Credit counseling Will Help You Improve Your Finances, This Is Why

Credit counseling is one of the most recommended debt solutions in America, especially for debtors filing for Chapter 13 bankruptcy. Before visiting a credit counseling agency, you ought to know if credit counseling works. This post answers the questions, “does credit counseling work?” What are the benefits of visiting a credit counselor? Is It Right for me?

Like general psychotherapy, there are a lot of criticisms on Credit Counseling. Some critics accuse debt counseling agencies of predatory practices, which is defined as “imposing unfair and abusive loan terms on borrowers”.

According to a 2006 audit report from the office of inspector general (IG) of the Federal Deposit Insurance Corporation (FDIC).

These predatory practices include; charging exorbitant fees, failing to meet expected standards, inability to proffer practical solutions for debtors, and deceiving clients.

Every field has its own bad eggs, and credit consulting is not an exception.

However, the red flags should not deter you from seeing the benefits of credit counseling, a field that was created with the purpose of helping debtors get rid of credit card debt.

What Are the Benefits of Visiting a Credit Counselor?

There are four major functions of a debt counselor, namely; debt management, budgeting, education, and tools application.

To paint the full picture of what each function entails, I’ve provided a bulleted list of mini-functions under each head-function.

Debt Management Benefits

* Evaluates the client’s total financial case by reviewing monthly wages, properties, credit card debts, expenses, credit reports, or other financial information.

* Develop debt management plans (DMP’s) and budgets to help clients meet their monetary goals.

* Drafts debt repayment dates in favor of clients.

* Recommend methods, such as adjusting budgets, applying for debt management plans, using personal loans, or declaring bankruptcy.

* Speaks to clients by telephone or physically to garner more financial data.

* Prepare documents to solidify legal contracts after getting a go-ahead from the client and creditor agency.

* Update records of the client’s account activity, like correspondence, financial transactions, or counseling session notes.

* Direct clients to community services or resources in cases beyond credit counseling.

* Evaluate the duration for Credit card debt repayment using the volume of debt, interest rates, income, and savings.

* Negotiate with creditors agency on behalf of clients to help adjust payments, reduce interest rates, extend payment duration, or devise a better DMP.

Budgeting Your Money to Pay Off Debt

* Evaluate the financial capacity or status of clients.

* Devise actionable methods to help clients pay their credit card debt, obtain permanent housing or mortgage programs.

* Creates monetary plans for clients while making debt repayment a priority



Financial Education to Avoid Getting in Debt

* Informs clients on financial issues, such as consumer protection laws, credit report ratings, wage attachments, bankruptcy laws, or collection actions.

* Recommends way forwards on housing issues, like mortgage delinquency, housing rental, and homeownership.

* When it comes to financial planning, credit or budgeting, debt counselors recommend educational materials for clients.


* Explain federal policies to clients, such as the DMP rules, the pros, and cons of enrolling in debt repayment plans, or lender concession policies.

Tools and Apps To keep You Debt Free

* Studies financial records for missing cheques, payment history, returned cheques, held money, or other similar cases to resolve client’s issues.

* Releases funds to creditors on behalf of clients.


* Oversees the foreclosure, repossessions, or removal of levies.

Best Credit Counseling Agencies in America

Credit counseling is a legit practice in America. Credit counseling society is dominated by non-profit organizations and Christian/religious entities.

The idea of credit counseling was spearheaded by lenders and credit agencies during the mid-’60s in a bid to curb the continuous outbreak of personal bankruptcies.

Even though there’s a difference from nation to nation or within a nation, consumer debt is basically made up of credit card debt, car loans, and home loans.

Credit counseling aka debt counseling deals with consumer debt, which isn’t in the client’s capacity to pay.

Aside from educating the client and creating a proper budget that suits the client’s income, credit counselors assist debtors in devising a debt management plan aka DMP.

In the United Kingdom, DMP is also known as IVA, an Individual voluntary arrangement.

For a DMP to be effective, the client has to give the credit counselor the mandate to negotiate with the creditor(s) on the behalf of the debtor.

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The aim of negotiation is to reduce the interest rate, extend payment date, lower monthly minimum payment, and waive outstanding late charges.

After the agreement has been made, the debt would be consolidated into a single payment, depending on the case at hand.

Not all debt cases demand a DMP or IVA, some debt counselors would go as far as negotiating debt relief or debt consolidation.

Does Credit Counseling Work: A Critic’s Perspective

Critics around the globe have criticized credit counseling, on the basis that the idea originated from credit agencies, who wanted to prevent debtors from seeking better alternatives.

Predatory practices include demanding unlawful or exorbitant fees, inability to meet the required standard, inability to proffer actionable solutions for clients, and neglecting the debtor’s interest in favor of the creditor.

Regulations Protecting Americans from Predatory Practices

The society of credit counselors is loosely regulated by the Federal Trade Commission (FTC) in America.

The FTC is the nation’s debtor’s protection agency, which can slam credit agencies with a lawsuit for deception, extortion, and offenses of any nature.

Though the federal government has created policies protecting debtors, individual states may also regulate DMPs.

The attorney general of the state has the power to protect citizens from predatory practices.

There are two major associations representing the interests of creditors, namely: the Association of Independent Consumer Credit Counseling Agencies and the National Foundation for Credit Counseling.

