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Monthly Archives: August 2017

Pick Credit Counselor

1. Moving too fast. If you approach a credit counselor and that counselor doesn’t take time to analyze your unique debt, budget, and income properly be very wary. You really should move on to the next company if an organization is in a hurry to put you into a debt management plan right away.

2. Read the contract. The organization that you choose as your debt solutions provider should practice full disclosure and their contract should be completely transparent so that you can comprehend all fees associated with the process. When you go through the contract it should disclose all fees involved with the debt management plan including enrollment fees, monthly fees and extra fees associate per account. All these fees can definitely add up, and could possibly increase your debt.3

3. Make sure that your creditors will work with your credit counselor. There are some creditors that will not work with credit counseling organizations, and visa versa, there are some credit counseling organizations that will not work with certain creditors. Ensure that credit counseling is a viable debt solution for your different debts.

4. Understand thatcounseling is not free. Even though most counseling agencies are non-profit, and associated with religious organizations be prepared for-at least-a monthly fee associated with your debt management plan. It’s true that the education and counseling you will receive during the process may be free; there is normally a fee associate with enrolling in a debt management plan. Depending on where you are located, and some other variables your monthly, “suggested donation” should be between $50-$75. There may be other fees associated with the program so make sure that the credit counselor discloses any sign up fee or other costs before you sign up to a DMP (debt management plan).

Free Debt Advice

Professional debt solution services can help you in a number of ways to overcome severe financial difficulties. Let us discuss in brief the various steps followed by them while assisting their clients.

  • They engage in a thorough discussion to get a clear understanding of your financial situation. They obtain detailed information regarding the debt amount, names of creditors, your annual income and your basic monthly expenses.
  • They provide you the necessary information on your legal rights and the various options that you can avail in order to deal with the debt situation. They make you aware of the various debt solutions available, and the one that would cater to your requirements. The advice offered by them is based on individual financial circumstances, needs and conveniences.
  • Professional services that are aided towards working for your best interests rather than working towards their profit, would always offer free debt advice. You would be charged only if you wish to proceed further to avail more services from them. It is advisable to avoid any service that charges you for offering debt consultation.
  • Expert services once hired, would be responsible for choosing the right debt solution for you, negotiating with the lenders for your best interests, proceed with legal proceedings if needed and help repay your debt in accordance with your conveniences.

Once you hire a professional to work on behalf of you, they are completely responsible for communicating with the creditors, rid you from their constant harassments, and choose debt solutions that would help you appropriately.

It is however extremely important to find the right service in order to overcome a debt situation efficiently. Any inappropriate advice can make a difficult situation even more unmanageable. There are some common ways that can help you find the right debt advisor during financial crises.

  • Internet browsing can be a significant method of seeking reliable debt advice services. Through web browsing, you can make a list of services that seem to be appropriate for your situation, and proceed to have a thorough discussion with them regarding the detail of their services and charges before hiring them.
  • You can also take help from friends, family and other acquaintances in finding services that are reliable and proficient. Finding any kind of service through referrals can prove to be highly effective and beneficial.
  • Even local phone directories can help with finding the names of reliable debt advice services.

Avoid Mortgage Drawbacks

Of course, large outstanding debts are a no-no. Obviously, people with large outstanding debts are less likely to be approved. This comes naturally as they will be looking at the borrowers’ ability to pay off. So, be sure you have things settled before approaching banks or lending institutions for a loan. No lender will approve a borrower who has major outstanding debts, that’s for sure.

Bad, bad credit rating. As much as large outstanding debts will not get your loan approved, such is the case if you have a bad credit rating. Be sure you don’t have credit rating issues before applying for a loan. Look into services that allow you to check your own records. It is very important that you have other financial issues, or at least the major ones, settled before applying for a loan.

Be realistic in your loan. More than any written record, you should be able to know your financial stature and should be reasonable enough not to apply for a loan that you may not be able to repay given the circumstances. It’s all about being realistic about what you can afford. Borrow only what you feel you can pay, or else, you will be in much deeper financial burden.

Private Money Financing

For many years I’ve been more investor than entrepreneur, but I see myself as a sort of venture capitalist who takes a large profit in return for sharing some of the risk with an entrepreneur. The amount of profit depends upon the particular transaction. When I have financed those who buy houses to fix up and resell and others who have developed mobile home lots, I’ve been able to earn around 20% per year on my invested cash. I’ve also financed those who attend foreclosure sales to buy houses for resale with roughly similar yields. I do no work. My role is that merely of a lender who lends money on a shared appreciation mortgage (S.A.M.) loan.

A lender usually gives up the benefits of amortization, appreciation, tax-shelter, and leverage in exchange for high cash flow returns. By keeping money invested in relatively short-term propositions, he is able to roll funds over and over, and thereby generate high yields. Except for mobile homes, I’ve rarely seen a house that would produce net cash flow yields that compare with those that private financiers can command. This is particularly true when conventional financing dries up. Builders, fixers, land developers, dealers are heavily dependent upon the availability of financing to stay in business, and they’re willing to pay high short-term interest rates to get it. When credit is tight, this is a fertile field of opportunity to those who followed my advice and sold some of their houses over the past few years and who are now looking for ways to invest their cash.

The big buggaboo of the lending business are those who become overextended and who file for bankruptcy protection. This can be a worrisome situation that robs the investor of a lot of time and money. There are several reasonable steps that a person can take to reduce credit default and bankruptcy risks.

1. Act like a banker. Lend only to those with high F.I.C.O. scores who have plenty of collateral that you would like to own. When you lend to them, don’t let them borrow more than they can repay. You won’t be able to get as high a yield, but if safety is a priority, this is a prudent way to get higher returns.

2. Don’t make loans! Instead of lending money to those involved in risky ventures, buy something else that they own at a discounted price. Instead of receiving regular payments which could cripple their cash flow, let them buy their property back at some point in the future. If they go broke, you’ve avoided the need to foreclose; or the need to file a motion in a bankruptcy proceeding. On the other hand, if they’re successful, the price at which they buy back their property can be increased in order to capture an agreed upon share of their profits.

3. Instead of buying another property as above, buy the property that a dealer wants to resell. Give him an Option to buy it from you at a price based upon risk factors and the time of repayment. This avoids potential usury problems, since you only deal with 3rd parties when buying, and they need not buy the property back from you. Obviously, you’ll want to buy at a very attractive price which will enable you to sell out to someone else if the entrepreneur fails to buy the property from you. This is particularly wise when dealing with builders and developers.