10 Questions to Ask

When Choosing a Financial Planner

You may be considering help from a financial planner for a number of reasons, whether it's deciding to buy a new home, planning for retirement or your children's education, or simply not having the time or expertise to get your finances in order. Whatever your needs, working with a financial planner can be a helpful step in securing your financial future.

The questions in this brochure will help you interview and evaluate several financial planners to find the one that's right for you. You will want to select a competent, qualified professional with whom you feel comfortable, one whose business style suits your financial planning needs. An interview checklist has been included for your convenience.

1. What experience do you have?

Find out how long the planner has been in practice and the number and types of companies with which she has been associated. Ask the planner to briefly describe her work experience and how it relates to her current practice. Choose a financial planner who has a minimum of three years experience counseling individuals on their financial needs.

2. What are your qualifications?

The term "financial planner" is used by many financial professionals. Ask the planner what qualifies him to offer financial planning advice and whether he holds a financial planning designation such as the Certified Financial Planner mark. Look for a planner who has proven experience in financial planning topics such as insurance, tax planning, investments, estate planning or retirement planning. Determine what steps the planner takes to stay current with changes and developments in the financial planning field. If the planner holds a financial planning designation, check on his background with the CFP Board or other relevant professional organizations.

3. What services do you offer?

The services a financial planner offers depend on a number of factors including credentials, licenses and areas of expertise. Financial planners cannot sell insurance or securities products such as mutual funds or stocks without the proper licenses, or give investment advice unless registered with state or Federal authorities. Some planners offer financial planning advice on a range of topics but do not sell financial products. Others may provide advice only in specific areas such as estate planning or on tax matters.

4. What is your approach to financial planning?

Ask the financial planner about the type of clients and financial situations she typically likes to work with. Some planners prefer to develop one plan by bringing together all of your financial goals. Others provide advice on specific areas, as needed. Make sure the planner's viewpoint on investing is not too cautious or overly aggressive for you. Some planners require you to have a certain net worth before offering services. Find out if the planner will carry out the financial recommendations developed for you or refer you to others who will do so.

5. Will you be the only person working with me?

The financial planner may work with you himself or have others in the office assist him. You may want to meet everyone who will be working with you. If the planner works with professionals outside his own practice (such as attorneys, insurance agents or tax specialists) to develop or carry out financial planning recommendations, get a list of their names to check on their backgrounds.

6. How will I pay for your services?

As part of your financial planning agreement, the financial planner should clearly tell you in writing how she will be paid for the services to be provided. Planners can be paid in several ways:

A salary paid by the company for which the planner works. The planner's employer receives payment from you or others, either in fees or commissions, in order to pay the planner's salary.

Fees based on an hourly rate, a flat rate, or on a percentage of your assets and/or income.

Commissions paid by a third party from the products sold to you to carry out the financial planning recommendations. Commissions are usually a percentage of the amount you invest in a product.

A combination of fees and commissions whereby fees are charged for the amount of work done to develop financial planning recommendations and commissions are received from any products sold. In addition, some planners may offset some portion of the fees you pay if they receive commissions for carrying out their recommendations.

7. How much do you typically charge?

While the amount you pay the planner will depend on your particular needs, the financial planner should be able to provide you with an estimate of possible costs based on the work to be performed. Such costs would include the planner's hourly rates or flat fees or the percentage he would receive as commission on products you may purchase as part of the financial planning recommendations.

8. Could anyone besides me benefit from your recommendations?

Some business relationships or partnerships that a planner has could affect her professional judgment while working with you, inhibiting the planner from acting in your best interest. Ask the planner to provide you with a description of her conflicts of interest in writing. For example, financial planners who sell insurance policies, securities or mutual funds have a business relationship with the companies that provide these financial products. The planner may also have relationships or partnerships that should be disclosed to you, such as business she receives for referring you to an insurance agent, accountant or attorney for implementation of planning suggestions.

9. Have you ever been publicly disciplined for any unlawful or unethical actions in your professional career?

Several government and professional regulatory organizations, such as the National Association of Securities Dealers (NASD), your state insurance and securities departments, and the CFP Board keep records on the disciplinary history of financial planners and advisers. Ask what organizations the planner is regulated by, and contact these groups to conduct a background check. (See listing at back.) All financial planners who have registered as investment advisers with the Securities and Exchange Commission or state securities agencies, or who are associated with a company that is registered as an investment adviser, must be able to provide you with a disclosure form called Form ADV or the state equivalent of that form.

10. Can I have it in writing?

Ask the planner to provide you with a written agreement that details the services that will be provided. Keep this document in your files for future reference.

The Certified Financial Planner Board of Standards (CFP Board) is an independent professional regulatory organization that owns the federally registered CFP and Certified Financial Planner marks. The CFP Board regulates financial planners through trademark law by licensing individuals who meet its certification requirements to use these federally registered marks.

5 questions to help choose a loan or line of credit

By Bankrate.com

The choice between a home equity loan or a line of credit is seldom black or white. But here are a couple of generalizations:

A home equity loan might be the best fit if you plan to use the money in a lump sum for a one-time occasion such as consolidating your credit card debt, replacing the roof, or paying for your daughter's wedding. The interest rate is fixed, and so are the monthly payments, and you can budget accordingly.

A HELOC -- home equity line of credit -- might be a better fit if you will need money periodically and not all at once. This is the case in lengthy home remodeling projects when you pay the contractor in two or more draws. Or perhaps you will need to shed an arm and a leg at the beginning of each semester over the next four years when the kids head off to college. A HELOC gives you the flexibility to borrow what you need, when you need it.

Q : Do I need the money in a lump sum, or in several installments?

