Fix up your yard with home equity

Beautify Your Backyard with Your Home’s Equity

It’s almost the fourth of July.  The hot dogs will be sizzling and the watermelon will be juicy.  But will your backyard be in shape so that your family and friends can enjoy them?  If you’ve been thinking about starting a remodeling project - be it landscaping, installing a deck, or fixing up the pool - but have hesitated because of the financial aspect, you should consider tapping into your home’s equity.

There are two ways you can do this: with a home equity loan or a home equity line of credit.  With a home equity loan, you will receive a one-time payout with the stability of a fixed interest rate and monthly payment.  With a home equity line of credit, on the other hand, there is a variable interest rate (sometimes with an option of a fixed rate as well), and you will have the flexibility to use your line of credit at anytime, which is ideal if you have ongoing financing needs.  The interest accrued on both of these home loans areusually tax-deductible.  Your situation and the type of your project will determine which of these loans is better for you. Read more

Home Equity Lines of Credit vs Credit Cards

Home Equity Lines of Credit vs. Credit Cards

While both sources of financing – home equity lines of credit and credit cards – are revolving, or open-ended, and therefore can be used for the same types of expenses, it is important to know the differences between them so you can use them as wisely as possible.

Similarities
The similarities between home equity lines of credit and credit cards include: Read more

Making a Large Down Payment

Making a Large Down Payment – Is it Right For You?

Getting ready to buy a home?  Applying for a mortgage? Trying to figure out how you will fund your down payment? You could use the money you so diligently saved with your Savings or Money Market Account to make a higher down payment.  But do you want to make a higher payment, or is it better to spend less money upfront?  Here we show you both sides of the question, whether a larger or smaller down payment is better.

Advantages
Not all mortgage loans require customers to make a 20% down payment.  Some loans require only 5%, while others require no down payment.  As appealing as these two options sound, you must keep in mind that if the lender saves you money in one place, you will most likely have to pay it somewhere else. In this case, in the form of higher interest rates and Private Mortgage Insurance (PMI).  Here are three advantages of making a large down payment: Read more

Will Consumer Spending Increase as Mortgage Rates Continue to Fall

Will Consumer Spending Increase as Mortgage Rates Continue to Fall?

The Federal Reserve continued to hold interest rates steady for the seventh straight consecutive time since June of 2006, remaining unchanged at 5.25%. The Fed’s decision means that the prime interest rate that commercial banks charge consumers for credit cards, home equity lines of credit, and other loans will remain steady as well.

While the Fed acknowledged that economic growth has slowed due to an increase in gas prices, a weaker dollar overseas, and a slump in the housing market, it remained bullish on economic expansion for the upcoming quarter. Even though the overall housing sector continued to suffer – primarily due to the sub-prime mortgage fallout – mortgage loan applications were up from the same time a year earlier, according to the Mortgage Bankers Association.

The national average interest rate on a 30-year fixed mortgage was lower from 6.76% a year ago compared to this week’s rate of 6.38% (Source: Informa Research Services). However, new home buyers are still finding it hard to qualify for a loan at today’s market prices. This gradual cooling of the housing market has resulted in a surplus of inventory and a decline in the number of new home sales, according to a recent report issued by the Lusk Center for Real Estate at USC. Read more

Time to Refinance Your Home Mortgage

When is the Right Time to Refinance Your Home Mortgage?

While fixed mortgage interest rates have been holding relatively steady for the past year –averaging 6.38% APR, slightly down .38% from a year ago – some homeowners with higher adjustable rates are finding that now is a good time to refinance their mortgages. According to the Mortgage Bankers Association, nearly $1.1 to $1.5 trillion in Adjustable Rate Mortgages will face rate increases this year, with borrowers expected to refinance as much as $700 billion of these adjustable mortgages.

The costs savings to refinance a mortgage loan can be a considerable amount. For example, a monthly payment (excluding taxes and insurance) on a $250,000 mortgage loan at 7.50% would be about $1,748. Reduce this rate to 6.5% and the monthly payment becomes $1,580, or a savings of $168. However, as attractive as this savings might be, refinancing may not be the best option for everyone. Some homeowners with adjustable rate mortgages who would like to refinance into a new loan with lower interest rates are finding it harder to qualify. Read more

How to Pick the Right Real Estate Agent

How to Pick the Right Real Estate Agent

Some of the most important decisions that you will make in your life are the ones associated with buying or selling a home.  If you are a buyer, then you have to find the right neighborhood, the right home, and the right mortgage.  If you are a seller, then you have to know the right time and decide on a price.  But the step that is often overlooked is finding the right real estate agent. 

