Home Loan Consolidation
Home loan consolidation may be the answer to those who are pressed on every side with mounting credit card bills and finding that it is becoming more and more difficult to pay all the bills each month. It is not surprising if the reader is in that situation for seventy percent of all Americans are estimated to live paycheck to paycheck, meaning there is little appreciable savings available. As purchases made by charge cards increase, the monthly available cash for food, gas, utilities and other necessities shrinks and then the squeeze is really on. If the debtor is fortunate to own a house even partially, there may be some hope for unhinging the squeeze but the solutions won't be without some pain. Here is advice from financial experts on home loan consolidation options.
The first and foremost is don't get one more loan because borrowing new money to cover old borrowed money is never a good thing to do, even if the money for covering old debt is better than the bad money being covered. So lie down on the doctor's table while he gives some very ouchy directions. Go out and get a second job before getting a home loan consolidation. That's right, go deliver pizzas, walk dogs, do consulting, jump through hoops, do something to make money to put on one's existing debt. Yikes, it's starting to hurt. Second painful needle is sell stuff. That riding lawnmower, some furniture, jewelry, the second car, silver service, bass boat, whatever, is all fair game and ought to be considered for the ultimate garage sale or auction block before chasing a home loan consolidation.
So there are no dogs that can be walked and selling that silver service is not going to happen. The next step is to get a home loan consolidation which can either be an okay move or a really bad one. Since the work two jobs and sell stuff is the best choice, the okay choice is a home equity line of credit. These are okay loans because they are secured lending agreements that are lower in interest rates. These loans are offered by banks, credit unions and loan companies. These lending agreements usually happen by the lender getting a person's house appraised and then offering a lending agreement based on a percentage of the equity someone has in his property. It is never one hundred percent and usually no more than seventy percent of the established equity.
The home equity home loan consolidation that comes from a bank or credit union will have a comfortable interest rate that is perhaps a dozen points below credit card interest. The lending agreement is okay because over time the person will be savings a lot of money on interest payment and it is an installment loan. An installment lending agreement can help instill a sense of discipline with the consumer because the amount due each month will remain the same, unless the APR goes up because of economic factors. Ready for some more painful truth? A bank and credit union only take the lowest risk borrowers.
To get those really low interest rates a consumer must have a credit score of at least six-eighty to seven hundred. Those are pretty high scores and will eliminate a large number of people wanting a bank issued home consolidation loan. While credit scores have a number of factors that go into their crafting, the two most important are payment integrity and debt to income ratio. If a consumer has more than a couple of thirty day late payments on their record over a two year period, his score will suffer a major deficit. Additionally, if a consumer's total debt payments each month is more than forty percent of his income, this is also a major debt score reducer. Heavy debt is nothing compared to dying without Jesus. "For the wages of sin are death, but the gift of God is eternal life in Jesus Christ our Lord." (Romans 6:23)
If the banks and the credit unions say no to a home loan consolidation through the home equity route, the final option is through a loan company which is a not so okay lending option. Major lending companies which cater to the higher risk borrower are funded not by depositors' money but through investors who are looking for high returns on their money and are willing to take the gamble on high risk borrowers. If the smell of high interest loans is in the air, it's not those sneakers but that lending agreement. Consider that a home equity loan from a lending company could be as much as fifteen percent or more. Consider that the loan may be for a longer period than the bank issued lending agreement. How much is a person really saving?
If it is difficult to figure out the savings, it would be a very wise move to consider talking to a financial counselor before asking for any home loan consolidation. If one cannot be found, call local colleges and see if there are any MBA students willing to talk and advise on this issue. Before considering bankruptcy or defaulting on any loans, look into the possibility of seeking the help of credit counseling services to at least bring down the cost of unsecured debts such a credit card accounts. These services can make a big difference in providing more money each month for a client's necessity expenses. But using these services can have a detrimental effect one a person's credit. Make sure the credit counseling service gives clear answers on that issue.
Home Equity Debt ConsolidationsWith home equity debt consolidations, homeowners can gain control of their indebtedness and better manage their finances. These programs can bring major relief from the ongoing stress of unpaid bills and mounting interest fees. There are many avenues to consider, and consumers and homeowners are advised to research and study all avenues of the programs before making any major financial decisions. However, home equity debt consolidation is proving to be a viable answer, because lower interest rates across the US on home mortgages are available.
Across the global society that we live in, credit is the way we negotiate and trade. Most loans and personal credit extensions are made based on a positive credit report, with scores being higher than 700. With credit being so vital to daily living, consumers are finding it easy to get into debt and get into it heavily. Excessive indebtedness is an increasing problem in America and around the world. Many homeowners are choosing to investigate home equity debt consolidations as a relief from their personal financial problems. With these loans, consumers can get much needed relief from unpaid bills and perhaps get a better interest rate on their mortgage, lowering their monthly payments.
