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Apache is functioning normally

Apache is functioning normally

Falling behind on your debt can be frightening. You may wonder if the creditor will come for your property or sue you. Sometimes, you don’t even realize you owe a debt before a credit collection service comes calling. But you do have rights and options. Get some tips for negotiating with creditors below. 

In This Piece

1. Determine Whether Negotiation Is the Right Move

Settling your debt isn’t always the right move. If you can pay your debt off quickly without settling, it may be better for your credit. On the flip side, the debt will cost you more money.

Consider the big picture of your personal finances to figure out whether you should just pay off your debt fast or negotiate for more time or a lower payment requirement. 

2. Make Sure the Debt Is Yours

While you’re thinking about whether debt negotiation is right for you, take some time to validate the debt. Mistakes happen—and so does fraud. It’s possible you didn’t originate the debt yourself, and if that’s the case, you can dispute it. 

While validating the debt, you should also check that it falls in the statute of limitations. If debt falls outside the statute, collectors can’t continue to collect it and the creditor can’t sue you for the debt.

3. Don’t Negotiate Without Knowing What You Can Afford

If you decide to settle a debt, figure out what you can afford. Sit down and go through your finances with a fine-tooth comb. What do you really need to spend money on every month, and what can you kick to the curb? Go to the negotiating table with a firm figure in mind. Keep in mind that lump-sum settlements generally cost less in total than monthly repayment plans. 

4. Understand Your Rights

Under the terms of the federal Fair Debt Collection Practices Act (FDCPA), creditors and debt collectors aren’t legally allowed to:

You also have a right to information about your debt, such as the name of the original creditor and how much you owe. Knowing your rights helps you protect yourself throughout the negotiation process. 

5. Keep Your Story Straight

Falling behind on debt often happens because of serious life factors, but reps at credit collection services or lenders aren’t counselors. They’re just employees trying to do a job. 

Give a condensed version of why you can’t pay your debt as agreed, and avoid drama. If you’re in a difficult situation, make that clear, and tell your lender what you’re trying to do to get back on track.

Before you talk with your creditor, it might help to write down and rehearse a few go-to sentences. This can make the discussion less emotional, making sure you’re better able to discuss the details and stand up for your rights. 

Whatever you do, tell the truth. It’s much easier to keep the truth straight, and you’ll feel better if you don’t tell tales.

6. Ask Questions

Don’t be afraid to ask questions. You have a right to know where the debt came from, how the total amount owed was calculated and what fees might be included. 

7. Take Notes

Talking about debt can be stressful and overwhelming. Keep a pen and paper handy so you can take written notes whenever you communicate with a debt collector. Make sure you write down the full name of the person you spoke to, the time of the call, how long the call went on and what you spoke about. You should also jot down any of the bad behaviors we mentioned above if they occur to create a written record of potentially illegal collection practices.

8. Read and Save Your Mail

It can be tempting to throw bills in the trash, but don’t do it. Instead, open them, read them and face your debt head-on. If a debt looks familiar, put the bill in a file and think about how you’d like to settle or discharge the amount. If you don’t remember accruing the debt, ask the lender for proof that you owe it.

9. Talk to Creditors, Not Collection Agencies

Try to negotiate with your original creditors before they sell your debts. Taking the bull by the horns at this stage could help you keep a few points on your credit score. Your original creditor may also have programs that can help you get back on track with payments. 

10. Get Any Agreement in Writing

Get any settlement or repayment plan in writing as soon as possible once you conclude negotiations. Don’t pay any money before you see the agreement in black and white. If you pay before receiving confirmation, you might have trouble later on. Some unfortunate consumers end up getting chased twice for the same debt.

11. Stay Friendly

Debt is a nerve-wracking topic. It’s easy to get emotional when talking to creditors and debt collectors, but try to be friendly and stay on topic. Remember—debt collectors can’t come into your home and confront you, and they can’t take the resources you need to live away from you. If they start making such threats, end the conversation and report them instead of getting heated and angry.

12. Put the Past Behind You

Once you settle a debt, prepare to move into the future as positively as possible. Continue making your other payments on time to avoid this issue in the future. And keep an eye on your credit reports to ensure these old debts don’t crop up again via new collections accounts. Save all the records of your debt settlement so you can prove you don’t owe the money if that does happen.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

The Fannie Mae Flex Modification Program (FMP) is a mortgage assistance solution designed to relieve borrowers facing financial hardship.

Are you looking to improve your mortgage management but don’t know where to start? Handling mortgage payments is challenging, especially if you’re facing economic difficulties and don’t know where or how to get financial assistance. The Fannie Mae and Freddie Mac Flex Modification Program may be the solution you’re looking for.

Learn what you need to know about the Flex Modification Program: how it works, who qualifies for it, and how you can apply. This comprehensive guide will help you understand the many benefits of FMP for a more stable financial future.

In This Piece:

What Is the Flex Modification Program?

The Fannie Mae Flex Modification program is a mortgage assistance solution designed to relieve borrowers facing financial hardship. This program offers a flexible framework for loans that helps eligible borrowers to modify their monthly mortgage payments and avoid foreclosure.

Modifying the loan terms can make mortgage payments more affordable and sustainable for struggling homeowners.

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How Do Fannie Mae and Freddie Mac Work?

The mortgage market has a few essential entities, including the government-sponsored enterprises called Fannie Mae and Freddie Mac. Their approach allows lenders to free up funds to provide more mortgage loans to borrowers.

