Travel and Its Benefits

Why do we need to travel? Why it is getting increasingly important that we, once in a while, change our environment and travel outside our country? Why it is sometimes a necessity for our emotional health to travel?Travel’s importance is underestimated by many people. Travel is not only fun, entertaining and enjoyable. With our current lifestyles and work conditions, travel has become more than an option. It is more than just having fun. As Augustine of Hippo said ” The world is a book and those who do not travel read only one page.”
 During travel you are able to do things you usually don’t do. When travelling, you go outdoor and be away from computers, and TVs and you are likely to be mixing with different people and cultures. People travel for different reasons. Some travel for fun and to have a good time. Others travel as a hobby. Travel can be an escape away from the hectic pace of life in big cities. Some travel just to change and move, as Robert Louis Stevenson said “I travel not to go anywhere, but to go. I travel for travel’s sake”. Some people like to learn from different cultures, as Mark Twain said ” Travel is fatal to prejudice, bigotry, and narrow-mindedness.” Travel gives the person the opportunity to discover, to explore and to feel the sense of adventure.Many people around the world are discovering the benefits of travel to the extent that the tourism industry is growing worldwide and has become one of the major profitable sectors in world economies. No wonder that travel is growing year by year. According to figures published by the World Travel & Tourism Council WTTC, world tourism industry grew by 3% in 2012, and contributed $6.6 trillion to world GDP by direct and indirect impact. In 2012, for the first time in history, international tourist arrivals reached 1.035 billion.Here are the main benefits of travel:1-Stress Relief: As you travel miles away from your environment, you are able to be free from your responsibilities and then begin to relax and rest. Not only you rest your body, but also your mind. Knowing that you can wake up anytime without an alarm clock, without the need to be physically available at work, will take off a lot of mental stress. Here, you can sense freedom. Stress relief is a major reason for travel. The moment you think you are heading for Hawaii or Bali, you get immediate sensation of excitement and stress-free feelings. It is this mental peace that makes travel a very good stress-relief. Sometimes travel can be stressful if your trip has a lot of sightseeing, or meeting a lot of people. But travel stress is different from home stress because it is positive stress. Travel stress does not associate with it anxiety or worry.Travel is a great way to connect with nature which is very helpful for your relaxation, mentally or physically. Nature is a stimulus for activating your right brain. Right brain domination is one major cause for stress-relief. Also, during travel there is no sense of urgency which is usually associated with home behavior. Change of scenery is by itself helpful for relieving stress.2-Physical Benefits: You move more when travelling. You walk more frequently whether riding the subway or exploring the streets of a historic city or even visiting a museum. By swimming or laying on the beach, you get a high dosage of vitamin D from the sun, something that is very useful for your bones and also for your positive emotions. Outdoor activities associated with travel can lower risk of diabetes, lead to weight loss and reduce cholesterol level. Some medical experts recommend traveling once every six months for cardiovascular health and for the heart. Some studies show that travel even improves better sleep.3-Cultural Benefits: Sometimes we need to be anonymous. Sometimes we want to be free from any responsibility. Travel allows you to exercise both while meeting new people and experience new cultures. You will know how different people accomplish their goals with different ways. You will learn new ideas that you have never thought of before.4-Relationship Benefits: Traveling with a companion and sharing same experiences and situations together will enhance your mutual bond. 93% of youth ages 8-18 consider travel as “a quality time” spent with their parents. 3 in 4 parents say that family vacations are very helpful for the family. Meeting new persons in new locations can result in long term relationship for many.5-Happiness: Many persons associate happiness with travel. More than 50% of adults buy souvenirs just to remember their vacations. Most travelers store photos of their destinations as a way of remembering those trips that are about tasting new food, beautiful sights, historic monuments, and new music. This is one reason that travel can be addictive, especially if have enough time & money. It has become a hobby for thousands of people around the world.Remember, you can travel and have fun with a limited budget. Plan carefully and spend wisely. Read and learn saving tips.