Most mortgage companies offer home equity loans to those who are considering refinancing. These mortgage companies will offer cash for equity, but may also charge closing costs. A consumer can, of course, get a refinance from any mortgage company and use the cash to pay off their excessive loans, credit cards or any other unsecured obligations. With a home equity debt consolidation, consumers can also combine existing loans into a one lump sum payment, making bill paying more manageable.
The Internet is a valuable source of information about home equity debt consolidations. Mortgage companies advertise over the Internet, providing applications online that are easy to fill out and easy to send. Borrowers must thoroughly research any lending company and read all of the documentations. God doesn't excuse believers of doing their homework and acting wisely. Proverbs 3:13 says, "Happy is the man who findeth wisdom." When applying for a home equity debt consolidation loan, ask for references of previous customers before deciding on which mortgage company or agency to use. If we don't do our homework, we have no excuses when we make bad decisions. But when we go by biblical principles and investigate the possibilities, we will begin climbing toward financial free living.
A government student loan consolidation is a fixed-rate loan that combines multiple student financial credits. For graduates with multiple credits, the opportunity to consolidate to one payment offers the recent graduate a blessing. Upon spending a number of years being educated, the recent graduate begins searching for a job that he or she has been preparing to obtain. Finding a good paying job can often take a little time. Even though the graduate has a 6-month grace period before payments on the debt need to begin, money is usually tight. The government student loan consolidation, along with the 6-month grace period, offers a recent graduate an opportunity to breathe easier and find stress relief.
In order to qualify for a government student loan consolidation the consolidator needs to meet a few eligibility requirements. The first prerequisite requires a potential consolidator to have more than one government student loan, also referred to as a federal student loan. The borrower must also be in good favor with the lenders. At least three payments should have been made, or the borrower should still be within the first 6-months grace period. Consolidation can occur with various options like subsidized and unsubsidized. While the two types can be combined and allow the borrower to have one payment, the lender will keep the two types separated for better management purposes. After the combination of all financial credits for the borrower, the lender is responsible for making payments for each advance. Thus, consolidation occurs.
The government student loan consolidation may also incorporate private financial advances into the consolidation, but many financial advisors warn against such incorporation. When private and individual lender amounts incorporate with federal loans, the combination will cause the benefits originally associated with the private and individual lends to vanish. Some feel that the combination is worth the risk and the combination offers better benefits than originally associated with the financial advances.
About four options are available for borrowers to choose from concerning repayment. The options surrounding the government student loan consolidation have a number of advantages and disadvantages. The advantages range from no fees for the consolidating process to the simplicity of the application process. Since borrowers are already paying a premium dollar amount for an education, the government offers students a break by not charging a fee for the application process and by offering lower interest rates. In view of the fact that most processes offer a stretched out payment period for up to 30 years, the smaller monthly payment offers recent graduates a sort of payment debt relief. The stretched out loan period and low interest rates can save a payee up to 53% in each month's payment. The government student loan consolidation offers low locked-in-rates, which presents additional savings to a student since interest rates tend to fluctuate and rise. As with most debt settlements found after college, government options provide a graduate with other benefits that include deferment of payment, if unforeseen problems arise, and forbearance options associated with deferments.
Disadvantages appear with a fusion of debt as well. Sometimes combining debt can lead to larger financial obligations. A consolidation may also lead to higher interest rates. A borrower must be aware of the amount of his or her financial obligations. Higher interest rates can happen depending on the types and dollar amounts involved and may vary depending on what previous rates were. The government student loan consolidation gives a borrower lower monthly payments because the payments extend over a long period. Because of the stretch in time, more interest is paid. When payments are made as scheduled, more money is paid, in the end, than originally borrowed. However, if a borrower has already made payments and has paid a large portion of the bill, a fusion of the financial debts may not be advantageous. Many consolidators now also require a certain dollar amount before a merging of financial debts is considered. So, if a student has several loans but the total amount is small, an application is sometimes rejected.
In today's society, more people are aware of and try to establish a good credit report. As a result, a graduate may make a wise decision in consolidation. No credit check transpires in applying for a federal consolidation program. In using government student loan consolidation, the graduate is helping his or her credit rating! Most graduates have up to eight different financial advances or more. Each financial lend is considered a debt and is looked at with negativity. When debt fusion occurs, the multiple debts look paid and only one outstanding bill remains. In the eyes of other creditors and even potential employers, the fewer debts a person has, the better. A larger benefit associated with credit checks and scores rests in early payoff methods. If a borrower can pay off the balance ahead of schedule, no penalty is placed on the person. An early payoff is a huge incentive for applying for federal consolidation. A person can have lower payments on their college bill upon graduation and have the opportunity to make larger payments or an early pay off when money is sometimes more plentiful. However, if an early payoff is desired, a person must plan and budget accordingly. Even making an extra payment or paying an extra portion each month can decrease a loan more quickly. "When thou shalt vow a vow unto the Lord thy God, thou shalt not slack to pay it: for the Lord thy God will surely require it of thee..." (Deuteronomy 23:21).