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Fighting Debt Together

Category Archives: Financing

You now ask what kind of things that you could take advantage of by obtaining good credit. To begin with, good credit can increase your chances of obtaining the loan you apply for and secondly, it will help you get specific work and programs that could require a perfect credit score. These are the 2 significant reasons why you need a good credit rating.

However, in case you are plagued with a poor credit rating previously, at this point you ask how you can obtain a good credit score again or how you are able to improve your credit rating. It can be important to realize the truth that if you have a bad credit score, you will need to fix it as soon as possible just before your credit rating will get much worse.

Before you go on and begin fixing your poor credit rating, you first need to understand what credit is all about. You have to know how it is affected by your everyday life. For instance, when you are in need of a loan, loan providers will probably have a look at your credit standing to check if you’re able to be approved for the loan.

A good credit rating will assure lenders that you pay your loans on or before the deadline day and thereby, will assure them you are able to pay the loan you will apply for. The same applies when you’re applying for a credit card.

Now you understand what it indicates to use a good credit score, the next action you have to do will be to check if you have a good credit report or not. Surprisingly, very few folks understand if they have got a good credit report or if they have got a low credit standing.

To find out your credit rating, just ask for it from the 3 major credit reporting services. They can give you a statistical indicator of how much your credit score rates and how much credit risk you might be.

Therefore, if you have a negative credit score, the first thing you have to do to be able to improve your credit score is to take care of old debts. If you are paying all your old debts, that will cause the debt collectors to stop making bad reports to credit reporting services.

This is actually the first thing you have to do in order to prevent your credit rating from becoming much worse than it already is. By simply reducing the source of bad credit, you’ll be on the right track to get good credit.

However, paying all your debts doesn’t necessarily mean that you’ll immediately get a good credit rating. You need to keep in mind that it will simply stop it from becoming worse. Your old poor credit report may be there. So, obviously the next step could be to begin looking for ways to make some good reports on your credit rating.

You’ll be able to make this happen by applying for a credit card that is intended for people who have a low credit rating, such as a secured credit card. You must also begin opening a brand new savings account or bank checking account. Don’t forget that you ought to pay your balance in time for you to establish a good credit history.

Eventually, your own old poor credit report will end in time. Continue to keep paying your debts before its due and your credit history will appear better than previously. However, it would typically take around 5 to 7 years for the old credit history with negative reports to expire. For this reason patience is extremely important.

With patience, you will notice that in time, your credit rating will grow and eliminate all those bad reports you had before. Don’t forget to keep paying your debts on time in order to have good credit.

With the skyrocketing use of technology, firms offering debt consolidation services are more conditional upon specialized software, which aids them to generate these leads quickly and inform ‘qualified leads’.

Debt consolidation references have come here to stay. They’re finding more and more takers by the day. The reason behind their popularity is not hard to see. Folks require cash for various reasons and some time or the other has no option apart from to borrow. Folks are spending more on shopping, housing and autos, to mention only a few. The booming world economy and accelerating pay packets have resulted in consumers spending more .

Today, even the young, starting out on their career are earning more and do not mind splurging on sometimes, even on luxury items. Research points out some of the children, just out of college, have sometimes up to 7 or eight cards. This goes to show the modified purchase patterns and buying behaviors, which has been driven by availability of easy cash. Although one may be earning well and this gives you the confidence to go in for debt consolidation leads, one has to take an informed decision.

Visiting online resources is a good way to find out in detail about the modus operandi of debt consolidation firms. You may learn more about, as an example, the various complexities involved in going for a debt consolidation lead. You may discuss with your money advisor and start to know more about these qualified debt consolidation leads. After you are clear about perhaps the basics, then it makes your decision on qualified debt consolidation leads, that much more easier.

Telemarketing plays a big part in the success of debt consolidation leads. In reality telemarketing debt consolidation leads are essentially responsible for the leads reaching the potential consumers.

Debt consolidation companies generate leads through numerous sources. The most well liked being online resources. Many firms offer these leads on their websites, in the form of pop-ups or as banner advertisements. The debt consolidation companies pick up these leads and thru their contact centres, do in depth telemarketing, passing on these leads to qualified clients.

Advancing technology means debt consolidation leads are being generated in bigger numbers and are reaching an increasingly large number of folk. ‘Live’ leads are generated by telemarketing agents, who are consistently in the watch for potential shoppers.

