This is both a positive and a negative for some homeowners. On the positive side, this means they are able to refinance their homes at a lower rate and take advantage of equity in their homes. But on the negative side, this assumes that the borrowers who are purchasing new homes still have good credit, can make at least a 20% down payment on residences with value of no more than $417,000.

Having indicated the above, it should be noted that there are loan programs available to the consumer whether refinancing or purchasing a new residence. An example of a lower down payment program is the FHA financing.

FHA loans are guaranteed by the government and offer more flexible guidelines than traditional mortgages.

Two important keys to this type of program:

• Loan amount available up to the maximum JUMBO FHA limit in your area
• FHA financing is for Everyone and not limited to first time homebuyers

When considering to refinance or purchase, a new property, the consumer must be prepared to present a complete financial package to their lender.

One product for the consumer to consider is FHA Financing. FHA loans are guaranteed by the government and for the new home buyer offer low down payment options that are in some cases have more flexible guidelines than the normal traditional mortgages.

Some of the features to this type of product are but not limited to depending upon the consumer’s situation are as follows:

• Down payment of 3.5%
• Allows for lower credit scores
• Cash out refinance transactions up to 85% loan to value
• Loan amount available up to the maximum Jumbo FHA limit in your area
• No minimum or maximum income limits

As a consumer if you are considering a refinance or a new purchase, you need to have all of your financial information available. By having all the information available, the lender will be able to assist you and explain to you all your various options whether under a FHA financing program or another loan program.

• Always be truthful to the lender
• Have complete copies of last two (2) federal tax returns including all W-2’s on all borrowers
• Have copy of most recent paystub for all borrowers on the transaction
• Have a copy of last two (2) months bank statements on all accounts and any stock/investment accounts
• If refinancing, have a copy of most recent mortgage statement
• If refinancing, bring copies of original documents in regard to mortgage
• Prepare a list of all assets, including names of banks, average balances along with a list of all liabilities, i.e., auto loans, credit cards, 2nd home mortgages. Note the lender can receive this information via a copy of your credit report. But having the information available at the meeting is important.

At this meeting, the lender will be able to approximate, what your debt to income ratio. The final ratio is determined by credit underwriting.

By having this information available, the lender should be able to discuss with the consumer various types of loan programs, which will meet the consumer’s financial position. If you are a new home buyer, it is important that you have money available for a down payment. A new home buyer should not be pushed into any program or loan that is at more than 80 percent of the lendable value of the home.

Consumers are facing financial hardship such as the lost of a job, reduced salary, divorce, death or a medical emergency. During these times – loans, bills and credit cards can quickly pile up and destroy the consumer’s ability to repay their financial obligations. Needless to say, these obligations weigh heavily on the consumer.

So what is the consumer to do about this situation? Some of the solutions make sound simply, in a normal economic such as:

• Understand your credit report
• Recognize financial situations
• Borrow only what you need
• Pay all bills promptly and more than the required monthly minimum payment

The consumer needs to try to at least to rein in their spending and establish some type of budget to mean their monthly obligations. One way to reorganize their financial situation is to:

• Call their mortgage lender to discuss a loan modification – This will achieve lower monthly payments
• Order a credit report – The consumer needs to know their credit score and identify any errors.

If the above does not fit your current financial situation then the consumer needs to look for other alternatives. One of the other alternatives is a debt settlement program. This type of program is designed to assist those consumer’s who are having financial difficulty. The debt settlement company will start to negotiate with the lender on your behalf.

So call for a free consultant today with your debt settlement expert.

A good credit rating is important because it affects every major financial decision the consumer makes. The better your credit rating normally, the lower your interest rate on your mortgage or car loans because you are better credit risk than someone with a lower credit score. In other words, if you have a positive credit history, meaning you repay your loans on time then you have a good credit. If you have a bad credit history, which means you are late on payments you have bad credit.

The three major credit bureaus are: Equifax, Experian and TransUnion. These companies use a scoring system that rates your credit by giving it a numerical number. This numerical number is considered your score and can range from 300 to 850 depending upon the credit bureau. On average, the majority of consumers should have a score in the mid 700 range to be considered a good borrower. Anyone with a lower then 650 is considered to be a poor risk by lenders.

Having indicted that lower than 650 is a poor risk. Credit card companies continue to issue cards to these borrowers but the rate is much higher than a consumer with a higher credit score. So how does a consumer improve their score?

Here are a few ways to improve your score:

• Make a list of all bills and their due date
• Make a family budget
• Enroll in an automatic or direct payment program – in same cases, you can get a lower rate by using these programs
• Monitor your credit report quarterly for errors
• Consider credit counseling to get tips on how to improve your spending habits
• If divorced, close all joint accounts after divorce. Start to rebuild credit in your own name
• Take responsible for your spending habits

Some of the things the consumer needs to revisit are the following key ideas:

• Does my family have a financial plan for the future
• Am I borrowing wisely and paying back promptly?
• Have I identified, avoided and recovered from various financial pitfalls?
• Have a gotten a recent copy of my credit report and do I understand it?

Everyone at some point in time has applied for some type of credit, whether it be for a auto, boat, RV loan, a home mortgage or a credit card. The consumer has normally been approved for a loan based upon their ability to repay the loan, cash flow and their credit score.

