There are several principles to employ when managing accrued debt, and making plans to pay off debt. While these can be accomplished by filling out a plan on paper, some people prefer to use software to develop a plan to payoff debt legally. The benefits are that it is easily managed in your computer and it becomes much easier to view the overall picture, and ability to view the projected savings can be a good motivation to continue.
There are several factors to consider when developing your personal debt payoff plan. First, you need to honestly consider your current and potential earnings and your total monthly expense for your current debts. If you are behind on payments, or if your income doesn’t adequately cover your current obligations, it may be wiser to seek a debt consolidation loan. The goal of such a loan is to bundle high-interest debts together and lump them into a single loan of lower interest, thereby lowering the monthly payment so that it becomes more manageable. The danger is that the “extra money” each month is no longer going to reduce debts, and particularly if it creates the illusion of having more money to spend and lulls the consumer into acquiring more debt, the overall financial position becomes worse in the end. In the hands of responsible consumers and those who must reduce monthly payments in order to survive, it can be very beneficial.
If you are fortunate enough to have income sufficient to meet your current obligations, a better choice for overall financial health can be a debt stacking repayment plan. The benefits of debt stacking are that the overall amount spent on monthly payments does not increase, but the time needed to become debt free is reduced, along with a substantial savings in overall monies paid to debtors due to less interest being paid over those years you save.
The principle is to list all of your debts and the amounts being paid. Generally, you will list these in the order they will be paid off under your current monthly plan. It can be beneficial to adjust this to list debts with higher interest rates first, especially if they can be paid off within a reasonable amount of time. A caveat here … often credit card companies will require only a very small monthly payment relative to the overall debt owed, and usually charge the highest interest rates. These debts should be paid off as quickly as possible, so it is better to allocate more funds each month than the minimums required and most importantly, DO NOT further increase your debt by continuing to use those cards!
Any debt that can be paid off, particularly those with higher interest rates, should be concentrated on first (while of course making payments as required to all of the others). If any extra money is available, it is usually best applied this debt. If you use some money each month for investment or savings, it is usually a better return to apply this money to your debts instead, once you have a sufficient amount in your savings account to cover an emergency situation (usually about two months’ worth of expenses). The reason for this is that the interest you pay on your debts probably far exceeds the interest you receive on savings or the return on any investments.
Concentrate on paying off one debt at a time. As soon as that one is paid off, take all of the money you had been sending each month to that creditor, and add it to the payments you are sending to the second creditor, increasing the amount paid for the second debt. This will of course result in the second debt being paid off even sooner. When that one is repaid, take all of that money and add it to the amount being paid to the third creditor, and so on. By the time you reach your longest-term or lowest-interest bill (usually the home mortgage in both cases) you will be able to send considerably more than the regular monthly payment, and will pay down the principal much more quickly than with your regular payment schedule. Your mortgage (along with all of your other debts) should be paid off years sooner than it would otherwise be, saving you a substantial amount of interest.
You will then be debt-free, often in far less time than your mortgage was scheduled to run. The savings for each person will vary, of course, depending upon your personal debt profile, but for almost everyone the savings of both time and money will be significant. If it is possible for you to use a debt stacking plan, you can be debt free in much less time than with traditional repayment methods and save substantially on interest.
There are several ways to save money on auto loans. The first thing is to make sure your credit score is as good as possible, since you will probably be offered a rate that depends upon your creditworthiness. This is not a quick-fix though … it is something that takes time and must be monitored. If your credit rating is poor, it may be possible to receive a better offer if you have a co-signer with good credit.
Another helpful resource is a loan broker. By applying to a loan broker, you can easily get quotes from a number of lenders, which will make it easier to choose one that offers the best rates and options for the loan you need. Quite simply, it’s better to have the lenders competing with one another for your business.
You may also want to consider alternative methods of finance. In some cases, the equity in your home may prove to be a better financing option. If you can take out an additional homeowner’s loan instead of an auto loan at a better interest rate, you may save money. However, you do place your home as collateral on your automobile in this case, which if there is any question at ALL in repayment is a riskier option.
Dealer financing is often a poor option. Before you decide to accept their terms, no matter how good they may sound, check into the terms you can receive from an independent lender. And before you are swayed by the $500 rebate they offer along with their financing, or the offer of a period of time with no payments, be sure to add up the total payments in that case and compare the bottom line. You will usually find that the higher interest over time will end up costing you more than you save with the rebate, or that the free period costs more than if you made payments all along with a different lender.
