Are you making only the minimum payment due on your cards each month, and watching the amount you owe rise with each billing cycle? Do you use your credit cards to purchase everyday household items, like groceries, that you used to buy with cash? If you answered yes to either question, you’re probably dealing with mounting credit card debt.
Credit cards are extremely easy to use, but need a great deal of discipline to avoid getting into unmanageable debt. A credit card debt is an unsecured loan, because the credit card company does not hold or ‘secure’ any of your assets to cover the amount you owe the company if you are unable to pay your credit card bill. When you default on a credit card payment by stopping making payments altogether, the credit card company will try and recoup its losses by contacting you, typically through a collection agency.
The key to credit card debt consolidation is to avoid getting to the stage where you’re receiving notices and calls from a collection agency. You can do this by taking control of the situation and cutting unnecessary expenses so you have more money to put towards your monthly credit card payments. If the amount is too large, you could consider contacting the credit card company and negotiating a reduced interest rate, and a reduced or waived late fee, to help you pay the debt off. Another option may be to go through a debt consolidation company, which will negotiate on your behalf and take over all communications with the credit card company and collection agency. Remember that even if the credit card company agrees to an interest rate reduction and late fee waiver, information on the payments you didn’t make will still be reflected in your credit report.
Second mortgages are important real estate tools that have been used for many years. A particular type of second mortgage is called a commercial second mortgage. These are used in combination with a first loan and as a main difference a second commercial mortgage will have a term much less than the first one (usually this new one is a 5 year loan).
In many situations, such a second mortgage is required, but the possibility to repay it must be taken into account and assessed properly. Borrowers must be sure that the money acquired will make a good investment for their commercial business or that they can pay their first loan and second loans at the same time.
Several qualified people are able to help borrowers find a good second mortgage. Also, whenever people apply for a commercial second mortgage a free assessment of their financials will be done. This is routine and is very helpful, as the borrower will then know exactly what they can afford, and their picture about their business and financial power will be up to date. With this information in hand, borrowers can then decide if taking the loan is a good solution or not.
People who are not approved will at least know their exact financial state and can risk it by applying somewhere else where they will be approved. The risks are higher but the rewards can be high if the borrower is careful in choosing the amount borrowed and the terms of the loan.
Taking a commercial second mortgage is a very big step and should be very well thought out. The repayment rates are higher than with a first loan and they must be paid on a shorter term. It is advisable to consult a financial professional before taking a commercial second mortgage in order to fully know and understand all of the available options.
You can obtain a home equity loan even if you have faced bankruptcy or have a bad credit rating. There are institutions that cater to this segment, however, interest rates and terms are likely to be stiffer. Additional fees also could be charged. The lender may offer high down payment and lower interest burden or vice versa. Loans with both fixed interest and variable interest are available. The maximum repayment time may be up to thirty years.
Usually lenders depend on reports by credit rating agencies like TransUnion, Equifax, and Experian, together known as FICO, to evaluate an individual’s credit rating on a scale of 300 to 900. The factors considered by these agencies include, past payment history, recent credit applications, and outstanding debt. A score below 600 indicates that you are in the bad risk group. It is possible that the rating of the same person given by each FICO agency differ. Some lenders score in the middle range.
There are ways and means of improving the FICO rating. Certain banks also offer credit counseling. Agencies approved by the U.S. Department of Housing &Urban Development (HUD) too give free counseling, including review of your financial situation. Some lenders may not even bother with FICO ratings. In such cases the maximum loan would be only 70 percent of the net value. They may insist on the borrower paying off some of the outstanding debt with the money loaned.
Do some research and see what different lenders have to offer. Don’t blindly believe everything that is said. Study them, ask questions; there is no need to feel timid about your present financial situation. And be careful. There would be people waiting to exploit your seemingly desperate situation.
The prevalence of credit cards with high interest rates often causes individuals to spend beyond their means and get into unmanageable debts. To get out of debt, many may have to think of debt consolidation. Debt consolidation facilitates low interest payments and lower monthly expense.
Debt consolidation means consolidating and restructuring all or most of the prevailing debts in a form that is easier to repay. It is suitable for individuals who have high rates of interest on mortgages, car loans and multiple credit cards bills. Debt management companies or financial organizations that specialize in debt consolidation handle debt consolidation.
Debt consolidation can be done by obtaining debt consolidation loans or by enrolling in a debt management service. By obtaining a debt consolidation loan, an individual can consolidate all the debts into one single loan amount used to pay off the debts. The loans are negotiated at lower interest rate with a favorable monthly repayment schedule. Debt consolidation loans can be secured or unsecured. An individual may either opt for secured loans or unsecured loans.