SUMMARY

Like I noted earlier, the major benefit of enrolling for credit counseling is guidance.

To get the most out of credit counseling, you ought to be attentive to every debt solution proffered by the credit counselors.

Then, you can decide to opt-in for DMPs, debt relief, debt forgiveness, or bankruptcy.

With respect to education, tool application, Student loan Debt, debt management, and budgeting, debt counseling works.

It is also important to know that the debt counselor is not a magician: he/she can only persuade creditors to reduce the interest rates or extend the payment date, but the final decision lies in the hands of your creditors.

Though, most creditors prefer DMPs to bankruptcies.

source: ussa.inquirer.net

Capital One Data Breach

One of the country’s biggest credit card issuers, Capital One Financial, is the latest big business to be hit by a data breach, disclosing that roughly 100 million people had some personal information stolen by a hacker.

The alleged hacker, Paige A. Thompson, obtained Social Security and bank account numbers in some instances, as well as other information such as names, birthdates, credit scores, and self-reported income, the bank,  said Monday. It said no credit card account numbers or log-in credentials were compromised.

Capital One Financial is just the latest business to suffer a data breach. Only last week Equifax, the credit reporting company, announced a $700 million settlement over its own 2017 data breach that impacted half of the U.S. population. Other companies that have had breaches include the hotel chain Marriott, retail giants Home Depot and Target.

WHAT HAPPENED?

Thompson, 33, who uses the online handle “erratic,” allegedly obtained access to Capital One data stored on Amazon’s cloud computing platform Amazon Web Services in March. She downloaded the data and stored it on her own servers, according to the complaint.

Thompson was a systems engineer at Amazon Web Services between 2015 and 2016, about three years before the breach took place. The breach went unnoticed by Amazon and Capital One.

Thompson used the anonymous web browser Tor and a Virtual Private Network in extracting the data — typical methods hackers use to try to mask infiltrations — but she later boasted about the hack on Twitter and a chat group on Slack, posting screenshots as evidence of her exploit.

It was only after Thompson began bragging about her feat in a private group chat with other hackers that someone reached out to Capital One to let them know on July 17.

Once the informant told Capital One the company closed the vulnerability. The company verified its information had been stolen by July 19 and started tracking Thompson and working with the FBI. The FBI raided Thompson’s residence on Monday and seized digital devices.

An initial search turned up files that referenced Capital One and “other entities that may have been targets of attempted or actual network intrusions.”

WHAT DID THOMPSON TAKE?

The data breach involves about 100 million people in the U.S. and 6 million in Canada.

Prosecutors said a misconfigured Capital One firewall let Thompson access folders of data that Amazon Web Services was hosting for the bank. Thompson sent a command that returned a list of more than 700 folders and copied data from an unspecified number of them. Capital One said the bulk of the hacked data consisted of information supplied by consumers and small businesses who applied for credit cards between 2005 and early 2019. The hacker also was able to gain some access to fragments of transactional information from dates in 2016, 2017 and 2018.

The bank said it believes it is unlikely that the information obtained was used for fraud, but the investigation is ongoing.

Capital One says 140,000 individuals had their Social Security numbers accessed, and another 80,000 had their bank account information accessed.

HOW DID CAPITAL ONE HANDLE THE BREACH?

Capital One says once it learned of the breach on July 17, it immediately closed the vulnerability, and it was able to figure out what Thompson accessed 36 hours later, on July 19. The company was able to build a profile on Thompson from their internal investigation and handed that to the FBI, who arrested her 10 days later, the day the bank disclosed the breach.

By contrast, it took Equifax six weeks before it publicly disclose its security incident, which was similar in size.

What To Do If You Were Affected By Capital One Hack
Capital One said it will reach out to those affected using “a variety of channels.”

That bank said it will make free credit monitoring and identity protection available to everyone affected. The company also said that consumers can visit www.capitalone.com/facts2019 for more information. In Canada, information can be found at www.capitalone.ca/facts2019 .

Consumers should also obtain copies of their credit reports at AnnualCreditReport.com. By federal law, consumers can receive a free copy of their credit report every 12 months from each of the three big agencies — Equifax, Experian, and TransUnion.

Look over all of your listed accounts and loans to make sure that all of your personal information is correct and that you authorized the transaction. If you find something suspicious, contact the company that issued the account and the credit-rating agency.

You may also want to consider freezing your credit, which stops thieves from opening new credit cards or loans in your name. This can be done online. Consumers can freeze their credit for free because of a law that President Donald Trump signed last year. Before that, fees were typical $5 to $10 per rating agency.

You’ll need to remember to temporarily unfreeze your credit if you apply for a new credit card or loan. Also, keep in mind that a credit freeze won’t protect you from thieves who file a fraudulent tax return in your name or make charges against an existing account.

You should also change your passwords regularly. CreditCards.com industry analyst Ted Rossman recommends using a password aggregator like LastPass that helps create strong, unique passwords for all of your logins.

source: usa.inquirer.net

Is Your Debt ‘Good’ or ‘Bad’?

Are student loans good debt that can open the door to a career or an insurmountable burden? Is all credit card debt a sign of reckless spending, or can it be a smart way to cover an expense? In general, no form of debt is inherently “good” or “bad.” What makes it good or bad is how it fits into your overall financial picture.