A : If you need it in a lump sum, lean toward getting a home equity loan. If you need the money in installments, lean toward getting an equity line of credit.

Q : Is it for a long-term purpose, or a short-term purpose?

A : If the money is to be spent on something that will last a long time, like a roof or a car, an equity loan might be better. If the money is to be spent on something that won't last long, like a semester in college or a wedding and reception, think about getting an equity line of credit.

Q : How big a monthly payment can I handle?

A : A home equity loan requires you to pay principal and interest every month for the life of the loan. A home equity line of credit allows you to pay just the interest for several years, if that's what you want to do. It's a whole other question whether it's a good idea to pay only the interest, and not the principal, for a long time.

Q : Would a line of credit tempt me to use the money carelessly?

A : Naturally, if you answer this in the affirmative, you should consider getting a home equity loan, because you pay off the principal and interest over time, and it's not a revolving credit account.

Q : Does a variable rate bother me?

A : A home equity line of credit has an adjustable rate that most likely changes every time the Federal Reserve raises or lowers the federal funds rate. If you don't like the idea of having a rate that could rise every time the Fed meets, consider getting a home equity loan, which has a fixed rate.

Your Refinancing Plans

Refinancing is a very valuable tool. So that there is no possibility of confusion, we have answered frequently asked key questions for you. Now you can focus on using refinance to leverage your investment and business.

Q. Is refinancing beneficial in all situations?

Whether to refinance or not depends on your individual situation and financial outlook. It is not the way out always. You want lower interest rates and want to decrease your monthly payment and you go to shop for refinancing options, you will find out that there are certain questions to be answered to refinance. Whether having lower payments make up for the closing costs, expenses associated with refinancing? What time you expect to be in your home? How much equity is there in your home? Can you pay points to get a lower rate?

Q. I have no income verification and a history of non-payment of certain bills of my home, which I mortgaged few years back. Can I get a good refinance quote?

A good quote largely depends on your credit score. But you can refinance even if you have a bad credit history but the rates are high compared to other people. You can refinance now, use money saved through refinancing to clear your debts and this in turn will repair your credit report to some extent and you can again go refinancing, which will now be offered at comparatively lower rates.

Q. Which refinance option is better an adjustable rate or a fixed rate?

The initial low fixed rate of ARM never bothers you but after that if the rates increases, you are worried. Then if you do not plan to stay long in your home say not more than 3 to 4 years then refinancing does not make any sense. But if you have a long-term stay in your home and if the rate on your ARM is about to rise to a higher value, then it may make sense to get a long term fixed rate mortgage.

Q. If I go for a cash-out refinance, will I have to pay more interest?

No, you do not have to pay more as the interest rate you pay on a cash out refinance loan will generally be the same as what you pay on a non cash out mortgage where you do not take cash out. However there is a fee associated with cash out refinance loan depending on the amount you want in cash, the particular loan you choose and the loan to value ratio. Loan to value is the ratio of how much you borrow compared to the value of the home you're borrowing against. It is calculated as the home value divided by the amount borrowed. The equity in your home can be used to pay off other high-interest credit cards bills, personal loans and any other debts.

Q. Its tough to decide on one interest rate. When should I finalize a rate?

Traditionally, interest rates rise sharply and come down slowly, yet they are unpredictable. Therefore if you want to buy a home or refinance your mortgage, do it now through the prevailing rates, a refinance option can be thought of later if rates drop again. A gradual drop in rates may not be sharp enough to bang your monthly mortgage payment, but again that depends on your personal situation.

Q. How long does it take to refinance?

Generally, refinancing normally takes between two and four weeks, depending on a few things:

1)Whether you have a recent home appraisal?

2)Are you in an area that appraisers have an easy access?

3)Are there homes like yours in your neighborhood?

Basically, getting the home appraisal is a slow process and it further slows down refinancing process. Added to it during refinancing highs, appraisers are tough to find out. Paper work, credit reports, old mortgage paper, if any, should always be ready to speed up the refinancing process.

Article Source: http://www.realestateinvestmentarticles.net

Five Questions Home Buyers Should Ask to Get a 'Real Bargain

By: www.buy-and-sell-house-fast.com

The recent upswing in the housing market has led many buyers to conclude that they have been playing in a seller's market, and while that may be true there are still things smart buyers can do to get the best possible deal on the home of their dreams.

It is certainly easy to see why so many buyers have been discouraged by the recent housing market. Prices, it seems, are constantly on the rise, and many houses have sold within a matter of days or weeks. While the situation for buyers is improving in many places, other areas of the country remain hot, making it even more important to shop around and to know how to get the best deal.

Whether you are in a buyer's market or a seller's market, there are a number of questions all buyers should ask when shopping for a home. The answers to these five questions can be extremely valuable, no matter what kind of real estate market you are in.

Question #1 - Why are you selling?

This is an important question to ask no matter what you are buying, but it is an even more essential question when it comes to buying a home. After all, for most of us a home will be our single biggest asset and it is vital to get the best deal, and to be aware of any condition problems that may exist with the home you are considering.

There are two main reasons to ask this important question, and they are:

To be able to tailor the offer you make in a way that will best meet the needs of the seller, and

To determine whether or not the seller is highly motivated to sell the home

For instance, if your question helps you learn that your seller is moving into a retirement community, they may be willing to carry back a first or a second mortgage, and this can provide an excellent secured source of income. This type of arrangement can be a winning situation for all involved. The seller can earn a steady interest rate of 6% or so, while the buyer gets easy financing.

You may also learn that the seller is facing foreclosure and need to act fast to get the most out of their home and to stave off any possible foreclosure auction. No matter what the reason for selling, it is important to ask, since the listing agent will seldom volunteer this important information.

