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Showing posts with label income. Show all posts
Showing posts with label income. Show all posts

Saturday, February 23, 2008

Using a Debt Consolidation Program to Help you Out of your Financial Jam

Author: Jon Arnold | Posted: 22-02-2008 | Comments: 0 | Views: 1 | Got a Question? Ask.

You don't want to think about debt consolidation. Sometimes debt can catch up with you before you even realize it has been chasing you for a long time. Most people do not intentionally dig themselves into a debt pit. But sometimes the financial obligations can be overwhelming to the point where you need to look at the best options to get back on track.

In fact, the majority of consumers in the US who find themselves with more debt obligations every month than they have income have found themselves in that position due to no real fault of their own, at least not directly. Most people find themselves in this very undesirable place due to circumstances outside of their direct control, such as a divorce, a job layoff, very high medical bills, and similar things that they have little to no control over.

But the reality of it is that sometimes you have no choice and need to keep yourself afloat financially. Typically, this period of hardship is hopefully a temporary one, where you just need to be able to weather this temporary setback until you can get back on your financial feet.

Seriously consider a good debt consolidation program. This is also applicable to new college grads that have a ton of student debt, where the same company can usually provide a student bill consolidation to accomplish the same purpose. A debt consolidation program is much better than taking out a personal loan, because with a personal loan you are simply digging your hole deeper, which is not the direction you want to go. Bankruptcy is probably not your best option either, since the long term negative effects of bankruptcy will haunt you for the next 7 to 10 years via a huge blemish on your credit report.

But be aware of what a debt consolidation company does and what they don't do. They do not pay off your debt all at once. You turn your bills over to them and then you make payments to them every month. They work with your creditors to lower each of your payments and reduce your interest. So if you had say $3000 a month going out before to satisfy your monthly bills, the bill consolidation company might be able to reduce that to perhaps under $2000 a month, giving you the financial breathing room you need right now.

These companies are very experienced in doing this, and can frequently also reduce or sometimes even waive the accrued interest that has built up on some of your outstanding financial obligations. This aspect in itself can save you a ton of money.

Another huge benefit to you is that you only need to make ONE payment each month, which is to the consolidation company. Compare this to making separate payments to 10, 15, 20 or more different creditors each month at different times of the month.

Seriously consider a debt consolidation program to help you out of your current jam. It's nothing to be embarrassed about and can put you back on the right track from a personal finance aspect.

Posted by Suhaimi at 3:06 AM 0 comments
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Monday, February 11, 2008

No Income Verification Home Equity Loan

Author: mayuresh sawant | Posted: 11-02-2008 | Comments: 0 | Views: 1 | Got a Question? Ask.
A no income verification home equity loan is a second mortgage loan that does not require you to provide income documentation to qualify for the loan. This type of loan is great for homeowners who need a home equity loan but have hard to document income.

The majority of borrowers with hard to document income are either self-employed or commission based employees. Consumers who fall under these categories may have high income but have a lot of business related deductions that they write off on their taxes. This is good on the one hand as it reduces the taxable income and thus the amount of taxes owed, however, when it comes to getting a home loan it can hurt as most lenders use the average of your last 2 years taxable net income (the amount left after all of your deductions) to determine your income figure for qualifying purposes. This may cause you to have a debt to income ratio problem if you have a high debt load and thus keep you from qualifying for the loan. With a no income verification home equity loan, however, your gross income can be used for qualifying purposes as opposed to the net income.

In order to qualify for a no income verification home equity loan you will, in most cases, need good credit and a high credit score. Expect to pay a higher rate for this type of loan as opposed to a traditional loan in which you have to document your income. Also, even though a no income verification loan does not require you to document your income, some lenders may require that you have a certain dollar value of assets on hand which must be verified. Not all lenders have this requirement though - some lenders offer a program called NINA which stands for "no income no assets" meaning you do not have to document either. Loan guidelines and rates vary from lender to lender so it is a good idea to shop around to increase your chances of getting the best deal available to you.

Posted by Suhaimi at 2:21 PM 0 comments
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Sunday, February 10, 2008

What is the Best Kind of Investment Property for You?

Author: Ajay Albertson | Posted: 10-02-2008 | Comments: 0 | Views: 1 | Got a Question? Ask.

Part of learning how to get started investing in real estate is determining what type of investment property to look for. There are many options to choose from. The investor can buy houses, duplexes, condominiums or apartment buildings - and that’s just the tip of the iceberg. They can buy lots and build investment property or buy lots and rent them to renters who then build on them. They can make “in really good condition” a part of his/her search criteria, or he/she can search for a property that seems to be in rougher condition than it is, in order to negotiate a good price. They can go after properties with absentee owners with the hopes that they finds someone who’s trying to put his/her property out of his/her mind because he/she really like to get rid of it.

