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Open the Cash Vault Inside Your Home
Believe it or not, many people do not understand equity and the power it provides. In its purest form, equity is money. With regard to real estate (specifically, your house or other investment property), equity is measured in terms of the value of the property minus what you owe. So, if your home is valued at $100,000, and you owe $40,000 on it, you have $60,000 in equity (actual money that is available to you, under particular circumstances). Surprisingly, many people have this type of equity and do not take advantage of it. Some people are actually in dire financial straits and fail to realize their problems can be solved very easily, by taking the equity from their home. Remember, your home is a "vault," and the money inside that vault belongs to you. Best of all, you can use that money/ equity for anything you desire, from home improvement to travel expenses to spending money. Exactly what is a home equity line of credit or HELOC? A home equity line of credit, which lenders and mortgage brokers refer to as a HELOC, is a different kind of home loan. An equity line has different rates and terms from a conventional first mortgage. In a standard home loan, or mortgage, your monthly payments cover both the principal loan and the interest you are charged. Most mortgage payments include escrow, or taxes and insurance. An equity line of credit payment does not reduce your principal loan amount and does not include escrow. You are borrowing the equity in your house and paying the bank an interest premium on that loan. With a HELOC, you pay only the interest on the loan and, generally, you get the money for less time than you do a standard first mortgage. The underwriting on these loans is very simple, and in most cases, the loans are very easy to get. At close, you either get one big check, which you can deposit into your savings or checking account or you can get a check book and treat your equity line of credit as another checking account. The payment on equity lines is very enticing. Paying interest only makes for a very low payment. It's important to remember, though, when paying interest only, you are not paying down the principal loan balance. The Power of Interest-Only Payments So, let's suppose you take an equity line for $50,000 at 4.25% interest. This interest rate is based on the Prime rate, a floating rate that can change but does not fluctuate very often. When this article was first published, the prime rate was 4.25 percent. So, on your $50,000 equity line of credit, your payment is $177.00 each month. This is an incredibly low payment on a loan of this size. This gives you a great deal of power, because you can control a large sum of money for an extremely low monthly payment. It is this low, because you are only paying the interest on the loan. At the end of the first year, you will have paid the bank over $2,100. You will, however, still owe $50,000. This is because your monthly payment is an interest-only payment. This is where some people can get in trouble with home equity lines of credit. If you use all the equity in your home and never pay down the balance, then decide to sell your house, you won't make anything on the sale, because you'll owe it all to the bank. It is also important to understand the terms on a home equity line of credit (HELOC). When talking to mortgage professionals about home equity lines of credit, be sure you understand the terms, as lenders vary on what they'll offer. Like conventional mortgages, which have terms of 30 years, 15 years, 10 years, etc., home equity lines also have various terms, but not all lenders offer them. Don't let this confuse you. Just find your trustworthy mortgage broker, and tell him or her exactly what you want. Unlike mortgage payments, which include complicated yearly amortization of the principal loan amount, interest-only payments are calculated very easily. You can do it in two simple steps. To find out your payment, first learn what rate of interest you'll be charged. If you are using 80 percent or less of the equity available and you have an A credit rating, you'll be able to get the best rate available, which is the prime rate. Now, let's assume you have $40,000 in equity in your house, but you only need $20,000 (taking less than 100% of the equity is important). You take $20,000 and multiply it by 4.25%, which gives you 850. This is what you'll pay each year to borrow $20,000. Next, divide the 850 by 12 for a monthly, interest-only payment. Your payment for your $20,000 home equity line of credit is $70.83. This is a very powerful loan. Imagine paying less than 71 dollars for the ability to control $20,000. Some people pay more for cable TV or their monthly cell phone bill. Some people even take the equity in their home and invest it elsewhere. You're probably figuring out how much equity you have right now, and what you can do with that money! To learn how you can turn your equity into a never-ending money cycle that will fill your bank account year after year, read Winning the Mortgage Game. Whatever you decide, open the cash vault inside your home, and make use of your equity today. Mark Barnes is author of the wealth-building system, Winning the Mortgage Game and other investment real estate books. He is also a suspense novelist, and his new novel, The League, will thrill both suspense and sports fans. Learn about Mark's wealth-building system and get his free home loan course at www.winningthemortgagegame.com">http://www.winningthemortgagegame.com. Learn more about The League and read an excerpt at www.sportsnovels.com">http://www.sportsnovels.com