Total Health Care For the Elderly With Effective Individual Health Coverage

Elderly Health Care A Financial Challenge for FamiliesTotal health care for the elderly poses an enormous challenge for many families in the face of ever-rising individual healthcare costs. Typically such costs can set you back five and a half thousand dollars or more yearly.Elderly Care Services Are ExpensiveToday, drugs to treat older people are becoming extremely costly and not getting the right individual health coverage early with affordable health insurance plans can mean bearing an exceptionally and financially heavy burden that will more often than not turn out to be crippling for the ‘man on the street’.Older People Are Medically More VulnerableWhen it concerns some of the more pressing elderly health care issues, vascular dementia will most likely top any list that may also include conditions like Alzheimer’s and Parkinson’s diseases. Among so many different conditions, vascular dementia is one big concern. Though it doesn’t get much media attention, it can severely affect any older person suffering from it and so, should be regarded seriously and addressed appropriately.Costs of Healthcare Only Go UpWhat’s more, every day senior health insurance costs are rising and are going through the roof. Not all of the costs are covered by individual health plans and even the cover from Medicare is low at best – particularly when treating serious, chronic health or medical conditions for older people.However, all isn’t lost because by having a look at certain health care resources that are especially catering to the needs of elders that pay for total health care for the elderly costs including hospitalization costs as well as visits to doctors, you can ease the heavy financial burden.Elderly Health Insurance – It Pays to Start EarlySelecting the right, affordable elderly health insurance plans before reaching the age of sixty-five can prove to be extremely useful in covering costs of total health care for the elderly. By paying a certain elderly health insurance premium on an once a month basis you can cover some of the high costs of dedicated elderly care services.Lastly, keep this in mind: Unlike individual healthcare for the average joe, money alone may not help when it comes to offering holistic elderly health care with the right individual health coverage.

The Prevailing Delusion About Online College Degrees: A Treatise on the Decline of Public Education

A delusion is defined by Webster’s Dictionary as a false belief regarding the self or persons, or objects, that persists despite the facts, and one of the most prevalent and hard-hitting delusions that have prevailed in the late 20th and early 21st Centuries is the extremely fallacious belief by millions of rank-and-file human beings around the world, especially in the USA, that computer Internet educational pursuits produce as much academic learning for a person as does traditional classroom instruction. As there have been for decades of time, there are currently many recalcitrant adolescent public school students who greatly dislike the free structured schooling that they are required to attend in classrooms for twelve years in order to attain basic academic skills and a high school diploma. These young misguided men and women account for approximately 67 percent of all public school students, and, in most cases merely occupy classroom seats, with their minds absently elsewhere, during their elementary, middle school, and high school years and end-up barely attaining the minimum grades necessary for high school graduation. The real sad fact is that, for the American public schools to retain some delusive credibility in properly educating the bulk of America’s youth, around 70 percent of that 67 percent of all public school students have their grades pragmatically padded with huge disproportionate academic curves in order to make it seem that most of the American youth leaving high school at eighteen years of age are basically educated and ready to, either, enter the workforce or attend college. Yet, these basically uneducated, barely literate men and women leave public high school, and currently end-up, within three-or-more years, enlisting in the military, attending junior college or trade school, apprenticing for a trade, continuing to live at home off their parents, or becoming mendicants on the streets. Every year thousands of these millions of young people, fifteen to eighteen years of age, run away from home to end-up spending five-to-ten years on the streets, many of them turning to crime, before they realize the time and the precious free resources that they have wasted through contrariness and indolence.Since around 1995, a great many of these millions of poorly educated young adults, eighteen to thirty years of age, have sought to bypass the need for hard work, and have been given the grand delusion that they can accomplish with a personal computer, alone at home for thousands of dollars, what they refused to accomplish during the twelve years of a free public education they were offered as teenagers. What do I mean by this? Seventy years ago, most graduates of public high schools actually graduated on a real eleventh-to-twelfth grade level and were prepared to, either, enter a college or university and perform real college-level work, or to enter a salable trade. As proper child-rearing in American homes (parents helping and encouraging their children to succeed in the public schools) became, over the decades after 1950, more of a burden than a privilege and responsibility for husbands and wives, who were more goal seekers than they were fathers and mothers, the male and female children of these very egoistic men and women were essentially left alone in the home to struggle academically by themselves during their formative and adolescent