But how does it work? Fannie Mae and Freddie Mac helped make mortgages more accessible by buying them from lenders. This allows lenders to have more money available to provide new mortgages to borrowers or invest in other financial opportunities. For example, if a lender originates a mortgage, they can sell it to Fannie Mae or Freddie Mac, who then include it in their portfolio or package it into mortgage-backed securities.

How Flex Modification Works

The Flex Modification Program offers loan modifications to eligible borrowers experiencing financial hardship. Here’s a breakdown of how the program operates:

Eligibility Requirements:

  • You must have a mortgage loan owned or guaranteed by Fannie Mae or Freddie Mac.
  • The mortgage loan must be at least 60 days delinquent or at risk of imminent default.
  • You must demonstrate a hardship that affects your ability to make timely mortgage payments.

Modification Terms:

  • The program aims to reduce your monthly mortgage payment to 20% or more below your pre-modification.
  • The modification may involve adjusting the interest rate, extending the loan term, or forbearing a principal portion.
  • The goal is to make the mortgage payment more affordable while ensuring it’s sustainable for you.

Application Process:

  • Apply to the Flex Modification Program through a loan servicer.
  • The loan servicer will assess your eligibility and collect the necessary documentation.
  • Once approved, the loan servicer will work with you to finalize the modification terms.

Why Should You Consider the Flex Modification Program?

Before considering the Flex Modification Program, it’s essential to understand its potential pros and cons.

Pros:

  • Lower monthly payments: The program aims to reduce your mortgage payment to a more affordable level, making it easier to manage your finances on time.
  • Protection from foreclosure: By modifying your loan, the program can help you avoid the devastating consequences of foreclosure.
  • Improved financial stability: By participating in the Flex Modification Program, you can regain control of your financial situation. Providing you with a sense of stability and peace of mind, allowing you to focus on rebuilding your financial health.
  • Simplified application process: Applying for the program is relatively straightforward, and you can work directly with your loan servicer to navigate the process.
  • Potential principal reduction: The FMP may offer this, which means that a portion of the outstanding loan balance could be forgiven or deferred, reducing the overall amount owed. This can be particularly beneficial if you owe more on the mortgage than your current property value.
  • Preservation of homeownership: One of the primary goals of the FMP is to help borrowers preserve their homeownership. The program offers a viable alternative to foreclosure by providing a framework for loan modifications.

Cons:

  • Extended loan term: Modifying your loan may result in a more extended repayment period, meaning you’ll make mortgage payments for longer.
  • Impact on credit score: While participating in the program doesn’t directly affect your credit score, the delinquency prior to modification might be reported on your credit report.
  • Limited availability: The program is specifically for Fannie Mae or Freddie Mac borrowers with owned or guaranteed loans. You won’t qualify for this program if either entity doesn’t back your loan. However, other programs may exist. Contact your lender if you’re struggling to make your mortgage payments.

Remember, these pros and cons will vary based on your circumstances. It’s essential to consult with your loan servicer and thoroughly review the modification terms to understand the potential benefits you may receive from participating in the program.

Who Qualifies for the Flex Modification Program?

The Flex Modification Program is designed for borrowers struggling with mortgage payments due to financial hardship.

To qualify for the program, you must meet the following criteria:

  • Loan ownership: The mortgage loan must be owned or guaranteed by Fannie Mae or Freddie Mac.
  • Delinquency or imminent default: Borrowers must be at least 60 days delinquent on their mortgage payments or at risk of imminent default.
  • Demonstrated hardship: Borrowers need to demonstrate a hardship that affects their ability to make timely mortgage payments. Hardships may include job loss, income reduction, medical expenses, divorce, or other significant life events.

Additionally, you must comprehend what a “hardship” entails to be considered for a loan modification. Each situation is evaluated individually, but common examples of hardships include loss of income, disability, serious illness, divorce, or the death of a co-borrower.

How to Apply for the FMP

If you believe you meet the eligibility requirements for the Flex Modification Program, you can follow these steps and tips to apply:

  1. Gather documentation: Prepare the necessary documents, such as proof of income, bank statements, tax returns, and any other documentation required by your loan servicer.
  2. Contact your loan servicer: Inform your loan servicer about your interest in the Flex Modification Program.
  3. Complete application forms: Your loan servicer will provide the necessary forms and guidance to complete the application process.
  4. Submit documentation: Submit all the required documentation and the completed application forms to your loan servicer.
  5. Follow up and provide additional information: Be proactive in promptly following up with your loan servicer and providing any additional information they request.
  6. Review and accept the modification terms: Once your loan servicer evaluates your application, they will provide you with the proposed modification terms. Review them carefully and, if acceptable, sign and return the necessary paperwork to proceed with the modification.

Remember, each loan servicer may have a specific application process, so it’s crucial to communicate directly with them to ensure you have all the necessary information and are following the correct steps. Having to redo the application process due to easily-avoided mistakes is the last thing you need.

Other Mortgage Payment Help Options

What if I don’t qualify? What can I do? Other mortgage payment assistance options are available if the FMP is not the right fit.

Fannie Mae and Freddie Mac offer additional programs catering to different circumstances. Some of these options include:

  • Home Affordable Modification Program (HAMP): This aims to help homebuyers struggling with financial hardship and mortgage payments.
  • Repayment plan: Allows you to catch up on missed mortgage payments by adding a portion of the past-due amount to your regular expenditures over an agreed-upon period.
  • Forbearance: Temporarily suspends or reduces your mortgage payments with this program. It can be for a specific period, providing short-term relief during financial difficulties, so you can reassess the situation.

But before you move forward with one of these, it’s essential to analyze your alternatives and consult with your loan servicer to determine the best course of action based on your specific circumstances.

