Taylor-Brown Real Estate Talks

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If you are like most homeowners you have considered using a home equity line of credit to get out of debt with high interest rate credit cards. There are at rate credit cards. There are at least two schools of thought to consider if you want to get a home equity loan for such a thing.

One thing is that using your home as collateral to get out of debt is risky. Why? If you fail to make the home equity payments you can lose your home. Still yet, the days of your home equity high are gone. Remember, equity is the difference between how much you owe on the mortgage and how much the home is worth. For example, let’s say your home is worth $57,000. In today’s market, it may be worth $65,000. The difference, equity, is $8,000. If you decide to take out this loan remember you now are adding another bill to your already overloaded expenses, so make sure you can handle this before doing it so you will not be facing foreclosure, as a result.

Another option would be to cut up the high interest rate credit card and pay more than the minimum until you get the card paid off. Do not close the account when you are paying it down because that can affect your credit negatively.

Originally posted 2010-01-11 05:00:53. Republished by Blog Post Promoter

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Despite the fact that banking fees are not part of your credit, those fees do affect your credit. How? Those unexpected fees that happen as a results of:

• A bounce check
• Using a “foreign” ATM (not the ATM for your bank)

Can cause you not be able to pay your other financial obligations. After all, when your check is direct deposited in the bank the fees owed are paid first, then whatever, bills or checks that you write against the account. There are, however, ways to avoid these unnecessary fees and yet a strong grasp of your credit at the same time.

The number one way to get a stronghold on your credit using your banking account is to balance your checking account. Ensure that your write down all your transactions in your check register including any fees that may be associated with the transactions. Next, balance your check book by subtracting the amount of the check, debit card transaction, or ATM transaction from the balance of the account.

Stop using “foreign” ATMS. This alone can save you up to $200 a month depending on the frequency that you withdraw money from the “foreign” ATM. As a matter of a fact, the charges for the use of a “foreign” ATM can be as high as $3.00 per transaction. In addition, your financial institution can charge you additional fees, as well, for honoring that transaction.

Understanding the fee structure of the bank before joining it can save still yet a lot of money. Some banks charge fees if you fall below a certain amount in the account. Still yet, the bank may charge fees if you write over a certain prescribed number of checks each month. For instance, one bank can charge $10.00 for every check over 25 that were written. Still yet, I found out from a friend that his back was charging him an overdraft fee for a debit card transaction that over drafted his account and $10.00 a day until he deposited money into the account to clear the transaction. He had amassed at that time over $400 in bank fees.

Another fee structure or pay structure that could get you in trouble with your banking institution is that of interest bearing accounts. On average an interest bearing checking account requires you to have a minimum balance of $832; where as, a non-interest bearing account has a minimum balance of $88. However, with the historically low interest rate that interest bearing accounts draw it may not be beneficial to have such an account.

A great saving choice is that of an insured money market account. It pays a higher interest rate than a regular savings account. Remember, that you can build a nest egg with as little as five dollars a week. I remember when money was tight for me I started with ten dollars a week. Those ten dollars a week went to purchase stock in a company that was considered a commodity. A commodity is something that you or anyone for that matter can use no matter what the economy is doing. As a matter of a fact, that stock help put a down payment of n a home and a car. Incidentally, I still have that stock, today. My point is start small if you have to but start saving.

Another option is look into internet banking. Be careful and shop around for the best option for you. Some internet banks offer better deals, higher yields, and lower fees than traditional banks. The drawback is that you will have to pay “foreign” ATM fees; however, some internet banks reimburse those fees.

Traditionally, the fees, interest rate, overdraft fees, etc. that you pay or receive is often overlook as having an adverse affect on your credit.

I hope this article has opened your eyes to the importance of shopping around for the best banking options and how doing so can improve your chances of acquiring not only a home soon, but improve your credit.

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