would mean you would have to skip a mortgage payment, what would you do?

Well, here's an amazing story about a woman who got a phone message just like this, and decided to help despite not knowing the woman or her daughter!

I hope I would do the same, without even thinking about it. But sometimes its hard to reach out to those we don't know. Even if we have more than them. It's just a little strange helping a stranger sometimes. It's a lot easier to help someone you do know.

So when I read this story about the wrong number miracle, I thought it was such a great lesson about helping others in need that I would share it here.

I wonder how many of us would help in a situation like this? And how many of us would just listen to the message, feel badly, and do nothing?

There is no balance sheet in life that says "help others financially and you'll get help in return." If it was that easy, then we'd all probably donate our time and money more often.

But give to those who have less than you do anyway. And when someone crosses your path and needs help of any kind, go ahead and help them. You may not get rich with money. And you may not get a story written about you. But you neve know when you'll be the one needing help.

So share this story, and your lesson of helping, with as many people as you can!

I get asked this question a lot. The credit bureaus (and a lot of the so-called experts) will tell you that you just have to sit back and wait 7 years for bad credit to fall off your credit report.

Sorry, but this is not true.

The key is to know which factors influence your numbers so you can make better financial decisions:

1. Your payment history (approximately 35% of your score)
Have you paid your credit card bills on time? If not, then late payments, collection accounts, and other negative items can lower your credit score. So pay on time as often as possible!

2. How much you owe (approximately 30% of your score)
FICO scores look at the amounts you owe on all of your accounts. Also factored in are the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be.

3. Length of your credit history (approximately 15% of your score)
The longer you've had credit the better. So, closing older accounts is not always a good idea. It is still possible to get a good score in a short period of time - if you've been responsible (by paying on time and not maxing out all of your credit).

4. New credit (approximately 10% of your score)
If you have recently applied for or opened any new credit accounts, this will have an affect on your credit score. So don't keep applying for credit every time you go shopping. And if you are making a big purchase, do your applications in a short period of time, and don't drag out your search for the best rate over a long period of time.

5. Other factors (approximately 10% of your score)
Other factors also can influence your score. For example, having different types of credit on your report (such as credit cards, installment loans such as a mortgage or auto loan, and personal lines of credit) is normal for people with longer credit histories and can slightly improve your score.

How can you improve your credit score?

First of all, credit scores are not always perfect! Since your credit scoring relies on information found in your credit report, it may not be entirely accurate (since many credit reports contain errors). So, it's a good idea to get a copy of your credit report once a year, look it over, and make sure it is accurate.

And if you are planning a big purchase, do this a few months ahead of time so you have enough time to get the errors corrected.

P.S. Thanks to Couple Money for including us in their recent blog carnival.

One thing I really hate is hearing an ad for something that is "free" and then being charged for shipping or processing or some other junk fee. In my book, free means free - if I need to pay anything, then it's not free.

Or if I need to sign up for another service first, and only then do I get the item for free, then to me that's not really free either.

So quite often I get contacted by companies like FreeCreditReport.com to offer their products on my website. You know, the company with the catchy song on TV? Since they advertise the free part so loud and clear, you would imagine that your credit report would be completely free.

But is it?

Well, you must sign up for a trial of their credit monitoring service. Sure, you can cancel before the trial period ends. But that's a real pain. And the trial is only for 7 days. Otherwise, you get charged a monthly fee. So, is that really free?

Want to know the worst part?

You can actually get a free credit report without any strings attached. No fees. No sign up. No trials. So here's the service I choose to recommend:

www.AnnualCreditReport.com

Not that FreeCreditReport.com is dishonest. Or illegal. In fact, they tell you everything on their website. But like I said earlier - to me, free means FREE - otherwise I can't be bothered. So when those companies contact me, I say "no". Since it bothers me as a consumer to have to pay for something that is advertised as free, I won't offer to my site's customers. Maybe I'm being way too picky. Or maybe I'm being way too philosophical. What's the harm? They're just a company trying to make money, right?

Of course. But to me, FreeCreditReport.com is not really free. What do you think?

It's almost a crime what colleges charge for tuition these days. And it's not much better how credit card companies target college students BEFORE they even get a job and make enough money to use credit cards. Sure, both are businesses and it is their job to make money.

But the culture of getting in debt is starting WAY too early across college campuses.

I read this article the other day, Student Loans are the New Indentured Servitude, and was amazed at just how much recent college graduates owe when they get out of school:

It's a little technical, but it makes a strong point. OK, I know college is expensive. Been there, done that. So I know what it is like to pay back your student loans.

