Should You Refinance Your Mortgage?

Everyday, homeowners are bombarded with offers and advertisements to refinance their mortgage at a lower rate. There are times when home refinancing is a great idea, and others when it may not be.

Reasons to pursue a mortgage refinance would include a lower interest rate, which may lead to lower monthly payments and the total amount of interest paid. Perhaps your credit score has greatly improved since you took out your first mortgage, or interest rates are considerably lower. You may also be considering financing improvements to your home and taking additional equity out of your home to pay for it.

Refinancing your mortgage can require quite a bit of time and effort in research and actually providing needed documentation to your proposed lender. Paycheck stubs, taxes and personal financial records will be needed to complete the application process. There are also fees charged by the bank when issuing a new mortgage.

Often, homeowners consider refinancing or using their home equity to pay off current credit card and other debts.

Other than refinancing your entire mortgage, you might want to consider a home equity line of credit, or HELOC. Rates for this type of credit are slightly higher than first mortgages, but are still much less than those charged by credit card companies. In addition, lapses on second mortgages in the event of a hardship or lost job will most likely not cause you to lose your home altogether.

Another reason to consider a HELOC is that you only use what you need. You may have $25,000 in equity on your home, but only $10,000 in credit card debt. This means that you can avoid using available financing unless absolutely necessary. In addition, borrowing only part of what is available will lower your interest charges owed on the HELOC.

That being said, using the hard-earned equity in your home should only be used as a last resort to pay off credit card debt. Debt consolidation help is available from several licensed advisors and counselors in every city and town, and may provide a better option that will not require you to seek additional credit sources.

Consolidating debts may include negotiating with individual creditors for lower interest rates or payments, or even forgiving parts of the principal balance owed. This will save you time and money, as well as expensive charges to take out a new mortgage or refinancing.

If your credit and income are high enough, another option is to pursue a debt consolidation loan. This may be unsecured or secured with property other than your home such as a boat or vehicle that is already owned outright. This option can still save money on interest rates and charges, while preventing your home from being at risk should you ever fall on hard times.

Things to Know About Home Equity Loans

If you have outstanding debt that is eating up your monthly income with high interest rates and minimum payments, you may be considering a home equity loan to pay them off. However, using the equity in your home should not be taken lightly; there are a few considerations that should be examined prior to pursuing your possible loan.

Let’s start by discussing what a home equity loan is and does. With this type of loan, a bank or other lender will assess the value of your property and the amount you currently owe on it. Any difference in these amounts is considered your “equity”, or amount of the property you own free and clear. Home equity loans use this to secure funds to be released to you or directly to the creditors to be paid off, creating a new lien on the property.

One such type of loan is called a HELOC, or Home Equity Line of Credit. These are typically issued to finance home improvements, but can be used to reduce other forms of debt. This saves money in the long-term because home equity loans typically are issued at lower average interest rates than unsecured loans, and interest paid is also tax deductible.

A HELOC also allows you to only use as much as you need when you need it, rather than pulling the entire amount out at once. This is still a great option for home renovations that may vary in cost when compared to original estimates.

However, even with all of these benefits, you must be aware that these lines of credit work much like a credit card, and will increase your debt load. If you have trouble refraining from impulse purchases or spending beyond your means, this may not be a great option for you. Remember that you will still need to pay the debt back!

Home equity loans can be a great tool to get you on the right track in your debt reduction and management program as well. If you’ve resolved to change your ways and want to use the line of credit only to reduce your expenses and pay off old debts, this is a great option.

Before applying for a home equity loan, also consider if you plan on selling your home within the next few years. If so, it’s probably not a good idea to max out your equity and risk selling for less than what you owe; not having this second mortgage will allow you to be a little more flexible in selling price for the sake of a speedy sale.

Look online for a handy debt reduction calculator and compare how much you will save with your current situation compared to your proposed interest rate with a HELOC. This will allow you to reflect monthly and thus yearly savings, which can also be applied toward payments on your line of equity to reduce that balance in a reasonable amount of time as well.

Whether you are looking for home equity loan line of credit, the lowest home equity loan, or debt consolidation home equity loan – there is a service that is available for you!

