Is Taking Cash Out to Buy Bitcoins Smart?

Posted on January 17, 2018 by Scott Li

There’s been some economic uncertainty in the US for several years now, and this means Americans are taking some unlikely routes toward financial security. One of the latest trends involves homeowners taking out mortgages to buy Bitcoins, a virtual currency that’s slated to become more popular over the next several years. Is this a smart move, or are these homeowners simply throwing their dollars away?

The Beginning of the Bitcoin Mortgage Trend

Early in 2017, one Reddit user took out an equity loan for the sole purpose of buying Bitcoins. At the time, it was trading for around $3000 a coin, and prices have since skyrocketed. That Reddit user is now quite a bit richer and his investment certainly paid off, but his daring attitude is rubbing off on others. According to Joseph Borg, a securities regulator, people are now using all their available lines of credit to buy into Bitcoin. This includes maxing out credit cards, using their home equity, and even taking out second mortgages all to get in on the Bitcoin craze. read more

Key Differences between Fixed-Rate and Adjustable Rate Mortgages

Posted on January 16, 2018 by Scott Li

Though most everyone understands the basics of what a mortgage is, there are some factors and variables that tend to get confused. If you’re shopping for a mortgage, you might hear the terms “variable rate” and “fixed rate” from time to time. Understanding the differences between the two can help you make better personal decisions when it comes to taking out home loans.

What is a Fixed-Rate Mortgage?

To put it as simply as possible, when you take out a fixed-rate mortgage, the amount of interest you’re charged for that mortgage never changes throughout the entire lifetime of the loan. If you take out a 3.8% fixed-rate loan, you will pay 3.8% interest for the entire duration of that loan. Your monthly mortgage payment is the same each and every month, but your lender will adjust the amount of that payment that goes to the principal balance (the amount you borrowed) and the interest (the fee you are charged for borrowing) automatically. For example, if your monthly mortgage payment is $1000, then with your first payment, you might be paying only $300 toward the principal balance and the other $700 in interest. As time goes by, you pay more on the principal and less on the interest with each monthly payment. read more

Things to Consider when Getting a Mortgage in 2018

Posted on January 15, 2018 by Scott Li

Though the stock market seems to be the hotspot for investors going into 2018, real estate still remains a lucrative and fruitful investment opportunity, as well. If you’re considering a mortgage in 2018, whether you’re simply making an investment or buying your first family home, there are three very important factors you should consider.

#1 – Tax Changes on Large Mortgages

A million-dollar home isn’t in everyone’s budget, but even for those who have the credit scores and who can afford the monthly payments, things might change this year. If you’re considering a high-dollar home, be sure to consider the notion that the provision allowing you to itemize mortgage interest on loans up to $1 million in value may no longer exist. In fact, there are lawmakers working to halve that amount, which can take a significant chunk out of your wallet come tax time. read more

Unique Ways to Find your Down Payment Money for Purchasing your First Home

Posted on December 1, 2017 by Scott Li

Coming up with enough money for a down payment is one obstacle that gets in many people’s way. After all, it can take years to save the thousands of dollars that’s needed to qualify for a traditional mortgage. That does not mean you are destined to wait forever, as there are plenty of creative ways you can come up with enough money for a down payment right now.

Ask Family Members for a Gift

Do you have a well-off relative who could afford to part with some extra cash? How about a parent or grandparent who might leave you an inheritance one day? Convince them to offer you a one-time gift, and both of you will win. They can enjoy a hefty tax deduction while allowing you to collect the keys to your brand new residence. read more

Items You Should Never Buy with a Cash-Out Refinance

Posted on November 30, 2017 by Scott Li

A cash-out refinance can help you consolidate debt and lower your mortgage payment. That doesn’t mean you can use that extra cash however you see fit. There are some limits as to what is prudent use of the money and what isn’t. To make the most of your refinance, avoid spending those extra funds on the following.

#1. A new car

The idea of paying for a new car with cash may sound exciting, yet is something you should definitely avoid. After all, you are not actually paying cash, but rather financing your new vehicle for the life of your mortgage-something that could be as long as 30 years. Do you really want to pay on an automobile that long? We didn’t think so. read more

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