loan amount – Flight 93 http://flight93.org/ Sun, 20 Mar 2022 22:40:48 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://flight93.org/wp-content/uploads/2021/07/icon-5-150x150.png loan amount – Flight 93 http://flight93.org/ 32 32 Does the mortgage overdraft benefit all borrowers? https://flight93.org/does-the-mortgage-overdraft-benefit-all-borrowers/ Sun, 20 Mar 2022 18:47:26 +0000 https://flight93.org/does-the-mortgage-overdraft-benefit-all-borrowers/ Mortgage overdraft (OD) is a form of home loan that combines the overdraft facility with a standard home loan. The facility can make servicing a home loan much more convenient for borrowers by allowing them to make unlimited prepayments and giving them access to a larger line of credit in case of an emergency. Additionally, […]]]>

Mortgage overdraft (OD) is a form of home loan that combines the overdraft facility with a standard home loan. The facility can make servicing a home loan much more convenient for borrowers by allowing them to make unlimited prepayments and giving them access to a larger line of credit in case of an emergency. Additionally, the facility can help borrowers reduce their interest expense by reducing the outstanding principal in a flexible manner.

How it works

In a home loan overdraft facility, a lender opens a savings account or checking account that is linked to the home loan account. This account is designated to accommodate deposits made by you and subsequent withdrawals requested from your side.

Under the facility, any excess you deposit is considered by the lenders as a prepayment of the principal amount. Similar to the regular home loan, the interest on the overdraft loan is also calculated based on the outstanding principal of the loan amount.

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However, the interest is calculated on a daily basis and varies according to the outstanding principal each day. Depositing additional funds into the overdraft account reduces the interest you end up paying and the term of your loan. However, the IME remains unchanged.

Apart from the prepayment, the overdraft scheme provides liquidity from the account whenever there is a financial need. The amount and duration of the loan are adjusted accordingly. Thus, this scheme doubles as an early repayment option and a liquidity avenue. However, before opting for this option, keep in mind that any increase in the outstanding home loan balance may increase interest outflows and there may be a cap on how much you can borrow from the account. discovered.

Adhil Shetty, CEO of BankBazaar.com, said that when you decide to opt into a home loan overdraft program, your lender will link your home loan account to your checking or savings account. The monthly equivalent payment (EMI) you pay each month to service your home loan goes into this home loan account. You prepay your home loan whenever you deposit additional funds above your usual EMI. This prepayment reduces the outstanding amount of your loan and lowers the applicable interest rate. “So basically if you have an amount in your savings bank account, you can transfer it to your home loan account to pay off your loan faster,” Shetty said.

You can also withdraw money from the overdraft account at any time, as it is linked to your checking or savings account. You can also transfer money from this account to your other savings account, if needed. The overdraft account acts like a loan approved by the lender. Each time you withdraw from the overdrawn account, the repayment term is realigned with the outstanding principal amount. The interest charged on the direct debit is the same as that of the overdraft mortgage.

Shetty said: “The process of withdrawing money is the same as depositing additional funds into your home loan account. Keep in mind that withdrawals may increase the outstanding loan amount, which you would be required to repay with interest.”

Raj Khosla, Founder and MD MyMoneyMantra.com, said: “The interest rate charged on advances made through the Home Loan Overdraft Facility is a notch higher than the interest rate charged on a regular home loan. Typically, the rate differential could be between 20 and 50 basis points.”

Limitations: This can be an expensive option for you, as the interest rates are usually higher than the usual interest rates on your home loan. Ratan Chaudhary, Head of Paisabazaar.com Home Loans, said, “Because the home loan savings option offers higher liquidity and flexibility than regular home loans, banks and housing finance companies typically charge slightly higher interest rates for this facility.”

Shetty said: “The Home Loan Overdraft Facility does not provide the benefit of the Section 80C tax deduction for the prepayment of home loan principal. This is because additional funds deposited into the home loan account with the overdraft facility are not considered a repayment of principal from a tax perspective.”

Who should choose it?

Experts suggest that a mortgage overdraft can be a good option for a businessman with seasonal receivables and debts. Having an overdraft account on hand can help you when you need cash immediately and when you have excess short-term cash. Khosla says, “Salaried people with a higher income and an expectation of large percentage increases in their respective annual income can also benefit from an overdraft on a home loan, creating an opportunity fund for themselves. Moreover, they can also prepay the amount before the end of the term and can save a significant portion of the interest charges. »

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A home loan overdraft is suitable for those who seek flexibility and are willing to accept higher interest rates and loss of tax benefit. If you are considering opting for this scheme, you must first do a cost-benefit analysis to understand its implications on your actual savings.

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How the Fed’s Interest Rate Hike Affects Buyers and Homeowners https://flight93.org/how-the-feds-interest-rate-hike-affects-buyers-and-homeowners/ Sat, 19 Mar 2022 16:27:43 +0000 https://flight93.org/how-the-feds-interest-rate-hike-affects-buyers-and-homeowners/ (NerdWallet) – The Federal Reserve raised a fundamental interest rate on Wednesday. As a result, mortgage interest rates will likely rise, and home equity line of credit rates will certainly rise. The Fed raised its federal funds rate target by 0.25%, or a quarter of a percentage point. Other interest rates are built on top […]]]>

(NerdWallet) – The Federal Reserve raised a fundamental interest rate on Wednesday. As a result, mortgage interest rates will likely rise, and home equity line of credit rates will certainly rise.

