Top 5 financial decisions you’ll regret forever

Top 5 financial decisions you'll regret forever

Financial regrets. We’ve all had a few. But there’s a big difference between making an impulse purchase that you second-guess the morning after and making a major decision about your money that could haunt you for a lifetime.

We reached out to dozens of financial planners and personal-finance experts for their views on some of the most consequential mistakes people can make with their money. We also offer advice on fixing these mistakes — or avoiding them altogether — so you’re not left ruing the day when you blew your budget, wiped out your savings or otherwise sabotaged your financial future.

1. Borrowing from your 401(k)

Taking a loan from your 401(k) can be tempting. After all, it’s your money. As long as your plan sponsor permits borrowing, you’ll usually have five years to pay it back with interest.

But short of an emergency, tapping your 401(k) is a bad idea for many reasons. According to John Sweeney, executive vice president for retirement and investment strategies at Fidelity Investments, you’re likely to reduce or suspend new contributions during the period you’re repaying the loan. That means you’re short-changing your retirement account for months or even years and sacrificing employer matches. You’re also missing out on the investment growth from the missed contributions and the cash that was borrowed.

Keep in mind, too, that you’ll be paying the interest on that 401(k) loan with after-tax dollars — then paying taxes on those funds again when retirement rolls around. And if you leave your job, the loan usually must be paid back within 60 days. Otherwise, it’s considered a distribution and taxed as income.

Before borrowing from a 401(k), explore other loan options. College tuition, for instance, can be covered with student loans and PLUS loans for parents. Major home repairs can be financed with a home-equity line of credit.

2. Claiming Social Security early

You’re entitled to start taking benefits at 62, but you probably shouldn’t. Most financial planners recommend waiting at least until your full retirement age – currently 66 and gradually rising to 67 for those born after 1959 – before tapping Social Security. Waiting until 70 can be even better.

Let’s say your full retirement age, the point at which you would receive 100% of your benefit amount, is 66. If you claim at 62, your monthly check will be reduced by 25% for the rest of your life. But hold off until age 70 and you’ll get a 32% boost in benefits – 8% a year for four years – thanks to delayed retirement credits. (Claiming strategies can differ for couples, widows and divorced spouses.)

“If you can live off your portfolio for a few years to delay claiming, do so,” says Natalie Colley, a financial analyst at Francis Financial in New York City. “Where else will you get guaranteed returns of 8% from the market?” Alternatively, stay on the job longer, if feasible, or start a side gig to help bridge the financial gap. There are plenty of interesting ways to earn extra cash these days.

3. Paying the minimum on credit cards

Americans’ plastic addiction is taking a toll on their bottom lines. The average household with debt owes $15,762 on credit cards, according to personal finance website NerdWallet.com.

“It can take years and years and years to potentially pay off that credit card debt with the amount of mounting interest costs,” says H. Kent Baker, professor of finance at the Kogod School of Business at American University, “especially if one continues to charge more and more and more.”

Consider this example: You have a $5,000 balance on a card with a fixed rate of 12.5%, typical of what banks are charging these days. If you only make minimum payments, it’ll take nearly 10 years and $1,700 in interest to eliminate that $5,000 debt, a Bankrate calculator shows.

What to do? First, stop making new charges. Second, if possible transfer the balance to a lower-rate card. Third, pay more than the minimum. Even a small boost to your monthly payment can result in significant savings on interest. Above all, advises Baker: Live within your means. (Kiplinger’s Household Budget Worksheet can help you get back on track.)

4. Putting off saving for retirement

Financial professionals have heard the refrain before: “I’ll start saving for retirement when I make more money.” But that fiddling while Rome burns won’t cut it as retirement nears.

“Many people do not start to aggressively save for retirement until they reach their 40 or 50s,’’ says Ajay Kaisth, a certified financial planner with KAI Advisors in Princeton Junction, N.J. “The good news for these investors is that they may still have enough time to change their savings behavior and achieve their goals, but they will need to take action quickly and be extremely disciplined about their savings.”

Morningstar calculated how much you need to sock away monthly to reach the magic number of $1 million saved by age 65. Assuming a 7% annual rate of return, you’d need to save $381 a month if you start at age 25; $820 monthly, starting at 35; $1,920, starting at 45; and $5,778, starting at 55.