The key to being a good credit risk is based upon the consumer’s credit score. This score is a numerical number assigned to the consumer based upon their credit history. This history is based upon number of opened and closed accounts, payment history, including late or missing payments and collection referral, original credit limit, current balances, etc. The higher your credit score is the better your ability to borrow at more favorable interest rates. The lower the score the consumer is charged a higher interest rate or decline altogether.

Basically, the consumer needs to obtain a copy of their credit report from one of the following three credit bureaus: Equifax, Experian or TransUnion. These companies’ reports will explain where the consumer stands when compared to other borrowers along with explaining their financial score.

• Try and manage their current debt themselves – in other words tighten their belt and spending habits.
• Debt consolidation loan – this would combine all outstanding unsecured debt into a single payment loan. The problem is can the consumer qualify for a new loan with no job or financial hardship issue.
• Refinance or Home Equity loan – This might work, if the consumer has enough equity in their home, however the repayment may be an issue.
• Credit counseling service – This program acts like a debt consolidation loan. The consumer pays a third party company who in turns pays a small or set percent each month to the lenders until all the balances are pay off. In addition, there is credit counseling for the debtor and this will also have an affect on your credit score.
• Bankruptcy – This is the most serious and the final step that a consumer should consider. The consumer needs to discuss with an attorney all facets of bankruptcy since it will cover all debts, both secured and unsecured.
• Debt settlement – This is a program by which a third party negotiates with the lender in order to reduce the outstanding balances on unsecured credit cards.

Here is a brief overview of the debt settlement process:

• The consumer needs to have a full and complete understanding of the process. The debt settlement company needs to explain all the in’s and out’s of the program.
• A “trust/escrow” account is established an a set amount in place in the account. Normally, this is less than the combined minimum monthly payments.
• After at least half of the lowest outstanding credit card balance is in the account then the debt settlement company begins to negotiate with the lender. The debt may be reduced by up to 40 to 50 percent. In most cases, the lender would rather have at least a partial payment at one time than receive nothing if the consumer files bankruptcy.
• This process is repeated until all debts are negotiated. This process can take between 12 to 48 months. It’s not a quick or easy fix however it will assist the consumer.

In the past, the consumer has been paying the 2 percent minimum monthly payment, it would take years to just payoff their current balances. So at the direction of the federal government, most credit-card companies are increasing the amount of the consumer minimum payment from 2 percent to 4 to 5 percent. The good news is in a good economic or without financial hardship by paying a higher monthly payment you’ll pay off your debt more quickly. The bad news: Your now have the additional burden of coming up with more money each month.

This is not a quick fix or easy step for the consumer. This program can take been 12 to 48 months depending on the consumer’s obligations. Basically, the program requires the consumer to place a set dollar amount aside each month into a “trust/escrow” account. Once there is at least half of your lowest credit card balance, then the debt settlement expert will start to negotiate with your lender. The key to this program is that the lenders are more likely to accept some monies from the consumer than receiving nothing from the consumer if they file bankruptcy. Under bankruptcy, normally the secured lenders receive their monies first and in most cases the unsecured lenders receive up to little or nothing. By receiving nothing, the lenders have to write this off as a loss or bad debt on their financial statements.

The debt settlement program is a better option than bankruptcy for most consumers. If a consumer is considering bankruptcy they should consult an attorney before taking this step. Whereas a debt settlement program will allow a third party to negotiate on behalf of the consumer for a settlement of up to 50 percent off their current outstanding balances.

Contact a representative today!!

Debt settlement is a method by which a third party negotiations on behalf of the consumer with their lenders to reduce their outstanding balances. Typically, this program works only for unsecured credit cards but may include any other types of unsecured debt like medical bills.

It is the consumers responsible to ask questions and do their research on the debt settlement company they select.

With any program, there are pros and cons when considering a course of action. Some of the pro’s are:

• One single monthly payment
• Avoiding bankruptcy as an option. Always consult with an attorney about this step.
• Stopping collection calls
• Possible elimination of lawsuits and other legal action
• Stop any extra charges to the credit card

The con’s are:

• Credit score will drop
• Tax ramifications – consumer will need to report any amount of forgiven debt that exceeds $600. This means an increase to your tax bill.

So call your debt settlement expert today to fully discuss how they can help you and your family.

This all changed over the past several years. Consumer’s started facing financial hardships, lost of job, reduced salaries, and divorce or faced a medical emergency along with the adjusted interest rate on their mortgages and increased unsecured credit card debt.

The consumer was faced with the reality of how to get out of debt. In most cases, this is the first time many consumers were faced with these uncertain financial times. So the consumer started looking for ways to payoff their financial obligations.

One of the options the consumer is selecting is a debt settlement program. Debt settlement is a method by which a third party negotiates with the lenders to reduce your obligation by up to 50% of the outstanding debt. The consumer puts aside a set amount of monies each month into a “trust/escrow” account over a period of 12 to 48 months depending upon the amount of their credit card debt. The debt settlement company starts to negotiate when at least half of the lowest balance is in the account. This proceed is repeated until all debts are settled.

This is not an easy or quick fix program for the consumer. However the amount of monies placed into the trust/escrow” account is normally less than the combined monthly minimum payments. By entering into this program, it will show the lender you want to repay your obligations but need help because of the consumer’s most recent financial hardship. The majority of lenders are willing to accept a settlement of half because if the consumer files bankruptcy the odds are the lenders will receive nothing. By receiving nothing this affects the lenders bottom line and is reflects as loan losses on their financial statements. So call your debt settlement expert to day to discuss.