Mortgage
Refinancing
Consider refinancing your mortgage if you can get a rate that
is at least one percentage point lower than your existing mortgage
rate and plan to keep the new mortgage for several years or more.
Refinancing a home is much easier today than in the past: often,
refinancing your home is just a few clicks away. Reputable companies
such as Low-Cost
Lending ,
E-Loan ,
and
GoApply.com all can initiate refinancing from their website
in minutes.
Home
Equity Loans
Be cautious in taking out home equity loans. The loans reduce
or may even eliminate the equity that you have built up in your
home. Equity is the cash you would have if you sold your house
and paid off your mortgage loans. If you are unable to make payments,
you could lose your home. Debtworking is familiar with a variety
of reputable lenders for both debt consolidation, home equity
loans and home equity lines of credit. For your reference:
Compare home
equity loans offered by at least four reputable lending institutions.
Consider the interest rate on the loan and the annual percentage
rate (APR), which includes other costs, such as origination fees,
discount points, mortgage insurance and other fees. Ask if the
rate changes, and if so, how it is calculated and how frequently,
as this will affect the amount of your monthly payments.
Credit
Cards
You can save as much as a thousand dollars or more each year in
lower credit card interest charges by paying off your entire bill
each month or by using a check, cash or debit card for purchases.
If you are unable to pay off a large balance, pay as much as you
can and switch to a credit card with a low annual percentage rate
(APR). They can make a difference in how much you pay for the
privilege of borrowing. We're fans of the following cards:
- American
Express: AMEX is the card that Debtworking uses. In
our opinion, it's the gold standard of credit-card companies.
Better yet, they can approve you in 60 seconds on the Web for
personal cards (Blue
Cash-Back
 ,
Hilton
Honors Platinum ,
and the Amex
Rewards Green )
and business cards (Business
Gold ,
Platinum
Business ,
and Blue for Business Card )..
- Discover®:
Several cards to choose from (Platinum
 ,
Titanium ,
and Student )
and even some cards with
dogs,
wildlife and sports
teams ,
if you're into that sort of thing.
- WorldPerks®
Visa®: A good partnership program that earns you
airline points and other rewards every time you use the card.
You can reduce
credit card fees, which may add up to well over $100 a year, by
getting rid of all but one or two cards, and by avoiding annual,
late payment, and over-the-credit limit fees.
First
Mortgage Loans
Although
your monthly payment may be higher, you can save tens of thousands
of dollars in interest charges by shopping for the shortest-term
mortgage you can afford. On a $100,000 fixed-rate loan at 7% annual
percentage rate (APR), for example, you will pay over $75,000
less in interest on a 15-year mortgage than on a 30-year mortgage.
We
recommend E-Loan for mortgage loans: their online application
is quick, and they call you almost immediately to get the process
going.
You can save
thousands of dollars in interest charges by shopping for the lowest-rate
mortgage with the fewest points. On a 15-year $100,000 fixed-rate
mortgage, just lowering the APR from 7% to 6.5% can save you more
than $5,000 in interest charges, and paying two points instead
of three would save you an additional $1,000.
If your local
newspaper does not periodically run mortgage rate surveys, call
at least six lenders for information about their rates (APRs),
points, and fees. You may also check www.bankrate.com for mortgage
information in your area. Then ask an accountant to compute precisely
how much each mortgage option will cost and its tax implications.
Be aware that
the interest rate on most adjustable rate mortgage loans (ARMs)
can vary a great deal over the lifetime of the mortgage. An increase
of several percentage points might raise payments by hundreds
of dollars per month.
Auto
Loans: If you have significant savings earning a low
interest rate, consider making a large down payment or even paying
for the car in cash. This could save you as much as several thousand
dollars in finance charges. Most automobile financing agreements
allow you to refinance your car through a number
of lenders, including Household
Auto ,
E-Loan ,
Driver
Loans
and
Capital One Auto Finance. 
Savings
and Investment Products
Before
opening a savings or investment account with a bank or other financial
institution, find out whether the account is insured by the federal
government (FDIC or NCUA). An increasing number of products offered
by these institutions, including mutual stock funds and annuities,
are not insured.
To earn the
highest return on savings (annual percentage yield) with little
or no risk, consider certificates of deposit (CDs) or U.S. Savings
Bonds (Series I or EE).
Once you select
a type of savings or investment product, compare rates and fees
offered by different institutions. These rates can vary a lot
and, over time, can significantly affect interest earnings.
Checking
You
can save more than $100 a year in fees by selecting a checking
account with a low (or no) minimum balance requirement that you
can, and do, meet. Request a list of these and other fees (including
ATM and debit card fees) that are charged on these accounts.
Banking institutions
often will drop or lower checking fees if paychecks are directly
deposited by your employer. Direct deposit offers the additional
advantages of convenience, security, and immediate access to your
money.
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