Has a loved one recently died and left you with a plethora of money? If so, you may be wondering what you can do with it. It’s amazing how much wealth a person can accumulate in a lifetime, and their family members have no real clue about it. If you’re lucky enough to find yourself in that situation, here’s how you can use it wisely:
Pay Down Your Debt
If you have received an inheritance and are saddled down with debt, consider using that money to pay down your debt. You’ll sleep better knowing your financial obligations is being taken care of or is now fully paid off.
If you’ve had difficulty saving for your retirement, you could use that inheritance for investments – even if you’re dealing with debt. Use the inheritance to make up for lost time, so that when you return to it you can live on something rather than nothing. Of course, any decision you make in regards to your inheritance should take into consideration your income. If it’s unstable or relatively low, and you don’t have an ideal retirement plan, investing the money can help.
Help Others with the Inheritance
Sometimes, it’s better and feels good to help others. This is especially true if your debt and retirement are already in good financial shape. When giving away the inheritance, there are two options.
1/ Give it to family and/or friends
You can also help your family out as well. Consider paying for your child’s education or putting the money toward a down payment on a home.
If you go with the charity option, you will be eligible for certain tax credits.
Spending It Like You Want
No one needs to tell you how you should spend your inheritance, as it’s your money. As long as you have controllable debt, you have a decent amount of retirement saved up and your income is stable, you can spend your inheritance as you wish. Consider something like a home renovation as a great way to add more value to your property.
After years of frugality, you’ve saved enough money up to put a down payment on a house. Perhaps a congratulations is in order since you’re about to become a homeowner! Well, not quite yet…
You see, you may have enough for a down payment, but you still need at least 80% to purchase a home. That means you need to be approved for a mortgage. However, how can you be sure you get a deal that’s the best for your financial situation? You can haggle for your mortgage, it’s just a little different.
1/You can Negotiate the Rate
According to RateSpy founder Rob McLister, posted rates are not final rates. In fact, there are very few lenders that have inflexible rates. And, even these lenders will bend the rules for those who demonstrate themselves financially stable.
2/Rates are Not the Be-All and End-All
While you do save money on a low mortgage interest rate, there are also hidden costs in a contract. With lenders posting rates on websites, prospective borrowers are far more likely to check out the advertised rate. This has resulted in many lenders adding clauses to their contract. For instance, a lender may demand that a mortgage must be completed within 30 years or the borrower may be subjected to penalty fees.
Prospective borrowers need to look at the rate of each institution to realize what they’re getting into.
3/Extend Negotiations Beyond The Rate
The rate isn’t the only thing to contend with in a mortgage. You must also address transfer fees, discharge fees, deed fees, appraisal fees and legal fees. There is a host of fees that you can negotiate that will help you to save a little money.
4/Have Leverage to Negotiate with
The bigger your mortgage is, the more likely lenders will negotiate with you. If you use a mortgage broker, you can negotiate with them to reduce their commission if you’re requesting a large sum of money for the mortgage.
5/Do Your Research before Negotiations
Before you even step into the negotiation ring, you need to do some research. Find out how the lender works and what the rates are like. Big banks and online-only lenders don’t offer the same kinds of services, which means negotiations will differ. Don’t try to use an online lending rate with a traditional bank.
6/Realize You Can’t Negotiate Everything
You need to understand that breaking a mortgage with your lender such as refinancing to another lender or selling your home can lead to a penalty fee. If you decide you want to break the mortgage, you give them no kind of incentive to negotiate with you.
What You Need to Remember
It’s not difficult to negotiate your mortgage, but you may have to compromise on a few things – fees, services and rate. The more money you’re asking for in a mortgage, the more you should learn about the various lenders, their rates and the fine print. Do this, and you have the power to negotiate yourself a good deal.