We would like to wish you a peaceful Thanksgiving holiday and the time to truly enjoy it with your friends and family. May you find much to be thankful for.
- The EYF Team
Many people believe that refinancing their home is a good way to get the money that they need without having to pay a high interest rate to obtain it. While refinancing a home can be a good financial move in certain situations, it is not always a good idea to pull equity out of your home using refinancing. Refinancing a home is not a decision that should be considered lightly as there can be many negative consequences to the decision. A home should only be refinanced for a reason that justifies the expense and the reduction of equity in the home. The following reasons are not good reasons for refinancing your home.
Paying For A Vacation
While rest and relaxation are important, it is not a good idea to withdraw equity from your home to take an expensive vacation. The pleasures of the relatively short vacation are far outweighed by the long-term repercussions of taking a large chunk of money out of your home. If you cannot afford to take the vacation that you want with the money that you have been able to save up, then you should probably scale back your plans for the vacation. There are many ways to still have a relaxing vacation without spending a large amount of money.
Eliminating Credit Card Debt
Many people believe that refinancing their home is an inexpensive way to get rid of expensive credit card debt. While this may look good mathematically, it can also leave some people further behind. Refinancing a home to pay off credit card debt will reduce your debt in the short term, but if the underlying problems that caused you to run up that debt are not addressed, you could find yourself in the same position a few years from now without the financial stability of the equity in your home behind you. If you are serious about getting out of debt and staying out of debt, you should reorganize your finances and change your habits so that you never end up in debt again.
A Minimal Interest Rate Change
If you are lowering the interest rate on your mortgage by a significant amount by refinancing, then you may be paying more with the refinancing than you are saving by getting the new loan. Many people forget that there are fees associated with refinancing a home, reducing the amount that is eventually saved by obtaining the new loan. If the new payment is not significantly smaller than the old payment or the timeframe for paying off the loan is not lessened by years, it is probably not worth it to refinance the home.
The Money Pages has a great article up on their website. Evidently, a new study has come out which shows that if you shop for groceries online, you are far more likely to stay on budget. This makes great sense, whenever my wife and I go grocery shopping we always seem to come back with more food than we intended to buy. Here is the first few paragraphs from their study:
It seems that online shopping is the best way to safeguard your budget when doing your weekly shop, according to the results of a new poll; revealing that 54 per cent of online grocery shoppers say that the fact that it’s ‘easier to stick to budget’ is the biggest motivating factor behind why they shop online.
The study, conducted by www.vouchercloud.com, polled 1,911 UK co-habiting couples as part of ongoing research into personal finance and household budgets. All respondents were aged 18 or over.
The study initially asked, ‘Do you usually do your grocery shopping online or in store?’ to which the majority, 61% said in-store. The remaining 39% said that they usually conducted their weekly shop online.
Click here for the full story.
Many people underestimate the importance of having a solid credit history. Building a solid credit history and keeping your credit score high can help you get the things that you want in life, including a house, a car, a job or a promotion. A solid credit history can also result in you paying less for financial products like loans and insurance policies. There are a number of methods that can be used for building a solid credit history and using as many of them together as you can to ensure the best credit score possible will go a long way towards establishing your financial stability.
Review Your Credit Report Regularly
When attempting to build a solid credit history, it is important for you to check your credit report regularly to remain up to date on your progress. The information in your credit report is used to calculate your credit score and errors on your credit report can result in a lower credit score than you should actually have. Checking your credit report is now easier than ever as each person can obtain a copy of their credit report from each of the three major credit bureaus, Experian, Equifax and TransUnion, for free each year.
Apply For A Credit Card
Applying for a credit card is a good starting point for beginning to build a solid credit history. A credit card allows you to show responsibility by making on time payments and staying within your credit limit. You decide how much to charge on the credit card each month and how to pay back the amount that you charged. Research your options to find the card that has a lending profile that fits you best, as each card issuer has different standards for the issuance of credit cards. If you are unable to obtain an unsecured credit card on your own, consider a secured credit card or having a trusted family member co-sign on a credit card for you.
Do Not Miss Any Payments
The best way to keep your credit profile strong is to make sure that all of the payments that you are required to make are made on time. This not only includes any payments for credit products you may be holding, but also includes payments for utilities, additional household services, medical bills, and rental payment. The companies that take these payments can also report missed payments on your accounts to the credit bureaus. It is important to budget your money wisely and have some money saved in reserve so that you can take care of these obligations as needed.