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August 28, 2013

Financing your First Car

Car financingIt will happen at a stoplight on your way to your first real job. The Plymouth Acclaim that you earned merely because you were the 16-year-old child of middle class suburbanites will not go, no matter how hard you hit the gas. The serpentine belt will blow, again, and it will seem silly to put more money into a car that is old enough to drink.

Still, what car seems affordable on an entry-level salary? Even the most economical of economy cars is likely too expensive to be paid for out-of-pocket. More often than not, securing an auto loan is a necessary step in purchasing your first car, and there are a few things that are helpful to know before you trust the offer made by your dealer.

New or Used?

Even before thinking about a loan, it is wise to decide whether you will purchase a new or used car, and from who? There are many pros and cons to both used and new cars, so it’s best to keep your budget in mind as you make your decision. Used cars, whether purchased as a “pre-owned” vehicle from a dealership or from your neighbor on Craigslist, will more often than not be significantly cheaper than a new version, and may not even be that, well, used. Notoriously, the value of a car depreciates as soon as it drives off the lot. If you buy a used car, make sure you have access to its entire history. Know who owned it before you. Know what accidents it has been involved in. That way, if you’re on the brink of having a used car horror story, you have the information to navigate your new-to-you car in another direction. On that note, never sign an As-Is statement. You are entitled to 30 days to find out whether the car is in working order.

As for new cars, they can be more expensive. And if few people are already driving that year or model, you can’t be absolutely sure that you haven’t landed yourself a lemon. Research is just as important with new cars as it is with used ones—you want to know the MSRP (Manufacturer Suggested Retail Price) and what deals other dealerships are offering on your chosen model. The Internet is a great place to research car prices, warranties, and safety features. Finance options for your new or used car can also be found online.

The Loan

Before you apply for a loan, it is wise to know your credit score first. There are many places that will give you access to your credit score for free online, such as Credit Karma. This will help you know what kind of interest rate for which you are eligible. Generally, the higher your credit score, the lower your rate. As you are young, it’s likely that your credit score will be low due to your brief credit history.

“The newer the car, the lower the rate” is also a piece of car finance advice that has been bandied about since the beginning of auto loans. While this may seem like a tick in the “pro” column for new vehicles, remember that the cost of the vehicle itself will likely be more than enough to make the savings in interest a moot point.

There are many ways for you to finance your car, and it’s smart to both diversify your application process and go to the dealer with a pre-approval already in place. Apply for loans at banks and credit unions, online financial institutions, and even the dealership (though these loans usually aren’t as competitive). Be honest on your applications, and take your time when considering all of your offers. Know the total cost of the loan. Pay attention to the loan term—a shorter term will involve higher monthly payments, but less interest. Don’t go for an offer that comes equipped with a laundry list of fees—you can be certain you won’t make up for the difference in savings on interest. No matter the case, do the math. Which offer works best with your current income? Which offer will allow you to save the most money in the long run?

If you go to the dealership pre-approved for a loan with a nice low rate, you will have the upper hand in negotiating what could be an even lower rate with you dealership.Be wary of the dealer offering you a lower price on the car with a higher interest rate. Remember, do the math. Rely on your own research. If you display clear confidence in your knowledge, it is less likely that the dealer financial manager will try to pull the wool over your eyes.

Driving Away in Your New…

While attempting to seduce you into their loan, the car dealership may offer you a number of “services” that also may not be in your best interest. Any “extended warranty” is more than likely not worth the extra cost—most warranties are extensive enough to cover any damages, and at the point the extension kicks in you will have spent more than you would out-of-pocket for repairs. Many dealerships offer expensive security systems that you could easily install yourself for less. Be careful about deciding to purchase life or disability insurance from your dealership. Like with loans, you may be better off getting a better deal elsewhere, if you need these types of insurance at all.

Of course, remember to have fun as you shop, and to buy a car that you can see yourself driving. A car may ultimately be a practical tool for transportation, but the right car can also provide a pleasurable experience.

Levi Hyatt is a part time blogger and a full time wannabe stunt driver. He’s carried his passion for cars over to writing about car financing. When he’s not going full throttle, Levi enjoys playing guitar for his cats George, Ringo and Paul.

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August 27, 2013

5 Tips for Saving a Home Loan Deposit – Fast!

for home loansSaving your home loan deposit can seem like a difficult task, especially if you are a first home buyer. Luckily, there are a range of things you can do that will help to make it happen sooner than you might think. Here are 5 top tips for saving a home loan deposit efficiently and effectively.

Cut Your Unnecessary Spending

The first step to boosting your savings is to immediately start cutting down on your unnecessary spending. If you want to get a home loan deposit together as fast as possible, it’s worthwhile scaling back what you spend on other things. Every little bit counts, and it can be as small as bringing your own coffee to work, eating at home instead of dinner out, and cutting out impulse spending on luxury items.