One is literally, battered by these calls from various debt consolidation corporations offering the newest current lead. Such is the contest among these corporations that you also have debt consolidation ‘transfer leads’, which permits the shopper to really migrate from one company to another.

You also have pre-programmed software, which does the telemarketing job for the debt consolidation corporations.

The entire process works in this way. The automatic software finds out the generated lead and a predictive dial up calls up the consumer and ‘talks’ using a exclusive telemarketing script. The consumer can then select for explicit leads, which may suit his wishes and simply hang up. His / her needs would be met by the debt consolidation companies in a matter of minutes. Such is the intense competition.

Debt consolidation firms are finding augmenting takers because of their abilities to manage debts better. Consumers can now consolidate their repayment into one single various payment, thanks to the appearance of these debt consolidation firms. The office consolidation firms now negotiate with creditors for your repayment options, balance and time period for your repayment, to say some.

Debt consolidation has its drawbacks too. For one they lengthen the duration of loan, at the same time making you pay more, over the same time period. Here’s where compound interest comes into picture. Care should be taken about taking all of these factors, while going in for debt consolidation. Another major drawback with debt consolidation lies in the fact that one is coping with only 1 creditor. This can cause difficulty in negotiation of repayments, should one face further monetary Problems.

Debt consolidation firms sometimes ask for a security. This is mostly in the shape of a home. One stands to lose the home, should one not pay back the loan amount in time. Therefore it’s vital that patrons make a provident choice and calculated choice when going in for debt consolidation.

A Remortgage (or a Refinance Mortgage) put simply, is a loan that replaces an existing mortgage. This can be obtained through the existing lender or a different lender, depending upon the best deal for the individual. Remortgages pay off the original mortgage and are used as a means of releasing additional funds. There is some general confusion surrounding Remortgages and it’s relation to Secure Loans, as a part from being a type of secure loan, Remortgages can also be used to do or buy most things. One of the main differences between Remortgages and Secured Loans is that the former can be obtained for any sum of money you require, whereas the latter usually has a maximum restriction of 100,000. Furthermore, secure loans do not change anything about the current obtained regulated mortgage.

Remortgaging is an important financial decision to a homeowner, so understanding the options available is vital. There are various options available for the UK Homeowner. For example, Fixed Rate Remortgages tie you into paying a set interest rate for a specified period of time and allows for effective budgeting with monthly repayments that remain stable throughout the fixed rate period. A Tracker Remortgage is a variable mortgage whose rate is usually tied to The Bank of England base rate, whereas an Offset Remortgage is a deal that allows borrowers to offset the savings that they have against their outstanding mortgage debt. Whilst holding the savings in a separate savings account instead of earning interest on their savings, the borrower will pay a reduced rate of interest on their remortgage. A Bad Credit Remortgage also known as an Adverse Credit Remortgage is available if you have adverse credit history or have been refused credit in the past. There are multiple other forms of remortgages too including Variable Rate Remortgages and Buy-to-Let Remortgages. With such a diverse choice of remortgaging options, it is strongly recommended that you obtain advice in regards to which deal is the best for your circumstances.

With interest rates falling to their lowest over the past 19 months, it is clear that the housing market is the biggest section of the economy to have been affected by the economic downturn. The latest figures from the Council of Mortgage Lenders show that remortgaging fell to its lowest ever level as a proportion of new mortgages in August, with just 25,000 remortgage loans, down 13% on July and 19% lower than a year earlier. With the financial risk to the lender increased during the credit crunch, many bowed out of the housing market, happy to leave homeowners with their current mortgage deals. As lenders removed themselves from the market, banks were left in severe financial trouble and the government was forced to bail them out.

However, as of October 2010, banks are showing significant signs of welcoming back remortgage loans with the number of remortgages jumping a huge 35% in September. As a result, at present, the Remortgage market is one of the most competitive markets with banks and building societies continually slashing interest rates in order to draw in custom. Remortgages now account for more business than properties, emphasising further its recent surge. Among the advantages of remortgaging is how it can help with the consolidation of higher rate debts such as credit cards or car loans. Similar advantages include; remortgaging to take advantage of a lower interest rate, to release equity, to pay for remodelling or expansion of your existing home or to pay for large expenses such as a child’s education or wedding.

