Fixed rate vs variable rate home loans

Taking up a loan may be a life-changing call with monetary impacts that unremarkably last for many years. attributable to the big quantity of cash that's usually concerned in an exceedingly loan, the charge per unit is sometimes the best thought for loan borrowers, and justifiedly therefore.

When it involves loan interest rates, there area unit usually 2 major categories: mounted rates and variable rates.

The former remains mounted throughout the loan amount, while the latter fluctuates with market conditions.

For most loan borrowers, creating a selection between the 2 is intimidating. In fact, several don’t even trouble creating the selection and permit the banks to try and do therefore on their behalf.

But for those that would like to create a call on your own judgement, start by understanding the most distinction between mounted rates and variable rates.

As mentioned, a fixed rate home loan features the same interest rate over the entire loan period.  Say you apply for one at a rate of 5% p.a., your outstanding loan amount will be charged at an interest of 5% p.a. until the day you pay off your entire loan. There are absolutely no fluctuations in interest rate.

In Malaysia, variable rate home loans,  meanwhile, are commonly pegged to the Base Lending Rate (“BLR”) as recommended by Bank Negara.

As an example: say you hold a variable rate home loan offering an interest rate of -2.4%; based on the current BLR of 6.6%, your actual home loan interest rate would be 6.6% – 2.4% = 4.2% p.a..

However, if the BLR rises to 7%, your interest rate too would increase to 7% – 2.4% = 4.6% p.a.. Similarly, if the BLR decreases to 6%, your interest rate would lower to 6% – 2.4% = 3.6% p.a..

Interest rates for fixed rate home loans are usually higher than those of variable rate home loans, to consider possible rises of the BLR in the future.

At present, most home loan products offered by banks in Malaysia tend to be variable rate. Fixed rate home loans are more common among “non-bank” financial institutions such as AIA and ING, though they are also available (though not as aggressively marketed) in certain banks.

Many people instinctively select variable rate over mounted rate loans, since the offered rate of interest of the latter is nearly perpetually on top of the previous. as an example, associate degreed fast|a set} rate home equity credit by AIA presently has an rate of interest of 4.85% p.a., whereas a variable rate home equity credit offered by some Malaysian banks ar going at 4.2% p.a..  The mere distinction of 0.65% for a principle loan quantity of RM500,000 could be a walloping RM3,250 in total interest repayments for the primary year!

However, should the BLR rise during the loan period, the picture could change in dramatic fashion.  Say the BLR climbs up to the 8% territory (which actually happened in 1999), a person on variable rate home loan with an interest rate of -2.4% would be paying a towering interest of 5.6% p.a..  In such a scenario, the person who opted for a fixed rate home loan of 4.85% p.a. would be paying RM3,750 less interest every year.

Because there is no way to accurately predict the movement of BLR, there is also no sure-fire way to ascertain if fixed rate or variable rate is financially the better option.  Theoretically, both choices have the potential of saving you money or making you pay higher cost; and it is up to you to balance the potential benefit and potential risk involved.

Refinance Your Mortgage for Lower Rate and Payment Reductions

One of the biggest reasons homeowners refinance their mortgage is to obtain a lower interest rate and lower monthly payments. By refinancing, the borrower pays off their existing mortgage and replaces it with a new one. This can often be accomplished with a no-points no-fees loan program, which essentially means at “no cost” to the borrower.

In the no-points no-fees scenario, the mortgage consultant uses rebate monies paid by the lender to pay off non-recurring closing costs for the borrower. These are “one time” fees such as escrow or attorney fees, title insurance, document preparation, tax service, flood certification, processing and underwriting fees, etc. The borrower is still responsible for recurring fees such as interim insurance, property taxes or insurance policy payments.

Refinancing typically occurs when mortgage interest rates drop significantly, but borrowers with recently improved credit scores (from paying off credit card debt, making mortgage payments on time, etc.) are often candidates for better interest rates as well. If you haven’t checked your credit score in a while, it’s a good time to call a mortgage consultant.

