Which is Best: Points or No Points?

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When getting a loan, you often hear about “points.” But what are they, and how do you know if they’re worth it? Which is best for you, points or no points? Let’s break it down.

What are they?

Points are upfront fees you pay to lower your loan’s interest rate. For example, let’s say you’re getting a $200,000 loan, and one point costs 1% of the loan—or $2,000. Paying that $2,000 could reduce your monthly payments because of the lower rate.

Be careful!

But here’s the catch: You need to stay in the loan long enough for the savings to make up for the cost. For instance, if paying points saves you $50 a month, it’ll take 40 months to break even ($2,000 ÷ $50). If you sell or refinance before then, you might lose money.

No points? That’s simpler. You’ll pay less upfront but may have a higher monthly payment. This can be a good option if you plan to move soon or want to keep your cash for other investments.

Which is best?

So, what’s best? It depends on your goals. Do you want to save now, or over the life of the loan? Knowing your plans can help you decide.

This choice might feel tricky, but with the right math and planning, you’ll find what works best for you!

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Not sure which loan is best for you and your needs? Contact us today to find out more about how to turn your debt into your friend instead of your enemy! 

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We also have free tools available! Accelerate Debt Payments Calculator to see which debt option is best for you! 

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Finding the Best HELOC Rate in Today’s Market

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In today’s market, finding the best HELOC rate in today’s market can feel like searching for a needle in a haystack. Rates are all over the place, and lenders offer different deals depending on your credit, equity, and location. But don’t worry, there’s a simple way to cut through the noise and find the best option for you.

HELOC Rates:

Start by knowing what makes a HELOC rate competitive. It’s not just the lowest rate you see advertised. Some lenders offer teaser rates that jump up after a few months. Instead, look for a rate that stays steady and fits your long-term goals.

For example, imagine two lenders: Lender A offers a 4.5% rate that increases after six months, while Lender B offers 5% fixed for three years. Even though Lender A sounds cheaper at first, Lender B might save you more over time.

Shop Around:

Shopping around is key. Check with local banks, credit unions, and online lenders. Ask about closing costs, annual fees, and rate adjustments. A few questions now could save you thousands later.

Finally, think about timing. If rates are rising, locking in a deal today might be your best bet. But if they’re dropping, a variable-rate HELOC could save you money.

Finding the right HELOC doesn’t have to be stressful. With a little research and the right questions, you’ll uncover the best rate for your needs.

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How can you get started in finding the best HELOC rate in today’s market? Contact us today to find out more about a home equity line of credit, as well as other ways to use debt to your advantage.

Free Tools For You! 

We also have free tools available! HELOC Shopping Scorecard to see which option is best for you! 

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Qualifying for a HELOC: How will your credit affect you?

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Your credit score plays a big role in qualifying for a HELOC (Home Equity Line of Credit). Lenders use your credit score to see how responsible you are with debt. A higher score can open doors to better rates and higher credit limits. On the other hand, a lower score could result in higher costs or even disqualification.

Here’s an example: Imagine two homeowners, Sarah and Jake. Sarah has a credit score of 750, while Jake’s is 620. Sarah’s strong credit lets her qualify for a HELOC with a 6% interest rate. Jake, with his lower score, gets approved but at 10%. This is a big difference in monthly payments!

Lenders also look at more than just the score. They’ll also review your payment history, total debts, as well as how much of your credit you’re already using. So, even if your score isn’t perfect, improving a few habits, like paying bills on time, can make a difference.

Understanding your credit is the first step to qualifying for a HELOC. With a little effort, you can position yourself for better rates and terms. It’s all about knowing where you stand and making smart choices.

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Do you need to boost your credit score? Contact us today to learn some tips that can help you level up quickly and easily! 

Free Tools For You! 

We also have free tools available! Accelerate Debt Payments Calculator to see which debt option is best for you! 

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Is a Cash-Out Refinance Right for You?

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Today we are going to discuss whether a cash-out refinance is right for you. A cash-out refinance can be a smart move, or it can lead to big regrets. The key is knowing when it works for your situation. Here’s how it works: You replace your current mortgage with a bigger one. The extra money comes to you as cash. Sounds simple? It is, but there’s more to think about.

For example, let’s say your home is worth $300,000, and you owe $150,000. You might refinance for $200,000, leaving you with $50,000 in cash. This money can help pay off high-interest credit cards, fund home improvements, or even kickstart a new investment.

But it’s not always the right choice. You’re taking on more debt, which means bigger payments. Plus, your home is the collateral. If something goes wrong, like a job loss, you could risk losing your home.

Here’s a good rule of thumb: Only use a cash-out refinance if the money helps you save or grow wealth. For example, using it to upgrade a rental property or consolidate high-interest loans can make sense. Using it for a vacation? Maybe not.

Understanding your goals and running the numbers will help you decide. It’s about making the cash work for you, not against you.

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Is a cash out refinance right for you? Contact us today to find out more about cash out refinances, as well as other ways to use debt to your advantage.

Free Tools For You! 

We also have free tools available! Download our Cash Out Refi vs Home Equity Loan Calculator to see which option is best for you! 

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Calculating Your HELOC Payment

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Today we are going to walk through the process of calculating your HELOC payment. Just to clarify, a HELOC is a mortgage on your house. However, it operates like a credit card. You can borrow money for anything that you need during the draw period and pay back what you borrow. On average, the draw period lasts between 5 to 10 years. Once the draw period is over, then the repayment period begins. 

Calculate your payment in 5 easy steps:

First: What’s your starting balance

Second: What’s your interest rate?

Third: Grab a calculator.

Fourth: Calculate your annual payment. (Balance x Interest Rate)

Final: Calculate your monthly payment. (Annual payment/12 months)

Example:

Starting balance: $50,000

Interest Rate: 8%

Annual payment: $50,000 x .08 = $4,000

Monthly payment: $4,000/12 = $333.33

Contact Us Today! 

Do you want to find out more about calculating your HELOC payment? Contact us today to learn some tips that can help you to achieve your goal quickly and easily!  

Free Tools For You! 

We also have free tools available! HELOC Payment Calculator to see which HELOC is best for you! 

Learn more!

Visit our YouTube channel to learn more about using debt instead of letting debt use you! 

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