But what message are we sending to young people by making them struggle under such incredible debt before they have the means to pay it back? If they can't pay back their loans, how will they learn to pay all their other expenses? By using credit cards?

No, I don't have a good solution to this problem. It's the same at most colleges these days. But I just can't help but wonder whether college is ever worth it for many of these young people. Especially when these loans and credit card bills don't come with any instructions on how to manage money.

Bad way to start adulthood. Tough lesson to learn the hard way.

Hopefully most of them will find a way to break through and not think that having debt is cool.

So, which do you think is worse for college students, credit card debt or even bigger student loan bills?

My biggest surprise as a college student wasn't the wild parties, the burning couches (thrown from the windows of "The Jungle" at UConn), the freedom to go to sleep and wake up whenever I wanted, or the ability to party 7 nights a week.

It was the ease of getting an American Express card with just a signature (and virtually no income)! I have to admit, it was fun to walk around campus with my new green AMEX card. And it was fun getting a call from my friends who went down to the casinos in Atlantic City NJ telling me they wish I had gone with them because "there are these cool machines that take your credit cards and give you money!"

But what a horrible lesson to teach a young adult in college, right!

You can buy things even without any money. All you have to do is use your card, and pay later. Never mind that you can barely pay for a pizza on a Friday night. You can but whatever you want, anyway (well, with AMEX you need to pay in full every month, but for most cards you don't).

Well, the new credit card rules that go into effect in February 2010 require that credit card companies can't just give away credit cards to applicants under 21, unless they can prove their ability to repay the cards or get a co-signer.

On the one hand this sounds like a great idea. After all, college students aren't responsible adults yet, are they? That's what I was thinking.

Until I read this article that states Credit Card Act treats adults as children. Now I'm not so sure.

What do you think? Are college students over the age of 18 adults who should be able to get a credit card and learn how it works before they're out in the working world full-time? Or should the credit card companies have the burden of treating college student special and make sure they know what they are getting into?

Are you kidding me? Yesterday I read a startling article that said our government representatives are actually considering - once again - passing the ASPIRE Act.

Now, I don't get into politics at all, so I'm not reacting to this in a political way. If you are into politics, here is a more political response to the issue.

But the consumer in me is irate that our tax dollars might be spent giving people money just because they are born. Now, I'm all for teaching kids how to save money. In fact, if most of us learned how to manage money at an earlier age, we'd probably have a LOT less debt!

Personally, I think handouts are the WORST way to teach people how money really works. Trust me, if I thought this would actually teach kids and their parents how to save and how to manage their money, I'd be all for it.

But this won't do either.

I don't care how many rules they put in place - to pay back the money, to only use it for college or buying a house, whatever - it won't work!

Why not?

Because giving people something for nothing won't teach them anything!

It will just teach them that when the going gets tough, "the government" will step in and help. And who funds this government?

We do, of course.

Thankfully, the ASPIRE Act has already been around the block a few times and has not been passed previously.

So, here are 5 better ways to spend this money than on something crazy like the ASPIRE Act: 1- Help create jobs 2- Pay down the national debt 3- Help struggling businesses with low interest loans 4- Stimulus money (like cash for clunkers - which was still not a great way to spend taxpayers money, but at least it is better) 5- More vocational or financial training programs in schools

Obviously, I'm not a social or political activist with lots of great ideas for saving our country. But please, anything but a freebie just for being born!

Do you agree? Or have any better ideas?

Since I've been running this site for 7 years, I know that debt is stressful. I hear from people with credit card debt every day. But this is a real bad sign about just how stressful it can be:

Workplace suicide rate up dramatically

I hear from plenty of people who have good jobs, work hard, don't live their lifes in luxury - and STILL have way too much debt!

Why the heck do we let money define our lives? And why don't we stop spending if we don't have the cash or savings to pay for something? How can so many people get the wrong message, and still use credit cards when the balances keep piling up?

Debt sucks, that's easy to figure out.

But the reason it affects so many people to such a large degree is the false hope it gives us:

- No interest for 12 months
- Buy now, pay later
- Small (affordable) monthly payments even for large purchases
- Credit applications in the mail, online, and at every store
- More credit is easy to get even when you're struggling
- It keeps multiplying and growing slowly over time so we don't notice we're in trouble until it's too late!

So do yourself a big favor - be honest. Don't buy if you can't afford. Don't apply for more credit just because it's so easy. Remember those who fell victim to the pressure and took their own lives.

And don't let it happen to you!