Uncle Sam offers incentives to procrastinators. Once you turn 50, you can start making catch-up contributions to your retirement accounts. In 2016, that means older savers can contribute an extra $6,000 to a 401(k) on top of the standard $18,000. The catch-up amount for IRAs is $1,000 on top of the standard $5,500.

5. Passing up professional advice when you need it

We all can use a hand once in a while, especially when it comes to tricky aspects of our financial lives. For example, some of the financial professionals we talked to pointed to the panic brought about by the sharp economic downturn in 2008 and 2009. Many individuals poorly timed when to get out of the stock market and when to get back in.

“Investors who aren’t very experienced tend to buy high and sell low, when you’re supposed to buy low and sell high in the stock market,” says Catherine Shenoy, director of applied portfolio management and senior lecturer at the University of Kansas Business School. “That’s one way a professional financial adviser can help you.”

Advice isn’t limited to investments. The right financial pros can assist with everything from taxes and insurance to retirement savings and estate planning. And good advice can pay off for you and your loved ones. Common but avoidable mistakes such as dying without a valid will or failing to designate the correct beneficiaries for your retirement accounts could leave your heirs in limbo and even see your wealth go to the wrong people.

“Not carefully choosing your financial adviser can be a huge mistake,” says Andy Tilp, an investment adviser representative with Trillium Valley Financial Planning in Sherwood, Ore. “It is very important to have an adviser who is a fiduciary for the clients and is working solely in the client’s best interest. An adviser who sells high-fee, commission-loaded products is helping his own net worth but can be a disaster for the client.” (Learn more about what to ask a financial adviser when hiring one.)

Most annoying fees on credit cards

Most annoying fees on credit cards

There seems to be little logic to why some companies tack on nuisance charges.

Fees for this, fees for that — even a fee for paying a fee. Where does it end? I’m afraid I know the answer. In this tough economy, businesses of all types are trying to nickel and dime us with add-on charges. They want you to believe these fees are necessary to cover the cost of doing business, but more often than not, they simply mislead the consumer by adding a hidden mark-up to the advertised price.

Sometimes the fees are small, but other times they can be severe. The mortgage loan industry has been doing this forever, but now the practice has spread like the plague to many other services. I can’t be the only person who is outraged by this continuing practice. Or am I?

Here are eight classic fees that really gnaw at me. Some of them I do a pretty good job of avoiding. Others, not so much …

1. Unlisted Phone Number Fees

This is arguably the granddaddy of them all. I currently get charged $1.75 per month for my unlisted telephone number — $21 per year. Why does it cost the phone company more to keep my number out of the phone book than in it? That’s a rhetorical question, but I’ll answer it anyway: It doesn’t.

2. Convenience Fees

I recently bought four tickets online from Ticketmaster so I could take the wife and kids to see the Harlem Globetrotters. Cost: $300 for the set. But on top of that was a “convenience charge” of $5 per ticket that added $20 to my bill. Usually, buying online saves a company money that they’d otherwise spend on a telephone operator or a store clerk. So why am I being charged to make Ticketmaster’s existence more convenient?

3. Fees for Printing Tickets

I’m not done with Ticketmaster. After gagging on the $20 “convenience” charge for my Globetrotter tickets, Ticketmaster wanted to charge me $2.50 so that I could print the tickets from my home printer. Keep in mind that I also had the option to get the tickets via the postal service — for no charge. Where’s the logic in that? How much do you think it costs Ticketmaster to print the tickets on heavier stock paper, using their ticket machines, and then pay their staff to place the tickets in envelopes with the proper postage and mail it to my house? I don’t know either, but I made sure that’s exactly what Ticketmaster did.

4. Hotel Safe Fees

There are more than a few hotels out there that charge you just for the privilege of using their in-room safes — whether you use it or not. Here’s one hotel that charges $1.69 per night. What a joke. Whenever I see this fee, I ask to have it waived.

5. Tax e-Filing Fees

Among the most egregious fees out there are the ones that charge money for essentially doing nothing more than making a mouse click or pushing a couple of keys on a computer keyboard. How much money does it cost to send some bits of information through the Internet? Well, if you ask TurboTax, it’s $36.95. That’s what they charge to e-file a state tax return. So rather than printing out the return and sending it through the mail, I clenched my teeth and reluctantly paid it. Hey, if you paid attention you’ll find a lesson on opportunity cost buried in there.