FAQs

Let’s address some frequently asked questions about the Flex Modification Program:

Does the Flex Modification Program Affect Your Credit Score?

Participating in the Flex Modification Program doesn’t directly impact your credit score. However, the delinquency prior to modification might be reported on your credit report

What if Fannie Mae or Freddie Mac Doesn’t Own My Loan?

If your loan isn’t owned or guaranteed by Fannie Mae or Freddie Mac, you won’t be eligible for the Flex Modification Program. However, you should contact your loan servicer to inquire about other available mortgage assistance options or loan modification programs specific to your loan type.

How Long Does the Flex Modification Program Last?

The duration of the Flex Modification Program varies depending on the specific terms of the modification. Typically, the program aims to provide long-term mortgage relief by modifying the loan terms to make payments more affordable and sustainable for the borrower.

The revised terms may involve extending the loan term or adjusting the interest rate. It’s important to discuss the duration of the modification with your loan servicer, as it will depend on your circumstances and the terms agreed upon.

Can I Qualify for the Flex Modification Program if I’ve Previously Received a Loan Modification?

If you have previously received a loan modification, you may still be eligible for the Flex Modification Program. However, the specific requirements and eligibility criteria may change depending on your previous modification and the current guidelines set by Fannie Mae and Freddie Mac.

It’s crucial to communicate with your loan servicer and provide them with all the necessary information regarding your previous modification. They will assess your eligibility based on your unique circumstances and guide you through the application process.

Remember, these answers are general guidelines, and you must consult with your loan servicer to get accurate and personalized information based on your situation.

What Are the Next Steps?

The Fannie Mae Flex Modification Program provides borrowers with a potential lifeline during financial hardship. It aims to make mortgage payments more manageable and sustainable by offering loan modifications. If you’re facing challenges with your mortgage payments, exploring the Flex Modification Program and other mortgage payment help options can help you find the assistance you need.

To take control of your mortgage management and improve your financial well-being. Consult with your loan servicer for accurate and personalized information based on your situation, and research different mortgage rates to make informed financial decisions.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

Car insurance can be confusing. First, there are all the policy considerations: Do you want a policy with comp and collision? How much liability should you carry? Do you need uninsured motorist coverage? Even once you make decisions on all these things, the bill that arrives can be difficult to understand—exactly what goes into the pricing for your car insurance premium? Here’s what car insurance companies don’t want you to know about premium pricing.

  • Your car insurance may not be tied to the driver.
  • The type of car you drive matters.
  • Prior claims and questions raise rates.
  • You can check your report for errors.
  • Your credit score impacts your car insurance costs.
  • Where you live impacts your premium account.
  • Your age affects your car insurance premium.
  • Gender, marital status, job and education level can affect premiums.
  • If you bought your car with a loan, your premium may be higher.
  • You can lower your insurance rates.
  • You have options if insurance denies your claim.

Is Car Insurance Tied to Car or Driver?

Technically, car insurance is tied to the car. That means if you let someone else drive your car, your insurance may kick in if there is an accident. Not all insurance policies cover all uses of your vehicle, though, so read the fine print on yours before you allow someone else to drive it. You may also be able to exclude drivers who live with you from your policy if you don’t ever want them driving your car and don’t want them impacting the cost of your policy.

>> Find Car Insurance Quotes. 

Does It Matter What Kind of Car You Drive?

The total value of your car, what type of vehicle it is and what type of safety rating it has all factor into the cost of your policy. Other factors can include how many miles you drive each year, where you park your car, and how many expensive extra features your car has.

Does Your Driving Record Affect Your Insurance?

Every claim you make—and even if you ask an insurance agent about making a claim—gets entered into a database that your current and future insurance carriers can access. If you have had any recent accidents or traffic violations, you may be more expensive to insure than someone with a clean driving record. If you’ve made any recent claims, your insurance premiums will likely go up. And if you shop around for a new company, they’ll have access to your records and will take your driving record into consideration.

Can You Check Your Insurance Reports?

Your insurance companies share information with two databases: the Comprehensive Loss Underwriting Exchange (CLUE) and the Automated Property Loss Underwriting System (A-PLUS). These databases are run by outside agencies—LexisNexis runs CLUE and Verisk Analytics runs A-PLUS—and any claims you make stay in your report for five to seven years, depending on the database.

The Fair Credit Reporting Act entitles you to one free copy of your report every 12 months. You can dispute inaccurate or incomplete information on your report. You are also entitled to notice about any negative decisions based on information in your report. Requesting your reports does not affect your credit score.

  • Request your CLUE report from LexisNexis online or call 866-312-8076.
  • Request your A-PLUS report from Verisk by calling 800-627-3487.

Does Credit Score Impact Your Car Insurance Cost?

In most states, your credit score can impact the cost of your car insurance. The only states that don’t allow car insurance companies to use credit score as a factor in pricing are California, Massachusetts and Hawaii. Statistical studies from the Federal Trade Commission and other research organizations show a correlation between credit score and how much a person is likely to cost a car insurance company. In short, someone with a poor credit score is seen as a greater risk, so the insurance company may charge more for the insurance to help cover expenses related to future claims.

Does Where You Live Impact Your Premium Amount?

Where you live can impact your car insurance cost. In 2018, for example, the average car insurance premium in Michigan was 64% higher than the national average. Other states with car insurance premium averages on the high end included Louisiana, Florida, Rhode Island and Connecticut. States with the least expensive average car insurance premiums included Vermont, Ohio, Virginia, Idaho and Iowa.

Does Age Impact Your Premium?

When it comes to what car insurance companies don’t want you to know, this one isn’t super secret. Age does impact your premiums, with the youngest and oldest drivers typically paying the most on average.

