After a recent bankruptcy, your loan options are limited. Those needing
quick cash for home improvements, wedding expenses, or college tuition
may be unable to secure the necessary funds. However, if you own a
home, getting approved for a home equity loan following a bankruptcy is a
realistic option.Understandably, banks and credit unions are reluctant to approve an
unsecured loan or credit card application. Because home equity loans are
secured by your property, lenders are more equipped to take a gamble.
However, if the loan cannot be repaid, you will lose your home.Benefits of a Home Equity LoanHomeowners obtain home equity loans for various reasons. In fact, some
apply for these loans in an attempt to avoid bankruptcy. Home equity
loans are perfect for debt consolidation and paying past due utility
bills. The interest rates are typically lower than credit cards and most
consumer loans. Thus, homebuyers are able to payoff debts, improve
credit, and save money at the same time.Some prefer home equity loans because they do not involve closing
costs. Refinancing an existing mortgage is great for obtaining a lower rate
and receiving cash. However, because a new mortgage is created,
homeowners are required to pay closing fees, which could amount to thousands
of dollars.Home Equity Loan LendersGetting a low rate on a home equity loan following a bankruptcy will
require work. Homeowners must be prepared to research various lenders and
negotiate a good finance package. To begin, submit a loan application
through your existing mortgage lender. If your payment history is
acceptable, the lender may consider this when approving your application.
Thus, you may avoid paying a higher rate.If your lender offers you a seemingly unbeatable rate, do not stop
here. Continue to obtain quotes from other money sources. Shopping around
for home equity loans online is popular. Mortgage websites make it very
convenient to get approved for a loan without leaving your home. Simply
submit your loan application and wait for a reply. Within a few hours,
lenders will contact your with their best offer.After obtaining at least four offers from home equity loan lender,
compare each offer. What are the terms? Interest rate? Monthly payments?
Subsequently, pick the lender that offers the most desirable mortgage
One common way that individuals try to pull out of debt is through refinancing. Refinancing requires individuals to take out loans that pay their other loans in full. There are several advantages and disadvantages to this, and it is important to note that certain pros and cons may not apply to everyone.Among the most positive outcomes of refinancing is debt consolidation. Individuals can cut down the number of monthly payments that they have, which often means a lower monthly payment. A lower monthly payment is key in refinancing, and there are several ways to obtain one.The most common way to secure a lower monthly payment is to look for a refinancing loan that has a lower interest rate than your current loan. Though the overall loan amount will be more, a lower interest rate may result in lower monthly rates.A lower interest rate alone may not lower the amount that you owe each month Another way to lower payments is to agree to loan terms that stretch out the repayment period. Though there may be a longer debt period, stretching out a loan can drastically reduce the monthly payment.All of these actions may have negative consequences though. In some cases, refinancing will lower monthly payments by a negligible amount. When this is the case, debts may not become any more manageable.Worse yet, individuals will be stuck with the loan for a longer period, which can cause more financial strains. Ultimately, an individual may be better served by declaring bankruptcy and wiping out his or her debts entirely.
I have been approached by a swarm of homeowners who are currently facing foreclosure. It saddens me to see so many people in this situation, and how they have been deceived into thinking they can afford these homes. Even until now I hear stories about homeowners being promised false hope that they can be saved from foreclosure by paying a short sale fee, loss mitigation fee, or just being striped totally of their equity by scrupulous professionals.The fact of the matter is that you can save yourself from foreclosure; because you don’t have many options.
