Open the Cash Vault Inside Your Home
Believe it or not, many people do not understand equity and the power it provides.
In its purest form, equity is money. With regard to real estate(specifically, your house or other investment property), equity is measuredin terms of the value of the property minus what you owe. So, if your homeis valued at $100,000, and you owe $40,000 on it, you have $60,000 inequity (actual money that is available to you, under particularcircumstances).
Surprisingly, many people have this type of equity and donot take advantage of it. Some people are actually in dire financial straitsand fail to realize their problems can be solved very easily, by taking theequity from their home. Remember, your home is a "vault," and the moneyinside that vault belongs to you. Best of all, you can use that money/ equityfor anything you desire, from home improvement to travel expenses tospending money.
Exactly what is a home equity line of credit or HELOC?A home equity line of credit, which lenders and mortgage brokersrefer to as a HELOC, is a different kind of home loan. An equity line hasdifferent rates and terms from a conventional first mortgage. In a standardhome loan, or mortgage, your monthly payments cover both the principalloan and the interest you are charged.
Most mortgage payments include escrow, or taxes and insurance. An equity line of credit payment does not reduce your principal loan amount and does not include escrow. You areborrowing the equity in your house and paying the bank an interest premiumon that loan. With a HELOC, you pay only the interest on the loan and,generally, you get the money for less time than you do a standard firstmortgage.
The underwriting on these loans is very simple, and in most cases, theloans are very easy to get. At close, you either get one big check, which youcan deposit into your savings or checking account or you can get a checkbook and treat your equity line of credit as another checking account. Thepayment on equity lines is very enticing. Paying interest only makes for avery low payment. It's important to remember, though, when payinginterest only, you are not paying down the principal loan balance.
The Power of Interest-Only PaymentsSo, let's suppose you take an equity line for $50,000 at 4.25% interest.This interest rate is based on the Prime rate, a floating rate that can changebut does not fluctuate very often. When this article was first published, the prime rate was 4.25 percent. So, on your $50,000 equity line of credit, your payment is $177.00 each month. This is an incredibly low payment on a loan of this size. This gives you a great deal of power, because you can control a large sum of money for an extremely low monthly payment. It is this low, because you are onlypaying the interest on the loan.
At the end of the first year, you will have paid the bank over $2,100.You will, however, still owe $50,000. This is because your monthlypayment is an interest-only payment. This is where some people can get introuble with home equity lines of credit. If you use all the equity in yourhome and never pay down the balance, then decide to sell your house, youwon't make anything on the sale, because you'll owe it all to the bank.
It is also important to understand the terms on a home equity line ofcredit (HELOC). When talking to mortgage professionals about homeequity lines of credit, be sure you understand the terms, as lenders vary onwhat they'll offer. Like conventional mortgages, which have terms of 30years, 15 years, 10 years, etc., home equity lines also have various terms, butnot all lenders offer them. Don't let this confuse you. Just find yourtrustworthy mortgage broker, and tell him or her exactly what you want.
Unlike mortgage payments, which include complicated yearly amortization of the principal loan amount, interest-only payments are calculated very easily. You cando it in two simple steps. To find out your payment, first learn what rate of interest you'll be charged. If you are using 80 percent or less of the equity available and youhave an A credit rating, you'll be able to get the best rate available, which isthe prime rate.
Now, let's assume you have $40,000 in equity in your house, but youonly need $20,000 (taking less than 100% of the equity is important). Youtake $20,000 and multiply it by 4.25%, which gives you 850. This is whatyou'll pay each year to borrow $20,000. Next, divide the 850 by 12 for amonthly, interest-only payment. Your payment for your $20,000 homeequity line of credit is $70.83.
This is a very powerful loan. Imagine paying less than 71 dollars for the ability to control $20,000. Some people pay more for cable TV or their monthly cell phone bill. Some people even take the equity in their home and invest it elsewhere. You're probably figuring out how much equity you have right now, and what you can do with that money!
