Frequently
Asked Questions
- Home
equity FAQ
- Mortgages
FAQ
- Refinance
FAQ
- Debt
consolidation FAQ
- Autoloans
FAQ
- Credit
cards FAQ
- Payday
loans FAQ
- Credit
repair FAQ
Home equity FAQ
Why
should I tap into my home’s equity?
It’s far less expensive to borrow money from the equity in
your home than to pay the high interest rates charged by credit
card companies.
How do I determine my home equity?
A Home equity is the difference between what your house is worth and how much
you currently owe (your mortgage debt).
What can I use a home equity loan or line of credit
for?
You can use the equity in your home for major expenditures like home improvements,
automobiles, weddings, college tuition or a dream vacation. You may also use
it to consolidate high-interest credit card debt. Furthermore, the interest
on home equity loans and lines of credit is often tax-deductible. Consult your
tax advisor for more details.
What’s the difference between a Home Equity Line of
Credit and a Home Equity Loan?
A Home Equity Line of Credit is a revolving line of credit that works like
a credit card. You use the money as you need it, repay all or a portion of
it and use it again as often as you’d like. You only pay interest on the amount
you use, and the interest rate will fluctuate according to financial market
conditions.
Mortgage FAQ What is second mortgage?
second mortgage is usually an equity-based mortgage loan other than the primary
loan that was borrowed to pay for a home.
What can I use second mortgage
for?
Second mortgages are often used to convert home equity into cash for home additions
or remodeling projects
Refinance FAQ
Is
there a company that has no closing costs to refinance?
There are lots. When you get a loan with no closing
costs, or no points and no closing costs, you will
get a higher rate than what
is available to someone who is willing to pay points and costs,
since the lender has to absorb the costs involved with
the transaction.
When is a good time to refinance?
When you are reducing your monthly payment at minimal cost.
Can you refinance your home with it listed on the market
for sale?
Usually no lender will lend on property if it is for sale because the loan
will not be on the books long enough for them to make any money on the deal.
Debt Consolidation FAQ What
is debt consolidation?
Debt consolidation is a new program for dealing with debt that is becoming
extremely popular. It is typically associated with non-profit consumer credit
counseling services.
The consumer gets their interest charges reduced, their monthly payments minimized
and have the convenience of paying all their debts in one monthly payment.
Also, by making the regular monthly payments, the consumer will be back on
the road to restoring their credit rating. Perhaps best of all this program
is largely or entirely paid for by creditors.
It is no wonder that debt consolidation services have become the number one
recommended way of dealing with excessive debt.
How
does the program work?
The way this program works is that a debt consolidation professional will contact
your creditors to get your interest rate and monthly payments reduced to an
amount that you can afford to pay
Good debt consolidation company can lower your monthly payments by 50%. In
some cases, they can even eliminate interest charges altogether. This way your
entire monthly payment will be toward the principal.
How Much Does This Service Cost?
Most debt consolidation companies are organized as "non-profit" companies.
How much money can I save consolidating my debts?
Good debt consolidation company can lower your monthly payments and interest
rate by 50% for each of your unsecured creditors.
Auto Loans FAQ
What is Auto loan?
Auto loan program helps you get approved for your car loan
Can I get an auto loan even if I have bad credit?
Of course! Our lenders will work with you every step of the way to help you get
approved!
Are there any fees associated with auto loan application?
This is a completely free service.
Credit Cards FAQ
What is APR?
Annual Percentage Rate. The APR is a measure of the cost of credit, expressed
as a yearly rate. It also must be disclosed before you become obligated on
the account and on your account statements. The card issuer also must disclose
the "periodic rate" — the rate applied to your outstanding balance to figure
the finance charge for each billing period. Some credit card plans allow the
issuer to change your APR when interest rates or other economic indicators
— called indexes — change. Because the rate change is linked to the index's
performance, these plans are called "variable rate" programs. Rate changes
raise or lower the finance charge on your account. If you're considering a
variable rate card, the issuer must also provide various information that discloses
to you:
that the rate may change; and
how the rate is determined — which index is used and what additional amount,
the "margin," is added to determine your new rate.
At the latest, you also must receive information, before you become obligated
on the account, about any limitations on how much and how often your rate may
change.
What is Grace Period?
Free Period. Also called a "grace period," a free period lets you avoid finance
charges by paying your balance in full before the due date. Knowing whether a
card gives you a free period is especially important if you plan to pay your
account in full each month. Without a free period, the card issuer may impose
a finance charge from the date you use your card or from the date each transaction
is posted to your account. If your card includes a free period, the issuer must
mail your bill at least 14 days before the due date so you'll have enough time
to pay.
What is Finance Charge?
Finance charge is a fee charged by issuer when you don't have a free period,
or if you pay for purchases over time, it's important to know what method the
issuer uses to calculate your finance charge. This can make a big difference
in how much of a finance charge you'll pay — even if the APR and your buying
patterns remain relatively constant.
How is Finance Charge calculated?
Examples of balance computation methods include the following.
- Average Daily Balance. This is the most common calculation method.
It credits your account from the day payment is received by the issuer. To figure
the balance
due, the issuer totals the beginning balance for each day in the billing period
and subtracts any credits made to your account that day. While new purchases
may or may not be added to the balance, depending on your plan, cash advances
typically are included. The resulting daily balances are added for the billing
cycle. The total is then divided by the number of days in the billing period
to get the "average daily balance."
- Adjusted Balance. This is usually the most advantageous method
for card holders. Your balance is determined by subtracting payments or credits
received during
the current billing period from the balance at the end of the previous billing
period. Purchases made during the billing period aren’t included. This method
gives you until the end of the billing cycle to pay a portion of your balance
to avoid the interest charges on that amount. Some creditors exclude prior, unpaid
finance charges from the previous balance.
