Archive for the ‘Banking’ Category

How To Get A Home Equity Loan With Bad Credit

Wednesday, February 27th, 2013

Last week I walked you through the basics of home equity loans. There are thousands of people with bad credit, and they all have a big question – how to get a home equity loan? A poor credit score (lower than 600) is a big obstacle in acquiring any type of loan. A home equity loan appears to be the best option for the borrower and lender both, because it is secured by your home.

For home equity loans, poor credit isn’t a cause of worry because the lender benefits from relatively higher interest rates and other terms on bad credit loans. But it’s not always that easy. Here is what you need to do to ensure that you get a home equity loan at a reasonable interest rate.

Review Your Credit Report

First off, you need to know how bad your credit score really is. Get your credit report and review it for mistakes and inaccuracies. You might notice some inaccuracies that are hurting your credit score. They can be fixed by contacting the creditors directly or by asking the credit bureaus to contact the creditors for you.

The Ramifications of Poor Credit

Though the banks may agree to lend you money, the interest rates and terms you qualify for won’t be as good as those for people with good credit. Additionally, the lender may ask you to put a large down payment or they might offer loans lower than your equity. If you badly need a loan, the additional expenses are worth it.

However, you can improve your credit score over time by staying current on your loan. In case you default on the home equity loan, you run the risk of losing your house.

Calculate How Much You Can Afford

You have to carefully assess what amount you need to borrow and how much of that you can afford to pay back. Be realistic. Though the lenders thoroughly analyze you financial position, it is your responsibility to make sure that you can pay back. Sometimes the lender may pressure you to obtain a loan that is larger than you actually need or the monthly payments are far too high for you to pay back on time.

How Much Equity Do You Have?

Before you apply for a loan, figure out your equity in the house. You can do it by subtracting the mortgage balance from the current market price of your house. People with excellent credit score can borrow approximately 75-80 percent of their home’s equity.

[blockQuote position=”right”]Before you apply for a loan, figure out your equity in the house. [/blockQuote]

Additionally, collect all of your financial information to provide lenders with proof of your income, investments, your equity in the house, etc.

Shop Around To Get Home Equity Loan With Bad Credit

Spend some time asking for no-obligation quotes. All the lenders have different terms, look for the one that is most suitable to your needs. Carefully read their terms and conditions, see if there would be any prepayment penalties, balloon payments or any other hidden fees. Remember, you can find loans with good terms despite a poor credit, if you shop around properly.

Verify The Validity of The Lender

Just like you do in any other financial transactions, make sure that the lender you are dealing with is reputable and legitimate, before you give them any personal information. Stay away from a company that says your credit score isn’t that important, but requests to see your bank account information, SSN or other records. Likewise, a company is unethical if it requests a payment before performing any services. Make inquiries, check references, check with Better Business Bureau or Federal Trade Commission.

When applying for a loan online, take time to make sure that their telephone number and address are valid. If possible, visit the location, and look up business in the telephone directory. Do not trust the lenders that only have a P.O. Box.

Additionally, I advise you to discuss the issue with a trusted financial adviser. They will help you plan a budget such that you stay current on your payments. On time payments not only protect your house from foreclosure, but also improve your credit.

What do you think people with bad credit should do to get a home equity loan? I’d like to hear your opinion.

What Is A Home Equity Loan?

Monday, January 28th, 2013

Many people ask me what is a home equity loan. Many others confuse it with the basic refinance where you pay off your existing mortgage by replacing it with another loan. Basically, it is a second loan (your mortgage is the first one) that you take on your house. While your mortgage (the first loan) goes towards purchasing the house, the home equity loan is the sum you can spend as you wish.

Once the lender approves your home equity loan, you’ll get a check of the total approved amount. You will have to pay the agreed monthly installment for a fixed time period, usually 5 to 15 years.

Lenders are usually more liberal in giving home equity loans because they hold your home as collateral. You just can’t disappear with your house; neither can you hide it when you default on your loan. In case you default, they have full right to foreclose.