6. Tax Refund Fees

After spending four hours doing my taxes with the online edition of TurboTax, I was due a refund. “Perfect!” I thought, “I’ll have TurboTax simply deduct what I owe them directly from my refund.” Unfortunately, it turns out TurboTax charges an additional $29.95 if you choose to go that route. My only other option was to pay by credit card — at no charge. How does that make any sense? So I paid with plastic. I hope TurboTax had to pay the credit card company an interchange fee for me using it too. Dummies.

7. Mortgage Junk Fees

There are dozens of mortgage junk fees out there, some more dubious than others, that make you scratch your head and ask what the heck is that for? Re-conveyance verification fees, commitment fees, and the infamous “warehouse fee” are just three classic examples.

8. And Then There’s This

It’s bad enough that airlines almost universally charge fees to people who have the audacity to travel with luggage. But a while back, United, US Airways, and Delta took things a step further by charging their “valued” customers who chose to pay for their bags at the airport, rather than online, an additional fee of between $2 and $3 per bag.

The dangers of using a debit card

The dangers of using a debit card

Consumers should be especially vigilant during the holiday season because identity thieves out en masse. Therefore it is essential that consumers keep their debit cards on the ice, “said Beth Givens, director of the Human Rights Chamber of privacy and exchange one of the foremost experts on the nation Protecting your private information confidential.

What makes debit cards so dangerous? Givens has so many reasons, his organization has developed a comprehensive information sheet if you must use cash, credit or debit card when you shop. (The report also explains the failure of gift cards.)

Here is the short version of the dangers of speed:

1. Limit Losses

Like credit cards, federal law limits your liability for fraudulent transactions on a debit card at $ 50. But only if you notify your financial institution within two days of discovery of theft. If you are a cadet of the space and do not check your bank statements for a couple of months, you could lose everything.

2. Pay Now / Reimburse Later

If someone has fraudulently used your credit card, you do not pay the fee. But when someone has fraudulently used your debit card, money is deducted directly from your account in real time. That means you’re out of money while the bank does have a quiet examination of their records to assess your application fraud. Many consumers complained to the Privacy Rights Clearing House have said they have lost access to their funds for several weeks. In the meantime, they have been caught short and unable to pay their bills, Givens said.

3. Merchant Disputes

The same problem affects merchant disputes. If you pay with a credit card when ordering something online, and that the product is damaged, broken or not at all, you can dispute the charge and stop payment by credit card. If you used your debit card, fees are paid when you order. When you find the goods were not what was announced, the merchant has your money and you are in the unenviable position of having to fight to get your money.

4. Phantom Expenses

If you use a credit card in a hotel, the hotel makes an impression when you register, but do not charge your card until you visit. It is a very different story with a debit card. Generally, the hotels put on hold “on funds in your account for more than you spend. Yes, more. They hold the entire amount of your stay, plus an estimated amount for “false”, such as meals at the hotel restaurant and diving into the mini-bar. This is not a real charge, the hold comes off your account at the end of your stay. But it affects the available balance in your checking account anyway and can lead to overdrafts. One consumer said that these accusations phantom cost him $ 140 in overdraft fees. These takeovers are usually placed on transactions made by debit card at hotels, service stations and car rental companies.

5. Overdrafts, Overdraft and Most Found

Overdraft charges have soared in recent years and the vast majority of consumers who pay to explain their discovery is the result of a transaction by debit card. Many consumers naively that if they have insufficient funds in their accounts, their bank would not approve a slip flow. But they were wrong. The result: a $ 4 coffee could trigger an overdraft fee of $ 35. Government regulators are reigning in these costs by requiring banks to give consumers the opportunity to “opt out” of overdraft protection automatically, but that does not begin to existing accounts until August. (If you have a new account, it starts in July.)

6. Skimming

Financial scammers have obtained sophisticated in recent years and that you use “skimming” machines to read your card information and charge your account, “said Givens. When your debit card is skimmed, your bank account can be drained before you know you’ve done.

Financial fights that can lead to divorce

Financial fights that can lead to divorce

Much has been written about how difficult economic times forced them to postpone couples divorce. They simply can not afford. The legal fees and accounting fees grow as a union is dissolved and a two-earner family life less than a pair of two single-person households.

As the economy improves, we’ll probably see the divorce rate climb. But even if money woes are not separate couples, financial disputes are still the cause of irreconcilable differences. Here are seven common financial issues that may lead to a divorce:

Paycheck Envy

More women enter the marriage with assets of their own and many earn more than their spouses. According to the Bureau of Labor Statistics, one in three women married outside her husband wins. This amount increases by more than half if they earn $ 55,000 or more.

