Is Equity Release Worth It?

Published on: 13 November 2018 Last Updated on: 08 August 2019

You might be having second thoughts on whether or not to get an equity release loan. On the one hand, you want to use the money for a significant transaction. On the other hand, you are afraid that the interest rate will be too high over the years, and it could result in the drastic reduction of your property’s value. If it is your only property, and you have nothing else to leave your children, you want them to enjoy its full value.

How to make a decision

It is understandable if you are having a hard time choosing. To help you decide, think about where you wish to use your money. If you are paying hospital bills and other emergency expenses, and you have no other choice, proceed with your plan. It is reasonable for you to take it. You are also making the right move if you intend to use the money for home improvements. You will be staying in your property until you die, so it does not hurt to invest in home improvements. Besides, it could help boost the value of your property.

On the other hand, if you are thinking of using the money to invest or start a business, it is a bad idea. You are at an age where you can’t wait to see where your money goes, or if it will someday grow. You need to enjoy your money at this point since you worked hard your entire life.

It is also reasonable to use the money if you wish to travel the world. It might not be reasonable if you were young, but at this age, do whatever you want to satisfy your desires. You might not have this opportunity someday, so while you still have it, make the most of it.

Check the details

Aside from how you want to use the money you borrow, you also need to check if the terms and conditions are fair enough. There are equity release schemes that are reasonable, while others seem to take advantage of your age. You can seek help from a consultant to tell you the details you don’t understand. The information online might not be good enough for you to make a sound decision in the end.

Look at the repayment scheme, and if there is a fee if you complete the payment earlier. You also need to look at the steps involved once you die, and your family needs to pay back the loan. If it is too difficult for them, and you think they will not receive a significant amount, you might as well look for other options.

Should you get one?

After consultation and research, you can decide whether or not you will take the loan. You already have the necessary information at this point to choose. When choosing, think not only of what you need now but in the long run. Think of how it will affect your family, but it does no harm to be selfish and think about its impact on you.

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7 TIPS TO REDUCE CREDIT CARD BILLS

If you have a large amount of credit card debt and you are only making minimum payments every month, you are not going to pay it off any time soon. In fact, if you only make minimum payments, it could be decades before you find yourself debt-free again. It is extremely important to put yourself in a proper financial position, and a good way of doing that is by reducing your credit card bills. Tips to reduce Credit Card Bills: Here are a few tips on how to reduce your credit card bills that will help you pay off your debt: 1. Take Stock: Before you start to reduce your credit card bills make sure you know where you stand. By this, we mean know your target. You will never hit the target if you don’t know where it is, so be honest with yourself. 2. Pay more than the minimum: As discussed before, if you only make minimum payments each month, then it will take ages before you find yourself debt-free again. Thus, it is clear that paying more than the minimum due you can lower your monthly credit card bills, but still, so many customers struggle in making that the priority. Making a little more than the minimum payment every month will eventually help you in the long run. 3. Ask your credit card company for lower rates: A simple and quick way to lower your credit card bill is by negotiating a lower interest rate. Just by reducing the rate of interest by one or two percent, you can save hundreds of bucks. Try calling your creditors and ask them politely to lower your rates. If you have a good credit score and have been a loyal customer to them, then you can easily negotiate and get yourself a lower interest rate. 4. Target one card at a time: People often use multiple credit cards to buy stuff. More cards mean more accounts which eventually leads to more debts. If you are using multiple credit cards, then a good way to lower the bill is by targeting one card at a time. Focus on one account and try to clear that first. Get the minimum for each card, but pay as much as you can on the card you are targeting first. Usually, paying the card with the highest interest rate works. 5. Make a budget: Make yourself a budget every month and stick to it. It can be difficult to adjust your lifestyle too quick, so instead, try going for small adjustments. It can be as simple as cutting out one or two pizzas each week or by changing your thermostat by few degrees. Reducing your costs a little bit can help you out in the long run. Remember to save yourself a few extra bucks every month in case an unexpected bill pops up. 6. Make two minimum payments every month: A good way to lower your bill is by making two minimum payments. Since credit cards apply interest daily, cutting your balance during the month will reduce the minimum payment for the next month. 7. Transfer your balance: Another good way to reduce your monthly payments is by transferring the balance from a card with a high-interest rate to a card with a low-interest rate. If done properly, this can save you hundreds of bucks every year. Remember that credit cards with a low rate of interest are mostly introductory offers which last about a year and a half, so make sure pay off the debt before the rate of interest increases. Conclusion: We hope these tips can help you to reduce your credit card bills. If you know more tips on lowering the bill, post them in the comment sections below! hence if you want to make your choices in the right direction then the use if the credit card bills can make things work for you in all possible manners. Work out the best strategy that can help you to achieve your objectives in the best possible ways. Read Also : Are Debt Consolidation Loans Recommended For Credit Card Consolidation Credit Card Fraud The Holiday Season: Things To Consider For Next Year What Are The Important Parts Of A Free Business Credit Report?

