The Uglycow Finance » interest rate

The Mortgages Lack

admin — Mon, 14 Jun 2010 06:17:01 +0000

Is it advisable to have a mortgage with shortages?

Many financial institutions or intermediaries, they offer hook fee paying less for a period of time, this mortgage product is referred to as Mortgage lack.

The mortgage lack is a mortgage product that offers you only pay interest during the hard time and not capital lack.

At first glance it may seem an attractive product, but may be more dangerous than you think.

Say you ask for a $ 180,000 mortgage with a term of 40 years and an interest rate of 5.82%. Meet the normal fee would be $ 873.

If the mortgage needy one year to the end of that pay a fee of $ 974, if the Euribor and interest rates remain in the state in which the mortgage.

Many brokerage firms offer this product to attract customers to refinance debts, pay less into believing they share with other advisers.

Behind all this comes trouble

1 The semiannual or annual review of the mortgage.
2 The completion of the gap.

Once the client has believed that its financial position is correct, you realize that the fees you will not be going to tackle it to be.

The most sensible recommendation is that anyone who wants to get a mortgage, know what you have to pay. For what I lack my mortgage if within six months is not going to be able to pay back Will I get to the end of the month hurry.

In the example I have discussed the fee amounts to 873 cadenced, What if you were not claimed lack? The fee to stay with the above conditions would amount to $ 967.

Is it worth $ 90 self-delusion? Or do you sell the bike that you will pay less?
Council is not cheap products, if advisers and bad products.

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Beware with Debt

admin — Mon, 01 Feb 2010 01:34:00 +0000

Many people think that loans can be a form of debt finance solutions. However, uncontrolled debt can derail your efforts to live according to your income.

Certain types of debts can be an asset. For example the long-term debt for the purchase of assets such as houses continue to increase in value can be useful. In contrast, credit card debt used to finance day-to-day lives can be disastrous. Hold to the principle not to pay even a dollar of interest expense or credit card. It is a credit card can ease your life, but always be careful when using it.

If you have a credit card, paying off credit card bills immediately before the interest arises. Financial experts recommend paying off debts credit card even if it means you have to sacrifice your savings. Think about it logically, that it does not make sense to get into debt with high interest savings while maintaining a low interest rate. This is similar to waste. Beware of the burden of credit card interest charge!

Calculate the Value of Investments Based on Time

admin — Sun, 10 Jan 2010 16:55:52 +0000

In the previous article we talked about the results obtained on the basis of interest. In this article I will explain the results obtained by the period of time.

Combine Time and Frequency

The examples above assume you make an investment only once (lump sum), where you put the money just once, and silenced for years, until 50 or 100 years.

But what if you do not invest just once, but the routine every year? Let’s say you’re beginning of each year to deposit USD 1 million. After 50 years, the amount you’re investing to $ 50 million. But since you put it in investment interest rates, the balance of your investment after 50 years to $ 2,688,020,438!

Huge! In fact, the total amount you’re investing for 50 years was only $ 50 million. Try to compare with once investment (USD 1 million), and the results you get after 50 years is USD 289 million.

Therefore, a combination of the frequency of regular investment in long term investment you have will result in investment balance really great magnitude. So, how? Still want to postpone investing?

Periodically or Just Once

When you make an investment, then there are two choices, can make a periodic basis, or only once. Periodic investments, you could invest once a year, six months, or even once a month. There some people who invests every one or two weeks. But the important thing here is that what is meant by periodic investing on a regular basis.

Typically, a periodic investing is the most powerful ways to pursue a major target of future funding. You do not need to have a large amount of funds at this time, but small enough to set aside part of your income to invest in an investment product. Over time, you will have a balance of investment was so great, because you also earn interest.

Periodically invest the same as a builder who was making the wall. What he did was take a brick, smeared with cement, and paste. Take longer a brick, giving the cement, and placed it on the left or right side of this brick. And so on until he could finish one layer. After that, he will continue with the second layer. The second layer is complete, followed by the third layer. And so on.

