minibikemulisha asked:


I have $15,000 in government student loans at 5.5%. They go back into repayment in 6 months. I’m just entering the work force and I’m thinking about doing a graduated repayment plan, it will rise as I make more and inflation rises. I have $20,000 saved in my bank account from work and saving. One friend of mine told me to use half of the $20,000 towards my loans before I consolidate making my loans at $5000, but that is money that didn’t come very easy for me and not very easy to make back since my income is currently low. Another friend told me to put my loans into repayment and invest my $20,000 I have saved and use my student loan interest tax write off to put towards taxes I have to pay from my investing. Use the money earned to pay my student loan monthly payments. I have no credit card debt, mortgage payments or any other debt besides a small car loan.

Any advice towards this situation would be great. If I should invest I’m open to investment advice, I’m not familiar with investing and I know the stock market is a mess at the moment. Thanks for your time.

Yolanda

Don asked:


Mortgage loans are calculated, reliant on the kind of interest that you signed up for. This is established on the interest rate and the period of the mortgage. The less the duration of the payment, then the more costly, the bill is on a monthly cycle; however, the higher the bill per month, the shorter the time period of the payment.

It’s all about the question of how much you can spare. Devise a budget and contemplate, how much can you really pay in a month. Think long term. Will you still be earning that exact amount in two, three years time? Do you have sufficient savings just in case an unexpected accident happens? How long can you maintain, paying the mortgage?

This is how some lenders calculate how much they can lend you. The housing payment is your total mortgage payment set parallel to, your monthly income and the total debt ratio – meaning what you are committed to pay, in the big picture.

That’s why there’s also the question of “Should I buy or rent?” If the person isn’t yet financially sound, it is more advisable that he or she rents in the mean time. Nonetheless, calculations show that the expenditures on rent are somehow close to signing up for a home mortgage.

Also, there’s a great feeling of pride in owning your own home. But with that comes the obligation of paying your bills on time. Plus, now that you’re a homeowner, you’re also required to set aside a large amount of your salary for taxes. Owning a home also means paying for utilities such as gas, electricity, water and food.

For you to determine, think whether choosing a home is what’s relevant, for you at this time. Determine if you have enough to actually afford to buy your own home. If not, then it’s better that you rent.

Now here’s where the mortgage rates come in. Begin by analyzing the interest rate and rate activity of a specific mortgage loan you’re signing up for. Mortgage rates rely on the Wall Street securities. Watch the stock market and the mortgage market trends to know the secrets on the direction of where your mortgage is going.

You must also learn the APR or the Annual Percentage Rate. By law, mortgage companies are required to reveal the APR to their customers. That is how they should advertise a rate. This is done so that people who signed up under them will be familiar, with where their rates are going. It demonstrates the true cost of the loan to the borrower and can be seen extensively when the yearly rate is presented. This avoids lenders, from hiding fees and for customers, to have an open association, with their mortgage dealers.

As much as possible, try to meet with the lender, in person. When money is involved, personal agreements, are better because not only can you define better, you could also have an idea of what type the person is, on the end of the phone or at the receiving part of the email you send out.

Now that you have met up with a dealer, know your APR, examine the stock market, and then you are prepared, to lock in your rate. This means that you are ready to commit with a lender and the lender is bound to a guarantee, to this certain interest rate.

From there, you must work on a budget. You must put aside an exact amount from your salary, for your mortgage and, if you can pay quicker, then why not? If you have extra money, speak to your lender and ask if you can pay for a higher amount.

For good credit history, always pay more, not less. Pay on time, not late. This is to safeguard, that you won’t have a difficult time mangaging, with insurance issues in the future.

With the right determination and the right budget, you won’t have any problem with money. It’s just having the self-control, of creating a budget, then maintaining it and paying on time.

If it is organized as such, notice that you could even save a couple of your own dollars.



Roberta