5 steps to take if your personal loan application is rejected

Ever applied for a loan, only to get rejected? Having your loan application turned down can be a discouraging experience, especially for first-time borrowers. Or, you may have taken loans in the past and wondered why your recent application wasn’t approved. The truth is that there are a variety of reasons that can affect your personal loan eligibility. Often times, it’s just one main issue, but other times, it can be a combination of reasons. If you aren’t sure why your loan application got rejected, you can use a personal loan eligibility calculator to check what was the shortcoming in your personal loan application. Read on to find out what you should do to increase your chances of approval in the future. 1. Check the lender’s eligibility criteria All banks and lenders have a basic criteria that determine whether a borrower qualifies for a loan. The main reason why most people’s loan application gets rejected is that they did not meet all the lender’s criteria. The eligibility criteria for a personal loan include age, income, location, credit score, employment, and other factors. Lenders will clearly mention this eligibility on their website or app. Generally, banks have stricter eligibility criteria and only accept applicants with a higher salary and excellent CIBIL score, whereas digital lenders have wider eligibility criteria. If you have read through the lender’s eligibility criteria but still aren’t sure whether you qualify, use a personal loan eligibility calculator. 2. Improve your CIBIL score CIBIL score is a summary of one’s creditworthiness based on their credit history. Although the minimum CIBIL requirement varies from lender to lender, one of the reasons that your application may have been rejected is because your CIBIL score is too low as per the lender’s eligibility criteria. Check your CIBIL score from the CIBIL website. If it is less than 650, you should work on improving your score by using a credit card. Spend responsibly and pay your card in full before the due date. This will help increase your credit score. 3. Make sure your outgoing expenses are low One of the reasons that lenders will reject a personal loan application is because the applicant has too many existing debts, and for such a borrower, taking on another financial burden would increase the chances of default. Take a look at your finances and see if there are any expenses you can cut back on. If you have a lot of existing debt, work on repaying them off before you apply for a new loan. 4. Provide the correct details Loan applications can get rejected if there is even a small error or a signature mismatch. Ensure that the details you provide in the form are clearly written/typed out, and most importantly, correct. Providing false details about your income, identity or credit score will certainly be detected by lenders, and this is another reason why many applications get rejected. Be honest in your application form, as some lenders are willing to accept applicants with less than perfect CIBIL scores or incomes. 5. Apply for a lower loan amount Due to your current financial capacity, you may not be able to take on the responsibility of paying back a huge loan. If you’re still in desperate need of a loan, aim for personal loans singapore as it makes the best offerings in financial capacity. Aim for around 40% or less of your net monthly income. Conclusion Don’t feel disheartened if your loan application got rejected. Follow the tips above in case your loan wasn’t approved this time, and re-apply after 90 days. If you aren’t sure whether or not you qualify for your desired loan amount from a lender, be sure to check the eligibility criteria for more information. You can also use a personal loan eligibility calculator to check for your loan eligibility. Read Also: 3 Factors That Determine Your Personal Loan Interest Rate 7 Reasons To Apply For A Loan Online 5 Questions To Ask When Deciding On An SBA Loan

