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What is a Car Title Loan?

A car title loan is a loan that a bank gives to a client, using the client’s car as collateral. The loan amount is almost equivalent to the market price of the car or vehicle. If the borrower fails to pay the loan, the bank confiscates the vehicle and resells it to cover the loan amount.

The process of getting a car title loan is considerably easy and quick. It is a short-term loan, in which the repayment period is 14 days to a month. As the repayment period is very short, the interest rate charged on this loan is very high. Banks demand a written title loan agreement from the borrower at the time that the loan is granted. Borrowers are expected to read the entire contract very carefully and understand all the clauses before signing. All the terms and conditions are deemed understood by the borrower after the agreement is signed.

These car title loans are available to almost anyone, who has a clear title of a paid off car. Documentary proof of income, identification and age are essential in order to take advantage of a title loan. Only individuals who are eighteen years of age are eligible for the loan. One of the most important factors of a car title loan is that a credit check is not done, so even borrowers with a bad credit history can take advantage of this type of loan. Thus car owners can easily apply for and receive a car title loan if they have fully paid for car at their disposal. These loans offer convenient ways of getting much-needed funds in an emergency situation.

By: Jimmy Sturo

Posted in Finance · June 16th, 2010 · Comments (0)

Loan Modification – What Really Happens?

The housing market is a mess right now. Millions of Americans are unable to make their mortgage payments. When a mortgage goes unpaid for too long, then a foreclosure follows. This hurts the housing market more because every foreclosure drags the cost of homes down lower and costs lenders even more money. To answer this problem homeowners can now seek and receive a loan modification. But what happens with a loan modification?

First of all, the entire point of a loan modification is to lower a monthly mortgage payment so that it’s more affordable. This is done by one or more of the mortgage terms being changed. The loan modification has to be agreed upon by both the lender and the mortgagee. However, there are certain criteria that must be met in order for a mortgagee to qualify for a loan modification.

Three of the biggest conditions that must be met are:

1. The homeowner has to demonstrate a hardship that resulted in an inability to pay the monthly mortgage payment. There are many different types of hardships that qualify.

2.The mortgagee has to prove that the new monthly payment obligation set forth by the loan modification is affordable and can be made on time.

3.The current home has to be worth less than the current amount of the mortgage. With the crash in the value of homes, this is the case for millions of Americans.

Unfortunately, once a homeowner falls behind with a couple mortgage payments, the late fees and penalties make it almost impossible to ever get caught up with the payments. What often happens with a loan modification is that those late fees and penalties can actually be rolled right into the principal of the loan.

So, what happens with a loan modification is that the mortgagee and the mortgagor agree to change one or more of the terms of a mortgage. Then the mortgagee basically starts all over with a new lower monthly payment that is much more affordable. This keeps the mortgagee in the home and it allows the lender to continue getting paid on the loan.

That’s what happens with a loan modification. It’s a great alternative for many homeowners, and many lenders, since it allows homeowners to stay in their home and won’t continue to add more weight to a housing market that is already near its breaking point.

By: Judy Mercer

Posted in Real Estate · June 15th, 2010 · Comments (1)

Top 10 Questions About Loan Modifications

The loan modification process can be frustrating and confusing for many distressed homeowners. If you are considering contacting your lender about a loan workout to avoid foreclosure, you need to get as much information upfront as possible so you will be prepared and able to present your case in the best possible light. Programs and guidelines are changing and it is getting much easier for homeowners to get the help they need.

Posted in Real Estate · June 14th, 2010 · Comments (1)

Mortgage Loan Payment Calculator

Buying a property is a massive undertaking. It is, no doubt, going to be the greatest expense of your life and one of the most nerve wracking purchases that you will ever make. We are talking about a very large sum of money and one wrong step could spell disaster and the loss of a lot of your money or even the loss of your home. If you are willing to undertake this kind of responsibility entirely on your own, then good luck to you. Most of us feel more comfortable getting some help in determining what kind of mortgage and financial help we should be asking for. One product that can help us to get started and understand the financial implications of the different loans available is a mortgage loan payment calculator.

A mortgage loan payment calculator will help you to establish a number of different facts. You will be able to enter your information into the calculator and then it will give you a whole range of interesting and very important figures. Then you will have a clear picture of how much you can reasonably borrow without having to worry about repayments. It would be disastrous to take on a mortgage only to find that you have bitten off more than you can chew and the repayments are much more than expected and too high to be managed.

