Many homeowners in the United States were cut off from one of the most popular sources of funds during the recent housing bust, the equity in their homes. As home prices begin to recover however, many have started to once again Into their home’s equity in order to do things like consolidate their debt, pay for home renovations and also pay for other “big ticket” items that they need.

In fact, over the last 12 months, there was a 27% spike in home equity lines of credit according to Experian, the financial services company, and experts predict that many more people will soon be following that lead.

That being said, there are 5 factors you need to consider before taking out a home equity loan (HEL) or a home equity line of credit (HELOC) or refinancing, to determine if it is really the best financial choice you can make. Those 5 factor are below. Enjoy.

Factor 1) Rates. In the last few years almost 9 million borrowers got 30 year fixed mortgage loans at the rate of 4% or lower due to the fact that mortgage rates were at near historic lows. Now however, those same rates are expected to increase. Keith Gumbinger, who represents mortgage information firm, says that “we may be in for a more volatile period,” and he’s probably right, when you consider that the Federal Reserve is ending a number of programs that they had in place to keep rates low under their quantitative easing monetary policy.

Factor 2) Costs. Simply put, if you get a home equity loan or HELOC, the price that you’ll pay up front is going to be cheaper than if you refinance. That’s because when you refinance most lenders will force you to go through the entire underwriting process and, when you do, they hit you with all sorts of fees at the same time.

Those include attorney review fees and inspection fees for example, along with having to get new insurance and a new title search. Typically this can cost you over $1000 or more, depending on your mortgage of course and, in the end, the cost of refinancing could actually increase to $2000 or $3000.

On a home equity loan or line of credit many lenders don’t have any upfront costs, however the higher interest rate that you pay will cover the application, appraisal and any other fees.

Factor 3) Time. When you refinance a loan the clock “resets” but, when you take out a home equity loan or a HELOC, the payments you make are made on the same schedule.

If, for example, you’ve paid 60 months on a 30 year loan and then you decide to refinance, it will be as if you just started at day 1 again with your 30 year term. You could roll the 30 year loan into a 15 year loan, which would reduce the number of payments but would increase the cost of each monthly payment instead.

Factor 4) The reason that you need the loan or credit line. Most financial experts will tell you that the best reason to get a home equity loan is that it will positively impact your finances. If you use it to renovate your property, adding value to said property, or to go back to school and advance your degree, a home equity loan makes sense.

On the other hand, if you use your home’s equity to purchase a sports car or take a luxury vacation, that money will soon be gone but, unfortunately, the debt won’t, and you’ll be paying it off for quite a few years into the future.

Factor 5) Tax benefits. When you get a cash-out refinance you might not get any tax benefits but, just like your first mortgage, many home equity loans and HELOC’s allow you to deduct up to $100,000 of the principal on your mortgage in interest paid.

And there you have it. 5 Factors that need to be seriously considered before using the equity in your home to get any money that you might need. If you have questions about refinancing or getting a home equity loan, please let us know by sending us an email or leaving a comment. Thank you.



The market capitalization on an investment refers to the total market value of the outstanding shares that a company holds. That is, it can be calculated by taking the shares outstanding and then multiplying it by the price per share. It is also known as the market cap.

This may not sound like the most appealing thing for your investing purposes but it can really make more of a difference than you might expect. The importance of getting into many investments with different market capitalizations in mind can be essential for many reasons.

Reduce Your Risk

Any form of diversification in your portfolio can be important. By adding more investments with a variety of capitalization levels, you will be taking in various different types of stocks that may operate differently from one another. By doing this, you will have a relatively easy time with getting an investment to work wonders for you.

This is especially because stocks with smaller market caps, or small-cap companies, tend to be riskier. They are often more fluid and can change quickly at any given time.

Get More Industries

You may find that some industries, particularly the tech sector, have stocks that are more likely to be in the large-cap field. Meanwhile, industries like the green power field can include small and mid-cap choices. Having companies with different market caps in your portfolio is a surefire way to get a diverse portfolio that covers many topics.

Get Solid Options

Having many types of market caps can help you to get more investments that you know can be reliable and attractive. Many large-cap companies that have higher market caps tend to be known as blue chips as they are known to be productive and can progressively provide you with a good return. It tends to take a little longer for you to get a good return on some of these but this can make a difference if you have lots of money to invest and you want to ensure that whatever you are putting your money in is as sensible and smart as possible.

Consider Newcomers

Sometimes newcomers can be interesting stocks to invest in. These have smaller cap numbers but can be paired with large-cap stocks to give you a more appealing portfolio.

Specifically, newer stocks are cheaper and have smaller market caps. They will often have a potential for significant profits thanks to how they are just being introduced. Still, like with any other small-cap investment, they can be risky and could have its value decline dramatically in no time at all.

You can ensure that you will have a full portfolio that is detailed and filled with many options by including these to go alongside the more solid blue-chip choices. This should provide you with a sensible chance to get money but still reduce the risk of losing far too much because that newer investment went south.

Remember to see how your market capitalization totals work with all your investments. By using stocks with many different investments, you will have an easier time with taking care of all the things that you want to take advantage of while on the market.

If you’d like to learn more about specifically investing like a stock broker, visit



On a Budget? Don’t Let These Triggers Sabotage You

by Justin Weinger on May 10, 2015

If you’re on a budget, the first thing you should do is congratulate yourself. The fact is, millions of people across the country still haven’t figured out that using a budget is the best way to build wealth, increase their savings, fund their retirement and avoid going into debt.