The first thing homeowners in trouble have to come to realization is to separate their emotional attachment to their home if they have owned it for less than four years. I say that because if you bought your home within the last four years most likely you bought really high priced and most of these homeowners bought with a 100% financing with no income verification. If this is the case you must realize you have no equity and your house isn’t worth keeping. What I recommend is a family meeting putting together a budget; net Income minus all expenses and if you’re in a negative forget it! cut your loses and move on its not too late to start over.Refinance may be an option with the new FHA guidelines that go into affect October 1, 2008 this where homeowners that are behind on their mortgage can refinance only if they can prove that their income is sufficient to pay the mortgage at 29% of their income, and only if their current lender agrees to take a loss (short Pay) on the current mortgage FHA will purchase the current mortgage up to 85% of current Fair market value with closing cost and debt all bagged together not to exceed 90% of current fair market value. You can visit their website at http://www.hud.gov and search for the HR 3221 housing bill for full description of bill. Please remember this is a full documentation loan it will not work for people who cannot prove their incomes!After you realize you can’t afford it and refinancing couldn’t help you call your lender don’t be afraid bottom line you can’t afford it. your lender must see that you can’t afford it so you have to lay the cards on table with them period give them all the truth once they see you can’t afford it obviously a payment plan won’t work. The lender may offer you loan re-modification if your income proves that you can pay the new loan terms so you see why I say sometimes its better to come to reality and forget the emotional attachment we have for homes. Most lenders offer forbearance which is deffer payments for up to six months but again if you still have the same income in six months it defeats the purpose.Option 4 is to put the house on the market to sell at current market value hire a Realtor to give you a free market data analysis if you list with them most likely your home won’t be worth what you bought it for, so its important that you maintain communication with your lender during this process, so they can at least see that you are trying to get yourself out the hole, plus they will pause foreclosing procedures during this time. Once the Realtor gives you the market value send a copy to your lender as they have to agree to take a loss; this is called a short sale. During this time make sure you save your money to start looking for accommodations to move out don’t get too comfortable. It surprises me how many people wait til the sheriff is knocking on their doors before they reality actually hits home.If after a few months the property doesn’t sell you have the right to claim Chapter 13 Bankruptcy. Just keep in mind that if you file chapter 13 its only temporary, if you can’t afford your current mortgage chapter 13 won’t help you as now you will have to pay your regular mortgage payment and all of your debt consolidated in another payment to the state trustee so now you will have two payments. Notwithstanding the enormous fees you will pay an attorney. Chapter 13 is for individuals who can prove they will be able to pay their current mortgage plus all arrears in a payment plan over 5 years.If Chapter 13, Selling, Refinancing, short selling, forbearance, payment plan, loan re-modification, don’t work out for you just give it up ask your lender if they have cash for keys ask for a couple of months to move out and you will voluntarily give them the deed in lieu of foreclosure, it’s certainly less embarrassing than the sheriff forcing you and your family out.Just remember during these tough times we fail to think straight and anyone who offers us a sign of hope will look like a god; but reality is you can save your own home if you just talk to your lender and come to realization if you can truly afford to keep this home even if the lender works with you.I can’t stress to how important it is to communicate with the lender, they will offer the options that they will offer any body else you hire to do it for you. Don’t fall into a trap just tell your lender the exact truth be bold and un-embarrassed tough times could happen to any one of us and it’s never too late to start over. Take it from me I have walked the path and I have helped hundreds some I saved their homes and the others just gave them up gracefully and started a new chapter in their life.After all is said and done just educate yourself on credit repair as your starting point.http://www.approvemyfhaloan.com
Credit card debt consolidation is a good option if you are finding yourself under a heap of credit card related and other debt. Debt consolidation organizations come to your rescue when you are faced with the problem of delayed payments and delinquent credit card and loan accounts because of improper credit card usage and multiple loans.Credit Card Debt Reduction – Two Way HelpSince, your economic condition is in a bad shape which made you unable in paying creditors, a debt consolidation organization will help you to alter both – your economic as well as credit status. Organizations that offer solutions for consolidating credit card debts have a plethora of tailor made credit card debt reduction solutions for different debt situations.Some options that you can get from credit card debt consolidation companies are debt consolidation loan, debt management program, card debt consolidation program, student loan consolidation program, credit counseling services, debt negotiation services and many more. You can search online or contact a debt consolidation company in your area to seek precise services to consolidate your loans and credit card dues depending on your financial status.Bad Credit Is Not A Problem With Bad Credit Credit Card Debt ConsolidationAs the name suggests, a bad credit debt consolidation loan consolidates multiple outstanding debts and credit cards into one single loan with convenient payment options even if you have a bad credit status. You can use this loan to pay off all the unpaid bills, other loan payments and credit card dues that have negatively impacted your credit score.Since the loan to consolidate debt is designed keeping your income and debt status in mind, they have usually convenient loan terms and interest rates which are not tough to pay off on time. As you pay off all your overdue and delinquent loan accounts, and start making loan payments on time, the credit bureaus get positive feelers based on your recent credit payments and your credit report starts moving in the positive territory. This is how a bad credit credit card debt consolidation loan can help you gain control over you financial standing and repair your credit report by Credit Card Debt Reduction. If you make prudent use of this loan and maintain a strict financial discipline, you can get back from the brink of bankruptcy and eventually become debt free.Debt Negotiation – Negotiate Better TermsAnother effective tool to repair your credit standing is debt negotiation program. Debt consolidation companies employ their skilled professionals to contact and negotiate with your creditors to offer lower and easier payments terms for your credit cards that you can easily pay off. These companies negotiate to reduce debt amount, interest rates, and may help you waive off late fees and penalties.Another benefit of debt negotiation program is re-aging of the credit account through negotiation. With re-aging and turning the account to current, you consequently are left with no unpaid credit from the past and no more bad credit score.You can use bad credit credit card debt consolidation, debt negotiation or a combination of both to take control of your debt situation and become free from the clutches credit card debt.
