Monday, October 31, 2011

Using Credit Cards Online

These days you can get almost anything you can imagine without leaving the comfort of your home just by logging on and shopping online. However, with so many new stores popping up all the time and warnings of fraudulent emails how do you make sure your card details don't end in the wrong hands? Read our suggestions for keeping your credit card details safe.

The Australian Payments Clearing Association has warned of a rising volume of credit card fraud. The amount involved in card fraud reached 3 million in the previous financial year soaring by nearly half from the 7 million reported in the 2006-2007 financial year.

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A large part of that huge rise involved card-not-present (CNP) transactions. CNP refers to transactions completed without the physical credit card being actually presented for swiping -- and that means those transactions conducted through the phone, the mail, or online shopping.

Fraudsters have found it easy to obtain details on Australian credit cards. The hackers who manage to steal these records often try to sell them on to scam related websites or organised cyber crime groups. You may not know it but your name, home address, email address, phone number, and credit card number (complete with the verification code) could be among a batch of records being peddled to the highest bidder on a website.

Card issuers and banks hasten to assure you that they have credit card security systems in place to ensure that if you fall victim to credit card fraud you will not be made to pay for the fraudulent transactions. Still, it can cause inconvenience. Being careful with card security procedures when using your card for online shopping is still the better way to avoid credit card fraud.

Here are some credit card security steps you can follow:

Making online shopping transactions;

- Make sure the website is a secure site before providing credit card information. The website address should start with "https://" and carry a padlock symbol in the bottom right corner of your computer screen.

- Click your mouse on the padlock to confirm the seller's identity and registered address.

- Read the page that details the seller's policies on privacy, security, product returns, and warranties. Look at how the site handles complaints and check for details such as a phone number and importantly a physical contact address.

- Never provide more information than is required to complete the transaction. Sometimes, personal information not really necessary is requested.

- Never follow a link given to you in an unsolicited email. It is best to check the site manually by typing the URL yourself.

- Enroll in secure payment systems -- Verified by Visa, for Visa credit cards, and MasterCard SecureCode, for MasterCard. These systems make online shopping safer by allowing you to create a private password to be used every time you pay online to a participating Internet retailer.

- Keep your Verified by Visa or MasterCard SecureCode closely guarded, as well as all passwords to e-commerce websites you frequent. Don't use the same password for everything, lower your exposure to risk by using a range of passwords for different sites.

Ensuring security in general;

- Never provide sensitive information (financial, personal, credit card details) by email or telephone. There are no security provisions in email and telephones.

- Avoid sharing crucial personal information on websites (including social networking sites).

- Shred documents that contain sensitive information (e.g. bank or credit card statements, receipts, etc.) before tossing them into the rubbish.

- Keep receipts of all credit card transactions and reconcile them with your statements.

Using Credit Cards Online

Sunday, October 30, 2011

Poor Credit Home Mortgage Loans - The Role of the FICO Score

If you have bad credit history and are looking to get a home mortgage loan, then chances are you are going to need to know all about how the FICO credit scoring system works.

FICO - Fair ISAAC & Company - is the leading credit reporting agency that lenders turn to when it comes time to credit scoring your home loan mortgage application; so if you do have bad credit history, these guys will know.

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The formula used by FICO cannot be disclosed because of a decision made by U.S. Congress. There are some things generally known about FICO which that could help you understand why and how you can get approved:

1. The higher your FICO score, the better chance you have of getting that home mortgage loan. Also, the higher your score, the more room you have to negotiate a lower interest rate.

2. If you have a FICO score lower than 500, there is very little chance you'll be getting a mortgage home loan.

That said, if you have a score of:

500 - 600 you should be able to get a home mortgage loan, provided you are willing to make a down payment.

600 - 640 You should get a 100% home loan financing. Thats right, with no money down.

640 - 700 You should be able to be approved for a 125% home mortgage loan.
700+ You're in the drivers seat! You should be able to get an excellent rate with excellent terms.

3. FICO depends on each credit report, so before you apply for a home mortgage loan, if you have bad credit history, get a copy of your credit report and make sure there is nothing on there that shouldn't be there. If there is, get it changed before you apply for the home mortgage loan.

4. Wait until after you have purchased or refinanced your home before you buy anything additional on credit. More loans or higher balances can have a dramatic effect on your mortgage approval, regardless of whether or not you had over a 600 FICO score before you bought on credit.

5. Remember, the FICO score is only a part of your home mortgage loan application, so if at first you don't succeed in getting your home loan mortgage, don't give up. Some lenders may still be willing to lend to you!

People with bad credit often don't understand how the credit scoring system works. It is beneficial to find out more about it when looking to get a home loan with less than perfect credit to bad credit or when dealing with sub prime mortgage lenders.

To view our list of recommended bad credit mortgage lenders online, visit this page: Recommended Bad
Credit Mortgage Lenders

Poor Credit Home Mortgage Loans - The Role of the FICO Score

Friday, October 28, 2011

Refinance Home Equity Line of Credit - Options for Paying Off a Line of Credit

Refinancing a home equity line of credit can save you from rising
interest
rates. They can also help you develop a payment schedule that fits your
budget needs. And if you consolidate your home equity loan with your
first
mortgage, you can save even more on rates.

Options For Paying Off Your Line Of Credit

Home Line Of Redit

A home equity line of credit with its open terms and rates, makes it an
ideal candidate to refinance. The easiest option for refinancing is to
roll
over the loan to a second mortgage. You can choose fixed or adjustable
rates
and terms. Closing costs will also be minimal.
The other choice is to combine your home loans into one mortgage. This
will
qualify you for lower rates than if you just apply for a second
mortgage.
However, if you already have a low rate mortgage, you could lose out on
closing costs and interest charges.
If you are thinking about doing a total mortgage refi, it's best to
compare
numbers on your financing options. Factor in how long you have left on
your
original loan, future interest charges, and possible savings.

Be Choosing With Your Lender

Your current lender will automatically strive for your business, but
take
the time to look at other offers. The best way to make comparisons is
to ask
for loan quotes.
These loan estimates should be based on preliminary information
supplied by
you. Don't allow lenders to access credit report; unless you want to
see
your score go down.
With loan quote numbers, look at the fine print. Compare the APR for
overall
loan costs, but also look at the closing costs and rates separately. If
you
don't plan on keeping your home or loan for more than seven years, you
don't
want to pay a lot at closing, even for a small reduction in rates. You
won't
recoup the cost in such a short time.

Don't Delay Refinancing

Once you find a favorable loan offer, start the application process to
secure the rate quoted. With online applications, your loan can be
processed
in less than two weeks with paperwork complete through the mail.

