For most of us, loans are a necessary part of life. Building credit responsibly ensures that when we need a little extra cash or funds for a significant purchase like a car or a home, we get fast approval with the very best terms available. While it is often easy to obtain credit regardless of your circumstances, there are differences between the types of borrowing available and the amount of interest you’ll be charged.
It’s important to fully understand how credit works, so we will break down the subject to give you clarity.
As we have established, a good credit score is important because it helps creditors determine the level of risk someone carries. This information will determine if credit will be extended, the type of loan offered, the interest rate, and potentially the repayment period.
Having a high credit score is beneficial because it ...
Personal debt is often referred to as consumer debt and it simply refers to money we borrow to pay for goods or services we need or want. When a bank, credit union, or store provides money to borrow they are known as a creditor or lender. The consumer or individual agrees to pay back what is borrowed with specified terms. There are various forms of credit that can be extended to an individual, some of them are as follows:
Unsecured credit cards — these are funds that you can borrow up to a certain limit or dollar amount without any asset (owned by you) to back the borrowed amount. The credit is revolving, meaning if the funds are not used up to the credit limit they are available to borrow at any time. Once the balance is paid off or down, borrowing may resume. Finance or interest rate charges accumulate each month based on the outstanding balance and the stated annual percen...
Everything You Need To Know About Buying a Home Pt. 1 (Credit & Mortgages)
Buying a home is without a doubt the most significant purchase we make in our lives — nearly all of us buy property with a mortgage. There are so many different types of mortgages available on the market that it is difficult to understand the wildly varying terms and conditions. Understanding the relevant terminology behind this very important purchase is the first step towards demystifying the process and allowing you to make the best decisions.
Here we take an in-depth look into the world of mortgage finance.
The Down Payment
One of the first steps to owning a home is to plan for the amount of money you want to put down. The down payment serves as immediate ownership or equity in the home. It is a good goal to have saved at least 20% of the home value to pay upfront and then finance or get a mortgage for the remaining 80%.
When a home buyer has less than 20% to pay upfront, ...
Everything You Need To Know About Buying a Home Pt. 2 (Taxes, HOA, & Post-Purchase)
There’s no way around it: once you have bought a home, you have taken on another tax obligation. How much you pay in property tax depends on the value of your property and where you’re located. It’s always worth taking taxes into account when you’re house hunting. Bear in mind that areas with high property tax rates generally have a wider choice of amenities than those where you have a lower rate.
How do property taxes work?
Even though some states in the U.S. don’t levy income tax, every single one has property taxes! This is because they are a vital source of revenue for state and local governments. As a resident, you want to ensure your community is well looked after.
The money gained from property taxes is used for infrastructure such as transport links, schools, colleges, and public safety. It makes sense then that the local counties that have the widest range of amenities and best quality schools are going to cost more in property tax than some other counties across the country.
There are different ways you can pay your property t...