Category Archives: Finance

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Primary Elements of an Adjustable Rate Mortgage

Man showing the house keyDuring your home buying journey, you will come across several types of home loans. Most people base their choice of a mortgage on what has worked for their friends and families in the past.

Mortgages are highly personalized loans and what works for one person might not work for another irrespective of the similarity in your finances and lifestyles. The two primary home loan categories available are adjustable or variable and fixed-rate mortgages.

The mortgage rates advanced by Guildford’s many lenders for an adjustable rate mortgage (ARM) alter over a loan’s lifetime depending on market conditions. There is a fixed rate period initially which can be one, three or five years after which the rate changes.

The initial rate your lender will charge is generally lower than that advanced for a fixed rate mortgage, and most people base their choice of an ARM on this. You should however asses all the elements of an ARM in totality to make a clear decision on whether or not this option will work for you.

The following are the primary elements of an ARM which should influence your choice.

Index

ARMs are tied to a particular index. This index will determine the behavior of your loan’s interest rate after the initial fixed rate period has expired. There are three indices generally used for ARMs including London Inter Bank Offering Rate (LIBOR), the prime rate, and the one-year Treasury rate.

The LIBOR is the most commonly used index since it allows the selling of mortgages on an international market. The prime rate index is generally used for HELOCs which allow you to draw on your home’s equity after some time.

Margin

Person giving bundles of cashYour lender will add particular percentage points to your loan’s index to determine your margin. This is the lender’s cost of business operations and their profits.

This margin is determined by a lender but generally range from 2–3.5% and is defined in your loan’s terms. It remains constant throughout your mortgage’s lifetime.

Cap or Limit

A cap is placed on how high an interest your lender can charge on your loan. This is an industry regulation to minimize the risk of a lender abusing an ARM by charging exorbitant rates.

The lifetime ARM cap, for instance, can be specified in your terms as a percentage of your overall indexed rate or as a stated number. Either way, you can plan your repayments around the cap rate since this is the highest interest rate which your lender can charge over your loan’s term.

Frequency of Adjustment

Your rate can be adjusted annually, bi-annually or after every two, three, five or seven years in an ARM. In general, your fixed period rates will be lower if you opt for a short adjustment period and vice versa. This is because your lender is cushioned from long-term losses in low rates from the frequent rate adjustment.

Some people shun ARMs because of the misinformation in various circles. If however you pay attention to and pick the best terms for the elements mentioned here, an ARM repayment will be hassle-free.

You will also take advantage of low repayments over certain periods and benefit from the flexibility and zero prepayment penalty an ARM offers.

person signing insurance contract

Tips for Millennials to Get Value on Their Insurance

person signing insurance contractOf course, everyone will get to the age where renting or buying a house, purchasing insurance, taking care of kids, and taking out student loans will be necessary. These life events make it crucial for millennials to have a financial security net. One of the financial security nets for a millennial is having an insurance cover. Although millennials avoid purchasing insurance in Raleigh for various reasons, it is an investment that can pay off in the future. Buying an insurance cover isn’t as costly as many people think.

Of course, no one wants to imagine experiencing a break-in, getting involved in a car crash, or losing valuable property in an unexpected event or fire. As such, millennials might want to be prepared as some of these events are unavoidable. It is the time for millennials to invest in an insurance cover for protection against their dear lives and property. The following are smart tips for purchasing an insurance cover.

Work with an Independent Agent

First-time insurance buyers are recommended to work with independent agents. Unlike captive agents who sell only insurance covers for agencies they work for, independent agents work with different carriers to meet the needs of each of their clients. With an independent insurance agent, you can be sure to get the best coverage at an affordable price. You will also gain a lot from the knowledge of the agent, as he or she will walk you through the available options and explain what each policy covers.

Shop Smart

Of course, every client prioritizes adequate coverage when searching for an insurance cover. Although the price is critical, millennials will want to determine the type of policy they require first. After that, check whether the coverage fits into your budget before deciding which carrier will provide you with comprehensive coverage. Although millennials are often tempted to choose a plan with the lowest price tag, they are likely to enjoy less financial benefits when filing a claim.

Fill in the Gaps

Although an average insurance policy will cover the fundamentals, a millennial might need to extend their coverage to cater to their unique needs. You might need to spend more money on an insurance policy to cover items that are financially difficult to replace such as jewelry and electronics.

Look for Discounts

man showing insurance policyAfter evaluating your needs, fit them into your budget and look for ways to maximize your savings. Of course, everyone wants to work with an insurance agency that provides discounts on their insurance policy. Your carrier might offer discounts for getting good grades, staying auto-accident-free, and paying your premiums in full. Another way a millennial can save money is to bundle their policies such as buying an auto and home policy from the same insurance company.