Men may feel threatened by not having their bragging rights as traditional breadwinners. For women, this means they have their own money away from the irresponsible action of a companion. With more play, women can not afford to be accepted to their partner how past generations were.

Debt

Utah State University Professor Jeffrey Dew author of a study often cited, which found that couples argue about finances at least once a week are 30% more likely to divorce than those who do sometimes leads to questions of money. Couples with no assets were 70% more likely to divorce compared to couples with assets of $ 10,000.

Cup in the ability to build the assets is dependent upon long-standing American credit card, but it can be a source of optimism. Who raised a record $ 988 million in revolving debt in 2008, the Americans eroded nearly 90 billion dollars last year there, according to the Federal Reserve. credit cards less debt should result in increased savings, more active and potentially more couples happy.

Bills

As part of an investigation last year, Fidelity Investments has found that less than half of couples make the daily decisions and financial issues such as budgeting and paying bills (45%) .

In many couples, one person is still paying the monthly bills at the beginning while the other could wait until the due date and beyond. checks can be cut even more stressful when one blows unnecessary monthly budget shopping and boyfriends do not take kindly to cable or text message their expensive batteries Better Half in the mixture.

Economy

While half of the relationship may be economical, offering dedicated and committed to building a retirement plan, the other may be more carefree, with a live “today, you can not take it with you “Outlook.

Invest

We can assume that investment decisions are increasingly dividing couples if both partners are financially sophisticated. The risk tolerance may be incompatible with the objectives out-of-synch.

Dump Apple or go long can also be a divisive debate that how often a mother-in-law visit. Overlooking an investment portfolio or 401 (k), one spouse may want to explore emerging markets fund, while the other rejects nothing, but in any national security to the large caps and bonds.

Then about a guy find true happiness with a sort of fundamental analysis of the gal?

Different Expectations

There is no shortage of men and women who value money more than love and companionship. You can be quite content to “live love” and weather financial situation “for better or for worse.” But she may feel entitled to a McMansion in a suburb of Tony and a Mercedes in which to drive your children to private school. Trouble is brewing with his latte grand prize.

Secret Stash

Financial infidelity is a newly coined term that describes situations in which one spouse is hiding cash or credit to his companion.

This may seem like a good idea to have a credit card or bank account secret that you can tap into, but your partner will probably be a big scandal in the underground. Beyond financial dishonesty on the screen, such gains may be a warning sign of even greater transgressions – maintaining a slush fund to pay the tab strip club or support a mistress on the sly.

Debunking the myth of ‘good debt’

Debunking the myth of 'good debt'

Don’t prolong your state of debt by thinking some liabilities are smart to hold.

Think your low-interest mortgage is good debt? Think again. There is some comfort in believing that being in the position of owing money to someone or some company can in some circumstances be “good.” Suze Orman, arguably the world’s most popular personal finance author and guru, explains the supposed difference between “good debt” and “bad debt.” Mortgages and student loans are examples of good debt, while car loans and credit cards are bad. Some debt, like high-interest loans and credit card debt, are certainly worse than others, but rationalizing owing money to others by calling it “good” is a stretch.

When the public is willing to consider any particular type of debt good, the lending industry is the only winner in the long run. For the benefit of our own personal finances, we’ll prosper more by considering all debt bad and striving to eliminate that debt even if we feel it is good.

Don’t fall into the trap of prolonging your state of debt while holding the idea that these forms of owing money are somehow good. Here’s why “good debt” isn’t all that great.

1. Mortgages. A mortgage on a house is a classic example of a type of debt personal finance experts and real estate agents want the world to be at peace with. There is something to be said for mortgages: the reality is that only a small percentage of Americans would be able to afford to purchase a house without access to a loan. The lending industry and the government have historically made it as easy as possible to own a home. We’re not escaping home ownership debt any time soon.

The deeper reality is that the value of real estate increases at or a little higher than the rate of inflation over the long term, but is much more unpredictable over the short term — the length of home ownership most people experience. Some consider mortgages to be good debt because it allows a home owner to be highly leveraged, in a good position for appreciation, but it is risky.

In addition, the tax advantages to paying mortgage interest are frequently overstated. While most taxpayers see an increased refund thanks to the mortgage interest deduction, the benefit can’t compete with not paying interest at all. We’re stuck with mortgages for now, but there’s no solid reason for keeping them around longer than necessary, as one might do with anything called “good.”