Credit card debt consolidation may be the only viable option to getting out of credit card debt. It’s not hard to get into debt if you just go out and spend money on credit without thinking about how you’re going to repay it. All of those plastic credit cards are a disaster waiting to happen if you don’t have self-control over your spending habits or the ability to repay your debt quickly.It’s not difficult to get stressed out or even feel hopeless when those monthly credit card bills show up in your mail box every month without fail. The problems begin to mount, however, if you do not pay the credit card balance within the grace period (usually less than 30 days) and have to pay an interest fee on top of the principal repayment. The total debt grows every month when you don’t pay all the interest due in addition to reducing the principal debt each month.An individual cannot continue to treat the credit debt problem without reducing the debt amount on a regular basis. There is help around the corner if you’re willing to consider the optional method. It’s called credit card debt consolidation. This is a method of taking charge of your debt problem and reducing it gradually over time with lower monthly payments.Financial institutions created the credit card as a method to earn a fee on consumer purchases financed by short-term loans. It was an alternative to the “lay-away” process used extensively by many retail stores in the 1940s and 1950s. The credit card process was a blessing in disguise for many consumers that had the financial ability to pay off their credit purchases in a relatively short period of time.Credit card debt consolidation involves the process of setting up one single loan to pay off all the individual credit card bills. There are two consolidation methods available depending on the financial institution you deal with. Method one requires setting up an unsecured (less likely) consolidation loan to replace the multiple unsecured credit card balances. Method two requires setting up a secured (most likely) consolidation loan to replace the unsecured credit card balances.A secured loan requires that an asset (usually a house) be used as collateral for the loan in case you default on repaying the loan. The secured loan enables you to replace the multiple high interest credit card costs with a lower interest and lower monthly payment. Credit card debt consolidation is a much better process of paying off those ugly debts than suffering each month with the multiple credit card bills.If you have a severe credit debt problem that has gotten worse over time, you are a prime candidate for credit card debt consolidation loan. There are many financial institutions that offer consolidation loans if you meet certain criteria and have valuable assets (e.g. a house with equity value) that can be used as collateral for the loan. You can research the types of consolidation loans available by getting information through online Internet searches. You need to make certain the interest rate is low and the monthly repayment (interest plus principal) is within your financial ability.
Home Equity is the difference between the fair market value (appraised value) of the home and the outstanding mortgage balance. Because the home is likely to be a consumer’s largest asset, many homeowners use a home equity loan for major expenses such as education, home improvements, medical bills, or debt consolidation.A home equity loan is a type of mortgage in which your home serves as collateral. Home equity loans can either be a revolving line of credit known as a HELOC (Home Equity Line of Credit) or a one-time, closed-end loan sometimes referred to as a 2nd mortgage. A revolving credit line lets you choose when and how often to borrow against the equity in your home. In a closed-end loan, you receive a lump sum of cash. Interest on these types of loans are usually tax deductible.If you have bankruptcy or bad credit issues, a home equity loan or line of credit may be right for you. Before making a decision, you should carefully weigh the costs of a home equity line against the benefits. Shop for the loan terms that best meet your borrowing needs without posing unnecessary financial risk. You can apply for and obtain more information on home equity loans through a mortgage broker, your bank or credit union.The federal Truth in Lending Act requires lenders to disclose the important terms and costs of their mortgage products, including the APR, miscellaneous charges, the payment terms, and information about any variable-rate feature. And in general, neither the lender nor anyone else may charge a fee until after you have received this information.