Question #2 - How much did the seller pay for the home?

In most cases the answer to this question is a matter of public record, easily accessible for most buyers. Knowing this vital piece of information will put the buyer into the position of being better able to gauge how much room for negotiation the seller may have.

Another good thing for the potential buyer to know is how much is still owed on the mortgage, as well as whether or not there are any outstanding liens, like second mortgages or home equity loans on the home.

Knowing how much the seller still owes is a good way to determine how much cash the seller will need to have at closing time, and this will help the buyer to better tailor his or her offer on the home.

Question #3 - What problems exist with the home?

In most parts of the country, home sellers are now required to provide potential buyers with a written set of disclosures which reveal any material facts that could affect the market value of the home.

A good listing agent will be sure to get the seller's written disclosures a the time the home is listed, and they should have it readily available to all potential buyers who request it. It is important to review this disclosure document carefully in order to avoid unpleasant surprises down the road.

It is also a good idea to go beyond the disclosure document and have a home inspection done before making an offer. Compared to the cost of the average home, the cost of a home inspection is negligible, and the results of the home inspection will give the buyer a lot of bargaining power when it comes time to make an offer.

Question #4 - What issues have you had with the home?

This question is designed to be open ended, and it is intended to spark a discussion of any past problems, most of which, hopefully at least, have now been corrected.

In most parts of the country, there are no laws that require home sellers to reveal all past problems that have existed, but it is a good idea for buyers to try to gather as much information on past problems as they can.

Question #5 - How are the public schools?

For those with school age children, and for those planning to start a family, the quality of the public schools is a vital consideration. Even for those buyers who plan to send their kids to private schools, it is crucial to remember that the quality of the local public schools can greatly affect the value of homes in the community.

In fact, affluent buyers generally prefer to purchase homes in areas where the public schools are of excellent quality. As a result, homes in areas where the public schools are of poor quality can often sell quite poorly, even in hot housing markets.

It is important for the buyer to do plenty of research, including looking up the latest statistics on the quality of the local schools. In most cases these statistics will be based on factors like average test scores and graduation rates. In some cases the listing agent will have this information, while at other times the potential buyer may need to find it on their own.

Should You Buy a New or Old House?

By: www.buy-and-sell-house-fast.com

One of the biggest decisions that a prospective home buyer must make is the decision of whether to buy a new home or an old home. Both approaches have their advantages and disadvantages, and the decision will be affected by the buyer's personal circumstances.

Buy an old home

On the one hand, an older house is likely to need at least some repairs. Things like the roof, septic system, carpet, woodwork and other items may need to be replaced now or soon in the future. On the other hand, construction quality on a well built older home is often better than it is on a comparable new home.

Of course, it pays to have any home thoroughly examined by a certified home inspector prior to purchase. Even a new home can have problems, and a good, thorough inspection is definitely a must whether you are buying a new or old house. Be sure to get any problems found put in writing immediately and presented to the seller of the home. The problems uncovered by a home inspection can be used as negotiating points when settling on the purchase price of the home. If the seller agrees to repair the items uncovered by the home inspection prior to purchase, be sure to get those promises in writing and to follow up with the seller prior to the closing date.

Buying an old house can allow the home buyer, especially a first time home buyer, to purchase a larger or more luxurious home than he or she may be able to purchase new. In addition, many buyers prefer the distinct character and storied history of an old house to the cookie cutter approach of many new homes.

If you decide to purchase an old house in a historic district, however, there may be local ordinances which limit what you can do to the home. Owners of historic homes are often restricted from changing the outside appearance of the home, including such things as painting, window styles and certain landscaping. A good real estate agent will be able to apprise you of any restrictions that come with your old house.

Buy a new house

If you decide that a new home is the right move, it is imperative to examine the history and reputation of builder and the developer. If you are buying a new home in an existing development, talk to the homeowners who already live their and get their feedback. Honest feedback is your best tool when searching for a new home. If the home you are considering is in a brand new development, seek out other developments that the builder has done. Talk to those homeowners and get their views on the quality of the construction and the nature of the neighborhood. This type of information can be of great assistance when seeking your new home.

Whether you decide to buy a new home or an old house, the decision to purchase a home in the first place is the most important decision of all. A home is a great investment as well as a roof over your head. Finding the best home at the best price will ensure that your investment continues to appreciate year after year.

The Big Questions about Home Mortgage Refinancing

By: www.buy-and-sell-house-fast.com

Some homeowners may have heard of refinancing home mortgage but not known what it exactly meant, what it entailed, or how to go about doing it. All of those questions are easy to get answers to, but a tougher question to answer is "when should I refinance my home mortgage " as is "why should I refinance my home mortgage." Finally, perhaps the toughest question a homeowner may have to ask is simply "should I refinance my home mortgage." Before we attempt to answer those three BIG QUESTIONS, let's take a look at what refinancing is, and what it is not.

What is home mortgage refinancing?

Home mortgage refinance is essentially the act of obtaining a new home mortgage. This is not a " second mortgage" and it is very different from a home equity loan or a home equity line of credit (which we'll discuss in a bit). It may be easier to understand home mortgage refinance if you think of it in the same terms as buying a house in the first place, because the process is quite similar.

In a home mortgage refinance the homeowner is obtaining a new mortgage. The new loan pays off the old one and the homeowner starts making payments to the new lender. There may be a number of reasons a homeowner would do this, but the primary reason most people refinance is to get a lower interest rate. Let's say you purchased your home five years ago at a fixed rate of eight percent. It was a good deal at the time and you were happy with the fixed rate because you knew that if interest rates suddenly went up, the lender couldn't change the rate on you. But interest rates went down and, for the sake of argument, let's say they went down a lot. You're paying eight percent when you could be paying four. A home mortgage refinance will get you out of that eight percent deal and into a more comfortable interest rate. This action can save you thousands of dollars over the life of the loan.