To learn how you can turn your equity into a never-ending money cycle thatwill fill your bank account year after year, read Winning the Mortgage Game.Whatever you decide, open the cash vault inside your home, and make useof your equity today.
Mark Barnes is author of the wealth-building system, Winning the Mortgage Game and other investment real estate books. He is also a suspense novelist, and his new novel, The League, will thrill both suspense and sports fans. Learn about Mark's wealth-building system and get his free home loan course at http://www.winningthemortgagegame.com. Learn more about The League and read an excerpt at http://www.sportsnovels.com
Debt Consolidation: A Way Out?
When you are living paycheck to paycheck and it seems everyone is getting a piece of the pie except for you, debt consolidation may help you free up a little bit of cash each month. Debt consolidation is usually a great option if you are paying several minimum payments per month on high interest credit cards or loans. If you are behind on any payments, debt consolidation may save your credit, or at least clean it up a bit.
Finding a Low Interest Debt Consolidation Loan
If you are in the market for a low interest debt consolidation loan, then you might think that you're out of luck. After all, aren't loans that consolidate your debt into a single monthly payment designed for people who have poor or bad credit?
Student Loan Consolidation
Student loan consolidation is one of the most used methods for reducing and working off student debt. If you want to consolidate debt, whether it's a student loan debt or not, you have to follow a certain process. However, this process is easy to follow and will absolutely not require big efforts from your side.
Debt Consolidation Service In Birmingham
Jane was a fun loving girl from Birmingham, you could say she lived for today. She wanted all the latest fashions and gadgets and certianly was not afraid to use her credit card to pay for them.
Debt consolidation ? Options for Reducing Credit Card Costs
Americans are using credit cards more than at any time in history, and credit card companies are reaping record profits. One of the reasons that the credit card industry is so profitable is that so many of us use our credit cards unwisely.If you have good credit, you can get a credit card with a reasonable interest rate; say 10% or so. You can keep that rate by paying your bill on time. On the other hand, if you pay your bills late or fail to pay in full, then you will have to pay late fees and interest. Late fees often range between $15 and $29; some card issuers may charge even more. Adding to the pain of paying late fees, however, is the likely change in interest rates on your card if you pay late. A late payment may trigger a substantial increase in the interest rate on your card, and that "reasonable" interest rate of 10% may suddenly rise to 20% or even 25%!It's hard to pay off your credit card balance when you have late fees and 25% interest, so this is something you definitely want to avoid. If you usually pay on time, and you pay late once and are charged a late fee, ask your credit company if they will waive the fee. They will often do it ? once. Some will not do it at all, but it is always worth taking the time to ask. If they are unwilling to help you, then you may be better off shopping around for a better credit card deal elsewhere. You can often save money by transferring your balance to a lower interest credit card, if you have one. Competition has been fierce during the last few years among credit card companies, and it is fairly common to receive "promotional" rates of less than 5% if you transfer your balance to another card. Be sure to read the fine print, however. Those low rates usually apply only to transferred balances, and not to new charges placed on the card. There is usually a time limit associated with the promotional rate, and higher rates may apply at the end of the time limit, perhaps even retroactively!In summary, if you want to minimize your credit card costs, try the following: Shop around for a credit card with a low interest rate.Pay your bills on time. A good way to do this is to pay online. That way, you won't have to worry about your check being delayed in the mail.Transfer balances from high interest rate cards to cards with lower rates.Use your cards wisely. If you can pay cash, do it.A few simple steps can save you a fortune in interest charges and late fees.
How to Find the Best Debt Consolidation Secured Loan
If debt is a way of life for you, it's time for you to consider finding a debt consolidation secured loan. This loan is designed so that you can pay off some or all of your debt, leaving you with a single low monthly payment instead of multiple payments that keep increasing as time goes by.
