Power Ideaz

Are you facing a foreclosure?

If yes, you need to act on it pretty quickly before things get out of your control and you end up loosing your home.

Remember, your lender will be getting a deficiency judgment if your home goes into foreclosure. This is for the difference between what you owed to the lender together with the attorney fees and the selling price of your home at auction.

But don’t worry. I have some very useful tips for you that are sure to tide you out of the crisis:

Make a budget: This is an essential step which will let you to visualize the amount you earn and spend. Keep in mind that this information has a crucial role to play if you wish to figure out a deal with your lender or even to file a petition to safeguard yourself from bankruptcy. Also, it will help you in slashing your expenses, where you think that’s necessary. In the statement you make, do not forget to underline the debts you owe (for example, unpaid bills of your credit cards).

Go all out to pay your loans: The home loan is your priority debt. You should never forget this. So, try everything to make sure that you are repaying your home loan every month. You must bear in your mind that even a month’s slip can be disastrous.

If you feel that your income is not enough to get you through, simply go for additional sources of earning. It can be a part-time job, selling items in eBay.com or even letting out your house on rent. You can even consider getting yourself enrolled in a credit program to get a respite from your credit card debts.

Try refinancing: This is a wonderful option if your loan hasn’t yet affected you in a negative way and you can still manage another loan at a reasonable rate. Refinancing or taking out a home equity loan can go a long way in solving your crisis. But you need to be very careful about this option, especially when you pay off your credit card debts. Remember, in case you fail to recover in time, you will be compelled to repay those debts which would have been waived in bankruptcy.

External help: Contact the Department of Housing and Urban Development, in case you fail to work out a payment arrangement with your lender. Remember, this department keeps a list of standard counseling agencies that may help you in saving your home. You must follow this route, if you have an FHA or VA loan.

Plus, you can also go for a legal help from any attorney who is an expert in bankruptcy matter and conversant with the foreclosure laws of your state

Search out a real estate investor: It can happen that you have no equity at home that can fetch you a loan at a decent rate. In that case, getting in touch with a real estate investor can be a smart strategy on your part. But, make sure, the investor you select is a reputed one. You should know that the real estate investor can make your lender agree to accept an amount which is less than what you actually owe and make an “under-selling” of your home.

But make sure that you have a written undertaking from the lender that you will no way be accountable for the deficiency, i.e. the difference between the amount you owed and what you actually paid. You also need to remember that your lender may report the “waived” amount as income to the IRS. In that case, you need to do some paperwork to convince the IRS of your insolvency. Else, you may have to pay taxes on that amount.

Never agree to any sales contract from someone who is not approved by your lender. In case you don’t get a professional to help you in selling, you can contact a real estate attorney, who can assess the terms of contract and also see you through with the paperwork.

By Arindam Bhattacharya

What’s the usual turn around time to recover your credit score?
That’s your question…your neighbor’s question and the question of millions around you.
Let me answer honestly…it could take seven long years or even more!!!
You might also do it in a year, if you know the tricks that work.
Before you get those power-packed tips to pick up your credit score, let’s take a quick look on some basics which you must know.

What’s credit score?
Credit score also referred to as FICO score is a number based on how prompt you are in paying back your loans. When you have a high score, it means that you can save more money and the possibility of paying your bills on time is quite high.

What should be your ideal score?
Usually, 620 is the minimum standard score that you must have to secure a loan from a bank. If you have a score above 700, you will get loans at lower rates. When your score crosses 760, you will get loans at the lowest rate. The perfect credit score is 850, whereas the average score is 723.

How do you get your credit report?
According to the Fair and Accurate Credit Transactions Act, you can get a free copy of your credit report every year from any of the accredited agencies.
To track any change in your credit score, it’s a good idea, if you ask for your report every four months, instead of getting all the three at a time.

Credit bureaus
Experian, Equifax and TransUnion are three foremost credit bureaus.

Top tips to repair your credit:
• Never apply for credit cards when you don’t really need it. This is because a new account lowers your credit score by 10 points, on an average.

You can have credit cards, but make sure you have it when you are debt free. In fact, your credit score gets a boost if you borrow and repay in the very first chance. Remember that if you neither have a credit card nor installment loans, the lenders might find you a bit risky as you have no record of loan repayment.

• Make sure that your bills are paid on time. If you do this, your credit scores would be up by around 20 points in a month. In case you don’t, it would feature in an area called “Adverse Accounts”, which would show up all details like the particular months, period of delays etc. Keep in your mind that such details are normally kept for 7 years.

• Another effective way you can utilize to ensure a high credit score is by keeping your credit card balances at the minimum. That can save you at least 70 points.

• Make sure that you obtain your credit reports from each of the major bureaus. This is important because, you cannot repair your credit, if you do not know the contents of your report.

• Remember that you have the right to remove any incorrect information that you may find in your report. So, take steps to clean up your report to erase out all erroneous facts

• Never apply for more credits while you are in the stage of credit repair. If you do this, it will have an adverse effect on your credit score.

• It’ll be a smart move on your part if you give a call to your creditors and have an open talk with them about the facts. Always bear in your mind that the many lenders who have a provision which would lower your monthly installments till you are back on track.

• It’s always good if you go for professional help. There are lots of resources available to help you out. You can even search a credit counseling agency through the National Foundation for Credit Counseling.

• Be tolerant to the situation and keep paying your debts. Remember, repairing your credit is a procedure and that doesn’t happen overnight.

I’m sure with these tips; you can really look forward to get your credit in order within a normal time frame.