Good Question? Yes, rising interest rates is a consideration, but so are some other things that might be even more important depending on your situation and your overall goals. Here are some things to consider from a situation that came up recently.
The goal in the example is to get the mortgage paid off within 5 years. The interest rate is only one of the technical considerations. Many people make decisions based on these technical details that are out of our control. Yes, managed, but not controlled.
The best way to stay in control and confident is to remember your primary goal and your reasons for choosing the product and terms you did in the first place. It is also important to know your exit plan - ie. when do you abandon the current program?
All this is not to say don’t lock in; rather, don’t make the decision based on fear of interest rates rising. In the case of mortgages, a good mortgage broker will consider your financial planning goals and present you with solutions that will meet those goals. In the example above the goals are: to be mortgage free before retiring from work, to maintain flexibility of payment while still considering new work, being confident in your decision based on different outside influences (i.e. interest rate).
Your broker will also present you with the pros and cons of switching in the context of your financial goals and current financial situation. There are costs, time, etc. that all come into the picture.
Before a meeting with your financial advisor or mortgage broker, it is helpful to know what your top monthly mortgage payment could be; what your time frame for payout is (in months) and other considerations and factors that could affect your payment plans. Some examples here could be different work, and therefore different income where you might be able to make higher or not as high payments, or possible lump sums of money that could be applied to the mortgage, or even the need for extra cash in the case of an emergency or terrific opportunity.
There is a lot to consider. This is why the expertise of a financial planning professional is so valuable, because getting focused too much on the rate of return before everything else will not help you stay in control or make decisions that are supportive of the bigger picture. This is the same approach you need to take with your investments: consider the bigger picture, goals, current needs, etc. first, then work your way toward considering the interest rate.
Copyright© 2006 Tracy Piercy
MoneyMinding
Tags: CFP, financial planning, interest rate, lock in mortgage, moneyminding, mortgage rates, Tracy PiercyCFP, financial planning, interest rate, lock in mortgage, moneyminding, mortgage rates, Tracy PiercyShare This
Debt Consolidation entails taking out a large single loan to get rid of many others. Debt consolidation is ideally suitable for paying off
Credit Cards Debt as interest rates charged on credit cards are much higher than that on the debt consolidation loans.
Consolidation loans can be both secured as well as unsecured. Secured debt means getting loans against collateral, generally property. The interest rates on secured loans are much lower than that on unsecured loans. This is because by keeping collateral, owner allows the lender for the forced sale (foreclosure) of property to recover the debts. Since the risk of lenders is reduced the Interest Rates offered are low.
The loans to consolidate debts are also offered without any security. The interest rates may be a little higher in that case but still not as higher as interest rates charged on credit card debts. The increased competition in loan market, may allow you to get even unsecured Debt Consolidation Loan at much lower interest rates.
If you are caught in debt trap it is advisable to shop around, you can do it online, and look for lenders who offer debt consolidation loans at lower interest rates. Internet is one of the best mediums to shop for all types of loans. It’s a platform where big, medium as well as small size lenders can be found without any hassles.
You can send online request for the quotes, which are generally offered for free. Compare the rates and repayment plan. Use online mortgage calculators to do the comparison precisely. These calculators are available almost on all websites selling or facilitating Mortgage Loans.
Other than repaying your credit card debts you can also consider debt consolidation loan for various other factors. If you have taken other small loans from different lenders, it allows you to repay all your loans in one go and save 1000s of dollars that otherwise might go in paying the interest for the loans.
Dealing with multiple lenders is again not easy as the mental tensions involve in the process is really troublesome. But before reconsidering this loan one must assess all the factors and the most important of these is to asses the overall benefits, in monetary terms, of getting one single loan to repay back all others.
The author Sare Adams is working with a company providing help to people who are looking for Debt Consolidation, for further help on debt Consolidation visit Apply4less
|
Tags: credit card debt, debt consolidation, interest rate, lender, mortgage, mortgage loancredit card debt, debt consolidation, interest rate, lender, mortgage, mortgage loanShare This