Should you refinance?Written by Michael VanDeMar
There are several reasons that might make someone consider refinancing their existing mortgage. One would be to get a lower interest rate than what they currently have, thereby reducing monthly payments and lowering overall cost of mortgage. Another is to shorten length of loan, which can save quite a bit in interest payments. Thirdly, someone may have other debts that they wish to pay off, and refinancing may provide them a means of consolidating that debt into one overall lower payment. A lower interest rate isn't only thing that should be taken into account when thinking about refinancing. There are costs and fees associated with refinancing your mortgage. The bank will charge fees, there will be costs for a new inspection and a new appraisal, title search, and so on. The process that is gone through is very much like process that one goes through on getting a first mortgage. It requires a new application with a new credit check, survey, and appraisal. As it is with a first mortgage, this can be a long and costly process. In general, it makes sense to refinance if interest rate on new loan is at least two percentage points lower than that of current loan, although this is not always case. Some things that need to be taken into consideration are total cost of refinancing, total monthly savings, and how long you plan to stay in your house after you refinance. You can calculate how long it will take you to break even on refinancing costs by dividing total cost of refinance by monthly amount you will be saving. For example, if cost is $2,500, and you reduce your monthly payments by $100, then it will take 25 months to start seeing savings from reduced mortgage rate. If you plan on staying in your house longer than this, then it may just make sense for you.
| | What is a Car Loan?Written by John Mussi
A car loan is a type of credit offered by a bank or other financial lender for specific purpose of buying a vehicle. Car loans allow you to finance buying a new or used car . There are a range of car loans available from banks, building societies or financial institutions; you can also take out a car loan with a specific car loan lender . Car loans are most popular type of loan that people apply for. Car loans, as name suggests, are unsecured loans specifically designed for purchase of a car. Car loans can be seen as a riskiest of loans from lender's point of view. This is because unlike a secured loan that may be used for home improvements that can add value to your home; a car loan is for an asset that depreciates very quickly. Thus you will find that car loans have generally a higher rate of interest than any other type of loan. A car loan does not require any collateral to apply. Almost all loan providers will allow you to apply for a car loan, with a few specializing in this area. The main reason people may apply to a specialist car loan provider (such as car dealers) may because their credit rating is not good. Please be warned that you will pay a higher interest rate from these specialist firms. You enter into an agreement with your lender to borrow a specified amount, usually up to a maximum of £25,000 depending on your circumstances. You then pay back loan over a set period of time. The payments you make consist of both principal amount of loan plus interest. With this type of loan you own car from time you buy it. Car loans are form of personal loan of which there are several basic types with slightly different conditions attached.
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