Refinance Home Equity Line of Credit - Options for Paying Off a Line of Credit

Thursday, October 27, 2011

Home Owners Can Get $50,000 Bad Credit Personal Loans Using Non-Traditional Lenders

Home owners with bad credit can land a ,000 personal loan by using a non-traditional lender. It may appear to be an amount that is only the stuff of dreams, but there are lenders who will help you with your rather large financial need. Here are five considerations while you are on your quest for a bad credit personal loan.

Consideration One: No Traditional Lenders

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Traditional brick and mortar lenders such as banks or credit unions are not going to grant you a five-figure loan. They have tightened their credit benchmarks and even good credit borrowers have a hard time finding loans with them, even if they are home owners. Because of this, many private lenders have stepped into the lively market and will work with bad credit borrowers. Most of these lenders can be found online and there are scores of them. Competition can be rather fierce.

Consideration Two: Research Lenders

Once you go online, you need to collect the bona fides of at least five lenders. Your first step should be to check the Better Business Bureau (BBB) listings. You should find each lender listed with a grade as well as customer feedback. Do not do business with any lender who has a score less than B. You should probably check online borrower forums. You may find information from other borrowers as to how they where treated by certain lenders.

Consideration Three: Getting the Best

You need to find the loan that fits your financial situation. If you do not want to put your home up as security for the loan, the loan may be a somewhat harder to find, especially for high value -- K or more. Your search will be for an unsecured personal loan. If you are putting your house up as collateral, you will be searching for a secured personal loan. Using your house as collateral, loans can easily reach K or even more. However, if you default on your loan, the lender can seize your house and sell it to cover the cost of the loan.

Consideration Four: Maybe a Cosigner

If you want to absolutely make such a substantial loan a reality, you could get a cosigner. Perhaps you have a friend, co-worker, or family member who has a steady job with a good income as well as a good credit rating; with a cosigner, your chances of landing a five-figure loan increase greatly. Lenders will be looking at your debt to earnings ratio whether you have a cosigner or not. They want to see that you have enough money left over every month to cover the loan payments. They will check any cosigners as well.

Consideration Five: Diligent Shopping

As noted above, the internet will offer you scores of lenders who are willing to work with bad credit home owners. So many have stepped into the market that you should shop among five to ten lenders. Get quotes and go for the one with the lowest interest rates and the best repayment scheme. When you ask for quotes, tell the lender that you are getting quotes from other lenders. You might want to use one of the free online loan calculators that will help you figure your loan regarding interest rates, fees, and monthly payments.

You Have Your Cash In the Bank

Once you land a loan, please use it wisely. Also, repay this loan under the conditions in the contract you signed. Paying back a large loan like this on time and in the right amount, you will be doing a big favor to your credit history. The next time you need a large loan, the borrowing will be so much easier.

Home Owners Can Get ,000 Bad Credit Personal Loans Using Non-Traditional Lenders

Tuesday, October 25, 2011

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit

Have you decided to refinance your home or apply for a home equity line of credit but worry about your credit rating? Even with poor credit it is possible to refinance your existing mortgage or obtain a home equity line of credit. New practices in the lending industry have made it easier than ever for you to refinance your mortgage or get a home equity line of credit. If you have adverse credit, specialized lenders can help you find the loan package your need with an interest rate you can afford.

Refinancing your home loan can allow you to make improvements to your home or consolidate debts. Some lenders offer loans up to 125% of your home's value even if you have less than perfect credit. Your current mortgage terms and interest rate, the length of time you intend to stay in your home, and the level of debt your currently have are all factors to be considered in making the decision to refinance your mortgage. If you have equity in your home, you will often receive a lower interest rate than those with little or no equity.

Home Line Of Redit

Home equity lines of credit are revolving accounts with your home serving as security for the loan. When you get a home equity line of credit you are approved for a certain amount of credit. The maximum amount you can borrow at a given time will depend on your credit limit. Typically, a home equity line of credit will have a variable rate of interest although some lenders may offer a fixed rate as well. You will have an amount you can borrow at any given time and you may not borrow more until a certain amount is repaid. Often you will have specific times as to when you may borrow money from your available credit limit.

Obtaining a home equity line of credit is can be the perfect solution for people with remodeling goals, children to put through college, or the need for access to extra cash in the event of an emergency or unexpected financial situation. You can use the money for any purpose and gain peace of mind in knowing you are prepared for whatever life brings you.

Refinancing your mortgage or getting a home equity line of credit has been the answer for millions of people looking to realize their financial goals. Even if your have bad credit there are loans and lenders who specialize in helping finance people with poor credit. They can help you reach your individual objectives.

To view our list of recommended bad credit or sub-prime mortgage lenders, visit this page: Recommended Bad Credit Mortgage Lenders.

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit

Monday, October 24, 2011

Pre-Approved Bad Credit Home Loans

Pre-approved bad credit home loans are home loans sanctioned to poor credit holders, on the basis of pre-approval. Getting pre-approved gives you an actual picture of the financial situation you are in and what your borrowing limit is. You can also form a clear idea of how much you'd have to pay every month if you borrowed as much as you want. This enables you to decide how much you can safely borrow and stay out of debt.

Pre-approval involves the process of submitting your financial information to your money lender before purchasing a home. Pre-approved bad credit home loans make the home buying procedure easy, saving money and time.

Home Line Of Redit

To obtain a pre-approved bad credit home loan, you should first submit a loan application to the lender mentioning your personal and financial needs. You also present copies of documents such as purchase agreement, tax returns, housing expenses, reason for poor credit, bankruptcy papers, and copies of credit reports. The lender verifies the application on the basis of your employment information, financial status, credit history, liabilities, and assets. After completing the application process, you will get a written document showing the amount, interest rate, and down payment according to the terms of the lender.

There are many lenders who specialize in pre-approved bad credit home loans. Depending on the lender, you are required to pay an up-front fee for processing, closing costs, and appraisal. Closing costs include title searches for deeds, processing documents, and legal fees.

Pre-approved bad credit home loans have numerous benefits. Once you are pre-approved, it gives you strong negotiating powers. The required time period for the pre-approval process varies from sixty to ninety days.

Pre-Approved Bad Credit Home Loans

Sunday, October 23, 2011

Home Equity Line of Credit (HELOC)

Home equity loans have been helping homeowners for years as a way of cheap financing for other expenses. A HELOC (Home Equity Line of Credit) can be used for home repairs, improvements, or can be used to pay off other debts and bills. It also comes in handy as a source of emergency credit in a bad situation.

Nowadays though, HELOC loans are hurting homeowners all over the country. The bad housing market, has led to a severe drop in home values, and a rise in the amount of delinquent mortgages. As a result, many mortgage lenders and banks have severely limited, or in some cases, halted, approval of home equity lines of credit. With most HELOC loans being denied, many homeowners are facing problems now that they do not have a huge loan, backed by their home, to fall back on. This is further ruining a lot of homeowners financial position, and halting progress in the housing market.

