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If a Debt Consolidation could save you hundreds of dollars each month on your bills and mortgage in Kansas City, what's stopping you from just doing it? If you could get a better rate and a great Debt Consolidation loan with the best Mortgage Pros in Missouri. Why wouldn't you "Just do it?!"
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Debt Consolidation means many different things depending upon who you are and exactly what you are trying to accomplish. To some it means having a large number of credit cards and other debt and trying to reduce the monthly payments to a manageable number. To others it may be paying off charge cards and automobile debt in order for that interest to be deductible under the mortgage provisions of the IRS. Still others want to pay off student loans, tax liens or judgments. Debt Consolidation is simply the paying off or paying down of debt that you have accumulated by taking out another loan or changing the terms of an existing loan.
Debt consolidation is a debt reduction system that allows consumers to combine their assorted unsecured debts into one payment. Instead of sending out payments on six or seven bank and store credit cards, for instance, you would make one payment to the debt consolidation company and that company would then disperse the funds for you.
The following rates are national averages. Rates offered by most mortgage brokers through their wholesale lenders are generally as much as 1% lower.
The above rates are published by a 3rd party and not compiled or guaranteed by Best Mortgage and Loan.
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This money management system can be extremely advantageous to the consumer as the debt consolidation company will generally negotiate a reduced interest rate, a reduced balance, a lower monthly payment, eliminate late fees, and set a term when the debt will be paid off in full. This may save the consumer large sums of money in the long run. A financial management system like this is far superior to paying the minimums on a credit card every month and watching as the balance continues to grow through the years. Mortgage loans and car loans are not subject to consolidation as these loans are secured. Unsecured loans like bank credit cards affiliated with Visa and MasterCard, and assorted department store credit cards (Marshall Field, Dayton's, Lord & Taylor, etc,) are typically the items put into a debt consolidation program.
Creditors view debt consolidation positively since the consumer is showing a strong, good faith effort to take responsibility for and pay his or her debt. Creditors much prefer debt consolidation over a bankruptcy as debtors can completely erase their debt in a Chapter 7 Bankruptcy, or pay, for example, 10 cents on the dollar in a Chapter 13 bankruptcy. In either case, the bankruptcy creditors are left with little or nothing from the debtor. While a bankruptcy allows consumers to wipe out their debt and start fresh, it also tends to destroy a consumers credit background. After a bankruptcy, a creditor will have difficulty establishing credit for almost seven years.
With a debt consolidation, on the other hand, a consumer can greatly reduce his or her debt, combine multiple payments into one payment, and preserve their credit background by avoiding bankruptcy. There are debt consolidation companies in almost every city and town in the United States. The Internet also lists such companies that are willing to help consumers begin to eliminate their debt.
Debt Consolidation Kansas City
Kansas City Facts and Debt Consolidation Resources
We have helped people all over Kansas City improve their financial outlook, get a great Debt Consolidation and save money every month. We can get you better Debt Consolidation rates in Kansas City.
Kansas City City Web Site - www.kcmo.org
Kansas City Population -
444,387
Kansas City Mayor - Kay Waldo Barnes
Kansas City Real Estate Listings - from Home Gain
Kansas City Department of Housing and Urban Development - HUD Kansas City
Kansas City News - Latest Kansas City news
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To determine whether Debt Consolidation is right for you; you need to list all of your debts, the interest rate you are paying on that debt and the length of time you have to pay that debt off. Generally we want to pay off those debts that have higher interest rates and any loans from finance companies. If you have incurred any judgments or liens that are showing up on your credit report; these need to be paid off in order to see your credit history improve. Make the list, secure a free credit report is necessary; make sure every debt is listed including your mortgages on your home.
To order your free reports, go to www.annualcreditreport.com where you can order your reports directly or download the Annual Credit Report Request form to mail in your request. You can also call 877-322-8228. The World Privacy Forum has released a study that indicates that privacy-conscious consumers may be better served by ordering their credit reports by phone or mail rather than online. See www.worldprivacyforum.org/calldontclick.html for more details. And for more information about access to free credit reports, see the Federal Trade Commission's Facts for Consumers at www.ftc.gov/bcp/conline/pubs/credit/freereports.htm.
The next step is to determine the value of your home. By determining the value of your home and deducting the outstanding mortgages on your home you can determine the equity that you may have available to pay off your debt. You can determine the value of your home by the following:
- What is your local auditor’s value of the home?
- What have similar homes sold for around you in the last 12 months?
- What does your insurance agent think about the value of the home?