Understanding Student Loans

Student loans are a very complicated area within the realm of credit subject matter. Several different types of student loans exist, whether subsidized or unsubsidized, and this affects the amount available, conditions and rates of these loans. You’ll need to be aware of these differences before choosing the best way to finance your all-important education as part of a long-term debt management plan.

Your school advising office and general government websites may help to answer some of your initial questions. A Stafford Loan is a popular choice in student loans. These may be able to partially or fully finance your education, and have the added advantage of no prepayment penalties. This means that balances can be paid off at any time with no added charge to you – when you land that new, six-figure job after graduation!

Stafford Loans require no payments while you’re still in school, which is great if you’re going full-time and want to dedicate 100% of your time and energy toward your studies versus getting a job. No credit check is required, but you do need to maintain half-time status as a student at all times. Upon graduation, the government allows you six months before having to start make payments on the amount you owe, giving you time to find a well-paying job and plan for your future debt reduction.

This type of loan does limit the amount you may borrow each year. They also include additional charges not found in other financing options, such as 3% in federal origination and default fees. Again, these amounts will vary between loans and different borrowers.

After the 6-month grace period, payments are relatively low compared to the amount financed, but are planned over a 10-year repayment period. This can result in a very expensive education with added interest paid over this time!

Other options for student loans may include personal loans through a third-party financier, in addition to unsubsidized loans, grants and scholarships. Some of these options will require repayment immediately, interest payments while the student is still in school, or securing a piece of property.

These options may save significant funds in added interest charges over time, but will require either help from mom and dad or finding a part-time job to cover current charges. Of course, the age-old option of simply saving well ahead of time can also help to pay for an expensive education later in life.

Starting sooner rather than later, no matter which vehicle you choose, can help to pay for your formal education when the time comes. 529 plans exist just for this purpose, and can also provide the added incentive of tax deductions for contributions made on a yearly basis.

These investment and savings vehicles should be well-diversified to reach your goals. Always consult a professional investment advisor to determine the best way to invest these funds for future education costs.

Also consider the many options available through employers today: finding a full-time job that helps to pay for part of your education will still leave you with time to attend classes in the evening, and make money in the meantime before graduating debt-free.

Why Is Your FICO Score Important?

When keeping track of your budget, saving as you should, and handling money responsibly still doesn’t qualify you for a much-needed loan, you probably need to take a look at your FICO score. This number reflects your creditworthiness, and can greatly influence your debt management program.

Fair Isaac Corporation founded the FICO score and the method with which it’s calculated. Your FICO score may be anywhere between 400 and 800, and the higher the better. Some other companies may use a letter grade system that is based on similar calculations used in the FICO.

The algorithm is a proprietary piece of information known only to Fair Isaac, but there are several items that have been determined to directly raise or lower your score. Late payments and the number of them will lower your FICO, as well as the total debt carried in relation to your income.

Scores of 720 and above are extremely good and optimal choices when awarding new lines of credit. 620 to 720 scores are considered on a case-by-case basis, as these people may provide good and bad credit situations. Anything below 620 is considered fair to poor, and these scores are unlikely to obtain any new loans or credit.

Some lenders will consider things other than a FICO score when making loan decisions, such as whether you own your home, if you have a history established with the lender, and how long you’ve been at your current job. Investments and retirement accounts may also be considered in this decision – especially if your score falls in the 620 to 720 range.

Virtually every establishment you have ever held an account with will report information that affects your FICO score. Credit cards, auto loans, home equity lines of credit and student loans will all be reported and associated with you. Good information always remains on your credit, and bad information is erased in 7 to 10 years after paying off the debt, such as collection accounts.

Lenders will look at the histories of these accounts listed on your report to establish whether you are worthy of a loan and what interest rate you qualify for. Better FICO scores qualify for lower interest rates, which effectively makes purchases less expensive in the long run. Other factors that may influence the issuing of a loan or line of credit is the demand versus supply of lendable funds, current interest rates and the current state of the economy.

Improving your FICO will not only increase your chances of being approved for a loan, but will also qualify you for a less expensive one through lower rates. Developing a debt reduction plan to pay off old collection accounts or bad debts, credit card balances and student loans will gradually increase your FICO score.