Based on the information given, the mortgage loan payment calculator will be able to give a clear idea of how much you will be able to borrow based upon your earnings. This is the first step and will mean that you can realistically start looking at properties in the right price range. There is no point in drooling over a mansion and thinking that it could be a possibility when an apartment is going to be far more suitable. The calculator will be able to tell you what you can expect to pay in mortgage repayments. This is dependent on a number of factors. The term of the loan is a major point to consider. You will be able to establish whether a fifteen or thirty option is the best for your circumstances.

These are the main issues that you will want to have clear in your mind and these are within the capabilities of any mortgage loan payment calculator. Some of them will then go on to give you further information options such as tax savings, extra payment options, refinancing, insurance etc.

There are some excellent websites which are readily available through search engines offering you good advice and sometimes a very detailed mortgage loan payment calculator. Many of them are independent and there to help you with sound advice. As buying a property is such a huge undertaking, it is good to know that there is help at hand and it could save you a lot of money and possibly even your home.

By: Robert Grazian

Posted in Real Estate · June 13th, 2010 · Comments (0)

Title Loan Companies

Title loan companies have gotten a bit of bad rap in the recent past. While they can charge high interest rates, they also provide quick cash for many individuals with bad credit who have difficulty otherwise obtaining a cash loan in a time of crisis. This article details how a loan from a title loan company works and whether they might be a good idea for you in a time of emergency.

At its simplest a car title loan is a cash loan secured by a piece of property, your car, truck or other vehicle. The way it works is that you bring your car title and your car to the title loan company. They will appraise your vehicle and tell you the maximum amount of loan that are willing to extend. Most loan companies will not loan more than 50% of the appraised value of your vehicle. For instance, if you bring a car to a title loan operation and they value the car at $5000, you will probably not be able to obtain a loan for more than $2000.

Now, in order for a loan to be processed you must own your car clear. If you are making payments or if the car’s title is not in your name, you will not be granted a loan. If you co-own the car with a spouse or family member, you must both be present to sign the loan paperwork.

The issue with car loans is their terms. In most cases, even though your loan is secured, you end up paying more than 300% in annual interest rates. Now, if you are able to pay off your loan in full at the end of the 30 day period, you will pay much less. But, even in that instance, you will still pay at least 20% for the loan, which is considerable interest on a loan of only 30 days.

However, if you do not have great credit or access to other sources for quick cash, title loan companies provide a critical service in times of emergency. In a true emergency, most people are willing to pay 20% to get out from a jam. But, these loans are not for everyone, so it is critical that you educate yourself about the associated fees before you sign any papers.

By: Ovri Ellington

Posted in Finance · June 13th, 2010 · Comments (2)

Defaulted Bank Loan Workouts

Most people frequently speak about SBA guaranteed loan workouts which have their own specific requirements. There are, however, an enormous number of traditional secured and unsecured bank loans which are in default and require workouts resulting in debt forgiveness. There are consulting companies who do hundreds of these every year. They are different and frequently easier to work out as there is far more local authority and flexibility as the banker and the ruling committee has the option of making whatever decision they choose to make without the restrictions than with SBA requirements and objectives which can handcuff a banker’s decision.

The bank can modify, defer and compromise its loans as it deems appropriate. Consultants can fashion more creative workout resolutions which will work even better for the borrower as well as the lending bank. It is far more of an open negotiation and works out very well; frequently better than SBA guaranteed loan workouts.

Unfortunately, the opposite can also happen as the local bank being unrestricted and not under anyone’s control can act irrationally, emotionally and contrary to workout logic either making unreasonable demands or simply refusing to resolve a workout unless under their terms.

Fortunately, loan default consultant experts seldom have such issues and their secured bank workouts are always well done and totally satisfactory to the borrower, with similar results as their experience with SBA guaranteed loan workouts… pennies on the dollar. These consultants perform the same strategies, protecting the assets and eliminating the personal guaranties. The difference is these consulting experts are dealing with the bankers’ personalities and their own guidelines.

They seldom have any difficulties. Bring your secured and unsecured bank loans and they will work them out as successfully as they do the SBA guaranteed loans.