Analyse Your Budget

Now that you’ve made a start, it’s time to take a good look at your budget. Analysing your income and expenses will help you to ascertain where your money is going, and how it can be optimised to create a more effective savings plan. Ensure that your budget is clear and comprehensive, and use it to help you maximise your income.

Dedicated Savings

To get the best results, consider opening a new savings account specifically dedicated to your home loan deposit. Look for something that is high interest with low fees to ensure that your savings continue to grow. Divert a set amount of your weekly wage directly into this account, and be sure to add extra contributions whenever you can afford it.

Consider a Professional’s Input

If you feel like you have tried all of the above and still haven’t seen a great boost to your savings, it might be time to call in some expert assistance. Talking to a financial professional can give you new ideas and strategies on the smartest ways to save, helping you to own your dream home sooner. You may even be able to get great advice from a lender, particularly those with a history of helping people to achieve their financial goals. Agencies such as Fox Symes are famous for their quality debt solutions, and have also become specialised in offering great value home loans. By choosing a lender like this, you are truly getting the best of both worlds, and will have all the help you need to effectively save your deposit, fast!

Stick to It!

Now that you have a great savings plan in place and your finances are working efficiently, it’s essential that you focus on the long term. It’s easy to feel discouraged if you get caught up in day to day expenses, and the trick to success is to have a positive attitude and always remember your end goal. Never forget that all of your hard work now is allowing you to achieve the incredible goal of owning your dream home in the future.

With these top tips, you will be able to start a quality savings strategy to help you buy your own home sooner than you might think. Time is of the essence, and when you’re looking at saving a home loan deposit fast, every day counts. Get started today and enjoy the reward of seeing your savings grow!

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August 17, 2013

Using a Refinance to Reduce Debt

Reduce debt to get financial freedomRefinancing is a great option that homeowners have especially when mortgage rates are lower than what they already have in place. Can refinancing a mortgage eliminate debt? The reality is that refinancing a mortgage cannot eliminate debt, although using a refinance to reduce debt can be a very successful financial strategy.

When refinancing, the homeowner is basically turning in the existing mortgage for a new loan. The new loan can have a different rate, a different term and a completely different program. Normally, borrowers will try to obtain a lower mortgage rate and/or a lower term, if possible. In most cases, the standard fixed rate mortgage is chosen even when refinancing from an adjustable rate mortgage. Fixed rate mortgages offers borrowers security by knowing that the same mortgage payment will be in place for the entire term of the loan.

Debt consolidation is often done when refinancing. By doing so, the borrower is combining the balances of other debt, such as credit cards, loans, etc., and adding it to the mortgage balance. While this increases the funds needed for the mortgage, the other debt is paid off at closing. The debt is not eliminated, it is simply moved to another debt vehicle which is the new mortgage.

Moving other debt to a new mortgage can only be done if the borrower has enough equity in the home. The homeowner must also qualify for the refinance according to the lenders guidelines. This type of loan is considered a cash-out refinance and will generally have a higher mortgage rate than a no cash out loan. The new mortgage will include the funds that are necessary to pay off the other debt. The debt amount is then part of the new mortgage and is paid as part of the the monthly mortgage payment for the full term of the loan.

By utilizing a debt consolidation refinance, many homeowners are able to free themselves of the burden of carrying an overabundance of debt that must be paid on a monthly basis. This debt usually carries a higher interest rate which can make multiple monthly payments uncomfortable. Adding these expenses to a refinance often results in a more cost effective budget for a homeowner because the total debt payment is usually reduced. The end result to the homeowners is typically a better monthly cash flow.

In order to reap the benefits of a debt consolidation through refinance, homeowners must make it a goal not to incur additional debt. With less debt, a homeowner’s financial stability will can often remain intact which leads to added security in case a hardship should arise. The savings recognized from a mortgage refinance can be accumulated or used in lieu of credit cards. This is the beginning of the path to financial freedom for many homeowners. However, incurring additional debt expenses after the refinance can lead a homeowner to repeating the process with multiple debt consolidation loans which, in the end, will not be cost effective.

Everyone dreams of the day when there will not longer be a mortgage payment to make. While it may seem so far away, time does move quickly and, with careful planning, it will be a reality faster than you think. Planning a refinance with debt consolidation will also help a homeowner reach their goals of eliminating overwhelming payments on a monthly basis.