The Fed raised its federal funds rate target by 0.25%, or a quarter of a percentage point. Other interest rates are built on top of the federal funds rate, including the prime rate often applied to business loans by major banks. It too will increase by 0.25%.

Fed interest rates are rising as an inflation-fighting measure.

“It is our duty to bring inflation down to 2%,” Fed Chairman Jerome Powell said at a press conference after policymakers met in January.

With inflation well above the central bank’s target, the Fed is expected to raise the fed funds rate several times this year. The rate started the year near 0%, and fed funds futures traders are betting it will end the year above 1.5%, according to the CME futures market tool FedWatch.

How the Fed’s rate hike affects home buyers

Mortgage rates are likely to rise because they tend to move in the same direction as the fed funds rate. With the expected increases, mortgage rates could trend higher all year.

If you’ve ever signed a contract to buy a house and locked in an interest rate, you’re in good shape. The lender cannot raise your rate.

But if you’re shopping for a home or planning until this year, mortgage interest rates could be higher by the time you get an accepted offer to buy. You can’t lock in an interest rate until you sign a contract to buy a house.

If mortgage rates rise significantly before you find a home, you might end up shopping at a lower price range. Indeed, higher interest rates weaken your purchasing power.

How much can you borrow for $1,500 per month (principal and interest)

Interest rate Amount of the loan
4% $314,200
4.5% $296,000
Difference $18,200

Don’t rush to buy just because mortgage rates are rising, warned Robert Heck, vice president of mortgages for online mortgage broker Morty. Rates, he said over email, shouldn’t be “the sole driving force in whether someone should buy a home right now.” Of course, rates play into the decision, but personal and financial factors are paramount.

How the Fed’s rate hike affects mortgage refinancers

With rising interest rates, fewer homeowners will have the ability to refinance at a lower interest rate to lower their monthly payments.

But not everyone refinances to reduce their monthly payments. Many people choose cash-out refinancing: they refinance more than they owe and take the difference in cash. This money can be spent on renovations, debt consolidation, tuition or other things.

Rising interest rates could reduce the loan amounts refinancers can afford, as higher interest rates mean higher monthly payments.

A home equity line of credit is an alternative to cash refinances, but HELOC rates will rise this year. The same is likely to happen for fixed rate home loans.

How the Fed’s rate hike affects homeowners with HELOCs

The interest rate on a home equity line of credit, or HELOC, increases each time the Federal Reserve raises the federal funds rate, and by the same amount. So when the Fed raises the fed funds rate by a quarter of a percentage point, the rate on a HELOC will follow within a billing cycle or two.

HELOC rates are pegged to the prime rate, which is pegged to the federal funds rate. On a HELOC balance of $50,000, a 0.25% increase in interest rate means about a $10.42 increase in monthly interest.

Interest rates on cash refinance, HELOC loans and home equity loans tend to be lower than rates on credit cards and personal loans, said Rob Cook, vice president of marketing, digital. and analysis for Discover Home Loans, via email. “That means leveraging the equity in your home will continue to be a compelling option even as rates go up,” he said.

How the Fed’s rate hike affects door-to-door sellers

If you’re selling your home, you probably take offers more seriously when they come from buyers who have been pre-approved for a mortgage. But to be confident in a buyer’s ability to afford your home, make sure pre-approval is based on current interest rates.

Why? Buyers pre-approved at yesterday’s lower rates may no longer qualify for the same loan amount at today’s higher rates. So if you accept an offer from a buyer who ultimately fails to qualify for a mortgage, you’ll lose valuable time.

If interest rates rise significantly, you could end up selling to someone in a higher income bracket than you originally marketed your home to.

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Mortgagees continue to switch lenders en masse https://flight93.org/mortgagees-continue-to-switch-lenders-en-masse/ Sun, 06 Mar 2022 21:20:52 +0000 https://flight93.org/mortgagees-continue-to-switch-lenders-en-masse/ New figures released by the Australian Bureau of Statistics (ABS) show that homeowners with mortgages still seem to be making the most of relatively competitive interest rates by switching their loans in considerable numbers. Released as part of the ABS’s latest Lending Indicators release, the figures reveal that $14.3 billion in home loans were refinanced […]]]>

New figures released by the Australian Bureau of Statistics (ABS) show that homeowners with mortgages still seem to be making the most of relatively competitive interest rates by switching their loans in considerable numbers.

Released as part of the ABS’s latest Lending Indicators release, the figures reveal that $14.3 billion in home loans were refinanced with a new lender during the month of January – $9.2 billion from homeowners and $5.1 billion from investors.

While that total figure of $14 billion was actually down month-over-month, the ABS noted that the amount of refinancing undertaken was still 18.7% higher than in the same period in 2021.

In fact, the January total is the ninth-highest month on record for the ABS since it began tracking rollover data in 2004.

January 2022 external refinancing values ​​(seasonally adjusted). Source: abs

Is changing credit worth it?

Given that $14 billion in home loans were refinanced in January and a record $181 billion was transferred over all of 2021, some borrowers may be wondering, “Why didn’t I refinanced my own home loan?” and “Is it worth changing?”.

Deciding whether or not to refinance is unlikely to be a simple yes or no decision, as there are a number of factors that can determine whether it is worth it, or even possible.

For example, some mortgage holders will not be able to refinance with another lender if their loan-to-value ratio is above 80%. It also might not make financial sense for those who are currently locked into a fixed rate with substantial breakage fees, or for anyone who already enjoys a competitive rate.

