Things have changed since 2006 when real estate values peaked and collapsed and they are still not stabilized . Home values have been cut in half or less in some parts of the country. Interestingly enough, the loan balances now are higher than the values of the property, and that makes most home owners underwater. There is a rash of foreclosures and they haven’t stopped slowing down in the cycle we have now. The values will be pressured downwards.

Just take the case of borrower A who still has a high balance say 80 percent loan to value and another borrower B who has paid down his mortgage consistently over the years and is now at 60 percent loan to value. Guess what ? If you fell behind in payments whose house lender would be foreclosing first? The one who has more equity and they wont even do a loan modification for that borrower because he has a lower mortgage balance. The borrower A would look good to a lender who sees few solutions for him since there is a lack of equity there. Because there is more equity involved in the case of borrower B the re-sell value on the house would be much better in the downward pressured market. It makes sense foreclosing and turn around and re-sell as a bank owned property at much lower value and recoup the original principal.

Paying off a mortgage early is smart move, and makes sense to many people taking a retirement or just paying off a debt and there is a greater peace of mind in that.

However a well known study by a Federal Reserve banker found that instead of paying the mortgage if the money money is directed to a retirement account it makes more sense. The lengthy study shows that directing money to an IRA or any such vehicle is a much better idea because : You are paying off your mortgage with after tax dollars which means that for very dollar you make only 70 cents goes to the lender, rest is eaten up in taxes assuming you have a 30 percent tax bracket.

If the money is directed to a cash account in these times or a retirement account and get a full dollars worth of mileage or more like like 1.5 times a dollars worth of it, if and when an employer matches your contributions, the retirement account accumulates assets much faster. The retirement account will grow faster than usual while the real estate may stagnate in values even though equity is created.

When real estate markets are healthy and there is an abundance of buyers paying down a mortgage builds up equity even faster. There is appreciation from 5 percent to 10 percent every year ans when the principal is  payed off , hence it creates a compounding a growth of equity from both sides of the equation.

Paying off a mortgage is a great idea during strong economic times no doubt. But during hard economic times and when the real estate market is in downward spiral, it is a much better idea to either accumulate cash reserves or grow an asset that will do better than real estate.

Paying extra on your mortgage ? Mortgage principal reduction

Having your identity stolen is extremely stressful, and can present a host of new worries that you did not ask for and do not deserve to deal with. However, there are things that you can do that will help decrease your losses in the long run, and help diminish your stress in the present.

Contact the Credit Agencies

First, find the phone numbers for the credit agencies (don’t send an email and hope they get it, get on the phone to make sure) and call them right away to file a claim of fraud. There are three primary crediting agencies in the United States: Equifax, TransUnion, and Experian, and their numbers are listed on many government resources. You will need to file a few different rounds of paperwork with these organizations, and will need to keep in contact for optimum protection.

Notify your Network

When an identity is stolen, a lot of extra accounts and credit cards may be opened, which has the potential to severely affect credit scores. You will likely be in contact with your bank, but you should also contact anyone or any company that you work with or who uses your personal or financial information on a regular basis, and either cancel your existing accounts, create another account, or make a special password to use so that they know it is really you.

Contact the Government

Once you have alerted the most important people to the theft of your identity, you should also make sure to contact your local authorities, such as the police department. You should also file a report with the Trade Commission. Many people forget this step amongst all the paperwork for their fraud claims, but your identity was possibly stolen by someone working locally in your area. International identity theft chains often place either a physical or technological agent in a place with ATM’s or cash registers. Contacting these authorities could give them information they need to stop these criminals, prevent future crime, and put local businesses on alert.

Damage

The damage from identity theft can range from mild to severe. You may have to only have to work with your credit card company to reverse $100 worth of purchases or the thief may have temporarily destroyed your credit rating (which can be catastrophic if you are working with a home mortgage lenders to refinance a property or involved in another significant transaction). Working through the issues can take months to years, depending on how prolific the thief was (and how early you identified the issue). You need to inform your home mortgage lender when initiating the application so the underwriters are aware of your circumstances and the loan is underwritten in that manner. Provide all the proofs you can to your lender as well.