- Previous Balance. This is the amount you owed at the end of
the previous billing period. Payments, credits and new purchases during the current
billing period
are not included. Some creditors also exclude unpaid finance charges.
Two-cycle Balances. Issuers sometimes use various methods to calculate your balance
that make use of your last two month’s account activity. Read your agreement
carefully to find out if your issuer uses this approach and, if so, what specific
two-cycle method is used.
Are there any other fees?
Annual Fees. Most issuers charge annual membership or participation fees. They
often range from $25 to $50, sometimes up to $100; "gold" or "platinum" cards
often charge up to $75 and sometimes up to several hundred dollars.
There is nothing on the card that indicates it is a secured card. It can be used
exactly the same as an unsecured card. Plus, the card offers all the convenience
of any major credit card
Transaction Fees and Other Charges. A card may include other costs. Some issuers
charge a fee if you use the card to get a cash advance, make a late payment,
or exceed your credit limit. Some charge a monthly fee whether or not you use
the card.
What is a Secured card?
A Secured card means that a security deposit account is needed to secure your
credit card. The security deposit amount will equal your credit limit. Using
the credit card does not access your deposit, thus the money remains untouched
in the security deposit as long as your secured credit card account is open.
A secured card can be one of the best tools for starting or rebuilding a favorable
credit history.
What values to look for?
Credit terms vary among issuers. When shopping for a card, think about how you
plan to use it. If you expect to pay your bills in full each month, the annual
fee and other charges may be more important than the periodic rate and the APR,
if there is a grace period for purchases. However, if you use the cash advance
feature, many cards do not permit a grace period for the amounts due — even if
they have a grace period for purchases. So, it may still be wise to consider
the APR and balance computation method. Also, if you plan to pay for purchases
over time, the APR and the balance computation method are definitely major considerations.
What to do when I lose my card?
If you lose your credit or charge cards or if you realize they've been lost or
stolen, immediately call the issuer. Many companies have toll-free numbers and
24-hour service to deal with such emergencies. If you report the loss before
the card is used, you can’t be held responsible for any unauthorized charges.
If a thief uses your card before you report it missing, the most you’ll owe for
unauthorized charges is $50.
If you suspect fraud, you may be asked to sign a statement under oath that you
did not make the purchase in question.
What rights do I have?
Federal law protects your use of credit cards.
- Prompt Credit for Payment. An issuer must credit your account
the day payment is received. The exceptions are if the payment is not made according
to the creditor’s
requirements, or the delay in crediting your account won’t result in a charge.
- Refunds of Credit Balances. When you make a return or pay more than
the total balance at present, you can keep the credit on your account or write
your issuer
for a refund — if it’s more than a dollar. A refund must be issued within seven
business days of receiving your request. If a credit stays on your account for
more than six months, the issuer must make a good faith effort to send you a
refund.
- Errors on Your Bill. Issuers must follow rules for promptly correcting
billing errors. You’ll get a statement outlining these rules when you open an
account
and at least once a year. In fact, many issuers include a summary of these rights
on your bills.
If you find a mistake on your bill, you can dispute the charge and withhold payment
on that amount while the charge is being investigated. The error might be a charge
for the wrong amount, for something you didn’t accept, or for an item that wasn’t
delivered as agreed. Of course, you still have to pay any part of the bill that’s
not in dispute, including finance and other charges.
- If you decide to dispute a charge:
Write to the creditor at the address indicated on your statement for "billing
inquiries." Include your name, address, account number, and a description of
the error.
Send your letter soon. It must reach the creditor within 60 days after the first
bill containing the error was mailed to you.
The creditor must acknowledge your complaint in writing within 30 days of receipt,
unless the problem has been resolved. At the latest, the dispute must be resolved
within two billing cycles, but not more than 90 days.
Anything else I should know?
Keep these tips in mind when looking for a credit or charge card:
- Shop around for the plan that best fits your needs.
- Make sure you understand a plan’s terms before you accept the card.
- Pay bills promptly to keep finance and other charges to a minimum.
- Hold on to receipts to reconcile charges when your bill arrives.
- Protect your cards and account numbers to prevent unauthorized use. Draw a
line through blank spaces on charge slips so the amount can’t be changed. Tear
up
carbons.
- Keep a record — in a safe place separate from your cards — of your account
numbers, expiration dates and the phone numbers of each issuer to report a loss
quickly.
- Carry only the cards you think you’ll use.
Payday Loans FAQ
What is a payday advance loan?
A payday advance loan is a confidential way to get an advance on your next paycheck.
The funds are transferred and debited electronically through ACH to your account.
Can I still receive an advance if I have poor credit or a bankruptcy?
Yes, you can still apply and receive the advance.
Credit Repair FAQ
What's the first step in rebuilding credit?
To avoid getting into financial problems in the future, you must understand your
flow of income and expenses. Some people call this making a budget. Others find
the term budget too restrictive and use the term spending plan. Whatever you
call it, spend at least two months writing down every expenditure. At each month's
end, compare your total expenses with your income. If you're overspending, you
have to cut back or find more income. As best you can, plan how you'll spend
your money each month.
How can I get a copy of my credit report?
You should order your report form credit bureaus for example: Equifax, Trans
Union and Experian
What information do I have to give to the credit bureaus to get a copy of
my credit report?
You have to provide the following: your full name, DOB, your current address,
your previous addresses over the past six years, and your signature
How do I correct negative information on my credit report?
Challenging the accuracy or completeness of an item is the best way to have
a negative item removed.
How long does it take to rebuild credit?
It's about two years to rebuild your credit
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