Refinancing vs. Line of credit

Many people confuse a refinance with a Line of Credit (LOC). These are actually two entirely different animals. A refinance is intended to essentially reduce your debt (or at least the amount you're paying) while a line of credit will have the result of increasing it. Most people will get a home equity line of credit when they need to make improvements or have some major purchase. The line of credit works similarly to a revolving charge account - transactions against it will reduce the credit line and payments to it will make that portion of the line available again. There is much more to line of credit accounts than can be discussed here. Suffice to say that a refinance is not a line of credit and a line of credit is not a refinance.

The big questions about home mortgage refinance

In explaining home mortgage refinance we have already answered the "why." The number one reason to refinance is to save money. The other two big questions are merely situational. When should you refinance your home mortgage? When doing so would be advantageous to you. No one is going to refinance for a higher interest rate, of course. The other big question, should you do it at all, also depends on the situation. If the timing is right and there is a benefit to the refinance, by all means do it. Click here to find out how you can take advantage of lowest interest rate and refinance now!

A Consumer's Debt Consolidation Loan FAQ

By: www.mortgage-refinance-home-equity-loan.com

Q. The commercials on television make it sound like a debt consolidation loan will solve all my financial problems. Are these loans really the perfect way to solve my debt issues?

A. For some people debt consolidation loans can work very well. For others they may come with disastrous side effects.

Q. How can I determine if a debt consolidation loan is right for me?

A. Start by understanding what a debt consolidation loan is and how it fits into solving your personal debt situation.

Q. Isn't a debt consolidation loan just a loan where you get money to pay off your bills?

A. No. In almost all cases a debt consolidation loan is structured as a second mortgage on your primary residence.

Q. What difference does that make?

A. Most debtors attempting to obtain a debt consolidation loan face issues with unsecured debt, such as credit card bills. A second mortgage represents a secured debt. This becomes of critical importance if things go from bad to worse. With unsecured debt a chapter 7 bankruptcy can discharge the debt, completely relieving the individual of the obligation. In the case of secured debt, such as a second mortgage, even in a bankruptcy situation, the creditor has the right to seize the collateral if the loan cannot be repaid. When speaking about a second mortgage that would mean foreclosure on the property.

Q. I intend to make all my payments, why is this an issue?

A. You may have taken the credit cards with the intention of paying off the balance each month as well. Good intentions are fine, but unexpected things happen in life. One of the most critical issues to analyze before taking on a debt consolidation loan will be the borrowers ability to weather a financial down turn. I recommend that anyone taking on a debt consolidation loan be very comfortable that should they have a health issue, loss of job or other unfortunate financial surprise that they would remain able to make the payment for some time on the new debt consolidation loan. To be even more clear, a debt consolidation loan means you "bet the house" that you can repay your credit card debt.

Q. My monthly payment with a debt consolidation loan will be much more affordable, what is wrong with that?

A. There is nothing wrong with lower payments as long as you understand the mathematical reasons why the payments will be lower. Take a hard look at your current debt including the payments and the interest rates. How long would it take to pay off the debt in full? Then look at the terms of the debt consolidation loan. In some cases lower payments result from a significantly reduced interest rate, in other cases the reduced payment can come entirely from extending the payoff time to as long as 30 years.

Q. Aren't the rates of these debt consolidation loans always low?

A. Absolutely not. In some cases, where the borrower has good credit and a fair amount of equity in the home, rates can indeed be close to rates expected for a first mortgage. In other cases, particularly those with individuals with poor credit or in case of 125% LTV debt consolidation loans, rates can soar to over 18%. Depending on your current debt, rates for these debt consolidation loans can be higher than the interest rate on the pre-existing debt.

Q. What is 125% LTV loan all about?

A. 125% LTV (Loan To Value) loans allow the individual to borrow monies beyond the value of their home. For example if a home is worth $100,000.00 and the mortgage debt on the house is also $100,000.00, a 125% LTV loan would allow the debtor to borrow an additional $25,000.00 with the result being the total debt secured by the house after the loan would be 125% of the value of the home. While this type of loan opens the door for some individuals who may otherwise have no access to money it comes with a price. The interest rates for these loans typically run much higher that other mortgage loans and origination fees to set the loan up can be as much as 10% of the loan balance.

Q. Can anyone get a 125% loan if they need it?

A. No. Only those with good to excellent credit will be eligible.

Q. What if a debt consolidation loan would really cure all my problems? Are there any other dangers?

A. Yes. The debtor must examine how the trouble began. One of the most common pitfalls and recipes for the worst of disasters happens when people take on a debt consolidation loan without rectifying the true cause of the debt. A typical situation would play out like this: Individuals get into debt trouble because they are living beyond their means and supporting their spending habits with credit cards. A debt consolidation loan seems to solve things by paying off the debts. Unfortunately, if the spending habits continue, the individuals find in another year or two they have run their credit cards up to the same levels or higher than they were before the debt consolidation loan. Only this time the equity in their house has all been used up by the debt consolidation loan. They are unable to pay either the new bills or the debt consolidation loan and bankruptcy and foreclosure becomes await them.

Q. What is the best way to avoid this scenario?

A. Find out why the debt has truly accumulated. In a case of irresponsible use of credit cards, after paying off the credit cards with a debt consolidation loan, cut the credit cards up. If you need to have credit cards for rental cars, business trips or on-line purchases consider secured credit cards or debit cards. Spending on secured credit cards cannot exceed a limit based on the value of an accompanying savings account. Use of debit cards require you have money in an account in order to use the card.