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Guide to Debt Consolidation Loans Here is a useful guide to Debt Consolidation Loans. A Debt consolidation loan is a loan used to repay several other loans. Bad Credit Debt Consolidation Loan Nowadays, many people can get into a bad credit situation if they do not keep track of their income and expenditure. Many young executives suddenly find that they are being offered credit cards by various companies. What Is A Debt Consolidation Program? Debt consolidation programs are devised to get you out of debt in the quickest and most inexpensive manner possible. When you sign up with a debt consolidation manager they will work with your creditors to combine all your debt and lower your monthly payments. Getting Your Best Deal on a Consolidation Loan If you find yourself having to make too many payments a month, you might consider getting a consolidation loan.Used for a variety of purposes, a consolidation loan can take multiple loans (such as personal loans and auto loans) and combine them into a single payment, or it can provide money to pay off a variety of bills and debts and consolidate them into a lower monthly payment. Consolidate All Your Debt Into One Monthly Payment Are you feeling overburdened with debt? Are you paying out too much every month for your credit cards, store cards and loans? Then why not replace them all with one, lower, convenient repayment through a consolidation loan?Consolidation loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest.Secured on your UK home, low cost, low rate, cheap, low interest debt consolidation loans can sweep away the pile of repayments to your credit and store cards, HP, loans and replace them with one, low cost, monthly payment - one calculated to be well within your means. Debt Consolidation: How it Works As long as consumerism flourishes most of us will be tempted to overspend thus creating a financial bind. While some people do manage to get themselves out of debt others, for a number of reasons, including job loss, divorce or hospitalization cannot. How To Get Rid Of Debt Problems Step 4 -- How To Get Interest On Your Debts Frozen The first thing to understand is that there is categorically no guaranteed way to get interest frozen.Each of your creditors has the right to refuse any change in the details you initially agreed. Debt Consolidation - Consolidate Your Student Loans Now! The Federal student loan program has benefited thousands of college students in the forty years since it was introduced. Interest rates for the program have historically been quite competitive, and the program has allowed many people to acquire a college education who otherwise might not have been able to afford one. Open the Cash Vault Inside Your Home Believe it or not, many people do not understand equity and the power it provides.In its purest form, equity is money. Debt Consolidation: Reduce Your Monthly Debt Payments Now Debt consolidation is frequently becoming a very familiar term used in these consumer frenzy-spending times when everything that is available to purchase is often presented with the availability of a hire purchase agreement.While the goods that we want are made more easily available for us to purchase this way, we should also be aware of the financial situation that this can place us in if taken to an extreme degree. How Do I Know a Good Credit Card Debt Reduction Strategy When I See It? Credit card debt reduction is an important part of the debt reduction process. The way credit card debt reduction works is if you have five credit cards, you need to keep track of and pay 5 bills every month. Consolidate Debt to Help Get You Out of the Quagmire Will you agree with me if I tell you that, the key to financial success is to live within your means? This is an old belief that modern day income earners have completely forgotten. This is because it is now extremely easy to get into financial trouble. Avoid Bankruptcy The first but definitely not the easiest thought that comes to most people when they are neck-deep in debt is to file bankruptcy. Filing bankruptcy seems to be the last straw left in the deluge of unpaid bills and abusive creditor calls. Debt Consolidation Sometimes life can get on top of you and out of control. When this happens many of us indulge in a little retail therapy but when a little becomes a lot then you can hit problems. Getting a Better Consolidation Loan Secured If you're looking for the best way to reduce the number of payments you have to make each month, you might want to consider a consolidation loan secured.By getting a consolidation loan secured, you can combine other loans, bills, or debts into a single monthly payment while getting a low interest rate by securing the loan with some form of collateral such as an automobile or real estate holding. Credit Counseling - Six Tips to Avoid Counseling Scams Credit counseling is a useful service for anyone with problem debt. A good counseling agency can provide advice regarding money management and debt consolidation. Debt Consolidation - Just Lump It All Together! In a world where people use credit as much as they drink water, it is no surprise that so many people need debt consolidation loans. Debt consolidation loans sound like a good way of getting your debt cleaned up, but are they? If you need help getting out of debt, consider all your options before choosing. Debt Consolidation: A Way Out? When you are living paycheck to paycheck and it seems everyone is getting a piece of the pie except for you, debt consolidation may help you free up a little bit of cash each month. Debt consolidation is usually a great option if you are paying several minimum payments per month on high interest credit cards or loans. Credit Counseling - Congress Offers No Details in New Law The recently passed Bankruptcy Abuse and Consumer Protection Act was hailed as a breakthrough in bankruptcy law. Passed with bipartisan support in Congress and signed enthusiastically by President Bush, the law creates sweeping changes in debt law and will make it much more difficult for debtors to have their obligations swept away by the courts. 7 Ways to Consolidate Your Debt If you are in debt, you have several options available to you in your quest to consolidate your balances and thereby reducing your monthly payments or paying off your loan faster. Let's look at 7 of the most popular and effective ways for you to consolidate your debt.
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