Good debt is manageable within your budget and can help you achieve your goals. On the flip side, bad debt is unaffordable and can overwhelm your finances.

Ask yourself these questions to determine if you’re dealing with good or bad debt. Then see how you can manage it.

WHAT LED TO THE DEBT?

The reason you took on debt can help you determine whether it’s helpful or harmful.

“Any debt that is taken on because people don’t have any kind of choice means they are starting out in a place of disadvantage,” says Ida Rademacher, a vice president of nonprofit think tank Aspen Institute. “That can create a spiral that can prevent people from being resilient.”

Conversely, Rademacher says, “the more helpful forms of debt can help people to become more resilient.” Student loans, for example, may enable a career that offers a high salary, making you more financially sound.

Think about whether you incurred the debt:

TO ACHIEVE A LONG-TERM GOAL: Student loans and auto loans can fit into this category. These debts can help you move ahead in life, so long as you don’t take on too much.

OUT OF CONVENIENCE: These are debts you incur to make other aspects of your life easier, such as when you have a big one-time expense and don’t want to deplete your savings. They can be benign if they’re helping you manage your overall financial picture.

DUE TO AN EMERGENCY: Desperation debt can be dangerous. A need for cash in a hurry can leave you with limited options and result in high-interest costs.

BOTTOM LINE: Debt taken to achieve a goal or out of convenience can be useful as long as you have a plan for paying it off. To avoid desperation debt, build an emergency fund. A 2016 report from public policy think tank Urban Institute found that savings as small as $250 can help consumers avoid missed bills and even eviction.

IS YOUR DEBT AFFORDABLE?

Comparing your debt load with your gross income can be a helpful tool for seeing if it’s manageable or becoming too large to tackle on your own. Leaving aside mortgages and student loans, since they’re generally more manageable forms of debt, here are some guidelines to consider:

DEBT LOAD UP TO 15% OF INCOME: This amount is likely affordable but is worth addressing. If you’re carrying a moderate credit card balance, for example, paying it off can free up cash and save on interest.

DEBT LOAD FROM 16% TO 39% OF INCOME: Debts in this range get increasingly difficult to pay off. You may be able to make them more affordable by reducing interest or payments, such as with a balance transfer credit card or a personal loan. If you can’t qualify for one of those, you could explore a debt management plan with a nonprofit credit counselor.

DEBT LOAD OF 40% OR MORE OF INCOME: Debt loads this high can be insurmountable. Use the free consultations offered by many nonprofit credit counselors and bankruptcy attorneys to see if debt relief might be right for you.

BOTTOM LINE: Know how your debt compares with your income and use that perspective to understand which approach is the most logical.

HOW IS YOUR DEBT AFFECTING YOUR LIFE?

Think about how debt is impacting your life overall, says Thomas Nitzsche, media manager at nonprofit credit counseling agency Money Management International.

“If your debt is something that is hanging over your head and you’re worried about it constantly, that’s something you should address,” he says. Any debt that affects your mental health or significantly diminishes your quality of life is bad debt.

Nitzsche advises taking an honest look at your situation and making a plan to resolve debt through a payoff approach like debt snowball — focusing on your smallest debts first — or by seeking debt relief. “Realize how uncomfortable you are with your debt and that it’s in your power to make changes.”

BOTTOM LINE: Debt doesn’t have to rule your life. If you’re feeling overwhelmed, take the first steps to resolve your obligations.

source: usa.inquirer.net

Can You Claim Land Transfer Tax?

Land transfer tax (LTT) is a charge levied by each Canadian province when you acquire a property. It is based on the amount paid for the land and includes any amount remaining on the mortgage or debt assumed as part of the purchase agreement. This tax is determined using a specific equation and a land transfer tax calculator.

Many people wonder if land transfer tax can be claimed. If you’ve moved for work and your employer has not reimbursed you, you can claim the LTT. Also, there exists a rebate in the provinces of Ontario, British Columbia and Prince Edward Island that allows you to recoup the cost of the land transfer tax entirely.

Land Transfer Tax Rebate

In Ontario, first-time home buyers can qualify for a rebate that is equal to the full amount of the land transfer tax paid, up to a maximum of $4,000. As of January 1st, 2017, this tax rebate is restricted to Canadian citizens and permanent residents of the country. Furthermore, you must apply for the land transfer tax rebate within 18 months of the date of registration of the transfer or the date of the unregistered disposition.

Qualifying for the Ontario Rebate

There are certain criteria you must meet in order to qualify for the Ontario land transfer tax rebate. You must be 18 or older and live in the purchased home within nine months of buying it. Furthermore, you cannot have previously owned a home. If your spouse has already owned a home during the time that they have been your spouse, you will not qualify. The rebate covers the full amount of the LTT up to the maximum home purchase price of $368,250. If your home costs more than that price, you can still qualify for the maximum rebate but have to pay the remainder of the tax.

Qualifying for the Toronto Rebate

The city of Toronto has its own land transfer tax that comes with a separate rebate. The criteria that must be met are similar to that of the Ontario LTT rebate. You must be 18 or older, live in the home within nine months of purchase, and cannot have owned a home before, with the same going for your spouse (during the time that they’ve been your spouse). The maximum amount you can receive as your rebate is $3,725. You are eligible for both the Ontario and the Toronto rebates if you’ve bought property in the city. Additionally, if you are purchasing a home with your spouse, and only one of you is eligible for the rebate, you can still get 50% of the rebate amount. This goes for both the Toronto and Ontario LTT rebate.

