Which is Best: Points or No Points?

Categories: , ,

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!

Contact Us Today! 

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! 

Free Tools For You! 

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

Learn more!

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

0 Comments/by

Is a Cash-Out Refinance Right for You?

Categories: , ,

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.

Contact Us Today! 

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! 

Learn more!

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

0 Comments/by

Calculating Your HELOC Payment

Categories: , ,

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! 

0 Comments/by

What is an Adjustable Rate Mortgage?

Categories: ,

An adjustable rate mortgage is a type of mortgage with a twist. Unlike a fixed-rate loan, where your interest rate stays the same, an adjustable rate loan starts with a lower rate for a set period. After that, the rate can change based on market conditions.

Let’s break it down with an example. Imagine you buy your first home with a loan that has a 7-year adjustable rate. For the first seven years, your interest rate is locked in, let’s say 4%. That means lower monthly payments compared to a fixed-rate loan at 5%. But after those seven years, the rate adjusts. If market rates go up, your payment could increase. If rates drop, your payment might go down.

Adjustable rate loans can be a smart choice if you plan to move or refinance before the rate adjusts. They’re a way to save money upfront but come with some uncertainty down the road.

The key is to know your goals and plan ahead. This type of loan can work well for people who don’t expect to stay in their home long-term. Want to learn more? Contact us today and we can help you decide if this loan type is right for you.

Contact Us Today! 

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! 

Free Tools For You! 

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

Learn more!

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

0 Comments/by

Should you pay points?

Categories: , ,

When you are shopping for a mortgage you may hear about points. Points are a percentage that is added to a loan amount. For example, 1 point or 1% of a $300,000 loan would equal $3,000. Points are a way for you to pay upfront in order to get a lower rate. Many people ask whether or not you should pay paints and if it is worth it in the long run, however, it is dependent on your financial situation. Buyers beware! Even lenders who say that there are no points often increase the interest rate so that they can still make money on the loan. 

What is the right move for you?

The decision to pay points depends on your plans. If you’re only staying in your home for a couple of years, it may not be worth it to pay points. On the other hand, if you’re planning on staying longer, you could save thousands by paying points and reducing the interest rate.

Contact Us Today! 

Do you want to find out more about mortgage rates with and without points? 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! Accelerate Debt Payments Calculator to see which debt option is best for you! 

Learn more!

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

0 Comments/by