It is suggested that if your score is lower than needed, you should delay seeking credit while you reduce debt and improve your situation. In addition to the lower interest rates you’ll qualify for, inquiries into your credit score from lenders, if excessive, can also reduce your FICO score.

Self Employed Health Insurance Will Help You Beat the Odds

A lot of people right now are working in the comfort of their own homes and although what is most important is setting up and making sure your business is in good shape, we can’t deny the fact that we all should look forward in being prepared in terms of getting medical assistance in the future. This seems like a very nice idea but what is holding most of us is that once we work on our own we also need to pay for our own self employed health insurance.

Another thing to take into consideration is to get an affordable insurance for self employed people. We venture into different sidelines in order to earn money but we also need to ensure that although we are not working for a certain company, we still need to be prepared in cases of health emergencies. Getting a self employed health insurance may take an effort but nothing beats the idea that in times of need, you can still depend on something to finance your needs. If you are really determined to leave your job and start off earning through working part time, then the key is to look for an affordable self employed health insurance.

Although there are different challenges that we can face in getting a health insurance for self employed people, there is a growing number of health insurance companies who will provide initiatives for people seeking for a cost effective yet affordable health insurance for self employed people. Self employed or not, we need to understand that medical insurance should be top most priority because medical costs have all soared up so high that without having medical coverage even if you’re not self employed this would pose a very big risk to your future budget.

Research statistics state that in US alone, almost 16 percent of the population are medically uninsured. The number of which may even increase in the advent of economic crisis where companies would either shut down or lay off workers leaving these employees and their families uninsured.

Even if you’re working on your own, you can still look for different options in obtaining an affordable health insurance for the self employed. Both government and private organizations may offer different services in your need to avail of a self employed health insurance. The first thing to do is to research for possible health history since this information is necessary for the insurance company to consider your application. The more information that you can provide to them, the greater the chance is for them to provide you with additional options that will target your medical needs in the future.

The insurance company considers a lot of things when you apply for a self employed health insurance. Their services may be a bit expensive than belonging in a group insurance since they consider a lot of factors such as age as well as history of pre existing medical conditions. On the other hand though this is quite difficult, but still it is better to get a self employed health insurance now and get good coverage rather than not having one at all which could definitely be a source of problem in the future.

The Basics on Short Term Health Insurance

There are a lot of different types of insurance policies available in the market: personal insurance, family insurance, student health insurance, temporary health insurance, etc. All these insurance have different coverage at different rates.

So you scan every detail of each and suddenly, one particular health insurance catches your eye. It has very low premiums and the coverage looks good enough to purchase. The name? Short term health Insurance. But before you congratulate yourself for finding a very good deal, it is important for you to know the fine details on this insurance coverage. So before rushing to purchase this insurance coverage, try to read on little bit to find out if a short term health insurance will fit your lifestyle best.

From the name itself, short term health insurance is a temporary insurance that usually gives a coverage period of 6 months to a year of selected medical services. This is great for people who do not have personal insurance, yet, and just want to make sure that they are medically covered for the duration of the time, until they get their new job or just until they enroll in a new university; or for people who are planning to get a long-term insurance but just haven’t decided what plan to take yet – this would also be a good option to chose.

And because the coverage is time limited, the monthly rates are very affordable. But just a heads up for insurance hunters, temporary health insurance do not cover pre-existing health conditions. Pre-existing health conditions are those that have reoccurred in a person’s medical record 2-3 years before the temporary health insurance was purchased. So if such a conditions return, then short term health insurance will not be able to cover any expenses related to the condition. There is actually a separate type of insurance that covers pre- existing medical conditions and they are much more expensive as compared to the latter.

So if you think that short term health insurance is the most cost-effective choice for your situation right now, the try to go online and search fort the best deal that you can find. There are numerous websites by insurance companies that allow you to read their coverage and policies online. Their website should be able to tell you everything that you need. But if you do have any questions about coverage or what ever, never be hesitant to call up the company themselves. Aside from this, most of the insurance websites also allow you to get a temporary quote of the price for the time period that you wish to use the insurance. And some insurance providers can even assure you of insurance coverage the very next day!