years. As a result, what used to be real high school diplomas conferred upon most eighteen year old graduates of public schools became no better than certificates showing merely 12 years of attendance, while junior college degrees (A.A.s and A.S.s) became certifications of remediation for high school deficiency. This process of remediation merely indicate that the students had compensated for their lack of academic attainment during their high school years at community and junior colleges during two years of study. Hence, as logically follows, traditional baccalaureate degrees now conferred upon senior college graduates, who matriculate from community and junior colleges, are hardly equivalent, to any degree conferred upon university graduates during the 1950s, ’60s, and ’70s.Now we arrive at the crux of the issue at hand, the attainment of B.A., B.S., M.A., M.S., and, even, PhD degrees by these under-educated students from colleges and universities offering complete online Internet curriculum programs leading to conferral of these degrees. What happens when under-educated men and women, who graduated high school on probably a ninth-to-tenth grade level, attempt to do real university-level academic work five-to-ten years after they leave the public schools? Now remember that a high percentage of these individuals have spent time in the U.S. military taking military enlisted courses taught on an eighth-grade level and are told by these universities that, if they enroll in particular online degree programs and pay the required tuition, they will be given college-credit for military courses and for “life experience (whatever that means)” that will lead to the total 120 hours of college credit necessary for a baccalaureate degree. Moreover, a great many of these under-educated adults, 25-to-35 years of age, begin their so-called college educations online without any previous junior college remedial study.So, have you, yet, figured out the dismal result of the grand delusion? These millions of under-educated students, who have anxiously embraced the computer-age, are actually made to believe that they can use the Internet, at home alone, to study the books and course materials provided by online universities and colleges, without the presence of an instructor/professor, in order to learn the equivalent of what is taught during four years of classroom instruction at traditional brick-and-mortar universities. What this was called in the 1950s, ’60s, and ’70s was correspondence/distance learning effect, which was not approved as equivalent to college classroom instruction by regional accrediting commissions. Presently, 98 percent of all Internet online college degree programs offered by most accredited universities and colleges are not interactive; that is, they do not provide video-teleconferencing for designated weekly lesson periods where the individual students are connected together to allow every student enrolled in the particular course to see his, or her, classmates, and the instructor/professor, on a computer screen during the lesson period, and to interact with each other during the class. As compared to the tuition cost of a three-unit undergraduate classroom course in American history, at the University of Maryland, which is around $500, the cost of an interactive online Internet course is about $700, and, invariably, the Socratic method cannot be effectively utilized by the instructor during this very expensive electronic interaction.Most online undergraduate and graduate courses are, however, “not” interactive to any degree, and the only means for a student to communicate with an instructor, or other classmates, during the semester or quarter course period is by email, and that is regarded by most rational people as an extremely impersonal and disadvantageous means of effective communication. Let’s say the under-educated undergraduate student lives in South Carolina and is enrolled in an undergraduate online degree program at the University of Maryland. The student has all of the course textbooks and study materials, for a semester, mailed to his residence and he, or she, is allowed to perform the prescribed lesson assignments whenever convenient. There are no verbal lectures unless the instructor records them and allows the students to access them, along with the other course materials, using “Blackboard” software. If this is the case, the tuition for the course is substantially increased. Now, believe it or not, the instructor may actually live in another distant state, such as Minnesota, and a student may be unable to contact the instructor by email for extended periods of time. Hence, the under-educated undergraduate student is essentially left alone for most of the semester or quarter to study the course materials alone, and to take un-proctored, open-book, multiple choice question tests for grades, when the student’s academic honesty is not even questioned.During the 19th and 20th Centuries, this type of learning was called the Lincoln-effect, which was named for the way Abraham Lincoln supposedly learned to be a lawyer, and was called then by most colleges and universities as a poor way to learn for the average student. Lincoln learned on his own by reading and studying what he needed to know in order to succeed in his legal endeavors, and his success was attributable to the fact that he was an extremely intelligent and intuitive person, capable of learning on his own, which the great majority of all public high school graduates are unable to do. Even today, a college or university will “not” give a person credit for learning independently, and actually knowing and mastering college-level course material before enrolling in a university and paying for the course. Then, even after a “very smart” person pays the costly tuition for the course and the professor allows the