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How to Save
Thousands On Your Next Loan
With the 2001 rate
cuts behind we are seeing a steady drop in rates to the 40 year low
of 6.10% 30 year fixed. Many now know that this can mean significant
savings in finance charges when buying a house, refinancing a home
loan or acquiring a new car. The question is how to take advantage
of the cuts.
We will go through the
steps of getting reducing finance costs by shopping for lower rates
for those with the following loan needs:
1. Homebuyers:
Finding your best mortgage loan
2. Home equity loan or line of credit, best options
3. Credit Card Holders, when to lower your rates be refinancing
Debt Consolidation Loans (credit card bills etc.)
5. Auto loans
All of the tips and
figures below come from Mortgage Loan Search's editors and research
staff and may include of consumer report data.
1. HomeBuyers:
Experts suggest locking in a fixed-rate loan at 7 percent or lower.
Looking at the
current pattern of rates drops almost each month since May
2002, Those seeking to lock in a fixed rate loan
are at a great advantage. The rates remains the same during the life
of the loan.
Smart Homebuying
Moves: Before requesting a lock in know what you can afford in a
home loan. Write up a budget and stick to it. When you're satified
with your figures try the Loanweb quick qoute form to begin locating
the best deal. Thirty-year rates averaged 6.96 percent in August
2001, Now 6.10%
If your seeking to
buy a home and plan to live in a house for only a couple of years
you might want to consider a short-term ARM now that rates on such
loans have fallen. Keep in mind that ARM's have a good chance of
rising from current levels.
One-year ARMs averaged 5.99 percent on August 15, 2001 according to
a national weekly Survey Compared To Well Under 5%
2. Home equity
loans: Home equity loan rates are affected by the prime rate. The
prime rate changes the day after the Federal Reserve cuts rates.
You'll notice rates begin to decline at that time.
Smart Home Equity
Moves: Experts suggested early in the year that equity loan
borrowers wait until the end of a rate cut streak to take full
advantage of the lower rates. Trends indicate that rates cuts may be
coming to a close.
Now that streak has
passed and drops are steady the next couple of weeks may be a great
time to lock in a low equity loan rate. If you can afford to borrow,
wait a couple of weeks for banks to adjust their rates to reflect
the latest Fed cut, then pounce! But remember, you'll find the
lowest rates on the shortest-term loans (say, three to five years).
Equity loan rates
averaged 8.95 percent 1n August 2001.
They are at 7.50% today.
Home equity lines
of credit: Line of credit customers are enjoying a significant low
in rate payments compared to last year. As the prime rate is cut so
the equity line of credit, which is tied to the prime rate. The rate
is not expected to get much lower then present.
After rate cuts
borrowers should allow time for the rates to adjust and reflect the
Fed's latest cut. That's the time to lock in low fixed-rate equity
loans.
Equity line of credit rates averaged 6.96 percent in August 2001. To
find the current
3. Credit cards:
Cardholders usually don't see the rate adjustment in their bills
until 2-3 months after a rate cut. The latest rate cuts showed
results in the Spring of 2002.
Other credit card
customers are more fortunate. Their variable cards are re-priced
monthly. These customers will see their rates drop very quickly by
the same amount the rates drop.
Still, with all the
rate cuts last year and significant drops this year, some card
customers have hit the minimum annual percentage rates allowed in
their cardholder agreements. The interest rates on their cards won't
drop any lower. Some variable rate cards come with minimum APRs or
floors and some do not. Be sure to check your cardholder agreement.
Wise cardholder
moves: Lowering your rate thereby lowering your future balances is
the best move to make now. You can transfer a balance to a low,
variable-rate credit card. The idea is to find a variable-rate card
that's lower than the rates on the card your currently holding. then
when the rates are cut again you'll see the adjustments in your
statements in good time.
4. Auto loans: Once
you hear that rates have been cut or allowed to drop, anticipate a
low in auto loans rates as well. Many Auto loan financers are
connected to banks whose rate levels are also linked to the prime
rate. These rates may or may not be competitive with auto
manufacturer financing.
