Category Archives: Auto Loans
Loan Modification Companies How They Work
If you are searching the internet for loan modification companies, this article will help you narrow down your search by teaching you what to look for.
Loan modification companies are used when a homeowner is struggling to make his/her payments and needs help. This can be caused by a loss of income, a type of hardship or an increase in your interest rate resulting in higher monthly payments. I know I suffered from a combination of all three of these at one point. I was in construction, my daughter needed two eye surgeries that were not covered by our insurance and my interest skyrocketed when my loan adjusted causing my payments to double. Yes, double!
The perfect candidate for a loan modification is someone who has higher interest rates, an adjustable loan and still has an income coming in. These tend to get approved quite easily.
So, what does a loan modification company do? Well, instead of you calling your lender and trying to resolve the problem with your loan yourself, they handle this for you. It is a very complex process that can take months to resolve and if you don’t get it right you’ll get denied. Or, even worse, if you don’t know what you are doing you could actually get a loan modification that does you no or little good and you’ll be stuck in it. There are no second chances with these.
It just makes sense to hire a professional in these cases and get the best possible resolution. If an experience loan modification company can get you a 4% fixed for 40 years loan and you get your current adjustable rate frozen for 3-5 more years, the difference in your payments each month with be substantial and the difference over the life of your loan will be tremendous!
The problem is, the press tends to highlight the negative aspects of loan modification companies. You never here stories on the news about a good company that just saved someone $800 a month on their mortgage payment! Instead, you here the exact opposite where some company took a homeowners hard earned money and didn’t accomplish anything. Both of these situations happen all the time, so you need to know what to look for in a good company.
Here are some tips:
1. Make sure they are licensed by the DRE in whatever state they are operating out of. They need to have a license or be an attorney to take payments for negotiating loan mods.
2. Just because someone is an attorney does not mean they are honest! Find out the attorneys name and check their bar status and see if you find any complaints against them. If there are excessive complaints you may want to think twice – especially if they are related to loan modification.
3. Choose a company that makes the most sense! Talk to a few different companies. Don’t make any rash decisions! If one company is just pushing for you to pay them and promises things that sound too good to be true, they probably are. Find a company that is extremely professional and outlines a good plan for your unique situation.
4. Get pre qualified! Did you know that some companies can actually have an underwriter call your lender and see if you will qualify for a loan modification under current guidelines? This way, you should know before you go in what kind out outcome to expect.
5. Check references. See if they have actual homeowners who have used their services that you can call. See if they can email you examples of their past successes. If they are a good company, they will have no problem with this.
I wish you luck in lowering your mortgage payments and hope this will help you make a wise decision.
Facts About Payday Loans And Credit Score
Everybody knows that payday loans and cash advance loans are probably two of the few financial products that do not require credit verifications to qualify for them. Though credit has little to do with the qualification process of payday loans and cash advance loans, there are still interactions between these loan products and your credit score and history. It is very important to know them if you are interested in keeping a healthy financial life.
These interactions may have nothing to do with approval but have implications on the qualification process of other financial products like credit cards, personal loans and even secured loans like home mortgage loans or home equity loans. So, as you can see, it is important for you to know them because your future financial life can depend on the use you give to these loans and their relation with your credit score.
Positive Interaction For Raising Credit Score
It may sound strange but even though payday loans are meant only for an emergency situation, they can be a great tool for recovering your credit if used properly. Since most of the lenders that provide this kind of loans report to all major credit bureaus, it is possible to obtain one of these loans that do not require credit checks and take advantage of the fact that the lenders report to credit bureaus to get positive inputs on your credit history.
Even though the approval of the loan will not have implications on your credit report because no credit checks are made, the timely repayment of the loan will be recorded into your credit history and thus, a positive entry will be added to your credit report. However, bear in mind that payday loans do not have long repayment programs and thus, a single or two entries will be reported during the repayment of a payday loan. Personal loans with longer repayment programs are far better for this purpose, however, you may need to request a few payday loans before you can get approved for a personal loan if your credit score is not that good.
Negative Effects On Credit Score
There are some reasons why payday loans can affect credit score negatively. The mere fact of getting a payday loan will not affect your credit score but if debt keeps accumulating it will affect your debt to income ratio which will, in turn, affect your credit negatively. Thus, you should avoid using payday loans as a common source of financing because that is the main reason why debt accumulates: people fail to raise the money to repay a loan and so, they take another loan to repay the previous one.
Also, payday loan lenders report to credit bureaus, as explained above, and if the timely repayment of the loan gets recorded into your credit report as a positive entry, the lack of payment, or late payment will also be recorded into your credit report but it will affect your credit score negatively. As you can see, just applying for a payday loan will not affect your credit but what you do with it and how you repay it can have either positive or negative effects. Thus, be careful.