Try to decrease your stress levels and remain calm throughout the process. Avoiding panic will actually help you work through this struggle in a more effective and efficient way. If you panic, the damages to your accounts and to your credit will merely increase. Seek support from friends and family members, and let your employer know what is going on so that any visible stress at work is accounted for and does not negatively impact your work. There are also many online resources and support groups online for identity theft, that can help you get more information and feel more at peace.

Even though identity theft can be very tough to manage, you will come out on top if you are able to stay as stress free as possible, contact the right people, and do everything you can in an organized way. Being a victim of identity theft often has an unexpected positive side, as it allows people to really consider and reorganize their finances, keep more detailed track of their credit score, and become more financially literate.

Home mortgage lenders and Surviving an Identity Theft

How can you assess the Phenomenal Popularity of Payday Loans

Times are changing and so are is the financial market. Most people get a paycheck at the end of the month. They then budget this paycheck and run their forthcoming month. However, it seems that progressively more people are using payday loans. The information below looks at analyzing why it has become so popular.

Best Pay day Loans

Payday loans are essentially small loans that you receive that act as an advance salary. These advances are usually taken to help the borrower with their finances when they are financially unstable. In essence, it is a loan that you take from a lender and in return, you give them your paycheck. Of course, a small amount of interest is applied to the payment.

Advantages of Pay day loans

• The biggest advantage of best payday loans is that you can use them to get money when you do not have any. Perhaps it is nearing the end of the month and you do not have enough money to fulfill your daily expenses. A payday loan will grant you with the money that you need and in return, a portion of your paycheck, proportional to the amount loaned, will be taken.
• Another advantage of payday loans is that you never really run out of money. Every time you need money, you have the option to take out a payday loan.
• When compared to the lending process and powers of a bank, payday loans are more secure and easier to get. In fact, due to the increase in strict measures adopted by most banks, first-time lenders will have a hard time getting a loan. This is because they are completely anonymous to the bank and they have no history of borrowing and repaying loans – personal or otherwise.
• One of the biggest advantages of payday loans is that the maximum amount you can borrow is never too high. This is a huge advantage because you will rarely be stuck in debt. The small maximum is a great way to keep both people and lenders in control of their finances. Lenders do not have to lend amounts of money that are impossible to return. Borrowers never have to take more money than they need, even if they are tempted to do so.
• Lastly, another advantage of payday loans is that you can get them as many times as you wish. You could be 6 days away from your paycheck and you could get a payday loan. 3 days later, you could get another. Although the maximum limit still remains, small and controlled loans help you borrow only as much money as you need without exceeding some limit. This keeps you in check and out of heavy debt.

Disadvantages of Payday Loans

Unfortunately, the biggest disadvantage of payday loans is the reduced limit on the amount you can borrow. If you need to borrow large amounts of money, a payday loan lender will not grant you any more money than your maximum amount. Not only does this help keep you out of debt, but it also protects the interests of the lender.

Assessing the popularity

There is a variety of reasons why this service has become so popular. The most obvious reason is for cash. In many circumstances, people need a small amount of money for either daily expenses or because they require a little bit of money for a purchase. Payday loans grant this.

Another reason why people use payday loans is to overcome various social problems that come with being caught without money. If you are going out on a date and find out that you do not have enough money to do so, payday loans could be an easy ticket out.

One of the biggest reasons why payday loans are so popular is because they are an easy way to get a decent amount of cash fast. With most payday loan lenders, there are very little checks in place. They usually need proof that you are earning money and ensure that you will be able to pay the money back by the due date.

Regardless of how you look at them, payday loans have become an easy way to access money when you need it the most. Best of all, you pay off the loan directly from your paycheck.

The Phenomenal Popularity of best Pay day loans

Imagine buying a car, a nice 4×4 Ford F150 pick up truck with all the load-outs and enough power and torque to pull an elephant out of a muddy ditch; or a nice sleek Lamborghini with its aerodynamic design and avant-garde engines capable of pushing up to 350km/h. Are they worth it? Ask the dealers, and they will say definitely, the cars pay for themselves and is worth more than the sum of its parts etc. Or ask auto-reviewers and they may give a somewhat different opinion, but can either of them give a relevant answer to you, the consumer? Sure they may know what the cars are capable of doing, but do they know your needs? If you’re a suburban single-mother, what good does a car that’s capable of pushing 350km/h do if you’re constantly driving in school zones? Even if the item in question is relevant, say the pick-up truck and you’re a blue collar worker who does repairs and maintenance of telephone poles and wires; is a car capable pulling a house really necessary?