Wise auto shopper
moves: When rates are drop dealers know that banks and credit unions
will be offering competitive rates to draw consumers in. Dealers
will likely offer equally or better financing and some attractive
incentives. Dealer financing should be considered when shopping for
a car. Competitive pricing and financing is often set to sell
following a rate drop.
How can you take
advantage of rates drops if you're still paying on a car loan.
Consider refinancing.
Rates on 48-month
new-car loans averaged 8.86 percent in August 2001. Rates on
three-year used-car loans averaged 9.95 percent. Current auto loan
rates:
New 48 Mo. 6.58%
Used 36 Mo. 7.14%
New 36 Mo. 6.27%
New 60 Mo. 6.62%
Bankruptcy Vs Debt
Consolidation
If you're overwhelmed
with large amounts of debt that you can't afford to pay, you've no
doubt considered bankruptcy. Before you take that step, you may want
to consider a debt management program. Let's take a look at the
difference between the two.
Bankruptcy.
There are many types of bankruptcy, but only two apply to individual
consumers, rather than large corporations. The different types are
referred to as "Chapters." They are both legal proceedings that
require legal representation. They are both governed by federal law
and are very complicated.
Chapter 7 bankruptcy,
often called "straight bankruptcy," is the most common type. During
this process, most of your debts are forgiven. This may seem easier
than repayment, but bankruptcy can have devastating effects on your
credit for up to 10 years. Once you have declared bankruptcy, you
are unable to declare again.
Chapter 13
bankruptcy, on the other hand, is a structured repayment plan where
your creditors receive some or all of the debt owed to them. You pay
a central party who distributes the money equally to your creditors.
The major drawbacks
of bankruptcy are that you can lose some of your assets and your
credit will be very negatively affected. However, if your income is
so low that you are simply unable to pay your debts, this can be a
process that will be of some relief. After debt is restructured or
forgiven, you will be able to afford your monthly expenses once
again.
Debt
Management. Debt management is
basically a payment plan. You are in no danger of loss of assets in
this case. A credit counselor will work with your creditors to help
lower interest rates and finance charges on your debt.
You will send one
check to your credit counseling service and they will forward
payments to your creditors. Debt management may be noted on your
credit report, but is not as devastating as bankruptcy.
Debt management is
far less complicated and does not require legal representation in
the way that bankruptcy does.
~~~~~~~~~
About the author:
Michael
Torrance is a financial consultant with First American Debt
Consolidation and Loans, a company specializing in
debt consolidation loan
alternatives through consumer credit counseling.
Cash Out
Refinancing
January 2003 saw the
lowest rates in decades not to mention a continued surge in
refinancing like no other decade. Current 30 year fixed rates remain
well below 6.00%. With 15 year fixed rates below 5%. Consumers are
seeing financial advantage that could save them thousands of dollars
over the life of the home loan. What should you do?
A year to year
comparison of average mortgage rates reveal the median rate for
interest charge savings is 7% or under. These factors indicate that
the long anticipated savings for home owners seeking refinancing has
arrived. The rates should remain low through the fall/winter months,
though fluctuating several basis points. This should prove ideal for
home bound shoppers seeking to find the best bargains and low
interest rates that will significantly reduce interest charges and
possibly save thousands of dollars over the life of the loan. Among
the more sought after loan programs at this time is what is called
Cash-Out Refinancing.
What is cash-out refinancing? Cash-out refinancing allows you to
refinance your mortgage for more than you owe and then pocket the
difference in the form of cash. This can be ideal for funding
college education, buying a car, investing or pursuing a business
venture. You use it as you need it.
How does it work? Here's an example: You currently owe $90,000 on
a home that's valued at $160,000. You are seeking to lower the
interest rate. You also want $20,000 in pocket-able cash. You
refinance the mortgage for $110,000. This leaves you with a lower
rate on the balance you owe on the house, and you pocket $20,000
cash to use as you wish.
To begin the process take advantage of low rate loan quotes from
various lenders competing in highly active online lending
marketplaces like LoanWeb.com. Fill out a quick quote form and take
your time comparing rates quoted from various lenders. In time
you're bound to get an offer you cannot refuse. Once a good offer is
made make sure to ask for a good faith estimate.
