Understand the Pros and Cons of Mortgage Relief

Posted on Friday 29 June 2012

The people who took lifetime mortgage schemes pay a monthly payment to the mortgage lender. Sometimes it becomes a huge burden to pay the continuous monthly payments. The increase pressure among the debtors has given birth to numerous mortgage relief plans. The relief plans are a good way to enjoy the retired life freely. Before going for any relief it is important to know whether you are working with a legitimate company or not.

How to work with the lender?

If you are unable to pay the monthly payments then you can directly seek help from your lender. The mortgage companies generally have no intention to lose their loans, so they offer different types of relief to the borrowers. Sometimes, they offer forbearance which helps the debtor to gain some additional payments in course of few months. They could also offer loan modification to their client. This policy enables you to have a reasonable and affordable mortgage payment for the rest of your loan period.

The Relief Programs

If you don’t want to work with your lender, then you can easily seek other mortgage relief programs. Various mortgage relief firms assist in negotiating the terms for loan modification. The companies which provide the assistance are non profit organization or governmental programs. But before you start working with any companies make sure the concerned company possesses a good track record in the market. You can even search about the company or check their records to be sure that you are working with a good firm.

Banning Upfront Fees

The statistics have showed that the clients had difficulties in selecting the proper firm from the scams. They found it hard to distinguish between the legitimate and non legitimate companies. To solve this problem, the Federal Trade Commission has banned the upfront fees from the debtors. Earlier many firms took the upfront fees from the clients and did not provide the required services. With this guideline, you can easily sort out the authentic firms from the scams.

Making Home Affordable

This Making home Affordable plan is a step that was taken by the federal government to help the property owners with real estate industrial problem. In this plan the government takes the initiative to choose the modification plan for you. Sometimes the government refinance on your property when you no longer afford to pay. The refinance plan helps you to receive money to refinance on you loan.

Attorney

This plan is considered to be the last resort if you fail to pay your loan. A real estate attorney helps you in your negotiation process with the lender on your loan modification. This process can be expensive as the attorneys will charge some amount of money for their assistance. But still it is the most reliable way to get mortgage relief. The attorneys are specialized to take you out from this situation with their tactful and straightforward work ethics. It is always advised to the people that they should take the advice of the attorneys before making any crucial decision.

The author,Jonathan has described the useful programs which help a person to receive mortgage relief. The programs are designed in a way to solve your mortgage debts and remove the tensions from your life.

savvy @ 8:00 AM
Filed under: General Finances
The Student Debt Scenario: Not Much to Look Forward To

Posted on Wednesday 27 June 2012

Student loan in default is something that almost every fresh graduate in America is facing. The cost of tuition, according to the latest data released by the National Centre for Education Statistics and the U.S Census Bureau, has increased manifold in the last 2 years. The average yearly tuition fee for a four year course is more than 40% of the average household income. Thus it should not be surprising that 2 out of 3 students are graduating with a loan burden of around $30,000.

This is not an easy burden to come to terms with. a financial burden of this magnitude at such an early stage of life can be crippling for the graduates. This burden is consequently delaying their other purchase plans like car, house etc. Thus it is high time that the federal government took some serious steps towards eliminating this problem.

Some of the steps that the government has already taken towards alleviating this problem like the Income Based Repayment Program (IBR) can be considered as a decent start. But it has missed to address the crux of the problem. It does not take into its purview the private loans that are already in the IBR or are being paid under the normal terms or are in default already. These are the ones that, according to many, need to be addressed first.

However, in comparison, the Student loan Forgiveness Act of 2012 has a wider scope. It includes the private as well as the older loans. But there is a catch. In the case of the education loans, the combined value of the debt (including the private and the federal ones) should be more than the average income of the household for the last three years. Another catch is that, the treatment for the defaulted loans is not clear. Whether they will be considered for forgiveness is not a question that has been answered here.

The federal loan forgiveness programs require the borrower to pay regularly for 20 years in order to qualify for the loan forgiveness. But this is not so in the case of the recent Student loan Forgiveness Act. It forgives the loans of those who have paid for consecutive 10 years.

Those who have their loans in default should seek default student loan assistance. The age old means of getting rid of a defaulted loan, such as consolidation, extension, etc. still prove to be helpful. Until any other measure or scheme is introduced that is better than them, we have to rely on the ones that are there.  For those who are yet to take the loans must make the plans before they apply for the loan. This is the only way they can make the payments without burning a hole in their pocket.

However, the situation needs a far more consolidated and a concrete approach from the federal government. This is a problem that is sucking in the American economy like a black hole. If major steps are not taken immediately, the situation might go beyond any repair.

Jonathan has been a financial advisor for a long time and has helped many a student from being crushed by the debt through his advice on default student loan assistance. Here he talks about the student debt scenario as it stands today.

savvy @ 8:00 AM
Filed under: General Finances
How Claims Affect Insurance Rates

Posted on Wednesday 6 June 2012

Carrying adequate insurance is important. Without it, you could be in serious financial trouble. There are many types of insurance, among them are health, life, auto, and home, but they all work essentially the same way: you pay a premium and receive economic security in return. One problem with this arrangement, at least as far as most insurance customers are concerned, is that your rates may go up if you need to file a claim. Following are a few tips on how claims affect insurance rates.

It’s a Numbers Game

Although it is generally accepted that filing an insurance claim will automatically make your rates go up, that may not be true. The fact is that filing multiple claims, especially if you do so within a very short period of time, will definitely raise your premiums. If you go for a long time without a claim, and have an accident or get sick and need to file a claim, it may not have any bearing on your insurance rates. However, filing multiple claims will more than likely cause them to go up.