The youngest drivers pay the most for insurance. Premiums are highest at the age of 18 and decline steadily until the driver turns 25. In the eyes of carriers, drivers then enter adulthood, during which time premiums stay pretty flat for the next 30 years or so, until the age 55. Premiums inch up slowly between ages 55 and 65 before jumping way up around the age of 75.

In addition to your age, your gender, marital status, education level and even your job can affect your insurance rates.

If You Bought Your Car Via a Loan, Is Your Insurance Cost Higher?

If you don’t own your vehicle outright, then you may pay more to insure it. If you own a vehicle outright, you’re only required to carry liability on it. Liability is the part of your insurance policy that kicks in to cover damage caused to other people’s cars or property in an accident you’re at fault in.

When you have a loan, the bank is concerned about protecting its investment. That means it may require you to carry comp and collision as well. This is the part of an auto policy that covers damage to your car in an accident you’re at fault in. A policy with this added coverage is more expensive than one without it.

How Can You Lower Your Car Insurance Costs?

No matter your age, gender, or location, you can potentially lower your car insurance via a variety of methods. Here are some tips your car insurance company doesn’t want you to know to put into action to save on premiums.

  • Drive carefully. Not only does driving carefully help you avoid rate-raising accidents, but many companies also provide good driver bonuses when you haven’t had an accident or filed any claims for a certain amount of time.
  • Pay your bills on time. Paying your bills on time goes a long way toward improving your credit score, which can improve your rate depending on where you live. Paying your bills on time also demonstrates trustworthiness to your insurance company, which means you may be able to negotiate for a lower rate.
  • Ask for discounts. When it comes to your insurance rates, it doesn’t pay to be shy. Ask your insurance company about discounts, including multi-driver or multi-car discounts, good student discounts or safe driver discounts. You may be able to score a large portion off your premium because you’re a good student or you follow all the traffic laws.
  • Review your credit report. Know what’s on your credit report and what you can do to drive up your score. Once you’ve improved your score, ask for a new quote for car insurance.

>> Need to review your credit report? Sign up for the free Credit Report Card.

  • Consider a higher deductible. Look carefully at your coverage and consider whether you can tweak anything in your policy. If you can afford to cover $2,000 in damages if you get in an accident, consider changing your deductible from $500 to $2,000 to save on your monthly premium.
  • Shop around for a better rate with other insurance companies. The insurance market is highly competitive, and you may find a better rate with an online company or through a broker that works with multiple companies. If you find a better rate, go back to your current company to see if they’ll match or beat the offer.
  • Choose your next vehicle carefully. Because the type of car you drive affects your insurance rates, do your research before your next purchase. Look for a car with plenty of safety features (but without too many other bells and whistles) that will get you a lower rate.

What Happens When Car Insurance Denies a Claim?

Of course, you don’t just pay for car insurance for the fun of it. If you get into an accident, you expect the insurance to step in and help cover the expenses. If your insurance company denies your claim, you have some options for appealing the claim.

  • Contact the insurer. After you’ve reviewed your claim denial, reach out to the insurance company directly. You may be able to explain your claim better or gather additional information to help you understand the reason for the denial.
  • File an official appeal. Most insurance companies will have an appeals process clearly set out online. You’ll want to write a clear, direct letter that explains why the evidence you originally gathered and submitted with your claim contradicts the insurance company’s decision to deny the claim.
  • Talk to a legal professional. If you feel that your insurance company is denying your claim in bad faith, talk to a legal professional about your options.

Bringing Down the Total Cost of Car Ownership

Car ownership is expensive. Make sure you pay attention to all the potential expenses to get the best possible deal overall—and don’t forget to shop around for the best rates before locking yourself in.

>> Ready to buy? Find your rates.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

Identity thieves are almost always opportunistic—but the crimes they commit feel very personal. Unauthorized credit card charges, bogus loan applications, missing money, and other financial violations make fraud a major nightmare. To keep fraud in check, you need to know how to check your credit report for identity theft, and how to deal with problems when they arise.

In this post, we’ll talk about the warning signs of identity theft—and then we’ll show you how to stamp out fraud before it starts.

Warning Signs of Identity Theft

How Do I Check My Credit for Identity Theft?

To avoid falling victim to identity theft, examine your credit report regularly. You can access a free copy of your credit report from all three bureaus—Equifax, Experian, and TransUnion—once a year. (Through April 2022, you can get free weekly copies of your reports.) You can also use a tool like Credit.com’s Credit Report Card or ExtraCredit to monitor your credit.

When you download your credit report with ExtraCredit, you’ll see a list of positive accounts, late accounts, collections, public records, inquiries and account balances. Your credit report contains a lot of information about you and about your financial habits, and if that information changes unexpectedly, it can indicate identity theft. Here are five of the biggest fraud warning signs to watch out for.

Warning Sign 1: Incorrect Personal Information

Sometimes, incorrect personal information is the result of an innocent mistake. Other times, it means something sinister is going on. If you see your name misspelled, a wrong phone number or address, or an incorrect Social Security number on your credit report, investigate immediately.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

Warning Sign 2: Lender Inquiries You Don’t Recognize

Credit bureaus keep the details of companies who ask for information about you on record for at least two years. Promotional inquiries and account review inquiries  are nothing to worry about, because they’re preapproved credit offer inquiries or inquiries by companies you already do business with. 

Hard enquiries from companies you don’t recognize are a different matter. Sometimes, fraudsters make a lot of credit card and personal loan applications in a short period of time, so if you see a recent list of unknown inquiries, someone might be trying to steal your identity.