aspiring individual to take the course’s comprehensive final examination, the examination is, in most cases, not the regular final examination taken by classroom students, but one that has been made inexorably more difficult for the express purpose of ensuring that the very smart person does not make a passing grade. Does this sound unfair and sorely inequitable? Yes it does, because it is! The current academic system is staggeringly unfair to, both, the very intelligent and the very under-educated. The startling reality is that nearly all of the colleges and universities in the USA are much more concerned with advanced learning as a profitable money-making business than what it should be, the scared responsibility of helping intuitive and intelligently capable men and women, who are prepared for college-level work, to attain the learning and research skills that they need to succeed in opening new frontiers of the natural and physical sciences, mathematics, humanities, and literature. The sad fact is that baccalaureate and graduate degrees are being awarded every year to under-educated men and women who have completed undergraduate and graduate online Internet degree programs that are, in no way, equivalent to the degrees attained through classroom work under the close supervision of professors and instructors.This particular grand delusion’s grave and deprecating effect, which I have endeavored to explicate in this essay, is, simply, that these men and women who have attained these online pseudo-degrees actually believe that they are as educated, intuitive, and intelligent as other men and women who have attended traditional colleges and universities to attain their undergraduate and graduate degrees. It is like comparing an online University of Phoenix baccalaureate degree in economics to a B.A. degree in economics obtained through continuous classroom study at the University of Texas at Austin, or at any other tradition accredited brick and mortar institute of high learning. The two degrees are basically incomparable. Yet, the majority of the American people of the 21st Century, 25-to-40 years of age, who have actually been conditioned to believe that obtaining college degrees quickly through superficial and watered-down online study is entirely equal to the painstaking process of obtaining a four-year baccalaureate degree through continual classroom attendance, have contributed greatly, by participation, to the educational diminution of the American republic, to its relegation to the status of a third-world nation. America now ranks 38th in the world in educational achievement. Can you imagine that, when, from 1945 until around 1970, the USA ranked first among all nations in population literacy, educational superiority, and scientific achievement?As to the origin and advancement of this grand delusion, the reader is owed an explanation. How could this progressive and aberrant mind-set about the fundamentals of advanced learning have become so destructively prevalent in the latter-part of the 20th Century by sheer accident, or how could it have been widely accepted by the people as a standard model of educational endeavor through the visible efforts of one great man or woman? These two foregoing accepted explanations for the cause of historical events, accident and “the great man” hardly explain the subtle, publicly unnoticeable, events that have occurred from the late 19th Century through the mid-and-late 20th Century, which, working collectively, have caused deliberate systematic change in the way Americans are educated. The “accidental,” and “great man” explanations for the occurrence of history don’t hardly explain the sad miserable events that has plagued human beings from the outset of recorded history. The third accepted explanation accepted by contemporary historians for sad history, conspiracy, is the most reasonable and plausible reason for the occurrence of subtle incremental events that have collectively combined over the decades to produce an effect such as the grand delusion about the proper methodology for American learning. When a thorough investigation of the facts reveals the motives of conspiring men and women over an extended period of time to cause a major shift in the presiding philosophy underlying the essential rudiments of public education, those facts can, either, be closely examined by the existing traditional and electronic media and accepted by the American public, or capriciously discounted by that same media and hidden from the public. Why would an objective and independent media hide such scurrilous facts from the public? A free and independent media would not do such a blasphemous thing, but a media bought and paid for by the powerful and wealthy men and women who have conspired together to bring about such a shift in philosophy would so such a thing quite capably.As Thomas Jefferson stated in 1805, “I’d rather have newspapers without government, than a government without newspapers.” What he actually meant was that he would rather have newspapers willing to publish the facts and the truth in the absence of government than a government unwilling to allow newspapers to publish the truth about what the government is doing against the interest of the governed. The American Constitutional Framers worked together to produce a state that would serve the people, not a state to be served by a people indoctrinated by government to be subservient. The latter status, a state to be served by the people, was predicated upon a political philosophy called Hegelian “statism”. A free-thinking people, such as the original American population that ratified the U.S. Constitution in 1789, are very concerned about individual liberty. As Henry Ward Beecher succinctly stated, “Liberty is the soul’s right to breathe.” This goes along quite well with what Thomas Jefferson