What the Bank Won’t Tell You About Mortgage RefinancingWritten by Paul Ashter
So you have a mortgage, and you need to refinance to get your interest rates low. Most people simply walk into their bank, ask to refinance, and then end up paying more money long term than they would have otherwise. Some banks would like everyone who is refinancing to remain ignorant, but I am here to tell you what banks don’t want you to know. Refinancing can be very beneficial, but one has to understand terms of deal, and be very careful when choosing a bank.
One mistake many people make is going to bank and deciding to refinance before actually looking at home loan. Some think that their interest rates are too high, and they have too many debts, so refinancing is only option. Be sure to look at numbers, and then go over those exact same numbers with your financial advisor. After discussing it, you can then decide to refinance. It is always a good idea, even after you go over numbers, to ask your bank, “Do I need to refinance?” They cannot lie to you, but they can withhold information. Banks do not want you to understand that fact. Asking questions is one of best things you can do. Banks love to let customers make bad decisions. As a financial advisor, banks are obligated to tell you best possible course of action, but not required. Unfortunately, some banks simply want profit, and so customer’s financial situation is not of utmost importance.
It is up to you then to be informed about all aspects of your financial situation before you walk into bank. It is advisable to know just as much, if not more than bank does. Banks take advantage of uninformed. Some want their customers to be uninformed, because uninformed individual poses no threat and can be manipulated easily. An uninformed person may accept banks offer simply because interest rates are lower. However, some banks try to give lower interest rates for refinancing, but let consumer end up paying more over lifetime of loan. Additionally, banks can expose you, as a borrower, to greater risks than you had with your previous mortgage with a higher risk loan.
Get Wealthy With the Rule of 72Written by Vincent R. Moloney MD
When it comes time to retire how many people would like to have a nest egg that is 2 or 3 or even 4 times larger than what they have? With an answer so obvious allow me to explain how you can make it happen for yourself.
First we'll explain Rule of 72. If you divide number 72 by rate of return on your investments answer is number of years it will take to double your money. If you are getting 7% annually then 72 divided by 7 equals a little over 10 so it takes 10 years to double. A 9% return divided into 72 gives us an 8-year time span to double. A 10% return needs only 7 years to double.
Now what return can reasonably be expected in our real world? Over last 100 years or so United States stock market has returned 10 to 11% per year on average, depending whose figures one reads. We'll use figure 10%.
Suppose at age 37 you start saving for retirement. We choose a reasonable sum of 110 dollars a month. In 7 years you notice that you have accumulated 13,200 dollars. Another 7 years go by and you see that you have nearly $40,000. At end of 21 years you have $93,000. By age 65 you notice that 28 years have gone by and you have $200,000 dollars. The rate of return kept steadily increasing. Those of you with some mathematical leanings will recognize this as an exponential rate and also as compound interest. This website has a good calculator: http://www.tcalc.com/tvwww.dll?Save
Also notice that 28 represents four 7-year spans, time for first dollars to double four times. Observe that during first 7-year period you accumulated $13,000, during 2nd 7-year period $27,000, during 3rd 7-year period $43,000 and during 4th period $107,000. During 4th period you grew eight times as much as in first period. All without changing amount saved, $110 per month.