Using the Land Transfer Tax Calculator

To determine what your land transfer tax is you will need to use the land transfer tax calculator. You’ll need the purchase price of your home and this land transfer tax calculator.

source:  northwoodmortgage.com

How Student Loans Can Affect Your Mortgage Application

The latest figures show that almost $30 billion is owed by Canadian students in student debt. With many people going back to school in their adult years, this increasing level of student debt brings with it numerous challenges for the average Canadian student. This is clear when examining how student loans can impact your ability to buy or sell a home. And so within this article, we’ll look at how student loans might impact a buyer during their mortgage application process.

Your Debt to Income Ratio

When buying a home, your lender will calculate your debt to income ratio by adding up your monthly payments, along with your expected mortgage, and dividing the total by your monthly income. To qualify for a loan with most companies, your debt-to-income level should be less than 43%. For those with a $20,000 student loan looking to buy a house for $300,000 or more, this debt-to-income ratio could prevent lender approval.

You May Need a Higher Down Payment

In order to decrease their mortgage amount, and thus the amount they’ll be comparing with their income, buyers might consider using a higher down payment for their property. This might mean waiting a little longer to buy their dream home or selling another asset such as a business or a vehicle in order to increase their down payment amount.

Options to Decrease Mortgage Application Challenges

While student debt can have a significant impact on the mortgage application process, buyers do have numerous options available to help overcome these challenges. Let’s look at several steps buyers can take to mitigate the impact student debt has on their mortgage application:

• Consolidate Loans Into One

For those with numerous loans in addition to their student loan, such as a credit card, it can help to consolidate the loan into one loan repayment. This can reduce the overall cost thereby reducing the debt to income level for the mortgage applicant.

• Choose a Longer-Term Mortgage

Another way a person with student debt can reduce their long-term debt to income ratios is to choose a longer mortgage term. This will provide a longer period to pay off the mortgage, thereby decreasing month-to-month costs.

It’s important not to let student debt prevent you from moving forward on your home purchase! There are multiple avenues towards buying a new home for those with student debt. To learn more, speak with our trusted experts directly today.

source: northwoodmortgage.com

What Income Verification Methods Are Required When Applying For A Mortgage?

When applying for a mortgage, you will need to demonstrate to a lender that you have a substantial enough income to pay off the mortgage in the future. But how exactly can you reasonably prove your income? This article will detail the methods you can use to verify your income to a mortgage lender.

 Make Copies of your Records

The first step is to provide your lender with copies of your records that indicate your income. This means your two most recent pay stubs, your most recent checking account statement, your current savings account statement, and your federal income tax returns from the previous two years. This should provide your lender with enough information to accurately gauge your income and financial situations.

Debt and Loan Statements

Your income will not be the only factor that your lender will want to verify. Your mortgage lender will want to know about any debt obligations you have. As such, you should provide your lender with copies of your most recent credit card balance(s) as well as the most recent statements from any other outstanding loans you have, such as personal, auto, or student.

Provide Employer Information

Your lender may also request that you send them the information of your employer. This includes your employer’s name, your office or work address, and the phone number to the human resources department. Your lender might want to call to enquire about and verify how long you have worked there and what your salary is.

If you have Unverifiable Work

Many people who apply for mortgages have not been in steady employ in recent years. This can make getting a mortgage more difficult, but by no means impossible. If you have been in and out of work, have been working as a freelancer, or are self-employed, then you will have to take some extra measures to demonstrate your income. This usually means providing your lender with copies of more years’ tax returns, such as four or five. You may also want to provide bank statements going back several months or years.

Most Importantly, Be Honest

Remember, while it may be tempting to try to exaggerate your income in order to impress your prospective lender, this will ultimately only hurt you. Any competent and ethical lender doesn’t want to give you a mortgage you can’t repay and drown you in debt. Financial honesty and responsibility are always prudent.

source: northwoodmortgage.com

Argentina starts talks with ‘vulture’ creditors

NEW YORK, United States—Argentina’s new government began negotiations with hedge fund creditors Monday, amid reports it wants them to write off up to a quarter of their bonds to settle a long-running dispute.

Finance Secretary Luis Caputo arrived Monday morning at the New York offices of the US court-appointed mediator Daniel Pollack in a fresh effort to end a debt battle rooted in the country’s $100 billion default in 2001.

Major Argentine newspaper Clarin said the government, which took office in December, planned to propose a 15 percent cut in the debt. Business newspaper El Cronista meanwhile reported that the reduction sought would be about 25 percent.

“We don’t expect any news today,” said Caputo as he arrived for the talks.

Argentina’s access to global financial markets has been tightly restricted for years due to the dispute with the hedge funds demanding to be paid the full value of the bonds they hold, even though some 93 percent of the country’s creditors accepted hefty write-downs of their bonds in debt restructurings years ago.

In 2012 a New York court backed the claim for 100 percent payouts sought by the hedge funds, NML Capital and Aurelius Capital Management.

But Argentina’s former leftist president Cristina Kirchner refused to negotiate, branding them “vultures.”

Buenos Aires said the funds bought up Argentine debt cheaply around the time of the default and then refused to take part in the restructuring.

