You have been overspending without realizing it and soon run into a cycle of debts. You know you have to do something about it and get out of this mess. Upon advice from friends and research online, you decided to use your home equity to consolidate your debts.

Before you sign on the dotted line to consolidate your debt, consider your repayment period carefully first. Because your loan overall interest payment is determined both by the interest rate and repayment period. Although you enjoy a lower interest rate on your equity loan, you still might be paying more interest because of longer repayment period.

Take for example: You have credit card debts of $10,000 and need to take up a $10,000 home equity loan.

For simplicity, we’ll use 10% loan interest rate.

For a 5 years loan, you will need to pay $212.47 monthly and incurred a total interest payment of $2748.20 when you finish servicing the loan.

For a 10 years loan, you will need to pay 132.15 monthly and incurred a total interest payment of $5858 when you finish servicing the loan.

From the above calculations (are estimates and are not guaranteed for any particular home equity loan), you can see that you will need to pay a much higher interest payment if you take a longer time to service your loan.

A little bit of interest every month can take up to a lot over a long period of time. If you are wise enough, draw out your monthly budget. See how much you can afford to pay back the loan every month.

The formula for saving your money on interest is simple, the shorter the repayment period, the lesser the total interest you incurred. But do take note of the late payment fees, know your limitations, and set a comfortable monthly sum where you know you can meet every month.

Moses Wright is the webmaster of Bulletpedia.com. He provides more helpful information on debt and bill consolidation tips, personal finance credit help and personal finance loan help that you can research in the comfort of your home on his website.

Share This

A no income verification home equity loan is a second mortgage loan that does not require you to provide income documentation to qualify for the loan. This type of loan is great for homeowners who need a home equity loan but have hard to document income.

The majority of borrowers with hard to document income are either self-employed or commission based employees. Consumers who fall under these categories may have high income but have a lot of business related deductions that they write off on their taxes. This is good on the one hand as it reduces the taxable income and thus the amount of taxes owed, however, when it comes to getting a home loan it can hurt as most lenders use the average of your last 2 years taxable net income (the amount left after all of your deductions) to determine your income figure for qualifying purposes. This may cause you to have a debt to income ratio problem if you have a high debt load and thus keep you from qualifying for the loan. With a no income verification home equity loan, however, your gross income can be used for qualifying purposes as opposed to the net income.

In order to qualify for a no income verification home equity loan you will, in most cases, need good credit and a high credit score. Expect to pay a higher rate for this type of loan as opposed to a traditional loan in which you have to document your income. Also, even though a no income verification loan does not require you to document your income, some lenders may require that you have a certain dollar value of assets on hand which must be verified. Not all lenders have this requirement though - some lenders offer a program called NINA which stands for “no income no assets” meaning you do not have to document either. Loan guidelines and rates vary from lender to lender so it is a good idea to shop around to increase your chances of getting the best deal available to you.

For more information on no income verification home equity loans, or to compare rates and programs of home equity loan lenders visit http://www.equityloansource.com

Levetta Rivera is a successful mortgage broker and publisher of the following financial websites: http://www.equityloansource.com and http://www.militaryvaloan.com

Share This

Your credit report is the information provided to the credit scoring system lenders use to determine their financial risk in granting you a home loan or home equity line of credit (HELOC). Credit bureaus, or consumer reporting agencies (CRAs), collect, package, and sell what is commonly known as your “credit report” or “credit profile” to companies seeking information about your financial matters. However, these reports can contain inaccurate, incomplete, outdated and sometimes even misleading information that can lower your credit score, also known as your FICO score, and can cause you to be denied a line of credit or debt consolidation loan, or to settle for a “bad credit” loan with high interest and poor terms.

There are hundreds of credit bureaus across the nation, but they are generally are affiliates of, or subscribers to, these three bureaus: Trans Union, Experian, and Equifax

What is a FICO score?

FICO is a credit scoring system developed by Fair Isaac & Co. According to myFICO.com, a division of Fair Isaac, you have three credit scores that range from 300 to 850, one for each of the three credit bureaus - Experian, TransUnion, and Equifax. Each score is based on information the credit bureau keeps on file about you (credit reports). As this information changes, your FICO credit scores tend to change, as well.

How Can I Increase My FICO Score?

Increasing your credit score takes time. The following are ways you can work towards increasing your FICO credit score.

Pay your bills on time to raise your score. Late payments and collections lower it.

Do not apply for credit frequently. Having too many inquiries worsens your score.

Reduce your credit card balances. Being “maxed” out affects your FICO score negatively.

If you have limited credit, obtain additional credit. Not enough credit can negatively impact your score.

Get a copy of your credit reports from each of the above-listed CRAs and check them for accuracy. If any information is incorrect, dispute it, so it can be corrected. This is known as “repairing your credit.”

Isn’t Credit Repair Illegal?

Credit repair is only a concern when anyone tries to have accurately reported derogatory information illegally deleted from their credit reports. The Federal Trade Commission (FTC) states that both the consumer reporting agency and the information provider (company or organization that provides information about you to a CRA) are responsible for correcting inaccurate, incomplete or outdated information in your report under the Fair Credit Reporting Act (FCRA).

Disputing Items on Your Report

You can dispute inaccurate, incomplete or outdated items online, but the FTC suggests that you dispute them by mail. Include copies (NOT originals) of documents that support your position. Clearly identify each item you dispute, explain why you dispute it, and request that it be removed or corrected. You may want to enclose a copy of your report with the items circled. Send your letter by certified mail, “return receipt requested,” so you can document what the CRA receives. Keep copies of your dispute letter and enclosures.

You could also contact the information provider directly (in writing) to dispute the items. Be sure to include copies (NOT originals) of documents that support your position. If the information is found to be inaccurate, the information provider must update the item with the CRA or have it deleted.

Maria Ny is an experienced free-lance writer from San Diego, California. She writes articles covering a broad range of subjects ranging from Bankruptcy Reform, Credit Repair to mortgage refinancing. Check out her featured articles at http://www.bdnationwidemortgage.com/

Equifax- P.O. Box 740256, Atlanta, Georgia 30374 (800) 685-1111 http://www.equifax.com

Share This