After living in your house for several years, you have built equity in it and can now use it as collateral for revolving credit. Financial institutions have different methods for determining how More »
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I've been getting a number of questions from 40-somethings and 50-somethings with little savings and abundant worries about retirement. More »
Following an investigation by the BBC it has emerged that some debt management firms have been exercising rogue practices, where they have been taking monthly payments off clients but have been failing to pass these on to the client’s creditors, leaving consumers in a worse situation than they were in before they signed up to Debt management firms exercising rogue practices is a post from: The Thrifty Scot
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Debt management firms exercising rogue practices
Personal debt levels in the Crewe area have raised concerns amongst industry officials, who are worried about the high level of personal debt in the area, which has grown over the past couple of years. Personal debt levels have been increased or causing issues for households all around the country for the past few years Crewe debt levels cause for concern is a post from: The Thrifty Scot
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Crewe debt levels cause for concern
Whilst there are a number of financial experts available to offer assistance and help to consumers these days, a recent study has shown that the majority of younger people tend to ask their friends and family for advice and help about their finances rather than turning to the industry experts.
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Younger people get advice on finances from family and friends
Homeowners facing payment difficulties should consider two options-loan modification versus refinance-when seeking a solution to an unaffordable home loan. What is the difference between the two and what are the pros and cons of each option? Here is a brief description of what each option has to offer a struggling homeowner:
There are several factors preventing people from taking advantage of the lowest mortgage rates we have seen in a long time. The most prevalent reason is that the mortgage is underwater. The decreases in home values have left many people with little or no equity in their homes. Typically, if you do not have any equity in your home, you cannot refinance your mortgage. Additionally, qualifications for refinancing have become much stricter. The days of obtaining a “no documentation/no verification” loan are long gone. Lenders have also raised the bar on credit requirements. As more and more people struggle to survive in the current economy, credit ratings are falling. This increases the difficulty of qualifying for a refinance, even for people who are current with their mortgage payments.
Critical to this program is the fact that delinquency is not a requirement for eligibility. Since loan modifications are more likely to succeed if they are made before a borrower misses a payment, the program aims to address mortgage problems before payments fall behind. HAMP Requirements: Home has to be primary residence.
The current first mortgage balance must be equal to or less than $729,750 (above this amount is considered a non-conforming mortgage per Fannie Mae and Freddie Mac guidelines)
You are having trouble making your mortgage payment – via reduction of income, increase of mortgage payment, or other hardship.
Current mortgage was taken out before January 1st, 2009
Housing expense (including mortgage payment, taxes, insurance and homeowner’s association dues, if applicable) are greater than 31% of your gross income.
The critical figure in the HAMP program is the housing expense ratio noted in the last bullet point above. The intent is to make the homeowners housing expenses no more that 31% of their gross income.
Another program requirement that is frustrating homeowners is the three-month probationary period. Once a homeowner has qualified for a refinance under the FHA program, the new mortgage payment is required to be made on time and in full. If the homeowner fails to meet this requirement, the new payment arrangement is revoked. However, if the payments were made on time, the homeowner is supposed to be granted this arrangement permanently. However, lenders have stretched this probationary period to six or even ten months. The unwillingness of lenders to uphold the three-month program requirement has left homeowners so aggravated that they walk away from the program even after they have qualified.
Home Affordable Refinance Program (HARP). This plan is designed to help homeowners, who have been keeping their mortgage up to date, to lower their mortgage payment by refinancing their mortgage before potential problems arise. As mentioned already, falling home prices have made it much more difficult to refinance a mortgage. Mortgage lenders, industry-wide, typically will not lend more than 80% of the value of a property (this is called Loan to Value). Hence, if your home is worth $300,000 for example, you cannot refinance your mortgage if you own more than $240,000 on the home ($300,000 X.8). HARP enables homeowners, who otherwise would be unable to refinance their home, a program to do just that – refinance their mortgage and reduce the monthly mortgage payment. HARP Requirements: Own (and reside) in a 1 to 4 family residence
Have a mortgage that is owned or guaranteed by Fannie Mae or Freddie Mac. Current on the mortgage payments (i.e., no payments past 30 days late in the last 12 months)
Amount you owe on the first mortgage is about the same or less than the current value of the home (you may be eligible if the first mortgage balance does not exceed 125% of the value of the home) Go tomakinghomeaffordable.gov/loan_lookup.html to find out if Fannie Mae or Freddie Mac owns or guarantees your mortgage.
Learn more about Obama Mortgage Relief Plan Qualifications.
An industry study released Monday shows a decline in home prices between May & June for move-in ready foreclosed properties, short sales and non-distressed properties. Experts are relating the decline in pricing to the expiration of the first-time home buyer tax credit. Many believe home buyers are simply reducing their offers by $8,000 in the wake of the credit.
Home buyers shopping the market will certainly enjoy these falling prices… People may now be able to afford a home in a city or neighborhood that in the past may have been out of their price range. However, what are current homeowners supposed to do in this situation? Mortgage rates are low, but home values are dropping.
Fannie Mae’s DU Refi Plus conforming mortgage program will allow for your current mortgage to be refinanced with a lender who is not the current servicer of your present mortgage. (Contingent on individual lenders’ guidelines). Who is the DU Refi Plus mortgage program for? Fannie Mae’s DU Refi Plus conforming mortgage program is better suited for those borrowers who do not currently have mortgage insurance. Although Fannie Mae does allow for current loans with mortgage insurance to be eligible for this program, it is challenging to find a lender who will allow it. You may be better off to check with your current servicer first if you presently have mortgage insurance on your current mortgage. Fannie Mae’s DU Refi Plus conforming mortgage program does not limit borrowers based on credit score, debt to income levels, property type or occupancy types as long as the new loan will benefit the borrower and put them into a better situation.
But more importantly, the FICO goes back up more than the drop from late pays as we eliminate the debt so their debt to income ratio goes down to zero and their FICO is back up higher than it was before they joined a settlement program even with the late pays on there,
but we demand a withdrawal of the late pay entry as part of the negotiated settlement and get that 99% of the time.
In spite of the current state of the economy, there are a lot of incredible opportunities to finance a purchase of a new home or refinance your current home at what may be considered interest rates at ignorant levels: Definition of ignorant from Webster’s Dictionary: “lacking knowledge or comprehension of a the thing specified’ While it may be difficult to comprehend current mortgage interest rates at these levels that doesn’t mean they do not exist or not available.
Learn more about Obama Mortgage Relief Plan Qualifications.
If you travel much outside the United States, it pays to be choosy about which credit cards you use abroad. Here are five key things to know about using credit cards in foreign countries.
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5 Tips for Using Credit Cards Abroad
Americans took on more debt in May and used their credit cards more for only the second time in nearly three years. Consumers stepped up their borrowing just as the economy began to slump and hiring slowed.
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Consumers step up credit card use
Credit card interest rates rose to record heights this week, according to the CreditCards.com Weekly Rate Report.
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Rate Survey: Credit Card APRs Hit Record High
Current averages
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Credit card rates give business a break
With 25 days to go before debt ceiling D-Day, President Obama says he’s gunning for the big deal — the comprehensive, balanced plan that would take a big knife to the country’s debt.
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Debt ceiling: Perils of a ‘grand bargain’