Kirchner though was replaced in December by a new conservative president, Mauricio Macri, who is seeking warmer foreign relations and has vowed to strike an agreement.

Even so, a deal would challenge the country’s finances. The hedge funds together with other so-called holdouts are claiming about $10 billion in total, which the court ruled had to be paid before Buenos Aires repays any other creditors.

On Friday a group of New York banks agreed to lend the country $5 billion to strengthen its foreign currency reserves, hit in part by the Macri government’s move in December to devalue the currency.

That would increase the reserves to around $30 billion, still relatively small for the size of the Argentine economy.

Macri has rolled back various protectionist policies of his predecessors, lifting currency and export controls and eliminating electricity subsidies.

He said such measures are necessary to make the economy competitive. His critics warn they will hurt poorer Argentines.

source: business.inquirer.net

When Is Bankruptcy Right?

When should a person in Texas file for personal bankruptcy? Is $10,000 enough debt? What about $100,000? The law says that you can declare bankruptcy in the state of Texas if you are in debt for a dollar or for a million dollars. In other words, the bankruptcy law sets no minimum amount. And like almost everything else in the law, the answer to when should you declare bankruptcy is, “It depends.” You can obtain a more precise answer – and have all of your bankruptcy concerns addressed – by speaking as soon as possible with an experienced Dallas bankruptcy lawyer and letting that attorney review your current financial circumstances.

If you are earning only a minimum wage income or a part-time income, $10,000 worth of debt might be enough of a reason to file for bankruptcy. On the other hand, if you have some resources and more than one stream of income, $100,000 worth of debt might not be enough to make bankruptcy right for you. Debts, assets, and income all have to be carefully evaluated, and you’ll also need to consider all of the consequences of a personal bankruptcy. There are no absolute rules, however, so an attorney’s advice is imperative. Everyone’s circumstances are of course different, so you really must consult personally with an experienced Illinois bankruptcy attorney before reaching any final conclusion or taking any kind of irrevocable action.

If bankruptcy is genuinely your best alternative, let a Dallas bankruptcy lawyer help you determine if a Chapter 7 or a Chapter 13 bankruptcy is your best choice. Your attorney can work alongside you and will fully explain all of the requirements and consequences of a bankruptcy. In the Dallas-Fort Worth area, the first thing you must do if you’re considering a bankruptcy is to seek advice from an experienced Dallas bankruptcy lawyer – as quickly as possible.

source: bankruptcyplanning.com

Student Loans And Texas Bankruptcy

If your debts are mounting rapidly and you are considering bankruptcy, you are probably dealing with more than just one debt. Car payments, medical expenses, mortgages, and credit card payments can pile up and swiftly spiral out of control. If you’re considering bankruptcy, you’ll want to discharge much debt as possible. However, bankruptcy isn’t right for everyone, and while many debts (including car loans, credit card debt, and mortgages) can be resolved through the bankruptcy process, bankruptcy cannot restructure or discharge certain other debts.

In the Dallas-Fort Worth area, if you’re thinking about bankruptcy, consult first with an experienced Dallas bankruptcy attorney. You do not want to initiate a bankruptcy only to learn later that it will have little or no effect on your debts. Some debts may not be discharged by either a Chapter 7 or a Chapter 13 bankruptcy. These debts may include child support and alimony payments; fines, judgments, or penalties imposed by any court; student loan debt; income tax debt; and all other tax debts.

A student loan debt is not dischargeable in bankruptcy unless you can prove that you would endure an undue hardship by repaying it. The precise definition of “undue hardship” is different in each state, but because the undue hardship standard is so high in Texas, student loan debts are almost never discharged through the bankruptcy process in this state. Understand that bankruptcy is not the best solution for everyone who’s facing a debt crisis, and a bankruptcy can remain a part of your credit history for up to ten years. If your debts are starting to bury you, and if you are thinking about bankruptcy in the Dallas-Fort Worth area – whether or not a student loan is one of your debts – speak with an experienced Dallas bankruptcy attorney immediately to review your alternatives and to learn more about the bankruptcy process.

source: bankruptcyplanning.com

Is There an Age Limit to Qualify for a Mortgage?

Many people are under the impression that once you reach a certain age, you won’t be able to qualify for a mortgage. Although there is some logic tied to that myth, it doesn’t make it true.

 In fact, as long as you’re a legal adult (over the age of 18), it’s illegal for a mortgage lender to decline you based on your age—regardless of being 21, 60, or 99-years-old, you can’t be denied a mortgage because of your age.

But this isn’t to say that mortgage lenders are obligated to offer you a loan. Even if you’re in the prime of your life, you’ll have to prove to your lender that you can afford your mortgage and that the odds of you going into foreclosure are slim.

Here are the factors that lenders do look at:

Debt to Income Ratios
Most lenders expect that your total monthly debts will equal no more than 36 percent of your gross income. This includes credit card payments, student loans, and of course, your estimated mortgage payments.

For this reason, it’s most beneficial to pay off the rest of your debts before you apply for a mortgage. It will greatly increase your chances of securing the mortgage you need.

Income

Mortgage lenders also want your mortgage to take less than 28 percent of your monthly income. In other words, the more money you’re bringing in per month—the more likely you are to get approved for a mortgage loan.

This is where age can make a difference. Not necessarily in terms of the chances of you getting a loan, but rather, when it comes to what income you’re including.