2. Student loans. Student loans are an investment in the future; a bachelor’s degree in hand will significantly increase a person’s lifetime income compared with just a high school diploma. Again, the lending industry encourages taking on unnecessary debt, and colleges and universities are complicit.

It is unnecessary to borrow money to finance a college education. In his forthcoming book, Debt Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents, author Zac Bissonnette explains how student loans can be more devastating to an individual’s financial condition than a mortgage. Did you know that bankruptcy can eliminate your credit card debt and your mortgage but your student loan will not be forgiven? Even the government will garnish your social security wages if you default on your student loans.

Bissonnette also shows how there is no good reason to borrow money for an expensive private college or Ivy League university when the quality of education you can receive and your earning potential is matched or bested by an inexpensive, local state college. Reconsider the assumption that you pay a higher price for quality.

3. Start-up costs. Whether starting a business requiring an up-front purchase of inventory or have just graduated college and need to buy appropriate attire for a career, some personal finance experts advise the cash-strapped newbie to anticipate tomorrow’s income and pay for your expenses with a credit card or take out a loan today. This, like borrowing money to invest in something without a guaranteed return, is risky.

While it is often true that success requires taking some risks, consider your options for dealing with the worst-case scenario. Unemployment is still at a high level, and many of last year’s graduates are still out of work with credit card balances increasing. Most new businesses fail.

Even borrowing money to finance assets expected to appreciate like a house, a person’s income potential through education, and a career or business carries risks and in some cases can be fully avoided with smart preparation. You may hear some personal finance experts call these types of debt “good,” but they are far from beneficial. At best, they are like other debt but might help improve your financial condition or quality of life at some point. At worst, however, even this debt can devastate your future if not watched, cared for, and eliminated.

8 ways to make money with no money

8 ways to make money with no money

You don’t always need money to make money. If you’ve stumbled upon this site, chances are you’re looking for ways to make money without dishing out any cash.

Well, the good news is that I’m not about to sell you a get rich quick scheme. What I’m going to show you are ten ways that you can earn some money which don’t require you to outlay much cash.

1. Start a flyer distribution run

Businesses looking for a cheap way to advertise will often resort to flyers placed in letterboxes of nearby dwellings.

While this market is often dominated by large marketing distribution companies, you can edge in on their turf.

Visit some local businesses and offer your services at a competitive rate. A good rate seems to be $20 per thousand for the average suburb.

You’ll need to walk quickly and drum up some work from several businesses to make it worthwhile financially.

Offer a written 100% deliver-ability guarantee to sweeten the deal.

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Five tips to setting effective financial goals for 2016

Five tips to setting effective financial goals for 2016

As the new year approaches, many will be analyzing the last year by assessing their lifestyles and committing to the standard personal resolutions: lose weight, exercise more, sleep more, reduce screen time, etc.

What many may leave off their list is something that may also have a major impact on their lives — a solid financial goal. Now is the perfect time to reflect on past spending and saving habits and to set realistic, effective money goals for the coming year. Here are a few tips to help you create successful personal finance goals for 2016.

1) Review 2015 spending habits

An effective method for setting your 2016 goals is to reflect on ​what you spent your money on this year. Derek Coburn, a partner at Washington Financial Group, recommends taking a look at your 2015 credit card and bank statements and identifying the three purchases that you feel best about and the three purchases that you regret most. According to Coburn, this exercise helps people make better decisions on future purchases and set more realistic financial goals. Coburn adds: “In hindsight, hardly anyone ever feels good about the money they spent on material goods and physical things. They almost always feel good about the experiences they purchased.”

2) Create a 2016 personal budget

Once you have reviewed your 2015 spending habits, creating your budget for next year will be easier. According to financial adviser Tahir Johnson, “Many people avoid creating a budget because they think its only purpose is to limit spending, but that is not the case. By keeping tabs on your income and expenses (both essential and discretionary), you not only gain a better understanding of where your money is going but it also helps you to formulate a plan on how you can save and invest in the future.”

3) Stay organized

One of the most effective ways to maintain your personal finance goals is to stay on top of your expenses, spending and taxes throughout the year. Organize your expenses by using apps such as Mint ​and Level Money or more traditional tools such as Excel or a spending notebook to create budgets, manage money and pay bills all in one place. For any income you plan to earn next year from a side job, such as freelance consulting, driving an Uber or hosting on Airbnb, set aside a portion to meet your income tax obligations. Apps such as Hurdlr automatically manage this for you and help minimize these monetary commitments.

