Why Use a Mortgage Calculator

The financial squeeze means more or less everyone – including the US government – is looking at their spending and trying to find ways to trim any unnecessary expenses.

This means that an increasing number of people are scrutinizing their mortgages to see if they are getting the most competitive deal or whether it would be more cost-effective to move their home loan to another lender.

This is one way in which a mortgage repayment calculator can come in useful, as it can provide an indicator of what the likely installments would be if you switched lenders.

However, it is important to remember that a mortgage calculator is only as good as the information that is put in and is designed to provide no more than a rough estimate of likely future costs.

Despite this, a mortgage repayment calculator can be a great way to get an idea of the differences between deals being offered on the market and reach a decision about which one is the best for you.

To get the best use out of a mortgage repayment calculator, it is necessary to know the interest rate that applies. This can usually be obtained from the lender's website or literature.

Some lenders provide their own online calculators that are pre-populated with the typical interest rate applicable, which simplifies the process somewhat.

All mortgage calculators need the amount being financed, the length of the loan and the interest rate applicable as a basic starting point. Some calculators are more complicated and take into account additional factors such as annual insurance – including principal mortgage insurance – as well as taxes, but these fields are usually not compulsory.

As well as using a mortgage calculator to work out how much the repayments would be for a deal already in the market, it can also be used as a handy budgeting tool.

Those on variable rate mortgages are watching the interest rates with trepidation, with many wondering what will happen to their monthly payment if the interest rate rises.

By simply adjusting the interest rate field, the repayment calculator can help by predicting how much you are likely to have to pay.

For those looking to find a bit more wiggle room in their budget, a repayment calculator can provide an idea about whether they could reduce their repayments.

By playing with various fields, such as extending the term of the loan, those looking to reorganize their finances can get a better idea of what effect various changes may have.

At the opposite end of the spectrum, those with a bit of spare cash may be wondering whether they would be better off overpaying on their mortgage or putting the money in a savings account. A mortgage calculator can show the effect that plowing some extra dollars in would have.

One of the best things about mortgage calculators is that they are free to use and available to anyone who has access to the internet.

Whilst the same information would be available from a mortgage broker, having the freedom to sit and play with numbers and work out the best deal without any sales pressure or time constraints, can be a very valuable tool.

Guest Post by MoneySuperMarket

5 things you should always shop around for

There are many things we purchase throughout the course of our life that don't require a lot of pre-planning or forethought. There are, however, some important things that we purchase that should be carefully researched and considered before rushing out to buy. 

In order to get the best value for money, make sure to shop around for items such as loans, insurance and your home/apartment. Automobiles and high-ticket electronics & technology should also be carefully researched.

There are a number of different types of loans we may need to take out at one time or another. 

Student loans help us pay for our much valued college education. Automobile loans help provide us with the luxury of owning our very first brand new car. 

Home loans help us buy that dream house we've always wanted. Home equity and personal loans make it possible for us to put in that swimming pool the kids have been begging to have for ages and ages. 

As interest rates and repayment periods vary greatly from lender to lender it is important that you shop around for the product to make sure that you are getting the most out of your money. Comparison websites are a great way of doing this as it cuts down on the amount of research required by you.

Check competing interest rates and figure out which loan terms best fit your situation. Do you want a 10-year loan with a higher interest rate or a 30-year loan with a lower interest rate? 

Another item for which you should always shop around is insurance. Whether it's medical, home, auto, or life; insurance is a necessity. 

Ask for referrals from people you trust. Often, a good insurance broker is a policy expert and can find the best policies for you, at the best prices. 

Much as you would shop for a loan, consider using the same criteria when shopping for insurance. Purchase the policy with the terms that best suit you. 

Do you prefer a medical policy with a low-copay and a higher deductible? Or would you rather pay a higher monthly premium and have a lower out-of-pocket maximum? 

When shopping for a home or apartment, make a list of your "must-have" items, a list of "would-be-nice" items and a "no way, can't do it, won't deal with it" items. Work with a respectable realtor to help you find a suitable living space that meets your standards.

Do your research and shop around before buying an automobile. Whether shopping for used or new, take your time and find the best car for the best money. Dealerships offer some advantages, like on-site financing and service, but buying from a reliable individual may be less expensive because you're not paying for a lot of overhead.

Often, if you're trading in a car or if you have a substantial amount of money to put down on the purchase price, you can reduce your monthly payments significantly.

