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No-Fee Mortgages Are Not Necessarily a Bargain

admin — Fri, 10 Dec 2010 07:57:30 +0000

In order to be competitive, a number of lenders are now advertising so-called “no fee” mortgages. According to commercials from a number of mortgage companies, you can obtain a home loan where you only pay the loan’s interest; there are no additional costs at closing. Can you really save money by applying for a no fee mortgage?

As usual with this sort of advertising, the answer is “perhaps, or perhaps not.” A mortgage company isn’t going to simply drop charges that can amount to as much as 3%-5% of the amount borrowed. Any lender that simply did away with a source of revenue would quickly go out of business, as those fees contribute to their bottom line.

How do these mortgages work? The lender is going to charge you a higher rate of interest than a mortgage company that itemizes closing fees will. Their profit must originate somewhere; it’s going to come from charging you more to borrow the money. That’s not necessarily bad; it means that they are earning their money in a different way. The increased rate of interest may make the loan more attractive to buyers on the secondary market. The company may make some additional money by re-selling your mortgage to another company later.

What does this mean for you, the buyer? As with any loans or anything else that you might buy, you need to shop around before applying for a loan. The only way to tell who is providing a bargain is to compare the costs of all the lenders and crunch some numbers. Only when you examine everything, including how much in total you will pay over the life of the loan, will you be able to tell who is offering the lowest cost. Each lender is going to have different ways of making their profits; some will charge higher interest rates, others will add more fees at closing.

Is the promotion a financial scam? No, but it might be rather misleading. The companies, via their advertising, would like you to believe that you are paying less, as suggesting that there are no closing costs might lead you to believe that you are paying less money. You aren’t actually paying less money, but it makes for good advertising. Whenever you think about taking out a home loan, you should assess all of the estimates from all of the mortgage companies you talk to so that you might find the deal that best meets your needs. Clever consumers always know to be suspicious when a promotion seems too good to be true.

Is Debt Consolidation Good or Bad?

admin — Sun, 20 Jun 2010 22:17:53 +0000

Many people suffering from deep debt obligations often look towards debt consolidation as the answer to their problems. Sometimes the debt is so painful, they don’t always look at both the pros and cons of this debt solution though, so we’ll take a brief look here.

First though, what is debt consolidation? Simply put, it’s the process of combining all your debts into one. If you have ten debts of $10,000 each, then you have a total debt of $100,000. Some of those debts however, might be generating an additional 10% interest, while others are generating 15%-20% interest. In other words: Some of your debt is more expensive than others.

This is where debt consolidation comes into play. In theory, you’d take out a loan for $100,000 at a reasonable – or hopefully low – interest rate. Then you’d use those funds to pay off all ten of the smaller debts. This leaves you with just one payment to make each month, and one interest rate to manage.

Consolidating debt can be done with debt consolidation loans, by transferring your debt to zero or low interest credit cards, and by taking out a home equity loan.

Using the equity of your home to pay off debts can be risky, because if you default on the new loan, you could lose your home.

Likewise, using zero interest credit cards could also be problematic in the future, because these offers are usually designed to lure you in. The zero interest doesn’t last.

Debt consolidation loans might be helpful, but be aware that when you have debt problems to begin with, you might not qualify for low enough interest rates. So if you choose to go this route, be sure to do all the math: Figure out whether the consolidation loan actually will reduce your overall payments – including the total interest you’ll be paying for the life of your loan.

Some credit and debt counselors feel debt consolidation of any kind is a bad move to make though. In fact, it’s estimated that 70% of americans who take out some sort of loan to consolidate their debt end up with the same or worse debt problems within two years.

A better, more long-term solution might be to consider using a debt counselor. Professional counselors negotiate with your creditors to lower your payments or interest rates, while at the same time coaching you to manage debt more effectively. The unfortunate side effect of using counselors though? Your credit report will take a hit because you’re not technically paying your bills as originally agreed.

So there you have a general overview of debt consolidation, the common solutions and options, along with pros and cons of each. Be sure to research all your options completely before making a decision of course, because you don’t want to make your debt problems worse in the long run.

Debt Consolidation – A Loan Unlike Any Other

admin — Thu, 27 May 2010 22:53:01 +0000

Why do we borrow? Cars, holidays, TVs, home improvements… the reasons might vary, but all loans mean we end up owing more. Or do they?

Debt consolidation loans stand out from the crowd. Unlike other loans, they’re designed to help people deal with the debt they already have. So they’re fundamentally different to other kinds of loan.

The principle is simple: borrowers consolidate their debts by taking out a new loan large enough to pay them all off. This can deliver three benefits in particular.

Benefits of consolidation

First of all, repaying one loan is simply easier than repaying many. Rather than juggling multiple debts – paying different creditors different amounts at different times – the borrower can just make one monthly payment. Since it’s easier to manage, the borrower is far less likely to make payments late (or not at all!), which can lead to anything from penalty charges to higher interest rates, and which always looks bad on a credit rating.

