Category Archives: Personal Loan
Why So Many Loan Modifications Fail and How to Seek Help
For millions of homeowners struggling to pay their mortgage, many are faced with falling home values which makes it hard to either sell or refinance. Therefore, many homeowners make the painful decision to simply walk away rather than fighting to stay afloat and keep their home. Financially speaking, it does make a lot of sense for many underwater homeowners to walk away or short sell because for some, it may take them many years to break even and start to have positive equity. However, not everyone falls in this category. The reasons are many, such as: (1) if you are planning to hold on to your house for a long time, you could break even and then start to have positive equity again; (2) perhaps you have personal goals to hold on to your house because you enjoy having your family living in it. So just because lots of people are walking away does not make it the right answer for everyone. This would be similar to doing what everyone else was doing during the bubble, which was to buy a house because everyone was.
In an effort to help some of these homeowners who wanted to save their home, loan modification programs have become one of the primary rescue effort. Loan modifications help make the mortgage payment more affordable so that people can keep their homes.
Unfortunately, these programs can be very challenging and at times fail to help the homeowners because the process to qualify for one and get approved for one is super complicated.
On one hand, banks make the process very difficult. In fact, some research shows that it was much easier for most people to obtain mortgages when they purchased their homes than it is now to apply for loan modifications. Many believe that banks do not have the proper infrastructure in place to deal with so many loan modification applications. Other believe that the banks are giving people the run-around on purpose.
On the other hand, they are lots of people who apply for loan modifications the wrong way not adequately knowing what they are getting into, or what will be expected of them. They submit their applications and wait for months hoping for the positive answer. Well, for most people, and this is a sad but true fact, if they are not financially pre-qualified they won’t get a positive response. What homeowners need to do is not only demonstrate to investors and lenders that modifying their current loan is more cost-effective than foreclosure, but that they are able to make the new modified payment.
So instead of applying unprepared, it would be better to know ahead of time whether you could qualify for a loan modification. This is vital to know because if you don’t qualify for the new terms, then the modification could be denied, anyway. And if you are not pre-qualified, perhaps fine-tuning your budget, i.e. lowering your debt, taking the train instead of owning the car, could help you get qualified. The decision whether to apply is 100% up to you, but having guidance can save you time and money, and increases your chances of approval for a loan modification. So here are some of the pre-qualification criteria that are considered crucial and this is where you need guidance with:
1. Your front-end debt-to-income ratio must be above 31% of your gross income prior to the modification.
2. Your house target payment, also known as PITIA (principal, interest, taxes, insurance, and association dues), has to be lowered to be at 31%-38% of your gross income after the modification in order to meet the HAMP guidelines. This is done in three steps. (1) Your house payment target is achieved by lowering your interest rate to no more than 2% with a 30 year loan term. (2) If the target is not reached, then your loan term is extended up to 40 years in order to try and reach the new house target payment. (3) The third step is to either provide you with a loan forbearance or a balance reduction if the target payment is not reached in steps 1 and 2. And this is the tricky part. There are relatively few loan modifications that have received a balance reduction. Additionally, as far as the forbearance option goes, this is very relative to your case; there is no size fit all, basically, the loan modification program guidelines do not give one percentage forbearance ratio for everyone.
So now you are wondering if you should become a mathematician in order to figure all the ratios and calculations involved in a loan modification. You sort of do if you are going to figure it out on your own. The alternative option is to seek out help where you can get unbiased, conflict-free analysis for your loan modification potential.
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Debit Card Advance- would put an end to cash deficit
A salaried individual would understand the essence of debit card the moment he falls short of cash. Actually, the debit card would act in two some ways. It can be used for withdrawing the cash from the bank or checking account. It would be also used for loan approval from the lender. In other words, it would empower you with easy way to extract cash from the lender. You can utilize the money for short term needs or debts till the next month’s pay check. This type of loan is known as debit card advance. It is similar to normal payday loans.
You can strengthen your knowledge on debit card advance with the help of computer and an internet connection. You would come to know about the variation in the rates. The rates are in fact higher for these unsecured loans. The term “unsecured “highlights on the fact that you would not have to pledge any collateral against the loan amount. You would not be verified for maintaining bad credit history. You would not be disapproved for any other bad factor like county court judgments, foreclosures, bankruptcy, missed payments, defaults, etc. You would be assisted with the loan amount ranging between £100 and £1500. The repayment period would not last beyond 31 days.
There is no dearth of lenders in the market. There may be lot of fraudulent practices in the market. Selecting a trustful lender would be a real hard work. It is better to check the market position of the lender before signing up. Moreover, it is better to read the terms and conditions given in the print. Otherwise, you would end up paying for hidden costs. Getting tied up with Debit Card Loans enables you to get higher loan amount at lower rate of interest. If you are running short of money to repay the loan amount, then your case would be given special treatment. They might extend the repayment date without charging any extra fee. You would be assisted with online loan application form to fill up the important details. These details are the following basic conditions:
You need to be genuine citizen of UK. You must have a regular source of income. It is necessary to reveal the checking account details along with 16 digit debit card number. This checking account should not be less than 3 months old.
It is better to revise the online filled up form and submit it. It would go to the lender’s secured server. The loan amount would be deposited in to the bank account.