Smart Borrower Center
Tools to help you borrow better
Second homes
Once your children have left home, and you are approaching or already enjoying your retirement, you may be interested in getting a vacation home. This usually requires that you be in excellent financial standing, especially if you still owe money on your primary residence or if your second home requires repairs or updates. Just as it was when you bought your primary residence, comparison shopping for your second mortgage is essential. It is the way to ensure that you find the best possible option. You may be able to use the equity you have in your first home for a down payment, and you may also be able to deduct the interest from your federal taxes. On the other hand, you may find that interest points are higher than they are on your first mortgage. Regardless, a good place to start looking for another mortgage is with the lender that holds your current mortgage. Not all mortgage lenders will finance the purchase of a vacation home, but you may find that your current lender is a good starting point because of the history you have with them.
Cars
Once your kids have graduated from high school and moved on to college, you may find that the station wagon that accommodated instruments for marching band, or the minivan that transported coolers to soccer games is going to waste. And chances are you are not only driving a car that is bigger than you want, but you are paying more than you want to in gas. If you want another car, comparison shopping is a must. First, you’ll need to figure out if trading it in to a dealership or selling it on your own will gain you the most money. Second, you will need to decide if you are going to get a new or used car. Third, if you decide on a new car, you will need to decide whether to lease or buy. Then you must shop around to find the best possible price. Comparison shopping for all of these details will ensure that you find a car that works for you, at a manageable cost. In addition, you can comparison shop for financing options to make sure you get the loan that is right for you.
Insurance
As your financial situation changes, you may want to reassess your insurance. You probably already have homeowners, health and car insurance but doing a little bit of comparison shopping can save you money. First and foremost, you should be sure that your insurance companies are up-to-date on the policies you hold. For instance, once your children have graduated from college and begun their careers, you can probably take them off your account since they are likely to have employer-sponsored insurance plans at their workplace. If you receive offers that seem like they could be saving you money, begin by reading the fine print. You can then take anything that sounds promising to your current insurance carrier to see if they can match or beat the advertised price. Regardless of what you find when comparison shopping for insurance plans, be sure that what you gain in savings doesn’t mean that you are skimping on the coverage.
When you’re making big decisions, about things like buying a second home, buying a car and buying insurance, comparison shopping is well worth the extra time it takes.