home mortgage | Debt Management Credit Counseling Corp.

Start Fresh After Bankruptcy

December 8, 2022August 4, 2013 by Aldo Gonzalez

Getting back on your feet following bankruptcy can be a very difficult task. You’ll be starting from scratch. It’s critical to your future financial success to make sure you don’t make the same mistakes .

To ensure you make a “fresh” start, you need to think and analyze your previous spending habits. What really lead you to go bankrupt? Analyze your expenses, the way you handle your money and of course your lifestyle. Do you have to live a lavish lifestyle? And the major question is can you afford that kind of living? What are your major purchases recently? Asses your situation, and the causes that made you experience bankruptcy.

After that, make a plan on how recover and live without going into a financial difficulty. The primary thing that you have to do is to reestablish your credibility, especially to financial institutions. You must regain a good financial standing status. Start to build up resources. Save your money and put it to good use. Don’t splurge on extravagant items. Keep in mind what drove you to bankruptcy, your too much spending attitude. You have to change the way you regard your expenses.

If you use a credit card, be sure to pay on time, in full. Make sure also that when using credit cards, it’s for emergency purposes and not for luxurious items. Keep only one or two credit cards. A lot of credit cards may lead to temptation. You don’t want to end up into the same situation again. Having a savings account is also a good option because it means less reliance on your credit card purchases. You’ll learn how to set aside cash in your account for large purchases.

Budgeting is also very important because it teaches you on how to manage your money. Stick to your budget!.

Some lenders are willing to offer housing loans to people who have declared bankruptcy. If you find a financial company to hold your home mortgage, make sure you pay them promptly. Prove to them that you’re worth their risk.

Bankruptcy can bring stress to your life, but there is a lesson to be learned. You’ll know now how to deal with your monthly expenditures. Your spending habits will change for the better and you’ll live a life without worries. Keep in mind, it’s fine to have debts as long as you know how to manage your resources and pay your creditors.

Should You Refinance?

December 8, 2022July 13, 2013 by Aldo Gonzalez

Interest rates have fallen so much, it may seem like a no brainer to refinance your home mortgage.

The decision to refinance your mortgage isn’t one that should be taken lightly. Before deciding, you need to understand all that refinancing involves. Your home may be your most valuable financial asset, so you want to be careful when choosing a lender or broker and specific mortgage terms. Remember that, along with the potential benefits to refinancing, the interest rate isn’t the only thing to consider when shopping for a new loan. Refinancing, after all, isn’t free. There are the bank fees, the bills for a new appraisal and inspection, your lawyer’s fee, etc.

When you refinance, you pay off your existing mortgage and create a new one. You may even decide to combine both a primary mortgage and a second mortgage into a new loan. Refinancing may remind you of what you went through in obtaining your original mortgage, since you may encounter many of the same procedures–and the same types of costs–the second time around. It requires an application, credit check, new survey and title search, as well as an appraisal and inspection fees. As you know, this process can be quite lengthy and expensive.

Age is another consideration. Carrying a mortgage into retirement has traditionally been viewed as a bad idea – ideally, you should be as debt-free as possible when your income stops.

As a rule of thumb, it pays to refinance if you can get an interest rate at least two percentage points lower than what you are currently paying. However, every situation is different. Make sure to carefully weigh the benefits against the costs to make the best choice for your situation.

DMCC is a 501 (c)3 nonprofit organization committed to educating consumers on financial issues and providing personal assistance to consumers who have become overextended with debt. Education is provided free of charge to consumers, as well as personal counseling to identify the best options for the repayment of their debt. To speak to a certified credit counselor, call toll-free 866-618-3328 or email contact@dmcconline.org.

Raising Your Credit Score

December 8, 2022January 31, 2013 by Aldo Gonzalez

Let’s face it, now a days, a high credit score isn’t easy to achieve. Not only do you have to master the basics — maintaining positive payment history and a low debt to credit ratio, but in order to be part of the upper echelon, you must pay attention to details as well.

Knowing what characteristics those with the highest marks possess can lead you in the right direction.

Since the bulk of your credit score is determined by your payment history and the amount of debt you may or may not have currently on file, having a clean record and impressive payment history is key. Those with perfect credit scores use credit regularly while paying it off on time, every time. They also have a squeaky clean record. The credit elite have no liens, no bank repossessions, no settlements, no debt to speak of. Nothing!

Top credit scorers also have a diverse set of accounts. A careful balance of credit lines including a mortgage, a car loan and a few credit cards on file.

History, also, is paramount in determining your credit score. Typically, due to age, our parents stand a better chance of having a higher credit score than we do. Unless, of course, they have mismanaged their finances. It’s not necessarily your age, but the age of your oldest credit account on file that influences your overall score. You may want to keep that store charge card you opened up in college.

The number of credit inquiries on your record can also factor into determining your credit rating. While having large number of credit card inquires on file won’t dramatically decrease your score, it can keep you from joining the credit elite, especially if several inquiries are recorded over a short period of time. No matter what type of discount retailers offer, you may be best advised to refrain from opening up a bunch of store accounts.

To get more educational information on credit reporting and a complete breakdown of the credit scoring factors, contact DMCC.