For most people between the ages of 20-50, the majority of their monthly income will come from their employee salary. On the flipside, many people retire in their 50s and 60s, after which their income will mainly be comprised of pension payments, high interest savings incomes, investment incomes, and other sources.

Credit Rate
No matter how old you are, the most important part of your mortgage payment is going to be your credit score. As is the case with any loan, the higher your credit score, the more credit you’ll be able to secure. Most mortgage lenders consider anything above around 740 to be a good credit score.

If you’re currently falling below that, try to increase your score as much as possible before applying for a loan. You can do this buy using credit, and making regular large payments to bring down your debt at a favorable rate.

source: northwoodmortgage.com

College Tuition Increases Slow Down; Students Take On Less Debt

The past year’s published increase in tuition and fees across all kinds of U.S. colleges and universities rose at a slower rate than the average for the past five, 10 and 30 years. And today’s students are going into less debt to pursue their degrees.

Those are the key findings of a report released late last week by the College Board.

The College Board is a private association that includes more than 6,000 colleges, universities and schools. It creates and administers standardized tests, including the SATs, and provides services and support to students and their parents as they consider college.

The rate of tuition increase has declined in each of the past three years, according to the College Board.

Students also are borrowing less money for college, the report said, in part due to the federal government increasing Pell Grants, tuition help for veterans and other assistance.

The report says a rebound from the economic downturn of the past few years was a factor. In contrast to the private sector, higher education costs tend to increase during tough economic times, as out-of-work adults seek new degrees and students who could opt to enter the job market choose to stay in school instead.

But even if recent trends are promising, a longer look at college costs shows that paying for higher education remains daunting for many families. While increases are slowing, they continue to climb higher than the rate of inflation.

Over the past decade, the average published tuition and fees at public, four-year schools have risen a whopping 42%, adjusted for inflation, according to the College Board.

“It is encouraging that published prices are rising more slowly than in the past and that annual education borrowing has continued to decline,” Sandy Baum, the report’s co-author and a professor of education policy at George Washington University, said in a written release.

“However, the reports also document dramatic increases in published tuition and fees over time that outstrip growth in grant aid for many students, as well as rising levels of cumulative debt among graduates.”

And, as the Chronicle of Higher Education notes, those figures don’t take into account other costs, like rent and groceries, which continue to rise.

According to the Chronicle, average room and board charges for four-year students now amount to more than $9,800.

Between the 2013-14 and 2014-15 school years, tuition and fees for full-time, in-state students at public four-year colleges and universities increased 2.9%, from $8,885 to $9,139.

The cost for out-of-state students at those schools rose 3.3%, from $22,223 to $22,958 during the same period, and tuition and fees at private, nonprofit four-year institutions jumped 3.7%, from $30,131 to $31,231.

Tuition and fees at public two-year schools also went up 3.3% on average, from $3,241 to $3,347.

Actual net prices tend to be much lower than published prices, the Board said, because many students receive grants from state and federal governments, or from the colleges and universities themselves. Education tax credits and deductions also help chip away at those numbers.

source: nerdwallet.com

Obama urges Congress to pass budget, raise debt ceiling

WASHINGTON - President Barack Obama on Saturday urged the US Congress to approve a budget to keep the government open after October 1, and raise the debt ceiling so the country can pay its bills.

Far-right Republicans in Congress want to take neither action in their attempt to defund a sweeping health care overhaul approved more than three years ago. Critics nicknamed the law "Obamacare," and Republicans have fought to repeal it since its passage.

If a budget "doesn't pass before September 30th - a week from Monday - the government will shut down," Obama said in his weekly Saturday morning broadcast address. "And so will many services the American people expect."

Obama warned that even soldiers serving abroad could see their paychecks stopped.

Congress must also raise the limit on government borrowing, as the US government is expected to run out of money by around the middle of October -- a scenario that could make stock markets tumble and send shockwaves through the global economy.

"Since the 1950s, Congress has always passed it, and every president has signed it - Democrats and Republicans," including conservative icon Ronald Reagan, Obama said.

"And if this Congress doesn't do it within the next few weeks, the United States will default on its obligations and put our entire economy at risk."

While Democrats and "some reasonable Republicans" are willing to take both actions,"there's also a faction on the far right of the Republican party who've convinced their leadership to threaten a government shutdown" and are "willing to plunge America into default" if they can't defund the health care program.

"The United States of America is not a deadbeat nation," Obama said. "We are the world's bedrock investment. And doing anything to threaten that is the height of irresponsibility.

"That's why I will not negotiate over the full faith and credit of the United States. I will not allow anyone to harm this country's reputation, or threaten to inflict economic pain on millions of our own people, just to make an ideological point."

Many federal agencies and programs will shutter on October 1, day one of the coming fiscal year, if Congress and the president do not agree on a temporary budget measure. — Agence France-Presse

source: gmanetwork.com

How to clean up your credit report

If you’re looking to apply for a credit card, loan, overdraft or mortgage, you need to ensure your credit report is in tip-top condition, or you risk getting turned down.

This is even more important in the current economic climate with lenders getting stricter about who they will lend to.

In fact, you may now also need to pass a credit check when applying for a contract with a mobile phone company, broadband service or utility provider.

While this may make worrying reading for those currently suffering from a less than perfect credit rating, it’s not all bad news.