If you’re able to refinance at a lower rate, it could be worth it considering the potential savings on offer – both in terms of money saved on monthly repayments and in total interest over the life of the loan.

Here is an example using the current average homeowner loan amount ($618,729) in Australia being repaid over a 20-year period with principal and interest repayments.

Monthly repayments Total interest
2.00% $3,130 $132,482
2.50% $3,279 $168,150
3.00% $3,431 $204,820
3.50% $3,588 $242,482
4.00% $3,749 $281,121
4.50% $3,914 $320,723

This is just a typical range of home loan rates available today, and it’s safe to say that over a 20-year period, any mortgage holder’s rate will generally fluctuate quite a bit. The takeaway, however, remains the same: a lower interest rate could help reduce the cost of the loan significantly over time.

RELATED: Many lenders offer $3,000 cash back to refinance your home loan

Want to know how much you could potentially save by switching loans? Make your life easier by taking our change and savings calculator for a spin, or familiarize yourself with a range of refinance offers by heading to Mozo’s dedicated refinance home loan comparison table.

* ATTENTION: This comparison rate only applies to the example or examples given. Different amounts and durations will result in different comparison rates. Costs such as withdrawal charges or prepayment charges, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate shown is for a secured loan with monthly principal and interest repayments of $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate, loan amount and term entered. Rates, fees and charges, and therefore the total cost of the loan, may vary depending on your loan amount, loan term and your credit history. Actual repayments will depend on your personal circumstances and changes in interest rates.

^ See Mozo Experts Choice Home Loan Awards information

Mozo provides general product information. We do not take into account your personal goals, financial situation or needs and we do not recommend any particular product. You must make your own decision after reading the PDS or offering literature, or after seeking independent advice.

Although we pride ourselves on covering a wide range of products, we do not cover every product on the market. If you choose to request a product through our website, you will be dealing directly with the supplier of that product and not with Mozo.

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Is it good for you ? https://flight93.org/is-it-good-for-you/ Wed, 02 Mar 2022 23:00:35 +0000 https://flight93.org/is-it-good-for-you/ Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners. Personal loans have become a popular option for covering a variety of major expenses, such as […]]]>

Select’s editorial team works independently to review financial products and write articles that we think our readers will find useful. We earn commission from affiliate partners on many offers, but not all offers on Select are from affiliate partners.

Personal loans have become a popular option for covering a variety of major expenses, such as home renovations, weddings, unexpected expenses, funerals and more. In some cases, it may actually be more affordable to use a personal loan than to use a credit card, as personal loans generally carry lower interest rates.

It’s even better when a personal loan, like American Express® Personal Loans, do not charge application fees or set-up fees. American Express is also one of the few big names in banking to offer personal loan products to everyday customers.

Of course, however, you should always do your research before applying for any financial product and ensure that you are comfortable with the terms of that product before signing on the dotted line.

To help you out, Select has looked at Amex’s APR, benefits, fees, loan amounts and terms. (Learn more about our methodology below.) Read on to find out if American Express is the right lender for you.

American Express Personal Loan Review

American Express® Personal Loans

  • Annual Percentage Rate (APR)

  • Purpose of the loan

    Debt consolidation, home improvement, moving expenses, wedding or vacation

  • Loan amounts

  • terms

  • Credit needed

  • Assembly costs

  • Prepayment penalty

  • Late charge

Benefits

  • No setup fees, no prepayment fees
  • Same day decision in seconds (in most cases)
  • Ability to pay creditors directly
  • Funds can be disbursed by direct deposit

The inconvenients

  • $39 late fee
  • No automatic payment discount
  • No co-signers or joint applications
  • Only American Express cardholders can apply
  • The payment due date cannot be changed
  • Funds cannot be used to pay American Express credit cards

APR

APRs range from 6.91% to 19.97% for American Express Personal Loans. Unlike most other personal lenders, American Express does not offer interest rate discounts for making payments using autopay (typically a 0.25% discount is applied for signing up so that your payments are automatically applied to your balance).

The APR range for these personal loans is a bit higher than some other lenders, but Amex personal loans carry fixed interest rates that won’t fluctuate for the life of your loan. Also keep in mind that generally the higher your credit score, the lower your interest rate is likely to be. American Express does not disclose the exact minimum credit score required to qualify for its personal loan products.

Benefits

Costs

Amount of the loan

Mandate’s duration

Applicants can choose from terms ranging from 12 to 36 months.

At the end of the line

American Express® Personal Loans are a great, simple option for those who are already American Express Card members and familiar with the company’s products.

Some lenders charge a penalty for prepaying your personal loan because it means they would miss these interest charges, but American Express allows you to avoid these charges.

If you’re looking for slightly lower interest rates and the chance to get an Autopay rebate, check out LightStream Personal Loanswhich offers this 0.25% APR deduction for the automatic payment of your bill each month.

And if you need a personal loan under $3,500, there are other options like PenFed Personal Loanswhich start at just $600.

Our methodology

To determine which personal loans are the best, Select has analyzed dozens of U.S. personal loans offered by online and physical banks, including major credit unions, that have no origination or enrollment fees, fixed-rate APRs, and loan amounts and terms. flexible to meet a range of funding needs.