stated in 1779, during the American Revolution. He said, “I have sworn upon the altar of liberty eternal hostility against all tyranny over the mind of man.” These immortal words, among the many others he wrote, today grace Jefferson’s memorial in Washington, D.C. All of the Constitutional Framers, who had also signed the Declaration of Independence, realized that “as a man, or woman, thinks, so he, or she, is,” and that perception of reality is the means whereby the American people will choose who, and what, they are. This is why the Constitutional Framers wrote the preamble of the U.S. Constitution to express its explicit purpose, which is stated with the first eleven words of the last twenty-three words of the Preamble “to secure the blessings of liberty to ourselves and our posterity.” The Preamble didn’t say that purpose of the U.S. constitution was to “establish justice, provide for the common defense, and promote the general welfare.” No, those particular things were a means for implementing the ultimate purpose, which was, and is, to secure the blessings of liberty.” Some might argue that the constitution of the Soviet Union had established a form a justice, provided for a common defense of the Soviet people, and promoted a form of general welfare for the Soviet people. But there was no liberty for the Soviet people to determine their own destinies with their independent pursuits of happiness. No, a communist dictatorship does not secure the blessings of personal liberty to a governed people, but, rather, just the opposite, which is control over the minds and bodies of the people. It’s certainly strange that most federal and State politicians today don’t consider the Preamble to the U.S. Constitution an essential part of the Constitution; but it really is.”Statism,” socialist fascist philosophy that the people of a nation-state are to be conditioned to serve the state, began in the new USA as a pragmatic sociopolitical ideology embraced by wealthy ideologues in several the New England States in the latter-part of the 19th Century. I know that that’s a long way to look backward on American history to collect the relevant and pertinent facts about what really happened, but those facts were duly recorded by historians, journalists, and ordinary Americans in the form of journals, diaries, books written by writers who had actually witnessed those facts being established, and newspaper articles documenting those facts. The five ‘Ws” and one “H” of historical research are the questions and inquiries that lead to a cogent explication of the issues. Who, What, Where, When, and Why, and, of course, How, constitute the basis for historical research and the answers to how, and why, sad events occurred. There have been wealthy powerful aristocratic people in the USA who, from the outset of the republic, did not, at all, like the idea of a common rabble of human beings, the rank-and-file American People, being allowed to choose democratically, by the vote, who would represent them in a bicameral Congress and legislate laws that would affect and diminish the power and wealth of those aristocrats. In effect, these ideological oligarchies, shadow governments within the State and federal governments, were comprised of super-wealthy people who feared freedom and liberty as a political means of making them less powerful and less wealthy. Hence, came the collective surreptitious efforts of these shadowy oligarchies to systematically control the minds of the population in order to secure their wealth and power. These wealthy, powerful, and pragmatic people, though actually very few in number, knew quite well that the proper education and intuitiveness of that common rabble, the great majority of the U.S. population, would cause that great cross-section of Americans to insightfully seek the passage of laws that would enhance the ability of the common People to eventually, through industry and entrepreneurship, compete with, and eventually overshadow, the controlling aristocratic power-brokers; such as common self-educated, and brightly intuitive individuals like Cyrus McCormick, Eli Whitney, Elias Howe, Thomas Edison, and Philo T. Farnsworth, the poor Idaho farm-boy who was invented television.In a succinct cut to the chase, the ten decades of passed time that have elapsed in the 19th Century have brought to pass the subtle, and extremely detrimental increments of change to public education in the American republic. For example, the ability to read and understand the published written word was regarded by the honored Framers as the keystone to public awareness and understanding of current events in State and federal government in order to assure an intelligent and informed electorate. The basic methodology for teaching America’s youth began as phonics, which was considered by such Framers as Benjamin Franklin, Thomas Jefferson, and John Adams as the proper methodology for teaching children, and illiterate adults, how to read. That was way that they had learned to read, and Franklin, Jefferson, and Adams had used traditional phonics to teach their own children how to read effectively, and the methodology was used effectively in the first public schools established in America before, and after the American Revolution. The first public schools established in the new United States of American were locally controlled and had nothing at all to do with the federal, or State, government. The parents of the children hired teachers to teach reading skills in these original one-room schools were for children of all ages, and phonics, learning to identify words by their vowel and consonant sounds, was used to teach reading.Yet, another methodology for reading was created around the year 1813 by a man named Thomas H. Gallaudet. Gallaudet created the “see-say” method of teaching deaf-mutes how to read, since