Home Line Of Redit

While mortgage lenders and banks have primarily targeted homes and locations which have suffered the most in terms of dropping home values, these are often where the most struggling homeowners live.

Are you concerned about not being able to get a HELOC? Do you know if your considered to risky for a mortgage lender?

Just a few years ago, mortgage lenders and banks were approving home equity lines of credit for nearly everyone. The housing market was booming, and it seemed to be a low risk, high reward investment. Nowadays though, lenders and banks are struggling themselves, and are desperately trying to scale back the amount of HELOC approvals. When a lender or bank has to foreclose on a home which has an outstanding HELOC loan, there is a good potential for a loss of money. By reducing, or in many cases, stopping all home equity loans, the risks are minimized for the lender and banks. This way, banks can provide a little more assurance that a homeowner will not be able to afford their home loan due to a loan, and lose it to foreclosure. On top of all of this, mortgage lenders and banks typically do not make much profit on a HELOC loan to begin with.

While getting a home equity line of credit is not impossible, it is much harder to do right now. The housing market is bad, and homeowners are struggling. Until this changes, getting a HELOC will remain a difficult, but not impossible, process.

Home Equity Line of Credit (HELOC)

Saturday, October 22, 2011

Why A Home Equity Line Of Credit Makes Sense For Your Home Remodeling Needs

Making some changes around your home is a great way to help you enjoy your home even more. There is so much you could do to improve the living space, the kitchen, bathroom, or even add a garage or a new sunroom. Each of these costs money, and one of the most practical ways to finance your next project is by getting a home equity line of credit (HELOC). Here are some common sense reasons why this could be the best way for you to go.

Open An Account

Home Line Of Redit

A home equity line of credit will enable you to get an account with a credit limit. This will be established by the lender and will be based on your credit score, current indebtedness, amount of equity available, and your ability to pay back the loan. You will be given access to this line of credit by either a credit card or as a checking account.

Get One Loan - Many Purposes

The money in your account is yours to use however you want. If you have more than one home renovation project and are not sure of the total costs involved, then this is the simplest way to go about it. Or, if you want to do several things with the money - but not all at once, then, again, this is the perfect solution to those needs.

Out of the money your receive, you could do things like:

Home renovations Consolidate Debt Cover medical expenses Take a vacation or trip College education Buy a car or boat Have emergency money
If you wanted, you could even do more than one of these things.

A home equity line of credit is usually an adjustable rate loan. This means that after a fixed rate period, the rates will change on a regular basis. The rate is based on the market rate and a margin.

Pay Interest Only On Portion You Use

One thing that makes a HELOC such a good investment is that you only pay interest on the money that you actually take out of the account. This makes it ideal for more than one project, and gives you the privilege of saving money on the portion you are not yet using.

In many cases, you have an option as to how you want to pay on your home equity line of credit. You could pay only the interest each month during the draw period. This period of time gives you a specified time in which you are allowed to take out more money. Another option is to make fully amortizing payments. This payment amount will be calculated monthly in order to keep up with how much you take out.

Different Amortization Methods - Pay Attention

Lenders have different ways to amortize their HELOC products when the draw period closes. You will need to know the method they will use to avoid surprises. One of these is to calculate fully amortizing payments and give you the balance of the 30 years to pay it off. Another way is to require a balloon payment at the end of the draw period. This means that you will probably need to refinance it. Some newer products simply roll the money over again to make it available to you - even without applying for it.

Whichever home equity line of credit you choose, be sure that you do some shopping to find a good deal. HELOC's vary quite a bit among lenders, and so do their terms. Be sure you find out about the margin rates and how it amortizes.

Why A Home Equity Line Of Credit Makes Sense For Your Home Remodeling Needs

Friday, October 21, 2011

Getting a Business Line of Credit With Bad Credit

A bad credit can lead to faulty business lines. This may even have a negative impact on the credit history of a person. Businesspersons have to consider many factors to get rid of this negative impact from their business lines.

A businessperson needs planning to fix his/her terrible credit. After this, that businessman has to note down the right plan and arrange for suitable loans from various finance institutions to start a new business. Virtually, everything in this world is based on finance.

Home Line Of Redit

Finance is the backbone to run every business activity. Even a homemaker plans for her finances, as money is essential to run the house. Usually, big businesspeople hire finance managers to look after their finances.

These finance managers manage finances in a proper way. There are special business schools that teach finance as a subject to improve many things in business. Things are now improving and so is the finance management to avoid people getting into dire credit business lines.

Help:

Bad credit business loans are a perfect way to help a financially unstable business to get back on its feet. When a person plans to start a business, financial management is very important at the initial level of planning, without which it is not a good idea to start any business.

If the planning is not proper, it can lead to serious credit business lines. When people manage money or finance properly, they can secure their futures. This is beneficial in both the case of individual as well as organization.

Moreover, people need to check as how the taxes influence their financial decisions. Money is necessary to pay for education, goods, real estate, automobiles, buying insurance deals, investing, and saving for retirements.

An individual needs to keep a few things in mind to avoid getting into the bad business lines. Certain important questions that businesspersons need to ask themselves for both personal as well business needs are, how much money is required at various points in the future, where the money will come from, how to back for unforeseen events in life, what the possible risks in the financial market are and how to transfer assets.

A person also has to consider about the funds for corporation activities, as finance is a huge topic. The Internet is the best source to gather information in this regard. In short, take care of finances to avoid dire credit business lines.

Business Cards:

Many credit-providing companies understand that some businesses incur losses and get into debt. Even after that, these businesses have the potential to stand on their feet again. For such businesses, bad credit business credit cards are made available by some agencies to pay off the debt. To get such types of credit cards, the businesses need to show accurate credit history and clear the present credit card debt.

Some companies take interest in rebuilding the bad credit business. The organization need to search for these kinds of creditor companies that offer business cards with bad credit business.

Getting a Business Line of Credit With Bad Credit

Wednesday, October 19, 2011

Home Equity Loan: FAQ

Home Equity Loans are a potentially money-saving option for homeowners who want to consolidate debt and/or turn some of their bad credit into good credit. The possible tax deductions on home equity loans make them potentially useful for debt consolidation, since other personal and consumer loans typically have no tax deductions and higher interest rates. A home equity loan can also be used for home improvement purposes, and certain tax advantages can apply.

According to current home equity statistics from the U.S. Census, approximately 7.2 million Americans obtained home equity loans in the past year. However, not all loans are right for everyone. It is important to decide which type of home loan is the perfect fit for you. To be sure that you are making a confident financial decision before you sign on the dotted line, read on for answers to frequently asked questions (FAQ) about home equity loans.

Home Line Of Redit

FAQ: Are Home Equity Loans (HEL) and Home Equity Lines of Credit (HELOC) the same thing?