When a millennial is looking for the best value on their policy, their search goes beyond just the cheapest cover out there. Although the price is a critical factor, there is a lot more in an insurance policy value. A valuable insurance policy should cover all your unique needs at an affordable price.

Of course, everyone wants to transact with a reputable insurance provider. However, it might take a little research and time for a millennial to find the best value in their auto or loan policy. Millennials might need to make themselves attractive to insurance providers to get the best in their insurance policies.

Franchise broker working

Franchise Brokers: An Important Aspect of Investing

Franchise broker working

At one point in a person’s life, one would dream of becoming their own boss and have their own business. However, not everyone grabs that opportunity when it comes by, while others slowly ease into entrepreneurial waters through secure means, like a franchise.

In fact, there are plenty of budding businesspeople who are interested in getting a franchise, and for good reason. Franchises comes with a tried-and-tested business model, as well as technical support. The rise of franchises’ popularity has led to the rise of franchise brokers, as well as people who’d like to become a franchise broker.

But, are such services really essential? Isn’t looking for a franchise as easy as browsing through a catalog or scrolling through product categories on an e-commerce site? Unfortunately, it is not. Read on and see how a franchise broker can help you channel your investment into lucrative ventures and form wise and practical decisions, especially if this is your first time investing.

They Act as Lead Generators

Brokers are generally sought after because of the wide array of information and connections that they have. They can get you proper leads that go beyond online listings and ads. The more options you have, the easier it would be for you to find the right franchise to invest in.

They Serve as Filters

Not only do they serve as lead generators, but they also serve as filters. A good franchise broker would be familiar with your needs as a franchisee/franchisor and provide relevant information that can help you make decisions.

Listings that exceed your budget, aren’t in your ideal location, or doesn’t have your preferred business structure will automatically be filtered, and remaining options will be ranked according to your priorities and preferences.

They Provide Free Guidance

In some cases, it would cost you nothing to seek help from franchise brokers. If you’re a franchisee, chances are the franchisors themselves hire their services to help them expand their business.

Thus, if you find a good and honest franchisor who has your best interest at heart, then you are in for a good learning experience. A good franchise broker serves as a bridge between the franchisor and franchisee while, at the same time, serves as a guide to the franchisee. Therefore, navigating through the business won’t be as overwhelming.

They Help You Save Money

Franchise broker with clients

Good guidance and advice can lead you to make a more informed decision, and this leads to bigger savings.

As a franchisee, finding the right franchise means you won’t lose money over unproductive ventures. For a franchisor, finding the right franchisee means there’s a lower chance of losing money over transactions that fall through. Therefore, even though it might cost you something initially, hiring a franchise broker will be a great help to your business.

Planning to skip such great service? Don’t. It might look like an unnecessary expense at present, but once your franchise grows, you will realize that it was well-worth it.

Man handing the car keys

How to Pay Off Your Title Loan Faster

Man handing the car keysIt is hard to get a loan, especially if you have a bad credit score. Most lenders will not even entertain your application the moment that they see your credit history. Still, there are ways to get a loan fast without having to worry about your bad credit score.

A title loan in Utah functions the same as a regular installment loan. The only difference is that you need to use your car to apply for the loan itself. You need to submit the title of your vehicle to your lender to secure himself if ever you default on your credit. Although it is an excellent option for people who have a low credit score, it is still essential to find ways to pay it off as fast as possible. But how do you do that? Here are the ways to pay off your loan:

Pay twice a month

Making payments twice a month instead of one regular monthly payment can help you pay off the loan much faster. HuffPost says that making payments twice a month can reduce your several months on your credit. You may want to discuss it with your lender to let them know about it.

Make extra payments

If ever you have extra money, you can consider paying down your credit cards and other loans. You can put any extra money to make additional payments to help you get your principal balance down a bit. My Money Coach explains that regular payments go toward your interest rates. Hence, making extra payments gets applied directly to your principal balance.

Make some extra money

Coins, calculator and piggy bankYou can think of other ways to make extra money to pay off your loan. You can consider doing a part-time job that can help you earn a little extra each month. Doing so can help you pay off your credit even faster. Finding a part-time job that pays as low as $100 every month can give you an extra payment worth $1,200 throughout the entire year.

Make one extra payment a year

If you don’t have enough funds to make bi-weekly payments, you can consider making one extra payment each year instead. Another option is to divide your monthly payment by 12 and then add the dividend to all your future monthly fees. For example, if your monthly title loan is $260 for twelve months, you can divide your monthly payment amount by 12. Then, add $21.67 to each of your payment for an entire year. The extra pay that you do every month is equal to one additional payment for a year.