Over time, you’ll see a wall. Just like that picture when you invest periodically. Only difference, by investing, you also earn interest. While the builder was, do not get the ‘flower’. All he did was like a piggy bank to save it on a regular basis. But the principle is the same: little will be a hill.

You also can invest only once (lump sum). That means, you can simply put the money just once in an investment product, such as deposits, and then you say let stand for ten years. Every year, you will earn interest, which you can add to your principal. Then, deposited again, so that the flowers larger and larger. But, as long as you had never touched it, until over ten years. After ten years, you will have a number of very large funds.

Calculate the Growth of Investment Funds (2)

admin — Sun, 27 Dec 2009 18:44:30 +0000

In past articles we have discussed about simple interest, now I will continue with a discussion about investment with compound interest method.

Compound Interests
The concept of compounding interests is a concept in which the interest you earn will be added to your principal, so that the interest earned in the next year will be even greater. Just like a snowball rolling from the top of the hill of snow. Further down the larger.

Now we’re back to use the example of money $ 1 million earlier. When you open a deposit worth $ 1 million with a 12 percent interest per year, the balance of your investment at each end of the year are as follows:

At the end of the first year, your balance is:
$ 1.000.000 + ($ 1,000,000 x 12 percent) = $ 1.000.000 + $ 120.000 = $ 1,120,000

At the end of the second year, your balance becomes:
$ 1,120,000 + ($ 1,120,000 x 12 percent) = $ 1,120,000 + $ 134,400 = $ 1,254,400.

At the end of the third year, your balance becomes:
$ 1,254,400 + ($ 1,254,400 x 12 percent) = $ 1,254,400 + $ 150,528 = $ 1,404,928.

So on every year, until finally at the end of the 10 Years, your investment balances will be $ 3,105,848. Bigger than using the simple interest method (which only $ 2.200.000).

Monthly Compound Interests
What you see above this is the concept of interest rates, the interest paid every year (yearly compound interest). However, there are also the interest rates paid interest each month (monthly compound interest).

For example, we will use the same numbers with the example above, where you put money $ 1 million. Only difference, you do not open it in the form of deposit accounts, but the savings.

For simplicity, let’s say it also provides savings interest rate of 12 percent per annum, payable monthly. This means that, at each end of the month, the interest you earn is not 12 percent, but 12 percent divided by 12, or 1 percent. This is because there are 12 months a year.

Thus, the calculation of your investment balance at the end of the first month are:
$ 1.000.000 + ($ 1,000,000 x 1 per cent) = $ 1.000.000 + $ 10,000 = $ 1,010,000.

At the end of the second month, your balance becomes:
$ 1,010,000 + ($ 1,010,000 x 1 per cent) = $ 1,010,000 + $ 10,100 = $ 1,020,100

And so on every month until the end of the month your balance becomes 12:
$ 1,115,668 + ($ 1,115,668 x 1 per cent) = $ 1,115,668 + $ 11,157 = $ 1,126,825.

If this continues until the end of the 10 Years (or 120 months), your investment balance to $ 3,300,387. More than if you use the annual interest rate.

Daily Compound Interest
What about the interest rate system that paid a daily basis (daily compound interest)? Many banks offer advertising savings products that provide a daily interest like this. The concept is similar to the monthly interest rate. The difference is, the interest is not divided by 12, but 365 (according to the number of days per year), until the amount is 0:03 per cent per day.

Now we will calculate how many you get. Once again, we use the example as above.

Your balances at the end of the first day are:
$ 1.000.000 + ($ 1,000,000 x 0.03 percent) = $ 1.000.000 + $ 329 = $ 1,000,329.

And so on until after a year (or the end of the day to 365) your balance becomes:
$ $ 1,127,104 + ($ 1,127,104 x 0.03 percent) = $ 1,127,104 + $ 371 = $ 1,127,475.

If continued until 10 years, then at the end of the day into 3650, your balance will be
$ 3,319,462. More than if you use the bank interest rate monthly.

From the calculations above we can see the difference between the method simple interest with compound interest investments. Now depending on your choice of which method is most suitable for your investment.