MoneyToys Online Financial Calculator Blog

Buy a House

Seth Godin shares his advice to someone in the market to buy a house in, How to Buy a House. He offers good advice!

I would change his #4 tip. If you’re buying a house, forget the concept of anchoring. Offer what you think the house is worth.

You’ll get a counter offer or a flat “no”. Either way, as a buyer, you’ve stated your opening position based on what you are willing to pay.

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Pick Your Perspective, Predict Your Future

One cannot help but become disheartened if they pay attention only to what they hear in the mainstream media. If you want to hear about wars, financial ruin, corruption, death and disease turn on the news! But be careful. It will pull you down, down, down.

And it really does pull you down. Listening to negative content, even if it isn’t personal, influences the way you perceive your own personal part of the world. Read about negative stuff enough and you will come to expect it in your life.

I’ve just read a real estate blog post by Tony Kawaguchi, aka “Aloha Tony“, titled, “I Can Predict the Future of Real Estate. Here’s How.”

It’s practical and positive. Tony picks a positive perspective (and can based on his efforts) and is able to make predictions about his personal real estate world. Check it out at: “I Can Predict the Future of Real Estate. Here’s How.“

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What is Moral Hazard?

You’ve certainly read or heard the term, “moral hazard”. The phrase is often used in discussions about the consequences of the various bailouts offered by the Federal government in its efforts to strengthen the economy. It’s a term from the insurance industry related to how much one is enticed to avoid risk if the reward for the risk is greater than the loss associated with the risk.

If I have an accident that costs $10,000 and my insurance requires a deductible of 20%, I’m not likely to seek out the accident. If I have the accident, I’ll lose $2,000. However, if my insurance pays $15,000 because of the accident and I’ve only lost $10,000 – that $5,000 gain might entice me to experience the accident again.

Underwater homeowners have had assistance made available through various Federal initiatives. Some who wish to be bailed out are in their current situation because they borrowed against equity in homes that are no longer worth enough to support the loans. They owe more than the house they are buying is worth.

Here’s where the moral hazard lies: the “hazard” is the effect a bailout has one people who don’t receive it.

If my neighbor has a home mortgage “accident” that costs $500,000 and the government bails him out after he quits making payments, I may be enticed to not make my payments so I can receive that same benefit.

When a person who makes a bad choice is bailed out or made whole — like homeowners who bought more house than they can afford and have their loans reworked — the homeowners who have acted responsibly and receive nothing start asking, “Why am I being responsible?”

That’s the moral hazard you hear so much about lately.

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Remember When You Thought 6% was a Great Rate?

If you purchased your home when rates were higher and you have not refinanced into a lower interest rate, you remember when 6% was a great interest rate.

It’s not now. The average interest rate on a 30-year fixed rate mortgage has recently jumped from 5% to more than 5.3% and home buyers in the market are reportedly growing antsy to find a home and close before rates rise even more.

MSNBC.com has the article, Homebuyers scramble as mortgage rates rise: Higher payments could price many would-be buyers out of the market. It’s news, but not earth shattering. Rates will rise and homes will continue to be bought and sold. When rates were at 13% in the 70′s homes were bought and sold.

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Individual MoneyToys are Easier to Purchase

Of course, the entire collection of MoneyToys is available as it has been for only $139.95. However, because of requests, each of the 17 MoneyToys calculators is now available individually for $39.95. (This has always been the case, but now, instead of being handled on a case-by-case basis, the purchase of single MoneyToys calculators is automated.)

Purchasing all 17 for $139.95 is usually the best option, but occasionally, someone will want only one or two of the calculators for a web site. By offering the online calculators individually, we’re able to offer customers exactly what they want at the price that works for them.

Check out the new MoneyToys Order Page and you’ll see how easy it is to choose the entire collection as well as individual calculators for $39.95!

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New Gift Card Protections

This week the Federal Reserve Board announced rules that are designed to protect consumers of gift cards. You know gift cards. They’re the credit card sized pieces of plastic sold by stores to limit where the recipient of your gift can use the money you didn’t want to give them because money is so impolite.

Stores love them because they win whether a recipient uses them or not … especially if not.

These rules by the Federal Reserve Board clarify how dormancy and service fees may be applied to a gift card. And expiration dates for gift cards must be at least fives years from their issue or after funds were last loaded.

Good for consumers. Learn more from the Federal Reserve Board press release.

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Credit Score Surprises

“Loan aid leads to drop in credit scores: Many homeowners angry that program carries hefty penalty” is on MSNBC.com this morning.