Ask for any discounts for paperless billing

There are a few companies that offer discounts whenever you sign for paperless billing. Lenders save money from printing bills whenever customers avail their paperless billing service. In return, they offer discounts for their customers as a reward.

Getting a title loan is an excellent alternative for those who do not have a good credit standing. However, properly managing your finances is still the best way to go. Paying your loan earlier than expected will help you save money on interest as well as decrease the overall term of your loan.

Woman worried about finances

Quick Financial Fixes for When Loan Applications Take Too Long

Woman worried about finances

As long as you need money in your daily life, there is always the chance that you will find yourself in desperate need of cash. When that time comes, an option that you may think of taking is getting yourself a loan. But what if you can’t meet the requirements or the money from that won’t be able to arrive in time for your payment? It is always a good idea to have alternatives. Here are good valuables that you can either sell or pawn off for quick cash.

Jewelry and Other Precious Items

These objects obviously cost a lot, so you will definitely get much from them as long as they are authentic. If you are not too attached to them, then you can turn your rings, bracelets, necklaces, gemstones, and precious metals into emergency funds. It is best to take your precious items and jewelry to pawnshops in South Salt Lake, Utah. You will be able to get your money right away, and more often than not, they have a high appraisal value. This is especially true for older pieces that are more sought after.

Vehicles

If you’re someone who buys and collects cars and motorcycles but only uses a few of them, then it might be a good idea to sell or pawn a couple of them. It can take a while to sell one outright, depending on the kind that you have. Hence, if you want cash much faster, you are better off using them as collateral. Just like with the precious items mentioned before, vintage vehicles are worth more as long as they are in good condition. You can actually do the same for your home, but that should only be your very last option, when you have exhausted every other one.

Gadgets and Furniture

Guy holding phone at the pawnshop

One good way of getting rid of clutter in your home is to sell the items that create it. Put up a garage sale and offer your old furniture, video games, toys, and antiques for sale. If you have any rare items and you can find collectors, you can also choose to sell directly to their community. Another way to go about this is to set up an online store and advertise your goods through social media or sale sites.

Firearms

America is known for its firearms, and just because they are relatively common does not mean that you can’t get a good price for one. Some pawnshops actually engage in trading these items. If you are simply collecting them, you can take yours to these places for the money you need. You can choose to sell them to fellow enthusiasts as well. If you have an old and valuable piece, you will be able to get a lot for it.

While these may all seem like great solutions to your financial problems, keep in mind that they are only temporary fixes. It is always best to find and keep a stable source of income and not just rely on the presence of these items, unless you plan to engage in trade.

Loan for home repairs

What Are The Pros And Cons Using HELOC To Pay For Home Repairs?

Loan for home repairsThe main advantages of using a home equity line of credit (HELOC) loan involves a lower interest rate compared to other similar loans, such as a reverse mortgage. However, HELOC has certain drawbacks that may be risky if you don’t understand how it works.

If you live in Utah, finding a cheaper rate for a home equity line of credit in Ogden will depend on your credit history. You could apply for one from a bank or a federal, community-based credit union, but you should first determine if you meet certain requirements.

What Are The Advantages?

HELOCs usually incur no fees on loan servicing and only charge low closing fees, so it is a good way to leverage the equity on your property for a big-ticket purchase such as repairs. Aside from a lower interest rate, a HELOC still leaves you with some equity if you decide to sell it or pass it on to your children. This is possible since your loan balance will usually be lower than the value of your house.

In some cases, your interest rate payments could also be deducted to your taxes. You don’t need to reach a specific age to qualify for a HELOC, unlike a reverse mortgage loan. Borrowers may also draw as much money as they wish from an approved HELOC loan. The risks, however, are contingent on the amount.

Understanding The Risks

Couple applying HELOCA HELOC loan with a small limit will obviously be more manageable to pay off, but payments on interest are variable. This means that it would be difficult to estimate your monthly payments, although your contract should state the maximum possible rate that may be incurred throughout the loan’s term.

Those who decide to max out their limit should be careful about this. Your monthly payments could increase beyond your capacity to pay if interest rates increase over time. Borrowers may lose their homes if they fail to pay, which may lead to foreclosure. If the sale proceeds from the foreclosure are not enough to pay off your balance, your lender would still be able to go after you for payments through a deficiency judgment.

Other Alternatives To HELOCs

If you dislike variable interest rates, a home equity loan is an alternative option. This is a better option for those who are already aware of the required amount you need to have, aside from wanting to pay a determined monthly installment.

