Common sense loan payment strategies...
Debt Consolidation Loans: Consolidating your loans into a single more manageable
loan payment can get you out from under a financially strained financial disposition.
However, don't make the mistake of taking on more debt just because your payment load is
lighter. So many people fall into that trap. You can only consolidate a few times before
you find yourself up against the wall where the only way out is bankruptcy.
Going bankrupt is not a pretty situation even if lawyers are making it look like an attractive alternative. Just ask anyone who has already found themselves in that situation. Bankruptcy lawyers make it look like a welcomed alternative, but you pay the price in other ways not to mention their large fees to help get you out.
Most people can apply for debt consolidation loans when there is a need to consolidate more than 2 existing credit bills. There are no special pre-requisites such as you must own a house or have a set amount of debt to qualify.
Know the Interest Rate: Be sure what your interest rate is for your favorite credit card. Sometimes people mistakenly see the monthly APR on the card and confuse it with the yearly APR.
Mortgage Payments: If your monthly mortgage bill comes to $1,027/month, consider putting in $1,100 each month. That extra put toward the monthly payment can cut years off of your loan and save thousands in extra interest charges. That extra bit also goes toward the principle amount of the loan which further adds value to your home and your investment.
Cancel Mortgage Insurance: Most who put down
less than 20% of the total value of the home are made to purchase mortgage insurance.
However, the bank does not tell you when you can drop mortgage insurance which can add
another $30 to $60 or more to your monthly payment. Once you own 20% of your home, you may
Even if you've only paid in a total of $12,000 on your $100,000 home (totals of all principle payments, and down payments), you may still be able to cancel the insurance because property values raise. That home may now be worth $112,000 or more if you've had the home for 5-7 years. By subtracting $12,000 from $100,000, we arrive at $88,000 which means you would only own 12% of the total closing value from the point of closing.
However, adding in the appreciation value, we now find that you own about 22% of the home which means you can cancel your mortgage insurance. You can put the amount you pay for insurance to your principle portion of your mortgage saving you more money and building your home investment
The percentage of home ownership is figured by dividing the principle amount still owed on the home loan by the appraisal value, then multiplying that value by 100, then subtract that value from 100 which will tell you what percentage of the home you own. With the above figures it would be set
up like this:
$88,000 ÷ $112,000 = 0.786
(rounded to nearest 1,000th)
0.786 × 100 = 78.6
(or 78.6% of the home value owed)
100 - 78.6 = 21.4
(or 21.4% of your part of the ownership)
Since the amount you would own is more than 20%, you can now eliminate that extra mortgage payment charge and put more towards your housing investment.
|Credit Card Sense|
Having the VISA or MasterCard is one of those conveniences that many of us appreciate. Sadly charge cards are one of the leading causes of people drowning in debt. People tend to look at them as spendable money that is not theirs making it easy to run up large bills.
People will do well to adjust their attitude toward their VISA, MasterCard, and Discover cards and treat them as if it were their own money. If you can't afford to pay for the item with your own money, you may want to consider forgoing the purchase. Of course there are life's little emergencies and those at times cannot be ignored.
Avoid signing up for too many charge cards as the temptation may be higher to spend more than you have. Cards usually have higher interest rates than most loans or other financing. That ultimately costs you much more money if you keep high balances on them. You end up working harder to get less for your earned wage when you have to pay off all that interest.
You will feel better and be happier if you use them responsiblyAll
the while you'll be building a great credit rating too.