Payday loans are the same, whether one feels it is “worth” getting a payday loan depends very heavily on the situation, and make no mistake about it; one only ever applies for a payday loan when they’re in a bit of a sticky situation. The interest charged by payday companies are typically in excess of over 100%. This is not an exaggeration, for a $100 loan you can expect a $15 charge at a bi-monthly rate. There are 52 weeks in the year, at a bi-monthly rate of 15% ($15 out of $100), the annual percentage rate is 390% (26×15%). Therefore it is clear payday loans are DEFINITELY not a viable long-term solution. What payday loans are good for is a desperate hail-Mary, all-in situation, temporary solution.

The loans themselves do not take long to process, at most branches one could expect to receive the loan they’ve applied for in hours, or latest one or two days. The loan process typically goes as follows: the person in need of the money comes in, apply for the loan package in question (typically $100, $300, or $500+), then they would show some paper work as proof of employment, and then write the payday company a post-dated cheque of the full amount that was borrowed plus the incurred interest.

The process for online is even faster, all one needs is their name, zip-code and email address, followed by a page where a 9-minute count-down timer gets the client has to write down their employment history, bank account and contact information before their loan approval “expires”. If this sounds a bit sketchy, it is. The default rate of payday loan companies is around 10-20%, which can be considered highly risky as an investment. There is very little doubt these programs are designed as the desperate measure for the desperate situation.

Below are prices listed by cashmojo.com, one of the biggest payday loan companies in the US. And hopefully these prices will help the reader decide whether they’re in a bad enough situation to try apply for a payday loan. In the state of Missouri, for a $300 loan the projected interest rate is around $75, for a $400 loan the rate is $100, and for a $500 loan it is $125; meaning once every two weeks you are expected to pay 25% of the total amount you’ve borrowed. This is, of course, just the “projected” interest rate, it is possible that due to some extraneous circumstances one may end up getting a cheaper interest rate, but it’s much more likely that one might end up paying more than the advertised 25%, not to mention there may be other hidden registration and administration fees and charges (not to mention they reserve the legal right to share your personal information if they so choose to do so, always read the fine print carefully).

So before you decide to apply for a payday loan, weigh the cost and benefits carefully. Is your credit rating worth a 25% bi-monthly interest charge or can it take a bit more punishment? Is your mortgage or car payment at the point of re-possession? And even if it is, how bad is the alternative compared to the high interest rate charged by payday loan companies? Also, very importantly, is this temporary solution really just temporary, or might this situation continue for the long term? Because if there is no foreseeable future where the debt is paid off immediately, payday loans will more likely than not to further exacerbate your debt crisis.

As Tom Lehman, a spokesperson for unregulated payday loan practices once argued, payday loan options are a better option than going to loan-sharks who may take limbs if one defaults on their payment. Indeed, his statement rings true, as the only situations one should ever apply for payday loans is when the alternative are sharks.

David Veibl, occasional guest blogger on health issues, business, SEO, sports and technology. David now writes for Poundaccess about responsible personal money management and short term loans, and wants to help you make good financial decisions. Poundaccess is an expert in fast payday loans, and tries to help you decide what you can afford, and how to budget the expense.

Online Payday Loans Is it worth getting them?

If you are in the market looking for a home purchase and have bad credit there are many bad credit mortgage lenders available even after the 2008 Great recession. If your credit scores are between 580 and 620 and banks have rejected or turned down your mortgage application there are avenues open to you.

F H A lenders

Since the Great Recession of 2008 FHA has been a primary source for borrowers trying to refinance or purchase home loan in this tight residential market. They have widened their lending programs and created many products to accommodate credit challenged borrowers. FHA will take borrowers with bankruptcy or foreclosures after 2 or 3 years.This is a Federal lending program which insures lenders for premiums. The lender is insured to certain amount of the loan against a possible default.