Q. Is there a way to get a debt consolidation loan that does not require pledging your house as collateral or a way to get a debt consolidation loan if you do not own a house?

A. No. You may be able to get an unsecured personal loan, but unsecured personal loans will always require good to excellent credit and come with interest rates even higher than debt consolidation loans. Some people may refer to an unsecured loan as a debt consolidation loan, but the typical advertising you see on television or in the newspaper for a debt consolidation loan refers to one secured by a second mortgage.

Q. Is there any legal difference between a debt consolidation loan and a home equity loan?

A. Not in most cases. A debt consolidation loan in legal structure generally does not differ in any way from what one might call a home equity loan or a second mortgage loan.

Q. Ok, Mr. Doom and Gloom, are there any good points to a debt consolidation loan?

A. Yes. When debt consolidation loans carry a low enough interest rate payments can be significantly reduced. Many people find making one payment can be much more convenient that making five or ten smaller payments. Even if not the best long term plan, in the short run longer amortizations available with debt consolidation loans can help with cash flow.

Q. I have very bad credit and no collateral, like a house or a car, what kind of debt consolidation loan is available for me.

A. Other than borrowing from friends or family, if you have very bad credit and no collateral I know of no legitimate financial entity anywhere that will make you a loan. This is an important point to stress for two reasons. If you have very bad credit and no collateral don't bother spending a lot of time and effort trying to find a loan. I have been trying to find unsecured personal loans for clients with very bad credit for 10 years, only to find none. If anyone reading this knows of a legitimate loan I would be excited to hear about it. Based on my knowledge of financial institutions, their requirements and the default rate that would exists on such loans, I don't believe that anyone who did endeavor to make such loans would stay in business long. With that said, the second point to keep in mind is not to expend any money to anyone telling you they can obtain an unsecured loan for anyone with very bad credit. I have seen ads where people are attempting to sell lists or in some way taking an up front fee for find such a loan. In other related cases credit cards are offered enabling a credit line even with very bad credit, where in reality the application fees, annual fees and other miscellaneous fees result with the borrower essentially paying $250.00 for a $250.00 line of credit. A new trick gaining popularity are "payday loans" or auto "title loans" avoid them like the plague. The hidden interest rates on these loans can be 500% per year! If you have very bad credit and need money don't make things worse by falling prey to a scam.

Q. In this context what constitutes very bad credit.

A. While each account and loan request may be judged on it's own circumstances, a bankruptcy within 2 years or a number of accounts over 120 days late would probably be viewed very negatively by someone examining a request for an unsecured personal loan.

Q. Are there cases where it's not a bad idea to pledge the house as collateral for a debt consolidation loan?

A. Yes, I can envision some situations, particularly in state that offers very little in way of homestead exemptions for homeowners in bankruptcy. In some places the equity in ones home is significantly at risk whether a debt consolidation loan is taken out or not. When the writing is on the wall that a debtor will lose their home unless they can clean up some of their financial mess, a debt consolidation loan can be the tool to save a home.

Q. I heard that debt consolidation loans are tax deductible, is this true?

A. In some cases depending on the cost basis of your home the interest portions may be tax deductible. Potential borrowers should check with their tax advisors to explore what portion, if any, would be tax deductible for them.

Q. If things get better can I pay off a debt consolidation loan early?

A. In most cases there is no prepayment penalty with these loans, but read your documents carefully. Some loans will indeed penalize you an extra-prepayment penalty fee if you pay the loan early.

Bad Credit First Time Home Buyers

By: www.businessremortgage.co.uk

If you have a poor credit rating and want to buy your own home then you are one of thousands of people who are classed as bad credit first time home buyers. Fortunately, you are not alone as many people have acquired a bad credit rating through life circumstances and it is happening to more and more of us every day. Financial institutions used to refuse to offer loans to bad credit first time home buyers but that is rapidly changing, in your favor.

There has been an explosion in the number of companies that are advertising home loans for bad credit first time home buyers. It is important not to be misled into thinking that you are getting the best interest rates on your first time home buyer loan just because a company has commercials every five minutes on the television, you need to shop around and online is a good place to start.

The key point to note with any offer of a bad credit first time home buyers loan is that you are considered a high loan risk. This is obviously not the case if you have simply had a short spell of financial difficulties but, to a lender, it does not matter. To help them to compensate for people who do default on their loans it is the bad credit first time home buyers that are often offered home buyer loans at the highest interest rates. You need to obtain quotes from a number of different agencies and organisations that promote the availability of loans to bad credit first time home buyers to make sure that you get the most competitive rate possible.

Online it can be relatively easy to make comparisons and to get advice before diving in. Some companies even offer an online application form which means you are not restricted to local companies.

A Guide to Getting Bad Credit Home

By: www.businessremortgage.co.uk

Improvement Loans

You might be wanting to look into bad credit home improvement loans but are unsure of where to start. After all, how do you get a good loan when your credit isn't the greatest?

What you probably don't realize is that there are a number of lenders who offer bad credit home improvement loans, which use the equity of your home or other real estate to determine the amount of the loan with no additional collateral needed.

These bad credit home improvement loans can be used to make repairs to your home or real estate, or they can finance expansions, new buildings, or any of a number of home improvement projects.

The key to getting these loans is knowing where apply and what they're looking at once you do.

Finding places to apply

A variety of banks, finance companies, and other lenders offer various bad credit home improvement loans.

Many of these lenders advertise this fact with print, television, and radio ads… however, the ones with the flashier ads will often have you paying for their advertising costs with extra fees and higher interest rates.