By: Don Todrin

Posted in Finance · June 13th, 2010 · Comments (1)

Understanding Mortgage Accelerator Loan Program

Mortgage accelerator loan program is a unique loan clearance program that has been introduced in the U.S. recently. Based on the concept of home equity borrowing, mortgage accelerator loans have been in vogue for several years in the U.K. and Australia.

Mortgage accelerator loan program works on a very simple concept. Here, the borrowers, who have taken credit on their existing property, are required to deposit their monthly paychecks into their credit account. All the monthly expenses, excluding their monthly mortgage payments can be withdrawn from the account through lines of credit. The remaining unspent amount gets deposited against the credit resulting in a lower mortgage balance. One of the advantages of this program is that it saves the interest that needs to be deposited with the principal. As a result, the time taken to pay off the loan is shortened or in other terms accelerated.

However, the monthly mortgage payments during the initial 10 year in a mortgage accelerator loan are interest only payments, making it possible to the borrowers to become financially stable. Later, the borrower is required to make payments towards the principal. Even the line of credit decreases by 1/240 every month till the remaining loan term.

This program is ideal for borrowers who are not financially disciplined. If the borrower does not spend the money by drawing against line of credit, it can be used to pay off the house. Apart from this, an additional benefit that mortgage accelerator offers to borrower is instant cash through line of credit during any financial emergency. This gives the homeowner confidence to become aggressive in paying off his loan and still having ready cash available during the times of emergency.

By: Pauline Go

Posted in Real Estate · June 13th, 2010 · Comments (1)

Loan Modification "Do It Yourself Kits" – Beware!

What is a loan modification anyway?

A Mortgage loan modification is a permanent change in the terms of your mortgage loan that allows your loan to be place back in good standing with your lender and potentially reduce the interest rate and provide affordable lower monthly payments. Modification is not a refinance of your home but a renegotiation of your current mortgage terms. The modification may include but not limited to a new interest rate, an affordable monthly payment, principle reduction and amortization schedule. A loan modification to stop foreclosure is a viable option that you can use to keep your home.

If you are one of the many Americans having a difficult time and have fallen behind on your mortgage payments. You are not alone. The first thing that you may be tempted to do is purchase a “do it yourself loan modification kit”. Well, if you are tempted and think that will solve your problem please keep reading.

So what are the advantage and disadvantages of a “do it yourself” loan modification?

Advantages

The primary advantage of a “do it yourself” loan modification is the money you will save by not hiring a legal professional to negotiate your loan. A loan modification “do it yourself” kit will give you all the necessary documentation and step by step process to negotiate with your lender.

Disadvantages

There is really no reason to purchase anything because if you need any information on modifying your mortgage loan that information is readily available through US Department of Housing and Urban Development (HUD). They will offer you free counseling and provide you with material to work with your lender and modify your loan.

However presenting your case of “hardship” to your lender may not be as easy as one may think. First of all you will need to know who to talk to. Once you find that person they will ask you to provide documentation to backup your hardship status. This could be a hardship letter, income statement and other documentation that may be requested. After providing the documentation then the lender will review and make a decision on whether to approve or decline the application and at this point you will begin the negotiation process with your lender.

So “do it yourself” could potentially save you some money but it will be a very time consuming process and at times it may be very aggravating and most likely a poor experience overall. A mortgage loan modification process can take a week to 90 days to complete. It will be dependent on your lender.

So be careful before you jump down the “do it yourself” route and only go in that direction if you are ready to dedicate plenty of hours and you like challenges.

What’s my alternative to “do it yourself”?

The alternative to do it yourself is using outside sources. If you decide to go the path of using the outside source make sure you are dealing with a professional company that is backed by legal team. Most outside source will charge you a fee on average of $2,500. Although this may seem to be a steep price your loan modification will be negotiated through professional attorneys who will not only save you money but remove the time consuming task and aggravation that you would have if trying to settle yourself.

The chances of a shorter loan modification process are much higher given that most service providers have established relationships with lenders and know who to talk to, what paperwork is required and how long the process may take. In other words your fee will be well worth your investment and you can be assured that in most case the service provider legal team is looking out for your interest.

So what should I do?

