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Department of Veterans Affairs Home Loans #federal #perkins #loan


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VA Loans

By Elizabeth Weintraub. Home Buying/Selling Expert

Elizabeth Weintraub has an extensive background in real estate spanning more than 30 years, including experience in related industries such as title and escrow. She is a full-time broker-associate at Lyon Real Estate’s midtown Sacramento office and is recognized as a top producer. She is also a Life Member of the Master’s Club, an honor bestowed by the Sacramento Board of REALTORS , and ranks in the top 1% of all the agents at Lyon Real Estate.

CA BRE License #00697006

By Chris Birk. Guest author to Homebuying at About.com

Congress created the VA Loan Guaranty Program in 1944 to help returning service members achieve the dream of homeownership. Since then, the Department of Veterans Affairs has helped more than 18 million military members purchase homes.

What is a VA Loan?

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That guarantee gives VA-approved lenders greater protection when lending to military borrowers and often leads to highly competitive rates and terms for qualified veterans.

What are the Key Benefits of a VA Loan?

Far and away, the most significant benefit of a VA loan is the borrower’s ability to purchase with no money down. Apart from the government’s UDSA’s Rural Development home loan and Fannie Mae’s Home Path, it’s all but impossible to find a lending option today that provides borrowers with 100 percent financing.

VA loans also come with less stringent underwriting standards and requirements than conventional loans. In fact, about 80 percent of VA borrowers could not have qualified for a conventional loan. These loans also come with no private mortgage insurance (PMI), a monthly expense that conventional borrowers are required to pay unless they put down at least 20 percent of the loan amount.

  • Competitive interest rates that are routinely lower than conventional rates
  • No prepayment penalties
  • Sellers can pay up to 6 percent of closing costs and concessions

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At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.


Debt Consolidation: Pros and Cons #loan.com


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If you are considering debt consolidation, understand the advantages and disadvantages.

Whether you are teetering on the edge of bankruptcy or just trying to better manage your finances, you can’t help but notice all the advertisements touting debt consolidation. But is debt consolidation a good option for you?

Read on to learn about the different debt consolidation options and the pros and cons of each.

(To learn about other ways to handle debt, see our Debt Management  topic area.)

What Is Debt Consolidation?

With debt consolidation, you get a single loan to pay off all of your smaller loans, thereby leaving you with just one monthly payment rather than several. The theory is that one payment will be easier to manage. The goal is to lower the interest rate and the monthly payment while paying off your debt more quickly.

Debt consolidation is not the same as debt settlement. In debt consolidation, you pay your debt in full with no negative consequences to your credit.

Secured vs. Unsecured Loans

When you take out a secured loan, such as a mortgage or a car loan, you pledge certain property, such as your home or your car, to secure the repayment of the loan. For example, when you obtain a mortgage loan, your house is security for repayment. If you fall behind, the mortgage holder can foreclose on your house to satisfy the loan.

Unsecured loans are based only on your promise to pay and are not secured by any property that can be foreclosed or repossessed to pay the loan. Credit cards are examples of unsecured loans. Unsecured loans usually have a higher interest rate because they carry more risk for the lender.

Debt Consolidation Through Secured Loans

There are many options for debt consolidation using secured loans. You can refinance your house, take out a second mortgage, or get a home equity line of credit. You can take out a car loan, using your automobile as collateral. You can also use other assets as security for a loan. A 401K loan uses your retirement fund as collateral. If you have a life insurance policy with cash value, you may be able to obtain a loan against the policy. A variety of financing firms will also loan you money against lawsuit claims, lottery winnings, and annuities.

Any of these could be used for debt consolidation. But are they the right option for you?

Pros of Consolidating With a Secured Loan

Often, secured loans carry lower interest rates than unsecured loans so they may save your money on interest payments. Lower interest rates will likely make the monthly payment lower and more affordable. Sometimes, the interest payments are even tax deductible. For example, in many instances interest paid on loans secured by real estate is allowed as a tax deduction.

A single monthly payment with a lower interest rate is likely to ease your financial burden substantially. Also, secured loans are generally easier to obtain because they carry less risk for the lender.

Cons of Consolidating With a Secured Loan

there is a huge downside to consolidating unsecured loans into one secured loan: When you pledge assets as collateral, you are putting the pledged property at risk. If you can’t pay the loan back, you could lose your house, car, life insurance, retirement fund, or whatever else you might have used to secure the loan. Certain assets, such as life insurance or retirement funds may not be available to you if the loan is not paid back before you need to use them.

The term of a secured loan may also be longer than the term of the debt obligations that you consolidated. This could cause the total interest that you pay over the life of the consolidation loan to be greater than the interest would have been on the individual debts, even though the monthly payment is lower.

Debt Consolidation Through Unsecured Loans

While unsecured personal debt consolidation loans used to be quite common, they are less likely to be available to people who need them today. Generally, an unsecured loan will require the borrower to have very good credit. Accepting a no interest, or low interest, introductory rate on a credit card is often used as a substitute for an unsecured personal loan for debt consolidation.

Pros of Consolidating With an Unsecured Loan

The biggest benefit to an unsecured debt consolidation loan is that no property is at risk. And, while the interest rate may be higher than a secured loan, it may be less than is charged on several different credit card balances, thereby lowering your interest burden and your payment.

Cons of Consolidating With an Unsecured Loan

An unsecured debt consolidation loan may be hard to get if you don’t have sterling credit. Most people who need debt consolidation loans may not qualify. Also, interest rates are generally higher than secured loans. This may result in a payment that is not low enough to make a difference in your financial situation.

Using balance transfer options on no-interest or low-interest credit card offers are tricky. Often, there is a transfer fee in the fine print which negates some of the savings. There are also rules which may diminish the benefits. If you use the card for anything else, the other charges may generate interest while payments are applied first to the no-interest balance. Also, the no-interest or low-interest period is generally limited. If you can’t pay the debt off during this time, you might end up paying higher interest once the special offer period runs out.