The best place to start looking for bad credit home improvement loans is the bank or credit union where you have previous accounts… cheques, savings, or even other loans.

Since you're a repeat customer, you might even get a reduced interest rate. Don't take the first offer that you get, though, unless you're certain that you won't be able to beat it elsewhere.

Get at least four or five different quotes for bad credit home improvement loans before deciding on one so that you can make the most informed decision.

Borrowing against equity

Bad credit home improvement loans base the amount that you borrow off of the equity of your home or real estate, which is the amount of the mortgage or home loan that you've paid off. 100% equity means that you own the home or real estate completely, whereas 30% equity means that a bank or lender has a lien or legal claim to it and you've only paid off 30% of the money that you borrowed to purchase it.

The more equity you have in your home the larger the amount you'll be eligible for when you apply for bad credit home improvement loans, and may also cause you to have lower interest rates if the equity is high in comparison to the loan amount you're requesting.

Three month credit repair

Having bad credit can be a stigma that can take years to get rid of, but in some cases the effects of your efforts can be seen in as little as three months.

Begin trying to pay off as much of your outstanding debt several months before you begin shopping for loans, making sure to make all of your payments on time. This will create a small bubble of positive reports in your credit history, which some potential lenders will see as a sign that you're making an effort to turn your finances around.

It's a good idea to start at least three months beforehand, since some creditors only report quarterly… plus, it gives you three months worth of debt reduction which is a boon regardless of everything else.

A Guide to Getting a Bad Credit Remortgage

By: www.businessremortgage.co.uk

There are several reasons why you might be in the market for a bad credit remortgage. You might be wanting to try to lock in a lower interest rate, or perhaps you simply need to use the bad credit remortgage as a way to consolidate some of your debts.

Regardless of your reasoning, securing a bad credit remortgage can sometimes seem like a daunting task… in the end, though, it's usually much easier than you might think.

Defining bad credit

If you're looking for a bad credit remortgage, then you already know (or at least have a suspicion) that your credit is less than perfect.

If you're like a lot of people, though, you might not be exactly sure what this means or how credit is determined.

Your credit rating is a numerical score that's given to you based upon reports from your previous creditors, who are the people who have issued you a credit line or a loan in the past.

If you've made your payments on time, then they send in a positive report and your credit rating goes up.

If you've missed payments or defaulted on your debts (meaning that you didn't pay them back), then they issue a negative report and your credit rating goes down.

The lower your credit rating score is, the more of a risk it's considered to lend you money… after all, if you've had problems repaying your debts in the past then it's reasonable for lenders to thing that there's at least a decent chance that you'll have those same problems in the future.

This makes it much harder to get loans and credit offers, and the ones that you do get usually have much higher interest rates and require some form of security deposit or collateral.

The bad credit remortgage

A mortgage is a special type of loan, used to purchase a home or other real estate and using that same property as collateral for the loan.

The mortgage lender has a legal claim to the property, so if you fail to repay your loan then they can repossess and sell the house or real estate.

A bad credit remortgage is a mortgage loan designed for people with lower credit scores, and is issued on property that you already own (and may or may not still have a mortgage on.) Since the house or real estate serves as collateral, you're more likely to be approved for a bad credit remortgage than some other loans… meaning that the bad credit remortgage can be used in the place of the loans that you weren't approved for.

It can also be used to restructure payments on your previous mortgage (since the new loan pays off the old one, and is for a lower total amount) and reduce monthly payments, usually with a slightly lower interest rate.

How to Get the Best Interest Rate

By: www.businessremortgage.co.uk

Bad credit loans are in high demand. And if you do any research on “bad credit loan”, you’ll find plenty of advice on how to get the lowest interest rate. You’ll also find plenty of people willing to give you a bad credit loan, but you’d be making a mistake to accept it.

Unfortunately, most of what you’ll find approaches the problem from the wrong direction. The way to get the VERY best interest rate on a bad credit loan is usually overlooked or concealed altogether.

But before we continue, let’s digress briefly and look at how significantly the higher rate for a bad credit loan affects the borrower.

Let’s say you want to buy a house, but have bad credit. No matter how diligently you shop for a lender, you’re still be charged a higher interest rate for a bad credit loan than if you had good credit.

With good credit, you might get a mortgage loan at 6% interest. But a bad credit loan will cost you closer to 12%. Assuming you get a £100,000 mortgage over 30 years, the difference you’d pay in interest amounts to a monstrous £154,461.60 MORE because you have bad credit. That’s over 1½ times the loan itself!

Now getting back to our original problem, how can you get a better interest rate for a bad credit loan? The answer is probably not what you were expecting.

The solution is to “think outside the box.” The way to get a bad credit loan with the best interest rate is to NOT get one! Instead, spend a couple of months fixing your bad credit, and then look for a “good credit loan” instead.

This answer probably comes as something of a shock to you. More than likely, several objections to this approach will come to mind.

1. “I need a loan NOW” or “It’s not worth my while to wait until I repair my credit.”

Oh really? Well, is it worth a savings of £150,000 or more? Granted you may not be looking for a £100,000 loan. But even if you want to borrow only £10,000 or so, the better rates you’ll enjoy with good credit will still save you several thousand dollars.

2. “Fixing my credit will take too long, or it just isn’t possible.”

It’s often possible to make very a significant improvement in your credit rating in just a few months, and in some cases as little as 30 days.

3. “I don’t know how to repair my credit and can’t afford to hire a credit repair agency”

For a fraction of the cost of a professional agency, you can purchase a good book on credit repair that will walk you through the whole process.