Although we encourage you to work with your lender if you are a payment or two behind, the reality is homeowners are probably not the best position to negotiate with their lender and in most cases you will end up in a more difficult position. Most of your lenders will know much more than you on laws as it relates to mortgage loan modification and could potentially take advantage of your lack of knowledge in this area. So my recommendation is to work with a service provider that has an experienced legal team and has dealt with multiple lenders. Do your homework and find a good service provider that will be looking out for your interest and not the bank or lenders interest.

By: Ronald Moore

Posted in Real Estate · June 13th, 2010 · Comments (1)

401k Loan

Your Personal Economic Stimulus
401k Loans Relieve Financial Distress

The Internal Revenue Code allows more flexibility and latitude about 401k loans than your employer’s plan rules probably will grant. The law does not restrict 401k loans, but it also does not require your employer to offer them. Although most major corporations do provide 401k loans for employees experiencing temporary financial difficulties, they must comply with strict guidelines about how to manage them. When your employer sets-out your 401k loan’s terms and conditions, saying “my hands are tied,” he means it.

Do not get confused by a tricky distinction in the law: The Internal Revenue Code mandates how your employer must set-up and pay-out your loan; it sets limits on how much you can borrow; and it establishes the timeline and requirements for repayment. The Internal Revenue Code also establishes the consequences for default. But the law says nothing about why employees do or do not qualify for 401k loans.

Your employer maintains complete discretion over conditions, circumstances, and restrictions on 401k loans. And if you work for a relatively small company, your employer simply may not offer 401k loans because they add too much to his administrative costs. The majority of large corporations will allow 401k loans when (1) employees pay college costs for their children, their spouses, or their children; or (2) the 401k loan will prevent eviction from or foreclosure on their homes; (3) the money pays reimbursed medical costs-co-pays or the cost of procedures insurance does not cover; or (4) the loan goes toward the first-time purchase of a home.

Internal Revenue agents and 401k specialists advise your employer on limits and guidelines for 401k loans: Because they pay administrative costs for managing your loan, most employers set a minimum loan amount-typically $1000. They also set the ceilings on 401k loans-typically 50% of your vested amount. If you’re married, your employer may require your spouse’s consent to the loan. Especially in “community property” states where your spouse could be saddled with the debt in the case of separation and divorce, he or she has a right to full disclosure and informed consent. Your employer probably then will stipulate that your loan payments must be deducted from your paycheck; although the stipulation seems to protect him against default, it actually does more to protect you.

Naturally, because you are, in effect, borrowing money from yourself, the loan requires no credit check, and most details about 401k loans are not forwarded to credit reporting agencies. You do, however, have to pay interest. The interest payments actually make up for lost earnings on your principal, so that they work to your long-term benefit. The interest rates almost always remain extremely low-usually the Federal Reserve’s Prime Rate plus 1%, which definitely qualifies as a “preferred rate.”

As with all major financial decisions, you should not take out a 401k loan in haste and without professional advice. At work, talk to your 401k Plan Administrator, and then talk to your tax person or your financial planner.

By: Jeffrey DeGraauw

Posted in Finance · June 13th, 2010 · Comments (2)

VA Home Loan Rates

VA home loan interest rates are much lower than any other interest rates applicable on other kinds of loans.

The VA home loan rates are transferable. You demonstrate your positive points to lenders and request a lower interest rate. Lenders investigate a number of factors before issuing VA loans, such as a borrower’s credit record, income levels, etc, which in turn influences the VA loan rates. The lender will also want to assure that you are capable of meeting the payments to cover the cost of a home, which includes credit payments, insurance, taxes, income levels, etc. Eligibility for a VA loan is not based on your credit score, but you pay the same low rate whether you are making a 5% down payment or no down payment at all.

Though first-time VA home loan applicants are guaranteed a VA loan of up to $240,000, the actual amount of the VA mortgage loan will depend on income, assets, and credit history. You can choose VA home loans at rates that are adjustable. A variable loan rate can save you money, if you do not have a long-term interest in the house.

VA loans can help you to obtain the funds to purchase an existing single-family home or new construction. You can take advantage of VA home mortgage loan to refinance or undertake home improvements. The interest rates on VA home loans differ from one financing company to another. These specific financing companies offering VA home loans also have an array of products with different loan rates. So, you can choose a VA home loan based on such rates.

By: Alison Cole

Posted in Real Estate · June 13th, 2010 · Comments (0)

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