So if you want to have peace of mind just before you get your new job or enroll to the next university, purchase a short term health insurance and you will get to enjoy health benefits at a very low rate and will protect you from any medical conditions that could arise at least in this time period.

You Really Can Save Money On Your Mortgage By Paying More

Mortgage payments are a bind, there is no getting away from it. It is fantastic to own your home but the interest on a standard mortgage is frightening and means paying thousands of dollars more than the initial loan..

Why? Because mortgages would simply not exist if the lender did not receive the additional interest, no one is going to lend in excess of $100,000 free of charge. So, is there really a way to reduce the interest and pay off the mortgage years earlier, also saving on private mortgage insurance? Yes, and it goes something like this.

Firstly, a little planning and frugality have to be applied, the rest is plain sailing.
The mortgage requires to be paid faster meaning higher payments per month to reduce the overall interest being paid. One method that is being practiced by many is known as the bi-weekly mortgage payment scheme. It is ridiculously simple where the mortgage is paid for twice in one month.

If you have an initial loan of $80,000 on your house over 30 years with a 7% interest rate and pay the mortgage twice per month you will cut the interest payments by $25,000 and clear the debt years earlier. The saving increases exponentially, the higher the loan the bigger the savings. A shorter mortgage term will equate to the same amounts of savings, however this is more difficult to qualify for initially.

You are actually just paying one additional mortgage payment per year with the funds paying for the principal sum as opposed to the interest.

Firstly, you can speak to your lender and find out the terms and conditions of your contract. Look out for any penalties for paying your loan early, although it may still be financially viable. You can use a specially adapted calculator to find out how much you would need to pay and how soon the loan could be paid off.

Failing that, you can approach an appropriate company to set up the payment plan. There is usually a fee of a few hundred dollars or a charge for each extra payment made. Many financial organizations are only too happy to help those wishing to pay their mortgage faster and save money, it is simply a matter of taking the first step and finding out your options.

You might be wondering how on earth you will be able to come up with this amount. As stated a little budgeting on all household costs should start to see a marked increase on extra spending money. Shop at discount stores and look for special offers and two for one when food shopping, you will be laughing all the way to the bank when you start to rake in the savings.

Choosing a Secured or Unsecured Loan

When you need financing for a purchase or improvement to existing property, you’ll be faced with the question of whether to apply for an unsecured or secured loan. In addition, the proposed lender will need to determine whether to require security against the loan in order to approve it. There are pros and cons associated with each type of loan, and you need to be familiar with them before going forward.

Secured loans are issued with the guarantee of some type of property. This may be a home, automobile, or other item of value like jewelry or a computer. With this type of financing, the lender has a claim against ownership of the property should you ever default on or fail to repay the loan.

However, this doesn’t simply mean that if you’re late on a payment your bank will come marching to your door to kick you out of your home. Foreclosures and repossessions of properties cost money and require a very long, drawn-out process, so don’t fret if you have a difficult month or so.

When a borrower defaults on a loan, the lender is likely to start sending strongly-worded letters looking for payment. At this time, it may be possible to work some type of payment deal out with your lender, but you should realize that they still have a claim against your property should you ever sell it. When you sell a property that is used to secure a loan, the loan must first be paid off before you get to profit any proceeds. This is referred to as the equity in your home or auto.

Unsecured loans are the complete opposite. They are issued on your good name alone, and are typically only available to those with great credit histories and a positive current financial position. There are many advantages to being able to obtain this type of loan.

If the lender is confident you have the means and ability to repay an unsecured loan, they will be more likely to issue it. A lender may also look at an application for an unsecured loan and require you to provide security as a condition of issuance.

Unsecured loans are much like credit card debt, in that the lender has no legal recourse should you default. They can send you to a collection agency and ruin your credit rating, but can never take possession of anything you own as a condition of the loan.

However, rates tend to be lower for unsecured loans versus credit cards. In addition, secured loans will provide lower rates than unsecured loans due to reduced risk. It is always best to pursue an unsecured loan for unforeseen expenses due to this fact; obviously, a home or auto purchase will require a secured loan.

In order to protect your credit rating and maintain a positive debt management program, always apply for an unsecured loan before using a credit card for unexpected or planned for expenses. If you can’t get approved, you should probably just avoid the expense at all cost.