For example: Let’s say you have 25 years remaining in your current loan, and you refinance back to a 30-year loan with a slightly lower interest rate, resulting in a payment reduction of $200 per month. (Note: This is just an example. The actual amount could vary.) You could then take that extra $200 per month and apply it toward the principal on the new loan. At this rate, the loan will be paid off in 22 years and 4 months, which is 2 years and 8 months less than the original loan.

Refinance Your Home Loan?

Bargain mortgage rate shoppers are on a refinancing spree. Many have secured unbelievably great deals. Others have gotten caught up in the frenzy and got the short end of the stick. How can you refinance your home without getting burned?

Last week mortgage application reports indicated that homeowners went on another home loan refinancing spree. Some of the reasons were the long-term impact of the Fed recent rate cut. As mortgage rates declined below 6% homeowners responded to the rate cut sensation with a surge in refinance applications.

Another reason for the refinance wave is the demand for cash. In recent months experts predicted that consumers would put up to $110 billion dollars in spending money back into the economy this shopping season following the ongoing refinancing wave. Using the web as a discount vehicle for commerce consumers have been looking for rare deals in merchandise, investment programs and home loan refinancing in order to pocket cash.

The Mortgage Loan Search Network reports increased use of its financial resources for financing and home loan refinancing. Traffic has increased 33% as user take advantage of mid-term hybrid mortgage loans that allow the consumer to pocket both cash and well as save money for investment purposes such as retirement savings, college savings or to pay down high interest rate debt.

There are many useful sites offering tools tips and guides to finding the best deal on refinance loan rate. The key to successfully locating a realistically low mortgage rate quote is making use of lending marketplaces. These marketplaces are like highly competitive auction houses. Lenders seek to win the users business by offering competitive rates, fees and incentives. The user first needs to figure out what rate level they best qualify for. How to get around various loan fees and added costs as well as how to make several lenders compete for your business. Click for more

Worst Credit Card Mistakes You Could Make

Since each person's financial needs are different, it makes sense that there are different types of credit cards. Before you apply for a credit card, become familiar with the various kinds of credit cards to make sure you're choosing the best credit card for you.The most common type of credit card allows you to have a revolving balance up to a certain credit limit. Credit is used up when you make a purchase and made available again once you've made a payment. A finance charge is applied to outstanding balances at the end of each month. Credit cards have a minimum payment that must be paid by a certain due date to avoid late-payment penalties.

If you have a credit card, you owe it to yourself to use it the right way. Making any of these credit card mistakes could cost money and precious credit score points.

1. Making minimum only payments.

Making the minimum payment on your credit card not only increases the amount of time it takes to pay off your credit card balance, it also increases the amount of interest you pay on your credit card. Increasing your credit card payment helps you pay off your balance sooner and at a lower cost.

2. Paying late.

Paying the minimum on your credit card not only increases the amount of time it takes to pay off your credit card balance, it also increases the amount of interest you pay on your credit card.
3. Loaning your credit card.

When you loan your credit card to someone else, you have no control over the purchases they make. In the end, you’re responsible for paying the bill, even if the person who borrowed your credit card doesn’t.

4. Ignoring your credit card billing statement.

If you don’t open your credit card billing statement, you risk missing your payment due date. You could also miss important announcements about changes to your credit card terms.
5. Letting your credit card get charged-off.

A charge-off is one of the worst things to happen to your credit report and your credit score. The charge-off listing will remain on your credit report for seven years and could effect your ability to get credit cards and loans in the future.

6. Applying for too many credit cards at once.

Every time you apply for a new credit card, you knock points off your credit score. If you start applying for several credit cards within a short period of time, you might notice the denials are more frequent as lenders start getting suspicious about the sudden onslaught of credit card applications. Apply for new credit cards one at a time on an as-needed basis.

7. Not knowing your credit card terms.

Knowing how your credit card company handles late payments makes you more likely to pay your credit card bill on time. Knowing your credit card terms give you more control over your credit card costs. You know how you should and should not use your credit card based on how your creditor will respond to your actions.

Is this the right time to buy gold?