Tip: Sometimes, the name of a financial institution doesn’t precisely match the name of the company checking your credit. Car dealerships, for example, sometimes run a series of credit checks via different finance companies—so it’s worth double checking before filing a fraud complaint.

Warning Sign 3: Accounts You Never Opened

Only your own accounts—including accounts that you’ve cosigned and for which you’re an authorized user—should appear on your credit report. If you find an unknown account on your credit report, one of two things has happened:

  • Your credit information has been commingled with someone else’s information by mistake
  • Your credit has been compromised by a fraudster

If you find an unknown account on your credit report, contact the relevant lender right away and tell them what’s going on. 

Warning Sign 4: You Credit Utilization Goes Up

If you suddenly owe more than before and you haven’t changed your spending habits, someone else might be splurging on your behalf. Check your credit card statement very carefully and flag any suspicious transactions straight away. Most credit card companies have a maximum 120-day limit for chargebacks, so it’s important to review purchases regularly.

Warning Sign 5: Your Score Goes Up or Down Unexpectedly

Credit scores change over time. When negative information falls off your credit report after a certain period of time, your score increases. On the other hand, if you apply for too many loans or credit cards in a short space of time, your credit score could take a hit. If your credit score changes dramatically—especially if it’s for the worse—dig deeper.

Warning Sign 6: Public Records You Don’t Recognize

Negative public records can substantially impact your creditworthiness. Bankruptcies, for instance, often remain on record for up to a decade. If you see public records you don’t recognize, alert the issuing agency without delay. 

Tip: Liens and civil court judgments used to appear on credit reports, but credit bureaus no longer collect information about those types of public records. Bankruptcies are now the only public records included on credit reports.

Can Someone Steal Your Identity with Your Credit Report?

Your credit report contains a lot of personal information, so it’s a goldmine for identity thieves. With a copy of your report in hand, a potential fraudster might be able to see:

  • Full name
  • Birth date
  • Social Security number
  • Current and past home addresses
  • Phone number
  • Accounts held in your name
  • Payment records
  • Public records, including bankruptcies
  • Many other valuable personal and financial details

Credit report content sometimes varies according to the credit bureau. 

If thieves need more information after accessing your credit report, they often choose to misrepresent themselves to get it. Phishing and smishing scams are when criminals pretend to be legitimate financial institutions—or government agencies like the IRS—to get personal information from victims via email or text. 

What Is the Safest Way to Check My Credit Report?

You can check your credit report quickly and easily with Credit.com’s ExtraCredit monitoring service. ExtraCredit includes five helpful tools, which help you monitor, build, earn, protect, and restore your credit profile. Two tools in particular can help you avoid or combat identity fraud: Track It and Guard It.

Track It

With ExtraCredit’s Track It tool, you get access to all three credit bureau reports. You can also monitor 28 FICO® scores—the real scores lenders see when they consider auto loan, credit card, and mortgage applications. Track It also includes a helpful credit monitoring tool, which gets updated every month. If something suspicious happens, you’ll notice right away.

Guard It

Many hackers sell consumer information on the dark web. Nefarious individuals use software, specific net configurations, or special authorizations to access the dark web. Thankfully, ExtraCredit’s Guard It tool actively monitors the dark web for consumer information and sends out security alerts when data breaches happen. You also get a $1 million ID insurance policy when you sign up with ExtraCredit.

Get Identity Theft Protection

Identity theft is a big problem in the United States. There were 650,572 cases of identity theft in America in 2019—and over 270,000 of those cases involved credit card fraud. If you see an unknown address or notice an unknown credit card on your credit report, flag it up right away. Tools like ExtraCredit from Credit.com make it easier to monitor your report on a monthly basis, so you can rest more easily.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

In July 2016, the Consumer Federation of America (CFA) and VantageScore Solutions reported that most consumers—more than 80%—knew basic facts about their credit scores, including that credit scores are used by lenders to approve or deny mortgages and by credit card issuers to approve or deny credit cards.

While it’s good that most people know the importance of credit scores, the same survey found that many consumers don’t understand credit score details. In other words, about how personal credit works and how credit scores work still confuses people.

How Are Credit Scores Created?

When you borrow money, whether through a revolving account, like credit cards, or an installment account, like an auto loan or student loan, the information is gathered by the credit bureaus. The data the bureaus keep in your credit files is the date used to calculate your credit scores.

When you apply for a loan or card, the bank or issuer may look at just your credit score or at your entire credit file. There are five major areas of information in your credit file that are used to calculate your score:

  • Payment history
  • Debt usage, also known as your credit utilization ratio
  • Age of credit accounts
  • Types of accounts or account mix
  • The number of hard inquiries on your credit, not soft inquiries

A good credit score includes a healthy mix of all these factors. Each factor though weighs differently toward a score. Payment history makes up 35% of your score. Debt usage 30%, credit age 15%, and account mix and credit inquiries each make up about 10% of your score.

How Are Credit Scores Used?

You have multiple scores and types of scores and there are different scoring models. The resulting scores and your credit file are used to determine your risk factor for future loans. The three-digit score is a numerical representation that indicates how risky a borrower you are from a lender’s perspective.

Score ranges break down as follows:

  • Excellent credit: 750+
  • Good credit: 700-749
  • Fair credit: 650-699
  • Poor credit: 600-649
  • Bad credit: below 600

A higher credit score—roughly 700 or above—can result in your getting approved for better terms and conditions. For example, your credit reports and/or scores impact the deals and interest rate you get when you buy a home, finance a car, rent an apartment, apply for a job, buy insurance, purchase a cell phone or open a new credit card.