4) Create a vision

Developing an annual budget and tracking monthly expenses is only half of your financial equation. You also want to look at the larger picture and create financial goals that are in line with your long-term vision. Creating a financial vision board is an easy, effective method to lay out your short-term priorities and uncover your larger financial goals.

All you need is a poster board, scissors, magazines and glue. You could cut out phrases and pictures that represent your short- and long-term financial goals (i.e. pictures of a new house or your dream vacation destination, phrases such as “no debt,” specific numbers that you are trying to reach) and paste these images onto your poster board. After you have created your vision board, you may need to alter your budget to save toward your long-term vision, or you may find the extra motivation to stick to your budget in order to achieve that long-term financial dream.

5) Set specific milestones

Many of us will make lofty goals for the new year, but few of us will actually stick to them as the year progresses. It is not enough to create a budget or a financial vision — you have to follow it through! Set goals for specific milestones throughout the year so that you have a way to measure how you are progressing against your plan.

For example, if your goal is to build up an emergency fund, decide how much money you want to have saved by three, six and nine months. Then check in at each of these points in time to confirm that you have hit your target savings and adjust accordingly to reach your ultimate goal. Use the above tips to set your financial goals, write these goals down, and refer to these goals and your vision board often throughout the year.

Beware of price hikes at supermarket

Beware of price hikes at supermarket

A surprise jump in wholesale food prices in September is bad news for producers and retailers, but you won’t feel it in your wallet. Yet.

Producer prices — the amount farmers receive for their goods from manufacturers — rose by 6.9% compared to September 2010 or 0.8% on the month, the U.S. Labor Department said Tuesday. Wholesale prices — those paid by retailers — increased by an annual 2.5%; the biggest rise since June 2009. Worse, higher food prices aren’t limited to a particular food group. U.S. wholesale prices rose across the board due to the rise in energy costs and commodities like grain and coffee. Fresh and dry vegetable prices soared by 10% on the year last month; beef and veal prices rose by 5.4%.

Analysts say supermarkets will start passing price increases onto consumers slowly and quietly. “Most retailers have been reluctant to raise prices up until now and have eaten up the higher raw material costs,” says Michael Keara, an equity analyst for Morningstar. “But they will start.” Although food commodity prices have been climbing steadily this year, grocery stores have held off because they don’t want to scare price-sensitive customers. However, expect to see supermarket prices edging up in six to nine months, he says.

Consumers watching their wallets may also want to keep a closer eye on package sizes for their favorite foods. Keara says the jumps in wholesale and producer costs are so high that manufacturers are likely to cut quantity as a way of disguising price hikes. In other words, start making a note of how many ounces you get in your six-pack of your favorite granola bars. “They don’t want to shock consumers,” he says, noting that increases over 5% hurts sales volumes.

Shopping experts are already advising consumers to stock up, track expiration dates and freeze perishables. “Shoppers are shopping less frequently, twice per month,” says Nick Dellis, a spokesman for online grocery list site Ziplist.com. Stephanie Nelson, founder of CouponMom.com, which advises consumers on the best coupon-clipping strategies and deals, suggests buying chicken at the end of its two-week sale cycle and freezes it. Buying chicken at $2 a pound or half price saves her $450 a year.

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8 phone calls that will save you cash

8 phone calls that will save you cash

Get the best negotiator in your house to pick up the phone and lower some of your bills.

Shopping online is undoubtedly convenient, but there are times when picking up the phone can save you some cash or, at the very least, score you a nice upgrade.

“Having that human element really helps,” says Laura Oliver, a deal expert who has scored plenty of deals just by making a phone call. “If you call and it’s not working, hang up and call right back,” she advises. “The phone lines are on a queue. You’ve got 15 to 20 other people you can try.”

She also points out it doesn’t have to be you who does the haggling for a better price. “You probably have someone in your house that’s your best negotiator,” Oliver says, advising consumers to let that person make the call.

Negotiate a Lower Credit Card APR

For people with average-to-good credit, the annual percentage rates associated with a credit card aren’t necessarily set in stone.

“Call your credit card company and say “Card X just sent me an offer for a card with 0% APR for a year and then a fixed rate of only 12%, which is much lower than the rate I’m currently paying you,” says Derrick Kinney, a financial adviser who specializes in helping families.

