Tag Archive for: smart with debt

Is a Cash-Out Refi the best choice?

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Today we are going to answer the question, “is a cash-out refi the best choice?” Thinking about tapping into your home’s equity? A cash-out refinance could be the answer. It’s a way to access the money you’ve built up in your home by replacing your current mortgage with a new one for more than you owe. The difference comes to you as cash. Keep in mind that interest rates should be first and foremost in your mind when making this move. While a cash-out refi is great for some, it can greatly impact others in the long run.

Is it the right move? That depends on your goals.

For example, let’s say Sarah has $200,000 in equity in her home. She decides to refinance and pull out $50,000. With the extra cash, she pays off high-interest credit card debt and starts a home renovation. Her new loan payment is manageable, and she’s saving on interest every month. For Sarah, it’s a win.

Now take John. He’s also sitting on equity and thinking about a cash-out refi to buy a boat. While it might sound like fun, the added loan balance and monthly payments could leave him stretched.

The key is to look at how the extra cash will improve your finances—or not. A cash-out refi can be a great tool for paying off debt, investing, or handling emergencies. But it’s not the best fit for everyone.

Before making the leap, think about how it fits into your bigger financial picture. Want to know more? Keep reading to see if this option could work for you!

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Is a cash out refinance the best choice? 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! 

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HELOC: How to Get the BEST Interest Rate

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Today we are going to discuss how to get the best HELOC rate. A HELOC, or home equity line of credit, is an excellent tool that you can use to pay off debt or fix up your property. Here at Smart With Debt we want to show you how to get the best interest rate for your HELOC in order to keep more money in your wallet. Let’s go through it step by step.

Step 1: Find out the Index

First and foremost, what is the index? The index is your starting point for your HELOC rate. This base number is the same for everyone. For example, you could have an index of 8.5%. Be aware, this will go up and down because it fluctuates with the market. 

Step 2: Find out the Margin

What is the margin? The margin is the profit that is added to the index. For example, you could have a margin of 0% to 6%, because each lender charges a different margin.  As a result, rates vary per person because it depends on where you get your HELOC. 

Calculating your HELOC rate

Here’s another way to think of it. Think of it like a gas station. Each station pays the same price for the fuel (aka the index). However, each station charges a different profit (aka the margin). The index plus the margin equals the HELOC rate! 

Step 3: Shop around

It is imperative that you shop around in order to find the best HELOC rate for your wallet. By doing a side by side comparison, you can easily see which lender has the best HELOC. Get started with a free HELOC shopping card today! 

We want to help you!

Finding the best HELOC rate can seem daunting! Don’t let the numbers get the best of you and your wallet. Contact us today to discuss whether or not a HELOC is right for you. Most importantly, download our free HELOC shopping card to compare lenders side by side!

Watch our most recent explainer to find out more about: HELOC: How to Get the BEST Interest Rate

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Finding the Right Credit Card for You

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Today we are going to discuss how finding the right credit card for you can make a big difference in the long run. Picking the perfect credit card can feel like searching for a needle in a haystack. But don’t worry, it’s easier than you think when you know what to look for. The right card depends on how you spend, your goals, and what perks make sense for your lifestyle.

For example, if you’re a frequent traveler, a card with travel rewards could help you save on flights and hotels. Imagine earning enough points to cover a weekend getaway, just by paying for your everyday purchases!

Or maybe you’re looking to pay off a balance faster. In that case, a card with 0% introductory interest might be your best bet. That way, more of your money goes toward your debt instead of interest.

Each card has its pros and cons, so it’s worth comparing options. Ask yourself: Do I want cash back, travel perks, or a tool to build my credit?

Finding the right card isn’t just about rewards, it’s about matching your needs. With a little research, you’ll be on your way to better benefits and smarter spending.

Contact Us Today! 

Do you have “good debt” or “bad debt” in your life? 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!

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How Does Credit Card Interest Affect You?

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Today we are going to answer the question, “how does credit card interest affect you?” Credit card interest can add up fast if you’re not careful, but understanding how it works can help you stay in control. First, credit cards charge interest when you don’t pay your balance in full by the due date. This interest is based on your card’s annual percentage rate (APR), which could be as high as 20% or more.

Let’s break it down. Imagine you owe $1,000 on your card with a 20% APR. If you only pay the minimum each month, interest builds on what’s left. Over time, you’ll pay much more than the original $1,000. For example, it could take years to pay it off, and you’d pay hundreds in interest.

On the other hand, paying off your full balance every month means no interest at all. This keeps your costs low and your credit in good shape. If that’s tough to do, aim to pay as much as you can above the minimum. It makes a big difference.

Credit card interest doesn’t just affect your wallet. It can also impact your ability to borrow for things like real estate investments. Lenders look at your credit card debt when deciding your loan terms. High balances or lots of interest payments can make you seem risky.

In short, managing credit card interest is key to keeping your finances healthy. Whether you’re paying it off or avoiding it entirely, understanding how it works puts you in charge. Use this knowledge to build better credit and save money in the long run.

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Do you want to find out more about accelerating your debt payoff? 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! 

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What Is a Mortgage and How High Is Too High?

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Today we are going to answer the question, “what is a mortgage and how high is too high?” A mortgage is a loan you use to buy a home or property. You borrow money from a lender and pay it back over time, usually with interest. Most mortgages are spread out over 15 to 30 years. The monthly payment includes the loan amount, interest, taxes, and insurance. It sounds simple, but how do you know if your mortgage is too high?

First, look at your income. Experts say your monthly housing costs shouldn’t be more than 28% of your gross income. For example, if you make $5,000 a month, aim to keep your housing costs under $1,400. This helps you balance other bills, savings, and goals.

Next, think about your debt. Adding a mortgage to credit cards, car loans, or student loans can strain your finances. Lenders often recommend keeping total debts under 36% of your income. If your mortgage pushes you over, it might be too high.

Finally, plan for the future. What if you lose a job or face unexpected expenses? A mortgage that feels fine now could become overwhelming later. Consider creating a budget that leaves room for savings and emergencies.

For example, Sarah bought a home with a $1,800 monthly mortgage. But when her car needed major repairs, she had to dip into her emergency fund. Keeping her housing costs closer to $1,400 would have helped her avoid stress.

In the end, a mortgage is too high if it leaves you feeling stretched. Stay within your limits, and you’ll enjoy your home without financial headaches.

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!

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