That being said, sometimes being on a budget can be mentally tough and, with spending “triggers” everywhere, there can be times when your budget is in danger of being busted. Below are a number of triggers that can do this, and advice on how to avoid them. Enjoy.

Trigger 1: Not knowing the difference between “need” and “want”. Humans have a way of justifying something that they want by saying it’s something that they need. For example, a person might say that they “need” the newest smartphone because they have to keep up with technology, or need to go out to dinner with friends because everyone is going to be there. In reality however these “needs” are actually just a justification for overspending, and the desire to “keep up with” everyone else. Your best bet is to simply focus on what you actually do need, not what you want. If the smart phone you already have is functioning correctly, purchasing a new one isn’t necessary.

Trigger 2: Rewarding yourself. Okay, sticking to a budget can be difficult, we know. Cutting back every day on everything can wear on you after a while and, if you’ve been diligently sticking to your budget, you may feel that it’s time to reward yourself. Many times a person who has just started a budget will feel this way and, in response to those feelings, overspend on something and throw their budget completely off. If that’s you, you would best start by cutting back on things slowly and working on your willpower, and your bank account, rather than jumping in to the deep end of the budget pool.

Trigger 3: Spending on vacation. Let’s face it, when you’re on vacation there are so many triggers around it’s ridiculous. Excursions, drinks out by the pool, spa treatments and more are around every corner, and keeping yourself from purchasing them can be quite difficult, especially since you’re on vacation to “relax”. If you’re planning a vacation, the best way to avoid these triggers is to set aside extra money to pay for the things that you know you’re going to want, so that you don’t break your budget and regret it when you get back.

Trigger 4: Purchasing something on sale that you don’t need. Oftentimes you’ll be in a department store and see something that’s on sale, maybe even at an excellent price. If you truly need it, and you have the extra cash, make the purchase. On the other hand, if you have to purchase that item using a credit card, or you simply don’t have the extra cash (or you truly don’t need it) that “bargain” might be a budget breaker instead. Even worse is if you purchase it and don’t pay off your credit card immediately, because then the extra interest you pay will end up negating any savings that you might have gained.

Trigger 5: Overspending because of a party or celebration. Let’s face it, there’s always some type of celebration happening in the average person’s life. Baby showers, birthdays, bridal showers, weddings, job promotions, anniversaries etc. etc. The fact is, there are an endless number of reasons to spend on a celebration but, if you destroy your budget doing it, those great feelings you have won’t last for long. One way to avoid this is to use your creativity instead of your money to give a nice gift to your friend or relative. Besides costing you much less, the sentiment that it creates will no doubt last longer than most things you could have purchased.

Using a budget, as we mentioned, is the best way to build wealth, increase savings, fund an emergency savings plan and also fund your retirement. That being said, the occasional splurge, if it doesn’t go overboard, is fine, especially if you’ve been diligently sticking to your budget. It’s really just a matter of balance and, the longer you use a budget, the more balanced you will be.



Good News for Consumers Who Love Their 401(k)

by Justin Weinger on May 3, 2015

There’s good news from the Internal Revenue Service (surprise!) for people who stuff as much money as possible into their 401(k) retirement accounts; starting this year the contribution limit has been augmented to $18,000, an increase of $500.

Even more good news for American workers who are 50 years of age and older is that the “catch-up” amount that they can contribute to their 401(k) plans will also increase $500 in 2015, meaning that they can put an extra $6000 into their 401(k) or $24,000 in total.

That being said, the truth is that most American workers unfortunately can’t afford to meet those maximum amounts. For example, of the more than 3 million participants in Vanguard’s 401(k) plan, a mere 12% maxed out their contributions in 2013 according to their annual report “How America Saves”. (Those figures don’t include monies from any employer matching programs.)

For consumers who use their 401(k) plan and earn over $100,000 a year, Vanguard found that 36% were contributing the maximum amount of money. That number fell precipitously however for consumers earning between $50,000 and $74,999, where only 2% were maxing out their contributions.

The IRS increase is connected to, and reflects, the increase in the Consumer Price index. This is the index that measures inflation but, interestingly enough, the IRS did not increase limits for contributions to traditional IRAs and Roth IRAs, which will stay the same and a limit of $5500.

Another bit of good news is that the income levels determining which consumers will get a full deduction on their IRA contributions are increasing in 2015 as well.

For example, a single taxpayer with a 401(k) plan will see their income level raise from between $60,000 and $70,000 up to $61,000 and $71,000. The deduction will phase out at incomes of $98,000 up to $118,000 (up from $96,000 to $116,000) for joint filers who have one spouse making IRA contributions as well as participating in a workplace retirement program.

It was also announced that, as far as Roth IRAs are concerned, more people will be able to contribute to them and take advantage of their after-tax contributions.

One last bit of good news is that, in order to qualify for the “savers credit” of up to $2000, the IRS has made it slightly easier for consumers. In 2015 this credit, which was put in place to help low to middle income retirement savers, will be granted to single filers with incomes of less than $30,500 as well as married couples with incomes of less than $61,000.

So, as you can see, not all news coming from the IRS is bad news, especially if you do your best to put as much money as possible into a 401(k), IRA or Roth IRA retirement plan.