There are some simple steps you can take to get it back in shape.

Get a copy of your credit record

 

Firstly, get your hands on your credit report from one of the three main credit agencies, Equifax.co.uk, Experian.co.uk or CallCredit.co.uk - there may be a charge for this.

"A credit report is like your financial passport," says Tom Ilube from credit report company Noddle.

"Companies look at your report all the time and make decisions about you based on this information, from approving a mortgage to giving you a mobile phone contract."

Put simply, the better your score, the better your chances of getting accepted for credit – and the better the rate you should get.

Simple steps

 

A simple step to improving your credit history is getting registered on the electoral roll, as lenders should view this as a sign of stability.

Also, paying all your bills on time and making more than the minimum payments on existing credit cards has a positive result as this helps build a good payment history.

Ilube adds: "Avoid keeping a high balance on your credit card, as this may be viewed as excessive debt."

In addition, having too much available credit can also be viewed negatively by lenders as there is the potential for you to get into debt at some point.

To help avoid this, you should close down out-of-date credit cards and cancel old agreements such as store cards.

Avoid multiple applications

 

Only apply for credit when you really need it, and don’t use a scatter-gun approach by making multiple applications for credit within a short period of time.

This is generally viewed badly by lenders and may result in you getting turned down as it looks like you need credit desperately because you are overstretched financially.

To help avoid multiple credit card applications from harming your credit history, Confused.com offers a free card matcher service which lets you see which cards you are likely to be accepted for before you apply.

Cleaning up your credit record

 

As well as understanding the significance of your credit score, you also need to know how to repair it.

If you find any errors, you need to write to the particular credit agency immediately, asking for them to be corrected.

For example, if you have fully paid a County Court Judgment, or if your bankruptcy has ended, make sure this is shown on your report.

If there is a particular reason for any blip you may be able to add a note to your file explaining your case.

Financial relationships

 

One person's financial situation may impact on another's credit rating if they’re linked financially - through a joint mortgage, for example.

Therefore Ilube advises people who are either divorced or separated to sever old financial relationships by making sure their ex’s details are removed from any joint accounts as soon as possible.

Finally, try to steer clear of so-called "credit repair companies".

These claim to be able to get rid of negative information from your report but may charge you for doing something you can do yourself for free.

Credit building credit cards

 

If you have some serious blemishes on your profile or a limited credit history, there are specialist card providers that may be able to help you access credit and rebuild your credit profile.

For example, credit building cards such as Luma, powered by Capital One, Vanquis and Aqua are all good choices for people with a less than perfect credit history.

You will usually start with a relatively low credit limit and higher interest rates of up to 40 per cent.

But provided you service these cards properly – by making repayments on time and in full and staying within your limit – you can pave the way to a better credit history.

And in turn, you may become eligible for a more competitively priced mainstream card in the future.

source: confused.com

Debt Levels, Big Monetary Stimulus on Tap at G20

Finance leaders of the G20 economies on Friday were set to debate specific targets for reigning in debt levels and the potential dangers from the latest round of aggressive easing of monetary policy from the world's biggest central banks.

They were also poised to demand swifter resolution to setting guidelines for financial benchmarks like the Libor interest rate in the wake of a global rate-rigging scandal.

But a rethinking of the austerity push among the world's biggest economies loomed as the biggest talking point. Advanced economies, particularly in Europe, have undertaken sharp austerity drives in recent years to curb growing debt, but those efforts have at times damaged economies already suffering from capital flight and under-investment from the private sector.

EU Economic and Monetary Affairs Commissioner Olli Rehn told Reuters in an interview on Thursday that a period of reduced spending and borrowing was necessary to calm markets concerned about out-of-control debt levels, particularly in peripheral European countries. That time has passed, he said.

"Decisive action was taken. Now as we have restored the credibility in the short-term, that gives us the possibility of having a smoother path of fiscal adjustment in the medium-term," he said.

The United States has opposed committing to any targeted level of public debt as a percentage of GDP, a common way to measure a nation's debt burden.

"I think an issue that will come up ... is the issue of hard targets, or not, for debt-to-GDP," Canadian Finance Minister Jim Flaherty told reporters on Thursday.

In a 2010 study frequently cited by policymakers, Harvard professors Kenneth Rogoff and Carmen Reinhart found that on average, economies contract when the debt-to-GDP ratio surpasses 90 percent - a level G20 officials were set to debate.

However, the study's results were disputed by researchers at the University of Massachusetts at Amherst, who said growth for countries with those ratios was actually 2.2 percent.

Weakness in economies that undertook the most severe measures to cut deficits undercut the austerity argument. The United Kingdom, in particular, is suffering its third recession in the last five years.

Still, Flaherty urged the G20 to set hard targets on debt and deficit, though he added that troubled economies should move more slowly towards balanced budgets than others.

"It's important for confidence by investors, which leads to more investment, economic growth and jobs," Flaherty said.

SPILLOVER CONCERNS

The unprecedented level of monetary stimulus designed to reinvigorate struggling large economies, including the United States, the euro zone and Japan, has raised concerns about excessive capital flight to developing nations.

In a communique on Thursday, the Group of 24 developing nations, whose ranks include Brazil, India, South Africa and Mexico, called on the advanced economies to "take into account the negative spillover effects ... of prolonged unconventional monetary policies including on inflation and the volatility of capital flows and commodity prices."