Self Employed Health Insurance-Things to Consider When Getting One

Getting a self employed health insurance is a very challenging task. The sole reason that you have to purchase it directly would need your careful consideration in terms of coverage. There are some important things to consider to be able to get the kind of insurance that would suit your needs.

Basically the first thing you need to do is to look for an affordable health insurance for self employed individuals. Although the risk of being turned down by health plan organizations is quite high especially if there is already a pre-existing medical condition, there are still health insurance companies who still provide services regardless of any medical history among the family members. All you need to do is to take a little extra effort in finding and confirming their insurance services. If there is a need for you to consult an insurance specialist then you may do so because this may lead you to save more money and effort knowing that you have a reliable source who can lay out all the information as concisely as what you need them. It would also be better that if you’re married, your spouse’s insurance should also cover you because then you may be able to save a large amount of money.

However, if you are single and self employed, one tip to get an affordable health insurance for the self employed is to check out the difference between availing it as a self employed health insurance basis or if it would actually be better and cheaper to purchase a health insurance at group rates. Again, this would need you to research and ask for information as to the availability of these types of insurances. Another way to save and benefit from your insurance is to have an assessment of what your medical condition is. There may be some restrictions to some health insurance for the self employed and if this happens then you may be paying for something that cannot cover for underlying conditions.

If you’re from California and you’re trying to get a self insurance for the self employed you can check for available options from a California self employed health insurance since they offer a variety of alternatives and different types of insurances according to your needs. Even if you already have a pre-existing medical condition, you may still be able to apply for a California self employed health insurance by availing a special program known as the California high risk pool or the Major Risk Medical Insurance Program. This program though only accepts people who have been denied already or if they have been offered with an excessive premium. The market offers a lot of options for consumers who would like to purchase an insurance plan at an affordable rate. There may also be a lot of companies who offer insurance for the self employed but one tip to look for affordable health insurance for the self employed is to ask directly to your state’s insurance department. This would save most of your effort, money and time.

Short Term Health Insurance: The Benefits

Short term health insurance, some people may be turned off by this kind of insurance given the limited coverage that it offers. This kind of insurance would usually cover about 30 days to a year of limited medical coverage. For insurance hunters who have long term in mind, then you could just throw this option out the window. But for people who are in unique situations, short term health insurance may be the perfect answer to their need for medical coverage for a certain period of time.

Different types of insurance were created to fit people’s different lifestyles and medical conditions. For people with pre-existing medical conditions, for people with families and dependents, for students, you name it, there is a specific insurance that are made to specifically meet their medical coverage needs. So read on and see if you are one of those people who are eligible for a short term health insurance and see if it will fit your situation best.

• For the temporarily unemployed
If you have just recently quit your job, then naturally, you will no longer be part of the medical insurance that your company offers. And if you do get a new job but your new medical insurance won’t work just until a few months or so, then a short term health insurance would be the best option to give you the adequate medical coverage during this gap.

• For teens who have just moved out of their parent’s houses
Spreading your wings and finally getting that independence that you have been waiting for is not an excuse to be lax when it comes to medical insurance. As you move out of your parent’s house, this means that you are also removing yourself from your parent’s health insurance coverage. This simply means, you are on your own. So if you want to have a temporary medical insurance to fall back on, just until you find yourself a job, then a short term health insurance would be perfect for you.

• For people who have not decided what kind of insurance plan to get, YET
Some people will take quite some time to choose what kind of insurance plan they want to purchase. After all, once you make a choice, it would mean a lifetime of being under the coverage of that plan so it would be just right for people to take their time in deciding. So for people who still want to have medical insurance for this time period, then getting a short term medical insurance would be the answer. Temporary medical insurance usually will cover up to 1 to 12 months of medical benefits and once you enroll, coverage could start as early as the next day.

• For students that are transferring to another school
Generally, it is standard procedure for universities to offer student health insurance. But if you are transferring from one school to another and still want to fill that gap with insurance coverage just until you get enrolled into your new school, the answer for this would be short term health insurance.

If you find yourself eligible for a short term health insurance and actually need it, don’t hesitate to go to your nearest insurance company to ask a quote for their short term medical insurance.

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