He says you should ask your current issuer if they can match the competing rate and, if not, it makes financial switch to transfer your current balance to take advantage of their competitor’s better offer.

“The fear of losing your business will usually make them match the offer,” Kinney says.

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Top mistakes to avoid when refinancing

Top mistakes to avoid when refinancing

Low interest rates do not necessarily mean owners will save on their mortgages.

When interest rates are low, leading many owners to refinance before assessing the true consequences of their actions. A mortgage refinancing can benefit some homeowners, especially if they intend to stay in their homes for the long term or whether they can significantly reduce their interest rates. Sometimes, however, a mortgage refinance may be the wrong choice.

“People often make bad decisions because of what I call” the envy of interest rates “around the coffee table,” says AW Pickel III, CEO of Financial LeaderOne in Overland Park, Kansas “They jump to refinance just so they can tell their neighbors they got a lower rate.”

Here are five of the biggest mistakes homeowners make when refinancing.

Not comparing the actual rate

“Borrowers should shop around for a mortgage by comparing the APR (annual rate) of each loan, rather than the interest rate quoted,” said Gregg Busch, vice president of First Savings Mortgage Corp. in McLean, Va. “You must look at the actual cost of the loan and compare it to your current APR to ensure that you will really save a half point or more on the new loan. ”

Busch points out that many owners today are finding that their home is worth less than they assumed when they have an appreciation.

“Fannie Mae and Freddie Mac have added fees on loans with high loan to value, so borrowers need to reassess the rates and fees before they decide to refinance,” said Busch.

Borrowers who have little or no action may be eligible for refinancing under Home by the Government of affordable refinancing program, or harp, available to those with an existing mortgage owner or guaranteed by Fannie Mae or Freddie Mac.

“The beauty of the HARP program is that it does not require an appraisal, so if you think you are underwater on your loan, this could be a good option,” said Busch. “Just make sure to compare rates and fees to see if the new loan is worth the cost.”

Choosing the Wrong Loan

Pickel said the first step when deciding to refinance is to establish a clear objective.

“If you think you can lose your job, but you have a moment, your focus should be to reduce your overall payments regardless of the length of the loan,” says Pickel. “If you want to be debt free by some years, then you need to find a loan that meets that goal.”

Pickel said that sometimes, even with a lower interest rate, you could end up making higher monthly payments due to packing in closing costs has increased the size of your mortgage.

Each borrower must look at the cost of refinancing and the financial benefits before choosing a loan, said Busch. Forget that some borrowers to refinance into another 30-year mortgage can add years of payments, especially if they have paid on the loan during a long time.

“A ARM 10 / 1 (variable-rate mortgage) or a 10-year fixed rate loan can sometimes be a better choice depending on the individual circumstances of the borrower,” said Busch.

Not Shopping Around

While many borrowers to compare loan offers from more than one lender, they can also shop for title services and save hundreds or sometimes thousands of dollars on their loan.

“Check at least three lenders and at least three companies before choosing a title,” said Busch. “It can be an advantage to go to the Management Authority that manages your loan the same now, because they may require less documentation, but I recommend also searched at least one other direct lender to compare rates and expense. ”

Ask the company as a reissue rate on title insurance own your vehicle – Busch believes that this can save up to 35 percent on premiums.

When refinancing you should not

Charles A. Myers, president and CEO of Home Loan in Jackson, Mississippi, said refinancing can be a mistake if you do not plan to stay in your home for many years.

“One client wanted to refinance to improve his property and rent it, but it would have ended up with a larger mortgage and then need a different loan because the property is no longer the principal residence,” says Myers. “The key is to ensure that the refinancing has a net tangible benefit to the owner.”

Borrowers must decide how long they intend to stay in the property and determine the break-even as economies outweigh the costs before deciding to refinance, said Myers.

Does not follow the Borrower responsibilities

Owners should rely on a lender to refinance, but they have obligations of their own that they are not met, could derail the mortgage refinancing. Borrowers must have good credit to refinance with most lenders require a credit score of 640 and above even for a loan insured by the Federal Housing Administration, said Myers.

Lenders can check credit borrowers again just before closing, if you need to maintain good credit and avoid a new debt, even after the refi was approved.

“Check the lock-in date to the interest rate on your new loan to make sure you can close before the rate expires,” said Busch. “Be sure to turn in all your documents as soon as it is required, because a delay could mean that your date should be postponed.”