4. “Do-it-yourself credit repair is too difficult” or “I don’t think I can repair my own credit”

Don’t be intimidated by the idea of fixing your own credit. If you can write a few letters, address, stamp, and mail them you can repair your own credit.

Your decision comes down to this; you have two choices.

1. You can spend some time (maybe a LOT of time) shopping for a bad credit loan with the lowest possible rate, and still end up paying thousands (even tens of thousands) more in interest.

2. You can spend some time fixing your credit and spend those thousands on your family’s needs, instead of paying them to your lender.

Finding a Bad Credit Mortgage Broker

By Tom Kerr

Bad credit has become so commonplace in this country, that many lenders compete for the business of people with low credit scores in order to capture this expanding sector of the financial marketplace. Lenders in this niche now offer so-called "bad credit loans" through a variety of flexible and creative loan programs, packages, rates, and payment options.

Since the choices can be overwhelming, bad credit mortgage brokers-professionals who represent numerous bad credit mortgage lenders-can help you put everything into perspective. Instead of running all over town shopping for a home equity loan or mortgage refinance, seek out a broker who focuses only on clients with credit problems. You may not find one in the same place where other traditional lenders congregate, but they're out there waiting to serve you.

Bad credit mortgage broker tips

You can locate bad credit mortgage brokers by asking friends or professional credit counselors for recommendations, by contacting bad credit brokers who advertise in local newspapers and yellow page listings, or by browsing the Internet. Once you've compiled a list of these specialists, check their credentials with the Better Business Bureau, and interview them to determine which one is the most qualified and resourceful. Such a person can help you get the type of loan you need at the best price.

The larger number of loans that you have to choose from the better off you'll be, so inquire about various lenders in your broker's business network. Even mainstream banks are getting into the bad credit mortgage game. If a broker is proactive and does a healthy amount of business, he'll have fresh data on a variety of lenders.

A good broker is entitled to reasonable compensation. However, he shouldn't pressure you to borrow more than you need, or accept rates that aren't the lowest available. Ask him to explain his fee structure-if he refuses, find someone else.

You may happen to have a low credit score, but that doesn't mean you're entitled to poor service. With a little bit of legwork, you can find a good bad credit mortgage broker to help you along the path.

Bad Credit Loan On Mortgage

By: Daniel Wesley

If you have bad credit record against your name, you can get your loan approved by a bad credit mortgage lender much faster than you would if you approached a bank or a credit union. For this, you have to pay the price. Also, you will end up with high rates of interests and high closing fees.

While this is inevitable, it can be worth your while to look for a lender who has the most suitable terms for you to give you a good deal. Spend time to contact a few sources to compare rates. A pre-payment penalty can accompany some bad credit loans on mortgages and it would be wise to ensure that you are not landed one. If you cannot avoid the prepayment penalty, look for a loan that has the shortest period. This will enable you clear your loan and avoid the penalty.

Points and Bad Credit Loan on Mortgage

Points can be defined as the fee for one percent of the loan amount. Points are sometimes called origination fees, discount fees and broker fees. We generally encounter two kinds of points: upfront points and back end points. Upfront points are paid by the borrower to the lender or loan broker as a fee for handling the loan transaction. With upfront points, the borrower has to be careful since there are brokers who charge hefty points just to earn themselves a better income.

Back end points are paid by the lender to the broker, often as an extra incentive for bringing about a loan, sometimes at a higher rate of interest. There are instances where brokers offer a higher interest just so they can earn extra back end points. Sometimes, back end points turn out to be advantageous in instances like preventing a foreclosure on a house.

The Best Time For a Mortgage

The timing for applying for a bad credit loan on mortgage varies from person to person. The sooner you buy, the better your options for refinancing at low rates. If you're personal cash management is the cause of your credit problems it is better to wait until your credit rating improves. If your mortgage payments are not affordable, your credit history might take a second beating and this is not viewed at very kindly. While a one off problem is okay with credit rating, creditors are wary about giving loans to people who constantly suffer bad credit, simply because they are a bad investment. Some borrowers apply for a loan without any intention of repaying it.

The bad credit lender's market is huge out there. So much so, even for someone who has filed for bankruptcy, it is not difficult to find a lender who can give him or her a bad credit loan on mortgage. Terms of credit obviously differ and can be strict, since bad credit loans involve extra effort and involve a bigger risk for the lender. If your credit history is very poor, it is better to talk to mortgage experts who can study your situation and advise you about an effective solution, even finding you a full mortgage.

Article Source: ADB Article Directory

Bad Credit Home Mortgage Refinance The Postal Worker Falls Asleep

By: L.W. Seals

Bad Credit Home Mortgage Refinance : Months had gone by, and everything seemed to be going so well. Steve's wife Deborah was getting closer to having their second child. Besides her odd appetite and occasional mood swings, life was almost perfect outside of the day today issues of politics and other drama throughout the world.

Their young son was now 4 years old, and he began to have interests of his own. His parents noticed he had a thing for the piano and started to take him to piano lessons a few times a week. The lessons were not very cheap, but this was simply an investment into their young son's musical interests. He enjoyed playing the piano, and he actually was pretty good at it. This was the perfect age to allow his inner musician to blossom to it's fullest.

One morning, Steve was on his way to work with his usual cup of coffe and a bagel. While scanning the radio stations, he heard some radio guests talking about the real estate market, and because of the way the economy was changing, there were possibilities that home owners with adjustable rates could see increases. It did not mean much to him, because the tone of the guest on the radio show sounded pretty confident that this would only be in rare cases, and there were no reasons for homeowners to panic at the present time. Steve and his family had a little more money saved up than before, so this was even more of a reassurance for him to feel good about his situation. He turned the station to his favorite jazz channel and really thought nothing else of the matter.