The Psychological Pros and Cons of Debt Consolidation

While the benefit of consolidating your debts into one loan with one lower monthly payment may provide you with a great deal of emotional and financial relief, it may also leave you feeling prematurely confident about your financial situation. This could cause you to let your guard down and incur additional debt before you have paid off the consolidation loan, starting the cycle all over again.


Debt Consolidation #best #personal #loan


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Introduction to How Debt Consolidation Works

You see advertisements for it all the time — Get debt-free and lower your monthly payments! Call now! Debt consolidation ads are as ubiquitous as diet pill ads and sometimes just as outlandish. Despite the remarkable claims, debt consolidation isn’t magic and doesn’t really eliminate your debt (at least not immediately) because it involves getting new debt. That’s what debt consolidation is — taking out one new loan to pay off all your other loans. Still want to call now? Be warned: You may wind up in worse financial straits than you were before.

Debt Pictures

Dealing with student loans. car loans and mortgages. as well as any other debts is daunting. If you can pull all those expenses together under a lower interest rate. like many ads boast, you will end up making lower payments. In addition, the idea of lumping several payments into one might appeal to you. Indeed, with this process, you are far less likely to forget to pay a bill. It seems like a win-win situation.

But is it too good to be true? Yes and no. If you dive into a debt consolidation deal without reading the fine print, hidden fees can worsen your financial situation. You may even owe money for longer, and it might cost you more long term. However, when entered into cautiously, debt consolidation can help you get control of your finances.

It can be frustrating to wade through the decisions involved in debt consolidation. Several methods exist, including using a bank. a finance company or even credit card offers. Often, you can qualify for lower interest rates if you are willing to put up your home as collateral, but you risk losing your home if you cannot make payments.

In this article, you’ll find out about the different methods of debt consolidation, how to tell the bogus deals from the legitimate ones and how to combine those pesky student loans (or not). Read on to find out if you show some of the telltale signs of having too much debt.


Debt Relief or Bankruptcy? #loan #amortization #schedule


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Related Items

Debt got you down? You’re not alone. Consumer debt is at an all-time high. Whether your debt dilemma is the result of an illness, unemployment, or simply overspending, it can seem overwhelming. In your effort to get solvent, be on the alert for advertisements that offer seemingly quick fixes. While the ads pitch the promise of debt relief, they rarely say relief may be spelled b-a-n-k-r-u-p-t-c-y. And although bankruptcy is one option to deal with financial problems, it’s generally considered the option of last resort. The reason: its long-term negative impact on your creditworthiness. Bankruptcy information (both the date of your filing and the later date of discharge) stays on your credit report for 10 years, and can hinder your ability to get credit, a job, insurance, or even a place to live.

The Federal Trade Commission (FTC) cautions consumers to read between the lines when faced with ads in newspapers, magazines, or even telephone directories that say:

“Consolidate your bills into one monthly payment without borrowing.”

“STOP credit harassment, foreclosures, repossessions, tax levies, and garnishments.”

“Keep Your Property.”

“Wipe out your debts! Consolidate your bills! How? By using the protection and assistance provided by federal law. For once, let the law work for you!”

You’ll find out later that such phrases often involve filing for bankruptcy relief, which can hurt your credit and cost you attorneys’ fees.

If you’re having trouble paying your bills, consider these possibilities before considering filing for bankruptcy:

  • Talk with your creditors. They may be willing to work out a modified payment plan.
  • Contact a credit counseling service. These organizations work with you and your creditors to develop debt repayment plans. Such plans require you to deposit money each month with the counseling service. The service then pays your creditors. Some nonprofit organizations charge little or nothing for their services.
  • Carefully consider all your options before you take out a second mortgage or home equity line of credit. While these loans may allow you to consolidate your debt, they also require your home as collateral.

If none of these options is possible, bankruptcy may be the likely alternative. There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal bankruptcy court. Filing fees are several hundred dollars. For more information visit www.uscourts.gov/bankruptcycourts/fees.html. Attorney fees are additional and can vary.

The consequences of bankruptcy are significant and require careful consideration. Other factors to think about: Effective October 2005, Congress made sweeping changes to the bankruptcy laws. The net effect of these changes is to give consumers more incentive to seek bankruptcy relief under Chapter 13 rather than Chapter 7. Chapter 13 allows you, if you have a steady income, to keep property, such as a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off your debts during a three-to-five-year period, rather than surrender any property. After you have made all the payments under the plan, you receive a discharge of your debts.

Chapter 7, known as straight bankruptcy, involves the sale of all assets that are not exempt. Exempt property may include cars, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official — a trustee — or turned over to your creditors. The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter 7. You now must wait eight years after receiving a discharge in Chapter 7 before you can file again under that chapter. The Chapter 13 waiting period is much shorter and can be as little as two years between filings.

Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs, and debt collection activities. Both also provide exemptions that allow you to keep certain assets, although exemption amounts vary by state. Personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. Also, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or security lien on it.

Another major change to the bankruptcy laws involves certain hurdles that you must clear before even filing for bankruptcy, no matter what the chapter. You must get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Also, before you file a Chapter 7 bankruptcy case, you must satisfy a “means test.” This test requires you to confirm that your income does not exceed a certain amount. The amount varies by state and is publicized by the U.S. Trustee Program at www.usdoj.gov/ust .

For More Information

Read more on dealing with debt from the FTC or contact the AFSA’s Education Foundation at 1-888-400-2233 for more credit and money management information.

This article was previously available as Advertisements Promising Debt Relief May Be Offering Bankruptcy .


Debt Consolidation #same #day #loan


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