When selecting and ranking the best personal loans, we focused on the following characteristics:

  • No creation or registration fees: None of the lenders on our top list charge borrowers an upfront fee for processing your loan.
  • Fixed APR: Variable rates can go up and down over the life of your loan. With a fixed-rate APR, you fix an interest rate for the life of the loan, which means your monthly payment won’t vary, making it easier to plan your budget.
  • Flexible minimum and maximum loan amounts/terms: Each lender offers a variety of financing options that you can customize based on your monthly budget and how long you need to pay off your loan.
  • No prepayment penalties: The lenders on our list do not charge borrowers for prepaying loans.
  • Simplified application process: We looked at whether lenders offered same-day approval decisions and a fast online application process.
  • Customer service: Every loan on our list offers customer service available by phone, email or secure online messaging. We have also opted for lenders that have a resource center or an online advice center to help you learn about the personal loan process and your finances.
  • Disbursement of funds: The loans on our list provide funds quickly by electronic transfer to your checking account or in the form of a paper check. Some lenders (which we have noted) offer the option of paying your creditors directly.
  • Automatic payment discounts: We’ve noted lenders who reward you for signing up for autopay by reducing your APR by 0.25% to 0.5%.
  • Creditor Payment Limits and Loan Sizes: The lenders above offer loans of varying sizes, ranging from $500 to $100,000. Each lender advertises their respective payment limits and loan amounts, and completing a pre-approval process can give you an idea of ​​what your interest rate and monthly payment would be for such an amount.

After reviewing the features above, we’ve sorted our recommendations based on overall financing needs, debt consolidation and refinance, small loans, and overnight financing.

Note that advertised rates and fee structures for personal loans are subject to fluctuation in accordance with the Fed rate. However, once you have accepted your loan agreement, a fixed rate APR will guarantee the interest rate and the monthly payment will remain constant for the duration of the loan. Your APR, monthly payment, and loan amount depend on your credit history and creditworthiness. To take out a loan, lenders will do a credit check and ask for a full application, which may require proof of income, identity verification, proof of address and more.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.

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L&T Finance ready to put Rs 10 lakh in PM Fund to avoid contempt charges https://flight93.org/lt-finance-ready-to-put-rs-10-lakh-in-pm-fund-to-avoid-contempt-charges/ Wed, 02 Mar 2022 17:59:00 +0000 https://flight93.org/lt-finance-ready-to-put-rs-10-lakh-in-pm-fund-to-avoid-contempt-charges/ Larsen and Toubro Finance issued an unconditional apology in the Delhi High Court and also volunteered to deposit ₹10 lakh to the Prime Minister Cares Fund to clear themselves of the contempt of court. Accepting the apology, the Delhi High Court observed last week “even if there is no willful disobedience, yet recklessness or negligence […]]]>
Larsen and Toubro Finance issued an unconditional apology in the Delhi High Court and also volunteered to deposit ₹10 lakh to the Prime Minister Cares Fund to clear themselves of the contempt of court.

Accepting the apology, the Delhi High Court observed last week “even if there is no willful disobedience, yet recklessness or negligence can also amount to contempt of court”.

The development took place on a petition filed by DM South India Hospitality. According to the company, it had taken out a ₹185 crore loan from L&T Finance in March 2017, of which ₹100 crore was repayable over 15 years.

To secure the loan, the company and other backers provided collateral worth more than ₹600 crore, including shares of blue chip listed companies.

The company alleged that although there was no outstanding principal or interest, L&T Finance sold the pledged shares in April 2019, citing a drop in the value of the securities below the required value. actions.

DM South initiated arbitration proceedings against L&T Finance on the grounds that the sale of the pledged shares by L&T Finance was illegal.

The company said the arbitrator issued a decision in November 2021 and ruled that L&T Finance had no right to sell the shares under the loan agreements. The arbitrator also awarded litigation costs to DM South amounting to ₹5.77 crore to be paid by L&T Finance.

DM South has contacted Delhi HC stating that they are ready to pay the entire remaining outstanding loan amount of ₹31.48 crore, but L&T Finance should release all securities worth more than ₹600 crore.

As a result, in December 2021, DM South delivered a sight draft of ₹25.72 crore to L&T Finance’s solicitor and the High Court then ordered L&T Finance to release all securities within 72 hours, at the exception of 10 crore of listed shares. The High Court further ordered DM South to pay the balance of ₹5.77 crore within a week, which the company claims to have complied with.

However, since L&T Finance would not have fully released the securities until January, the company again went to high court to bring a contempt action against L&T Finance. Finding the prima facie strength of the plea, the High Court issued a notice of contempt for cause to L&T Finance.

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Three reasons why you should settle the mortgage last if you have several loans https://flight93.org/three-reasons-why-you-should-settle-the-mortgage-last-if-you-have-several-loans/ Wed, 02 Mar 2022 02:05:28 +0000 https://flight93.org/three-reasons-why-you-should-settle-the-mortgage-last-if-you-have-several-loans/ Most households have multiple EMIs running at once – from a home loan to a car loan to perhaps a durable consumer loan or even a credit card or personal loan. It is advisable to take out loans based on your cash flow and other expenses, there are times when the situation can become overwhelming […]]]>

Most households have multiple EMIs running at once – from a home loan to a car loan to perhaps a durable consumer loan or even a credit card or personal loan. It is advisable to take out loans based on your cash flow and other expenses, there are times when the situation can become overwhelming especially if there is a job loss or a drop in salary.