When he arrived, he couldn't help but overhear a couple of co-workers also talking about real estate and the increasing interest rates. Was this something more serious than he'd thought? He hadn't usually joined the conversations his fellow employees were involved in, so he did not join in this time either. However, he listened a little more closely to see if he heard anything that could be of significance to him and his family. He wasn't necessarily worried about it, but maybe a little curious.


Article Resource: www.Articlebliss.com

Bad Credit Home Loans for First Time Home Buyers

By: Joe Ramirez

Is bad credit keeping you from owning a home? Many people are fed up with renting and feel that their credit situation is keeping them from purchasing a home. If you feel this way, you are definitely not alone. Thousands of individuals and families across the US think that they are stuck in a rental due to bad credit. There is good news. In many of these cases, the individuals think that their situation is much worse that it truly is. Examining your credit report, finding out your credit score, and speaking with a mortgage professional are three basic steps that you can take to begin improving your situation. Once you know your current credit picture, you will be in a position to begin improving it.

Obtaining a copy of your credit report will allow you to see in detail the items that make up your credit profile. The first thing you will want to look for is errors and incorrect information. If you see accounts that aren't yours or information that is not correct, all you will need to do is contact the credit agencies and have the information updated or removed. Be prepared to send documentation to the agencies as well to support the changes that you are requesting.

Many companies provide credit scores as well. A score of 500 Or below is typically considered bad credit. A score between 501-580 is considered poor credit. A score of 580-620 is considered average. A score of 620-720 is considered good credit and scores above 720 are excellent credit. Scores can be deceiving at first glance, don't read too much into the report as there are a number of things you might be able to do to drastically improve your score in thirty days or less.

In many instances, mortgage brokers will be happy to evaluate your credit with you to determine the best steps for you to take in order be able to qualify for a home loan. Mortgage brokers are a great resource as they can direct you on how to improve your situation from a bad credit borrower to a good or even excellent credit borrower in the eyes of the lending industry. Also, many mortgage brokers have access to lenders and banks who specialize in helping people with not so perfect credit. A mortgage broker can also help you determine what type of payment and loan you can afford. With this information you can begin looking for homes in your price range and avoid spending time on properties with price tags and payment that may be out of your reach.

Don't be afraid to ask questions when speaking with a mortgage broker. Also, be sure to give the broker honest answers. Be sure to discuss possible rates, payments and fees with your broker. As a rule of thumb, the better your credit, the better the loan. If you can improve your credit, you will have a good chance of receiving a lower rate and less fees. Also, if your credit score is below 620, you may need to make a down payment on the property of up to 20% of the purchase price. If your score is above 620, you have a good chance of qualifying for a zero down home loan.

Even if you have bad credit, you may be able to qualify for a new home loan. If you do have bad credit and have the ability to put money down to purchase a home, you may want to take a look at making the purchase even if the loan terms aren't exactly the best on the market. Once you have a mortgage reporting on your credit report, you begin demonstrating to the credit agencies and to future lenders that you are not as risky of a borrower as you once were. However, you have to be sure to pay the mortgage on time as paying it late will keep you in the bad credit bracket.

Remember, if you have bad credit, but are willing to take the necessary steps to improve your financial situation, you could be closer than you think to qualifying for a home loan. If you haven't done so already, obtain a copy of your credit report and contact a mortgage broker to discuss your situation and identify the steps that you can take to transform yourself from a bad credit renter to a good or even excellent credit homeowner.

Article Source: ADB Article Directory

Bad Credit Home Equity Line Of Credit

Bad credit can increase the difficulty that a homeowner encounters when seeking a home equity line of credit. Bad credit can be the reason for a poor credit score.

by Jonny Goldmann

Bad credit can increase the difficulty that a homeowner encounters when seeking a home equity line of credit. Bad credit can be the reason for a poor credit score.

What is a credit score?

The credit score varies between the values of 300 and 850. The credit score is the creation of the Fair Isaac Corporation. Lenders who arrange for a home equity line of credit use the credit score in order to set the interest rate that will be charged the homeowner.

Homeowners with a low credit score will need to pay higher interest payments. A score above 700 is assurance of good interest rates. The credit score also serves as an indicator of whether or not a lender should accept a homeowner’s application for credit. Decisions on credit limits for the homeowner are likewise based on the homeowner’s credit score.

The credit score is a function of the homeowner’s past line of credit. In the U.S., three different agencies keep a record of each consumer’s line of credit. Those agencies are Experian, TransUnion and Equifax. If a homeowner with a low credit score wants to raise that score, then the homeowner must contact each of those three agencies.

The effort to overcome a record of bad credit and to raise a credit score requires the contesting of false claims that money is owed. If the homeowner can prove that the claim for money is spurious then the homeowner has an opportunity to raise his credit score. This action should be taken if the homeowner who plans to seek a home equity line of credit has a score less than 640. Such a score would be a sign of bad credit.

The contesting of a credit score is not like a shot in the dark. A survey of credit reports in the U.S. showed that 80% of such reports contained mistakes. Thus, a homeowner could have good reason to question the credit score that is being used to determine the interest rate on a home equity line of credit.

The credit score for a couple, a pair that are joint homeowners, is based on three credit scores from the person with the most sizable income. This is the score that the homeowner needs to make correct. Such correction may require a written statement to each of the above-mentioned agencies. Those agencies will then contact the homeowner and indicate if more information is necessary. If the homeowner is lucky, then the credit score will be increased and the interest rate for the desired home equity line of credit will be lowered.

Once the homeowner has a good credit score then he will want to avoid slipping back into that region of bad credit. This means that the homeowners must avoid the sort of spending that carries them to the borders of their credit limits.