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5 Financial tips for the 2nd week of November 2012

January 09th 2013

Here are the 5 financial tips for the second week of November 2012.

Tip no 1: Try to opt for refinancing without any closing cost.

Usually, you've to pay several fees when you take out a refinance loan. You need to pay closing fee on a refinance loan. This actually increases the cost of the mortgage refinance loan. However, if you can qualify for loan without closing cost, you can potentially save a lot of money.

In a refinance loan (without any closing cost), the lender takes the responsibility for paying the associated fees such as attorney fees, title insurance costs, appraisal fees, etc. This helps to ensure that the mortgage balance doesn't increase at closure.

Tip no 2: Child support cannot be included in your annual tax file as a deduction.

If you're spending a portion of your paycheck for child support, then don't expect that you'll qualify for tax deduction. You're not allowed to deduct the amount spent on child support from your income while filing tax returns. You can't deduct the amount in order to adjust your income. Similarly, if you're receiving child support from your spouse, then also you can't include it in your monthly income. You can consult an experienced tax professional to get detailed information about this. You can even visit the official website of the IRS to get more information on this.

Tip no 3: Educate yourself before you put your family's financial security on the line.

Your family's financial security is your top most priority in life. So, it is better that you enhance your financial knowledge before making any decision for your family. For instance: gather knowledge on life insurance before purchasing a policy. Get acquainted with basic life insurance terms and terminologies first. Know about key terms such as deductible, coverage, premium rate, etc. This will help you choose the right life insurance policy for your family. You'll be able to offer best protection to your family without wasting any money.

Tip no 4: Increase your awareness about mortgage scams, in order to avoid becoming a victim of the same.

Millions of homeowners are struggling to make payments. Many homeowners are facing foreclosure nowadays. Fraudsters know this fact very well and they're taking full advantage of this. Browse through various financial websites and try to broaden your knowledge on the mortgage scams. Find out how people are being scammed. This will help you avoid losing money on mortgage scams.
Don't work with any company just because you're in mortgage debt. Conduct a thorough research on the company before working with them. Don't succumb to catchy taglines and attractive advertisements. Never work with a company that asks you to pay advance fees.

Tip no 5: Stop using your credit cards to come out of credit card debt; but don't close your accounts as that'll hurt your credit score.

If you've racked up credit card debt, then the first thing you need to do is stop using plastics. Your credit card debt amount will only increase as you whip your credit cards. So, stop using credit cards unless it is absolutely necessary. Focus on finding out the ways to pay off your credit card debts.

Don't close your credit card accounts just because you're not using the cards. This is because it'll hurt your credit score. Your payment history will be affected negatively after the credit accounts are closed. As you already know, your payment history makes up 35 percent of your credit score. If your payment history gets negatively affected, then your score will also drop consequently.

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