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August 16, 2013

The Importance of Comparing Equity Release Schemes

Equity release schemesHome owners are able to cash in on the value of their property through an equity release scheme. They can do this without actually having to sell their property and find a new home. Two schemes exist to make this possible:

  • Reversion schemes
  • Lifetime mortgages

When you decide to release the equity of your home, deciding which option to go for is but one of many decisions you will have to make. This is why comparing equity release schemes is so important. You should seek not just financial advice, but legal advice as well. When you take money out of the value of your home, this could have a serious financial consequence and you have to be prepared for that.

Equity Release

Equity is surplus value in your property. A home that is worth £200,000 with a £100,000 mortgage has £100,000 in equity. However, equity release schemes aren’t available for anybody, but usually only to older people (over 55 for a lifetime plan and over 60 for a revision plan), who are unlikely to have a regular income.

Most people choose a lifetime mortgage. Here, you essentially take a loan out on the property, which remains yours. The debt has to be repaid when you die or go into long term care, meaning no monthly payments are needed. However, the interest does accumulate, which means you will owe a lot more than you originally owned. So, a £45,000 loan could turn into £152,387 after 25 years.

The drawdown version is the most popular lifetime mortgage. This is for those who don’t need a huge lump sum straight away. Instead, they can dip into a pot of money as and when needed. No interest is paid on the money that is not released.

The other option is the revision scheme. Only very few people use this. Here, you sell your home or part of it to a company, but you retain the right to live in that home. When you die or go into a home and sell the property, you only receive money on the percentage of the home you still own, which is often nothing. You also generally have to pay rent to the company that has purchased your home or part of your home from you.

Do bear in mind that releasing equity in your home can be costly. Usually, you will have to make at least a £1,500 fee and your financial adviser and solicitor will have fees as well.

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August 14, 2013

The Better Way to Invest and Earn With Commercial Property

Commercial property earningIt is obvious that any person with adequate saving usually thinks about investing in something. However, if a person is going to put investment factor into proper consideration, will definitely wonder how to start and what type of investment of course to consider. If you are one of those people planning to invest and you do not know how, commercial property investment can be an ideal choice. To earn with commercial property is one of the best investment or thing one can consider to be part of in these days. Currently, there are so many commercial real estates that are overflowing with properties in many areas across the world.

There are always several ways one can use to invest and earn with commercial property. Some of them are as follows:

Before earning with commercial property investments, it is important to know that this type of investment needs a huge amount of money. Therefore, it is basically a huge investment than just a personal property investment. It is very essential for investors to ascertain that their investment is accurate and easy in order to earn adequate gains from it at the end.

In this case, an individual is required to posses full information about the location, maintenance cost, market trends, competition, existing lease just to name a few so as to make a highly lucrative investment. There are several other factors, which need to put into proper considerations in order to make commercial property investment premium form.

There are also various factors that are linked to commercial property investment. Investors must always consider all available market factors, the location of the property, its limitations, and several such means, in order to ascertain that they can possibly make a very lucrative commercial property investment. In short, any investor must ensure that all factors involved are adequately covered to hold an investment, which is actually lucrative.

Another important thing to know, as a real estate investor is that commercial property sector must always have an excellent value level. Investors must consider all property details and invest for their money carefully and wisely, in order to ascertain that they can be able realize more gains without any problem coming on their way. In addition, investors must also invest money in a commercial property sector, which can possibly deliver them with finest gains and very much rewarding. Lastly, on this point, investors should invest in a properly maintained commercial property.

To attract and meet a huge number of commercial property buyers, it is also an important and vital factor for anyone planning to earn with commercial property investments. In order to gain profits on commercial property business, potential buyers of the property are also a vital feature to look for in this sector as well. It is recommendable to invest in the commercial property sector which is can possibly meet all its future needs without forcing any future changes and that is promising as well.

Anyone planning to invest in real estate business in order to earn with commercial property, must also consider making an investment in the sector, which is termed as an appealing one. An attractive or appealing commercial property makes it possible for an investor to earn the amount of income as well as making sure that the maximum level of profits are gained with ease.

For the commercial property sector to meet its commercial requirements must also comprise features, which can provide them with some outstanding gains. These can be additional amenities such as pools, rest rooms and more of those amenities in order to offer commercial property sector with a more appreciation value.

If you are looking forward to earn with commercial property, these can be a few essential factors, which should be considered by you in order to make the finest commercial investment of real estate with much ease. You should always avoid all sorts of issues from happening while ensuring that you are capable of making an investment, which is exceedingly rewarding to you. If you do not have adequate knowledge in this industry, then it is important to look for a professional real estate agent to handle your issues in a professional way.

In conclusion, with commercial property investment, investors can possibly secure huge gains in this sector, if they follow these guidelines in a right manner. It is also important to be aware that purchasing decent commercial properties is a daunting task. Knowledge is really formidable in this field.

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