Archive for October, 2008

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Bankruptcy: Know the Right Questions to Ask

Wednesday, October 29th, 2008

Are you in deep trouble with your finances? Have tried just about everything to get out of trouble? Some have tried credit counseling or get debt consolidation loans. But those things don’t always work for everyone. When families or individuals are at the end of the rope with their debt, bankruptcy seems to be the only option that they have. This looks like an easy way out. However, others say that bankrupcy isn’t advisable if there are other options that can save them financially. Before you declare bankruptcy, start by asking the right bankruptcy questions.

Question # 1. Should I do it on my own or should I get a lawyer?
You are better off with a lawyer, but that isn’t always feasible. Some lawyers who handle bankruptcy know that money is involved to get you out of your problem, so they require payment plans. Research on bankruptcy lawyers who can answer some of these questions. You may find some reliable lawyers through the Internet if you’re patient to search.

Question # 2. What will this do to my credit? To reiterate, though some may think they’re going to be better off, it may not be easy that easy after all. You will think about getting credit after bankruptcy. You may be given credit but it is not always what you want. Usually it t will come with a very high interest rate. Credit consolidation loans and other options should be considered first because they will not be as harmful to your credit situation as bankruptcy will be when it is all said and done.

Question # 3.How long will the process take? The process depends on the situation. There may be instances that you will be required to go to court for your proceedings. But if you seek the help of your lawyer, you may not be asked to appear in court.

Question # 4. Will there be some debts excluded? Some debts like student loans are exempted from bankruptcy. In short, you will still owe that money once you have gone through the process, and it will still be refl;ected on your credit report.

Bankruptcy seems to give you a new start, but it definitely comes with a price.

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Get A Home Loan After Bankruptcy

Tuesday, October 28th, 2008

Have you experienced bankruptcy?  Do you wonder if you can still get a home loan?  Or maybe you also wonder if buying home after bankruptcy is a good idea after all.

Bankruptcy may affect your mortgage loan approval. It might be difficult for some mortgage companies to have your papers approved. But yes, it’s possible to get a mortgage after bankruptcy. In fact, there are a number of bad credit loans coming all the time.

These companies are what we call as subprime lenders. They are actually there to help poor credit to purchase home after bankruptcy. This occurs mostly because bankruptcies are increasing and there is a growing number of people with bad credit who are seeking financing for the home.

Here’s an overview to consider when you think of buying a  home after bankruptcy:

Increase your credit rating. Paying on a regular basis will help rebuild your credit rating. Once your pre-payment penalty is paid up, you should be able to refinance your loan credit for a lower interest rates.

When you have completed paying your mortgage 2-3 years after bankruptcy, you will have a much easier time qualifying for a lower interest rate on the mortgage.

By then you’ll be able to own an asset. If you’re just renting a house then you are absolutely throwing your monthly payments away. Why not buy a house,? Over time, your house’s  value will increase and you work your way out of debt because now you have an asset.

After you purchased your home, in as short as 6 months or sooner,  you can take a loan on your home and consolidate any other debt you may have had. Taxes and student loans will not be discharged in bankruptcy. You may also want to use the extra money to invest in a business or home improvement if necessary.

It is very tempting to buy a new house, a new car, or make renovations. You might  feel that now you can afford a larger house. But it’s not so easy ; there are a few factors to consider before you commit to a new house payment.

1. The pre-payment penalty. This penalty is usually about 6 months of house payments and payable usually in 2-3 years. When you sign the mortgage documents you absolutely make these payments. If you have no money for the pre-payment penalty of savings, you will have to choose the locked in payments or worse, lose the house.

2. Two years paying period. Remember that after 2-3 years of the date of bankruptcy clearance, mortgages will be much easier to obtain. With a small deposit, you can even be able to obtain a mortgage without pre-payment penalty.

So if your mortgage plan is 6 months to 2 years, it would be smarert to wait and have more options to mortgage.

3. Borrowing too. If you decide to buy a house, know if you can afford it. Do not place  yourself on another credit and on the tip of your income. Of course, if your income drops suddenly, you’d want that you can continue to pay your home. Therefore, be conservative with buying the house you need.

Many of us believe that bankruptcy is the end of our credit life. Despair not because many people who have been out of business were able to recover quickly and rebuild their credit. Most of the, too were able to buy a new home .

Your bankruptcy report will be posted on your credit report for 10 years. Surely each mortgage lender will  see this fact when assessing your mortgage application. Although it may be difficult to find a bank to give you a mortgage, it is not impossible. The banks want to make money and there may be one that is ready to take the risk.

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Posted in Bankruptcy | 8 Comments »

Financing and Refinancing Programs

Monday, October 27th, 2008

“Money makes the world go round”. This adage still rings true especially these days when absolutely everything and anything tangible or intangible can be had with money. It is apparently very essential. If you want to buy a home or start your own business, you need money! If you want to finance a project, you need money! But where will you get the money?

If you have the management and planning skills, financing helps you enter into a business that will grow and get the desired profit. Various financial institutions are offering different types of financing that assist you in this matter.

A wide array of financing options for your money needs are available :

1. Revolving Line of Credit
A revolving line of credit , the most usual and low-cost kind of business loan for small and medium-sized businesses, can be readily availed to fund a company’s working capital. This working capital is computed as the sum of present assets minus the present liabilities.

2. Non-Capital Goods Financing
This is short-term loan that deals with settlement terms of about a year or maybe less for buying goods, such as construction materials, products, and other non-capital stuff.

