Wednesday, September 23, 2009

Five most common Bankruptcy questions

Can my creditors harass me after filing bankruptcy?

No, they will not! As per the law, once the bankruptcy documents are files, creditors must cease all the actions against debtors. Creditors cannot continue any lawsuits or call for payments.

Do spouse get affected?

If you spouse is not responsible that is didn't sign a contract or agreement, then they won't be affected. There are few cases where it is must for both husband and wife to sign the contract, such as purchasing or selling of a property. But other debt, such as credit cards, doesn’t require both to sign.

Consult your lawyer for more information on this.

Who can know?

Though Chapter 7 filings are public records, no one will know about that. There will be a record of your filing with the Credit Bureaus and for next 10 years it will remain on your credit record.

Will I ever get my credit again?

Yes! Many banks offer "secured credit cards where debtors need to put up a certain amount of money in account as security and guarantee payment. Initially the credit limit will be equal to the amount deposited and then it increases as per your payment record.

After two year of discharge, debtors can also avail mortgage loans on normal terms and conditions. Filing bankruptcy record stays for 10 yrs on your credit report. After that it becomes less significant.

How much it cost?

Filing chapter 7 bankruptcy will cost you $300 plus the lawyer's fees. Bankruptcy lawyer's fee varies, but should not be more that $2,000.

Friday, September 18, 2009

Common mistakes that we do when Refinancing a Mortgage

1. It's easy to find a lender online or in newspaper, that appear offering a good rate and borrower go for that without checking what other are offering. This is a very common mistake found by borrowers. Checking out the competition will help to save more.

2. We all know that interest rate is the primary factor, but there are also some other charges that we should check before applying for a loan. Borrowers usually check the interest rate and if low they go it without checking other charges like loan origination fees, points, credit reports etc.

3. Some borrowers also try time interest rates. That is watching daily changes and goes for the lowest. But in that case interest rates might go up again. It's just like stock market that goes up and down with time.

4. Some of refinance our mortgage to take some cash out of their home, perhaps for investments, home repairs or a major purchase. That is basically borrowing against the equity of their home, which is fine. Problem arises when you take too much equity which can boost your mortgage and may fall in financial crisis.

5. Resetting a longer loan period is not a good idea. Refinancing is like taking a new loan that has 20 or 30 yrs to repay. Generally refinance is to save some money, but if you set a long time for loan period, the total amount you pay is same that as for first mortgage loan.There will be no saving.

Tuesday, September 8, 2009

Help With Your Loan Modification

Homeowners who are struggling to make payments on their home loans can now use loan modification help to convert their high-priced loans into smaller, more affordable monthly payments. Find out what lender loan modifications are and see if you are eligible to qualify for them. The following are some of the questions you might ask if you are going to apply for a loan modification and the answers to your questions:

  • What qualifies you for loan modification help? If you have been a victim of a financial tragedy or have an adjustable rate mortgage then you might be eligible to qualify for a loan modification which will lower your monthly mortgage payments.
  • How does the lender decide how my new lower payment will come to be? This varies from bank to bank so you should check with your bank and find out what their rate is. Usually most banks will make the payment anywhere from 37-41% of your gross monthly income.
  • Will my interest rate be decreased? Most loans involve one or more of the following: A lower interest rate, principal forbearance, a more spanned out loan term, or an interest only period. Generally, there will be a combination of any of these scenarios to arrive at a lower mortgage payment.
  • What about all of the numerous penalties and fees that were added to my loan? In most situations the lenders will void the fees and penalties; this is part of the loan modification program. You will still be responsible for the payments that you missed, however they will be spread out over the term of your loan.
  • What is the cost of loan modification help? When you apply, the bank will not charge you, but you should be ready to make a payment once you come to terms with the loan workout. At the beginning of the loan modification, most lenders will ask you to provide them with the first five months payment.
  • How can I find out what programs are available to me? You will need to speak to someone in your bank’s loss mitigation department and request an application package. The Complete Loan Modification Guide can also assist you with learning about the various programs as well as helping you set up and send you package for reviewing.
  • Do you have to have a bad history with your payments to get help? Most lenders do not require this; however you will face an interest adjustment rate or a reduced income in the future. Homeowners who are in danger of losing their homes will be given first choice for this service. Just remember, the sooner you submit an application, the sooner you will receive help.
  • Which is better: Going through a loan modification company or using my bank? In most situations using your bank is the better choice. A lot of these loan modification companies do not know what they are doing and do not guarantee you success. If your specific case is complicated then you should seek out an attorney with experience in this field.
  • How is do-it-yourself loan modification? To successfully do this you must do research in this field. Plenty of borrowers have modified their loans successfully and you can too. A knowledgeable homeowner, who is persistent, should have no problem receiving loan modification help from the lender of their choice.
  • Where do I begin? There is an easy to understand handbook that will take you through this process step-by-step so that you can get the results that you desire.

Monday, September 7, 2009

How to stop foreclosure and save home

Foreclosure should be a last resort in the way of save your self out of this recession period. Home foreclosure is one of the common hits in the recent period of financial recession. This situation basically arises when a borrower misses too many mortgage loan installments. Once he receives a warning notice to foreclose his house means the process has already started. Foreclosure is a legal process where the property will be sold and the money collected from the sale process will be used to meet the outstanding debt. This is actually done after all options are failed.

In a legal manner, a borrower must approach the lender stating his financial condition and he has to be honest enough that the lender can consider his request. This could be the one of the ways to protect the home from the foreclosure. Considering all the factors relating to foreclosure, the lender has to take certain decisions because the foreclosure normally has a complex process to deal and takes certain more time. It is a deal of more expensive with time is the crucial factor. One of the important things from the borrower point of view is, his credit will go down if he forecloses his property. It effects on borrower credit rating for more than seven years.

So considering all the above factors, if a borrower is good honest person and submits himself/herself to the lender with actual financial position, the lender may help the borrower in saving your house.

Wednesday, September 2, 2009

Unemployment rate worried traders

As per ADP National Employment report, employment fell by 298000 in August following a loss of 360000 in July. It is much less than the number of losses in since last September 2008, but more than expected by the analysts.

This report on unemployment gave investors another reason to worry about what is widely seen as the biggest problem facing the current economy. Unemployment mostly hit consumer market. People are restricted themselves for consumer spending, which accounts for about 70% of U.S economic activity. It will be a real trouble in pulling the economy out of the longest recession after World War II, without getting much help from consumers.

"Until Friday's data comes, no one is really making any big bets," said Neil Massa, senior trader at MFC Global Investment Management. "A little profit-taking looks healthy at this point."getting much help from consumers.

Investors fear to take risk for the reason that a weak job market can effect in pulling up the economy and hit the stock market. For every two stocks, three fell.

The Dow fell 29.93, S&P index fell 3.29, while the Nasdaq fell 1.82. Bond price get a rise. Other smaller companies fell 2.23.