Benefits of Home Equity Loans

Borrowers are attracted to home equity loan because it provides an easy source of cash. Additionally, your credit history and credit score don’t really have any effect on the approval process. So, even people with bad credit can easily get a home equity loan. It’s primarily because your home is the collateral. Home equity loans can be tax deductible (we’ll discuss it within a few minutes). This type of loans have lower interest rates. Also, you can borrow relatively large sum of money.

How People Use Home Equity Loans

People use home equity loans to pay down some of the larger expenses in life such as renovating or remodeling the house, paying for college education of a family member, an unexpected medical bill or paying off the high interest credit card debts.

[blockQuote position=”right”]A home equity loan makes sense only if you want to invest that money into something that will have long-lasting benefits.[/blockQuote]

If you are a responsible borrower with a steady source of income, its tax deductibility on interests paid and lower interest rate makes it a lucrative alternative.

Jon Duncan, a Tacoma, Wash.-based certified financial planner, says, “a home equity is a sensible option only if you want to put that cash into something that will have long-lasting benefits.” He recommends a home equity loan if you need to pay down the credit card debts with high interest or renovate your house.

The Most Common Pitfalls

Remember that you risk losing your home if you default on the payment schedule. Many people are addicted to borrowing, spending, then borrowing more and sinking into deeper debts. Such people finally turn to home equity loans that allow them to raise 125 percent of the equity in their house. The interest rate increases because the borrower is raising more money than the house is worth. If you fall into this category of borrowers, DO NOT take out a home equity loan.

Another common pitfall is spending the funds on luxuries, vacations or other things that don’t add value to the house and increase the financial burden.

Beware of scammers! They have plenty of ways to cheat you out of your most valuable asset. Make sure you know everything about whoever you are dealing with. If you smell something fishy, step back, review and do a background check that the deal is legitimate.

Is Home Equity Loan Tax Deductible?

Yes, but not entirely. Generally, interests paid on the first $100,000 of your home equity loan will be tax deductible. Beyond that, it depends on how you spent the home equity loan. If it was used to renovate your home – or to purchase a second home – interests are deductible on up to $1 million or the value of the house.

Additionally, interests paid on the part of the loan above the value of the house is not tax deductible. For example, let’s say your home is worth $100,000, of which $80,000 is the first mortgage. Here, your home is worth only $20,000 more than the actual debt. But you can borrow $45,000 under the 125 percent program. So, the interests paid on the first $20,000 will be tax deductible, and not on the entire $45,000.

Home equity loans are a good option, but only for the responsible borrowers. Next week, I will tell you how to get a home equity loan quickly and easily.

Do you have any questions? I’d like to help. Leave a comment.

Tips on How to Order Personal Check Online

Sunday, August 21st, 2011

Ordering your next batch of personal checks online will enable you to browse through a wide variety of collections and designs. You can also compare prices and decide on the printing company which can provide you with the best quality, prices and the most secure shipping service. Actually when it comes to shipping services, you should choose the most reliable and secure service in order to avoid any risks related to your checks falling into the wrong hands.

When you order personal checks online you can easily get yourself a good bargain by choosing from the discounted personal checks collection or even ordering a large quantity for which the printing company may give you an offer. You can also get a good offer for shipping rates, either for free or at a discounted rate based on the quantity you order.

Also if you are not satisfied with the shipping service that the printing company offers, you can always use whichever shipping company you find most suitable for you. Of course being assured of the shipping service, its reliability and security is very important in choosing a shipping service, especially when it comes to delivery of your personal checks with all your personal information printed on it. You can choose whichever shipping service you feel most comfortable and secure with and have the printing company use that service to deliver your personal checks. One option to further ensure the safe arrival of your personal checks is to have them delivered to your post office so you can pick them up yourself instead of having them delivered to your house and risking their delivery while you are not home.

In addition to giving you the option to choose your own shipping service, printing companies also give you the ability to print whatever information you want on your personal checks. You can send the printing company all the information you want printed on the personal checks, and you also don’t have to worry about your information being misused by the printing company, because according to their privacy policy all the data submitted by the clients to the printing company are protected and are not to be used by the company or distributed to other companies. But it is always advisable not to include a lot of personal information on the checks so it wouldn’t put you at risk of identity theft.

