Refinance consideration needs a specific and clear plan in mind. Until we clearly know about our goals, things become difficult to judge. So first job is to identify and judge them properly and then evaluate the best way to achieve it. While taking final decision be sure that there isn't any other option open for you.
So, once it is decided some possibilities should be considered. Below are are some of them:-
i) Home equity loan is a very good alternative, so here we need to understand whether this can take care of the purpose.
ii) Talk to your current lenders and find out whether they agree to renegotiate on the previous terms of your loan to keep the business, if so then you save time and save yourself from getting harassed from finding a better deal as well save closing cost money.
iii) If you wish to decrease the length of your loan, then think and check out whether you can make extra payment each year or not.
As a professional finance executive, I hereby want to give my readers some advantages and disadvantages of my explanation:
Advantages:
i) Rate of interest gets reduced than the current one which in turn reduces the amount of monthly payment.
ii) You can avail full opportunity to either extend or reduce the length of loan.
iii) Gives permission to switch over to a different type of mortgage, for example form adjustable rate mortgage to a fixed rate mortgage.
Disadvantages:
i) Closing cost might need to be paid which sometimes can be substantial.
ii) Extension of a loan can also result in ending up paying more in interest than usual.
iii) Sometimes the new mortgage become larger than the one it replaces.
I hope my readers will follow all the above points and think twice before refinancing.
Do we know what Credit score actually means?
It is basically a numerical and statistical analysis done on a person’s credit report to value the creditworthiness of that person.
Fair Isaac Corporation (FICO) was the first company to develop software from which the most credit bureau scores are used in US today. These scores are provided to the lenders by the credit reporting agencies as data which gets used to provide the best guide for future risk. It normally says that the higher the credit score, the lower the risk, but at the end the lenders take the total decision as they use their own strategies and consider different levels of risk and factors to determine the actual rate of interest for a particular product.
Below is a diagrammatic explanation given on FICO break outs and ratings for Credit Score. This is a famous model used to decide creditworthiness of a person.
Coming up next some depending factors for Credit Score Rating:-
1) Payment history – about 35% of a FICO score – Avoid late payment and bankruptcies as its most important factor to keep a good record.
2) Outstanding debt– about 30% of a FICO score – It depends on how much you owe on all your accounts. The more you owe compared to your credit limit, the lower your score will be.
3) Length of your credit history – about 15% of a FICO score – It is the period of time one continue with credit. The longer had established credit, the better it is for your overall credit score.
4) New credit – about 10% of a FICO score – Opening new credit accounts will definitely rate negative score for short time.
5) Other factors – about 10% of a FICO score – Having a mix of credit types on your score report can add on positive points slightly.
So by now I am sure you have had enough idea on what credit score is, how it works and its depending factors. Not necessarily that the score which is given to you depending upon all above factors are always correct. So if you see errors in your credit score report, immediately use these helpline numbers to report it to the credit bureau.
The three major bureaus in U.S.
Equifax (1-800-685-1111),
Trans Union (1-800-916-8800) and
Experian (1-888-397-3742) .
All have procedures for correcting information promptly.
People know very little or nothing about where their financial condition is taking them to the extent of recovering from huge debt. That is the reason I am writing this post to give very necessary advise to my readers which I am sure will help everybody to calm down their nerves. Investing strategies, proper planning, saving money is becoming really tough job for people, hence at this condition a proper financial advisor is very much in need and I guarantee that this post would be worth reading. Christopher Mizzi (a Certified Financial Manager) said “be greedy when everybody is panicking, and panic when everybody's greedy” so till the time i continue extending my help giving financial advises, “you can be at peace”.
So, here I present my words of “Wisdom” and “Comments” to all of you:
1) Identify the difference between your needs and wants – We often fail to understand the difference between them which always create confusion in deciding our own priorities. So take time and select the most required and necessary one and be a smart chooser.
2) Try to earn more if you need more – This is a fact which we all try to skip from, but trust me the earlier you believe it, the earlier it does good to you and before you realize, your bank has enough balance and you have a smart wallet.
3) Always save little no matter how much you earn – Saving money seems to be a hard job, without understanding that it is the most important part of finance and once you get the taste of it, you will definitely manage it somehow and start living on what is left over after saving.
4) Put your money to work – Saving money is not enough; saving it in place where it can provide proper interest as well security is what we should look for. Thus making our money work hard as we are doing to earn it.
5) Plan a good future after retirement– Always remember whatever we do today has an after effect on our future. So work hard and save hard for a relaxing and happy retirement life giving a good thought to your future.
6) Be prepared for that rainy day – we should all be prepared to face the most outrageous day of our life. Here I mean to say that we all should make our finance position strong enough to support and reimburse in our hard days.
7) Reduce being Frugal and Stingy – Be very selective in purchasing products to reduce the chances of waste as it also saves a huge amount of your pocket money. At the end of the day money is there to do good things, hence take the advantage of smooth consumption.
8) Avoid Borrowing – Borrowing gives a feeling of instant relief, the reason why we get attracted towards it but trust me it is like wetting your bed in middle of night which initially gives you a sure relief but then starts stinking and horrible cold feeling last of all do not allow you to sleep at all, so discomfort is something not wanted by anybody.
9) Be slow but steady – Saving is something that is necessary to do but don’t be in a haste to do it. Be slow in saving but be steady in doing it, do not skip days in between once you decide and start saving.
10) Always diversify your investment – It is always important to keep in mind that everything has potential downside and upside. So keeping this in mind diversifies your investment and don’t put all the eggs into one bucket.
Listed above are some of the financial advises which I am sure going to do wonders in your life and make a big differences. So what are you waiting for, hurry up and give it a try today.
Good luck!!!!!!
One of the reasons why I thought it might be a good idea to start something like this was that upon speaking with my friends in different profession and my colleagues, I found that these people had very little knowledge in finance. By finance, I mean knowing how to save money as well where money can be saved, moreover some or the other way protecting your personal finances in the way you don't face any problem in future. Before I got seriously interested in learning more about money and finance I realized how much money I've actually wasted in my entire life.
This has personally motivated me to come up with my own financial blog. After i joined the finance company in Texas, I made sure that i will learn more about saving the finances and i will definitely share my knowledge with the people who are in need of some help regarding their finances. So, here i am presenting everybody my financial advices to all of them who are in seek of it.