The price of Gold has gone down to well over 1200 USD from a high of 1,600 USD.No, it's not a good time to buy gold, because there is no evidence that gold has reached the bottom. It's down nearly 30% just since the first of the year. That's not a safe haven.The prices may go down also to some extent. Hence I will not suggest you go for bulk buying of Gold. Instead, you should invest using SIP (Systematic Investment Plan) in a gold fund. There are many mutual fund companies (such as Birla sun life, HDFC) etc. that have launched gold fund. This will protect you from downside risk and also let you take advantage of price increase.

Tips Save Money by Refinancing Car Loan

People go to great lengths in order to save even a little money. We clip coupons. We drive halfway across town to buy things on sale. We look for deals online. We buy in bulk. There are many different ways to save money, and comparison shopping is a great place to start. If you compare prices before buying, you're more likely to find a lower price for whatever it is you need.

You may be familiar with the term “refinancing” because of your mortgage. A lot of people choose to refinance their mortgage because it saves them quite a bit of money. However, what most people don’t know is that they can also refinance a car loan. It’s an idea that’s thrown around pretty often among car buyers, but it’s seems relatively new for the rest of us. Good thing to know though is that car loan refinancing is a lot easier than mortgage refinancing – the papers, requirements, the process in general isn’t as stressful.

Here’s some information you need to gather first.

• Go online and research for a lender that offers an online application so you can apply for car refinancing and get a decision back immediately.  
• Determine if the offer presented by the lender is a lower interest rate than you are currently paying. You should also determine what options you have for shortening or stretching out your term to maximize savings.
•  If those terms are suitable to you, complete your paperwork online and return any necessarily documents needed to the online lender.
•  The online lender will payoff your existing loan and you will have a new, lower interest and lower payment loan with the new lender. 

If you have decided to refinance your car loan deal, do not forget to gather the information asked above. Also, don’t forget to do a lot of research, the best deals often need to be hunted down.

Tips To Get The Right Personal Loan

You've got to repair your car, or buy a new refrigerator or make payments for college tuition. Or it has always been your dream to renovate your home in a particular style, perhaps to develop an organic farm around your home, or take a cruise to Alaska with your family.
For all of these expenses that are major enough to warrant a loan but minor and personal enough not to take a home or business loan, there is a personal loan. This is a short-term loan designed to be a quick-fix payment on sudden expenses that are personal in the sense that they relate to your household and family.
Anyone with a generally good credit history can apply for a personal loan. There are two types. Usually personal loans come in the form of unsecured loans. This means that there is no collateral or security offered. So you don't need to mortgage your house against the loan, for instance. This is useful for someone who does not have unlimited assets. Since this is risky for the lender, the rate of interest is high. And non-repayment of the loan with the agreed interest will usually involve taking recourse to the legal system.

On the other hand, there are secured personal loans. As the name suggests, they are offered against an asset like a car or property, or anything else that has a monetary value attached to it. Due to this the loan has a low rate of interest. And in the case of non-payment of the loan amount with interest, the collateral is simply confiscated. The terms of the loan are dictated by the kind of collateral offered. They get easier as the value of the security offered is higher.

If you are looking to get a personal loan, get in touch with your bank or any institution that offers this service. You should shop around a little bit so that you can get the best deal that suits your needs. You should have your eye on the interest rates, the length of term, additional services and the fine print. You could even try to negotiate for a better deal based on your income and collateral in case you choose a secured loan.

You will have to fill out the paperwork and offer proof of your residence, work and identity. And finally set up a savings account, if you don't already have one to receive the loan and through which to make your repayments. Once the bank is satisfied with your background, only then will you be approved for the loan.

  Source : Ankita Ramesh Mathur

No Claim Occure, 15% cash back rebate from Car Insurance

Owning a car is an expensive as well as costly thing to have, and that is the truth. Besides the upkeep and maintenance of the vehicle, you would also have to spend for gasoline, which only goes up these days. Now factor in the possibility of how much you would have to spend if you get into an accident. 

Other than paying for the damage of the car, there could be medical liabilities involved. This is where car insurance plays a very important role in owning a vehicle. It is one of the safest, albeit relatively expensive, policies that you need to have other than your life insurance.
For more extensive coverage, you might want to consider Takaful Malaysia COMPREHENSIVE type of cover. Not only you will get everything that we offer in the THIRD PARTY type of cover, you will also get indemnity for the loss or damage to your vehicle or its spare parts arising out of the following events :

•     accidental collision or overturning.
•     collision or overturning caused by mechanical breakdown.
•     collision or overturning caused by wear and tear.
•     impact damage caused by falling objects provided not resulted from convulsion of nature.
•     fire explosion or lightning.
•     burglary, housebreaking or theft.
•     malicious act.
•     while in transit.

