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Common Signs of Loan Modification Scams and How to Avoid Them
For those considering loan modification, times have likely been better. Generally, people only seek information on modifying their loans after having some difficulty keeping up with their mortgage payments and other bills. They see this as an option to stay in their homes and continue getting their finances back on track.
Unfortunately, some loan modification companies are preying on these individuals with false promises and guarantees that are too good to be true. Since the Home Affordable Modification Program, or HAMP, began many opportunistic individuals, including some loan modification attorneys, have attempted to profit.
Here are some warning signs that one of these loan modification companies is attempting to add you to their list of victims.
1) They ask for upfront payments. This is one of the most important flags because of its predatory nature, and also because it is illegal to ask for money before their work on the modification has begun. Also, you should never make your monthly payments to the loan modification attorney or any other third party. Your loan is still serviced by the lender and that’s where your payments should be sent.
2) They offer results that are too good. While the purpose of the program is to reduce your monthly payments to an affordable amount, either through spreading out the repayment period, reducing interest rates or reducing the principal, if the offer sounds exceptional then be wary. Any “guarantee” or “promise”, whether it is an end to foreclosure proceedings or even acceptance into the program, should be approached with caution.
3) They can’t, or won’t, explain the services they are going to do. While the loan modification process can sometimes seem difficult or tedious for homeowners, the process is relatively straightforward. Your lender supplies a packet that must be filled out, generally including an authorization to release tax information, proof of income and bank statements, as well as an explanation of why you are having difficulty making the payments. There is no mystery or secret to the process and any reputable loan modification company should be able to explain the process to you.
Loan modifications can be confusing to many people but guard yourself against potential scams by watching out for upfront payments, too-good-to-be-true results, and mysterious methods.
Home Loans, Why To Decide To Purchase A Property
Even when it may not sound easy, purchasing a home may not be as hard as it seems to.
Being a homeowner is a desire that most of people share. Even when we love the possibility of changing, the idea of having a place to call ours sounds good at any moment of our lives. That idea gets stronger as we are growing older. When we want to settle up, and kids start to come, then is when most of people whishes to have had earlier the idea of purchasing a home.
It does not mater when you start thinking about purchasing a property. It will always be a good idea. Having a property will grant you among other benefits, the possibility to obtain cheaper loans for whatever you may need them in the future.
Finding The Right Mortgage
Home mortgages are loans secured over the property that is being purchased. They have longer terms than other kinds of loan have, usually they are set up for 20 or 25 years.
You will find many different options on home mortgages, that you will have to analyze depending on what are you looking for. The most important thing to do is to choose your lender carefully. You have to evaluate all the conditions of that mortgage loan that seems to suit your needs best, remember that you will be obligated to that loan and to its terms for a long period of time.
As many other kinds of loans have, mortgage loans can have either fixed or variable interest rates. Fixed rates will be slightly higher, but you will know exactly how much are you going to pay every month until you have finished with the loan repayment. Variable rates are a good opportunity to readjust your monthly budget, since they usually start at a very low interest rate and then it goes on increasing. With this option your monthly payments will be lower for some time and then you will start paying a higher amount.
You can also get a mortgage loan with both, fixed and variable rates. By doing this you will pay a fixed amount for a certain period and then interest rate will become variable.
Both options have their strong and weak points. Fixed interest will ensure that you will be paying the same even if the interests go higher in the future. This kind of rate is good if you choose a long repayment term. In the other hand, if interests get lower, a variable rate will make you save a lot of money, but you will be expose to the market fluctuations and if interests go higher again your monthly payments will be increased. This option implies less risks if you have chosen a short repayment term, or may be better to consider it later in case you would like to get a home mortgage refinancing.
Home Mortgage Refinancing, Later In Time They May Be A Good Option
If you decide to purchase your property with a home mortgage, you may want to know that there is a possibility of refinancing your loan after you have started with the repayment.
Home mortgage refinancing allows you to lower your monthly payments or choosing a longer repayment period. The way in which home mortgage refinancing loans work is very similar to other debt consolidation loans. You get another loan to cancel you home mortgage after you have started the repayment. Getting a new loan you will be able to set up again your loan rates and terms. The best thing is that you can shop for a better loan that the one you have, since you do not have to get a mortgage refinancing from your actual lender.