Debt Control - Mortgage Refinancing
Mortgage Refinancing loans are getting more and more popular because of its attractive lower interest rates. There are 3 primary reasons people refinancing their mortgage loan :
- To take advantage of lower interest rate
- To convert some of the equity in their homes into cash.
- Convert from an adjustable-rate mortgage(ARM) to a fixed-rate mortgage
Although refinancing your mortgage sometimes is a good idea but in certain condition, it is also not advised. Each situation is different, so you’ll have to calculate for yourself whether it is worthwhile to refinance.
Refinancing your mortgage means trading in one mortgage for another. The refinancing option can be a good idea if:
- The interest rate on your mortgage is higher than current prevailing rates
- Your mortgage carries an adjustable interest rate that has been trending up
- Your new mortgage loan is 80 percent or less than the value of your home. In this way, you don’t have to pay for PMI (Private Mortgage insurance)
You must be careful if you intend to refinance your mortgage to pay off other debt. You could ruin your life if you aren’t careful. You only can refinance your mortgage to repay other debt only if you’ve made the commitment to top borrowing and remain debt-free. If you can’t resist the temptation to into debt again, then you better don’t take the risk.
Debt Control - 10 steps to debt freedom
Today, I found a good article called “10 Steps to debt freedom†where Marry Rowland shared her personal tips to help us. Don’t you think sometimes it is good to read back the old articles?
“10 steps to debt freedom
- Figure out how much you owe. Gather all your credit card statements and make a list that includes the interest rates, total amounts you owe and minimum monthly payments. List the cards by the interest rates they charge with the highest rate first and so on. “A lot of people have lost track of what they owe,” says Gerri Detweiler, author of “The Ultimate Credit Handbook.”
- Keep the two cards with the lowest rates. Cut up the others. Write to the card issuers and close the accounts. (One caveat: Check the terms of use before you cancel. Some credit issuers charge higher interest rates on the remaining balance due to people who close their accounts. If this is the case on one of your cards, pay it off and then cancel.)
- If you don’t have a card with an interest rate of less than 14%, get one.
- Resolve that you will use your cards only for essentials over the next six months. For other purchases, use cash or a debit card.
- Add up your minimum monthly payments. Credit cards often require very low minimums. Follow them and you will be paying forever. For instance, if you owe $1,000 on a card with a 17% interest rate, experts say it might take you 12 years and cost you $979 (in addition to the principal) to pay it off if you make only the minimum payments.
- Calculate how much you can pay over the minimum. Really stretch your budget. For instance, let’s suppose the minimum payments on your credit cards total $350 a month. What could you pay if you really stretched? How about $750? No pain, no gain.
- Apply all of your additional repayments to the card with the highest rate. If two cards have the same rate, put the additional money on the card with the largest balance.
- Consolidate your debt. Many credit card issuers offer introductory rates as low as 3.9% for six months. If you’re really serious about getting out of debt in a hurry, transfer your largest, high-rate balances to a card with an extremely low rate and pay them down aggressively.
- Pay the minimum on your lowest rate cards until you’ve paid off the balance on the more expensive cards.
- Consider using your savings to get out of debt. Sure it sounds harsh. But if you put together a balance sheet, your debt would cancel out your savings anyway. If they’re in the bank, you’re probably earning just over 3.2% to carry debt at 18% or more.â€Â
Source : MSN Money
Financial Freedom - Golden Rules of being Rich and Wealthy
Do you believe or not :
Your income only can hit to the level that you believe.ÂÂ
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