There are however some problems/disadvantages and complexities surrounding Remortgages. For example, following the credit crunch, lenders have become increasingly stricter regarding who they lend to and how much they lend. If you are newly self-employed or your employment has recently changed, lenders may be reluctant in lending large amounts of capital as they regard such future income as uncertain. Similarly, if it hasn’t been that long since you obtained your original mortgage and got it at a discounted rate you may face substantial penalties for early repayment. In order to qualify for a remortgage there are various steps to follow; your home must be valued, you must complete a detailed loan application, the lender will require conveyance work to secure a report and a solicitor will be engaged to ensure your previous lender is paid in full and to release any additional funds directly to you. The cost of remortgaging varies depending upon the lender, but in general, it will probably cost less than when you first obtained a mortgage!

Myth 1: Buying A Home Is Always A Good Investment

Depending on your financial circumstances, needs and life choices, it may be better for you to rent rather than buy. Also, it used to be that property prices would mostly steadily increase so a homeowner would sell their house for a good profit. The crash of the housing market a few years ago evidences that this is not always the case. The housing market of today is quite different.

Also, even when the figures look good on paper, the real story may be different. Say a home purchased in the 70s for the price of $50,000 and sold in 2005 for $300,000 which adds up to what appears to be a $250,000 profit.  Although there was a 500% increase in price, it does not factor in a number of factors related to the cost of owning a home.

For instance, based on the price, the annual compound return is just 6.15% annually. Inflation was not also factored in. It reduces the returns to an approximate actual return. There is also mortgage interest, homeowners insurance, taxes and the cost of maintenance and repairs incurred from when the house was bought up to the time it was sold.

In the final analysis, what looks like a sweet deal may actually have been a loss. It does not always work out this way but it is important to understand the figures and understand that you will not necessarily be able to sell your house at a profit should you ever choose to do so.

Myth 2: You Will Always Get Added Tax Deduction For Your Mortgage Interest

Mortgage interest is deductible but it is not always wise for you to take the deduction. This is an individual matter and you should talk to your accountant or mortgage advisor before you decide. To accept the mortgage interest deduction, you have to itemize each deduction as compared to taking a standard deduction. Typically, standard deductions are higher than itemized deductions. It would therefore not make a lot of financial sense to choose to itemize your deductions.

Myth 3: Paying Down Your Mortgage As Fast As Possible Is Always Best

This advice became popular during the high interest rate 1980s. However, the advice may not have been ideal even at that time. Homeowners tend to focus on the interest rates and get into a panic. However, putting everything you get into paying into your mortgage may not be the best. There may be other uses for the money that would be more profitable.

For instance, you may choose to make long-term investments such as in stocks and bonds that would bring you some very good returns over the years. If you own a business, you can invest into expanding and diversifying it.

The important factor to consider is the rate of return. Work out which ones puts you in a better financial position in the long run: is it the saving you’ll make when you pay down the mortgage or the returns you would make from the investments that you make? Creating wealth is all about making your money work for you.

Bonus Myth: The Perfect Home

There is another myth that those buying a first home are especially susceptible to. It is the myth of the perfect house. With a first home, the focus should be on a home you can afford depending on your financial situation.

While there is nothing wrong with having the highest aspirations about the house that you buy, reality must reign. Otherwise, your mortgage applications will keep on getting turned down because lenders feel you cannot afford the payments or you will get yourself into a corner with a house that you can’t really afford.

If what you can afford is a smaller house, a fixer-upper or a home in a location that is different from what you wanted, take it. You can always remodel and renovate or wait for it to gain value and sell. There are renovation loans that lend buyers the money to buy the home and finance the necessary renovations.

What’s Right For You?

When it comes to mortgages especially buying your first home, the fact is that there is no black or white or hard and fast rules that work for everyone. It depends on your individual financial circumstances. Take the time to do thorough research into the options. Listen to your mortgage advisor or broker too and use a mortgage calculator to see both the small and the big picture.

Consumers are often overwhelmed by the quantity and variety of financial advice, coming from all corners of their lives.Protecting your assets and providing for your loved ones is an often ignored golden rule of smart personal finance.How you manage, spend, and invest your money can have a profound impact on your life.