How to refinance mortgage if you cosigned for student loan
Sun Aug 29, 2010 05:08PM
Q: I wonder how to refinance my home loan. I owe about $150,000 on the mortgage and $30,000 on the line of credit. My house is worth conservatively around $250,000. I am only looking at the first mortgage. I am about 6 years into the 30 year fixed rate mortgage at 5.375% and thinking about 20 year term. I earn $90,000 a year and credit score is above 730. My biggest concern is that I cosigned for nephew's student loans. He owes close to $130,000 and has paid since April, $615 per month. Is this going to negatively affect my credit score and interest rate?
A: The fact that you are a cosigner has very little to do with the interest rates in ongoing mortgage and housing mess. And as long as the nephew is paying on time, will not do anything to your credit scores. However, it has everything to do with debt to income ratio which is the decisive factor if you are to qualify for the new mortgage. So stop worrying about would be mortgage interest rate and start worrying about your recurring monthly payments like credit cards, auto loans, child support, alimony, etc. How to go about? Just put them all on the piece of paper including that $615 student loan payment, because as a cosigner you are responsible. Then sum all the payments up and divide the resulting dollar amount by your gross monthly income. Gross means before taxes. The resulting ratio between your monthly payment amount and gross income with today lending guidelines should be under 50%, to the best knowledge.
The only way for the payment on student loans that you cosigned for not to be counted against your monthly expenses is to show 12 to 15 monthly bank statements that prove that the nephew is paying on time without you helping him. While you are still responsible for this loan as a cosigner, such a payment record would show that he can handle it himself. Here is some relevant reading,
Erasing or disputing cosigned student loan won't work
Cosigning a student loan - a sure way to ask for troubles!
How to build credit history fast
Tue Aug 24, 2010 11:08PM
It's important to learn how to build credit history fast, because it is going to save you money. And on the long run, lots of money. When you build credit score fast and reach certain level, you see immediate results - better loan terms with less fees and lower interest rate. Paying extra $50 a month doesn't seem much to many of you, but it amounts to $600 a year, enough to take vacation or buy a new set of tires and decent ones. So how can you achieve this? You can compare the process involved to build your credit history with the battle to lose weight. Do it too fast and it can cause more harm, so credit building takes time and there is no quick fix. One must manage his or her credit responsibly over time. The tips provided here are for someone who has a decent credit history without too many delinquencies and wants to raise credit score further. If you have real credit problems and want solve them fast, see quick credit fixes.
Cease and Desist letter to payday loan company
Sun Aug 22, 2010 01:08PM
Q: Where can I have Cease and Desist letter template for payday loan companies? Can't find any. I have had payday loan issues for a year, paying as little as possible. Now, I started paying my debts back in earnest to all 4 payday loan companies. Comes out to $140 a month and I should be done in 15 months, including fees, interest, etc. I owe close $1,800 altogether, $450 a piece. I sent certified letters to all 4 with detailed explanations that this is what I am planning to do and they'd better take it. If not they won't see a dime. I hit a rather rough patch 2 years ago and had to use payday loans. Now I am in great financial shape but being smarter, they will never be able to get anything unless I am willing to pay. I figured that $300 in interest is enough for them on $1,800 loans total. Each is going to get its $75 share in interest. They made their money on me. Of course, they do not like it.
Now I need some sort of Cease and Desist letter. I want them to stop calling my home and my cell which they had since I had to cancel my land line. They do not know my work number. I do not want to talk to them on the phone, period. They do not like my proposal, they can send me a letter, but no calling. I have already told several times to each of these payday loan companies that this is as good as they get it, period. I can change my both phone numbers, I can even disconnect my home line, but before I would do that, I want to have payday loan shops shut up.
A: I suspect that the reason you can not find templates or samples is because Cease and Desist clause is only applicable to the collection agencies since only a debt collection agency is bound to follow the Fair Debt Collection Practices Act. Not the original creditor which is what a payday loan company is your case. Besides, Cease and Desist forces debt collectors to stop all forms of contact with a debtor, written included. You can try the following letter which asks your payday loan companies to refrain from calling you.
Settling credit card debt with Chase - why settle?
Wed Aug 18, 2010 10:08PM
Q: I have two Chase credit cards with total debt of $27,000, around $12,000 and $15,000. Think of settling this credit card debt and can not decide if I should go with a debt settlement company or do it myself. I mean I am unemployed for 5 months and have nothing much going, so I can just start settling with Chase without any help, at least try. I have may be $10,000 in savings and are moving with my brother since I will be loosing my house to foreclosure soon. So I can offer them around $5,000. I am afraid that once I am foreclosed and my credit is ruined, Chase won't be settling on good terms.
A: Before you start settling see if there is another way out. I mean, you are unemployed, about to get foreclosed and you are worried about credit card debt? No matter which state you live in, you sound pretty insolvent to me. By the way, settling credit card debt with Chase or every other lender should be done without any third party dent settlement shop. What you need to do is start talking to a bankruptcy attorney because you may be riped to file Chapter 7. Depends on how long your unemployment benefits will continue, how much you are getting and what are your expenses.
I would not worry about what Chase would offer later. If you are not working and will lose you home shortly, Chase or any other lender will probably offer you a good deal. They understand your credit is ruined regardless and you have nothing much they can garnish as I do not think any state allows garnishment of unemployment benefits. Had you worked then it would have been totally opposite scenario. Chase would see that your biggest monthly expense - your mortgage is gone and would be going hard after your paychecks if you give them hard time settling credit card debt on their terms.
But that is besides the point. Now you need professional help, so find a qualified bankruptcy attorney and have him or her go through your finances. I have a gut feeling, you will be in much better shape a year from now, at least debt wise.