So, next time you run out of checks and are thinking of renewing your stack of personal checks, just use the internet to search for reliable printing companies to make your order and choose the designs you want, also submit the information you want printed on your checks, all from the comfort of your own home.

Charity Personal Checks

Sunday, August 21st, 2011

Sometimes ordering personal checks and using them for conducting your day-to-day transactions can be more than just a payment method choice you make, because now printing companies give you the option to choose from a variety of causes personal checks. By ordering any of these checks, you get to choose from a collection of charity checks, where part of the money that you pay the printing company will be supporting the cause that you choose. Many printing companies offer these collections to support different causes so that everyone can find whatever they are looking for. The collections are also offered at lower prices to make them more appealing to you to choose over other designs and collections.

So buying personal checks does not have to be only about choosing the most appealing design to you anymore, you can actually give something back to society and pay charity by selecting any of the causes personal checks available in the charity checks collection. Also, to make the collection more appealing to you, the prices are usually cheaper than other collections as a way to encourage you to be charitable and at the same time save your money. But still the printing company uses a percentage of the amount you pay to buy the causes personal checks to donate to the organizations that support the cause you choose.

Causes can vary from supporting organizations that raise awareness for diseases like cancer to other organizations that help preserve wildlife and rainforests. There really isn’t a shortage of causes or of the personal checks that can help you support them, all you have to do is choose a printing company that offers such a collection and order whatever causes personal checks you want.

Using personal checks for a cause can also help these charitable organizations and what they stand for in many ways. In other words, it is not only your money that counts, but also the awareness that you are spreading by using such personal checks and exposing them to whomever you use those checks to pay, which makes other people aware of the causes and maybe taking your example and supporting a cause next time they order their own collection of personal checks.

So go ahead and give the charitable personal checks collection a look and get more than your money’s worth by giving back to society. You can also ask the printing company to print your cause charity checks on eco-friendly printing paper so you can benefit both the society and the environment. Really, ordering and using personal checks can save you money, enable you to support causes, pay charity and at the same time use your favorite payment method to handle your bills and transactions.

Eco-friendly Personal Checks

Tuesday, August 2nd, 2011

If you like paying your bills using custom-designed personal checks, but feel guilty every time you issue one or even order checks online because of all the trees and wood used to manufacture the check-printing paper that you are using, there is a solution to rid you of that guilt. Now you can choose from the collection of eco-friendly checks which are now offered by many environmentally-aware printing companies.


Avoid Stale Dated Checks by Ordering Right Quantity of Personal Checks

Monday, July 18th, 2011

How many checks should you order online? It really depends on how often you use your personal checks. If you pay for everything using your personal checks or you conduct your business transactions with mostly checks, you might want to order enough quantity to keep you covered for a while. But you have to maintain the balance between the frequency of your consumption of the checks and the amount of checks you tend to order to determine if a large quantity is going to be unused for a long time.


Personal Checks Security Features

Thursday, July 14th, 2011

With the everyday advances in technology and the availability of high-tech equipment to consumers, it is becoming easier for scammers and con artists to steal someone’s identity or use their personal checks for withdrawing whatever amounts they want. But as the bad guys keep coming up with new ways to cheat security and anti-fraud systems, on the other hand security experts try to make whatever services you use as secure as possible in order not to give a chance to anyone who would take advantage of whatever loopholes there might be.


Personal Checks versus Debit, Credit Cards

Thursday, July 14th, 2011

Ordering personal checks or just replacing them with a debit or credit card is a decision you must have faced at some point when organizing your finances. There is a lot to consider when choosing between the two options, but it mainly depends on what you are going to use them for and which of them is going to save you more time, and preferably more money. Also, you need to consider the risks when using either of them, whether security risks or other risks that might arise from their usage.


Security & Safety Measure related to Ordering Personal Checks Online

Tuesday, July 5th, 2011

Some people might be worried about ordering their personal checks online because of fear that their personal information might be stolen and they would be exposed to identity theft or similar problems. Such worries are applicable to any online purchase you might make, and sometimes the internet security and safety measures that are taken fail the purchaser and his credit card ends up stolen anyway. This doesn’t have to be the case with you, unless you are facing an extra dose of bad luck! (more…)