A reverse mortgage also provides you with nonrecourse, which means that lenders may no longer demand payment for any balance left after a foreclosed home’s sale. Most lenders require borrowers under a reverse mortgage deal to be at least 62 years old. They should also be the primary resident of a property and ideally own the house.

Conclusion

Think carefully about taking out a HELOC loan to avoid spiraling into unwanted debt. If it is necessary, applying for a low amount and relying on your savings fund would be a better option to fund a large expense.

Will You or Won’t You: What Should You Include in Your Last Will and Testament?

Last Will and Testament Many people dread the thought of death. Many do not feel comfortable talking about what happens after with their family and friends. And many others don’t even entertain the thought of it at all.

Despite how difficult it seems to face the reality of death, however, you have to be practical about it. Your family will inevitably grieve after you pass but there is one way you can make it easier for them — and that’s by preparing a will and testament that distributes assets and belongings to your loved ones.

Before preparing your last will and testament, however, you have to know the answer to the question, “what and who should you include in it?” One of Denver’s experienced probate lawyers can help your surviving family members settle debts and distribute your assets when you are gone, yes. But meticulous estate planning lets you streamline the process for them after your passing.

What Things Should You Include in Your Last Will and Testament?

Your last will and testament is a reflection of your final instructions to your loved ones. So, you have to specify every single way you would like for them to grant your requests and deal with your assets. You may include the following things in your will:

  • Guardianship of your children: Choose someone who can raise your child the way you want them to be brought up.
  • Real estate: Include the certificate of title and declare any mortgage or loan you left behind.
  • Jewelry and family heirlooms: Leave them to people who appreciate their personal value.
  • Financial assets: Specify those who will receive part of your financial assets.
  • Beneficiaries: Specify the people and organizations you wish to benefit from your will.
  • Executor: Appoint a trusted individual to manage your estate.

On the other hand, you cannot include the following in your last will and testament:

  • Joint tenancy properties
  • Properties in a living trust
  • Life insurance proceeds with a beneficiary
  • Retirement plan proceeds from a pension, IRA, or 401(k)
  • Stocks and bonds that automatically go to your beneficiary
  • Proceeds from a payable-on-death bank account with a named beneficiary

Additionally, your will is not the right document to state your funeral instructions. If you are not comfortable discussing funeral arrangements with your loved ones, you can make a separate document for them and give it to your estate’s executor.

Final Will Preparations

What Happens When You Want to Change Something in Your Will?

Changing your last will and testament is easier than you think. Even if creating it involved the expertise of a local estate-planning attorney, you can amend or modify it any time you wish to do so. You can even completely revoke it. The only condition is that you are mentally competent to do so.

For minor changes, like when you decide that you want to change the executor, you can simply create a will codicil. This is a secondary document attached to the original will stating the small changes you made on the last will and testament. Just make sure to prepare and sign the codicil the same way you signed the original document — complete with the same number of witnesses requires.

Alternatively, if you included a personal property memorandum at the time you made your last will and testament, you can simply replace the memorandum attached. It doesn’t need signatures or witnesses.

If you are making major changes in the last will and testament, your safest and least complicated option might be revoking it and writing a new one completely.

Businessmen studying the stock trends

Trading Stocks While Working Full-Time? It’s Doable with Swing Trading

Businessmen studying the stock trends“Wala akong oras magbantay ng stocks. Ang dami kong trabaho.”

“Gusto kong mag-invest sa stock market kaso may full-time job ako.”

“9 to 5 ang shift ko, hindi ko matututukan ang pagte-trade.”

Do any of these statements sound familiar to you? Many Filipinos want to begin investing in the stock market, but only a few people do. One reason is that people believe that trading requires a lot of time and attention, which full-time workers don’t have.

Employees shouldn’t lose hope, though. There is a way for them to trade stocks successfully while balancing work, friends, family, and personal time. The secret is swing trading.

Unlike day trading in which you have to buy and sell stocks multiple times in a single day, swing trading involves buying stocks, holding onto them for days or weeks, and selling them when the time is right. Since this form of trading demands less time than day trading, swing traders can work a full-time job.

Swing trading is a suitable option for many beginners because it limits the potential risks, which tend to come trading stocks. Additionally, it enables full-time employees to maintain their current income. This minimizes investment-related pressure and stress, which could negatively affect a trader’s performance.

Interested to become a swing trader? Money Wise offers these suggestions to get you off to a good start:

Allot Time to Stock Analysis and Research

Although swing trading requires less time than day trading, you still need to do your homework. You won’t succeed by choosing stocks randomly. So do your research and analysis during your free time. Doing your homework will allow you to plan your trading strategy effectively.

