MAKE DEBT CONSOLIDATION WORK

It is a very commonplace issue today for people to be upside down in a number of debts. The first and foremost option people have when it comes down to repaying debt, is simply discipline. There are usually, like most things, extenuating circumstances, and you just can’t make your payments on time. There is something that you can do to help. It’s called debt consolidation.

This is not a new concept, although it is becoming increasingly popular considering today’s economic struggle. What happens in a consolidation is you take out one loan, which is enough to pay off all of your current debts. This way, you only have one large debt to repay, instead of several small ones. Another advantage is that the consolidation payment will be at the same time every month, unlike what you may be used to working around. This may or may not be the right solution for you, so there are a few things you should look at first.

You really need to understand the pros and cons of debt consolidation. Some of the benefits are the fact that there will be no more annoying collection calls to deal with. Those creditors have been paid off through your consolidation. Another is the possibility of boosting your credit rating.

Some of the pros of debt consolidation are the possibility that debt consolidation is not the right move for you to make concerning your financial situation. There are many different aspects to consider before making that decision. If you are seriously indebted, understand that consolidating your debts will not alter your spending habits. The concern with this is even with a consolidation plan, without some discipline you could end back up right where you are now.

You will definitely want to do your homework regarding debt consolidation loans. You need to find out if the loan that you qualify for is at a lower interest than what you are currently paying. If it isn’t, it will only cause you more harm than good. The most important aspect in any type of consolidation is getting your interest, and the amount of your payments reduced.

ALLEVIATE PROBLEM DEBTS

There are several ways people deal with their debts, the most common of which are debt settlement, bankruptcy, and consolidation. Commonly, people opt for consolidation. The reasons why are universal.

It’s very hard in today’s economy to be able to save money. What with inflation, skyrocketing fuel prices, and increasing job loss, it makes things more difficult for a lot of people. Given this financial situation, there are no guarantees that anyone will be able to maintain their lifestyles, or keep their jobs. This is causing more and more people to choose to consolidate their debts.

Debt consolidation will not make your debts disappear. What it will do, though, is get your interest rates and payments reduced. You can pay off all of your high interest debts, and simply pay back the consolidation loan. This is a great solution for being able to save money, and get your debts repaid.

For many, this looks like a viable option. It can be, but be very careful. If you enter into a consolidation unaware, you may end up even further in debt. You need to understand your current financial situation, and be willing and able to create and maintain a budget. Consolidation will help you, but you also need to help yourself.

DEBT REFINANCING OPTIONS

There are many people out there that just can’t seem to pay their bills in a timely manner. Their high amount of debt is drowning them, and for many, they end up filing for bankruptcy to get out of it. Unfortunately for those people, having filed a bankruptcy has destroyed their credit rating. This can make it almost impossible to get any sort of loan, for any reason. There is a viable option for those who are considering bankruptcy. You can refinance your debts.

What refinancing your debts does, is consolidates all of your debts into one lower monthly payment. This way, you will not only be paying your bills, but you will be saving money, and your credit rating. Another thing that consolidation refinancing will do is stop the irritating phone calls from your creditors. There are other advantages to refinancing your debts as well.

You will not have to pay those exorbitant interest rates you have been paying, and you will no longer have to deal with late payment fees, or over limit fees, it those apply to you. This is a great help to those who simply cannot make any more than the minimum monthly payment. You will finally be able to pay on the principle of your debts, not just the interest.

The most important thing to remember when it comes to debt refinance is to investigate the company that you decide to use. This is imperative because there are many companies out there that are scams, and will do nothing more for you than charge an outrageous interest, usually higher than what you are currently paying, or worse. Some may just take your money and do nothing more with it than put it in their pocket, and that’s it. For the most part, debt refinancing agencies are non-profit organizations, whose sole purpose is to help people in your financial situation. They are reputable, honorable, and will genuinely help you. However, it is still up to you to choose wisely, for your own situation.

Why you Need a Reliable Independent Mortgage Advisor

Why you Need a Reliable Independent Mortgage Advisor

In light of the latest housing predicament and unstable and faltering economy, mortgages and mortgage loans have become very complicated today more than ever before. If you are looking to buy a home therefore, you are highly likely to get frustrated not only at the complexity of getting a home loan but also at the complex ins and outs of the mortgage contracts. In case you find the process of acquiring a mortgage loan daunting, you may wish to look at hiring an independent mortgage loan advisor, but what are the important considerations to make when looking for the most reliable one?

The same way you will approach any business transaction, you might want to shop around and research on different mortgage advisors. There is a widespread misconception that hiring a mortgage advisor is very expensive. Note that independent mortgage advisors are paid directly by the lender and not a company hence there are many professionals out there who are available and do not ask for any obligation or fee from clients. Researching several different options is now easier than ever before since you will not feel tied down to a single advisor. Additionally, the advisors get access to all manner of lending options from various lenders hence you will get to reap the best benefits.

It is important to remember that a mortgage advisor has done many mortgage transactions than you can imagine thus, they are well versed with the process and all the nitty gritty. Perhaps you are familiar with the basic mortgage loan concepts such as early redemption penalties and stuff, but your independent mortgage advisor is in a position to explain to you in detail the practices of all individual lenders hence you wouldn’t have to make any phone calls for further clarifications. Mortgage advisors further know about the loopholes and details to be cautious of, and can advise accordingly.