A: No. Although both of these loans are of second mortgages, a HEL and a HELOC have some important differences. With a HEL, you receive a lump sum of money, while a HELOC works more like a line of credit.

The interest rate on these loans also works differently. Home equity loans generally have a fixed interest rate, but according to bankrate “almost always carry fees and closing costs, which many lenders do not generally charge for credit lines.” While home equity lines of credit may be free of some of these costly up-front fees, keep in mind that they are also variable rate loans, which means that the interest rate can change over time, according to the prime interest rate set by the Federal Reserve.

When choosing between these loan types, ask yourself whether receiving your loan all at once or having access to a line of credit works better for you.

FAQ: What Is a Loan-To-Value Ratio?

A: The loan-to-value-ratio is the difference between the amount of your current mortgage and the newly appraised value of your home. This ratio will be figured into the loan terms of your second mortgage.

FAQ: Is Home Refinancing a Better Option Than A HEL or HELOC?

A: That depends. If you decide to refinance your current mortgage, you may be able to obtain a lower interest rate, which means lower payments, and the possibility of a cash-out refinance.

Obtaining an interest-only refinance is also a possibility. However, while an interest-only lowers your payments, it can also lower the equity in your home and, says CFA for bankrate, Don Taylor, “only makes sense for people who don’t plan on being in the mortgage or house for a long time.”

If you are happy with the interest rate on your current mortgage, it makes more sense to consider a HEL or HELOC, especially since it is possible to refinance your first mortgage as well as your second in the future if interest rates do take a dip in your favor.

FAQ: What Is a Subordination Clause and how does it relate to a HEL?

Depending on the lender, a subordination clause or agreement most often means that before you can get a second mortgage, the first mortgage company must agree to allow the second mortgage to be placed in first lien position. The new loan then has the priority in case of a foreclosure.

This is especially important down the road if you pay off your first mortgage, because the lender in charge of your second mortgage can then write a new first mortgage and place that in first lien position, which will help protect your interest rate, since the rate for second mortgages is higher.

Terms of subordination clauses can vary by lender, so it is important to have a discussion with yours before entering into any agreement.

Being an informed consumer is the first step toward making sure you get the right loan for you. Be sure to talk to your lender and weigh your options carefully before making a final decision.

Home Equity Loan: FAQ

Tuesday, October 18, 2011

Looking For a Start Up Business Line of Credit?

Key to any startup is maintaining cash flow. Of course, if you are new, getting startup funding for your company can be difficult because..... you and/or your new venture are new and have no track record. Bit of a catch 22 situation there.

However something you may want to think about is unsecured loans are loans that do not require any cash down, home equity, personal assets, or business assets of any kind. Obviously, unsecured lending is a valuable option for startups which have property or assets they want to protect. Should you default on the loan and its unsecured versus secured, your property and/or assets will be protected from any liens.... now while these are attractive, can you really find such an animal?

Home Line Of Redit

Without a doubt, an unsecured business line of credit is probably the most valuable financial tool that a small business owner can possess. Essentially, the credit line works like a huge credit card but at times can have added benefits like check writing and lower interest rates as compared to most business credit cards.

An unsecured line of credit loan is extended by banks or other types of lenders. The amount of the credit line offered is based solely on the credit worthiness of the company and does not require a personal guarantee. Even though unsecured business lines of credit have been in existence for many years, it still comes as a surprise to many small business owners that the program exists or that their company can even qualify.

One typical, and smart question that you should ask yourself is why would banks make unsecured line of credit loans? The answer is simple. Banks and other lenders are already making unsecured lines of credit to you as an individual. Why shouldn't they offer a commercial program? So in reality, it is not nearly as big a stretch as most people think.

If you think about it, almost every American carries at least one Visa, MasterCard or American Express credit card in their wallet or purse. I know in my wallet, with multiple businesses + personal, I carry 8 credit cards at a time. In this case, then one way to think is that the total of all the credit limits on all the cards is your total line of credit. Now, we don't advocate going out and rapidly blowing that but change a way to change your perspective on things.

The credit cards and the limits on each are issued to you based on your credit worthiness as an individual and are totally unsecured. Therefore, it makes good business sense to offer an unsecured credit line program to corporations. In fact, corporations could be viewed as more stable than an individual and are more likely to use the lines more frequently. When you are a startup, of course this gets a little tricky and requires some unique techniques above and beyond the scope of this article.

But, if you have a startup and are looking for capital credit lines, you should really look down this path. Fortunately, just like your personal credit cards, you only pay on what you use and for a new business, we suggest you play it very conservative. However, when you get your credit line, it gives your business access to capital when you need it.

Looking For a Start Up Business Line of Credit?

Monday, October 17, 2011

How to Acquire a Bad Credit, Home Mortgage Refinance Loan With Easy Terms

In current unfavorable economical situation, people obtain a refinance loan for various reasons. However, people with bad credit are normally are faced with another problem. Loan providers tend to provide this people with refinance loans that are of high interest rates. In addition, they also impose stringent clauses on them in these loans. However, do not lose hope. With a proper approach, even people with bad credit can acquire the refinancing loan with terms that meet their requirements.

Dealing With Your Poor Credit

Home Line Of Redit

Before acquiring any loans, you first have to understand why loan providers will impose higher interest rates and more stringent clauses for people who have lousy credit ratings. This is because of the risk you imposed for the lenders; it is natural that the financial institutions will provide you the loan with unfavorable terms. So, in order to get a refinancing loan with terms and conditions similar to people with good credit, below are some points you need to keep in mind to help you improve your credit worthiness.

There are 2 ways which you can improve your credit rating. You can first consolidate all your debts and get a loan to pay these debts so that you only have to pay a single installment for the new loan you have taken. This can help you to pay your bills on time and not missing any of the small debts you may overlook.

Next, you can consult an agency specialized in helping people with bad credit to fix their problem of a poor credit history.

Other ways to get a refinancing loan with favorable rates are as below:

Prepare To Pay A Down Payment

In most cases, lenders will require a down payment for the loan you wanted to get. By making a down payment, it can help in cutting costs because of the waiver to having to pay the closing costs. However, people already in debts may find it difficult to save enough to pay this down payment. Therefore, it is good if you start saving today and be cautious about how you spend. It will be a good idea that you save enough to pay this down payment in order to get a refinance loan with terms favorable to you.

Finally, you should research on the internet to compare the quotes by the different lenders on the market. Do not jump on the first loan providers you come across. Make all the proper calculation and ensure that with the new loan you acquire, the monthly installment will not be more than what you pay for the current loan. Take care of all the hidden costs and fees associated with the new loan.

The above are just some useful suggestions that can help you to get the bad credit home mortgage refinance loan with favorable terms.

