Posted by admin on June 5th, 2011
Whenever interest rates drop, a refinancing frenzy naturally follows. Whether you’re looking to trim your mortgage payments, eliminate credit-card debt or pay off your car loan, experts say you should fully understand all of the options available to you before deciding to refinance.
Allied Mortgage Consultants, a mortgage company recognized for educating consumers on the realities behind new home loans and refinancing, reveals seven common mistakes people make when refinancing.
1. Not saving enough to justify refinancing. It’s best to decrease your rate by at least .75 percent to 1 percent. This will save you about $100 a month on a $150,000 mortgage.
2. Not knowing your closing costs up front. By law, closing costs must be disclosed within three days of the loan application. However, there are different approaches to calculating them. Until the details of your loan are clear, the closing costs quoted to you are only estimates. Plan for the worst-case scenario.
3. Not fully understanding your reasons for refinancing. Besides reducing your interest rate, there are other legitimate reasons to refinance, such as debt consolidation, home improvements or major purchases. In some cases, you may be able to deduct your interest payments on your tax return. Always consult an accountant or tax attorney before making these types of decisions.
4. Not being aware of APR “teaser rates.” Some mortgage brokers use annual percentage rates to get your attention, but it may actually end up costing you more. APRs often are derived by using a 30-year mortgage coupled with an accelerated payment plan. Make sure you know the actual interest rate you will be paying throughout the life of the loan.
5. Not weighing the pros and cons of adjustable rate mortgages. ARMs can minimize your monthly payment, but not if additional refinancing occurs. In this case, they can cost more in the long run.
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Posted by admin on May 21st, 2011
If you currently have unbearable debts and thinking of wipe it off from your statement by declaring bankruptcy; Just on-hold your decision for a while, there may be other options available. Try to improve your situation before you investigate the bankruptcy option. No matter which way you go, evaluate the 5 steps below to see if you could avoid taking that drastic step.
1. Detail out all your debts
First, look at all your secured debts such as mortgage and car loan. How much are the repayment for each month? What are the interest rates?
Then, list down all the fixed expenses such as power, phone, insurance, food, etc. What are the total costs for these expenses?
Follow by examining your credit card debts. Take out all your credit card statement and write down the amount you owe for each card and their interest rate.
Finally, write down all your other expandable; these are your optional expenses such as entertainment, gym, membership, dinners at restaurant and other impulsive purchase.
2. Eliminate the unnecessary expenses
Now you should have a better idea on where your money goes; Make a diet plan on your cash; In your Cash Diet Plan, list down all the your savings from the elimination of the optional expenses. You will be surprise that how much money you can save by carefully control your expenses. The money you saved can be used to pay down your debts.
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Posted by admin on April 29th, 2011
1. Credit card companies can change almost all of the terms of the credit card by giving just 15 days notice.
We get used to credit card companies adjusting their lending rate by 1/4% as interest rates fluctuate but did you know they can alter any of the terms for any reason. For example they can increase the late payment fee and they can increase the interest rate without the need to justify it. If you are late or miss just one payment the low rate you are currently being charged can double or even treble almost overnight.
2. Credit card companies can increase the cost of a purchase months after you bought it.
If you purchased a widescreen plasma TV 3 months ago, using a card which at the time was costing 9.9% apr, and you are late with just one payment, the credit card company can charge you a late payment fee, say $40, and increase the interest rate to 29.9% apr, or even more, and there is nothing you can do about it.
They can, in effect, increase the cost of your TV months, or possibly even years after you purchased it. The TV retailer wouldn’t be allowed to do this but your credit card company can.
3. Discount offers are only good if you keep up all your payments.
Interest free balance transfers and initial periods can dissapear for any minor omission. Failure to keep to all the terms of a card will result in special terms being withdrawn and possible penalty interest being applied. If you have interest free purchases and balance transfers make sure you keep up the payments.
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Posted by admin on April 7th, 2011
Are you sick of paying interest on your monthly student loans with no end in sight? Afraid of cash-flow problems that may prevent you from paying your student loans on time? I know I was and there is a solution to this problem. It is called student loan consolidation.
What is Student Loan Consolidation?
Student loan consolidation simply means consolidating all your student loans into a single loan with a monthly payment plan. Effectively, all your previous student loans are written off and a new student loan is created which you have to pay off monthly.
Benefits of Student Loan Consolidation
Here are some of the benefits of student loan consolidation
1. Lower monthly payments
By consolidating all your student loans into one loan, you only need to pay off one loan monthly instead of several student loans monthly. Thus, your monthly payment is lower
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