Set Your Buy and Sell Range Prices

Once you’re finished with your research and analysis, choose the stocks you’d like to monitor and determine your buy and sell range prices. Your aim should be to “buy low and sell high,” so use the knowledge gained from your research to identify acceptable prices. This allows you to quickly execute your transactions during trading hours and help you prevent making trades based on gut feel.

Be Consistent with Your Trading Plan

Stock trend closeupIf you see that the stock price has reached your buy or sell range, execute the trade. Otherwise, hold your position and check the stock market again tomorrow. Don’t get carried away by your emotions by trading on a stock that gets close to your set range. Stick to your plan and be consistent.

Use Technology to Your Advantage

You’ll find so many free apps that can help you monitor your stocks. A few of the apps you can consider are PSE Watch, Tsupetot, and Investagrams. Apps like these can set up price alerts, letting you go about your work until the moment when your stock reaches your set price range.

Start off as a swing trader by taking time for research and analysis, setting your buy and sell range prices, sticking with your trading plan, and using apps to help you check the prices of your stocks. Establishing yourself as a trader while keeping a full-time job won’t be a walk in the park. With consistency and time, however, you’ll start to see positive results and find that hard work does pay off.

Businessman showing his empty pockets

Filing for Bankruptcy? Avoid These Mistakes

Businessman showing his empty pocketsBankruptcy may be a negative thing, but it can also be a positive experience, especially if you’re looking for some debt relief. This only makes it important to approach the process the right way, which also means knowing what you shouldn’t do before filing.

Law Office of Davis & Jones, P.C. and other bankruptcy attorneys in Salt Lake City share the mistakes to avoid when filing for bankruptcy:

Doing it on your own

Bankruptcy has legal and financial outcomes, so it is only recommended to find the right legal representation. The laws regarding bankruptcy are also complicated to understand and if things don’t go as expected, you can’t change it or ask for a do-over. It is best to hire a bankruptcy lawyer who can explain you the law the process, decide which chapter is right for you, and guide you all throughout.

Not disclosing all assets and income

In Chapter 7 bankruptcy, keep in mind that there is a “means test” that will determine your eligibility for debt relief and ability to pay off your debts. If you intentionally lie about your assets and income, it is likely that the court will dismiss your cases. You cannot simply get away with your deception, so just tell the truth.

Giving assets to friends or family

Giving away valuable assets or asking friends and relatives to keep some of your stuff with the intention of getting them back is another way of lying or cheating. You are also likely to lose a valuable possession if you give that to a loved one before filing for bankruptcy. The main takeaway: List all your assets and always tell the truth.

Taking on new debts or using your credit card

If you make credit card purchases before filing, the creditors can challenge the debt discharge. You should also know that purchases made within 90 days of filing would not be listed as bankruptcy debt. You will need to pay for those debts in full. You may also be accused of fraud.

Not doing your homework

While bankruptcy can offer some debt relief, not all debts will be wiped out at the end of the case. Some debts that are never discharged include alimony, child support, certain tax debts, and fines for breaking the law. It is best to do your homework and get the help of a lawyer to help you learn more about bankruptcy.

Desperation or intentions to help your case may only backfire. The best thing you can do is to seek the assistance of a legal professional to guide you throughout the process.

Early Mortgage Payoff: 3 Smart Ways to Cut Back On Costs

mortgage documentPaying off your debt early comes with various benefits. Your interest accruals are minimized, you rid yourself of debt burdens, and you get to focus your energy and finances on other investments. However, early mortgage repayment also comes with a fair share of its pitfalls.

Opportunity Costs

When you allocate budget to your FHA 203k loan payment, you miss an opportunity to allocate funds to other essential investments. However, if such funds are spared and set aside for other profitable projects, they can yield unimaginable returns as time progresses. It is wise to first weigh your options to make an informed decision on whether to use the extra cash to invest or pay off debts.

Emergency Savings

A disaster or disease may strike you or your loved ones, and you might have to take out cash to attend to these emergencies. Your cash reserves are the best source of quick cash when trouble comes your way. This is one reason why your cash reserves should not be used to pay debts.

Other Debts

Some individuals have a number of debts in their name. The interest rates chargeable on these loans vary from one type of loan to another, and many factors are responsible for the difference in interest rates – from credit scores to the state of the economy at large. But ideally, the best way to pay your loans is starting with the ones that carry high-interest rates so that you cut back on costs in the long run.

Using a mortgage to build or buy a new home comes in handy especially if you cannot fund the whole project alone. However, the need to pay off the debt early should not deny you a chance to explore and take investment opportunities that will lead you to your financial goals.