Month: January 2016

How to Get Approval for a Home Mortgage Loan

dgIf you are planning to apply for a home loan, check out the following helpful tips to get your application approved.

Know Your Credit Score

Credit activity and credit scores will greatly affect your mortgage approval. Lenders usually require minimum amount of credit score that should be maintained so that your conventional mortgage loan request will not be denied.

Also, having derogatory credit information might hinder mortgage approval. To avoid unwanted denial of your requested loan, you should lower your debts, pay bills on time, and fix errors on credit reports.

Save Your Cash

Mortgage lenders require down payments which depend on the kind of loan. If you have the means, pay a higher down payment. This will lower your balance and alleviates your private mortgage insurance.

Down payment is not the only fee you should be worrying about. Acquiring a mortgage also involves home inspections, title searches, closing costs, application fees, credit report fees and other fees. Save up cash for these payable fees.

Stay at Your Job

Changes on your employment and/or income status will have a major effect on the mortgage process. The information you provided in your application will be the basis of your home loan approval. Giving up a job to be self-employed or getting a lower paying job will make a wrench in the plans, leading to a reevaluation of your finances to check if you’re still qualified for the loan.

Pay Debt & Avoid New Debt

Qualifying for a loan doesn’t require that your credit card be zero balance. But, it’s better that you owe less to your creditors. Your debts determine whether you will get a mortgage or not. Also, it will determine how much you will acquire from the lender. When you have many credit card debts which makes your debt ratio high, the lender might refuse your loan request or provide a lower mortgage.

However, even though you get approval for a mortgage with debt, it is advised that new debt should be avoided while under the mortgage process. Before the mortgage closing, lenders recheck credit and when they found out that there are new debts they can stop the closing.

Have Pre-Approval for a Mortgage

Having your home loan pre-approved will help you determine what you can afford before bidding on properties and what interest rate should you be paying on the loan.

Determine What You Can Afford

Choose a home that will fit your budget. Though some lenders pre-approved applicants for more than what they can afford, be smart, live within your means and purchase a home that you can afford.

Managing Your Credit Scores In Your 20s

ssAge brings with it wisdom especially when it comes to taking financial decisions. A 40-year-old may be aware about more of credit repair facts and myths as compared to a 20-year-old. However, there may be instances when people may be stuck with similar credit issues irrespective of their age.

To begin with, the key to improve your credit score is – a dynamic focus. You need to seek help from a proficient credit repair specialist and then prioritize certain things as you age in order to do away with the issues that come in your credit domain.

Things to Consider in Your 20s to Improve Your Credit Score:

In your 20s, there are specific things that calls for your attention, when it is about enriching your credit health.

Attend to the five Factors:

The first step to improve your credit score is to have a clear understanding of the rules. The actual status of your credit score is determined by five factors – debt utilization, payment history, new credit, credit length, and diversification. If you were unaware of the essential factors that have an impact on your credit score, you need to work on the strategies that will help you to take care of the five factors.

Repay your student loans:

As stated by The Institute for College Access and Success (TICAS), about 69 percent of the students left college with loans in 2013. The bottom line (which was $28,400) was actually a big burden for the salary of a fresher. You have a choice to stretch the loan for whatever time span you want to (years or even decades), but you also need to keep in mind the downside of the decision.

Adding on the interest will not only increase the principal amount and will also increase the life of the loan. This will increase the overall cost of the loan that you have taken. Paying off your loans at the earliest will lead to a lower credit utilization ratio, better and more opportunity to improve your credit, less stress on your budget, and last but not the least even more opportunities to save.

The final tip:

Credit score plays a vital role in every phase of your life whether you are in your early 20’s or 50’s and beyond. Analyze your credit score regularly to ensure that you maintain a positive credit and avoid any problems related to your financial plans.

The Inner Workings of Credit Repair

5Credit problems can affect anyone at any given time. Whether bad credit scores arise from a layoff, wrongful termination, new or old medical conditions that cause large bills to pile up, divorce, improper money management, or other reasons raising a credit score can be a daunting task for even the most dedicated individuals. Not only can credit problems affect your loan interest rates but it can also prevent a person from landing a job that also bases a person’s character on their credit worthiness. When an individual finds himself or herself in this situation there are a couple potential solutions. One, to do the time-consuming research necessary to find the rules and regulations in order to fix your credit yourself, or two contact a reputable credit repair company that has already undergone the training and acquired the skills to negotiate through the credit lines and repair them.

What Repairs Do:

The process is started by reviewing your credit history on your credit reports. Once a thorough assessment has been made, we can determine the best course of action in your individual circumstance. Credit repair is not for everyone, and not all negative items can be removed from a credit report. Some items on a credit report may require settlements with an agreement that the specified item is modified to a positive line on the credit report while others take less drastic measures and require only the removal of the negative items. Contacting a credit repair company is the first step in beginning the repairing your credit.

How It Works:

There are legitimate negative errors on your credit report. A professional that repairs credit can contact the companies and have these errors fixed.

Errors on the credit report that cannot be verified. If any specific item in the credit report cannot be verified from, a company closing or being bought out our specialists can fix these errors by having the credit bureaus contact the lenders. Once they receive no response from the original creditor, the items must be removed.

Lenders willing to work with companies. The company contacts the individual companies and negotiates a settlement with them in order to create a positive remark on the individuals credit score. Not all companies are willing to negotiate with many companies, so this route does not always work.

Do I need to have my bad credit repaired?