How to Acquire a Bad Credit, Home Mortgage Refinance Loan With Easy Terms

Saturday, October 15, 2011

Home Equity Line of Credit Pro and Cons

Home equity line of credit pro and cons are important if you decide to tap your equity in your home. Whether you are choosing a home equity loan vs equity line of credit, each loan is considered a second loan and is secured by your home.

Here are some home equity line of credit pro and cons to make your choice a little easier.

Home Line Of Redit

Pros:

Most home equity lines of credit have little or no closing costs.

You only need to make interest only mortgage loan payments which means lower monthly mortgage payments than with a fixed interest rate loan.

Variable mortgage interest rates are usually much lower starting rates than with fixed interest rate loans.

You can use the loan to draw on only as you need the money. You only pay interest on the money used not on the entire loan amount.

You can use the remaining unused balance of the equity line as an emergency fund.

Cons:

Variable mortgage interest rates are not stable and could go higher than a fixed interest rate loan.

Monthly mortgage payments are not level and can fluctuate a great deal.

Most home equity lines of credit have yearly fees paid to the lender.

With equity rates rising quickly it's easy to spend your all of your home equity.

It makes sense to use the equity in your home to pay down debt, or pay credit cards off. But use the money wisely and only use as little equity as you have to.

Hopefully these home equity line of credit pro and cons will make your choice of equity loans easier for you.

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Home Equity Line of Credit Pro and Cons

Friday, October 14, 2011

Fixed Term Second Mortgages Versus Adjustable Rate Home Lines of Credit

With rising first mortgage rates, smart homeowners are looking at second mortgage options if they need cash, because they don't want to refinance their entire mortgage because the interest rate they have is low and fixed for 30 years. Many consumers are looking to access equity in their home must make a choice between a fixed rate 2nd mortgage and a home equity line of credit. This can be a tough decision, as each type of home equity loan has distinct benefits, and both are tax-deductible, but if you understand the basic differences in their structure, you can make an intelligent decision for you, your family and your financial future.

According to a recent Bankrate article, a home equity line of credit is "an agreement to lend a specific amount to a borrower and to allow that amount to be borrowed again once it has been repaid." With a HELOC, you can borrow money against your equity up to a certain pre-determined amount. There is no set repayment schedule and in many cases, you are only responsible for paying the interest on what you borrow for the first several years. A home equity line has an adjustable interest rate, which is typically tied to the prime rate index, as reported by the Wall Street Journal. 2nd mortgage lines of credit are best suited for homeowners who want the flexibility to borrow various amounts of cash at staggered intervals. Because they HELOC's have revolving interest much like credit cards, home equity lines of credit are not the most practical choice for homeowners who would be tempted to spend carelessly.

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Second mortgages are lump sum loans with fixed interest rates and fixed payment terms. With each monthly payment, you are paying down both the principal and the interest. A home equity loan makes the most sense for those who need access to cash in a lump sum and are using the money for long-term purposes, such as a home construction or bill consolidation. They are also a smart choice for homeowners looking to get away from adjustable interest rates.

Whichever type of loan you chose, you need to keep in mind that your home is the collateral. It is always a wise choice to evaluate if what you are borrowing for is worth liquidating your valuable asset called, home equity.

Fixed Term Second Mortgages Versus Adjustable Rate Home Lines of Credit

Wednesday, October 12, 2011

Building Wealth - Get $100,000 Credit Line and Make Money Fast!

We all know that money makes money but if you don't have it, there is a way to get 0,000 by putting 0 down and you can invest this sum to make money fast. How do you do this? Let's find out.

If you open an online currency trading account you will be allowed to leverage your deposit x 200 so have 0.00 and you can trade 100,000.This gives you massive profit potential

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Before you say I couldn't be a currency trader, it's to complicated!

Think again - because the fact is anyone can learn to be a currency trader from home, as everything about currency trading can be learned. Let me tell you a story to illustrate the point.

Back in 1983, legendary trader Richard Dennis set out to prove that anyone could learn to trade and he taught 14 people to do so in just 2 weeks. These people came from all walks of life, varied in age and he chose both men and women. After they had completed their training he set them up with trading accounts - the result?

In just 4 years they piled up 0 million dollars in profits and some still trade today.

So anyone can learn to trade but most traders simply don't get the right education and lose - Dennis knew this and while he taught them a logical simple method, he taught them something more:

To have confidence in it, so they could apply it with discipline through losing periods, take small losses and wait for the big profitable trends which they then could hang onto.

To trade forex you don't just need a method you need mental discipline and that's exactly what he taught them with stunning results.

The equation for market success is:

Logical Simple Robust Method + Applied with Discipline = Forex Trading Success

In forex trading the method should be simple, as it will be more robust than a complicated one, in the face of ever changing volatile market prices

The best way to trade forex is simple to follow prices and try and lock into and hold the longer term trends by following forex charts. This is a learned skill and you will soon be able to spot and act on these repetitive patterns.

The fact is forex markets offer anyone with a desire to succeed, a way to build wealth quickly and today you don't need much to get started just a few hundred dollars. All you need is an internet connection and a computer and your all set.

Sure you will have to do your homework first - but what other medium offers you such huge profit potential for such little work? Don't forget once you have learned your method you can execute it just 30 minutes a day.

Forex trading is not a walk in the park and you will have work at learning the right skills and with the rewards on offer it's worth the effort.

The question is do you have the desire to make money fast and do you have a willingness to learn?

If you do, welcome to the world of currency trading, an exciting and lucrative business opportunity, that could change your financial future.

Building Wealth - Get 0,000 Credit Line and Make Money Fast!

Tuesday, October 11, 2011

Secured Home Equity Loans - How Do They Work?

Home equity loans provide you with low rate credit based on the
security of your home's value. Your home is your collateral, which reduces
your loan risk with creditors. Home equity loans also come in a variety of
terms, so you can pick what is best for your financial needs.

Home Equity Loan Basics

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You can cash out all or part of your home's equity with a second
mortgage or line of credit. Home equity loan rates are typically a couple of
points higher than a regular mortgage. In some cases, you can get a
better deal by refinancing your original mortgage and cashing out your
equity at that time.

Your home equity loan lender does not have to be your original lender.
In fact, you should do comparison shopping on rates and fees to be sure
you are getting the best deal.

More Options With Home Equity Loans

Besides how your rates are structured, you have several options when it
comes to your home equity loan. Loan periods are flexible, and many
have refinancing options. You can opt to only pay interest only for a few
years, and then roll it over to a structured payment plan.

With a line of credit, you only borrow what you need. So payments are
much like a credit card bill, with a minimum amount due. You could also
choose a lump sum payment, ideal for remodels or bill consolidation.

Find The Right Loan For You

With so many choices, it can be a bit intimidating to find the right home equity loan for you. Start by selecting the loan terms that meet
your needs, whether that's a large sum payment with a second mortgage or a
flexible line of credit.