Ideal Retirement Age Planning: Strategies For Financial Freedom

When approaching retirement planning, it is widely recognized that starting early is a cornerstone of ensuring a secure and comfortable retirement. The notion of an ideal retirement age may vary individually, but there are certain age-related milestones that can guide individuals in maximizing their retirement benefits and minimizing penalties. Consistent saving from the beginning of one's career, coupled with a clear understanding of these milestones, is essential in laying a strong foundation for the future. Retirement planning is not a one-size-fits-all process; it involves a series of strategic decisions tailored to an individual's life stages and financial situation. Assessing how much do I need to retire on $100,000 a year in retirement is another critical component of the process. This involves not only saving but also making informed choices about retirement accounts and investments to ensure that the funds will grow adequately over time. Individuals must also be mindful of specific age benchmarks that impact retirement planning. For example, being aware of when they are eligible for certain government programs and the implications of withdrawing retirement funds at various ages can help in avoiding unnecessary fees and optimizing benefits. This strategic management of timing in relation to age is a key aspect of effective retirement planning. Determining Your Retirement Goals When planning for retirement, individuals must carefully assess their financial needs and health factors to establish a clear and realistic set of goals. Assessing Financial Needs A critical step in retirement planning is determining the amount of savings required to sustain one's desired lifestyle. Retirement calculators can be instrumental in estimating the necessary nest egg. These calculators assess current income, savings, and anticipated retirement age to provide a personalized savings goal. To tailor these estimates, individuals should consider: The proportion of current income they aim to replace during retirement is often recommended to be around 70-80%. Expected major expenses, such as housing and leisure activities. Potential sources of retirement income, including Social Security benefits, pensions, and annuities, which can reduce the reliance on personal savings. Evaluating Health and Life Expectancy Individuals' health status and life expectancy play a significant role in retirement planning. Those in good health may require a larger nest egg to support a potentially longer retirement period. Key considerations include: Life expectancy data to inform the duration of retirement savings should last. The cost of health care, generally rises as one ages, necessitates a larger reserve in the retirement fund. Long-term care insurance can mitigate the risk of high unexpected health-related expenses. By focusing on these aspects, individuals can establish a retirement plan that aligns with their unique circumstances and supports a financially secure and healthy retirement. Retirement Savings Strategies Optimal retirement savings strategies are centered on maximizing contributions to retirement accounts, understanding the significant effects of compounding over time, and balancing risk with investment choices. Maximizing 401(k) and IRA Contributions Individuals should aim to contribute the maximum allowed amounts to their 401(k) and IRA accounts each year. For 2024, the contribution limit for 401(k) plans is $20,500, with an additional $6,500 in catch-up contributions permitted for those aged 50 and over. IRAs offer a lower threshold, with a contribution limit of $6,000 and a $1,000 catch-up contribution. Taking advantage of these limits can significantly enhance one's retirement savings, especially when employers match a portion of 401(k) contributions. Understanding the Impact of Compounding The power of compounding cannot be overstated in the context of long-term investment. When returns are reinvested, they generate additional earnings over time. This effect is particularly potent for those who start investing early. For instance, investing just $100 a month starting at age 20 could lead to a substantial accumulation by retirement age, assuming a modest annual return. Balancing Risk and Investment A well-balanced investment portfolio blends various asset classes, such as stocks, bonds, and possibly other investments, to align with one's risk tolerance. Typically, stocks offer higher growth potential but come with increased risk, whereas bonds traditionally provide more stable, but often lower, returns. As individuals approach retirement age, they may consider shifting their investment focus towards more conservative options to preserve capital. Additionally, the use of a Roth IRA can be beneficial for tax-free growth and withdrawals