Tag Archives: rates

The Ups and Downs of Doing a Balance Transfer

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So you’ve gotten yourself into some credit card debt and you’re feeling a little overwhelmed about how to get out of it. It seems like every time you look at your balance, it’s gone up way more than you expected because of those pesky interest charges, and you’re beginning to wonder whether you’ll ever be able to get it back to zero.

But then, a beacon of hope arrives in the mail. Your bank is telling you that you can put a stop to those interest charges—at least for a little while—by putting all of that debt somewhere else. Or, maybe a new bank is telling you to bring your debt over to them by opening an entirely new account. Whether or not you should take advantage of one of those balance transfer offers depends upon the current state of your credit and the merits of the offer itself.

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If you’re interested in opening a new card, one of the negative sides is that, even though the direct mail letter may make it seem like you can basically call them and the card will appear in your hand, you still have to apply for the new line of credit. Because of that, the process can take time and you risk being denied. Daily Finance advises against applying for several lines of credit at a time because it will work against your credit score, decreasing your chances of actually getting a new credit line. However, if you are approved, your credit score could increase because your credit utilization rate (or your credit-to-debt ratio) will improve.

Using an existing line of credit may be a great way to consolidate your debt as well, especially if you already opened a new line of credit in order to complete a balance transfer in the past. CreditCards.com shares the important reminder that you may not be able to open a new line of credit because creditors could see you as a risk if you continue to carry a balance even after getting new credit. Being seen as a risk would make it harder for you to get different types of credit, such as loans for cars or a home.

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Regardless of whether you need to open a new account or are considering using an existing line of credit, make sure to read the fine print to find out how much it will cost. Every balance transfer will have a fee associated with it, regardless of the bank or the newness of your account, but some balance transfer offers have lower fees than others. Another consideration is the length of the zero or low interest rate promotion: some give you 18 months to pay off the amount, while others give you 24 months. USA Today makes an important point for debtors: creditors have no legal obligation to remind you of the end of your promotional rate, so it’s important to be diligent about paying off the entire amount in time or be prepared for the appearance of interest charges when the promotional rate expires.

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In addition to enjoying a lower interest rate on your debt, you’ll have the added benefit of easier, streamlined payments. If you have found yourself confused by due dates and bill cycle closing dates, this may be a very real perk to help you get back on top of your debt. The phrase “consolidating debt” sounds a lot fancier than it really is: all it means is that you put all of your debt in the same account, typically using a method like a balance transfer. But, keep in mind that many balance transfer offers have a limit on the amount of debts you can transfer.

If you do a balance transfer, be careful not to forget about the debt or only pay the minimum just because you are enjoying a zero percent interest promotion. Make regular payments and remember, if you have zero debt, you won’t have to worry about finding a card with zero interest!

Tips for Buying a Home

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Ever get that feeling like you just want to put down some roots?  You’re not alone (obviously: usnews.com reports that census data indicates that for the last 5 consecutive years, 600,000 new American homes were acquired annually).  As you contemplate this decision (the purchase of what is for most people the most expensive item they will ever possess), you naturally are wondering “What are the smartest moves I can make?  What should I avoid like the swine flu?”  With home buying season in full swing, here are some useful tips on how to get the most bang for your buck and the best house on the block.

Keep your money like your letters: stationary.

Wheeling and dealing just months prior to attempting to close on a home doesn’t send the best message to creditors and banks.  In fact, it freaks them out like a creepy clown who offers you glistening red cotton candy.  It’s best to keep your money stable and it’s “not wise to make any huge purchases or move your money around three to six months before buying a new home.” states hgtv.com.  Just…be cool.

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Get ready to make yourself comfortable.

If you can’t stay in one location for the next few foreseeable years, then you are NOT ready to buy.  Unless you’re a professional “house flipper,” who knows the intricacies of the market, bouncing from home to home is not a stellar idea.  “With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner.” reports money.cnn.com.  Don’t forget: each time you purchase a home there are “closing costs,” which can be devastatingly high, even when the overall market is seeing a spike.  Your helpful attorney still needs to get paid, like a boss.

Make a list, check it twice.

