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Investments

7 Safe Investments you can make

There are lots of different types of investments you can make with your cash, but you don’t want to choose just any of them. It is important that you take the time to get all of the information you can about each type of investment before making a final decision. When you take the time to do this research, you will be able to decide on the right overall option. The last thing you want to do is to rush into a certain investment decision.

1. Certificates of Deposit

Certificates of deposit or CDs are federally insured time deposits that have specific maturity dates that can range from just a few weeks to several years. You will not be able to withdraw the money for a certain amount of time without incurring a penalty though. The financial institution pays you interest at regular intervals. Once the CD has matured completely, you will get your original principal back plus the accrued interest.

2. Money Market Accounts

A money market account is essentially an FDIC-insured, interest-bearing deposit account. This sort of account is completely different than money market funds, which are just mutual funds that are normally not FDIC-insured. You will find that money market accounts usually earn higher interest than savings accounts, and they require higher minimum balances.

3. Money Market Mutual Funds

Money market mutual funds, which are also known as money market funds, are a great savings and investment option offered by banks, mutual fund companies and brokerages. These funds are regulated by the Securities and Exchange Commission or SEC. These funds have historically tried to maintain a share price of just one dollar, though there is never any guarantee that a fund will be able to hold a share price.

4. T-Bills, Treasury Notes, Treasury Bonds

Treasury Bills or T-bills are short-term debt instruments issued by the U.S. government to raise money to pay for various projects as well as to pay its debts. T-bills are not technically interest-bearing, and they are sold at a discount from their face value. When they fully mature, the government pays you the face value. They are issued in terms of two, three, five, seven and ten years and pay interest every six months until maturity.

5. Government Bond Funds

Government bond funds are essentially mutual funds that invest in debt securities issued by the U.S. government and its various agencies. The funds invest in different debt instruments like T-notes, T-bills and mortgage-backed securities issued by government-sponsored enterprises like Freddie Mac and Fannie Mae. There are some risks involved with these investments, though the level of risk is fairly low. If you are looking for a good low-risk investment to make, this is one of the better options you have.

6. Municipal Bond Funds

Municipal bond funds invest in a wide range of municipal bonds issued by state and local governments. Any interest that is earned is usually free of federal income taxes, and also may be exempt from state and local taxes. Individual bonds always come with the risk of default, meaning the issuer becomes unable to make further income or principal payments. All in all though, it is still fairly low-risk.

7. Short-term corporate bond funds

Short-term corporate bond funds invest in bonds that are issued by corporations. These bonds have an average maturity period of 1-5 years. As with other bond funds, short-term corporate bond funds are not FDIC-insured. The fact is that these bond funds can reward you with higher returns than Treasuries, but there is always the chance that companies will have their credit rating downgraded.

Final Thoughts

With all of the different types of investment opportunities, you will need to make a point of selecting the right ones. There is always risk involved with every type of investment, but you will have to take the time to decide which risks you are willing to take. All of these are fairly “safe” investments, but you will still need to do your homework. It is important to have a widely diversified investment portfolio, so you will have to keep that in mind as well. Everyone likes a safe investment, but you’ll never get anywhere without taking some risk.

Home Loans

6 Sure fire Tips for getting approved for a Home Mortgage Loan

When it comes to getting a home mortgage loan, you will need all the tips and advice you can get. A lot of people who apply for this type of loan don’t get approved for a number of reasons. The more information you have, the more likely you will be to get the money you need for your dream house.

1. Get familiar with your credit score

The first thing that you should do before applying for a home loan is to get familiar with your credit score. It is important to know what your score is, because it will have a big impact on your chances of getting approved. The better your score is, the more likely you will be to get the loan you need. Look over your credit report carefully to make sure there aren’t any mistakes on it, because this is something that happens more than you might think.

2. Save up your cash

You should also make a point of saving up your cash so that you will have as much as possible to put down on your loan. The more money you have to put down on your loan initially, the better your chances will be of getting your application approved. Most lenders won’t think twice about rejecting someone who cannot afford to put anything down on their home mortgage loan. While it may be true that some lenders don’t require a down payment, most of them do.