abnormal people could not hear word-letter sounds and learn through the normal use of phonics. Then in 1835, Horace Mann, a college educated intellectual, who had, himself, learned to read phonetically, was instrumental in getting the “see-say” reading primer, “Mother’s Primer” established for use by all primary schools in the State of Massachusetts; but by 1843, the very normal and reasonable parents of Massachusetts rejected the “see-say” method and phonics was restored as the standard method for teaching all normal primary reading in the State of Massachusetts how to read. Yet, Thomas Gallaudet, his children, and grandchildren were all graduates of Yale University, as was Thomas Mann, and they were also members of a secret order that existed then at Yale, and still exists and flourishes in the 21st Century. This was, and is, the Secret Order of the Skull and Bones. In fact, Horace Mann was co-founder of Skull and Bones, and it is much more than a passing thought as to why Mann, who had learned to read using phonics, would have pushed and shoved to get the “see-say” reading methodology, originally designed for abnormal deaf-mutes, accepted as a reading methodology for normal primary-age children. Furthermore, the false propaganda disseminated about the, supposedly, successful use of the “see-say” methodology, from around 1853 to 1900, resulted in the adoption of “see-say” by the influential Columbia Teachers College and the Lincoln School, which propelled the thrust of the speciously new John Dewey-inspired system of education that was geared away from the fundamentals of learning towards, rather, preparing primary child to be subservient units in the organic society instead of intelligent and intuitive individuals who could read comprehensively and effectively. ‘See-say” was ideal for the proponents of Dewey. Since learning to read effectively was the primary key for unlocking a child’s ability to read to learn, the Dewey-system deliberately eviscerated the one essential key step in the learning process, which would ultimately culminate in producing an informed electorate. See-say” also appeared to be an easy way to learn to read, despite the recognized fact that learning to read well required personal discipline and hard work.Hence, I sincerely believe that the rational and reasonable American reading this essay will be clearly able to cogently extrapolate the inexorable and egregious results of adopting a reading methodology system, “see-say,’ created for “abnormal” deaf-mutes, for systematic use by “all” of the public school districts in all of the States by 1920, in order to teach normal elementary school-age children how to read. It wasn’t adopted by accident or as a result of a grand gesture by a wise man or woman, but, rather, by conspiratorial means over a long period of time The leading educational “authorities” from 1900 to 1920, exclaimed by newspapers, magazines, and radio as “progressives,” in the likeness of Theodore Roosevelt and Woodrow Wilson, constituted a select group of, mostly, men who had been educated at Yale University and were members of Skull and Bones. For an ultimately conspiratorial reason, the fundamental wisdom of the Constitutional Framers, regarding the adoption and preservation of phonics, was devalued during this time, and most, that is over 70 percent, of the national electorate were made to believe that what these, supposedly, learned 20th Century men were spouting about educational learning standards for children was based upon truth. Therefore, what is extant today, a nation of dumbed-down adults, is a sad result of a conspiracy that worked its evil in increments over 150 years to the present day. “See-say” is still the predominant methodology for teaching reading in the federally approved “common-core” system of public education. Though there are many private and parochial schools that have continued to teach phonics in the 20th and 21st Centuries, the graduates of these schools make up a very small portion, less than 10 percent, of all the school children in the USA. Most of America’s children, more than 90 percent, are, and will remain to be, products of the public schools.In conclusion, the reasonable person can clearly see the progression of ineffective educational standards in the current process of educating most of America’s children. You have the elementary schools, which don’t teach basic reading, writing, and arithmetic to properly prepare children for their middle-school learning experience, and the dumbed-down children that enter middle-school from elementary school aren’t properly prepared for the last three, or four, years of high school. Consequently, middle-school is really a remediation of elementary school, and high school is, in most cases, a remediation of what should have been learned in middle-school. Therefore, 98 percent of the 17-to-18 year old adolescents who receive high school diplomas, aren’t really receiving graduation certificates for the proper completion of twelve years of education, but, rather, for merely attending twelve years of classroom experience, and graduating on much less than a twelfth-grade level. Most seniors in public high schools are actually working on a 9th to 10th grade-level when they walk across the stage to be graduated. So, here we are back at the beginning of the time-frame when men and women, 25-to-35 years of age and the graduates of public schools, begin to think that online college and university degrees are “really” equivalent to degrees earned by classroom attendance in brick and mortar universities; and that what they couldn’t achieve in a classroom with their level of academic preparation could be achieved outside of a classroom, at home, before a computer screen. This is, and will remain to be, the mass grand delusion that is the nemesis of American educational superiority.

