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Pitfalls of debt consolidation
In my mail box everyday I receive at least one or two mails regarding the debt consolidation companies and services and I always wonder how many people will be taken into these attractive statements without knowing much about the details. The luring claims of these companies include;
1. To decrease interest rate to almost a zero level.
2.50% lessening of monthly payments
3. A security to your company and debt.
If you are stuck into this whole system of unpaid debt these statements would look like a relieving pain killer or an exact ointment on your wounds. But before actually jumping on any of these services let me give a few drawbacks of this whole methodology that will compel you to think appropriately and then decide.
Zero Interest Rate
Well, zero interest rate is not possible humanly, because no fooling is sitting in these companies to let you spend all his money gaining no profit in return. Its just like you need to have a detailed calculation about the monthly payments you are going to make and the time period. Most of the times youll come to know that interest rate are as much as 22 to 25% high. You may be paying less monthly amounts but yeah the duration will be much prolonged.
Payments and their Share in these
You will pay your monthly amount to these debt consolidation companies and then lets see what can happen to those. First of all you may notice that they are having their share or fees in every payment and ultimately paying the creditor a lesser one. Then some of these companies are even notorious to make late payments or missed payments that will worsen your credit score and your rating for payments.
Balance Transfer Cards
These low interest balance transfer cards re very much into market these days even you can have dozens of them in your pocket. But what is the drawback? You ask for such a balance transfer cards and pay that low interest payments for few days, but after that time this interest rate is diminished and you have to either pay the original interest or even more than that thatll be devastating.
Negotiating
This is the part they said they are expert in, but actually they are misleading you so as not to involve you in this whole matter. The better option here will be to negotiate with the companies by you so that you wont have any doubts regarding the payments.
FHA 203K Loan Benefits Of FHA Home Improvement Loans
In recent studies, home ownership rates have increased steadily because of the implementation of the FHA home loans. Purchasing homes has been made easier because of this benefit.
Through the years, FHA has assisted Americans to gain their rights in owning the homes that they want. Reasonable mortgage rates for middle class, producing housing for the elderly and those with low income, and financing military housing are only a few examples of what the FHA has done for them.
The whole process begins with the lenders extending the loans to those who normally couldn´t buy a house without their assistance. But of course, these people must meet the FHA requirements before they are given the loans that they are applying for. One requirement they must meet is that they should have a good credit rating.
If they have a bad credit rating, they might have a hard time getting their application approved. If they do get it approved, it might mean that they would have to pay a higher interest rate compared to those who have good credit score.
Also, FHA loans give benefits to those who wish to buy homes but aren´t able to make down payments because they are fresh college graduates, newlyweds, or people who are still trying to complete their education.
There are also some lenders who allow people with negative credit rating to qualify nonetheless. They know that these people are marred by foreclosure or bankruptcy but they are willing to give them a second chance.
The FHA 203k loan is the most popular FHA home loan. There is a fixed rate and this is the most ideal for first time home buyers. It lets the individuals pay up to 97 percent of their total home loan. This means the down payments are regulated on a manageable level and the closing costs are also at a minimum.
The FHA 203k loan is the only loan wherein the total closing costs can be given as gift from a non-profit or government agency that is related to the cost and benefits of the whole company.
However, the guidelines to remember in this whole transaction when dealing with the FHA 203k loan is that there is a minimum income requirement. The individual must qualify for this before he be granted an FHA 203k loan.
The debt ratios may also be specific, depending on the state he is living in. The FHA 203k loan is a great investment because one can purchase the home he´s been wanting.