Next, research lenders based on your ideal loan terms. Ask for loan
estimates, but don't give out your credit information just yet. Only give
permission for a lender to look at your credit score if you are serious
about applying for the loan. Otherwise your credit score will drop
needlessly because of multiple credit inquires.

Try using one of ABC Loan Guide's Recommended Secured Home Equity Loan Lenders.

When comparing offers, look at the APR for the total loan cost. But
also read about any annual or miscellaneous fees. They can easily add up
to a couple of hundred of dollars a year.

Within a day, you can find a competitive lender and be on your way to a
low rate equity loan.

Secured Home Equity Loans - How Do They Work?

Monday, October 10, 2011

A Home Equity Line Of Credit May Be Just What You Need

When you are looking for the cash you need to fix up your home, a home equity line of credit (HELOC) may be just the thing for you. This would be especially true if you have a project in mind but are not sure what it may cost. A HELOC could be just the solution you are looking for - because it offers you cash with different options than a traditional mortgage. Here are some of the benefits.

A home equity line of credit is to be considered as a second mortgage. After you fill out the paperwork, and the lender looks over your credit report and your ability to repay the loan, you will be given a credit limit. This means that an account is set up for you, and you will be given access to it either with a credit card or with checks. This way, you can draw out the money as you need it, and only as much as you need.

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A home equity line of credit is usually based on a 25 or 30-year time frame. There is a draw period and a payment period. The draw period could be up to 11 years, and the rest of the time period is used for repayment.

You only pay interest on the amount that you draw out. This is an excellent way to save some money, because you still have access to more if you do need it. During the draw period, you will be paying interest - adjustable rate, on the amount of money you have taken out. The interest rate does not amortize the loan in any way - since you are only paying interest.

At the end of the draw period, however, the amortization period starts. Your payments will be calculated on how much you have withdrawn and your payments will be determined at that time. These payments will fully amortize the loan within the time remaining - most of the time. Some lenders do not calculate the payments to fully amortize the loan. Obviously, you will need to watch for this before you sign the agreement.

Home equity lines of credit can come with a number of repayment options. These range from balloon payments at the end of the draw period, to simply monthly payments for the rest of the term. Other options that may be included is the possibility of renewability. Some lenders give this option for those who want an ongoing line of credit.

Before you sign up for a home equity line of credit, though, be sure to compare a number of quotes first. A home equity line of credit may have monthly fees, annual fees, and more, so be sure you know about them all first. By comparing several plans, you can find the one that will be the least expensive, have the lowest rate of interest, and will be the best for you.

A Home Equity Line Of Credit May Be Just What You Need

Sunday, October 9, 2011

How Will Foreclosure, Short-Sale, Deed-In-Lieu of Foreclosure, and Bankruptcy Affect A Credit Score?

Every day we have more and more clients ask us the question of how foreclosure affects their credit score vs. bankruptcy, or whether it may be more beneficial to short-sale a house rather than a bankruptcy, and the answer is always, "It Depends." This may seem like an evasive lawyer-like answer, but it is true. The answer always varies depending on each particular person's individual situation. No two people's credit situation is exactly alike; therefore, the answers will tend to change depending on the person's spending habits.

There are many different factors in the determination of your credit score, including things such as how long you have had credit, if you make monthly payments on time, how much credit you have available to spend, how many different credit accounts you have. How a foreclosure, short-sale, deed-in-lieu of foreclosure, or bankruptcy affects your credit score depends on what your credit score was prior to the foreclosure, short-sale, deed-in-lieu of foreclosure or bankruptcy.

Home Line Of Redit

A foreclosure occurs when you are unable to pay your mortgage for a long period of time. The mortgage lender takes back your home to sell to someone else. A short-sale is when you sell your home for less than what you owe on the mortgage. You would need your mortgage lender's approval prior to the short-sale of the home. A deed-in-lieu of foreclosure is essentially giving title of your home back to your mortgage lender in exchange for having the debt forgiven and not having a foreclosure on your credit report.

A bankruptcy is when you receive a discharge of all your debts, and your personal liability for all of the debt is wiped out. For secured debt, like houses or cars, you can keep the property if you continue to make payments, but the lenders will not be able to pursue you for any deficiency if you choose to surrender the property in the bankruptcy.

Most people are surprised to know that foreclosure, short-sale, and deed-in-lieu of foreclosure have approximately the same impact on a credit score. All three of these ways to lose a home are reported to the credit bureaus as having the account settled for less than what was owed. People have always been under the impression that a short-sale may be better than a foreclosure, or signing a deed-in-lieu of foreclosure is better than either a foreclosure or a short-sale. However, the important factor in determining a credit score is how long an account has been delinquent, such as 30 days, 90 days or 120 days. Most of the time people that have a foreclosure, short-sale, or deed-in-lieu of foreclosure on their credit report have been delinquent on their mortgages for a long time. By the time the foreclosure, short-sale, or deed-in-lieu of foreclosure actually take place, the damage to their credit score has already been done. The higher your credit score is, the steeper the fall. The opposite is also true. If your credit score is already low, having a foreclosure, short-sale, or deed-in-lieu of foreclosure will not affect it as much. There is no such thing as having a negative credit score, so there's a limit to how low your credit score can go.

Filing bankruptcy generally lowers a credit score the most, because you are receiving a discharge of all your debts, so it has a bigger impact. However, if you are struggling under a mountain of bills and a mortgage you cannot afford, bankruptcy may be the best option for you, regardless of how it impacts your credit score.

How Will Foreclosure, Short-Sale, Deed-In-Lieu of Foreclosure, and Bankruptcy Affect A Credit Score?

Saturday, October 8, 2011

Bank of America Credit Cards: A Look At The Top 3

You probably know Bank of America from its commercials on better banking. They are one of the major players in commercial banking and lending. Well, you know you can enjoy their "Higher Standards" through a variety of products, including mortgages and checking/savings accounts, but did you know they have an uncommonly large pool of credit card options? "B of A" is one of the countries top credit card providers, and their Higher Standards certainly extends to this product line as well. This article takes a quick peek at the Bank of America Platinum Visa, the Bank of America Visa Signature with WorldPoints, and the TripRewards MasterCard by Bank of America.

A Look at the Top Three

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The Bank of America Platinum Visa - The B of A Platinum Visa is a solid all around card. Categorized by Bank of America as an "everyday credit card," it is chock full of useful features and reasons to consider it. The Platinum Visa offers a six month interest free introductory period, and accepts initial and subsequent balance transfers with no additional fees. So, if you are on the market for an all around solid card with cheap and easy balance transfer options, this could be the way to go.