Carrying a High Deductible

One reason that people carry a high deductible is to keep their insurance premiums as low as possible. When you do that, you need to have money on hand to pay the deductible if you want to file a claim, because the insurance company won’t send you a check until the deductible is paid. Another reason for carrying a high deductible is to avoid having to file a claim in the first place. If you have a low deductible, you may be tempted to file a claim even though the amount you need really isn’t all that high. If you do so, you may end up filing claims quite often, even  though the upfront cost is relatively low. In that case, your rates will more than likely go up due to filing multiple claims. You may be better off carrying high deductibles and paying for minor problems yourself to avoid having your rates go up.

You May Face Cancellation

Insurance companies may want you to believe they’re in business to provide you with financial protection. The truth is that they’re in business for one reason and one reason only–to make money. It is the primary motivator for any company. Sure, they provide a service, but that’s really a secondary purpose–an insurance company will penalize any customer that files multiple claims, because that person is costing them money. Carrying this scenario to its ultimate end, an insurance company is likely to cancel your policy, and refuse to issue another policy, if you file one claim too many–because an insurance company intends to make a profit they may attempt to get rid of any customer that files multiple claims and ends up costing the company more than they make from them in monthly premiums.

Pay for Small Claims Yourself

One way to avoid the possibility of having your insurance premiums skyrocket, and maybe even being canceled due to filing multiple claims, some people pay for repairs to an auto or for slight or recurring illnesses, out of their own pocket. Any claim that you would normally file should be scrutinized to see if the potential for increasing insurance rates is worth the cost of paying to solve the problem yourself. Some people balk at this simply because it diminishes the reason for carrying insurance in the first place. But you have to stop and consider the ‘big picture.’ Will it end up costing you more if file the claim? Only you will be able to answer that question, because everyone’s financial situation is different. For some people having their monthly bills go up is unacceptable, because they simply don’t have the money. For others it would be much easier to file the claim, let the insurance company handle the problem, and pay a few bucks extra every month.

Go Shopping

If it gets to the point where the monthly premiums are too high, then you could try and find another company that will give you better rates, despite the fact that you’ve filed multiple claims in the past. If you go shopping on the Internet, and at the more traditional brick and mortar companies, you may be able to find a company that will take a chance on issuing you a policy without you having to pay a lot of money.

Guest post from Cameron Gray. Cameron writes for AutoInsuranceQuotes.org.

savvy @ 8:00 AM
Filed under: General Finances
7 Negotiating Tips for Car Buyers

Posted on Monday 4 June 2012

If you’re in the market for a new or used vehicle, you’ve probably spent a lot of time trying to decide what type of car to buy. It may seem like there is a never ending list of things you should know about any given vehicle–fuel efficiency, safety features, and warranty terms are just a few factors to mull over. Another thing to consider is the price. That’s an area where a lot of people struggle, because it’s standard practice when buying a car to try and get the best possible deal you can from the seller. However, there are a few negotiating tips ever car buyer can employ.

Be Prepared

Before heading off to the dealership to buy a car, it would be to your advantage to do some research–not only on the type of vehicle you’re considering, but on the dealership as well. Ask your friends and neighbors what type of car they own and whether or not they’d recommend it. Determine what type of car you’re interested in, and do your research to find out what a good price would be. The more you know about the vehicle, the better prepared you’ll be to come away with a good price. The same goes for a car dealer. If a number of people have nothing but bad things to say about their car buying experience with a particular person or dealer, then you would be well advised to avoid them. If a certain dealer is praised repeatedly for their business practices, you may want to consider buying from them.

Don’t Become Emotionally Involved

A car dealer’s job is to try and sell you a vehicle for as much money as they can. It’s your job to try and keep the price at a reasonable level. An experienced dealer will try and make you fall in love with the car they’re trying to sell you. Make every effort to avoid becoming emotionally attached to the car. If you fall into the trap of loving the car, the dealer will sense it, and you may never get the kind of deal you’re looking for.

Arrange Financing Before You Shop

Because a dealer does business with lending institutions at a volume rate, they are frequently able to get better interest rates than you will be able to. Unfortunately, they also want to make a profit from their offer to finance your vehicle, so they charge more than the rate they’re getting. You would do better to try and arrange your own financing ahead of time. This will also allow you to know exactly how much money you have to spend, so you won’t be tempted to overbuy. Another consideration is to make sure your credit score is as high as possible so you’ll qualify for lower interest rates.

Go Easy on the Extras

A car dealership will probably make more money from the extras they sell you than they do from the car itself. They’ll undoubtedly offer you an extended warranty and rust proofing, among other things. Although these may ultimately be beneficial, you could probably get them cheaper from another source. The same thing goes for insurance coverage–you would be better off arranging for an insurance policy with your own provider.

Ask for Discounts

When you’re negotiating a price with the dealer, be sure and ask for any discounts that may be available. This is another area where having your financing arranged beforehand can be to your advantage, because in some cases the savings you would normally get from any discount would be absorbed by the higher price of financing through the dealer. If additional discounts are available that you don’t qualify for, ask what you would have to do in order to become eligible for them.

Comparison Shop

Don’t simply walk into a car dealership and buy the first car you fall in love with. You should look at buying a car as a marathon and not a sprint. The object is to get a vehicle you like at a price you can afford. If you’re impatient, you’ll more than likely end up paying far more than you would if you take your time and visit a few dealers before making a decision.

Be Realistic

Be realistic in your expectations. If the MSRP (Manufacturer’s Suggested Retail Price) is $40,000, don’t expect to make a deal for $15,000. The dealer expects you to try and negotiate a good price, but they have to make a profit too.

Guest post from Sam Landon. 

savvy @ 8:00 AM
Filed under: General Finances