You might even want to consider leasing a vehicle instead of buying one, if your credit is good enough and you can find a good lease offer. Payments are often less than those for buying a car outright. However, the flip side is that you don’t own anything in the car, and after the lease expires you own nothing.
Careful consumers will explore all their options, and factor in the downpayment, total payments over time, and any other factors that enter in to the deal in order to make a decision. While you are researching, find out how much your insurance payments will be as well, so that you get the whole picture of your financial obligations before you make a commitment. And with the price of gas these days, it is wise to also consider how one model compares with another regarding fuel costs, as this is becoming more and more of a factor as well.
There are different types of home insurance policies available, depending upon your particular needs. Most homeowners opt for coverage of the property, contents, and liability, at a minimum.
The first important part of homeowner’s coverage to consider is the structure itself. Structural insurance policies will pay to repair or rebuild your home if it is damaged by such things as fire, hurricane winds, lightning, hail, or other covered disaster. The coverages should be specifically listed in your policy. Flooding is not covered (and be careful, while hurricanes may be, usually only the part of damage determined to be caused by winds and rain will be covered and not any portion assigned to flooding), and usually such things as earthquakes are excluded as well.
Coverage for the structure will generally also cover detached structures, such as garages, storage buildings, and possibly fences. Check your policy and ask specific questions to make sure. These structures are usually limited to a percentage of your overall policy. Do make sure when purchasing structural insurance that the amount you purchase is enough to rebuild your home if necessary, and update your coverage to keep up with rising costs if needed.
Personal belongings are another category of coverage. If your furniture, appliances, clothing, sports equipment, or other belongings are stolen or damaged by fire, hurricane, or other covered disaster, your policy will pay you for them if you elect this type of coverage. Some policies cover replacement cost, but most are limited to an amortized value. Some policies will also cover your belongings anywhere in the world, so if you are traveling or moving, your coverage may still be in effect.
Certain items, especially expensive ones, such as jewelry, furs, pieces of art, and often collectibles and antiques must be covered separately, or they will only be insured up to a certain limit. You should check with your agent to be sure about these. Also, if you own your own business, items which are a part of your business may not be covered under your homeowner’s policy.
Most policies cover plants, trees, shrubs, etc. under this part of the policy if they are damaged by fire, collision, or are stolen. The policy will not pay in case of disease, wind, or water damage.
Liability is another portion of homeowners insurance that can offer important protection. If someone is injured on your property or by your pets, your coverage should take care of the medical bills. If you, your children, or your pets damage someone else’s property, your homeowner’s liability will usually cover this as well. However, the liability coverage will not pay for damages to your own property.
Another category of coverage is additional living expenses. This type of coverage will pay for your extra expenses if your home becomes unlivable due to a covered event. Generally this is to pay for such things as hotel bills and eating out. Sometimes this coverage is included in a homeowner’s policy, and sometimes it must be purchased separately. You can usually purchase extra coverage, and this may be wise if, for example, you are offered this coverage but only for a short time, and you might need some other accommodations while your house is being rebuilt in case of fire.
Coverage for additional living expenses may also reimburse you for part or all of the rent you would receive if you rent your home out, and it becomes unlivable due to a covered disaster.
Certain types of disasters are excluded from almost all homeowners policies, especially flooding. Generally, you must purchase a separate flood insurance policy in order to be protected against flood damage. The availability and cost of such coverage is determined by the rating of your home relative to flood zones.
One of the biggest way to impact your personal financial portfolio over your lifetime involves the decisions you make concerning your education. According to the US Department of Labor, graduating with even an Associates degree will increase your weekly earnings 25% over those with a high school diploma, and at the same time reduce your risk of unemployment by almost 1/3. Schools that offer internship programs, such as the Gibbs Norwalk location, further benefit the graduate immediately by increasing the likelihood of entering directly into the workforce in the field for which training was received.
The relationship your chosen school has with the community is one factor to be considered, especially if you plan to remain in the same area after graduation. Having a good reputation for producing capable graduates improves your prospects for employment after graduation, and the school’s career services can often help.
Even if you don’t plan to remain in the area, a school that offers internship opportunities give you a big advantage, even in fields where internship is not strictly required. Lack of work experience is the main factor that limits college graduates in their employment opportunities, as well as decreases the starting pay. Being able to point to work experience within the chosen field may set you ahead of other applicants, and might even garner you a higher starting salary, giving you a boost up in your earning potential that you might otherwise have to wait a couple of years to enjoy.