The Bank of America Visa Signature with WorldPoints - What on earth are WorldPoints? We're glad you've asked. WorldPoints is one of Bank of America's great incentive programs for cardholders. WorldPoints is a flexible incentive program that lets you apply your purchases to a number of categories: cash back, travel, merchandise, or personal services. In addition to this powerful rewards program, you will receive an introductory 0% APR for the first twelve months of membership. B of A offers a handsome black and silver design that really instills the impression that this is one of their top-of-the-line cards.

TripRewards MasterCard Credit Card - With its uniquely redundant name, the TripRewards MasterCard Credit Card has become a favorite for travelers. The 0% introductory APR on balance transfers is a nice feature (and a theme for B of A), but most users are attracted to its high powered rewards plan. Earn 2 points for every in net retail purchases and earn 13 points for every spent for qualifying TripRewards hotel stays, and that can add up quickly.

All Bank of America cards come with the same great 24 hour customer service, online account management, and fraud protection. Opting into a B of A card gives you all of the benefits and security of one of America's largest financial institutions. So, if you are considering a general use card, check out the Platinum Visa; if you want flexible incentives, make sure to apply for the Visa Signature with World Points; and, of course, if you're out to see the world, the TripRewards MasterCard Credit Card is the way to go.

Copyright Ed Vegliante. Free online reprints of this article are allowed provided the resource box remains intact with a live link back to www.credit-card-surplus.com.

Bank of America Credit Cards: A Look At The Top 3

Friday, October 7, 2011

The Pros and Cons of Credit Card Balance Transfers

Credit card balance transfers can save you a lot of money if you consolidate your debts from other credit cards with high balances.

If used wisely, low interest credit card balance transfers can be an excellent way to reduce your interest payments. If used poorly, a balance transfer could cost you even more in interest and fees.

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As always, you need to read the fine print in any balance transfer agreement before you sign the dotted line. There are a number of things you need to look out for.

The first thing you need to look for is the length of time the low interest rate on your transfer will be upheld. Some of the best offer the same low interest rate on the transferred balance for the life of the balance. Other cards will offer a low rate for a set period of time and then revert to the credit card's regular interest rate if the transferred balance is not paid off in full before the interest rate change. If you've transferred a large balance and don't pay it off in time you could wind up paying even larger interest payments than before you transferred the balance.

You also need to find out if you'll be charged a fee for a balance transfer. The fee could either be a flat sum or percentage of the debt you plan to consolidate. If you have time to shop around you may be able to find a credit card that offers free balance transfers.

The last thing you'll want to look for is a listing of the penalties for late or missed payments. Some companies will immediately cancel your low interest rate, jack up your rates as high as 20+ percent and charge you a hefty late fee if your payment is even minutes late getting to the payment processing center. If the credit card you want to transfer a balance onto has a "universal default" clause your interest rate could increase drastically if you are late paying any bill whatsoever. Pay your electric bill late and your interest rate could skyrocket!

As long as you make all your required payments on time you don't have to worry about the penalties for a late or missed payment. Being aware of the penalties should provide all the encouragement you'll ever need to try to pay all your bills on time.

You also need to keep in mind that any additional balance or purchases you make with the credit card will be paid for after your low balance transfer is paid off. If you have a ,000 transfer with a 2.9 percent interest rate and spend an additional ,000 in purchases on your credit card at a 12.9 percent rate, your balance transfer will be paid off first. Rack up too many additional purchases and you won't be saving as much money in interest as you originally anticipated.

A credit card balance transfer could be an excellent idea or a very bad idea depending on your circumstances and how long it may take you to pay off the transfer. Only careful planning and a full understanding of the potential pros and cons will help you maximize the usefulness of a balance transfer.

The Pros and Cons of Credit Card Balance Transfers

Thursday, October 6, 2011

Virginia Home Equity Line of Credit (HELOC) Loans

If you're shopping around for new credit and you own a home, a home equity line of credit, or HELOC, is an option. Using the equity in your home, you can qualify for a large amount of credit at a fairly low interest rate.

A home equity line of credit is a revolving credit account that uses your home as collateral. Depending on the amount of equity you have in your home, it's possible to obtain a large credit limit, much larger than most credit cards allow.

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With most HELOCs, your credit limit is calculated by using a percentage of the home's value and subtracting the balance of the mortgage. So, your HELOC limit might not equal the full amount of equity you have in your home. Even so, it's possible to have a credit limit of ,000 or more, depending on your home's equity.

The application process and fees associated with an HELOC are very similar to those of a mortgage. As such, it's common for initial fees to total several hundreds of dollars. So, when you're choosing a HELOC it's important that you shop around for the best terms, the same way you'd shop around for a mortgage. Because interest rate and fees vary from one lender to the next, getting a few loan quotes is important to minimize your cost in terms of interest rate and fees.

Shopping around for an HELOC by getting free loan quotes is a more effective way of finding a loan than simply choosing a lender through other arbitrary means. When you compare loan quotes from several different lenders, it's likely that you'll find lower interest rate and fees with a lender that you didn't first consider.

Get free loan quotes for different lenders before you make an application for a home equity line of credit.

Virginia Home Equity Line of Credit (HELOC) Loans

Wednesday, October 5, 2011

Home Equity - What You Can Do With It

Home Equity

Home equity is the value of your home above the total amount of the liens against your home. For example if you owe 0,000.00 on your house but it's worth 5,000.00, you have ,000.00 of home equity.

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What You Can Do with It

Simple, you can borrow against it! You can either apply for a home equity line of credit (HELOC) - a form of revolving credit - or, obtain a traditional second mortgage. In both scenarios, your home will serve as collateral.

Naturally, you will have to qualify for this loan. The lender will evaluate your ability to repay the loan by looking at your financials. Lenders will approve a specific amount of credit. This amount is generally based on a percentage of your home's appraised value.

For example, if you were to apply for a HELOC using the numbers above, here is how it would look: your home appraises for 5,000.00 and the lender qualifies you for a line of credit of up to 80% of the home's appraised value or 6,000.00. Subtract the 0,000.00 that you owe on your first mortgage and you have ,000.00 left, thus your HELOC will be for ,000.00.

There are many different home equity plans and they change all the time; do your homework before signing on the dotted line.

A word of Caution

Just as with a first mortgage, you will lose your home if you don't pay back your line of credit. If you were to default on your payments, the lender will start the foreclosure process in an effort to recuperate the outstanding monies owed.

Conclusion

Borrowing against your equity can be a great source of extra capital, just make sure you do so responsibly. Before entering into a commitment, consider how you will pay back the money you are about to borrow.

Good Luck!

Dimitri Larno
Designated Broker - Realtor®

Home Equity - What You Can Do With It

Tuesday, October 4, 2011

Buying a Home afterwards Foreclosure - Ways to Get Approved

Before attempting to buy a home after foreclosure, it is important to educate yourself on the necessary steps, and improve your odds of getting approved. Certain situations are extremely damaging to your credit report. These include bankruptcy, foreclosure, repossession, etc. Fortunately, you can rise from a bad credit situation. Here are a few tips to help you get approved for a mortgage after a foreclosure.

