Estate Planning – The Mortgage – To Pay Or Not to Pay
Where does your home mortgage fit into your financial planning and particularly into your estate planning? In the world of yesteryear, the chief goal was to pay off the mortgage and hold the property free and clear. Higher land prices, higher building costs, and fluctuating interest rates have changed the landscape of the housing market, with instruments available from flexible interest schedules to interest-only mortgages, in which the buyer never actually purchases the property.
There are advantages to paying off your mortgage as quickly as possible and there are disadvantages as well. It just depends on your needs and your aims for the future, which route you should take. Say, for example, that you had just come into a lump sum of money – from a stock market windfall, inheritance from Uncle Joe, or some other pile of cash that gave you the option to pay off your mortgage and be done with it, or not.
Some things to consider in contemplating this matter include:
- Are you still working and intend to be working for 20 more years, or are you nearing retirement age within the next few years?
- Do you intend to retire in the home, or move to another retirement location altogether?
- Do you have children who would want to inherit the family home?
- Are you in a stage where you are actively trying to build a retirement nest egg?
- Is the interest rate on your mortgage high or relatively low?
- Do you need extra tax deductions or is that immaterial?
The answers to these questions can help you determine whether you want to use the extra money you have available for paying of your mortgage or put it to other uses.
If the following statements describe you, paying off the mortgage is the best option:
- You are a person who craves personal security and don’t like the worry of having a mortgage hanging over you.
- The interest rate on your mortgage is higher than that which you are currently earning on your investments.
- You would like to have money available to begin, or contribute more heavily to, an investment or retirement program.
- You don’t intend to retire in the home, but want to buy a smaller home by the lake, mountains, river, in the tropics, etc.
- Your mortgage is near to being paid off (within 10 years) so you are now paying more principle than interest.
- You have enough money to pay off the mortgage and still have a healthy savings account.
If these statements best fit you, you may want to ignore the mortgage and use the money for other purposes.
- The interest rate on your mortgage is lower than the interest rate you are receiving on your investments.
- You have more than ten years till retirement and are able to comfortably handle the mortgage payments and don’t anticipate any change in that situation.
- Paying off higher interest credit cards would be more beneficial to your financial situation than paying off a low interest mortgage.
- You still have 20 years to pay on the mortgage so there is a significant amount of interest still to be paid before you begin to seriously impact the principle.
These are questions that your estate planner or estate planning attorney can help you resolve by listening to your plans and making suggestions.
Very Bad Credit Loans – Bad Credit Rating Not A Problem
Are you one of those who have a bad credit history and have encountered an urgent need for cash? Do you think no lending institution would lend you cash? Think again!!
A very bad credit loan is for people who because of some mistakes in the past became a victim of the circumstances and made their credit history worse. There are many lenders who might deny a loan to such people. But this should not disappoint the borrowers as there many lenders who are ready who have customized products for people with a very bad credit history.
One can avail the loan from the comfort of ones home or office. So this amounts to no running around. Added to the benefits list is the variety of uses that you can put these loan into. The lender doesn’t mind how you use the loan. It doesn’t matter if you use it for medical bills, car repair, holiday loan, wedding loan or any other expense. So this loan serves to meet any emergency need.
Advantages of an unsecured very bad credit loan:
An unsecured bad credit loan provides the borrowers with an opportunity to improve the credit history. The other advantage is that there is no chance of losing the asset in case of a default.
Key factors to be considered in the loan approval process:
Income source of the individual, actual income, credit history along with any open loan with the individual decide the loan approval of the individual.
Types of very bad credit loans:
The very bad credit loans can be of two types – secured and unsecured loans. In case of a secured bad credit loans collateral needs to be furnished by the borrower. Borrowers can use the equity lying in the assets. For example home equity can be used to borrow money. This helps the borrowers in two ways – firstly they can get a better rate for the loan and secondly they can get a loan of a higher amount. Moreover a bad credit record has little effect on the approval of the loan.
An unsecured loan has advantages of its own. Since an unsecured loan doesn’t involve valuation of the asset the loan processing takes less time. The other advantage of an unsecured loan is that there is no fear of losing the asset. A little higher interest rate might be charged in case of an unsecured loan. Another means that lenders may adopt to make good the unavailability of the security is an extra down payment.
With a very bad credit loan you can borrow
Bad Credit, Low-Income Home Loans
Bad credit, low-income home loans are meant for people with a low income and with a bad credit history. Following some legal requirements; most money lenders and banks have increased the number of loans to low-income home buyers with bad credit.
Generally, these loans are available in rural areas. In bad credit low-income home loans, the payment schedule is based on the household income. To obtain such a loan, the applicant must meet certain income limits and have a reliable income.
Bad credit low-income home loans are designed for the long term, and the interest rates may vary throughout that period. Low-income members of the society with bad credit have numerous difficulties in securing home loans. Closing costs and down payments are some of the problems. Closing costs include title searches for deeds, processing documents, and legal fees. These fees are always fixed, as per the money lender. However, some companies do not require down payments for their bad credit low-income home loans.
Bad credit low-income home loans differ in a number ways. As the financial situations of low-income groups are in constant flux, the risk of default is very high. Most lenders prefer weekly cash repayments. For getting bad credit low-income home loans, you should first submit a loan application mentioning your needs. You should also present an explanation of your credit reports; the explanation should include the reason for the failing of your credit.
There are a good number of companies and money lenders who provide bad credit low-income home loans at low interest rates and with small or no down payments. Several finance companies and banks specialize in high-rate loans to low-income families. Online services are a convenient and fast method to learn about these loans. They provide the details regarding interest options, rate of interest, prepayment, and repayment options.