The best way to improve your credit score or maintain it is to be responsible with the credit cards and loans you have. Remember those five factors mentioned a minute ago? This is where they come into play—things like making loan and credit card payments on time each month and maintaining a good debt usage or a credit utilization rate—the amount of debt, including credit card debt, you have in relation to your overall credit limit—can help you reach the credit score you’re after.

Using credit irresponsibly by making late payments and maxing out credit limits can have an affect your credit negatively and lower your credit score.

How Does Credit Reporting Work?

The credit reporting system includes three main players:

  • Consumers
  • Credit bureaus
  • Financial companies, such as banks, lenders and credit card issuers

Information about your credit cards, loan accounts and credit inquiries is reported electronically to the three main national credit bureaus—TransUnion, Equifax and Experian—by lenders and creditors roughly every 30 days. The bureaus collect and store your credit information in your credit file for future reference. Meaning, your behaviors can be reviewed in the future by others to determine your risk level.

Businesses, such as auto loan lenders, banks, credit unions, credit card companies and insurance agencies—even employers—use your credit data from the credit bureaus to determine your risk level. Once they have an idea of how risky it is to lend you money, they determine the rates you have to pay or other terms and conditions. Or, they may determine not to loan you money or give you a credit card at all. They may also use this information to send you pre-approved offers in the mail.

The three national credit reporting agencies don’t share information with each other and not all lenders or creditors report to each. As such, your credit reports from TransUnion, Equifax and Experian can contain different information about you. So, it’s important to monitor all three reports because you can never be sure which one will be used when you apply for a new account. You also want to make sure you review them for any errors that are damaging your scores. Learn more about how to dispute an error on your credit reports.

Are Creditors Required to Report to Credit Bureaus?

Not all creditors report your account information to the credit bureaus. And they’re not required to. While businesses are legally required to report accurate information, there’s no law that says they have to report at all. While nearly every major creditor reports to all three bureaus, smaller lenders and banks may not send your monthly account information to all three or any of the credit bureaus.

What’s On Credit Reports?

Along with your credit card and loan account records, basic information about you, like your name, address and recent applications, is recorded in your credit files. Public records such as bankruptcies, tax liens and judgments can also appear on your reports.

Information about your income, race, gender, age, religion or health details isn’t included on credit reports.

Most information expires from your credit reports after 7 to 10 years, but when information expires can vary depending on the circumstance. It’s important to keep the information on your credit reports positive and accurate. And if there’s something inaccurate on your credit reports, you can file a dispute with one or more of the credit reporting bureaus to try and have it removed from your file.

Find Out Where You Stand

Finding out how credit works is important. And now that you’ve done that, you likely want to know where you stand. You can get your free Experian credit score and a free credit report card on Credit.com.

Your report card includes including a grade for each area that makes up your scores. You see how your payment history, debt and other factors affect your scores, and get recommendations for ways to improve each area if needed.

Your report card is updated every two weeks, so you can check your credit regularly and ensure nothing unexpected pops up. An unexpected change in your score can indicate an issue, such as potential identity theft.

Source: credit.com

Apache is functioning normally

Apache is functioning normally

Foreclosure activity increased eight percent in July from June and was up 55 percent from the same period a year earlier, according to the latest report from RealtyTrac.

A total of 272,171 properties were in some stage of foreclosure last month, with one in every 464 households in the nation receiving a foreclosure notice in July.

And while preliminary filings like notices of default accounted for much of the activity, the final stage of the process is also exploding.

“Bank repossessions, or REOs, continued to be the fastest growing segment of foreclosure activity in July, posting a 184 percent year-over-year increase — compared to a 53 percent year-over-year increase in default notices and an 11 percent year-over-year increase in auction notices,” said James J. Saccacio, chief executive officer of RealtyTrac, in a press release.

“The sharp rise in REOs, combined with slow sales, has resulted in a bloated inventory of bank-owned properties for sale. RealtyTrac now has more than three quarters of a million properties in its active REO database, a number that represents approximately 17 percent of the inventory of existing homes for sale reported in June by the National Association of Realtors.”

As always, Nevada led the nation with the highest foreclosure rate of one filing per 106 households, followed by California at one per 182 households, and Florida at one per 186 households.

More startling however, was the fact that bank repossessions were up 384 percent in Nevada, 427 percent in California, and a whopping 627 percent in Florida, compared to the same period a year ago.

The highest foreclosure rate among 230 metro areas tracked by RealtyTrac was Cape Coral-Fort Myers, FL with one filing per 64 households, followed by Merced, CA with one in every 73 households, and Stockton/Modesto, CA with one in every 82.

That’s a lot of missed mortgage payments…

Source: thetruthaboutmortgage.com

Apache is functioning normally

Apache is functioning normally

Rates moved only moderately higher on Wednesday after the Fed rocked the bond market with its updated rate forecasts.  To reiterate yesterday’s analysis, it’s not that the market is expecting the Fed to be accurate in those forecasts.  Rather, the forecasts help investors understand how the Fed’s approach will be calibrated going forward.

In simpler terms, the Fed doesn’t think rates are too high right now.  If anything, they might need to go higher.  Moreover, they won’t go lower until economic data really starts to deteriorate in a compelling way. 

Unfortunately, this morning’s most relevant economic report didn’t deteriorate at all (weekly jobless claims were 201k versus a median forecast of 225k).  Actually, it’s fortunate for the economy, but unfortunate for interest rates.  

Between the data and the overnight momentum in overseas markets, bonds are at their weakest levels in years.  Mortgage-backed securities (the bonds that dictate mortgage rates) didn’t swoon quite as much as Treasuries, but as of today, it was just enough to push the average mortgage lender almost perfectly back in line with the highest 30yr fixed rate of the past 23 years. 