Sued for credit card debt
Sun Aug 15, 2010 09:08PM
Got several credit cards and decided to go on a shopping spree. Big deal, it is an unsecured debt after all. I can not be sued for credit card debt, there is no collateral, what they going to do to me? That was the topic of conversation among three dummies in their 20s that I overheard in the car repair shop. Recent immigrants, rather fresh of the boat. When I tried to explain them that unsecured debt doesn't mean that repaying such a debt is optional, they looked at me like I was insane. I went quite patiently on, saying - you sign a contract with credit card issuers when you apply for the credit cards, which specifically states various ways to collect the unsecured debt, including turning it over to a collection agency and taking you to court. If you are in default, you are in breach of that contract. And yes, you can be sued to recover unpaid debt. At this point the conversation started getting a bit heated so I wished them all the best and left thinking that I need to write about it. So here goes.
Debt reaging - what you should know
Wed Aug 11, 2010 10:08AM
There are basically two types of debt reaging and several important points about each to know. We will cover both in details. The first type is when the lender is reaging debt on consumer request. If you have a past due account, you can request the creditor to reset it anew. Reaging a delinquent account amounts to your creditor setting the account due date back to current. If you missed a few credit card payments and your creditor agrees to reage your account, then the missed payments are gone. Not all lenders reage past due accounts. Those that do, must follow two federal guidelines,
- creditors may only reage an account once in a 12-month period and
- twice in a 5-year period for open-ended accounts like credit cards
The account will be considered for debt reaging only if,
- you show a renewed willingness and ability to pay
- your credit card account is at least 9 months old
- you must make at least 3 consecutive minimum monthly payments
Capital One is the worst credit card issuer
Mon Aug 9, 2010 02:08PM
And I am not taking about their customer service, which is not worse than that of others. I am talking about their willingness or rather unwillingness to settle debt with consumers. After we published Debt settlement with Capital One and Bank of America story that described how successfully a couple I know manage to settle credit card debt, we have received many emails which basically state that Capital One settlement is very hard to negotiate and that they simply refuse to settle for anything less than 50% of the outstanding debt amount. Sometimes, they do not want to negotiate at all, even after a 120-day default. According to many readers, where Chase, Bank of America, Wells Fargo and few others would often settle for less than 30%, Capital One charges bad debt off and then sends it down to its Recovery Department. It also files lawsuits more frequently than the rest.
Well, as I said before the couple that settled for so little, is very persuasive. May be they were just lucky, may be they exaggerated somewhat or a lot. Who knows. The fact is if the Capital One is the worst credit card issuer among the others that you are trying to settle with, negotiate your debt with others and then try to settle with Capital One. Do not let it hold you up. Apparently, Capital One also does not sell its default debts to the third party collection agencies so you can keep on trying to settle with them.
Wells Fargo debt settlement? Get it in writing
Mon Aug 9, 2010 10:08AM
Q: I owe close to $43,000 in credit card debt to Wells Fargo, give or take. I have not worked for 3 months and may be going back to school. Wells Fargo just offered a debt settlement plan which I find hard to resist but also believe. It will give me up 84 months with 0%. The monthly payment of $531 would amount to $44,604 to include $1,500 settlement fee. My minimum payment now is $930 at 14% interest. I have not missed the payment yet, but wrote them a hardship letter detailing my situation and then called. The family would give me the interest free loan so I can afford the payments. This credit card debt settlement sounds too good. Could it be Wells Fargo is simply trying to see if I would take the deal and then turn around and say - OK, now that we see you can afford the payments, we are going back to the original agreement?
A: Was this verbal offer made via the phone or at your Wells Fargo branch? Do you have the letter with such a debt settlement offer? If you do have it in writing, take it. If not call them and request this offer be sent in writing. Once you receive it, read it carefully and make sure you understand all the terms. Look closely at the small print and every condition they often put on the very bottom. Only if you have it in writing, the Wells Fargo can not renege or claim that you misunderstood. Make sure that once the 84 months are over, the debt is paid in full.
Utah statute of limitations on credit card debt
Thu Aug 5, 2010 12:08AM
Q: What is the statute of limitations in Utah for credit card debt lawsuits? Is that a written contract or a promissory note type? Which stature I should look at? I owe $2,000 in credit card debt for quite some time and have a feeling, the statute of limitations is about to expire.
A: To my best judgement, credit card debt in the state of Utah falls under Open Account type allowing 4 years for the creditors to act. Note that Utah law explicitly states that a written acknowledgement signed by the debtor revives the statute of limitations.
Bankruptcy after divorce, can they come after my ex assets?
Mon Aug 2, 2010 05:08PM
For those of you who want to split and bear no hard feelings towards each other, it is an important question. This is quite a complicated issue and if you think you can get away filing for bankruptcy after divorce, you may be right. On the other side, you may be wrong and the creditors will come after your spouse assets with guns blazing.
One of my wife girlfriends divorced last November. In late September, basically 6 weeks prior to the divorce, she and he would be ex split their assets and did it rather amicably. Not that they had much of assets to start with, but both were working and seemingly stable financially. Never was a word about bankruptcy and such. Just two nice persons not suited for each other, whatever that means. Regardless ...
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Recent Entries
- How to refinance mortgage if you cosigned for student loan
- How to build credit history fast
- Cease and Desist letter to payday loan company
- Settling credit card debt with Chase - why settle?
- Sued for credit card debt
- Debt reaging - what you should know
- Capital One is the worst credit card issuer
- Wells Fargo debt settlement? Get it in writing
- Utah statute of limitations on credit card debt
- Bankruptcy after divorce, can they come after my ex assets?
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