If you find yourself with several loans and you are not able to manage them all, it may be a good idea to settle some of the loans to reduce the burden, both financial and emotional.

Usually, the home loan is the most important because it is taken for an expensive asset, but settling the home loan first to reduce your burden may not be the right approach. Read on to find out why.

Lowest interest cost

Typically, home loans have the lowest cost or interest rate. It is best to settle the loans that have the highest cost. These are usually credit cards and personal loans. The interest rates for these loans can go up to 20%. By comparison, some financial institutions have mortgage rates as low as around 7% for certain categories of borrowers.

Consider reducing the burden of interest charges, as this is something you pay in addition to the principal amount. It’s best to close the personal or credit card loan first, as it’s likely to have the highest interest rate. Next in line should be car loans. Auto loan interest rates are usually fixed and higher than home loan rates. Currently, they are around 7 to 8%.

“A car loan is for a depreciating asset (i.e. a vehicle), so it has to be repaid after a personal loan because the interest rates are higher compared to a home loan,” says V. Swaminathan, CEO of Andromeda and Apnapaisa, a lending distribution company and its digital arm, respectively.

Fiscal advantages

Unlike a personal loan, credit card or car, the repayment of home loans offers a tax advantage on interest and principal repayment.

Given the tax benefits, home loans must be repaid after all other loans have been repaid. “When it comes to home loans, there are advantages such as tax benefits for paying principal and interest, which proves beneficial in the longer term because a home or house is an appreciating asset. and, therefore, you can try to keep them for a while,” says Swaminathan.

Auto

The main part of the EMI paid for the year is allowed as a deduction under Section 80C of the Income Tax Act up to Rs 1.5 lakh. Remember that this deduction is available if the property is not sold within five years of owning it. For the interest part of the EMI, a maximum deduction of Rs 2 lakh is allowed under Section 24B. In this case, the loan must be taken out for the purchase/construction of a house and the construction must be completed within five years of the end of the financial year in which the loan was taken out.

There could be another deduction of Rs 50,000 for the interest part, under Section 80EE, where the loan amount taken should be Rs 35 lakh or less and the value of the property should not exceed Rs 50 lakh . Additionally, there could be a deduction of Rs 1.5 lakh for the interest portion, under Section 80EEA, where the stamp value of the property is Rs 45 lakh or less.

Build an asset

Remember that a home loan helps you build wealth, which is not the case with other loans. A consumer loan or auto loan will also help you acquire and own property, but such property depreciates over time, unlike a house.

There’s no greater sense of accomplishment than prepaying or foreclosing a loan. “In doing so, it should be borne in mind that there are additional prepayment charges applicable in the event of a personal or car loan; home loans are mostly free of these fees. After paying the full amount of the closing, remember to obtain the “No Objection Certificate” (NOC) from the lender and the closing will be duly updated in the database of the credit authority . Remember to request and retrieve your original/pledged documents and removal of the lien from the pledged property or vehicle,” Swaminathan adds.

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What you need to know about the mortgage interest deduction https://flight93.org/what-you-need-to-know-about-the-mortgage-interest-deduction/ Mon, 21 Feb 2022 18:00:27 +0000 https://flight93.org/what-you-need-to-know-about-the-mortgage-interest-deduction/ Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own. The mortgage interest deduction allows homeowners to […]]]>

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

The mortgage interest deduction allows homeowners to reduce their taxable income by the amount of interest paid on the loan. (Shutterstock)

Many people think tax time is frustrating, confusing, or downright dreadful. But if you know about some potential deductions, you may be able to increase your tax refund (or at least reduce the amount you’ll owe).

A potentially attractive tax deduction for homeowners is the mortgage interest deduction. This article will help you understand the mortgage interest deduction, who can claim it, and how to include it on your tax return.

If you’re looking to refinance your home, visit Credible to compare mortgage refinance rates from various lenders, all in one place.

What is the mortgage interest deduction?

The mortgage interest deduction allows homeowners to deduct the interest they paid on their mortgage. The mortgage can relate to your principal residence and to a secondary or secondary residence.

To claim the mortgage interest deduction, you must itemize the deductions. This means that your total itemized deductions – including out-of-pocket medical expenses, state and local taxes, deductible mortgage interest, and charitable contributions – must be greater than the standard deduction available for your filing status.

Because owning a home can significantly increase your itemized deductions thanks to property taxes and mortgage interest, many homeowners view the mortgage interest deduction as a benefit of home ownership.

How does the mortgage interest deduction work?

Your The mortgage interest deduction may be limited depending on the amount of your mortgage and the date you took out your mortgage.

The Tax Cuts and Jobs Act (TCJA) of 2017 capped this deduction for people who took out mortgages after January 1, 2018. If your mortgage started after that date, you can deduct interest paid on up to $750,000. $ of “home acquisition debt,” which is debt used to buy, build, or significantly improve your home. This $750,000 applies whether you are single or married, although married couples who file separate returns will be limited to interest paid on up to $375,000 of home acquisition debt each. This limit still applies if you took out your mortgage before January 1, 2018.

If you took out your mortgage before January 1, 2018, you are allowed to deduct interest paid on up to $1 million of home acquisition debt, plus $100,000 of home equity debt.

The $750,000 limit is set to expire Dec. 31, 2025, unless Congress acts to extend it. The TCJA also eliminated the home equity debt deduction. But that doesn’t mean that all interest paid on a home equity loan or home equity line of credit (HELOC) is no longer deductible.