Source: mortgagenewsdaily.com

Apache is functioning normally

Apache is functioning normally

Buying a house and getting a mortgage is a big investment– and not only for you.

When you choose a mortgage lender and are approved for your home loan, your lender is agreeing to lend you all funds necessary to cover your home purchase. Because a house is a high-cost purchase, lenders want to guarantee that you’re not a “risky borrower.” Lenders want to know that you’ll be able to make your monthly payments on time and in full.

How do lenders decide whether you’re a risk?

In most cases, mortgage lenders, or their underwriters, to be exact, will take a look at how well you’ve managed debt in the past, and how well you’re managing debt currently.

So, having debt can be a good thing. 

This may seem counterintuitive because if you’re buying a house, you’d want to save as much money as you can. And you probably wouldn’t want your money tied up in other debts, right?

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Yes, saving money is always a good idea. But having some debt before buying your house can actually be an important factor in getting approved for a mortgage.

Why Debt Matters

To see how well you manage your debts, mortgage underwriters will take a detailed look at your credit score/credit history and your debt-to-income ratio (DTI).

Generally, you’ll want to have a high credit score and a low DTI. A high credit score indicates that you manage your debts responsibly. A low DTI indicates that you don’t have too much of your income tied up in paying off those debts.

Let’s take a closer look at both factors:

Your Credit Score

Each factor in your credit score is defined by debt. And to create and increase your credit score, you need to take on debt and manage it responsibly.

Your credit score is usually impacted by the following five factors:

  • Payment history — Your payment track record is the most important factor considered in your credit score. Lenders want to know if you’re a trustworthy borrower. And so, they want to see if you make on-time payments on other debts.
  • Credit utilization (or amounts owed) — Owing money on your credit cards, in particular, is not a bad thing. But, if you’re using too much at one time, underwriters might take that to mean that you’re overextending yourself financially.
  • Length of credit history — A longer credit history is favorable. But if your credit history is limited, you won’t necessarily be disqualified from borrowing money.
  • Credit mix — Underwriters want to see how you manage different types of debt.
  • New credit — If you’ve opened multiple credit accounts at one time, this is a red flag for underwriters because it can suggest that you’re in financial distress.

For a mortgage, you’ll typically need a credit score of at least 620 for a conventional loan. But, it could be best to shoot for a credit score of 700 or above. A higher credit score increases your chances of approval, and also increases the loan amount that you’ll be approved for. But a high credit score could also help you secure a lower mortgage rate, which could save you a significant amount of money over the life of your home loan.

Your Debt-to-Income Ratio (DTI)

Your DTI is a percentage representing how much of your income is put towards paying down debts. Since a mortgage is such a large investment, and your monthly payments could be fairly substantial, underwriters want to make sure that you’ll be able to make those payments. So, the lower your DTI, the better.

In general, a DTI of 36% or lower is ideal. In fact, a DTI above 50% most likely won’t be approved (although there are exceptions).

To calculate your DTI, simply divide your monthly debts by your monthly gross income. If your resulting percentage is higher than 50%, you’ll want to work on paying off some of your debts.

Debt Management Tips

Whether you’d like to reduce your debt before buying a house or just want to maintain a solid credit score by making consistent credit payments, knowing how to manage your debt could help you qualify for a mortgage. And it can also reduce your own stress levels.

The following tips can help you manage debt before buying a house, and could also be helpful once you’ve purchased your dream home and are in the thick of making mortgage payments:

Look at Your Credit Report

Your credit health is an important qualifying factor for a mortgage. So, it can be a good idea to take a look at your credit report to ensure that everything has been reported correctly and that there aren’t any errors. You wouldn’t want your credit score to be negatively impacted because of mistakes in your credit report.

You can order your credit report from any of the three major credit bureaus: Equifax, Experian, and TransUnion using annualcreditreport.com. Or you can even get your free credit report card here on Credit.com.

Once you have your credit report it is important to look at the following:

  • Your personal information
  • Your credit accounts
  • Credit inquiries

If you see any errors or inconsistencies anywhere in your credit report, these can be challenged with the credit bureau that created the report.

Consolidate Your Debt

If you find that you’re making payments on various loans and/or credit accounts, it could save you money (and save you from stress) to consolidate your debts into one. This way, you’re only paying interest on one debt instead of multiple. Therefore, you won’t have multiple payments to keep track of.

Related Read: What Is a Debt Consolidation Loan and How Can You Get One?

Don’t Make Drastic Changes to Your Credit

It can be tempting to pay off debts right before applying for a mortgage. However, doing so could actually hurt your credit score. When you pay off a debt, your credit score will actually drop temporarily.

On the flip side, if you’re trying to build credit and try to open multiple credit cards, or take on other debt before applying for a loan, this will also take a hit on your credit score. Not to mention that seeing a lot of change and new debt before applying for a mortgage is a red flag to underwriters. It can indicate you might not be financially prepared to take on a mortgage.

Make a Budget

Whenever a financial discussion is taking place, budgets are bound to come up. While the concept of making a budget might seem obvious and over-shared, it’s a great way to track your expenses and ensure that you’re meeting all your financial expectations and needs. There are a lot of costs involved with buying a house. So, you’ll want to make sure that you can afford them.

In this case, creating a budget can help you map out your current debts and other expenses in relation to your income. This allows you to see what’s happening and adjust as needed. A budget can give you the peace of mind that you’re not overspending, and are still able to meet all your other financial responsibilities.