3. Project Finance
Financing for projects that need longer than 5 years repayment terms is also available. It depends on the predicted cash flows and kind of revenue that a project will generate. Project financing, though undergoes extensive analysis.

4. Capital Equipment Financing
Fund extension plans is possible if one chooses this financing to purchase capital equipment. Because it involves a huge sum of money to be financed, the extension can go from 1 to 10 years.

5. Subordinated Mezzanine Debt
It is a more expensive type of financing compared to revolving line of credit and term debt. Lenders such as banks and other credit companies usually ask for equity like warrants to add on their earnings from interests.

6. Equity Financing
This is a form of financing for investors who are brave enough to face major risks brought by financing. But with great risk comes the expectation of high returns, of course on the part of the equity investor.

7. Piggyback Financing
For home buyers who avoid the required mortgage insurance, this is the one that they should avail of. This is preferable when the mortgage exceeds 80 percent of the purchase price. A second mortgage with possible lower costs are available for the borrower of this type of financing.

8. Creative Financing
This option is advisable to take when the buyer of the house is with a third-party lending institution, i.e., a bank or a loan company.

9. Owner Financing
This happens when the property owner or seller himself finances the buyer.

These are some of the most popular financing possibilities one can choose from for his/her business or any financing activity. But before you avail of any of these, consider the payment terms you can afford and the right timing when applying for the funding plan.

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Posted in Financing Programs, Refinancing Programs | 5 Comments »

Consumer Credit Counseling Gets You Back on Track!

Monday, October 27th, 2008

Are you having trouble keeping up with the bills? The mortgage crisis that rocked the USA this second quarter of the year when the Lehman Brothers Holdings Inc. declared a $2.8 billion loss in their investments has a great impact on most American households.

Amidst this crisis and the recession in the country, credit card debt is still the primary choice of most families for their monthly payments. The pressure on regular living expenses has increased credit card debt. Even when a credit card holder is aware that If he can’t make more than the minimum payments on credit cards, the interest increases until he’s in greater financial debt. A single day in late payments will result to  penalty charges and the credit card company may also well increase your APR. You’ll soon find yourself in an uncontrollable financial situation which only gets worse over time. What can you do? Is there a solution?

The best thing to do is to seek help from consumer credit counseling companies. They have helped millions of people get back on their feet after a really bad credit debt situation. Getting a legitimate consumer credit counseling services can lessen your burdens. They can negotiate a lower rate of interest, consolidate your credit card debts into one, reduced monthly payment, help with your credit rating and get you out of debt in lesser time.

How do you determine which consumer credit counseling services are real and which are not? You’ve got to research. Search online for a  the keyword ‘consumer credit counseling’.  Look for sites with the .org suffix; these sites usually non-profit organizations. Be cautious of sites which charge a fee even before you’ve actually talked to them. Fraudulent companies make money through the fees they charge from you, not through any genuine intention to help. Don’t bite it if the company promises to wipe out bad credit marks instantly. There’s only one thing you must do if you really want to wipe off and that is to pay off your debt. Legitimate and effective consumer credit counseling services are there to negotiate with your creditors for better rates, but they cannot completely erase your debt.

Credit counselors from reputable companies can provide you with advice and strategies to help you reduce your current debt and not incur new debt. Better management of your household budget is discussed with you by your credit counselor.If you feel that your monthly payments are getting out of control, you can turn the situation around. If you want to soon get back to the track, seek the help of a reliable consumer credit counselor.

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Posted in Credit | 4 Comments »

Debit Card or Check Card

Sunday, October 26th, 2008

Imagine yourself driving up to an ATM, inserting your card and driving off with some cash anytime, day or night. That’s the comfort of having a debit card!

A debit card is also called a check card. It has become something that people take for granted. Fees are charged for using a different ATM or bank than our usual. The fee can sometimes be small and other times you’re paying a dollar just to use someone else’s ATM machine. Banks are actually getting a small fortune off those fees. Banks also charge a merchant if you choose to pay for items with your debit card.

We have all been advised to get rid of our credit cards. If we get rid of them, our debt problems will be gone. But come to think of this: using a credit card is much less risky than using a debit card. If you have the self discipline and control to pay off your credit card balances each month,then you are better off using a credit card over a debit card to pay for things. Many credit card companies handle fraudulent purchases on a daily basis. You are not accountable if someone uses your credit card account number without your knowledge. With a credit card, you aren’t dealing with your own personal money, but the credit card company’s money.

But, if someone steals your debit card account information, you will find your bank account empty in no time. Can this really happen? Absolutely possible. Remember that a person doesn’t necessarily have to be in possession of your actual debit card.All they need is your account information and they can already purchase online. All they’ve got to do is type in the information. It is more difficult for them to pay in person without the debit card in hand for swiping. Purchasing something with a debit card is just as the same as cash. If something goes amiss with the purchase or merchandise, your legal standing could be weaker when paying with a debit card.

However, there are also some ways to protect yourself and your debit card. Here’s how:

  • The most basic thing is never let your debit card out of your sight. That means don’t leave it sitting on your desk at work. When purchasing, never let a clerk have it for too long lest your debit card information has been copied.
  • If you tend to make purchases online, use a regular credit card.
  • Don’t keep all of your money in one account. Have a savings account or a second checking account, just to keep your money safe.

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Posted in Debit Cards | 5 Comments »

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