Negative Effects of a Home Foreclosure

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Aside from embarrassment and shame, having a home foreclosure will significantly decrease your credit score. Immediately following a foreclosure, it is difficult to obtain any type of credit, especially a home loan. Because many factors contribute to the inability to repay a mortgage loan, those who experience a foreclosure may be able to afford a new home loan.

For example, if foreclosure was due to loss of employment, once the previous homeowner finds work, they may be able to handle a new mortgage. The problem lies in getting approved. Lenders could careless about the circumstances surrounding bad credit. Their main concern is determining whether you are a good candidate for a loan. Thus, it is essential to improve credit before applying.

Maintain Regular Payments with Existing Creditors

The best approach for improving your credit score following a foreclosure is to keep up with regular payments to your other creditors. For example, if you have three credit cards, make an effort to pay the bills on time. If possible, payoff the credit card balances. This will increase your available credit, which is perfect for quickly boosting credit rating.

If you do not have a credit card, another tactic involves applying for a new line of credit. This might consist of an auto loan or secured credit card. Likewise, maintain on-time payments. Be aware that late payments or skipped payments will cause further damage to your credit rating.

Choose a High Risk Mortgage Lender

If applying for a mortgage after a foreclosure, many traditional lenders will not approve a loan request. For this matter, request quotes from several sub prime or high risk mortgage lenders. These lenders approve loans to people who have a difficult time securing financing.

Buying a Home afterwards Foreclosure - Ways to Get Approved

Monday, October 3, 2011

How Do HELOC's (Home Equity Lines of Credit) Work?

A home equity line of credit, or HELOC, is a secondary mortgage loan set up as a line of credit that lets homeowners withdraw funds for a variety of purposes. These mortgage loans are used to fund sporadic needs such as debt reduction, home improvements, college expenses, etc.

HELOC's have a withdraw period, wherein the borrower can draw on the line, and a repayment period, in which the funds must be repaid. Standard withdrawal periods are five to ten years. On the other hand, repayment periods are extended - usually ten to twenty years. The distinction between the two periods is that borrowers are only obligated to pay interest in the withdrawal period, whereas the repayment period includes a payment of interest and principle. Home equity lines of credits vary, and some require repayment of the entire balance once the initial withdrawal period ends.

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How to Qualify for a Home Equity Line of Credit

To qualify for a HELOC, mortgage lenders look at the loan-to-value ratio. The majority of home equity lines of credit require a LTV less than 75%. In other words, if your mortgage balance is 5,000, and your home is worth 0,000, the loan-to-value is 50%, and you are eligible for the loan.

What's more, mortgage lenders have to ascertain that an applicant can pay back the withdrawal money. To meet the criteria for a home equity line of credit, the borrower's debt-to-income ratio, which includes payment for the HELOC, must be less than 55%.

Home Equity Line of Credit Disclosures

Disclosure statements contain important information about HELOC's. Terms vary according to plan, and each borrower should set aside time and review disclosure contents. The home equity line of credit terms are subject to change. For example, the interest rate can increase. Additionally, the mortgage lender can terminate the line if the following occurs:

1. If borrower defaults on repayment

2. If borrower's financial circumstances change

3. If borrower falsified loan documents

4. If the property's value decreases

How Do HELOC's (Home Equity Lines of Credit) Work?

Sunday, October 2, 2011

Home Equity Loans vs Home Equity Line Of Credit

A home equity line of credit is quite similar to a home equity loan. However, there is a difference between the two and it is in your best interests to understand it so that you know which option is the best suited for your needs and requirements.

A home equity loan is very much like a mortgage wherein you can borrow an amount based on the equity of your home. In other words, home equity builds as you keep clearing the mortgage. It is the value of your home that you have already paid off and this is the part that you actually own. You receive the money in a lump sum after you close the loan.

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Home equity line of credit is also based on the amount of the home you own but the loan terms are different. This works like a credit card where the amount you receive is limited to the equity you own in the home. You do not receive the money as a lump sum. Instead you can withdraw the amount as and when you need the money.

When you take a loan against the equity in your home, you already know the monthly payments you have to make. However, when you avail a line of credit against your home equity, the payments as well as the interest vary. You pay only for what you use.

If you need a lump sum to settle debts or you want to use the money for funding something, you should opt for a home equity loan. However, if you are not aware of an expense like that involved in traveling or starting a new business, you should opt for home equity line of credit.

Home Equity Loans vs Home Equity Line Of Credit

Saturday, October 1, 2011

My Home Equity Line of Credit Was Just Cut Off - What Should I Do?

Lenders have been freezing or cancelling home equity lines of credit  (HELOC) for homeowners recently.  This has been in response to declining property values.  This can really be hurtful to a homeowner who has been using and depending upon their HELOC.  What can be done?

Well, a slowdown in consumer spending is not going to help our economy at this juncture, that is for sure.  Homeowners in debt, investors who buy and sell or build spec homes,  parents with children in college, the list goes on and on, but everyone will be affected. 

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I know being told by your bank that your HELOC has been cut off comes as a shock.  Many consumers needed access to what remained on their credit line.  They have lost their "cushion".  What is they just got downsized and lost their employment and were using that HELOC money to pay their health insurance COBRA benefits every month until they can find work again?  Their only recourse now may be to utilize their credit cards, and that carries high interest and will ultimately push them farther into a "hole" financially.  Credit card, as consumer debt, is interest paid out that cannot be deducted for income tax purposes.

A study by the National Association of Securities Dealers has revealed that many people take HELOC's to invest in the equity and bond markets, there are certainly a lot of opportunities there right now.  Closing people's HELOC lines will have an impact on the financial markets now.

Now that property values are down, it is a buyers' market and an excellent buying opportunity indeed.  Many people planned on using HELOC funds for the down payment on investment properties or a second home or vacation cabin.

Well, here are some suggestion:

First, get a new appraisal done on your home.  Find out where you stand with regard to Loan To Value (LTV) because that is the figure that is going to be looked at by the lender.  Generally do not count on being able to take cash out of your home's equity if your LTV is greater than 80%.  Your current mortgage(s) balance(s) divided by current home value = LTV.

If your LTV is less than 80%, consider visiting your lender with specific plans for how you wanted to utilize the HELOC funds and your new property appraisal in hand.  Lenders are in business to lend and individual situations will certainly be considered.  Obviously it helps if you have good credit and have not missed/been late on any mortgage payments!

It may be possible, if you wanted to buy a second property, to set up a new HELOC that is liened to both properties, to give the lender more assurance.

As always, consult a good mortgage broker for guidance and suggestions.

My Home Equity Line of Credit Was Just Cut Off - What Should I Do?