Debt Management 101: When You Should and Shouldn’t Refinance

Whether you’re dealing with a mortgage, student loan, or credit card debt, refinancing might be a good option if you want to save some money. However, it’s not always a good choice for every situation. Learn about the pros and cons of refinancing so you can decide if it’s right for your situation.

What Is Refinancing?

The first step to deciding whether refinancing is right for you is understanding exactly what is refinancing. It’s the process of getting a new loan to replace an old loan. When you refinance a loan, the new loan will pay off the debt of your old loan. While your debt isn’t eliminated, you typically get better terms, which can help you save money.

How Does Refinancing Save You Money?

Refinancing can save you money in several ways. You can get a lower interest payment, which will help you pay less over the life of the loan. A lower interest rate can also lead to lower monthly payments, which means you’ll have more money remaining for other expenses. If you’re refinancing a mortgage, you could look to shorten the loan term. This would help you get to the point where you’re free from paying a mortgage.

Refinancing Credit Cards

If you’re struggling with credit card debt, refinancing can help. One of the simplest ways to refinance a credit card is to open a new account that offers a special zero percent interest rate. Then you just transfer your balance from your original card, and you have some time to pay down the balance without interest. It’s important to make sure you don’t put any new purchases on this card while you’re paying it down. Additionally, keep in mind these special rates don’t last forever. You might have to pay a small fee upfront to transfer balances.

Refinancing Student Loans

Many people religiously pay their student loans every month without realizing they can refinance these loans to save money. Private student loans typically have variable interest rates based on your credit history. When you first take out the loan, you’re young and you have a small credit profile. This means lenders consider you a higher risk. However, after you graduate, obtain a job, and start making regular payments, your credit risk goes down. This can help you qualify for a lower interest rate on your loan.

Refinancing Mortgages

When you refinance a mortgage, you might be able to lower your interest rate, consolidate debt, shorten the term of your mortgage, or use your home’s equity to finance a larger purchase. Just remember that closing costs can add up to thousands of dollars, so you’ll want to make sure your savings will let you more than break even before you start the process.

Everyone likes to save money, so refinancing sounds like a great option. However, keep in mind that refinancing is a time-consuming process that can get expensive, so you need to weigh the pros and cons before deciding if it’s right for you.

Don’t Despair: You Can Handle The Cost of Redundancy

If you find yourself made redundant, you might panic about your financial situation. As you’re about to discover, redundancy doesn’t have to be the bell of doom that it seems at first. You can – and we know this is a cliche – see it as a grand opportunity. It’s the chance to leave that old boring position behind and move on to something bigger, better and brighter. So many people sink into a job that is comfortable and often won’t realize how stuck they have actually been until they are quite literally shown the door. You might find, that when you think about it, this was what you always wanted. Was the job you’ve just been let go from supposed to fill a gap and provide an income for a short duration? Then it’s time now to look for the position that you really want with the company that you want to work for, whatever that is wherever that is.

At this point you’re probably thinking, hey wait, what about my income? Don’t worry, there are ways to deal with the income conundrum when you’re out of work. First, we need to ask one question.

Was It Your Fault?

There are a number of reasons to ask this question. First, you might have been wrongfully dismissed. If that’s the case, then you do have a legal case against your employer. You can sue them for wrongful dismissal, and in cases like this, you can get a lot more than just your lost paycheck. That’s one option available to you, but how would you know if you had been wrongfully dismissed?

This is a difficult question to answer, but your first point to explore would be looking at the reason they gave for letting you go. Does it seem fair to you? If the answer is no, then you might have a case.

You might have needed to leave work due to an injury. But again, the question should be asked whether the injury was your fault. If it wasn’t, then you can think about contacting a lawyer. A lawyer will typically say, hey come to our law office and let’s see if you have a case here. If you’re interested in doing this, you need to gather all the information about the accident possible, but there’s a good shot to get the pay you have lost here.

Or, it could be that the company has failed. Again, this isn’t your fault and you are entitled to a severance package in this case. That is something that you should be pursuing through the appropriate channels.

After you have explored all these possibilities, you need to ask yourself another question.

How Long Do I Have?

 

What we mean by this is the amount of time that you can survive easily without an income. Include in your calculations the money you get from your severance package, the money you get from any lawsuit that you might have taken against the company and indeed your savings. They are all important to take into account and build up a picture of how long you will be able to last without your job. For most people, it’s going to be around six months. Six months can seem like a pretty long time, but it will move like lightning when you are unemployed. Suddenly, you will be on the last month and have very little capital left to rely on. That’s an issue, and it is possible that it takes more than six months to find a new job. It depends on the state of the economy, whether people are hiring and whether you are a sought-after resource.