The Bank of Japan is attempting to end decades of stagnation by pumping $1.4 trillion into its economy, some of which is expected to find its way into emerging markets. Local currency funds have pulled in $16.7 billion in the first quarter of 2013 worldwide, the most in more than two years, according to Lipper, a unit of Thomson Reuters.

"There is a call from the G24 members to have clear coordination and better communication between advanced economies and emerging markets ... towards using coordination as a way to mitigate these potential asset appreciation bubbles. The consensus is that this is something that has to be closely monitored," said Mexican Finance Minister Luis Videgaray.

Videgaray has cause for concern.

In the days following the Bank of Japan's announcement, for example, the Mexican peso jumped 2.5 percent against the dollar to its strongest in 20 months. Against the yen, the peso surged over 9 percent.

Bank of Japan Governor Haruhiko Kuroda, in response to questioning about the country's aggressive efforts, said he didn't see signs of asset price bubbles "brewing in emerging nations" as a result of monetary stimulus.

"It's true that the massive monetary stimulus of advanced economies may affect emerging economies including through capital inflows," he said. "Such spill-over effects had been discussed even before the G20 meeting, and will likely be on the agenda at (this week's) meeting too."

The G20 finance ministers are due to release their formal communique around midday on Friday. They plan to task the Financial Stability Board, a coordinating body of global financial regulators, with overseeing the reform of financial benchmarks such as Libor, two sources familiar with the situation told Reuters on Thursday.

An early draft of a communique G20 financial officials will be debating asks the FSB to take on the role after a global interest rate-rigging scandal that involved some of the world's largest banks.

The International Organization of Securities Commissions came out with a report this week saying that financial benchmarks should be based on actual transactions rather than estimates, such as is the case with Libor.

source: foxbusiness.com

Things to Have Removed from your Credit Report

If you want to repair your credit quickly, there are a number of things that you can do to fix up your credit report. In general, there are some things on your credit report that really drag your credit score down. This is a look at the seven worst possible things that you can have on your credit score, as well as an explanation of why removing them will allow you to repair your credit quickly.

Most of us are already aware that some things on our credit reports are more dangerous than others. For example, going through a foreclosure or bankruptcy can cause your credit report to be scarred, and can force your credit score to plummet. Surprisingly, there are five other things that can have the same effect without you actually knowing it. Because lending institutions and banks that issue credit can use your credit score in order to evaluate who you are as a borrower, it is absolutely vital that you ensure that none of these entries ever appear in your credit report.

1 - Foreclosures.

While it may seem as if your world has literally crumbled all around you, there is still hope even when you are going default on your mortgage payment. When you do eventually default on your mortgage, most lenders are going to force you to give up possession of your home. Depending on your state laws, the lender may then auction your home off within a certain period of time in an attempt to recoup some of the lost costs. If there is any deficiency at all between what was owed to them and what your home is sold for, the lender can still come after you to reclaim those funds. With all of the foreclosure that is occurring right now, more and more banks are trying to come up with special arrangements in order to work with the homeowners. Even if you work out a deal with the lender and manage to keep your home, your credit score and credit report may still be scarred by the missed mortgage payments and the pre-foreclosure. Foreclosures remain on your credit report for seven years, so avoid them if you can.

2 - Debt Collections.

Attorney debt collections and ordinary debt collection companies can create a huge negative when they are listed on your credit report. The average credit score can drop by between 30 and 85 points for a single debt collection notice on a credit report. Sometimes you will take an even harder hit because the original credit will mark your account as a charge off, and then a second entry will appear for the collection agency, and this will only do more unnecessary and avoidable harm to your credit score.

source: richcreditdebtloan.com

Refinancing and Home Mortgage Schemes

You will be amazed to find out that there are numerous ways to pay out your debt more easily than you have ever imagined. This will make your financial life secure too. You will learn many new tricks to make your life financially secure and your finances stable. Having a safe and secure financial life has a great say in long term goals of your life. You need to have stable finances if you want to achieve a safe future. Mortgage insurance loans will help you to take loans which are beneficial, require you to pay less interest but also play a great role in making you rich. Sometimes when you take a loan its heavy interest amount is like a burden. Every month it leaves a big hole in your pocket. This site will teach you all the clever tricks that you require in taking any kind of bank loan or home mortgages. It aims to instill in you certain ideas that will help you take you financial decisions more judiciously.
Home mortgage loans are pretty common. As we all know that the present economic scenario is quite dynamic. It is ever changing and the risks are increasing day by day. You cannot predict what the market will be like, the next day, with hundred percent sureties. At these critical times the one major thing to have your own, is a house. Everybody does not have the finances to buy a house on their own, even if they have sufficient finances it is advisable that the entire money is not spent on it. It is cleverer to take a home mortgage loan and buy your own house. mortgage-insurance-loans will provide you great information on what points to keep in mind while taking a home mortgage loan.
You should be well aware of your financial situation and take a loan whose interest you won't find hard to pay off. You do not want these interests to become a monthly burden for you. This site will teach you many clever tricks which will help you to pay your home mortgage debts very easily and the interest amount will be less too. With a little use of brains and with a little help from this site you will be able to come up with great plans which will help you in refinancing homes and home mortgage loans. Various schemes will be defined with their respective pros and cons to make it easy for you to understand.

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