You can also apply for additional coverage which include :

•     windscreen
•     accessories
•     additional authorized driver
•     MPA (Motorist Personal Accident)

A step to heighten the efficiency of service to our participants, the Tele Bantuan programme provides FREE TOWING SERVICE from the point of accident to the nearest Takaful Malaysia panel workshop, 24 hours daily, anywhere in Malaysia.

Also, if there are no claim occure, you are entitle to get 15% cash back rebate from Takaful Malaysia.
For more info Takaful Malaysia

10 Things To Know Before Investing Into Gold And Silver

As the global economy became increasingly unstable during 2010, investors all over the world flocked to precious metals such as gold, silver, copper and platinum.  The price of gold set an all-time record high last year, and gold investors were euphoric.  Many analysts are projecting that prices for gold, silver and other precious metals will continue to soar throughout 2011.  But does that mean that everyone should just suddenly jump into gold and silver?

Investing in precious metals is very different from other kinds of investments.  There are significant hazards and pitfalls to watch out for.  But if you take the time to do it right, investing in precious metals can be very rewarding, and it can potentially be a great way to protect your wealth against the tremendous inflation that is coming in the years ahead.

The following are ten key things that you should know before jumping into gold and silver. 

1. Precious Metals Markets Are Highly Manipulated
Big financial institutions, and even governments, openly manipulate the precious metals markets.  This is an open secret that you should know if you plant to invest in precious metals.  Those who think that they can jump in and out of gold or silver and make a killing usually end up learning a very painful lesson.  Investing in precious metals should be done for the long-term unless you really, really know what you are doing.
So why is long-term investing safer?  Well, as we have seen over the past few years, the short-term manipulation of gold and silver prices usually gets trumped by the long-term trends in the end.
But that doesn't mean that gold, silver and other precious metals won't take some very significant short-term tumbles.The following "mini-documentary" does an excellent job of examining some of the strange things that we have seen in the precious metals markets recently.

2. The Long-Term Trends Are Very Favorable For Precious Metals
As the U.S. dollar has declined, gold, silver and other precious metals have been going up, up, up over the past decade.  Investors all over the globe have been flocking to the safety and stability that they provide.
Just check out the following chart which shows how the price of gold has risen dramatically over the past decade.  In fact, this chart is a little out of date.  At one point during 2010, the price of gold exceeded $1400 an ounce.  As you can see, those who have been investing in gold for the long-term have been doing very, very well

3. Gold Holds Value Over Long Periods Of Time
In ancient Rome, an ounce of gold would buy you a nice suit.  A hundred years ago, an ounce of gold would buy you a nice suit.  Today, an ounce of gold will buy you a nice suit.
Meanwhile, the U.S. dollar has lost well over 95 percent of its value over the last 100 years.
So which is better to hold on to for the long-term - U.S. dollars or gold?

4. The Value Of The Dollar Is Going Down
Usually (but not always) when the value of the dollar goes down, the value of gold goes up.  As the U.S. government and the Federal Reserve have been flooding the system with new dollars, investors across the globe have been flocking to precious metals.
At some point in the years ahead we are going to be facing some very, very serious inflation.  When that time arrives, U.S. dollars are not going to be worth a whole lot.  But all of that gold and silver you have stored up still will be.

5. Physical Gold Is Preferable To Paper Gold
When investing in gold, it is much more preferable to actually take possession of the physical gold than it is to have a piece of paper that says that you have invested in gold.  Someday when the financial system crashes, you may find that your "piece of paper" is not going to do you much good.

6. Diversification Is Key
When investing in precious metals, it is important to diversify.  This spreads out your risk.  Some investors accumulate as many different precious metals as they can.  Others diversify by getting precious metals from a variety of dealers or by accumulating it in different forms - coins, bars, jewelry, etc.
It is always wise not to put all of your "eggs" in one basket.