The possibilities are endless. The question is, which property is the right property?

Ultimately, the right investment property is the one that will generate the most money while not costing you an arm and a leg to be rented out. Getting a property up to speed might involve renovation to bring a building up to code – installing up-to-date appliances and that sort of thing. It might involve a fresh coat of paint, or even evicting some unwanted tenants. What the potential new buyer has to determine is, if the building's problems can be repaired.

For example, in his book “The ABCs of Investing,” Ken McElroy writes about someone who purchased a property without ever viewing the site, and found himself saddled with several tenants who were not just bad. These people were dangerous. The investment property was in a bad part of town where the owner should never have purchased a property. When he finally got around to contracting Ken’s property management company, he had lost a bunch of potential income because of delinquency.

McElroy's team fixed what they could. They got rid of the delinquent tenants and hired security for the building, but they couldn’t change the quality of the surrounding neighborhood. The property would never be one that renters with a lot of choices would choose to inhabit, based simply on its location. It would never command the rent that it could have if it just had been located somewhere else. Most of the building's issues were just un-repairable.

The old saying, “Location, location, location” is very influential for a reason. Location might be the single biggest factor the real estate investor needs to consider when searching for potential properties to invest in.

Besides simple viability, the investor needs to consider how he/she wants to go about handling his/her investments. McElroy recommends that investors contract a property management company for their experience and to free the real estate investor to look for additional investments, but some people just prefer a more hands-on approach. This type of investor might want to consider purchasing property that’s little enough to manage on his/her own. Some people are unwilling having investors or partners and so will be restricted by that as well. In that case, less expensive and smaller is usually the best option for them.

In the end, McElroy also advises that the investor not assume they should start small. If they have learned enough to buy investment property in the first place, they can learn how to work with other people's money. They should think about, however, what they are comfortable doing - or what they would regard as the easiest approach. The opportunities are almost infinite.

Posted by Suhaimi at 1:25 PM 0 comments
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Saturday, February 9, 2008

The Loan

This is a type of loan wherein the equity of the borrower’s home is the collateral. Many a times, such loans are taken to finance various things like medical bills, or a college education amongst others.

You must have an excellent credit history if you are thinking of taking a home mortgage loan. Also, the ratio of the loan to value must be reasonable enough. This loan is secured against the value of the borrower’s property and is also called a second mortgage. A second mortgage is usually of a shorter term than a first mortgage.

The Types of Mortgage Loans on Offer

The Fixed Rate Mortgage Loan: A fixed rate mortgage loan has a fixed rate of interest. The fluctuating interest rates won’t have any bearing on your loan and you can repay your loan amount at a fixed rate through a fixed period of time.

Adjustable Rate Mortgage Loan: The opposite end of a fixed rate mortgage loan. Herein, the interest rate of your home mortgage rate will fluctuate and be dictated by the various economic indices. In most cases, at the beginning of the loan period, you usually have to pay a low interest rate.

The Closed End Loan

A closed end home mortgage loan gives a lump sum to the borrower at the time of closing. No other amount is further given to the borrower. The maximum amount that can be borrowed is dependant on factors like the appraisal value of the home, income, and credit history of the borrower.

If there are no liens on the property, most often, a borrower can borrow an amount equal to the appraised value of the home. However, various states have different laws that determine the amount that can be borrowed on equity.

The Open End Loan

This offers its borrowers revolving credit. This essentially means that you as a borrower can determine when and how often will you borrow against the equity of your home. However, the initial limit of the credit line is fixed by the lender, and are available for up to 30 years, very much like closed end loans.

In most cases, the open end home mortgage loan is available at a variable interest rate.

Credibility and Choice

We have mentioned the point that your credit history would be an important factor in determining the interest rates offered to you. However, don’t just take this as a one way mode. As a borrower, you must also check the credibility of the lender. You can do so through various banking sources, consultants, etc.

Also your choice of the lender must take into consideration the comparison of offers, negotiations on the rate of interest, and other conditions. Conduct an intensive study of the market and only then choose the perfect home mortgage loan that will suit your needs.

These are just a few home mortgage loan pointers that might just be able to guide you in the right direction. So take due cognizance of what we have mentioned, and make the right choice.

Posted by Suhaimi at 2:36 PM 0 comments
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