3. Do not leave your job

The last thing you want to do when you are going through the process of trying to get a home loan is to quit your job. You will need to show the bank that you have a stable source of income, and quitting your job is an effective way to get your application rejected. If you want to find another job because you don’t like the one you are at, wait until you get your application approved and everything goes through.

4. Take care of all your current debt

It’s always a good idea to care of all the current debt you have before even submitting an application for a home mortgage loan. Lenders do not typically give out these types of loans to people who have a lot of debt. The very best thing you can do is to pay down the debt you have so that you won’t have any issues with getting your application approved.

5. Get pre-approved for a Mortgage

Anyone who wants to buy a new home will need to get pre-approved for a mortgage loan. The process of getting pre-approved for this type of loan is pretty straightforward. All you need to do is contact a mortgage lender, submit your information and wait to hear back. The lender will print a pre-approval letter for your own records, and the funds will be available after the seller accepts your bid.

6. Figure out what you can afford

You should definitely know what you can afford before you even start looking at houses that are on the market. Sit down and take the time to go over your budget so you will be able to determine with accuracy which houses you can afford and which you cannot. The last thing you want to do is to take on a mortgage that you are going to struggle with each month. Those who take the time to crunch the numbers early on are always glad they did.

Final Thoughts

It is absolutely imperative that you take care of all the finer details before you try to get a home mortgage loan. This type of loan can be difficult for some people to get, which is all the more reason to do your research. The better prepared you are, the more likely you will be to get your loan application approved. If you are ready to buy your first house, you will not want to rush into this process. As long as you are careful about everything, you shouldn’t encounter any major problems or setbacks. Getting a home loan requires some patience and due diligence on your part.

Lenders

Should I Borrow from a High Street Lender?

There are more and more places on the high street where we can now borrow from. There are different brands of lender and they seem to offer good deals for many people, but they are not the same as banks and building societies and should be approached with caution. It can be tempting to think that these would be a great option for getting some extra money and that they may be more likely to lend to you than a bank or building society. However, it is worth thinking hard before borrowing from this sort of lender.

Firstly, it is important to make sure that you really do want to borrow the money. You may think that you really need it for something and there is not any other way that you can get it, but you should really consider it first. This is because all borrowing costs money and so you will find that you will always have to repay more money than you have borrowed and so you need to consider this. Think about the items you are buying with the money and whether you think that it is worth paying that extra money for them. You will need to consider whether you would have still bought those items had they been that price in the shop.

You also need to think about the repayments as well and whether they are something that you will be able to manage. It can be easy to forget about the repayments altogether but you need to remember that you will have to find the money for them throughout the term of the loan. This means that you need to be confident that you will always have enough to pay for them even if you have a change in circumstances as you will still be expected to make those repayments regardless of what happens to you. If you miss repayments then you will be charged and you need to think hard about whether this is likely to happen to you and how you will cope if charges are added on to what you owe.

High Street lenders have very high rates of lending. They may be more likely to lend to people but they could be a big mistake for many. It is really important to make sure that you know what you are getting in to before you borrow anything. You need to think hard about whether you really need to borrow the money at all and whether this is the best place to borrow from. Look at their rates, both their interest rates and their fees, if they have any and compare that to other types of lending. You should be able to compare lending rates online between different lenders. Of course, you may not be able to borrow from just anywhere. Lenders will look at your credit record and your income and if they feel that you are not able to repay the money they will not lend to you. You may feel that a high street lender is more likely to lend to you. It is worth asking around though, you may find that there are other lenders that are willing to take you on and will be cheaper. Credit unions could be a good place to go. They do prefer lending to customers that save with them, but they do assess people on a case by case basis, trying to work out ways that they can lend them money even if other lenders will not, however, they lend at a better rate.

So although there are risks with all types of borrowing, high street lenders could be worth avoiding if you can. They tend to have higher costs, both with regards to their interest rates but also due to the fees that they charge if you miss any repayments. This means that you could end up paying significantly more for your borrowing compared to if you borrowed through different lenders. It is therefore worth comparing rates and seeing whether there are any cheaper alternatives for you. It can be easy to think that a high street lender is an easy option and more likely to lend to you, but you could end up getting yourself into a lot of financial trouble by using one of these and so they could be best avoided.