Credit Card Minimum Payments Rising Rapidly

You should see a signifigant change in your credit score for the positive when you pay your credit cards down with a mortgage refinance.

The increase in the credit card Minimum Payment is generally bad news for consumers who don't own their own homes, however for homeowners this is an excellent reason to take advantage of the power of their home's equity and finally consolidate those high interest rate credit cards and car loans and roll them into a 30 or 40 year mortgage, spreading out the payments at a very low rate of interest by comparison, and reducing the total monthly spend for your family in the process. And you'l be even happier when you speak to your tax professional about how much money this will allow you to potentially deduct on your tax returns!

The new regulations on the minimum credit card payments will have a dramatic affect on many credit card users. People who typically have a payment of around $150, can now expect that payment to be as high as $350.

Under the pressure of ferderal regulators, banks are starting to announce that they are increasing minimum monthly payments on credit card balances. Obtaining a 2nd mortgage(HELOC, 2nd Trust Deed) can be a valid option to consolidate credit card debt and comes with the added benefit of deducting mortgage interest expenses.

Credit card debts just got harder to deal with. Since the new change in minimum monthly payments went into effect consumers across the board are feeling the pinch. This is one more reason to consolidate and reduce your monthly outgo. Stop paying such high interest rates and free up your cash.

The federal government had nothing but the best of intentions in mind when requiring these new credit card minimun monthly payments. Under the old Minimum Payment structure, many consumer credit cards with high balances would take 25 years or more to pay off by just making the Minimum Payment. The amount of interest that the card holder would pay in such a scenario would be astronomical. The one thing the government didn't fully consider is that making such larger monthly payments will prove very difficult, Cash Flow wise, for many Americans. If you find that making these higher credit card payments is creating Cash Flow difficulties for your household, speak with me to see if a debt consolidation refinance might make sense for you situation. What you want to avoid at all costs is falling behind on the credit card payments because once behind it becomes very difficult to get current. This will also lower your credit score making refinancing more difficult and expensive. You can see that it is always better to act before the situation gets out of control.

The average American household with one or more credit cards carries a balance of approx. $9500 dollars. An increase to the minimum monthly payment can impact one's budget severely. It is wise to seek advice from a mortgage professional if this is the case.

The way things stand now aren't a whole lot different then before. If you charge your credit card and make the Minimum Payments its just like taking a 20 year loan.

Interest rates on mortgages are much lower than those on credit cards. The interest on mortgages is also tax deductible which means you save even more when comparing to the interest on credit cards.

Also if you choose to consolidate your bills you typically will have a savings each month and sometimes you can save hundreds of dollars. Now if you take this amount or even a portion of the savings and apply it to the principle of your new loan you can pay that loan down much faster. One extra payment per year can shave almost 10 years off of a 30 year mortgage.

What is Alternative Documentation - Alternative Documentation is xpedited and simpler documentation requirements designed to speed up the loan approval process. Instead of verifying employment with the applicants employer and bank deposits with the applicants bank, the lender will accept paycheck stubs, W-2s, and the borrowers original bank statements.

Alternative Documentation (Alt Doc) loans differ from Full Documentation (Full Doc) loans in that Alt Doc loan programs do not require the usual income and assets verifications from a third party (the applicant's employer or the depository bank where the loan applicant keeps the down payment funds). Full Doc loans often require such third party verifications and therefore the underwriting process takes longer.

It is now possible to obtain an alternative credit report accredited by the National Credit Reporting Association (NCRA).

The usefulness of this documentation type is obvious; it allows the borrower to speed up the process for underwriting. While you may ask your loan agent for this type of documentation, certain restrictions may apply in order to qualify.

Alternative documentation types can allow borrowers with non traditional sources of income to qualify for loans.

A good example of a borrower who would need to use alternative documentation would be a plumber who works a regular 40 hour per week job but also works after hours and weekends doing "side" jobs. Many such folks earn a significant portion of their overall income this way and would have a difficult time proving this income with traditional methods.

Another option to consider if it is difficult or impossible to verify your income, employment and assets is to No-Doc. A No-Doc loan requires No Documentation of income, employment or assets. You do need a good credit score to go No-Doc and will pay a slightly higher interest rate in some cases but if verification of income, assets and employment is a problem, consider going No-Doc.

Any alternative credit accounts you use must have a good payment history and be open for a minimum of 12 months. Canceled rent checks can also be used for an alternative crdit account.

Alt A and subprime lenders also allow other documentation types such as bank statements, business bank statements, and/or verifcation of employment to satisfy income documentation requirements. Check with your broker to see what programs will work best for you.

Only in recent years have we as mortgage professionals been able to work with alt doc type loans. In the past you had to put down 20%, provide proof of everything and have great credit to buy a home. Now we have to ability to pick from multiple loans programs that fit just about anyones profile.

Getting a Mortgage after a Bankruptcy - Traditional mortgage financing dictated lending after seven to ten years after a bancruptcy. Today, a mortgage can be obtained after only 1 day from release.

After bankruptcy, it is also important to make sure that the customer seriously review their options to refinance and take cash out for debt consolidation with the goal of reducing the amount of the overall monthly bills they have into one low payment, which is much more readily manageable than a menagerie of high interest accounts.

To qualify for a conforming loan, a bankruptcy must have been discharged at least 4 years ago. Alt A and subprime loan programs may still be an option if it has been less than 4 years since the bankruptcy has been discharged.

When choosing among different bankruptcy mortgages, applicants should keep in mind that they are likely to refinance within a few years, after they rebuild the credit profiles through better credit management. Therefore, bankruptcy mortgage loan applicants should consider bankruptcy loan programs with lower starting interest rates, such as Hybrid mortgages with a lower fixed rate for the initial two or three years.

Also you will find lenders that will loan even if you are in the middle of a chapter 13. FHA guidelines are 1 year from the file date. You have conventional lenders that will refinance your home if you have equity and are paying your chapter 13 payments on time. This is called a chapter 13 buyout. What's nice is you completely rid yourself of the debt in the chapter 13 using your equity to do so allowing you to be fully discharged from the BK. You will have to gain permission to do so from the court but it's very rare to be turned down.