Understanding the Home Loan Application and Mortgage Approval – The Mortgage Lender Analysis

Do You Pass The Mortgage Lender Analysis? When a mortgage lender reviews a real estate loan application, the primary concern for both home loan applicant, the buyer, and the mortgage lender is to approve loan requests that show high probability of being repaid in full and on time, and to disapprove requests that are likely to result in default and eventual foreclose. How is the mortgage lenders decision made?The mortgage lender begins the loan analysis procedure by looking at the property and the proposed financing. Using the property address and legal description, an appraiser is assigned to prepare an appraisal of the property and a title search is ordered. These steps are taken to determine the fair market value of the property and the condition of title. In the event of default, this is the collateral the lender must fall back upon to recover the loan. If the loan request is in connection with a purchase, rather than the refinancing of an existing property, the mortgage lender will know the purchase price. As a rule, home loans are made on the basis of the appraised value or purchase price, whichever is lower. If the appraised value is lower than the purchase price, the usual procedure is to require the buyer to make a larger cash down payment. The mortgage lender does not want to over-loan simply because the buyer overpaid for the property.The year the home was built is useful in setting the loan’s maturity date. The idea is that the length of the home loan should not outlast the remaining economic life of the structure serving as collateral. Note however, chronological age is only part of this decision because age must be considered in light of the upkeep and repair of the structure and its construction quality.Loan-to-Value RatiosThe mortgage lender next looks at the amount of down payment the borrower proposes to make, the size of the loan being requested and the amount of other financing the borrower plans to use. This information is then converted into loan-to-value ratios. As a rule, the more money the borrower places into the deal, the safer the loan is for the mortgage lender. On an uninsured home loan, the ideal loan-to-value ratio for a lender on owner-occupied residential property is 70% or less. This means the value of the property would have to fall more than 30% before the debt owed would exceed the property’s value, thus encouraging the borrower to stop making mortgage loan payments. Because of the nearly constant inflation in housing prices since the 40s, very few residential properties have fallen 30% or more in value.Loan-to-value ratios from 70% through 80% are considered acceptable but do expose the mortgage lender to more risk. Lenders sometimes compensate by charging slightly higher interest rates. Loan-to-value ratios above 80% present even more risk of default to the lender, and the lender will either increase the interest rate charged on these home loans or require that an outside insurer, such as FHA or a private mortgage insurer, be supplied by the borrower.Mortgage Closing Settlement FundsThe lender then wants to know if the borrower has adequate funds for settlement (the closing). Are these funds presently in a checking or savings account, or are they coming from the sale of the borrower’s present real estate property? In the latter case, the mortgage lender knows the present loan is contingent on another closing. If the down payment and settlement funds are to be borrowed, then the lender will want to be extra cautious as experience has shown that the less of his own money a borrower puts into a purchase, the higher the probability of default and foreclosure.Purpose Of Mortgage LoanThe lender is also interested in the proposed use of the property. Mortgage lenders feel most comfortable when a home loan is for the purchase or improvement of a property the loan applicant will actually occupy. This is because owner-occupants usually have pride-of-ownership in maintaining their property and even during bad economic conditions will continue to make the monthly payments. An owner-occupant also realizes that if he/she stops paying, they will have to vacate and pay for shelter elsewhere.If the home loan applicant intends to purchase a dwelling to rent out as an investment, the lender will be more cautious. This is because during periods of high vacancy, the property may not generate enough income to meet the loan payments. At that point, a strapped-for-cash borrower is likely to default. Note too, that lenders generally avoid loans secured by purely speculative real estate. If the value of the property drops below the amount owed, the borrower may see no further logic in making the loan payments.Lastly the mortgage lender assesses the borrower’s attitude toward the proposed loan. A casual attitude, such as “I’m buying because real estate always goes up,” or an applicant who does not appear to understand the obligation he is undertaking would bring low rating here. Much more welcome is the home loan applicant who shows a mature attitude and understanding of the mortgage loan obligation and who exhibits a strong and logical desire for ownership.The Borrower AnalysisThe next step is the mortgage lender to begin an analysis of the borrower, and if there is one, the co-borrower. At one time, age, sex and marital status played an important role in the lender’s decision to lend or not to lend. Often the young and the old had trouble getting home loans, as did women and persons who were single, divorced, or widowed. Today, the Federal Equal Credit Opportunity Act prohibits discrimination based on age, sex, race and marital status. Mortgage lenders are no longer permitted to discount income earned by women even if it is from part-time jobs or because the woman is of child-bearing age. Of the home applicant chooses to disclose it, alimony, separate maintenance, and child support must be counted in full. Young adults and single persons cannot be turned down because the lender feels they have not “put down roots.” Seniors cannot be turned