in retirement, depending on an individual's tax situation. Navigating Government Benefits Government benefits for retirees hinge on correct timing and a thorough understanding of eligibility requirements. This section guides through Social Security and Medicare, two pivotal components of retirement planning. Optimizing Social Security Benefits To maximize Social Security benefits, individuals must consider their full retirement age (FRA), which varies from 65 to 67 depending on their birth year. Claiming benefits at the FRA ensures the full monthly benefit amount. However, one can begin receiving Social Security payments as early as age 62, but this results in permanently reduced benefits. Before FRA: Reduced benefits At FRA: Full benefits After FRA: Delayed retirement credits Strategically, delaying Social Security benefits beyond the FRA can increase the monthly payment by a certain percentage until the age of 70, offering one of the simplest ways to enhance one's retirement income. Planning for Medicare Eligibility Medicare eligibility begins at age 65, regardless of one's FRA for Social Security. Enrolling in Medicare on time is critical as late enrollment can result in penalties and gaps in coverage. Medicare includes several parts: Part A: Hospital insurance, usually premium-free if one has paid Medicare taxes for a sufficient number of years. Part B: Medical insurance, covering doctor's visits and outpatient services, which requires a monthly premium. Part D: Prescription drug coverage. Understanding the interplay between Medicare and other health benefits is also important, as it might affect decisions regarding employment benefits or Marketplace coverage. Individuals should review their options within the IEP or Initial Enrollment Period (IEP). It begins three months right before the month of their 65th birthday whereas it ends after three months. Conclusion: Preparing for the Unexpected In retirement planning, addressing potential risks and preparing for unforeseen healthcare expenses are crucial. They often advise individuals on incorporating health insurance and long-term care into their financial strategy and emphasizing the importance of an emergency fund and insurance options. Incorporating Health Insurance and Long-Term Care One must assess the risk of healthcare expenses and the necessity for long-term care. Health insurance is vital for managing costs associated with medical care during early retirement, especially prior to Medicare eligibility at age 65. Long-term care insurance can safeguard one's finances by covering expenses that traditional health insurance does not, such as in-home care or assisted living facilities. Assess Early Retirement Needs: Individuals retiring before age 65 should plan for their health insurance coverage to bridge the gap until Medicare. Long-Term Care Costs: Evaluate the potential need for long-term care services, which can quickly deplete retirement savings. Building an Emergency Fund and Considering Insurance Options An emergency fund is a backbone of financial security, acting as a buffer against unexpected expenses. They also stress considering various insurance options, such as life insurance, to mitigate financial risks to dependents. Furthermore, understanding penalty-free withdrawals from retirement accounts can provide greater financial flexibility in case of emergencies. Emergency Fund Size: Aim to save at least three to six months' worth of living expenses in an easily accessible account. Insurance as a Safety Net: Life Insurance: Provides financial support to beneficiaries in the event of the policyholder's death. Flexibility with Retirement Funds: Familiarize with conditions under which penalty-free withdrawals from retirement accounts are allowed, to avoid unnecessary financial strain during emergencies. Read Also: Smart Ways to Invest in Gold How To Start Your Investor Journey: 5 Credible Options To Explore What Investors Should Know about Investment in Gold and Silver Assets

Is Equity Release Worth It?

How to make a decision

Check the details

Should you get one?

How Intranet Services Can Make Your Financial Institution More Effective

6 Loan Mistakes Every Business Owner Must Avoid

Content Rally

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

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Related

7 TIPS TO REDUCE CREDIT CARD BILLS

5 steps to take if your personal loan application is rejected

Ideal Retirement Age Planning: Strategies For Financial Freedom

Is Equity Release Worth It?

How to make a decision

Check the details

Should you get one?

Share this Article

How Intranet Services Can Make Your Financial Institution More Effective

6 Loan Mistakes Every Business Owner Must Avoid

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

Leave a Reply

Popular

Follow Us

Recent

Related