You will need 3.5 percent down payment and seller can contribute 6 percent in concessions. Which can be used pay some closing costs and loan costs.

Hard Money Lenders

These are lenders who lend based on property and not credit. They will loan 60 percent to 65 percent of value on a purchase or refinance. The criteria is the property in question and not your credit. If the property qualifies you will get a loan. The loan process is simple enough with very little paper work and red tape. Many investment professionals use hard money lenders for flipping properties and or short term lending where there is an urgent need for financing and usual channels do not work. Borrowers can use these lenders creatively where a portion of loan is financed by hard money lenders and the other portion by the sellers. Expect to pay few points and higher interest rates and that goes with the nature of these loans.

Bad Credit Mortgage Brokers

If you came to this site than that is the right step, these type of lenders specialize in bad credit home loans and often look at the borrowers with a different lens. When shopping for bad credit lenders always find out how much experience they have in that field and discuss your criteria first to evaluate their expertize.

Major banks and other lenders hardly want to invest time with bad credit or low credit borrowers. They carry these loans and want a clean cut portfolios.

Once a bad credit mortgage lender is identified, gather all your paper work and apply for the loan. There is nothing to lose but everything to gain.

Bad credit mortgage lenders

But unfortunately, how many students are there who can manage their credit cards wisely and stay off the cycle of high interest credit card debt? There are some smart financial moves that you have to take as a freshman before you start racking unnecessary debt on your plastics. If you’re waiting to complete college and take control over your personal finances, you’re perhaps committing a blunder that can cost you dearly in the long run. Read on to know about  reducing your debt  burden while in college and its importance, pay off credit card debt .

Student credit card debt statistics that can shock you

If you’re a freshman and you’re still not serious about managing your plastics, have a look at some student credit card debt statistics that can shock you into thinking the other way.

* 95% of the undergraduates carry at least one credit card and this figure has risen from 75% in a study that was conducted in 2006.

* The average undergrads in the US carry $4276 in credit card debt and this is the highest recorded figure since the study started.

* 93% of students who haven’t completed their graduation pay for their entire educational expenses through credit cards and 35% have admitted to pay their tuition fees with the help of plastics too.

* Apart from credit card debt, the students have also amassed $30,000 as student loan debt.

* 35% of students pay a late fee on their credit cards and about 20% of them pay over-the-limit fees that unnecessarily boost their monthly payments.

Some personal finances tips that can help you stay off the cycle of debt

Being a student, you have to be more careful about your credit score as the employers, landlords and all the loan lending companies will check your credit score before transacting with you in any way. Have a look at some worthy financial tips that a student needs to follow.

* Stay watchful about your credit : Is it worth to saddle with high interest debt when you can’t afford it and when it’s hurting your credit score? Before you purchase anything, you have to think about the effect on your credit score so that you’re not subject to any sudden financial shock. Get a copy of your credit report from any of the 3 credit bureaus time to time so that you know what the credit bureaus are saying about you.

* It’s never late to start saving : As you’re young enough, you should inculcate the habit of saving money so that you can continue practicing this throughout your life. No matter you live on a fixed income, you should still try to save at least 10% of what you make in a month, whether from your part-time job or from your allowances. Build this emergency fund as much as possible.

* Stick to a frugal budget : Form a budget that eliminates all the unnecessary things and enables you to save your bucks. You can easily keep a close watch on your pennies so that you know when to rein in your bucks. Evaluate the budget at the end of the month and adjust it according to your changed financial needs.

* Use plastics sparingly : If you want to establish a solid credit history, you should use your plastics sparingly so that you know where to stop. It is even wiser to stop using your credit cards unless it is too necessary. Use cash instead of credit.

So, when you’re a student, you should be more responsible about your personal finances so that you can avoid falling in college credit card debt. Get help from professional debt consolidation companies if you can’t reduce or pay off your credit card debt on your own.

Pay off credit card debt – Manage your personal finances

We have several years of real estate growth and when the market cratered in late 2005 it took down the housing values, and than came the greedy bankers and investment professionals and they sold these non performing mortgages to unsuspecting investors. They in turn shielded themselves with insurance protections from insurer’s like AIG and many others and even bet against the decline and fall of the real estate market, and even against their own bad mortgages, that they sold. This created a huge problem with the insurers who could not remain solvent and they started going down the drain and than the real estate fueled  financial crisis hit the country in the face like a two by four. Factories slowed down and workers were laid off, jobs were slashed and the productivity declined. Its became insane during the year 2008 and thereafter.

