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Internet Helps Consumers Investigate Home Financing Options

23.05.12

El Centro, California (NAPSI) - Not only are more people stirring toward online banking (62 percent, according to an American Bankers Union survey), they’re also using the Internet to research such big decisions as selecting a home advance.

A survey of homeowners by Wells Fargo found that nearly half visited their monetary institution’s website to learn more about products and services.

A home loan is one of the most outstanding financial decisions most people will make and the difference in a few key variables can have a significant implication on your borrowing costs over the life of the loan.

Here are a few questions and answers you may want to take into account when researching your home financing options:

What type of loan do I need?

• There are two underlying categories of home loans. A mortgage loan can be used to purchase a home or to refinance an existing mortgage. A home equity credit or line of credit lets you access your home’s equity to fund such things as home improvements or large purchases, or consolidate remarkable debts.

What will the money be used for and how much could I borrow?

• Whether you’re buying your first home, fixing up an existing home, refinancing, looking for a home equity line of credit or distressing to identify ways to manage existing debt, researching how much you can borrow is an notable step. Credit experts, such as the National Foundation for Credit Counseling and others, suggest spending no more than 28 percent of your monthly pretax proceeds on housing payments, which include principal, interest, property taxes and insurance.

Should I get a determined- or adjustable-rate mortgage?

• Depending on your personal financial case, either choice could be an option for you. If you’re planning on staying in your home for a long time, a set-rate mortgage may be a good choice since it offers predictable monthly payments and guarantees that your interest fee will not increase over the life of the loan. However, if you’re planning to refinance or move within a few years, an adjustable-value mortgage (ARM) might be better. Typically, ARM loans have lower initial rates and then reconcile oneself to within a predetermined range, usually annually.

Learn More

For online calculators, outcome comparisons, checklists, guides and other information on the entire homeownership life rotation, visit www.wellsfargo.com/mortgage/home-loans .

Source: Imperial Valley News

Money moves for 2012

23.05.12

The New Year is a conditions to take a step back, reflect on the past year and consider what can be done to improve the future. In totalling to typical resolutions, the New Year brings with it the opportunity to do something to improve your financial well-being. The moneyed moves listed below outline strategies that may help you get started on the right approach in 2012.

•Know your break-even point.

One of the most useful ways to approach your personal finances is to act towards them as though they are not personal at all — manage your finances like a business. One important slues that all business owners are aware of is their break-even point.

When a business’s expenses alter ego its income, that’s the break-even point.

Do you know your break-even? Unfortunately most people are entirely unaware of exactly how much is coming in after taxes and how much is going out in the form of living expenses.

One of the most able tools for shedding light on your break-even point is your budget. While many people become stricken with dread and anxiety when they hear the word budget, the exercise can be painless when approached politely. Interactive online budgeting tools found at websites like Kiplinger.com or Bankrate.com can outfit a framework for listing income, expenses, and for determining your household profit or impoverishment. Becoming aware of exactly how much you are spending can be an eye-opening experience, but it lays the foundation for reducing supererogatory expenses that can be applied toward other financial goals.

•Build an emergency fund.

Realize reserves are the cornerstone of any sound financial plan as they help protect you from the ineluctable financial curve balls that life may throw at you. While many experts suggest three months’ usefulness of expenses in an accessible reserve, the continued economic uncertainty may mean that you need six to nine months’ benefit in order to provide a stronger safety net.

Many savers feel it is unrealistic to require to accumulate a savings of that size. It’s true that it could take some time to accomplish this reproach. However, keep in mind that consumers have no problem taking five years to pay off a loan for their latest auto toe-hold.

Approach your savings with the same discipline. Monthly cash reserve savings should be budgeted lawful like any other expense so that you can begin the New Year with a game plan to accumulate a genuine financial parachute.

•Consider refinancing.

Mortgage rates are near all-nonetheless lows and present a tremendous opportunity to those who can take advantage of them. According to Freddie Mac’s pre-eminent mortgage market survey, the rate on 30-year and 15-year mortgages are approaching 3.9 and 3.2 percent respectively. Refinancing a $200,000, 30-year secured-rate mortgage at 5.75 percent to current rates could save around $233 per month.

In addition to refinancing a primary mortgage, this may be an opportunity to consolidate other debts. Study transferring variable rate debt like home equity lines of credit or other credit card answerable for to a single fixed loan at one of the best rates in history.

For homeowner’s who owe more than their home is currently value but are current with their mortgage payments, the recently modified federal government’s Home Affordable Refinance Program, or HARP, could be an powerful option for taking advantage of lower interest rates. However, in order to qualify, the mortgage must be owned or guaranteed by either Fannie Mae or Freddie Mac.

•Dilate your retirement savings.

The recent collapse in the equity, housing, and job markets has pushed the end retirement date back for many investors. In fact, the Employee Benefit Research Society has stated that approximately two-thirds of American workers reported total savings and investments of less than $50,000.

There are a few things to bear in mind in order to improve your retirement plan. First, time is a saver’s greatest resource — the sooner you start off saving, the closer you may be to retiring. Next, consider gradually increasing your retirement contributions by a few part points throughout the year. Keep in mind that the IRS has increased the 401(k) limit for 2012 to $17,000, allowing additional savings.

In fine, take full advantage of employer-provided matching contributions. Simply put, a match is loosely money! If you are not saving up to the maximum matching level, you are leaving money on the register.

Implementing the tips above can help establish a solid financial game arrangement for the New Year. Consider taking action so that when 2012 eventually comes to an end, you can bring to light on the year and feel confident about your financial well-being.

This is for general information only. Please consult your mentor about your specific situation.

Kurt J. Rossi, MBA, is a CERTIFIED FINANCIAL PLANNER™ Practitioner & Wherewithal Advisor. He can be reached for questions at 732-280-7550 and kurt.rossi@Independentwm.com. LPL Pecuniary Member FINRA/SIPC.

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Source: The Times of Trenton - NJ.com