- If in doubt call the real estate agent that sold you the home and ask them to revalue your home in today’s market.
By taking the value of your home and deducting the mortgages from it you now the equity you have available in your home. If a home is worth $200,000 and you have a first and 2nd mortgage totaling $150,000, you have equity of $50,000 in the home.
Now that you know you have approximately $50,000.00 the next step is to determine if a new 1st or 2nd mortgage is right for you. They are some debt consolidation tools available to you at www.bankrate.com; these tools allow you to play what if’s. Assume I pay off these credit cards or these debts and increase my mortgage balance by this sum and rate, how much will I save. By going through these exercises you can determine what is best for your particular circumstances. If you want to talk to someone about your situation do not hesitate to call a Loan Officer at a Bank, Credit Union, Savings & Loan, or Mortgage Broker office. These individuals can do various loan scenarios for you so that you can accomplish either lower monthly payments and or bid rid of certain debts.
Be an informed consumer/borrower. Ask questions, if you do not understand ask them to explain again.
With tens of thousands of lenders and brokers each offering as many as dozens of different loan programs, it's helpful to find an unbiased source to give you the wisdom to make the right choice.
To help take the guesswork out of choosing your next purchase or refinance mortgage, The Good Advice Press of Elizaville, N.Y. has developed a 12-step program designed to guide you through the mortgage maze.
The Press is a self-help consumer advocacy group about to celebrate its 18th anniversary after nearly two decades of helping consumers save money, get out of debt, and live better on less through educational books, software, newsletters and audiotapes and a Web site.
- Study Your Choices. In addition to banks and mortgage lenders, don't overlook mortgage brokers, seller financing, a family loan or insurance company financing. The Press suggests creating a loan comparison chart to sift through the differences.
- Estimate Tenure In Your Home. If you plan on staying in a home for life, consider higher up front costs to obtain a lower rate. If you are moving within seven years consider an adjustable rate mortgage (ARM) with a low introductory rate or a zero-point loan.
- Gauge Your Tolerance For Risk. ARMs are relatively less predictable than fixed rate loans. If you'll be moving soon, avoid them unless you can somehow protect yourself from the risk of future rate hikes.
- Consider A Convertible. Convertible mortgages are special ARMs that give you the opportunity to bail out if rates climb too high, typically after the first year and before the fifth year. The conversion will cost you but you could lock in a fixed rate before your loan becomes unaffordable.
- Learn The Two-Step. The flip side of convertibles, two-step mortgages give you a fixed rate for a fixed short term, say five or seven years. Then it becomes an ARM. If you sell or refinance within the initial term, you could avoid higher ARM rates.
- Take A Graduated Payment. Graduated payment mortgages (GPMs) start out with a relatively low monthly payments which gradually increase, hopefully, along with your income. The loans can get you in a larger home than other loans would permit, but if your salary can't keep pace you could be in trouble. The Press says to make sure the initially lower monthly payments are high enough to cover interest otherwise your debt will increase each month.
- Give Yourself Credit. Pull your credit reports before you apply for a mortgage to avoid the lender alerting you to surprises. The preemptive examination of your credit report gives you time to correct errors, add consumer statements or otherwise clean up your credit act.
- Know Your Limits. Your real estate salesperson will tell you how much they think you can borrow, but your credit report is a better indication of your credit worthiness. Don't shop for a home your can't afford.
- Take Your Time. Unless you know you've got sufficient long term income to handle the higher monthly payments of a 15 or 20 year loan, stick with the conventional 30-year mortgage. You can always make extra payments as if it is 15-year loan and save a bundle.
- Tax Advice Is Good Advice. Taxes regarding mortgages and mortgage costs can be confusing. For example, if you write a separate check to the lender to pay the points on a first purchase mortgage you can deduct them all at once. If they are financed along with the mortgage, you'll have to deduct them over the life of the loan's term. Rules vary for second mortgages, refinancing and cash out loans for home improvements. Get professional tax advice.
- Compare Everything. To truly decide which loan is best for you, you'll need to set up a table to compare all costs for each loan, including all the closing costs, points and yield spread premiums.
- Plan To Invest In Your Mortgage. Even small payments each month, in addition to your regular mortgage payment, can save you a bundle. The tens of thousands of dollars you can save over the life of the loan is tax-free savings, says the Good Advice Press.
Debt Consolidation is not some secret process or plan. It is a logical step by step process to replace high interest rates and payments with lower interest rates and lower payments. You can accomplish Debt Consolidation by asking questions and using the above as guidelines. |
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