Another advantage of internships are the opportunity to discover whether or not you really are suited to work in a particular field and will enjoy your work. Participating in work internships early on in your college career will allow you to change majors before too many credits are wasted, if that turns out to be your decision.
Internships may be paid, in some cases, providing you with some additional income, but in many cases they are unpaid positions. College credit can often be received for work as an intern, however, so there are other monetary advantages besides compensation.
Overall, internship programs are something to consider in your college career.
The purchase of a new home is, for many people, their primary source of investment. Over the life of the mortgage, you will be putting a considerable amount of money into your purchase and, should circumstances change in your life, your home represents an asset that may be sold and can possibly return a handsome profit as well.
It only makes sense to consider ALL of the relevant information when purchasing a new home. This can be much more difficult, however, if you are moving across the country and are not familiar with the neighborhoods, schools, etc. associated with the home you are seeking to buy.
This is where websites offering information to potential home buyers can be a good start in researching the relevant factors. For example, if you are planning a move to the Chicago area, you can first visit Illinois homes to view a variety of locally helpful data. Illinois rates for a variety of loan types are compared, showing the weekly change, along with a comparison to the national rates. You can view the city popularity below and see that Chicago is indeed a major market, which is likely to impact favorably on resale values. Visiting the Chicago page will provide further details, along with a list of nearby cities you may also wish to check out in case you don’t want to buy a home right in Chicago.
Each state has similar information available. You can, for example, visit the Indiana MLS and view such information as statewide demographic details, or choose the city where you wish to see the same information. Even small towns are well represented. I checked Franklin, a town where I lived as a child. The population is now 1,264. You can view full demographic details with information such as ethnicity, family income, price of a home, education level, family size, age range, and even the average commute time. Housing-specific details include the percentage of owned homes vs. rented and the percentage of vacancies. Local hospitals, medical centers, schools, colleges, churches, and more details are provided. All of these factors influence the potential resale value of a home, as well as give a snapshot of the local market.
Another useful feature of such websites are the ability to view foreclosures and other specific real estate deals. While in the state of Indiana, since I am familiar with the cities there, I also checked out Indianapolis foreclosures. The important relevant information was provided in a list form for almost 6,000 foreclosures in that city alone. Each entry shows an aerial photo view of the home, address, foreclosure amount, number of bedrooms and bathrooms, square footage, usually the year built, the foreclosure company, the date the home was listed, and the auction date. More details are available from the listing page, but you do have to sign up to receive that information.
Much more useful information is included, from the mortgage calculator tools to more detailed relevant information. When I searched for my high school among the school listing, I was able to view the full county records and statistics, including expenditure per student, classroom ratios, graduation rates, how many students received free or reduced price lunches, the ethnic demographics, and more.
Use online resources to gather as much information about your planned move as you can, an you will be prepared to purchase a home in a neighborhood that will help you retain your home’s value and protect your investment, should you ever wish to sell it.
Reverse mortgages are a special type of mortgage that allows older homeowners to borrow against the equity in their home with no repayment required as long as they continue to live in the home.
Proceeds are generally tax-free, and don’t usually affect Social Security or Medicare benefits. The borrower keeps the title to the home, and does not have to make any monthly payments as long as they live in the home. The home cannot be foreclosed due to missed mortgage payments, since none are due.
In some cases you can use the money for whatever you want (depending upon the type of reverse mortgage you apply for), and in many cases there are no income restrictions. One caveat is that they are generally more expensive than other mortgages to originate, so if you plan to remain in your home for only a short time, a reverse mortgage may not be your best choice.
There are several types of reverse mortgages available. Proprietary reverse mortgages are one kind, offered by private lenders and generally with fewer restrictions. This type of reverse mortgage can be especially suitable if your home is more valuable and you would like more cash up-front than may be available from other types of reverse mortgages.
Some states are becoming more competitive, with a greater percentage of seniors coupled with many valuable homes, such as the market for California reverse mortgages. Competition among lenders often means better terms for consumers of mortgages.
In such an environment as this, a mortgage broker can assess your situation and present you with a number of offers from different lenders in order to secure the best terms for your particular situation. Particularly if you are in the market for a CA reverse mortgage, or any other location where competition is keen among lenders, be sure to contact a broker to consider the offers from their lender’s network, even if you are considering a different type of reverse mortgage.
The main option for low cost life insurance is a term policy. Term policies are intended to protect your family in the event of your death, and are purchased for a specified length of time only, after which time a new policy must be bought if you wish to continue coverage. They do not accrue a cash value as a whole life policy does, but do have much lower premiums.