Of equal importance to keep in mind is that you lack half the amount of experience with lenders that independent mortgage advisors have. Note that you are a complete stranger to lending institutions while your financial advisor has hopefully worked with nearly all the lending institutions you can think of. Chances are quite high he has formed a personal relationship with these institutions and thus has all the insider information and knows what to expect from each advisor. Part of the information that a mortgage advisor maintains include current promotions and deals that are likely to slip past the attention of a novice in the industry. By maintaining close business ties with mortgage lenders and banks, an independent mortgage advisor is in a great position to guide you through different lenders’ practices.

Getting a mortgage can prove a confusing and very tricky affair. There are many legal jargons that are sure to try your patient. Just take a moment to consider the amount of work and efforts you are willing to put into coupled with your level of experience in the mortgage field and decide whether you need to hire an independent mortgage advisor.

Top Five Major Features of a Reverse Mortgage

Top Five Major Features of a Reverse Mortgage

Reverse mortgage loans are a category of mortgage loans available today tailored for American seniors who are aged 62 and above, and who have equity for their homes. Senior citizens typically need to have more disposable cash so that they can enjoy their sunset years and home equity is one of the most lucrative sources. The popularity of reverse mortgages has significantly increased something that is very useful because it is one of the surest ways that seniors can get insightful information. Here are some of the most vital features of a reverse mortgage loan that all seniors looking to tap this lucrative opportunity should be aware of.

1.      Maturity of reverse mortgage loan – a reverse mortgage loan matures when the last borrower sells the property in question, moves away, or dies. Moving away could be interpreted by the lenders as when the borrower moves from the property for over 12 consecutive months. In such a case, the house is foreclosed and sold to cover the interest and loan capital and all fees incurred.

2.      Interest – another important aspect is the compound interest in that because nothing is paid to the lender until the loan closes, the interest is bound to pile up to a huge amount. Interest is mostly calculated on a monthly basis based on all expenses and other factors such as the capital, service fees, and other small upfront items and stuff. You might want to request your lender to calculate the figure upfront to avoid bad surprises in future.

3.      Shareholding – this is a very critical principle. The collateral of the reverse mortgage loan comes from the real value of the property from the main mortgage insurance. It is for this reason that lenders care less about your income information or your credit score because either way they will recover their money

4.      Reverse mortgages and taxes – reverse mortgage loans basically use money which you once paid for its taxes hence when you start receiving the monthly passive income, you will not be expected to pay any taxes. Be advised though that if the whole amount is not used up within the month received, your liquid assets may rise so high to a point you will lose your eligibility to public social security. Thus, it is advisable that you confirm this pertinent issue before you sign any deal. Still on taxes issue, annuity advances may be subject to taxation.

5.      ,Affordability – be advised that reverse mortgages are very expensive owing to the upfront costs which tend to be higher than the costs of a normal mortgage. When thinking of taking a reverse mortgage loan, you should compare the costs of what you stand to gain and what you will pay and all other financial options at your disposal before making a decision.

Important Information about Mortgage Loans

Important Information about Mortgage Loans

Imagine you want to get your family a place they will call home, but lack enough cash in form of savings in the bank to pay for the house in full. In such a situation, it makes total sense to use the small amount of cash that you have as down payment and then apply for a loan against the property as collateral, which you will then start repaying in form of monthly installments until the loan is due… and that is what is known as a mortgage loan.

What exactly is a mortgage loan?

A mortgage loan is one type of loan a home buyer (mortgagee) procures to be able to pay the property seller in full, after which the mortgagee is expected to repay the lender (mortgager) the total mortgage amount plus fees and interest accrued as agreed. Until the whole amount is paid off satisfactorily, the title deed or ownership of the property in question remains with the mortgager.

There are several types of mortgage loans customized to meets the tastes and preferences of different mortgagees. There are fixed rate mortgages, variable rate mortgages, long-term or short term mortgages etc. A mortgagee should procure a specific type of mortgage depending on their financial needs and their long-term plans. For example, a mortgagee who plans to live within the property for a long period of time may opt for a long-term fixed rate type of mortgage compared to the one who seeks short-term deals for investment purposes. Thus, both the mortgager and mortgagee must spend enough time and efforts on finding the most suitable mortgage loan customized to an individual’s mortgage needs.

How does Mortgage Default occur?

In case you fail to honor your end of the mortgage loan deal i.e. make the monthly payments towards the loan as agreed, it will result in the mortgage loan being termed as an ‘in default’. In such a case, the mortgager has the right to foreclose on the property meaning you the mortgagee will lose the property. Mortgage default should be avoided as much as possible because even if the mortgager doesn’t foreclose on the property, chances of tarnishing your credit score are quite high. This will put you in a very compromising situation because you will affect your odds of securing a loan of whatever kind in the future with a bad credit score.

Thus, to avoid a situation that will lead to mortgage default, you should ensure that your payments towards your debts do not exceed 28% of your total revenue or monthly income. You should factor in other loans such as credit card debts, car loan, etc that are pre-existing when applying for the mortgage in order to calculate and manage your finances effectively.