Bill Ranson

Home equity is the value of your home less the remaining outstanding mortgage balance. While you may be worrying about currents debts or wishing you could refurnish or remodel your home, you may be sitting on the cash you need.

With a home equity loan or equity line of credit, you can use the value of your home (less the balance owing) and consolidate debts or even remodel your home.

What is an Equity Loan or Equity Line of Credit?

Unlike a typical loan which deposits a set amount of money in your account and begins charging you interest and payments at a fixed rate until repaid, an equity line of credit acts as a revolving credit (like your credit card). In addition, you do not need to pay interest on the full amount you have access to, you only pay for the money you have borrowed. Like a credit card, when the debt is repaid you still have access to the credit.

Using an equity line of credit (also known as a Home Equity Line of Credit or HELOC) gives you greater flexibility with the least cost. Not only can you access the credit only as you need it, but your monthly payments will reflect only the balanced used. The less used the lower your payment. Some lines of credit have only the interest as the minimum payment, which can be helpful when finances are tight.

What Can I Do With My Equity Loan or Line of Credit?

While you can probably find numerous uses for your line of credit, here are samples of the more common reasons for obtaining an equity line of credit.

Consolidate Debts – Using your equity line of credit to consolidate other debts can not only eliminate the stress of multiple bills but can also give you a more favorable interest rate or tax benefit.

Second Mortgage – Use your line of credit to pay off the existing mortgage for better interest rates.

Remodel, vacation, new car, etc. – You may use your line of credit for renovating your home, buying new furniture, a car, or taking a vacation. You would pay less interest payments than using a credit card or store card making it a wise choice for large purchases.

Using Your Equity Loan or Line of Credit Wisely

Before succumbing to what seems like easy money, it is important to evaluate the additional risk.

Some debts, as student loans have features that you may not be entitled to if you switch them to an equity line of credit.

Other items like cars and vacations may seem like a good idea to buy with your home equity line of credit, but with the ability to pay only the interest you may find the motivation to pay off the debt is lacking and end up owing for items that have lost their value or were consumable. Plan to pay off the debt quickly for the most advantage.

Second mortgage (or refinancing) may or may not be a good idea depending on interest rates and your repayment terms. While lines of credit take advantage of current low interest rates you may find that your regular loans protect you better from fluctuating rates if you will not be paying the loan down in the next few years.

By understanding, the risks and making good financial decisions you can get relief from debt and financial freedom.

There are a lot of expenses for which we’re billed in large chunks. For example, consider your car insurance. In most cases, your auto insurer will send you an annual or semi-annual bill. If you pay the entire amount, you can avoid paying additional convenience fees (usually a few dollars). Otherwise, you can decide to pay a monthly amount which includes the convenience fees. It’s the same with your life insurance policy and your home property taxes.

Those people who consider themselves financially savvy might immediately think that paying unnecessary fees in order to enjoy the convenience of paying monthly is foolish. However, there are compelling reasons to do so. IN this article, I’ll describe the benefits of paying large bills on a monthly basis.

Advantages Of Paying Monthly

The first advantage comes from enjoying a higher yield on your savings and money market accounts than the interest rate implied by the convenience fee. For example, assume that your auto insurance bill is $1,300 for one year of coverage. If you elect to pay a portion each month, you’ll be required to pay an additional $2.50 fee (hypothetically). Let’s further assume that your savings account has a 4% yield (not uncommon with online banks).

If you were to put the $1,300 into your savings account and transfer the necessary amount to your checking account each month, you would likely come out ahead. In effect, you could earn more through interest than what you’d pay in extra fees.

Another advantage is related to budgeting. A lot of people place a high value on knowing what their expenses are each month. By writing a monthly check to cover a large bill, they can track their budget more easily, especially if the payments are sent automatically from their bank.

One of the realities of struggling to make a living is that finding the funds in order to pay off a large bill in one lump sum can be difficult. Returning to our car insurance example, many people might have trouble setting aside $1,300. Unexpected car repairs, medical expenses, and other factors can cause short-term cash flow problems. By contrast, paying a smaller portion each month can provide a little financial breathing room, even if that means having to pay a small convenience fee.

It’s important to note that every circumstance is unique. Choosing to write a check each month for large bills may not be appropriate for every situation. Nor is it appropriate for every person. Review your personal finances in light of your recurring cash flow needs. If you decide that sending monthly payments is the right choice for your circumstances, consider establishing an automatic payment plan with your bank. The convenience of having it drafted each month represents one less thing to worry about.

visit popular sites on Sell Old Gold and Marketing Tips for other interesting information

5 Simple Ways To Lower Your Monthly Bills And Save Lots Of Money!

Here you’re going to learn several ways to save money every month by lowering your monthly bills.

There are lots of ways to save money, no matter how much of it you have – or don’t have!

Having struggled for many years paying my own bills, I learned many ways to save money. From simple things like food, gas, and clothing, to bigger expenses, like insurance and your mortgage.

All you need to know is where to look to find the savings.

Several Ways To Save Money

The first thing you need to do is eliminate ALL of your unnecessary expenses:

eating out on the weekends
buying lunch at work every day
magazine and newspaper subscriptions (especially those you can get online and at the local library)
cable TV (you’d be amazed at how many other ways you’ll find to spend your time once you get rid of cable TV)
groceries (you can save lots of money with coupons and specials.)

It’s OK to reward yourself once in a while, but if you are really looking to get out of debt faster, you owe it to yourself to save every single penny you can!

To find other ways to reduce your expenses, take a close look at your checkbook and credit card statements. You should also call your credit card companies to see if they will lower your interest rates, even if it is only for a short time.

You’ll be amazed at how many ways you can save money, especially once you start looking carefully at how you spend your money every month.

Shop Around For The Lowest Prices

For those expenses you can’t eliminate, it’s time to start shopping around for the best prices.

Once I realized you can shop around for just about ANYTHING you spend money on every month, I learned how to save myself SEVERAL HUNDRED DOLLARS each and every month!

In fact, by shopping around I ended up saving myself more than $750 a year on car insurance alone!

The same is true of many of your monthly expenses – like long distance telephone service, internet service, all types of insurance, mortgages, and in some places even your utility bills.

It DOESN’T take any special skills. All it takes is a few clicks and you can save yourself a bunch of money in no time at all!

So, if youd like to save yourself lots of money every month – and who doesnt – start shopping around and looking for ways to lower your monthly bills right away!