Compare Lowest Cash Out
Refinance Rates at
LoanWeb.com
For more information on what consumers in the financial industry are
doing go to
Mortgage Loan Search
Author: Mark Askew
Editor for the Mortgage Loan Search Network, the MLS Rate Watch
Program Newsletter and a host of e-business periodicals
-------------------------------
Editors
To refer to this article link to
http://www.bcpl.net/~ibcnet/cash-out-refinancing.html
For immediate release - July 2002
Article written by Mark Askew
President of Mortgage Loan Search at
http://www.mortgageloansearch.cc - A directory of lending networks
featuring tools and resources for low rate loan comparison for
equity, refinance and mortgage loans.
Surviving The
Economy
The recent
terrorist attack left Americans feeling very vulnerable to loss of
life and precious possessions. Many questions have been asked as to
whether the economy will fall apart or the great depression set in.
The most important thing to remember is DON'T PANIC.
Although the World Trade Center
played major roles in the distribution of goods and services
worldwide, other major financial institutions remain intact and
functioning. In addition the Federal Reserve has been poised for
just this kind of disaster and is putting billions of dollars back
into the economy. Banks will be granted funds to keep the flow of
business, goods and services moving. Oil prices have been locked to
prevent rising prices. The Feds are prepared to lower interest rates
again when needed. So there is reason for optimism of economic
recovery from Tuesdays grim reports. Still when disaster strikes
what can you do to protect your family and assets?
Hold a family meeting to review survival procedures and
communication protocols. Provide family with written phone numbers
and address of primary contacts and alternative care providers in
case of separation. Instruct them to keep I.D. on their person at
all times. Parents always ascertain where children and older
relatives are, where they are going, and when to expect them back.
When evacuating the home take head counts regularly. Establish a
place to meet if they cannot reach their home.
Disaster Recovery at Home
Turn off gas and unneeded utilities
Avoid sweeping powdered glass.
Cover glass with tarp, plywood or any other protective
material.
Take items off high shelf levels.
Bolt water heater to floor or low walls
Remove flammables from living area
Store clean drinking water as soon as possible
Velcro computers and televisions to tables and desk.
Tape drawers and cabinets closed
Keep plastic bags handy in case of evacuation
Keep absorbent materials handy in case of leaks
Evacuation Procedures
Assign each family member items to take in case of evacuation
Blankets, wash cloths, toiletries, clothes, water, food, flash
lights, portable radio and batteries, tools, medicine, vital
documents and files.
Designate a place to meet.
Vital Records and Documents
Move vital documents and files to a more secure storage space
- Check book and bank statements
- Insurance documents
- Wills
- Power of Attorney documents
- Tax documents
- Paid bill receipts
- Deeds of Trust
- Leases
- Certificates: birth, education, satisfaction, course study,
etc.
- Mortgage records
- Titles
- Medical records
- List of assets
- Certificates, licenses, permits
Financial Issues and Communications
When disaster strikes the most important
thing to remember is DON'T PANIC.
Most situations that appear grim can be
overcome with a little forethought and preparation.
It's always important to allow adequate
time for mailings to reach its destiny. Make advance payments where
possible. Use phone payment methods and electronic transfer of
payments. Pay bill online where possible. Remember to contact your
creditors immediately to set up payment arrangements.
When mail carrier transportation is
restricted let creditors know this as soon as possible.
Take advantage of grace periods where
possible.
For more information on what consumers in
the financial industry are doing go to
Mortgage Loan Search
Author: Mark Askew
Editor for the Mortgage Loan Search Network, the MLS Rate Watch
Program Newsletter and a host of e-business periodicals
-------------------------------
Editors
To refer to this article link to
http://www.bcpl.net/~ibcnet/article15.html
For immediate release - October 2001
Article written by Mark Askew
President of Mortgage Loan Search at
http://www.mortgageloansearch.net - A directory of lending networks
featuring tools and resources for low rate loan comparison for
equity, refinance and mortgage loans. |