High-ticket electronics such as desktop and laptop computers, flat screen high digital televisions and home theater sound systems should be researched in advance. With the abundance of these items now being sold in warehouse-type chain retail stores, price shopping is easier than ever before.

Post by MoneySuperMarket

The Right Way to Obtain a Credit Card

“You can save 10% on this purchase if you open a credit card at our store.  Would you like to do that now?”

Make any purchase at a department store and, if you are not currently one of their store’s credit card holders, you will hear that pitch.  You may have even fallen for it.

Credit card offers abound, but there are right ways to obtain credit cards and ways you should avoid.

The Wrong Way to Obtain a Credit Card

• Open an account just because a store offers a one-time discount off your purchase.  In most cases the 10% discount on your purchase will easily be recouped by the store.  They are counting on you using the card frequently, running up a balance and having to pay interest (which many customers do).  Don’t be enticed by the discount. 
• Apply for a credit card because you get a free tee shirt or mug.  Credit card companies used to be notorious for setting up a table at a college campus and enticing students to open a credit card by giving them a freebie bag.  Rules on this behavior are stricter now, but again, don’t sign up for a card just because you get a small item for free.

The Right Way to Obtain a Credit Card

• Apply for one from your bank or credit union.  Chances are they will have a reasonable interest rate and agreeable terms.  (Still, be sure to read the fine print before signing up.) 
• Apply for one that offers you rewards.  There are many credit cards that give members rewards.  If you fly frequently, try a credit card that offers flyer rewards.  If you drive frequently, consider getting a credit card that rewards you with gas discounts.

When applying for credit cards, make sure that you know what the APR will be, if there is an annual fee, and what the terms of payment are.  Once you have done your research, open an account with confidence.

Credit is part of life, and if you are responsible about the way you obtain credit after careful research, you can make sure credit cards are a positive part of your life.

Are you a rate-hopper or a promo junkie?

Rate-hoppers and promo junkies. You may have never heard the terms, but each apply to a certain type of credit card consumer.

As you may have guessed, rate-hoppers always keep a lookout for the lowest interest rates and make balance transfers more often than the average consumer.

Promotional junkies are lured by the promise of rewards and sign-on promos. A promo junkie may not care about balance transfers like the rate-hopper, but he'll sign up for more credit cards than he needs in order to reap the benefits.

Certainly there are true benefits to transferring balances to lower interest rate cards and for taking advantage of promotional offers, but there can be some disadvantages as well.

Rate hoppers know the value of a low interest rate. It is never a bad idea to transfer a balance on a high interest rate card to one with a 0% introductory rate.

Transferring a high balance to a 0% interest credit card can save a lot of money, even if the introductory period lasts for no more than a year.

The trick to taking full advantage of a balance transfer is to pay the credit card off in full before the 0% introductory rate ends. Most rate-hoppers, however, do not do this.

Rate-hopping can show up as a negative on your credit report. Some financial institutions have reservations about lending to a rate-hopper because of the number of closed accounts. They may assume you will bail out of your financial obligation to them before they can make a profit out of your business.

Promo junkies like opening new accounts with any company that offers a deal that's simply too good to pass up. Tempting promotions can come in the form of cash back, airline miles, free trips and those popular credit card points.

These promotional junkies dream of the day they can cash in those points for rewards, but it takes a lot of spending to rack up the points. Even if you don't use the card enough to stockpile the big points, some companies offer smaller awards such as MP3 downloads, books and DVDs.

Some credit card companies allow you to combine points with another cardholder, meaning you could end up sharing a reward that neither of you could have earned alone.

Other rewards include cash-back options. This means you can redeem those stockpiled points for cash or even a credit on your account.

The problem some promo junkies may run into is the temptation to apply for more credit cards than necessary. Having too many cards makes it more difficult to earn a substantial amount of points on one card alone. It may even mean a larger debt than intended.

Whether you are a rate-hopper, a promo junkie, or simply a savvy consumer, comparing credit card offers is a smart move. Utilize websites that allow you to compare cards before applying for any offer that comes in the mailbox.

Comparing credit card companies puts you in control. You can quickly see the card with the lowest APR percentage and lowest fees for balance transfers. The 0% interest period is plainly listed with other perks and rewards. Reading product reviews is another way to ensure you're making the right decision.

No matter your style, rate-hopper or promo junkie, it pays to be mindful of options.

Guest Post by MoneySuperMarket