What was at the  heart of this financial crisis? Mortgages for poor credit. These were loans and tranches sold to investors without blinking an eye on borrowers who could not have qualified and got a mortgage in the real world alone.  The appetite for mortgages with poor credit was so high that everything was taken in with minimum scrutiny and oversight. The leadership in Washington DC had no clue what was transpiring in this world of finances and mortgage meltdown.  They were too busy with Iraq and Afghanistan wars and billions of dollars fueling through military industrial complex.

The subsequent decline was massive  in real estate values and job markets. Just about 8 million households lost their livelihood and 3 million homes got  foreclosed. If this was not a calamity what else could be ? The Titans of Wall Street meanwhile kept enjoying multimillion dollar bonuses year after year while the nation twisted and turned in a horrific recession. This greed continued into higher spirals unchecked till a new administration came to Washington in January 2009.

So as a home owner and a member of society during these calamitous times how do you prepare yourself and arm with the tools to chart your financial future? Here are some basic points which are easy to follow, and may apply to a broad spectrum of  mortgage applicants:

1. First evaluate your current financial situation. If you have a job than its good news , you can apply now,  if not you have to wait.

2. Check your credit report right here. Take a hard look, and what is posted in it.

3. Dispute and remove all those items that are duplicate and irrelevant and not even yours.

4. Prepare a simple plan to apply for mortgages for poor credit by visiting online resources or this site.

5. Get all your financial papers in order and execute the plan and contact mortgage professionals.

There is lot more information available on this site that can help various special programs and credit issues. Coming out of a recession is challenge and it wasn’t your fault as I see it.

Getting mortgages for poor credit

So how do you get rid of this biggest debt that you own ? We provide you with few methods given below depending on your circumstances and economic outlook and money management skills.

Bad credit refinance to cut down your loan

By reducing the term of the loan you can reduce the the time it takes to pay off the mortgage. If you refinance from a 30 year loan to 15 years even though your mortgage payments will be higher they will be at lower rates and your mortgages will be paid off in lesser time. From full 30 years amortization now you have a 15 year amortization and it cannot get any better. The principal gets paid off much sooner and hence the mortgage debt. It may or may not suit your cash flow and that is something you need to carefully evaluate.

Making Biweekly payments

The key here is to make extra payments to reduce the mortgage amount. Instead of making 13 monthly payments which a typical homeowner does , make 26 biweekly payments in a year. It will depend on your present financial situation if you do that every other week or not. This will cut down your loan from being amortized from 30 years down to 22 years over time. The principal will get reduced quickly and therefore it will also lower the time taken to pay off your loan, peeling the onion little more every month.

Sell your home

Sometime the only way to clean out your mortgage is to make a sale of your property and buy something smaller with a smaller mortgage payments. This is by far not such readily available option unless you are able to sell your home in this economy quickly and efficiently. But if you have lots of equity you can take a note back and get rid of that mortgage with the buyer qualifying for the amount of your loan.

Walk away

If your circumstance hardly allow the mortgage to be repaid properly its called the strategic default option. You simply walk away from the loan. In some states the lender may start a judicial foreclosure and may come after the borrowers, for the amount of loss, but in Trust Deed states like California and others,  the property is the only re-course for the lender. This is by far the least desirable option, but you have to weigh the pros and cons and talk to an attorney about your situation.

These are the few options that have been used by borrowers lately and they each work in various circumstances. There are no hard and fast rules for these options and one can use a combination of methods outlined here, and still come out ahead.

R: Bad credit Refinances-

Bad Credit Refinance- How to get rid of your bad credit mortgage

Given below are some guidelines that constitutes this vague and general  outline used by lending community. There are no hard and fast rules and lines drawn in the sand, but just basic guidelines which will help you evaluate your own situation.

• Credit scores below 620
• Mortgage delinquencies in the past 12 months
• Foreclosure in the past 24 months
• Bankruptcy discharge in last 36 months
• Debt to income ratios higher than 50 percent
• No cash reserves and savings.

