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Refinancing - Is It Always (wealth management advisors) Worthwhile?

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By Paul Hata

 This is a very important question which all homeowners should ask themselves both at the start and towards the end of the process of re-financing. The answer to this question can spur the homeowner to investigate re-financing further or convince the homeowner to table the thoughts of re-financing for the moment and concentrate on other aspect of owning a home.

Establish Financial Goals

This should be the first step in the process of determining whether or not re-financing is worthwhile. Without this step, a homeowner cannot accurate answer the question of the worth of re-financing because the homeowner may not fully understand his own financial goals.

While financial goals may run the gamut from one extreme to another, the most basic question to ask is whether the more significant goal is long term savings or increased monthly cash flow. This is important because re-financing can usually achieve these two goals.

Do You Want to Save Money in the Long Run?

Homeowners who establish a goal of saving money in the long run should consider re-financing options such as lower interest rates or shorter loan terms. Both of these options can considerably lower the amount of interest the homeowner is paying on the loan. This is significant because paying less interest will result in a greater cost savings.

Consider an example where a homeowner has an existing debt of $100,000, an interest rate of 6.25% and a loan term of 30 years. Just by reducing the loan term to 15 years the homeowner can significantly decrease the amount which is paid in interest during the course of the loan.

However, this option will also result in an increase in the monthly payments made by the homeowner. Therefore this type of re-financing option may only be available to those who have enough cash flow to compensate for the increase in monthly payments.

Do You Want to Increase Your Monthly Cash Flow?

Some homeowners may have a chosen goal of increasing their monthly cash flow. For these homeowners the overall cost savings may not be as important as having more money available to them each month.

These homeowners might consider a re-financing option in which they are able to extend their loan terms. This means they will be repaying the existing debt over a longer period of time. The homeowner will pay more in interest in the long run but will achieve their goal of lower monthly payments and an increased cash flow.

How Will Re-Financing Affect Tax Deductions?

This is another serious consideration for homeowners who are interested in investigating the possibility of re-financing. The interest paid on a home loan is often tax deductible. A homeowner who re-finances in a manner which results in less interest being paid annually may adversely affect their tax strategy.

The implications of this type of chance can be amplified for homeowners who were previously just below a significant tax break line. A significant decrease in the amount of interest paid will mean a significant decrease in the deduction the homeowner is allowed to take.

This reduced deduction can put the homeowner in an entirely different tax bracket and could end up costing the homeowner money in the long run. For this reason, homeowners who are considering re-financing should have a tax preparation professional determine the ramifications re-financing will have on their tax return before a decision is made.

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Has The Oil Price Topped For Good?
By Jennifer Stromsteen

 Quite a while ago I predicted that crude oil prices would top $130 per barrel in 2008. My forecasts were correct. Crude oil topped around $147 per barrel a few short weeks ago. Since that time, the price has fallen dramatically to around $113 per barrel today.

Are prices going to stabilize here? Will prices fall further? Or is this just a temporary correction in an ongoing trend of ever increasing oil prices?

My opinion is the latter.

Here are some facts:

1. Production at Mexico’s giant Cantarell oil field is falling dramatically Crude output from Cantarell, the world’s third-largest oil field, is falling at the fastest pace in 12 years, down a stunning 34% in May, 2008 from a year earlier, or a loss of more than 540,000 barrels a day.

I had originally thought that Mexico’s oil exports could halt by the end of 2010. It seems that I was too optimistic. Recent reports are that Mexico’s internal demand coupled with the shrinking supply are creating the conditions for Mexico to switch from being a net exporter to a net importer much sooner than 2010.

Naturally, falling production is curbing exports to the U.S., which buys about 80% of Mexico’s oil exports. Sales to the U.S. tumbled to 1.07 million barrels per day in May, 2008 from 1.4 million barrels per day in September, 2007.

2. World demand is growing rapidly. Here’s a fact that you probably were not aware of: the United States actually exported more than 300 million barrels of oil last year. Given the political talk about decreasing our dependency on foreign oil, it’s an oddity, indeed, that the oil companies would be selling domestically refined gasoline, diesel fuel and other products overseas. Why not just sell it domestically? Because other countries are willing to pay, simple as that.

Half the world’s population is now emerging out of their poverty onto a plain where they need oil just as much as the developed world. $2,500 cars are now becoming available in China and India and the rest of Asia. More than 20,000 new cars per day are being sold to Chinese citizens who have never owned an automobile before. Additionally, a steady 10% GDP growth per annum is predicted to continue for the next decade at least, confirming that demand for oil will not slow at all but continue to increase even more.

Other factors include the recent military actions in the country of Georgia, tensions with Iran, and the sinking value of the dollar on the world currency market. Even without these factors taken into consideration, it is not hard to imagine oil prices topping their recent record of $147 per barrel.

It could even happen before Christmas.

J Stromsteen has many years expertise in the finance, real estate, insurance, and home business industries. She contributes to the website Internet Business Opportunity where you can find a very unique Work From Home Internet Business Opportunity that includes free, highly specialized one on one training.

How To Consolidate Your Debts
By Paul Hata

 Debt consolidation offers users an opportunity to get out of debt and to regain control over their lives once again. Many people owe a lot of money and often struggle to find ways to payoff their debts.

Debt consolidation is often the best choice in this scenario, as it can help debtors pay off both secured and unsecured loans.

Debt consolidation will also give debtors the chance to reorganize their lives along with their debts. If they choose to go with a debt consolidation program, then a qualified company will help them combine their bills into one monthly installment.

The debt management solutions can help you by terminating your interest rates on personal loans, mortgage loans, credit cards, and other loans. The overview of debt consolidation then is that you will pay off your debt sooner and have more cash to spend later.

Few online debt consolidation lenders will help debtors reduce their debts. Homeowners who are in over their heads in debt can use their homes as collateral to payoff their debts.

The loans offered are given to the debtor to repay the debts; and then the debtor must payoff the loan in monthly installments. In other words, your bills are calculated and rolled into one monthly installment.

If you have credit cards, then the interest rates will roll into the monthly installment, as well if you have personal or home loans or other types of loans, then the interest rates are rolled in to one balance per month.

If you own a home and your credit is bad, you may want to seek out a bad credit mortgage lender to help you reduce your monthly installments and interest rates. Be aware that some mortgage lenders will increase your rates of interest and mortgage installments while claiming to lower your bills.

There are, however, loans available that provide genuine opportunities, such as early pay-offs, cash back loans, lower interest rate loans, lower monthly mortgage payments, and so on.

The lenders are aware that families run into problems and instead of taking advantage of this, they will work hard to help them get out of debt and restore their credit.

There are also lenders that will combine your mortgage, interest and bills, including credit cards into one monthly payment after refinancing your home.

Finally, if you are in debt over your head, don’t become like the person who despairs and accepts that he will lose his home, vehicle, and business; rather, become the person who attacks things proactively to find a solution before you are that far in debt; start seeking out the proper debt consolidator right now.

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Wednesday, August 20th, 2008 at 2:30 am and is filed under finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.