Second, there’s a good chance the new consolidation loan will come with a lower interest rate, especially if it’s used to pay off high-interest debts like credit / store cards and overdrafts.

Third, a consolidation loan gives the borrower a chance to think carefully about repayment terms. If they couldn’t keep up with repayments to their ‘old’ debts, it might make sense to pay back the consolidation loan over a longer period of time. It’ll mean they stay in debt for longer (and perhaps cost them more in the long run), but it’ll reduce their monthly payments, and sometimes that’s the most important thing.

Drawbacks of consolidation

However, there can be drawbacks to debt consolidation.

First, as mentioned above, paying a debt back more slowly means it’ll take longer gathering interest, so the total amount repaid can be higher.

Second, consolidation loans – unless handled carefully – come with a very real danger. When someone uses the loan to pay off their debts, they have to be very careful not to run up fresh debts (particularly tempting on credit / store cards and overdrafts, since they make it all too easy to borrow a few pounds here and a few there). So in general, debt consolidation is a solution that’s suitable for people who are confident in their ability to say ‘no’ to fresh credit. Anyone who isn’t confident could well be better off with a different debt solution.

Alternatives to consolidation

Either way, it’s always important to talk to a debt adviser who understands the full range of available solutions, such as debt management plans, IVAs (Individual Voluntary Arrangements), Trust Deeds (for residents of Scotland) or even bankruptcy. Each solution is unique, and its benefits and drawbacks can affect different people in very different ways – which is why it’s so important to talk to an expert first.

Learning about the modification of loans secured on your home

admin — Mon, 18 Jan 2010 15:09:42 +0000

During the boom years, all you had to worry about was the color to paint your home. Everything else was just great as house values kept on going up, releasing ever more housing equity as collateral for your loans. Now we have a recession and a wave of foreclosures has been sweeping across the land. Friends and neighbors have suddenly disappeared and their empty homes now stand out like bad teeth along streets that have forgotten how to smile. Needless to say, all these empty homes have no buyers and the resale value of all property has been falling over the last eighteen months. To complete the picture of the perfect economic storm, unemployment has pushed up above 10% in some areas. With this number of people out of work, there’s little chance of any significant pick up in the housing market over the next months. Indeed, you may be feeling the pressure of keeping your own head above the water. Too often people are discovering that the loans they acquired in the good years have terms raising the interest rates now. At a time when money is tight, this is unwelcome news.

The answer is negotiating a loan modification. This should be easy. You call up the loan company, explain your problems, show how much you can afford, agree to extend the term of the loan, and reduce the monthly instalments. Except you suddenly discover you no longer know who owns the mortgage. All these clever banks and finance companies sliced and diced all the loans into securitized bonds. The debts were all sold on and funding out who the owners are now can a real problem. But let’s assume you are lucky. That the original lender still owns the debt or you can find someone to talk to who works for the new owner. What exactly do you want? There are two options. The first changes the interest rates applied. Many people have been caught out by variable rates that have increased. To survive, you need to replace this balloon rate with a low fixed rate. The second option is hopefully added on to the first. You need to add years to the term of the mortgage. If you repay the same amount over twenty years instead of ten, your instalments are suddenly affordable again. Yes, you will pay slightly more interest over the additional ten years. But this will be a small price to pay to save your home.

At this point you discover that the person listening is not that sympathetic and sees no reason why the owner of the mortgage should now make less profit. Telling this person about family emergencies and health issues cuts no ice. You also discover the much-publicized Home Affordable Modification Program introduced by the Obama Administration is actually not that helpful. So what does work? The answer is either you are persistent or you get a specialist to help you. But be warned. There are a small army of crooks and con artists out there pretending to be home loan modification specialists. Never employ someone to help unless you have proof they offer real services. Always remember one truth. In the end, the lender makes more money if you stay in your home and pay something. If there is a foreclosure, everyone loses.

Online Real Estate Loan

admin — Sat, 07 Nov 2009 23:56:45 +0000

Doing banque sur internet is easy because more than one type of institution providing these loans. Most of the sources which allows someone to do the application online, and then make real estate loans easily. Mortgage lenders, credit unions, online financing centers, banks, etc are some places that may be contacted to obtain real estate loans. If you prefer to know more on mutuelle complementaire sante or emprunt Immobilier so I think you should explore creditfonctionnaire.org.

They’re among the most beneficial services in this area, contribute greatly to know how to find all the best interest rates on loans, remember to read their comments about real estate, all of these reviews were written by professional team in order to ensure that you’re going to read a helpful and useful resources. Do not hesitate to contact their customer support if you need assistant, they’d be happy with you all, the information you need will be found in very short time because you are served by a professional, so the service would be perfect.

A mortgage diminishes your working life

admin — Mon, 11 May 2009 01:38:26 +0000

The mortgage involves a number of factors that make us more compliant in the workplace and limit our professional development. Based on data provided by the Research Service of BBVA, a mortgage, far from being a way to consolidate the dream of the owner, is a weight that leaves us in job insecurity and unhappiness, and diminishes our chances. Some points to think before taking out a mortgage.