Most any large city has a number of small shops offering payday loans. They’re often found in strip centers; sometimes they double as pawn shops. They have a simple business – they lend you money until your next paycheck. The system is pretty convenient; you write them a postdated check for the amount you’re borrowing plus interest. On your next payday, they cash the check and your loan is paid off. What many people who use payday loan services fail to realize is that the interest rates charged by these firms are substantial, often reaching the equivalent of four hundred percent per year!The interest rates charged by payday loan stores varies from state to state, but a rate of 15-17% for two weeks is not unusual. This translates to 390-440% per year, which is a staggering amount of interest to pay on a loan. The lenders say that these amounts are fair, and are necessary to cover the overhead associated with running a business and to account for a substantial number of borrowers who fail to repay the loans. That may be true, but that high of an interest rate can turn the “convenience” of a payday loan into a nightmare. Many borrowers are relatively low paid blue-collar workers who live from paycheck to paycheck. Someone who is a “bit short” this week may also find themselves short again on their next payday. If they fail to pay back the payday loan, the interest continues to accrue and additional penalties, such as returned check fees, may apply. It is quite common to see loans of $300 or so turn into debts of several thousand dollars, especially if the borrower compounds the problem by borrowing funds from a second payday loan store to pay the loan from the first one.Several states have already passed laws capping the interest rates that may be charged on payday loans. Others will undoubtedly follow. A good alternative to the payday loan would be to take a cash advance on a credit card. There is usually a fee associated with a cash advance, but the annual interest rate, combined with the fee, is still a lot cheaper than a loan at 400%. Anyone who is considering taking out a payday loan should read the terms carefully. Otherwise, that “loan until payday” could be there to haunt you for a long time.
If you could consider filing bankruptcy without lawyer, please be aware that the new bankruptcy laws and procedures are more complicated and confusing than the previously constructed.Though many people who consider bankruptcy are facing difficult financial times and may find the attorney’s fees to be burdensome, the cost of not having an attorney can be more costly. It is important for one to have a thorough understanding of the chapter 7 bankruptcy requirements. The new bankruptcy laws impose certain restrictions on the eligibility for a chapter 7 and hence, are not that easy to interpret. If your case is complex, you may not be in a position to get this valuable information from a paralegal that merely prepares paperwork and files them in the bankruptcy court. Therefore, if you wish to obtain a favorable outcome of bankruptcy case, it is desirable to use the guidance of a professionally qualified and experienced bankruptcy attorney who is well versed with the procedures.In bankruptcy, a person probably will be able to keep his or her home and car, but that’s not a certainty. The advantage of bankruptcy is that foreclosures, evictions, repossession, garnishment of wages or Social Security payments, utility shut-offs and collections calls stop. If a person waits too long to file, a legal judgment might eliminate options for saving an asset. Bottom line is that, if you are considering filing bankruptcy, you should take the time to speak with a qualified bankruptcy attorney. He or she can review your finances and help you to make an informed decision that makes economic sense. If filing for bankruptcy won’t help you out of your current economic problems or is unnecessary because of your financial situation, an experienced bankruptcy attorney will provide you with alternatives to filing bankruptcy.
At a time when the Michigan economy is declining its residents are under financial strain. Those waiting on an answer about their Michigan social security benefits are feeling a heightened sense of financial and emotional pressure. The backlog of social security disability claims decisions across the country exceeds 3 years in some cases. Those with Michigan social security claims can expect to wait at least 2 years.It is not uncommon for initial requests to be refused. Although 2/3 of those who appeal their rejection end up getting approval for social security benefits in the end. However, the time and energy involved in the appeal process can be overwhelming and many applicants give up after the first rejection. Most successful appeals have the support of a specialized social security lawyer who can assist in gathering key medical information required to prove a case is valid. Making an appeal within 65 days of the denial date is critical to any hope of receiving benefits.Meanwhile, bills and financial obligations continue to accumulate. Even the financially prudent find themselves at risk for bankruptcy and losing their homes before their benefits are paid. Proof of an eviction notice often brings a social security benefits case higher on the decision priority list, but by that time, it is often too late to keep the home. Some hopeful social security benefit recipients facing terminal illness don’t even live to see their benefits fulfilled.The addition of new appeals judges may provide some relief from the backlog, but comes at a price of over $100 million beyond the amount requested by the president to support administrative costs. Any improvement on shortening the length of delays will come at significant cost.If you are facing a social security benefit claim, your best ally is knowledge. Read all you can, and get reliable answers from someone experienced with social security law.