Before even viewing your first potential new living space, you should make a list of all the things that you absolutely can not live without (hard wood flooring, functioning pipes, garage door operator, the Clapper, etc.)  Further down on the list, clearly demarcate the items that you would strongly like to have (lemon yielding trees, glossy garden gnomes).  Then, you can scribble at the bottom some “would-be-nice” features (within Fresh Direct delivery radius, chic gothic porch lights, sexy neighbors).  When inspecting homes, bring along your list.  Foxbusiness.com supplies the advice: “If you fall in love with the house and your checklist shows that the house has none of your must-haves, it will at least make you pause and think.”  Meaning, if you’re all but ready to cut a check for a modern one bedroom ranch style home, and then you refer to your list and realize you have 8 kids, please do not make the purchase.

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“I’ll have to ask my agent…and my Aunt.”

At this point you are well aware that a real estate agent can possibly find you the perfect home – of course when utilizing an agent you’ll have to pay their fee (check out Bravo’s “Million Dollar Listing” to watch some of these 6 figure commissions get handed out like Skittles).  If you want to avoid such a cost, or just want to keep all options open, try simply asking around.  You’d be surprised to see what results a few emails sent out to friends and kin could drum up.  Some sellers elect to not use an agent either, and will list their property “for sale by owner.” Investopedia.com suggests “driving around the neighborhoods that interest you in search of for-sale signs.”  You may find your dream house right on your fantasy block.  And lest you forget, there is always the ever expansive internet to scour for permanent lodgings, just try not to become overwhelmed by the multitudinous sea of choices.

Foresight for sore eyes.

“When it comes to investing, the best place to invest is in an up-and-coming area,” says frontdoor.com.  This may seem obvious, but it can be very tempting to look the other way if you find a lovely house…that is in a rapidly deteriorating location (ie – if the neighboring homes all come with pit bulls on the lawn and screams/death rattles from within, it’s best to move it along).  The safest bet is to buy in an area that looks as if it’s expanding and developing, or at least is just stable; you can always make improvements to your home, you can’t to the neighborhood.

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“Lowest Mortgage Rate” Ads:  Worst.  Thing.  Ever.

A quick Google search on ‘ways to finance a new home’ will leave you bombarded with a slew of sparkly “lowest mortgage rate” advertisements.  Caveat emptor!  Forbes.com warns that “these ads are typically paid for by lead-generation firms that pass on your personal information to pushy mortgage lenders.”  It’s the ole ‘bait and switch’ move.  Many a plucky and unsuspecting new home buyer has fallen prey to these louche-like tactics, becoming proselytized into confusing and rigidly binding mortgage contracts.  Just stay away from these and anything that resembles them, and, if possible, consult with a financial planning specialist.

Speaking of mortgages…shop around!

Various banks and lenders can offer you different types of mortgages/loans.  You need to pick the one that is right for you.  For instance, there are long term loans, with a “fixed rate” (which is lower than an “adjustable rate” loan, where you have more leeway, and are not necessarily locked in for decades.)  “You might be one of those people who never plans to buy another home, so maybe you’re more interested in a 30-year, fixed-rate mortgage,” offers howstuffworks.com.  Even if you’re a commitment-phobe, you’ve got to be thinking about the big picture, and what makes the most financial sense with your lifestyle (real estate purchases for the novice are no place to be acting out any “Mad Max” fantasies of reckless abandon – let’s stay grounded and keep it real…estate.)

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Become a supplemental-case.

One of the shrewdest things you can do before making a massive purchase is to supplement your income.  Not everyone is adept at playing the market or has a yacht that they can hock.  However, there is one asset that many Americans are in possession of: a piece of diamond jewelry.  Either a diamond engagement ring, vintage diamond earrings that were handed down from Nana, a diamond tennis bracelet gifted by an opulent and impetuous former lover; a lot of different people have a lot of different diamonds.  If you have a diamond that is one carat or higher, it can go a long way in aiding the initial financing of a home.  The liquidation of a diamond engagement ring can significantly help with the down payment of a property.  The most important thing to do if you are in this boat (and, again, don’t actually own a boat), is to find a trustworthy intermediary with a great reputation.  Enter Diamond Lighthouse.  Our unique diamond selling platform allows for people to get the true, fair value for their diamond jeweler.  We don’t buy diamonds, we help you sell yours and take a commission from the sale = we want to get you the most money possible.  Find out everything there is to know on this topic right here.

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Let Diamond Lighthouse find you the best value imaginable for your diamond jewelry, as you begin your new home purchasing journey.  Remember, at the end of the day, there’s no place like home.

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-Joe Leone