Finance: WHEN IS IT RIGHT TO REFINANCE?

WHEN IS IT RIGHT TO REFINANCE?

Written by Tim McMahon

Continued from page 1
But what if you took it one step further? What if you kept your payment repparttar

same and reduced repparttar 112631

term of your mortgage as far as possible? A $111,000 mortgage at 5% with a payment of about $765 would require a term of 223 months or about 18.5 years. Assuming you could get an 18.5 year mortgage and you intended to stay in your house that long, this would be an excellent move! You have drastically reduced repparttar 112632

amount of money you will pay repparttar 112633

bank over

life of

mortgage and you are free and clear 6.5 years earlier! Even if you move sooner, your equity will be building faster so you will have more money when you sell. Unfortunately, lenders do not usually let you choose an odd term length like 18.5 years , so you would have to choose either a 20 year term with a payment of $732.55 which would still save you about $30/month but also knock 5 years off your loan (and build equity somewhat faster). Or you could choose a 15 year term with a payment of $877.78 which would actually cost you about $110/month more than what you are currently paying but would knock a full 10 years off your mortgage. If your income has risen since you got your initial mortgage and you could swing it... it would be money well spent. For those with higher incomes who have difficulty saving, this is a great idea because it actually forces you to save a little bit more each month and once you get used to it, you won't even miss it. Perhaps you can remove repparttar 112636

mortgage insurance off your mortgage. On repparttar 112637

original loan, you might have to pay it for repparttar 112638

first 10 years, so you would still have to pay it for 5 more years. But... if you have made improvements to repparttar 112639

home... or property values have increased dramatically in your neighborhood... you might be able to get repparttar 112640

new loan without repparttar 112641

mortgage insurance. If you can, you will save an additional $100/month! With that savings you can move to repparttar 112642

15 year mortgage without mortgage insurance for repparttar 112643

same amount that you are currently paying for a 30 year mortgage with mortgage insurance. Not bad eh? Whack 15 years off your mortgage just like that! Another way to reduce repparttar 112644

monthly payment is to reduce repparttar 112645

amount you borrow. If you could come up with repparttar 112646

additional $3000 in closing costs from savings, your monthly payment on a 15 year mortgage would drop from $877.78 to $854.06 ... or only about $89. per month more than what you are currently paying. Is it worth $89/month to knock another 5 years off your mortgage? That depends on your personal circumstances! If your budget is already stretched to repparttar 112647

limit, or it will put you at risk if you lose your job, NO. But if you can find a way to come up with $3.00 per day, (perhaps by giving up cigarettes, or skipping a trip to repparttar 112648

vending machine or to McDonalds) it will save you thousands over repparttar 112649

life of your mortgage! To choose from dozens of places to search for repparttar 112650

best mortgage rates check out http://yourfamilyfinances.com/yff/Resources.aspx Useful Mortgage Calculators http://yourfamilyfinances.com/yff/calculators.aspx

Tim McMahon, Editor Financial Trend Forecaster and InflationData.com The Place in Cyberspace for Inflation Information www.YourFamilyFinances.com www.fintrend.com www.InflationData.com

Editor of Financial Trend Forecaster since 1997. Also editor of InflationData.com and YourFamilyFinance.com

No Load Mutual Funds or Exchange Traded Funds (ETFs)?

Written by Ulli G. Niemann

Continued from page 1

So, if these ETFs are so great, why hasn’t your broker or financial planner recommended them to you? Simple! Brokers, and those advisors working on commissions, don’t make money on ETFs; no commissions up front or hidden on repparttar back end. It's simply not in their interest to promote them.

With all repparttar 112630 positives for repparttar 112631 investor, there is one disadvantage, which may not be applicable to you unless you are a hot shot no load mutual fund picker. It is that in any given economic environment really super performing mutual funds can outperform repparttar 112632 indexes, but an ETF can never outperform repparttar 112633 index it’s tied to. You would need to look at your own investment record to know whether this is a downside for you.

Here’s a real life example from my advisory practice. My trend tracking indicator signaled a Buy on 4/29/03. Based on my momentum indicators I chose 5 no load mutual funds and 4 ETFs. Over repparttar 112634 following 3 months my ETFs gained anywhere from +10.02% to +22.36%, while my no load mutual funds gained from +9.15% to +36.35%. If you’re fortunate enough to make a superior selection you will outperform an ETF. Of course, that presumes you picked a very successful fund as compared to only a moderately successful ETF.

A word of caution! Just because ETFs are cheap and easy to buy doesn’t mean they will guarantee you a profit. You can lose money with them just as easily as you do with no-load mutual funds. You still need to make sure you have a disciplined methodology in place to help you get into and out of repparttar 112635 market. If you don’t, you’re gambling no matter what you invest in.

Having gotten repparttar 112636 disclaimer out of repparttar 112637 way, hopefully these insights into ETFs will broaden your perspective on ways you can prosper in your investments.

Ulli Niemann is an investment advisor and has written about methodical approaches to investing for over 10 years. He avoided the bear market of 2000 and has helped countless people make better investment decisions. Subscribe to his free newsletter: www.successful-investment.com

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