When it is time to get a new set of wheels, it’s time to get a new set of wheels! You do not want to be kept hanging around waiting for some auto loans clerk (who is on commission) to make a decision as to whether or not you get an auto loan! Here are five tips to help you out when you go looking for that new auto.
The less debt obligations you have, the more cash you will have free every month to put towards a mortgage payment. I recommend paying off any credit card debt you have before buying a house because with high interest rates, your debt can easily snowball. Anything with an interest rate over 8-9% is potentially trouble.
If you’re also told that it’s all right if you’ve got less for the expected downpayment, do your homework. A monthly fee for the Private Mortgage Insurance will be levied against your loan and you’ll be paying this insurance for years, adding to the burden of paying the loan for 15 or 30 years.
Free Loan Calculators period: Usually a car loan is for 3 to 5 years, but you can ask for a longer tenure as well. It is always better to repay the loan as soon as possible to cut down on interest payments.
Look back whether you have sufficient life and health insurances already in place, just in case. Auto loan lenders, sometimes insist on additional insurance cover depending on your financial and credit report status. You will have to take this into your car budget in case you are lacking them.
You will be surprised how many lenders you will find on the internet. Just point your browser to: Personal Loan. Scores of lenders will pop up. You will be able to shop among them, choosing those with the lowest rates and the most comfortable repayment terms. You would make a smart move by pulling up one of the free Free Loan Calculators to figure total costs including interest rates, fees, etc.
We need to calculate the approximate annual property tax rate. This figure will vary not only by region but also within regions. In California we can start with a normal base rate of 1.25% annually. By taking 1.25% multiplied by the target sales price of $250,000 and divided by 12 months we arrive at a property tax figure $260.42 we can use in our initial calculation.
If you are borrowing $300,000 your payment with no points will be about $1,850. If you were to pay two points (2%) and be able to lower your rate a full percent, say from four percent to three, your new payment would be about $1,700. Even though your loan amount would increase $6,000 to accommodate the 2 points (2%), you’re going to be surprised at the results. Just by your willingness to pay the 2% (2 points) you save yourself about $150 each month. That adds up to $54,000 in savings over the life of a thirty year loan. When you look at it this way, why would you not pay any points?
Need more help? Get out of debt by applying the techniques I mentioned in my blog. Visit my blog for more ideas how to eliminate debt, and debt management settlement for more debt management settlement tips.