Home equity loans and HELOCs

The IRS considers any home equity loan or line of credit used to buy, build, or substantially improve the home to be home acquisition debt, so the interest is still deductible.

For example, let’s say you take out a $700,000 mortgage to buy your house and then a $100,000 mortgage to remodel the kitchen. You can deduct all the interest paid on the first mortgage and half the interest on the HELOC. All funds have been used to purchase and improve your home, but you are limited to $750,000.

On the other hand, let’s say you take out a $700,000 mortgage to buy your home, then take out a $20,000 HELOC to refinance high-interest credit card debt. Interest on the first mortgage is deductible, but any HELOC interest is not deductible because it does not count as home acquisition debt.

Also keep in mind that the $750,000 limit applies to all mortgages on your principal residence and your secondary residence combined.

What is considered mortgage interest?

Mortgage interest doesn’t just apply to single-family homes. This also applies to condominiums, cooperatives, mobile homes, motorhomes and houseboats, provided they have facilities for sleeping, cooking and toilets.

And it’s not strictly limited to the amounts you paid for interest. You can also deduct:

Credible lets you compare mortgage refinance rates from multiple lenders without affecting your credit.

What is not deductible?

The amount you pay each month to your mortgage lender usually includes several items other than interest. If your payment includes any of the following, it is not deductible mortgage interest:

  • Regular principal payments
  • Additional principal repayments designed to prepay your loan
  • Property taxes paid into an escrow account (property taxes are deductible, but not as part of the mortgage interest deduction)
  • Home insurance premiums

How to Claim the Mortgage Interest Tax Deductionnot

If you think it might be beneficial to claim the mortgage interest deduction, here’s how to do it:

  1. Obtain your Form 1098 from your lender. After the end of each year, your lender(s) must send you a Form 1098 showing the total interest, mortgage insurance premiums, and deductible points you paid that year. To complete your tax return, you will need this form.
  2. Decide if you want to claim the standard or itemized deduction. You can only deduct mortgage interest if you itemize the deductions. Add up your total itemized deductions for the year, including medical expenses, taxes, interest, and charitable contributions. If your total is more than the standard deduction available — $12,550 for single filers and $25,100 for joint filers in 2021 — you’ll likely get a detailed breakdown. Otherwise, you better claim the standard deduction. If you’re not sure which option is better for you, most tax software will analyze the numbers and tell you which option is best for you.
  3. Complete Schedule A. Schedule a is the form used to itemize deductions. It has lines for entering mortgage interest and points, mortgage insurance premiums, and other itemized deductions. You can find more information on completing Schedule A in the IRS Instructions for Annex A. You will need to attach it to your Form 1040. You do not need to send a copy of your Form 1098 to the IRS – just keep it with your tax records.

When to use the mortgage interest deduction?

Although almost all homeowners qualify for the mortgage interest deduction, it doesn’t make sense in all situations. Here are some scenarios in which claiming the mortgage interest deduction might make sense to you:

  • You have many other itemized deductions. Itemizing only makes sense if your total itemized deductions are greater than the standard deduction available for your filing status. Since the TCJA has nearly doubled the standard deduction for each filing status, nearly 90% of taxpayers claim the standard deduction. But you might benefit from a breakdown if you have a high mortgage balance, live in a high-tax state, make a lot of charitable donations, or have a lot of medical bills.
  • You file separately from your spouse, and your spouse details. A tricky part of filing a separate tax return from your spouse is that if one spouse is itemizing, both must be itemizing — even though one would benefit more from claiming the standard deduction. If you and your spouse file separate returns and your spouse itemizes, claiming the mortgage interest deduction may increase your deductions on Schedule A.

If you are unsure whether you should benefit from the mortgage interest deduction or have questions about your tax obligations, it is advisable to consult a qualified tax professional for advice.

Visit Credible for compare mortgage refinance rates from various lenders in minutes.

]]> Unfair ‘settlement’ puts bank under High Court scanner | Chennai News https://flight93.org/unfair-settlement-puts-bank-under-high-court-scanner-chennai-news/ Sat, 19 Feb 2022 22:12:00 +0000 https://flight93.org/unfair-settlement-puts-bank-under-high-court-scanner-chennai-news/ CHENNAI: Noting a bank’s single settlement offer of 14 lakh, against the principal loan amount of 62 lakh, and a court-ordered sum of 1.8 crore with interest, the Madras High Court has launched a due diligence investigation against the bank. Appalled by the settlement pact, the First Bench of Chief Justice Munishwar Nath Bhandari and […]]]>
CHENNAI: Noting a bank’s single settlement offer of 14 lakh, against the principal loan amount of 62 lakh, and a court-ordered sum of 1.8 crore with interest, the Madras High Court has launched a due diligence investigation against the bank.
Appalled by the settlement pact, the First Bench of Chief Justice Munishwar Nath Bhandari and Justice D Bharatha Chakravarthy has now summoned the bank to explain why a vigilance investigation should not be ordered against the officer who agreed to the single settlement .
“Public money cannot be allowed to be embezzled in this way,” the bench said.
The matter relates to a plea filed by Virudhunagar-based Pandian Extractions Private Ltd challenging the decision of the Union Finance Ministry to reject the Single Settlement Pact entered into between the petitioner and the Industrial Investment Bank of India (IIBI).
“This tribunal takes cognizance suo motu of the whole matter relating to the Single Settlement and intends to know why an instruction should not be given to file a vigilance investigation or register a case against the officer who was implicated in the conclusion of a single settlement term, as well as against the plaintiff/appellant who is the beneficiary of the transaction,” the judges said.
“The action of the bank in making a single settlement for 14 lakh, against the principal amount due of 62 lakh and the decretal amount of 1.85 crore, this too, when two properties of the appellant were available, stinks of bad faith intentions and it only shows that there is more to the whole transaction than meets the eye,” the court said.
The court then adjourned the appeal until February 23 for the bank to respond.
A former Chief Justice of the High Court of Madras once said that Indians regard failure to pay a bank loan as their basic right. To prove the same, a failing private company managed to convince a bank to accept a one-time settlement of 14 lakh against a principal loan amount of 62 lakh and a court-ordered amount of 1.85 crore with interest.
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Mortgage Refinance Rates Today, February 18, 2022 | Rates tick higher https://flight93.org/mortgage-refinance-rates-today-february-18-2022-rates-tick-higher/ Fri, 18 Feb 2022 12:15:01 +0000 https://flight93.org/mortgage-refinance-rates-today-february-18-2022-rates-tick-higher/ Editorial independence We want to help you make more informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and allow us to earn a referral commission. For more information, see How we make money. Today, several benchmark mortgage refinance rates went up. Both the 15-year fixed […]]]>