 

However, typically, you can bridge the gap here with freelance work and operations that you can complete without an employer. Who knows it’s possible that your time spent out of the office might be just what you need to move forward with your true passion. Perhaps you could start your own business in this time.

If there is a benefit of being unemployed, it’s that, while you still have money to fall back on you have freedom to decide your next path. You shouldn’t rush this decision, and you should instead make sure that you plan your moves carefully. The right step here could double or even triple your finances in the future.

We hope this helps you deal with the crushing blow of redundancy and that you come out of this difficult situation stronger than you were before.

Pitfalls to Watch Out for in your Commercial Lease

If you are looking out for a new property or if you want to make sure that the property you are looking out for is right for your needs then there are a couple of things that you need to look out for. Unfortunately, a lot of businesses end up losing out on a ton of money every single year because of their lease so if you want to avoid all of this or if you want to make sure that your lease is solid then there are some things that you can do about this.

Rental Reviews

When you undergo a rental review, this will be an assessment of the rent that you are paying. There is a high chance that you will undergo a rental review when you have a very long lease and it can make all of the difference to your financial situation. Reviews can be very complicated and they can even contain a variety of different factors as well. The main review that you will face is the open market review and this means that the rent that you pay is put up for negotiation. If you find that you are being put up for rent reviews a little too often then make sure that you keep an eye out for this and even hire a solicitor to talk you through the process. Some landlords want to charge you more than they have to because they know how important your property is to you and they also know how many customers you’ll lose if you do happen to move. For this reason, it helps to monitor your reviews to see if you are overpaying, being put under review too often or if you are being put up for a review before you are actually due to have one.

Repairs

Another thing that you need to look out for is the cost of repair for your property. You also need to look out for the cost of insuring it as well. You have to understand who is responsible to make any repairs if something should go wrong. The wording in your lease is everything here, and it also helps to find out what the definition of “repair” is according to your landlord. Some people will try and pin more responsibility on the tenant so that they can come away with more profit at the end of the term and this is another factor that could be brought up during your lease negotiation as well. If you want to avoid this then make sure that your repair clause is clear and that you understand your own degree of responsibility. When you are aware of this information and what you are entitled to do if something goes wrong, you can then start to prepare for the future.

Lease

The lease really does need to fit in with any objectives that you have in the long-term. If you happen to commit to a long-term lease then you will not be able to downsize or even upgrade your property during this time. You may not think that this is a problem, but if you are taking out a lease for more than a couple of years then this can be a serious concern. You need to plan ahead in this instance and you also need to be aware of any company expansion plans that you have as well. Remember that a couple of years is a very long time when you run your own business and if you happen to rocket in terms of your profit then the last thing you’ll want to happen is for you to be stuck in one building for the next 5 years.

Location

When choosing your rental property, the location is as important as the building itself. Property search engines such as Howard Hanna are great in this instance and they can give you a  good idea of what is available on the market while also helping you to know if there is anything that you can do to really benefit from what is in that location. When choosing the location for your property, take into account any public transportation lines, the quality of the area and the parking that you have available.

 

Underletting

New tenants often make this mistake. They think that they can sell their lease to someone else. Leases often prohibit you from doing this and you will be responsible for the terms of the lease even if the new tenant happens to move in. You have to comply with the conditions of your lease at all times and you also have to make sure that you are aware of any rules regarding the sale or exchange of the lease as well. If you are able to transfer the lease then it helps to understand the process, so that you have a good get-out clause in place if you do happen to move on.

 

Breaking your Clause

Tenants often think that they have the ability to break or terminate their lease at any given moment. If you do terminate your lease then you will face a huge range of consequences and some of them can be devastating to your business. It’s important that you recognise the fact that when you have broken the lease, the landlord has the right to take action against you and this doesn’t look good for your business at all. If your landlord happens to break the lease then they will also face consequences, but before you take out the lease it’s a good idea to know what you can do if this happens. You’ll want to be protected in every way possible when you decide to rent a property, and this means being a bit more diligent in your approach to the lease and the fine print.

Expert Advice

Whenever you take out a lease on a rental property, you have to make sure that you do everything you can to get the advice you need. You also have to make sure that you are aware of the legal standing that you have with your lease and it may even be a good idea to have a lawyer look over the terms of the lease as well so you don’t get caught up in a loophole.