A real estate agent can be extremely helpful to guide you through the home buying or selling experience.  They have the knowledge and experience that you might not have.  They take care of handling the paperwork so that you do not have to worry about it.  When you are buying, they can help by letting you know where schools, shopping centers, and hospitals are located, so you can find the home and the area that best fit your family’s needs.  When you are selling, they set up and oversee open houses, making your life a little easier.  Therefore, you should not underestimate the value of a good real estate agent. Read more

Should You Pre-Pay Your Mortgage

Should You Pre-Pay Your Mortgage?

As with most things in the financial world, the answer to this question is not a simple one. There is not one piece of advice that should be given to everyone. Instead, there are several factors that should be taken into consideration when deciding whether you should pre-pay your mortgage.

Why It’s a Good Idea
You can pay off your mortgage loan early by making extra payments throughout the year, or paying more than the minimum amount on each payment. The best reason for doing this is that it can greatly reduce the amount of interest you have to pay. Some economists estimate that by adding just $25 to each required payment on a $140,000 loan, you will save over $16,668 in interest costs (Source:www.goodadvicepress.com)! Another advantage is that you will have the loan paid off sooner, leaving you with one less source of debt and one less monthly payment to worry about. Also, the more of your mortgage that you pay off, the more equity you will have in your real estate, possibly opening up other opportunities that you might not have had otherwise – home improvement projects, for example.

When It Might Not Be the Best Option
There are certain situations where it might be prudent to use your extra money in places other than early mortgage payments. Mortgage loans, as compared to auto loans, home equity loans, and credit cards, usually have the lowest interest rates. Therefore, if you can only afford to make early payments on one of these at a time, it is best to pay off the loans with the highest interest rates first. So, before automatically using your extra money to make early payments on your mortgage, you should instead look first to get out of credit card debt, and then pay down your home equity loan, then your auto loan, and finally your mortgage. Read more

Is a Down Payment Holding You Back

Is a Down Payment Holding You Back?  It Shouldn’t.

Do you have your eye on that four bedroom house with a white picket fence and a bonus room?  You’ve compared mortgage rates and monthly payments, and the only thing holding you back from buying your dream home (real estate) is the large down payment required?  Well, here are a few strategies you should consider for saving up for that down payment.

Step 1 – Shop around for loans that require lower initial down payments. Not all loans require that customers have a 20% down payment.  Some loans require only 5%, while others don’t require a down payment at all. However, these loans usually charge a higher interest rate, or they require private mortgage insurance (PMI), which would increase the monthly payments. Make sure you do your homework by matching the best rates with the down payment requirement and monthly payments that work best for you. Read more

Shopping for a Home Equity Loan

Shopping for a Home Equity Loan

If you are planning a big project, and thinking about financing it by applying for a home equity loan, you need to take two preliminary steps.  You first need to decide which type of home equity loan is right for you.  After you have done this, you need to begin the actual application process by qualifying for that loan.  The following information and tips will help you make a well-informed decision and have a positive shopping and application experience.

Knowing what type of loan to apply for begins with picking the one that best suits your needs. With a variety of lenders competing for your business, choosing one because it has the lowest mortgage rate shouldn’t be your only consideration. The two types of home equity loans are a Home Equity Loan (HEL) and a Home Equity Line of Credit (HELOC).  Both are secured by the equity in your real estate, and the interest on both is usually tax-deductible. But they also have several differences. Deciding which one is better for you begins with answering some basic questions: Read more

Wedding Bills with Home Equity

Financing the Big Bill for the Big Day

June is again upon us, and with it comes the beginning of the wedding season.  The average amount of money spent on weddings has been increasing over the past several years, and CNNMoney.com reports that it has now reached $27,852. 

If you’re planning a wedding, then you know how easy it is to rack up a bill of this size.  But you can’t spend all your time worrying about the money; you also have other things to think about – the invitations, the menu, the flowers… and the list goes on and on.  So why don’t you go work out those details for your perfect wedding, and let us take some of the stress off by helping you with the money issues. Read more