Build Your Emergency Fund

Building your emergency fund before getting a mortgage may be one of the most important things you can do. You never know what expenses might arise once you purchase your house, and you don’t want all your money tied up in your mortgage payment and other monthly payments if, for example, your roof needs to be repaired or you encounter water damage.

It’s often encouraged to set aside three to six months worth of expenses in an emergency fund.

The Bottom Line

Buying a house is a big purchase, and it can be daunting to think of getting a mortgage if you are trying to pay down student loans, an auto loan, credit cards, etc. To help you save money and save you from stress, work on paying down other debts so you can be confident in your ability to make mortgage payments and enjoy your new home.

However, you don’t need to be debt-free to buy a house. In fact, some well-managed debt can boost your credit score, showing mortgage underwriters that you are a responsible borrower.

That doesn’t mean that you need to dig yourself into a hole of debt that you’ll never crawl out of. By taking the time to create a budget or analyze your credit report, you can see how you’re doing financially and where some changes can be made. Perhaps you could consolidate some of your existing debt, or you could completely pay off some of your debts. 

In the end, you just want to make sure that you’re comfortable taking on a mortgage and can afford to do so. 

Source: credit.com

Apache is functioning normally

Apache is functioning normally

Quick answer: Yes, it’s possible for undocumented immigrants to get a mortgage loan. They face legal and financial obstacles that don’t stand in the way of other purchasers, but millions have done so successfully.

You don’t need to be a resident to own real estate in the United States. Many documented immigrants own homes. While it’s difficult to get accurate statistics about undocumented homeowners for a number of reasons, in 2014, the Migration Policy Institute estimated that around 3.4 million undocumented immigrants owned homes in the United States.

Keep reading to discover how your residency status impacts the home loan process. We’ll also highlight some important information you should know about your rights when applying for a mortgage. 

In This Piece

  1. How Residency Status Affects a Home Loan
  2. Understand Your Rights
  3. How to Get a Mortgage

How Residency Status Affects a Home Loan

Overall, residency status plays a significant role in determining the availability and terms of home loans for individuals in the United States.

Green Card Holders

Green card holders are permanent residents eligible for most types of mortgages available to U.S. citizens. This means they must provide proof of income, credit history and other financial documents to qualify for a home loan. In some cases, green card holders might face additional challenges during the home loan and purchase process. Those can include difficulty in obtaining mortgage insurance or a higher down payment requirement, which can vary based on the lender and the type of loan.

Refugees and Asylum Grantees

Refugees and asylum grantees are individuals granted legal status in the United States due to persecution or fear of persecution in their home countries. They may be eligible for certain types of mortgages. However, their ability to obtain a home loan might depend on their specific immigration status and financial circumstances. For example, refugees or asylum grantees who have been in the United States for less than 2 years might have a harder time getting a mortgage because many lenders require at least 2 years of residency to establish credit history.

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DACA

DACA recipients, or individuals who’ve been granted Deferred Action for Childhood Arrivals, are not eligible for most types of home loans. This is because they don’t have legal permanent residency status. However, some lenders may offer alternative financing options or assistance programs specifically designed for DACA recipients and other undocumented immigrants. 

Additionally, DACA recipients who have obtained an Employment Authorization Document and can demonstrate a stable income and credit history may be able to get a mortgage under certain circumstances. 

Understand Your Rights

The Fair Housing Act prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status or disability. Immigrants, including those who aren’t U.S. citizens or permanent residents, are protected under the FHA and have the same rights as other individuals.

That includes:

  • The right to rent or purchase housing without discrimination based on national origin
  • The right to be treated the same as U.S. citizens or permanent residents in all aspects of the housing process, including advertising, application, screening and approval
  • The right to request reasonable accommodations in housing, such as modifications to the physical structure of a home or changes to policies or procedures, if disabled

If you believe you’re being discriminated against during the home loan, home buying or other housing process, you should report it.  

How to Get a Mortgage as an Undocumented Immigrant

Undocumented immigrants aren’t usually able to qualify for mortgages through traditional services, such as those backed by Fannie Mae and Freddie Mac. However, individuals with an ITIN may be able to get approved for special loans from private lenders. An ITIN (Individual Taxpayer Identification Number) is a unique identifier the IRS uses to process tax returns and payments for those that do not have or do not qualify for a social security number.

Apply for an ITIN

The first step is to apply for an ITIN, or Individual Taxpayer Identification Number. You do this by completing Form W-7 via mail, in person at an IRS-authorized agent or in person at an IRS Taxpayer Assistance Center.

Save for a Down Payment

Because undocumented immigrants can’t usually qualify for federally backed loans, such as those through the FHA, they probably won’t qualify for mortgages with low down payment requirements. Private lenders may require down payments as much as 20% or even 30%. If an undocumented immigrant wants to buy a home, they should start saving as soon as possible. That might mean paying down other debt first.

Get Documentation Ready

In addition to the ITIN, undocumented immigrants will have to provide information to help qualify them for a private home loan. That information can include:

  • Proof of income, such as recent pay stubs, tax returns or other financial documents
  • Information about credit history, including any outstanding debts, loans or credit accounts
  • Recent bank statements that show account balances and transaction history
  • Identification documents, such as passports or government-issued IDs
  • Proof of residency status, such as a lease agreement or utility bill in the person’s name
  • Proof of employment or self-employment, such as a letter from an employer or recent tax returns

Apply for an ITIN Mortgage

Once you have an ITIN, a down payment and all the necessary documentation, you can apply for an ITIN mortgage. Start by browsing the mortgage options in the Credit.com marketplace.

Source: credit.com