One single bank account
July 30th, 2007 at 12:09 pm (Uncategorized, Bank Accounts)
A lot of people spend most of their life owing somebody else’s money. And it is quite understandable that they are not totally happy with the way their bank accounts and mortgage accounts are handled. Is there anything which can be done to improve the system?
The one account. Those people just do not fully realize how much money they can save, consolidating their income, borrowings and savings into one single bank account. This type of account is managed like a regular bank account: there are bank cards without a limited number of withdrawals and there are chequebooks. Sure, this is not the usual way people manage their finances having the income going into one account, savings into the other and holding the mortgage in the other bank. But if you have only one account, it helps you to keep the cost of your debts much lower than traditionally.
Possibility of negotiating a loan. Opening a single bank account allows you a borrowing facility that can represent 95% of the value of your home. So, if you own a $100,000 house and need an 75% mortgage you can set up a loan facility of $95,000 having additional $20,000 to call on when you choose. As soon as the facility has been acceded, you can make use of the money whenever you want. Besides, you can settle this debt however you want. But there is a need of proving that you will be able to pay it off until you retire.
Other advantages of the single bank account. Moreover, you have the same or close to the same interest rate for your savings and your borrowings, as the one account keeps the balance of it. And because of the structure of the one account the repayments of your mortgage are made monthly and this helps you to safe some more money, comparing to the way when the repayments are taken off in the end of the year.