The article reports that some who participated in the Federal government’s loan modification program have seen their credit scores fall by as much as 100 points. The arguments for and against the credit score reduction are presented. From, it’s not fair because participants aren’t informed and are doing their best to improve their financial situation to, of course it’s fair, other lenders need to know about the financial risk presented by homeowners who can’t afford their payments.

I think most people will make the decision to seek loan modification based on their immediate financial needs and not their credit score. the article points out that a loan modification will impact a credit score by about 100 points and a foreclosure will drop a credit score by 150 points or more.

If you apply for assistance through the Obama administration’s loan modification program and are accepted, your reduced credit score will slowly rise over time as you make monthly payments. However, if you apply and are not accepted, you face a double-whammy, you receive no relief AND your credit score takes the hit. Ouch!

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MoneyToys Free Loan Calculator, 5.1, Released

For Immediate Release

February 12, 2010 — MoneyToys Free Loan Calculator, 5.1, Released.

The latest version of MoneyToys™ Free Loan Calculator is new available for download from MoneyToys.com.

Version 5.1 adds the ability to calculate and compare two loans side-by-side. For more information or to download this free, Windows-based loan calculator, visit the Free Loan Calculator web page at MoneyToys.com.

MoneyToys™ are a collection of 17 online financial calculators for web sites. With a few lines of HTML and MoneyToys, real estate webmasters can quickly install online financial calculators allowing their visitors to do financial math on their real estate web site.

The MoneyToys collection includes a Home Seller’s Proceeds Calculator, a Down Payment Savings Calculator, an APR Calculator, a Pay Down Debt or Invest Calculator, a Loan Spread Calculator, a Refinancing Calculator, a Closing Costs Calculator, a Simple Loan Calculator, a Very Simple Loan Calculator, a Savings Calculator, a Biweekly Payment Calculator, a Payment Calculator, a Loan Comparison Calculator, a Discounted Cash Flows Calculator, a Rent or Buy Calculator and more.

Real estate webmasters can configure MoneyToys website calculators to match their web site’s colors. In addition, the initial values of these web site calculators can be configured to meet the needs of a particular web site’s market.

For example, while a typical home loan in one markets may be $150,000, in another markets a typical loan amount may be $600,000. MoneyToys are easily configured for either market and display the initial values a real estate agent wishes visitors to see when they use the calculators on their website.

Installing MoneyToys is easy. Step-by-step installation instructions are included with each MoneyToys calculator. In addition, three sample web pages are included which show exactly how the calculators can be customized.

MoneyToys calculators allow real estate webmasters to easily add practical, interactive financial tools to their web site helping it stand out and offering visitors reasons to return.

MoneyToys are installed directly on a real estate web site and do not require access to any other site or web server. Unlike some website calculators, MoneyToys financial calculators do not include links which can take a visitor away from the web site. MoneyToys are designed to keep visitors on a real estate site and bring them back.

Individual MoneyToys calculators may be purchased for $39.95 (USD), while the entire MoneyToys collection of 17 calculators is available for only $139.95 (USD) at http://www.moneytoys.com. These license fees are one-time fees. MoneyToys requires no annual or traffic-based fees.

Try the entire collection of MoneyToys at http://www.moneytoys.com. For more information, contact Wheatworks Software, LLC, Post Office Box 7, Ruston, LA 71273.

About Wheatworks Software, LLC
Since 1997, Wheatworks Software has developed innovative financial calculators for consumers, professionals and companies in the real estate and financial services industries.

For more information contact:
Rick Wheat, Managing Partner
Wheatworks Software, LLC
MoneyToys.com

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Visualizing Economics is a Beautiful Blog

Do you love economic charts and graphs? Does the thought of visualizing economics excite you?

If you answered, “Yes!”, then you must explore Visualizing Economics, a beautiful blog by the talented Catherine Mulbrandon.

Explore Visualizing Economics and you won’t be disappointed. You’ll see a huge collection of financial graphics. Some of my favorites include “Average Income in the United States“, “Prices, Inflation and Deflation: The Great Depression vs. the ‘Great Recession’“, and “United States Poverty Map“.

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Buy a House

Pick Your Perspective, Predict Your Future

What is Moral Hazard?

Remember When You Thought 6% was a Great Rate?

Individual MoneyToys are Easier to Purchase

New Gift Card Protections

Credit Score Surprises

MoneyToys Free Loan Calculator, 5.1, Released

Visualizing Economics is a Beautiful Blog

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