1. Labor Helplessness
Be subject to a monthly payment inevitable, the mortgage is required to maintain employment. A situation that gives companies a weapon to be submissive and perform abusive practices.

2. Anchored
The new economy of globalization; often ironically bless some regions while punishing others. Before a local economic downturn, tied to their property, the mortgage can not migrate in search of better opportunities. Or do it after a costly and complex sale process.

3. Unhappy
Leisure is an essential part of life, but the cost entertainment. A mortgage consumes more than the third of family income. Without extra money, no entertainment, leisure, and without the pressures of working life intolerable, this becomes less productivity and participation at work.

4. Extra costs
Any activity in the life of the mortgaged means fuel costs and time, unable to separate from its future ownership: transportation to work (before the housing boom, most of the new properties are on the outskirts of urban centers), the school, doctor …

Rent or buy? The decreases in interest rates and housing prices may be misleading. The crisis will not last forever and better macroeconomic and price can translate into higher rates. Moreover, one of the lines to cut down the glut of homes is the momentum of the car and the promotion of the modality of hire-purchase. Any alternative is better than bondage to the dream of owner status to the cost of labor unhappiness.

It is not the same credit as a loan

admin — Tue, 10 Mar 2009 15:24:30 +0000

Although ordinary credit loan used synonymously, banks and financial institutions make a clear difference between them, and given that these differences affect us as debtors (in the capital, interest and repayment terms), we should know.

Concession
The loan is allocating a specific amount to the client to perform a specific project (a mortgage, for example) that will be repaid in regular installments by paying a portion of capital and interest generated on each payment (monthly, trimester or biannual). It is a financial tool fixed and invariable conditions, governed by a contract, it is necessary for the enjoyment of which offer him a guaranteed on the amount allocated (a property, for example).

The credit is the client who decides how much it will take up the bank offers (for example, the maximum amount we allow the cards).

Interests
In lending, the bank charges interest from the first day of delivery the customer money, no matter what the money is used or not.

In credit, only pay interest on the amount used, and is the client who sets the amounts and repayment terms, within a range established by the bank. The interest rates are higher than in the loan and shorter repayment periods.

Renewal
Once its life (the return) of the loan, no renewals allowed.

You can renew a loan over and over again, asking and even raising the maximum amount available to the client.

Utility
The loan is used to purchase goods.
The provision for greater liquidity.

Five Ways A Foreclosure Defense Attorney Can Benefit You

admin — Sun, 04 Jan 2009 12:40:26 +0000

Article by Andrew Stratton

Professional foreclosure defense attorneys can put the power back in your hands so you have more control over your future finances and the fate of your home. There are many ways to avoid this, save money, and prevent your credit from being damaged. So before walking away from your home, consider the help of a professional.

Extensions and Forgiveness

Some homeowners facing foreclosure are simply stuck due to lack of time or defaults and fees that are adding up too quickly. They may still be able to salvage their home, but will require some flexibility on the lender’s behalf. A foreclosure defense attorney can request the lenders to give payment extensions as well as forgive some fees and defaults that may have accrued.

Lower your Monthly Payments and Interest Rates

Most people find themselves unable to make their minimum mortgage payments, or that the interest has inflated to an unreasonable amount. It is especially difficult due to excess financial strain caused by the weak economy and job market, as well as rising prices elsewhere. Many people have found themselves torn between the mortgage payment, putting food on the table, and the electricity bill. This kind of attorney can help you negotiate a lower monthly payment and interest rates with your lender. Rate reduction can immediately relieve financial stress and help you get back on your feet and saving money again. It will also keep you and your family in your home.

Forbearance

In certain circumstances, this kind of lawyer may be able to convince a lender to agree to a forbearance period. During this time, your monthly payments may be greatly reduced or temporarily stopped altogether. Once the forbearance is over, you will resume payments as usual, or may be able to make some further loan adjustments.

Short Sale

If paying a reduced monthly payment is still financially impossible, you can negotiate a short sale with your lender. This process is far less damaging to your credit. The bank will attempt to sell the property quickly at a small loss, which helps both parties avoid the high costs and consequences of this situation. Some lenders require a certain set of criteria to request a short sale; however, a skilled defense lawyer can often fight for those who don’t initially qualify for this option.

Deed in Lieu of Foreclosure

Another option for is to request a deed in lieu. In the scenario, the homeowner returns the property to the bank and is released from any further obligations. Now, the attorney is invaluable under these circumstances because many lenders will demand a deed of lieu with recourse, which means they can later sue the former homeowner if the sale amount is less than the original loan, therefore collecting any difference lost. It’s an easy trap to fall into, especially for a homeowner under duress, which is why a foreclosure defense attorney can help you ensure a deed in lieu without facing further financial consequences.