Holy cats! My credit card interest rates!

I decided to take my own advice that I’ve been dishing out about credit cards and debts. Today I reviewed my credit card accounts to see what my current interest rates are. I’m pretty lucky to have great credit and that I’m able to pay off my debts monthly. [Read more…]

Another reason to pay off your credit card debts

Yesterday I read an interesting article in the Seattle Times about how (and why) to pay off your credit card debt as soon as possible. The article warns of a slowing economy and future rate hikes by the Fed, which will translate to higher interest rates on credit card debt. In addition to the higher rates, the slower economy may cause some people to have reduced income which will be more challenging with the high interest rate debt.

The article encourages readers to have an emergency savings fund and to focus on paying off credit card debt. [Read more…]

Home Equity Loans and Home Equity Lines of Credit

If you have been wanting to spruce up your kitchen, bathroom or any part of your home and you don’t want to touch your low interest rate on your existing mortgage, a second mortgage could be an option worth considering. [Read more…]

Could you survive one month without income?

With the government shutdown pushing over a month long, some federal employees are having to juggle another missed paycheck. Yesterday during an interview with CNBC, US Commerce Secretary Ross is quoted stating:

“So the 30 days of pay that some people will be out – there’s no real reason why they shouldn’t be able to get a loan against it and we’ve seen a number of ads from the financial institutions doing that… there really is not a good excuse why there really should be a liquidity crisis,” he said. “True the people might have to pay a little bit of interest.” [Read more…]

Cash Out Refinances for Student Loans

Fannie Mae has revamped some guidelines regarding student loans and how they are treated in debt to income ratios for qualifying for a mortgage. This is great news… however what’s even better news for home owners who have student loans, Fannie Mae is offering improved pricing on cash out refinances for paying off student loans! [Read more…]

Friday Funny on Debt

All sarcasm aside, if you want to buy or refinance a home, think twice before going deeper into debt.

If buying or refinancing a home in Washington state is on your radar, please contact me – I’m happy to help you with your mortgage needs and develop a game plan.

How does a Loan Mod impact buying your next home?

Many home owners who were unable to refinance and did not qualify for special programs like HARP opted for a loan modification (or loan mod). A loan mod is when the existing mortgage terms are adjusted or modified, in most often cases to reduce the mortgage payment.

To be clear, I am not in the “loan mod” part of the mortgage industry. My focus is on helping Washington home buyers and home owners with mortgages for purchasing a home or refinancing their mortgage.  With my mortgage practice, I do come across home owners who have had a loan mod and they are often surprised to learn how it may impact their odds buying a home. 

Many lenders view a loan modification, if done for reasons of financial distress, as a “pre-foreclosure” or short sale.

A lot will weigh on the borrowers credit report. Lenders will look to see how the loan mod was reported to the bureaus. For example, some lenders may have added language to the credit report such as “PAYING UNDER PARTIAL AGREEMENT” or “LOAN MODIFIED…” which indicates a loan modification has taken place. Lenders will weigh if the borrower had late mortgage payments, how late the payments were and how recent the last late payment took place. 

It’s also possible that the loan mod may not prevent you from buying your next home depending on your circumstances and how the loan mod was reported to the bureaus.

If you’ve had a loan modification in the past few years and are considering buying your next home, you will want to connect with a mortgage professional as soon as possible to see what your options are. 

If you are considering a loan mod, please review this information from Washington State DFI. Another great website for you to check out if you are a Washington state homeowner in distress is www.homeownership.wa.gov.

If you are considering buying a home located in Washington state, I’m happy to help you. Worse case, if you are not able to “buy now” we can work on a plan together so that you’ll be in a better position in the future.

The Fed is Getting Tougher on Credit Card Companies

In a press release earlier this week, the Fed announced they have approved the final rule amending Reg Z regarding credit cards which will go into effect on February 22, 2010.   The new rules set tougher guidelines on credit cards, especially with regards to protecting consumers against rate changes and how they are billed.  

No interest rate increases for the first twelve months.  There are some exceptions such as if you have a variable rate tied to an index; if your rate is an introductory rate (which in that case, your rate must be fixed for a minimum of 6 months); and if you're more than 60 days late on your bill.

Increases to your interest rate can only be applied to your new balance.  Your old balance will keep the lower rate.

Payments will be applied towards the highest interest rates first when you pay more than the minimum payment.  (Some exceptions may apply).

Statements must be mailed or delivered at least 21 days before your payment is due.  Your due date should always be the same day of the month unless it falls on a weekend, in which case your due date will be the following business day.

Charges you make "over the limit" may be restricted (not allowed) unless you give your credit card company permission.

If you're under 21, you may need a cosigner such as a parent, to obtain a credit card.  Guess those credit card companies will have to stop preying on college students unless Mom or Dad agree to cosign.

No two-cycle (double-cycle) billing.  According to the FOMC's site "credit card companies can only impose interest charges on balances in the current billing cycle.

When your rate or fees are going to change, you must be notified 45 days priorto the change taking place.  You will have the option to refuse the change, however this probably means that your canceling your account.  If you do refuse the change, and your account is canceled, the creditor can impose higher payments by requiring to pay off your account in five years.  NOTE: Canceling your account may be damaging to your credit scores.  Should you get a notice that your rate or terms are changing and you don't agree with it, you are probably better off (as far as your credit score is concerned) paying off the card by applying more principal than canceling it with the creditor.

New monthly statements will show you how long it will take you to pay off your credit card making minimum monthly payments as well as what your monthly payment would need to be if you wanted to pay off your card in three years.

I applaud the new credit card rules.  Since their not going into effect until February 22, 2010 you may want to keep an eye on your interest rates…with just over a month before they take place, sly credit card companies may try to sneak a few changes in before things get tougher.