down as long as life expectancy exceeds the early risk period of the loan and collateral is adequate. In other words, the emphasis in borrower analysis is now focused on job stability, income adequacy, net worth and credit rating.Mortgage lenders will ask questions directed at how long the applicants have held their present jobs and the stability of those jobs themselves. The lender recognizes that loan repayment will be a regular monthly requirement and wishes to make certain the applicants have a regular monthly inflow of cash in a large enough quantity to meet the mortgage loan payment as well as their other living expenses. Thus, an applicant who possesses marketable job skills and has been regularly employed with a stable employer is considered the ideal risk. Persons whose income can rise and fall erratically, such as commissioned salespersons, present greater risk. Persons whose skills (or lack of skills) or lack of job seniority result in frequent unemployment are more likely to have difficulty repaying a home loan. The mortgage lender also inquires as to the number of dependents the applicant must support out of his or her income. This information provides some insight as to how much will be left for monthly house payments.Home Loan Applicants’ Monthly IncomeThe lender looks at the amount and sources of the applicants’ income. Sheer quantity alone is not enough for home loan approval; the income sources must be stable too. Thus a lender will look carefully at overtime, bonus and commission income in order to estimate the levels at which these may reasonably be expected to continue. Interest, dividend and rental income would be considered in light of the stability of their sources also. Under the “other income” category, income from alimony, child support, social security, retirement pensions, public assistance, etc. is entered and added to the totals for the applicants.The lender then compares what the applicants have been paying for housing with what they will be paying if the loan is approved. Included in the proposed housing expense total are principal, interest, taxes and insurance along with any assessments or homeowner association dues (such as in a condominium or townhomes). Some mortgage lenders add the monthly cost of utilities to this list.A proposed monthly housing expense is compared to gross monthly income. A general rule of thumb is that monthly housing expense (PITI) should not exceed 25% to 30% of gross monthly income. A second guideline is that total fixed monthly expenses should not exceed 33% to 38% of income. This includes housing payments plus automobile payments, installment loan payments, alimony, child support, and investments with negative cash flows. These are general guidelines, but mortgage lenders recognize that food, health care, clothing, transportation, entertainment and income taxes must also come from the applicants’ income.Liabilities and AssetsThe lender is interested in the applicants’ sources of funds for closing and whether, once the loan is granted, the applicants have assets to fall back upon in the event of an income decrease (a job lay-off) or unexpected expenses such as hospital bills. Of particular interest is the portion of those assets that are in cash or are readily convertible into cash in a few days. These are called liquid assets. If income drops, they are much more useful in meeting living expenses and mortgage loan payments than assets that may require months to sell and convert to cash; that is, assets which are illiquid.A mortgage lender also considers two values for life insurance holders. Cash value is the amount of money the policyholder would receive if he surrendered his/her policy or, alternatively, the amount he/she could borrow against the policy. Face amount is the amount that would be paid in the event of the insured’s death. Mortgage lenders feel most comfortable if the face amount of the policy equals or exceeds the amount of the proposed home loan. Less satisfactory are amounts less than the proposed loan or none at all. Obviously a borrower’s death is not anticipated before the loan is repaid, but lenders recognize that its possibility increases the probability of default. The likelihood of foreclosure is lessened considerably if the survivors receive life insurance benefits.A lender is interested in the applicants’ existing debts and liabilities for two reasons. First, these items will compete each month against housing expenses for available monthly income. Thus high monthly payments may reduce the size of the loan the lender calculates that the applicants will be able to repay. The presence of monthly liabilities is not all negative: it can also show the mortgage lender that the applicants are capable of repaying their debts. Second, the mortgage applicants’ total debts are subtracted from their total assets to obtain their net worth. If the result is negative (more owed than owned), the mortgage loan request will probably be turned down as too risky. In contrast, a substantial net worth can often offset weaknesses elsewhere in the application, such as too little monthly income in relation to monthly housing expense.Past Credit RecordLenders examine the applicants’ past record of debt repayment as an indicator of the future. A credit report that shows no derogatory information is most desirable. Applicants with no previous credit experience will have more weight placed on income and employment history. Applicants with a history of collections, adverse judgments or bankruptcy within the past three years will have to convince the lender that this mortgage loan will be repaid on time. Additionally, the applicants may be considered poorer risks if they have guaranteed the repayment of someone else’s debt by acting as a co-maker or endorser. Lastly, the lender may take into consideration whether the applicants have adequate insurance protection in the event of major medical expenses or a disability that prevents returning to work.When a mortgage lender will not provide a loan on a property, one must seek alternative sources of financing or lose the right to purchase the home.