1. Refinance your auto loan
There are a lot of people who purchased cars within the last few years who are green with envy over today's low auto rates. Most car owners can now lower their payments by $20 a month by refinancing. The entire process takes about 20 minutes and the only fee is a title registration charge, which is usually about $25.
2. Use the equity in your home to reduce the anxiety associated with job jitters
Although many people have begun building an emergency fund, most people don't have one. For people who are truly concerned about their job security and don't have an emergency stash, it's not a bad idea to put a home equity line of credit in place now. "You can't get a loan, when you really need a loan," is an old cliche, but unfortunately, it's often true. If a person loses their job and then tries to get a home equity loan, they might not be able to get one. Although it's not a substitute for an emergency fund, a home equity line may reduce some anxiety until a person achieves their savings goals. Homeowners don't pay any interest on a home equity line until they tap it, and the interest they do pay may be tax deductible.
3. Consolidate your debt, then cut up your credit cards
There's no reason consumers should pay 18% interest on their debt if they can pay 5.25% APR by consolidating their debt through a home equity line of credit. That being said, if they turn around and charge their high interest rate credit cards right back up again, they'll negate the benefits of consolidating their debt.
4. If you haven't refinanced yet, it's time to get off the sidelines; but consider all the options
It's no secret that we're in the midst of refinance boom and that all homeowners should be monitoring their mortgages to see if they can get a better deal. At the same time, it's very important for people to examine their full range of alternatives and make sure that they're refinancing into a product that is in line with their personal and financial objectives. For instance, many people are instinctively drawn to 30-year fixed mortgages. However, if they're planning to be in their home for only a few more years, is a 30-year fixed really the right choice? Not necessarily. People should do research and get professional advice on their mortgage just like they do when they're making investment decisions.
5. Don't do a cash-out refinance if you don't need the cash
For many people who are in the midst of refinancing their mortgages, it's very tempting to take cash out. However, if they don't really need the money in the near future, they may want to think twice. It may be more advantageous to lock in the equity in their home through a home equity line of credit, and avoid paying interest until they have a purpose for the money.
6. Check your credit score, order your credit reports, and clean up inaccuracies
E-LOAN offers credit scores for free -- to ensure that they know where they stand before they apply for a loan. In addition to their score, people should also review their credit reports from all three credit bureaus so that they can dispute any inaccuracies as soon as possible. Because it's not unusual for it to take one to six months to correct a mistake, it's very important that people stay on top of the information contained in their credit reports, which directly impact their credit score. This is particularly the case for people who are planning to make a significant purchase, such as a new home or car, within the next few months.
7. Stop paying private mortgage insurance (PMI)
Mortgage insurance is generally only needed when your loan amount exceeds 80% of your property value. Keep in mind that home values have increased in many places, so many people may have more equity in their home than they realize.
Besides being expensive and not having any tax advantages, another annoying thing about PMI is that it's not uncommon for these insurers to forget to notify their customers when to stop paying. Homeowners should take the time to call their PMI representative to determine whether they've built up enough equity in their home (over 20%) to eliminate this pesky expense.
Also, interest rates are often lower when you have significant equity in your home. Refinancing could eliminate your mortgage insurance and lower your rate and payments.
8. Lower the APR on your credit card balance.
If you can't take advantage of the equity in your home to consolidate your credit card balance, you can still take advantage of this lower interest rate environment. Make sure you're not overpaying with your current credit cards. Even if you don't carry a balance, you may find there's a better "rewards card" for your needs.
This article provided by E-Loan