7. Accumulate Different Denominations If You Can
In the future, if you actually need to spend your precious metals you don't want them all to be of the same denomination if possible.  For example, if you need to buy a little bit of food, you don't want to only have high value coins.  Variety is a good thing, and accumulating different coin denominations is another way that you can diversify.

8. You Cannot Eat Precious Metals
Investing in precious metals should be done only after you have gathered together an adequate emergency food supply.  If the global economy completely shatters, having gold and silver is not going to be good enough.  You are going to need lots of food for you and your family.  So be sure to take care of the necessities before you invest in precious metals.

9. Do Not Advertise That You Are Accumulating Precious Metals
Don't go around telling everyone that you are storing up precious metals.  That is just going to make you a target.  Investing in precious metals is something to be done quietly.

10. Get Educated
If you want to invest in precious metals, you need to get educated.  People that do not know what they are doing are at much greater risk of getting burned.  Be smart enough to realize what you do not know.  Don't be too proud to ask for advice.  Seek out reputable dealers.  If you take the time to do things right, then you will have the best chance for success.
The following video contains some more facts and figures about investing in gold.  I do not know anything about the organization that put this video together, but this video is well produced and it presents a lot of important information about gold in an entertaining manner.

Investing in gold for long term profits

Savers opt to invest in gold for usually one or two reasons - it's traditionally viewed as the ultimate safe haven during times of economic volatility and therefore seen as a wealth preserver. In addition it is used as a hedge against the US dollar.

Given that stock markets have endured some of their worst falls on record as the financial crisis hit, that the response to this was to print unprecedented amounts of money and that the dollar has been floundering, it should come as no surprise that gold boomed. In addition, it is liquid, so therefore easy to sell and buy. It always has supply issues - mining output peaked in 2003 and there's never enough to meet demand.

Gold's long-term returns

Although gold like any other commodity, experiences periods of, sometimes very strong volatility over the long term its returns have been spectacular.

Famously, when Gordon Brown was Chancellor of the Exchequer, he sold off more than half of the UK's gold reserves - some 395 tonnes - in a series of auctions between 1999 and 2002, when the price of bullion was in the doldrums. The move cost the public purse billions of pounds as the average price achieved in the auctions was $275 an ounce. 

Gold is now worth more than five times that.It is very important to remember, however, that while gold has a strong track record of holding its value in terms of what you can buy with an ounce, its price is also entirely dependent on investor sentiment.
When you buy a share you take ownership of a small part of a company that aims to grow, generate profits and return cash to investors either through share price growth, dividends or both.When you buy gold, you are buying some precious metal that people hold as valuable.

 

 

The Only Gold Coins Investors Should Buy

With gold having doubled in price over the last four years - not to mention a U.S. dollar that continues to weaken - it's no surprise at all that the world coin markets are attracting buyers like moths to a flame. First timers often arrive and are confused by all that's available - including rare and antique coins, and a numbing array of "collector" and "commemorative" coins.

But here's a rule of thumb that will make things simple: If you're an investor looking to bolster your portfolio with a modest helping of "hard assets," there's really only one category of gold coins to consider.if you still want to buy gold coins, you need to understand two things:

• Are you an "investor" or a "collector?

Before You Buy

The most important step that you need to take is to determine just why, exactly, you wish to buy the gold coins in the first place.

Are you looking to buy them strictly as an investment - a hard-asset addition to a portfolio that's otherwise composed of stocks, bonds, funds and other such "intangible" assets? Or are you more likely to become a collector?

There's no wrong decision, but you do need to know - because that decision should determine just what kind of coins you are willing to buy.

If you think the coin designs are beautiful, enjoy knowing about their designers and the history of the images depicted, and love how it feels to hold and look at them, then you're probably more of a collector than an investor. That means you'll want to bone up on minting standards, grading, rarity, the completion of coin "sets," and display methods before you begin purchasing.

But if you're trying to establish a hard-asset reserve against the next financial Armageddon - or want to be able to sell at a profit next month or next year - then you are playing in our ballpark and are definitely an investor.

And means you should target the basic bullion coins.