We want to help you make more informed decisions. Certain links on this page – clearly marked – may direct you to a partner website and allow us to earn a referral commission. For more information, see How we make money.

Today, several benchmark mortgage refinance rates went up.

Both the 15-year fixed and the 30-year fixed saw their average rates tend to rise. The average 10-year fixed-rate refinance mortgage rate also rose.

The average mortgage refinance rates are as follows:

Compare refinance rates for a wide range of different loans here.

2022 refinancing rate forecast

Refinance and mortgage rates could be subject to significant volatility this year. Nonetheless, interest rates are expected to continue to rise steadily throughout 2022. Several factors have contributed to this expected rise in interest rates, including higher inflation and a strong economy. This is offset by the uncertainty surrounding the COVID-19 Omicron variant and the possibility of other COVID-19 variants impacting the economy. So even though most experts predict that higher rates will be the trend going forward, we probably won’t see consistent day-to-day or week-to-week gains.

How the Refinance Rate Forecast Affects You

There has been a significant increase in refinance rates, but overall borrowers can still access rates close to historic lows. Now is a good time to refinance if you haven’t done so in the past two years. Homeowners could save thousands of dollars with a rate and term refinance if they can get a new rate 0.75% to 1% lower than their current rate, as a rule.

As home prices have skyrocketed, the ability to turn your home’s equity into cash with a home equity line of credit (HELOC) has grown in popularity. In some situations, a HELOC can make sense, especially when consolidating debt or renovating your home.

Homeowners who are hesitant to refinance will want to consider whether or not it’s right for them. Finding the best refinance deal becomes increasingly important as rates rise.

What you need to know about refinancing fees

As part of the refinancing process, you may have to pay upfront fees called closing costs. Closing costs range from 3% to 6% of your loan amount, so they can add up quickly. Your monthly payment may drop with a refinance, but be sure to keep the loan long enough for the ongoing savings to outweigh the out-of-pocket costs.

30-year refi rate

Currently, the average 30-year fixed refinance has an interest rate of 4.20%, an increase of 18 basis points from the previous week.

You can use our mortgage calculator to get an idea of ​​what your monthly payments will be and to understand how much you could save if you made additional payments. Our Mortgage Calculator will also tell you how much interest you will be charged over the life of the loan.

Fixed refinancing rates over 15 years

Currently, the average rate on a 15-year fixed refinance loan is 3.45%, an increase of 11 basis points from the previous week.

The monthly payments on a 15-year refinance loan will be larger than those on a 30-year refinance at the same rate. However, a shorter loan term can help you build equity in your home much faster.

10-year fixed refinancing rates

The average 10-year fixed refinancing rate is 3.42%, an increase of 17 basis points compared to the rate observed the previous week.

Monthly payments with a 10-year refinance term would cost a lot more per month than you would with a 15-year term, but you’ll pay less interest in the long run.

How we determine refinance rates

Our rollover rate trends are based on daily rate data from Bankrate, which is owned by the same parent company as NextAdvisor. These average daily refi rates are based on a consumer profile meeting these criteria:

  • At least 20% equity
  • Principal residence
  • Credit score 740 or higher
  • Single family Home

The information provided to Bankrate by lenders across the country is displayed in the table below:

Rates as of February 18, 2022.

Take a look at mortgage refinance rates for a number of different loans.

Pro tip

Enter your mortgage payment and other loan information into our mortgage refinance calculator to better understand if refinancing is right for you.

Frequently asked questions (FAQ) about the refinance rate:

Does refinancing still make sense?

While refinance rates are higher than recent record lows, they are still exceptionally low. A lower rate can lower your mortgage payment, so if you haven’t refinanced in the past few years, today’s low interest rates may be a good time to do so.

However, your interest rate isn’t the only factor to consider when determining if the time is right for you to refinance. In addition to the number of years remaining on your existing mortgage, the new repayment term will impact your decision. Those who have paid off their current mortgage for 10 years may want to refinance a 20-year loan so as not to add more years to the end of the loan. Keep in mind that your monthly payment will be higher with a short-term refinance than with a longer-term loan.

Before jumping on an exceptionally low refinance rate, make sure the overall deal makes sense to you.