After 2008 these guidelines are lot more strict than prior to the 2006 lending world where things were much easier.  Lenders  want to see if you have cash reserves of few months to cover mortgage payments should the need arise. Few missed payments don’t count as much but a regular pattern of non payments will. The rates and interest charges are determined by the FICO scores on the credit scores.

How to improve your credit scores

Paying on time

The best and most effective method is by far the common sense. Paying bills of time can raise your credit scores over few months. Non payment of 30 days on a mortgage can devastate those results by 30-50 points. Credit card bills should also be paid on time. This is by far the most difficult , yet the easiest method of raising credit scores.

Lower balances

Cutting down balances on credit cards to 50 percent of loan limits will help improve credit scores and mortgages for bad credit history. High balances definitely lower your credit scores by many points.

Too many Negative accounts

If your credit report only carries negative accounts your credit scores will suffer. So its important to open new accounts with secured credit cards to balance the act. These new accounts should be paid on time and within few months they will boost credit scores and improve credit profiles tremendously.

Getting mortgages for bad credit history should be treated as a longer term project. Few months of works should eventually pay off when done correctly. Meanwhile a strict credit management plan should be in place for monthly progress. Every month this plan should be reviewed, and the progress checked. Getting to see your credit report every month is one good way to check on the progress made. If some items are improving than more focus should be applied on that side.

Bad Credit mortgages

Mortgages for bad credit history

Bankruptcy

Once a foreclosure or bankruptcy occurs its stays on the credit report, unless some action is taken by the holder of that credit profile. Passive attitudes never help borrowers at all. Under current statutes a person can file bankruptcy once every seven years but the information stays longer on your credit report.

A bankruptcy filing stays on the credit report more than 7 years and its up to 10 years before you can legally remove it. If you filed a recent bankruptcy some credit lenders may grant you loans after 6 months. The period varies with lenders and there is no hard and fast rule here.  Hard money lenders will take bankruptcy discharges one day after and provide you a loan with 25 to 40 percent down. The rates and fees are  much higher as expected.  If you need to get good rates it my take up to 4 years  getting A paper loan rates.

Foreclosures

This information stays on credit reports more than 3 years and indefinitely, unless challenged and removed by the borrower after 3 years. But the borrowers can start looking for loans with FHA after 2 years. The FHA program provides 3.5 percent down payments and is very helpful and forgiving to the foreclosure challenged buyers. Many other lenders still won’t  consider loaning money to a borrower more than 3 years from the date of foreclosure action reported on the credit report.

Repossessions

If you had gone through a time period between 2007 and 2012 known as the “Great Recession” and have incurred any repossessions of autos, motorcycles , boats or other items this information will stay on the credit report more than 3 years and indefinitely unless challenged and removed by your actions after the statutory periods ends as per the Fair Credit Reporting Act. Credit bureaus are not in the habit of  ” dropping off” bad credit information easily. An active borrower would have to invest time in clearing up these spills of misfortune and start afresh.

Borrowers can easily get financed by used car dealers right after any such event on their credit profiles. Do expect to pay more interest rates and fees. Some car dealers will also finance, if you put more down payment.

Present Cash Flow

Most important thing to remember here is you present situation. If you can demonstrate financial cash flow to a prospective lender or a mortgage company like us than you will always make a stronger case no matter what.  Its what the lenders are looking for. It’s the monthly income from a new job or a new venture that will help the lender determine your loan. There is some timing needed for these things to mature also. They can see now that you are able to meet your obligations and it will expedite anything you will attempt.

When people contact me for a loan the first we determine is your present cash flow and the the future ability to pay your obligations on time. The past records are past, but they are reminders of what happened and why it happened. Specially the period 2007 to 2012 has to be considered and taken into full account.

If you are still experiencing financial upheavals than its a good idea to wait for sometime, before attempting these curves. Let the things settle down a bit, and let the passage of time erode some of the negative impacts. You don’t want to go into another home right after a foreclosure, may be renting for sometime will help, and you can gather more confidence and use the tools here to launch your next step.

RE: Home financing for bad credit

Home financing for bad credit