You should ask this question before beginning the process of removal of derogatory marks from your credit.. While companies can help pretty much everyone with any type of credit repair it does cost money. If in your specific situation there are only one or two small problem lines which do not affect your credit score then companies are not of much use or if your payoff amounts for the negative lines are very small it may be easier and cheaper to just pay them off on your own. However, if you have a few or more lines with negative results or larger amounts owed which will require negotiation to lower the total cost to settle, it is in your best interest to contact a specialist today.

Consumer Credit Counseling – Is It Worthwhile To Clean The Cluttered Credit Slate?

22It will be difficult to come across someone who does not have a debt. Loans, mortgages, and credit card balances have more or less become a way of life, especially for those who live life king-size. The record of debts and payment history has a huge impact on credit reports. However, people rarely worry about their credit report until they are buried under deep debt and it lowers their credit score. Low credit score will make it difficult for you to rent an apartment, obtain a loan or apply for a new credit card. This is the reason why it is essential to repair your credit score when you find yourself in a similar situation.

You can hire a company that offers credit repair counseling to help you improve your credit score. While many of you may have some inhibitions when it comes to credit counseling but to your advantage, there are a lot of benefits that a reputed credit repair company can provide. Read on to get know how a credit repair company can help you out in deleting bad credit history from your report.

Find the a Reputed Company

An essential point that you need to understand is that all counseling services are not inadequate. However, you need to know a few checkpoints before you make the final decision. A little bit of know-how on certain factors such as the market value, dependability factor and performance of the company will enable you to spot reputed credit restoration services that will cater to all your requirements and preferences.

Post Finding the Correct Services

When you find a reliable and a legitimate credit counseling company your next step is only to follow the lead.

The companies offering credit restoration services make your life much easier as they take off the financial burden from your shoulders and help you fix bad credit rating. A lot of credit companies work with you in a way that you do not find it tough to pay off all your debts. They follow a strategy.

Since the credit counselors are excellent at negotiating, they speak to all your creditors and try to reduce the overall interest rates and monthly payments.

The companies also provide you tips on managing your credit and finances better which plays a major role in determining your credit score. Depending on the money you owe to the creditors and your income, they design a budget for you.

They also structure a credit plan for you to pay off your pending bills.

The credit repair specialists will not only help you in improving your credit score but will also guide you to maintain it in future.

Charged Off Debts and Debts in Collections – What Can Collectors Do To Me?

13You are behind on a credit card or other unsecured loan (a loan that does not have any collateral like a car, boat or house). And the first call from a debt collector has come into you. What is their next step? Can they put you in jail? Can they sue you? Can they threaten to call your boss and have you fired?

Since I had 12 credit cards and one personal loan in delinquent status back in 1998 and 1999, I know what you are going through. The fear of the unknown is probably very large for you right now. Get some peace of mind! I will explain what can and cannot happen to you.

1. You will not go to jail for not paying your loan.

The police will not show up at your door with handcuffs. We do not have debtor prison in the USA. In fact it is a violation of the FDCPA (Fair Debt Collection Practices Act) for anyone to threaten you with arrest!

2. The debt generally does not get sold to a collection agency until you have been late for six months.

Your creditor is hoping to get payment from you. But after 180 days, he has to clean up his books. So he will transfer or sell your debt to a collection agency. This is called a charge off. This does not mean that your debt has been wiped out! It is an accounting term; your debt still remains.

3. You can control the collector’s phone calls to you.

Collectors can only contact you during reasonable hours, which generally is 8am-9pm your time. If you do not want to be called anymore, either at work, at home, or both, you must get the mailing address of the collection agency and send a notice to stop calling, IN WRITING. Some collection employees are good about putting notes in your file to stop calling but many are not good about this. I recommend that you send this Certified with Proof of Mailing in case they continue to call you. That way you have proof to threaten them with legal action for violating the FDCPA.

4. You can control the collector’s mailings to you.

Same as the phone calls. If you send them written notice to not contact you by mail, they must stop. Though they legally can send you two more notifications. One, they received your notice and will stop contact with you. Two, they are taking an action against you, such as a lawsuit. Everything else will stop.

5. They will contact your relatives, employer and possibly friends.

Generally only if they cannot find you. This is called skip tracing. Legally the collector can only discuss the debt with you, so he will use phrases like “It is very important that I speak with ____” or “Please have ____ call me as soon as possible.” They will try to get your phone number or address.

Your relatives and friends can tell the collector to stop calling them.

If your employer does not want you getting phone interruptions while on duty, the collector is supposed to stop calling. Which makes sense because the collector has zero chance of getting any money from you if you get fired!

6. The collector cannot threaten to sue you.

The key word here is “threaten”. If the collector has started the legal paperwork to take you to court, then he can tell you that because it is a fact, not a threat. So if you receive this call or letter, take it very seriously.

7. If the collector wins in court, he will get a judgment against you.

The judgment is what allows a collector to legally garnish your wages, garnish your bank account, put a lien on your house, and even sell your car to collect the debt. He cannot garnish social security payments, retirement accounts, disability payments, etc.

A collector usually will not spend the money to take you to court if you have no assets that he can get to. This is called being judgment-proof. So if you are unemployed and have few assets, the judgment is all bark and no bite.

Hopefully this relieves the fear of the unknown for you. So if a collector calls, do you want him to stop? Do you want to negotiate the debt with him? Do you see yourself as judgment-proof so the debt will never be collected? You now know what can and cannot happen to you if you do not settle or pay off your debt. Sleep peacefully tonight!