Alternatively, an individual may prefer debt consolidation by enrolling in a debt consolidation service or a debt management plan. In a debt consolidation service, the firm
negotiates with the creditors for lower interest rate and waiver of fees and penalties and restructures the repayment of debt on terms favorable to the customer.
Those who are not sure how to handle their debts can seek help from a certified counselor who can point out the various options and their inherent advantages and disadvantages and suggest a best option for handling the debt.
Before approaching any organization, it is worth the effort to shop online and compare the best deal a firm has to offer for debt consolidation. This can certainly save a few hundred dollars.
The FTC gives free information to the customer regarding fraudulent business practices. They can be visited at their official website at www.ftc.gov.
A 2nd mortgage may be one of the best financial moves you will ever make. If you know what it is and how it works, you can use it to generate money for profitable investments, simplify your debts and beef up your credit score. The key to taking advantage of a 2nd mortgage is understanding how it works.
A 2nd mortgage is a loan that uses the equity in your home as collateral. When you avail of a 2nd mortgage loan, you are technically putting a second mortgage lien on your title without refinancing or changing the terms of your first mortgage.
A 2nd mortgage is considered a “simple interest loan” because unlike other major loan vehicles, it has a fixed interest rate. This fixed interest rate is based on a number of factors such as the current market rate of your home, the prevailing interest rates and your personal credit history. You can choose terms that vary from five years to 25 years, depending on your capacity to pay and other cash flow considerations.
Many people turn to 2nd mortgages to consolidate their debts – they pay their credit cards, loans against insurance and other high-interest loans with the money they borrow from a 2nd mortgage. Experts say that the fixed interest rates of 2nd mortgage allows you to save up to three times more than you would if you are paying minimum payments on your credit cards. And, since the interest in a 2nd mortgage is amortized yearly, you don’t have to pay daily compound interests that credit cards charge.
Best of all, a 2nd mortgage actually gives you a tax break – the interest you pay on this type of loan may be tax deductible up to $100,000 of the loan amount, or 100% loan to value.
Today, finding the right company to finance your home is not too difficult, but difficulty lies in finding the company that has the best to offer you, with minimum hidden costs. However, to be able to nail the companies you are looking for, you need to first be aware of the first mortgage resources.
Real estate agents usually keep close contact with first mortgage companies, some of them entering strategic win-win tie-ups whereby the agents earn an incentive for every client they recommend. Real estate agents have first mortgage resources at any given point. After all, their concern is to see that the property is sold at any cost, even if it means going out of their way to help the buyer.
Another prime source for first mortgage resources is the Internet. If you use any search engine, enter the key words first mortgage companies, along with the area; then you will have many websites guiding you to finance companies and banks close to you. Another avenue for first mortgage resources is the Yellow pages, where companies advertise their finance services.
Finally, one more area from where you can gain first mortgage resources is from builders. Generally, they tie-up with certain banks and financial institutions that provide home loans. The strategic tie-up ensures that the buyers get the required home loan from the company, which is beneficial to the builders.
While there are varied resources for the first mortgage, the main thing one needs to do is verify the authenticity of the company, to ensure that they are not being misled. There have been fraudulent companies that provide a smaller loan and then on some pretext or the other sell the property and give back the borrower far less than the appreciated cost. Generally speaking, private finance companies and financiers are more likely to indulge in such fraudulent activities.
So, finally you have purchased that dream house of yours. Your dream of rubbing shoulders with what you consider your peer group is finally a reality. And how did you buy that house? Well, you have gone in like a brave soul and got yourself an interest-only mortgage loan. The lender has also given you a 10 year time period to repay the loan.
Interest-only mortgage loans are appealing for this very reason. They give you ample time to repay the interest on a monthly basis. Of course, one should not forget about the principal. A ten year repayment period is ideally suited for those people who are in the middle of their career, either in the late thirties or early forties. They are usually at the peak of their careers, with reasonably good energy levels and earning well. Such people are fairly confident of repaying the loan amount over the period of ten years, without any difficulty. It pays to be prudent though. One should always take into consideration the future while going in for interest-only mortgage loans. After all anything could happen in the ten years.
What interest-only mortgages have done though is to arm people with additional purchase power. They have their own inherent dangers though. You can never be sure of the future. Especially so, if you don’t have excess money to splurge in the first place! Interest rates may go up, real estate prices may come down, you may face a mid-career crisis, and anything is a possibility. Therefore you need to consider all these factors, before making that purchase decision. It is crucial that you consult your financial advisor, before buying that dream house of yours. You can also get vast information on the various complexities involved in interest-only mortgages, if you happen to surf through the web sites of leading online lenders and brokers.