Escape the Credit Card Death Spiral
You're burdened with crushing debt and at the end of your rope. There's got to be a way out. You go to the door every day, expecting bad news. Your minimum credit card payments are eating up most of your paycheck every two weeks. You can't go to dinner, go on a trip, or save for your kid's education, and it just keeps getting worse. You're using your credit cards for living expenses now. This really sucks!
Getting a Debt Consolidation Loan with Bad Credit
If you've ever tried to get a debt consolidation loan with bad credit, then you know that it isn't always easy. It may seem odd that you can have such trouble being approved for a loan designed to help people who are in debt, but many lenders can be hesitant to give money to a person who has a history of not repaying.
Stafford Loan Consolidation
Stafford Loan Consolidation
Is Consolidating Loans Right For You?
Consolidating loans makes sense but only if you can pay a lower interest rate than what you're paying now. This is especially true if you are consolidating mortgage loans. Be aware of your total overall costs to avoid getting deeper in debt than when you started.
Choosing the Right Credit Counseling Agency for You ? Some Tips
Credit counseling companies come in all shapes and sizes. Whether you are looking at working with a local credit counseling organization or a national credit counseling organization there are some very important factors to calculate before choosing the right credit counseling option for you. Here is a list of questions for you to ask a credit counseling company before determining whether or not you should participate with their organization.
Use Caution When Entering Into Debt-Consolidation Loan
To the person drowning in debt, a debt-consolidation loan looks a lot like a lifesaver. But agreeing to such a loan without understanding it completely could be a serious mistake.
Does Working With a Credit Counseling Organization Hurt Your Credit Score?
Credit counseling organizations do not lower your credit score when you approach them for assistance in creating a budget that you can work with. Credit counseling is designed by nature to assist each individual in a way that is unique to a person's particular situation. A credit counseling plan that may work for you will most likely not be the best credit counseling plan for the next person.
Debt and Bill Consolidation - Signs You Need To Consolidate Your Debt
If your debt is becoming difficult to get on top of, here are some questions to ask yourself to help you determine if you need some help managing or consolidating your debt. If you answer yes to any of these questions, you should probably consider applying for a debt consolidation loan or seeking help from a debt management service.
Are You Buried In Debt?
Are you having a problem paying your bills? Are you receiving past due notices from creditors? Are most of your accounts being turned over to debt collectors? Are you worried that you might lose your home or your car?
Best Debt Reduction Service
There was a time when incurring debts was looked down as one of the worst crimes ever. People were punished for not repaying within the stipulated time. Charles Dickens' s father spent months in a debtor's prison because he was unable to pay off his debts. With other ghoulish crimes taking center stage, debts have become a commonplace now. However, sinking in debt has increased with the introduction of newer and scientific temptations. Credit cards are the most popular and the worst temptation. All of us feel rich all the time because of these plastic cards. We hardly realize the pains we have to go through once it is paytime.
Dangerous Debt Consolidation Loans
On the surface, debt consolidation loans offer cash-strapped consumers some relief from high interest rates. Looking deeper, consumers should be wary of both the pros and cons of this fast growing practice. In their simplest forms, debt consolidation loans are refinance agreements, second mortgages, or home equity loans.
Debt Consolidation Made Simple
If you have considered debt consolidation then you are probably a little overwhelmed with the mass amount of debt consolidation companies there are to choose from. With some of these debt consolidation companies, it's hard to even find out what debt consolidation is all about. It seems you have to commit to sharing your entire financial history, as well as sitting through a high pressure sales pitch, with some.
Getting the Most Out of Consolidation Loans UK
Before letting too much debt or too many payments get the better of you, consider applying for consolidation loans UK.
Debt Consolidation - Is It Really The Best Option For You?
It is a very common question that people pose to themselves across the English speaking world: should I consolidate my outstanding debt? There is no single answer to this question, as no two people have identical finances and other personal circumstances. There are also other factors that come into play that can affect the right or wrong of your decision.
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