How to qualify for the lowest refi rate

Your financial situation has a significant effect on the rate of refinancing that you will be able to obtain. Having more equity in your home and a higher credit score usually translates to a lower interest rate.

But your personal financial situation isn’t the only consideration that affects your refinance interest rate. The equity you have in the home also comes into play. Having at least 20% equity in your property is ideal.

Even the mortgage itself has an effect on what your refinance rate will be. A short-term refinance loan usually has lower rates than a longer-term loan. Also, if you want to turn your equity into cash with a cash refinance, you will have to pay a higher interest rate than other types of refinance.

How much does refinancing cost?

When you refinance a mortgage, closing costs typically range from 3% to 6% of the loan amount. So, for a loan of $300,000, you can expect to pay $9,000 to $18,000 in closing costs.

There are a number of factors different lenders take into account when assessing your situation. Compare your options and shop around. Everything from the location of the home to the type of loan you’re refinancing can affect your upfront costs.

Mortgage interest rate by type of loan

Mortgage refinance rate

Mortgage redemption rate

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Current Mortgage Rates — February 17, 2022: Most Rates Higher https://flight93.org/current-mortgage-rates-february-17-2022-most-rates-higher/ Thu, 17 Feb 2022 14:13:09 +0000 https://flight93.org/current-mortgage-rates-february-17-2022-most-rates-higher/ Image source: Getty Images Is it the right time to take out a mortgage? Here’s the scoop. Mortgage rates are higher today for all loan products except the 20-year loan, which is down slightly from yesterday’s level. Here’s what the rates look like as of February 17, 2022: Type of mortgage Today’s interest rate 30-year […]]]>

Image source: Getty Images

Is it the right time to take out a mortgage? Here’s the scoop.

Mortgage rates are higher today for all loan products except the 20-year loan, which is down slightly from yesterday’s level. Here’s what the rates look like as of February 17, 2022:

Type of mortgage

Today’s interest rate

30-year fixed mortgage

4.135%

20-year fixed mortgage

3.794%

15-year fixed mortgage

3.347%

ARM 5/1

3.337%

The data source:class=”little-legend”> The National Mortgage Interest Rate Tracker from The Ascentclass=”little-legend”>.class=”little-legend”>

30-year mortgage rates

The average 30-year mortgage rate today is 4.135%, up 0.0410% from yesterday. At today’s rates, you’ll pay $486.00 principal and interest for every $100,000 you borrow. This does not include additional expenses such as property taxes and home insurance premiums.

20-year mortgage rates

The average 20-year mortgage rate today is 3.794%, down 0.020% from yesterday. At today’s rates, you’ll pay $595.00 principal and interest for every $100,000 you borrow. Although your monthly payment will increase by $109.00 with a 20-year loan of $100,000 compared to a 30-year loan of the same amount, you will save $31,970.00 in interest over your repayment period for every $100,000 borrowed.

15-year mortgage rates

The average 15-year mortgage rate today is 3.347%, up 0.020% from yesterday. At today’s rates, you’ll pay $707.00 principal and interest for every $100,000 you borrow. Compared to the 30-year loan, your monthly payment will be $221.00 higher per $100,000 of mortgage principal. However, your interest savings will be $47,448.00 over the length of your repayment period per $100,000 of mortgage debt.

RMA 5/1

The average ARM 5/1 rate is 3.337%, up 0.032% from yesterday. A 5/1 ARM should result in much lower monthly mortgage payments than a 30 and 20 year loan. But after five years, your ARM’s interest rate could spike, making your mortgage payments more expensive. Make sure you’re willing to take that risk before you pass up the opportunity to get a fixed loan.

Should I lock in my mortgage rate now?

A mortgage rate lock guarantees you a specific interest rate for a certain period of time – usually 30 days, but you may be able to guarantee your rate for up to 60 days. You’ll usually pay a fee to lock in your mortgage rate, but that way you’re protected if rates spike between now and when you take out your home loan.

If you’re planning to close on your home in the next 30 days, it pays to lock in your mortgage rate to today’s rates, especially since they’re quite attractive, historically speaking. But if your close is more than 30 days away, you might want to choose a variable rate lock instead for what will usually be higher fees, but could save you money in the long run. A variable rate lock allows you to get a lower rate on your loan if rates drop before your mortgage closes. Although today’s rates are somewhat low, we don’t know if they will increase or decrease over the next few months. As such, it pays for:

  • LOCK if closing 7 days
  • LOCK if closing 15 days
  • LOCK if closing 30 days
  • FLOAT if closing 45 days
  • FLOAT if closing 60 days

If you’re ready to buy a home, shop around with different mortgage lenders to compare the deals available to you. Be sure to ask about not just pricing, but also closing costs. The last thing you want is to get a low interest rate on a mortgage only to end up with high closing costs that are eating into your savings.

A Historic Opportunity to Save Potentially Thousands of Dollars on Your Mortgage

Chances are interest rates won’t stay at multi-decade lows much longer. That’s why it’s crucial to act today, whether you want to refinance and lower your mortgage payments or are ready to pull the trigger on buying a new home.

Ascent’s in-house mortgage expert recommends this company find a low rate – and in fact, he’s used them himself to refi (twice!). Click here to learn more and see your rate. While this does not influence our product opinions, we do receive compensation from partners whose offers appear here. We are by your side, always. See The Ascent’s full announcer disclosure here.

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