Term life insurance policies provide the most benefit for families who would be financially devastated if the breadwinner dies anytime in the near future … say a family with young children who will need their parents’ income to support them for the next 10 years or so. Or in the case of a family with a debt that will be difficult to pay if someone dies where the term of the debt is about 10 years.
In these cases it is generally better to buy term insurance and then invest the difference between the cost of the term policy and what a more expensive whole life policy would have cost.
There are two types of mortgage suppliers a consumer may shop with when seeking a mortgage. One is a mortgage lender. The lender provides money to the borrower at closing, in exchange for the borrower’s promise to pay, and a lien on the property in case the loan is not repaid. Mortgage brokers, on the other hand, do not lend money. Instead, they work as an independent contractor and offer loans to the borrower from a number of different lenders. In general, the broker will solicit clients in the market for a mortgage and provide them with offers from different lenders and counsel them on the selection of a mortgage. They may also offer counseling to help the buyer qualify for a mortgage, will take the consumer’s application, and usually process the loan for the lender.
Consumers will usually receive better rates by dealing with a mortgage broker rather than a lender, because the broker will be able to offer the terms from a number of lenders, allowing the consumer to select the best deal available at that time. Also, they can specialize in helping consumers with particular needs, such as those with a poor credit history.
With internet access, this process has never been easier. For example, consumers can apply to get a loan with Centrro, a company with an online network of brokers and lenders, just by filling out a simple one-page form and submitting it, then waiting for several competing lenders to contact them.
This is similar to credit card comparison sites. In fact, some of the same loan networks carry different types of loans. You can also get a credit card with Centrro, and the company will soon be including personal loans in their service as well.
A number of factors influence the car insurance rates that a company will offer a consumer. The first and most obvious is driving history. Depending on where you live and how many and what kind of charges are against your driving record (and how long ago), your rates can increase by more than several hundred percent.
Almost all consumers also realize that some vehicles cost more to insure than others, depending upon how often that type of vehicle is stolen, the likelihood of injury while driving that particular model, and how likely you are to be involved in an accident if you drive a particular vehicle. Purchasing an SUV, since it is a common target for theives, will cause your rates to increase, for example.
Other factors influence your insurance rates, such as age, gender, marital status, and even credit history. The tricky part that you may not realize is that some companies use not just your simple credit score, but track other kinds of financial behavior (such as using alternative sources of financing) in order to justify raising your rates.
While you probably can’t even find out which companies penalize you for what behavior, the best way to keep your rates as low as possible is to compare the offers from various companies, so that if one particular company does penalize you for taking out a cash advance loan, for example, you can at least see the rates from another company that may not hold that against you.
So compare rates, and take every opportunity to educate yourself about the factors that influence your insurance rate in order to pay the lowest premium possible.
Speaking of blogs (as we did in our last post) we would also like to review another site that includes an informational blog along with their regular service. Mortgage Finders Network offers a variety of home refinance options, making it more likely that the consumer can find a mortgage that suits their particular needs. Along with this service, the helpful information provided in the blog can steer consumers in the right direction, whatever their current situation.
There are posts on a variety of topics suited to consumers in all areas of the housing market. Buyers may wish to know how to be able to purchase a home without making a down payment out of pocket, how to select the best mortgage and what all those terms mean anyway, how to avoid mortgage scams, how to decide how much house they can realistically afford, how to find the best house for their needs and how to negotiate the best deal on it. Outside links for buyers are listed with information on all aspects of purchasing a home.
Sellers will appreciate tips on selling their home, the seasons that affect sales and market prices, and information about having the home inspected for the buyer. There are links to outside resources for sellers as well that help with each phase of readying the property for sale and getting the best price for a home, and everything else along the way.
Homeowners who aren’t planning to sell can benefit from reading about securing a loan for home improvement, how to refinance their mortgage and save money in the process, refinances to avoid, and how to increase the value of their home (as well as mistakes to avoid that could potentially decrease its value).
And anyone can benefit by reading tips on how to start putting some of your money away in savings and the general money management tips offered within the blog posts.
If you are interested in refinancing though, that’s where the information is most helpful, since this is a mortgage finders service. Making the decision to refinance (or not) is covered with all of the details that may affect a particular consumer’s choice. Overall we have to say, there’s a lot of interesting reading here and it’s definitely worth a visit whether you are buying, selling, or considering a refinance or any other type of home loan.
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