1.8 million homes were foreclosed in 2008. Millions of homeowners are expected to enter into foreclosure in 2009 and 2010. Rather than face foreclosure and suffer an eviction from your home, is there anything you can do to prevent the situation from escalating?
Indeed, there is! You can ask to change the terms of your mortgage. Mortgage lenders are not in the business of repossessing and re-selling homes. The cost of foreclosure with attorney’s fees and lost income is just too much for a lender’s bottom line. It is in the lender’s best interest to change the mortgage terms so that they continue to earn interest from your home purchase.
Step One: Open Communications with Your Lender
The first step is to call your loan servicer and discuss your current financial situation. If you have experienced a drop in income, or other bills have piled on so that your current mortgage payment is not sustainable, let them know that you would like to discuss a loan modification.
Typically, a lender will require you to go through another underwriting process where they will evaluate your situation. They will ask for your income verification and IRS tax filings. The lender will pull a credit history report, as well as require a home appraisal usually at your cost. If you want to ask for a loan modification, be sure to have all possible paperwork and documentation at the ready. Even after submitting copies of your paperwork, it is likely that the underwriter will ask for additional documentation. The faster you can respond to these requests, the quicker he will be able to make a decision.
Step Two: What Factors the Lender Considers
The loan modification underwriter must determine whether changing your loan terms will still meet the lender’s investment objectives and parameters. They will check to see if your debt to income ratio has changed, and if so, whether a new, lower interest rate will help lower a mortgage payment to one more affordable to you. Sometime a lower interest rate does not fit with their loan parameters. However, even if the new loan terms are not within the typical parameters of their loan objectives, remember that a possible alternative is foreclosure. Mortgage companies will take that into special consideration if they want to avoid foreclosing.
Step Three: The Payment Reduction Scenarios
If you are granted a loan modification to lower monthly payments, it may occur through several possibilities. The best situation (but worst for the lender) is that they could lower your interest rate. This would help lower your monthly payments by hundreds of dollars.
If you have paid a considerable amount down from your principal balance, they may just extend the current term and re-amortize. For instance, if you had a $200,000, 30-yr mortgage with an interest rate of 7%, your monthly payment is $1331. If your balance was down to $175,000, you could extend your mortgage to another 30 years and lower your payment to $1164. That’s a savings of $167 per month, and it could be even lower if the interest rate is reduced as well.
Another possibility is that the mortgage company may extend forbearance on your mortgage payment for a limited time. With forbearance, you are not required to make monthly payments for a period of time; however, interest will still accrue and be added onto the principal balance. Though you could end up paying more for this type of modification in the end, it could certainly save you from entering foreclosure in a time of financial crisis.
How Long the Process Takes
If your lender is willing to listen and re-negotiate your mortgage, and you have the required paperwork ready, you could have a decision within a matter of weeks. If there are delays due to needed documentation, or required fixes found from a home appraisal and inspection, you may have to wait a month or two until everything has been approved to the lender’s satisfaction. The best strategy is to be flexible and agree to meet the demands of the lender.
This article is intended for general information. Always seek sound financial and legal advice before making any financial decision.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9882.shtml
Monday 20 April 2009
Tuesday 7 April 2009
Time to Review Your Goals and Business Plan
It is the end of the first quarter and time to check the score.
Just as planning your goals for the coming year should always begin with a look back at the year in review, so planning your business for the rest of this year should take a look back at the first quarter. Business planning isn’t just a numbers game, but also an accounting and analysis of the year’s overall progress.
Begin by asking the hard questions:
• What happened in your business this past year? Past quarter?
• Did you meet your goals? If not, why not?
• How did you accomplish your successful goals?
• Where did your business come from?
From there, analyze the specific sources of success or failure.
• Were your lead systems facilitating your goals?
• Did the number of listings support the number of closed transactions?
And yes, now analyze the numbers: closed sales, closed commissions, expenses, how many listings taken, how many listings sold, how many active? Quantify where the business came from in comparison to your goals: how many sales from sphere? Referrals? Websites? Print media? Signs? Other lead-generating systems?
Also take a look at the team. Who do you have working with you and what are their roles? Did they support last year’s business? Did they reach their goals? Were their goals congruous with your business plan? And let’s not forget that important last count: the one where you evaluate yourself, including how many hours you worked per week and how much vacation time you took during the course of the year or quarter.
Think of this business in review task as a report to imaginary shareholders in the business. They would need a reminder of last year’s goals, a comparison to the actual numbers, an analysis of the year’s operations and relative success, and an evaluation, ultimately, of your business strategy. The success of the past year forms the basis of your business plan for the next. You are able to determine if you need to completely overhaul your “to-do” list or merely fine-tune it. You are able to focus on the past year’s strengths in order to maximize their results for the future. You are also able to isolate weaknesses or “misses” and problem-solve them to a positive resolution.
The business “flashback” in review cannot be ignored if you hope to continue to grow your business into tomorrow. The necessary steps to planning for that future can only happen once you’ve seen what came before. That is when you learn not just from your mistakes, but from your successes. It’s then you can set the new goal and create the plan. It’s then you can focus your time and resources. It’s then you can make accountability a part of the process. It’s then you can move forward with the confidence that you have planned for an incredible year ahead.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9936.shtml
Just as planning your goals for the coming year should always begin with a look back at the year in review, so planning your business for the rest of this year should take a look back at the first quarter. Business planning isn’t just a numbers game, but also an accounting and analysis of the year’s overall progress.
Begin by asking the hard questions:
• What happened in your business this past year? Past quarter?
• Did you meet your goals? If not, why not?
• How did you accomplish your successful goals?
• Where did your business come from?
From there, analyze the specific sources of success or failure.
• Were your lead systems facilitating your goals?
• Did the number of listings support the number of closed transactions?
And yes, now analyze the numbers: closed sales, closed commissions, expenses, how many listings taken, how many listings sold, how many active? Quantify where the business came from in comparison to your goals: how many sales from sphere? Referrals? Websites? Print media? Signs? Other lead-generating systems?
Also take a look at the team. Who do you have working with you and what are their roles? Did they support last year’s business? Did they reach their goals? Were their goals congruous with your business plan? And let’s not forget that important last count: the one where you evaluate yourself, including how many hours you worked per week and how much vacation time you took during the course of the year or quarter.
Think of this business in review task as a report to imaginary shareholders in the business. They would need a reminder of last year’s goals, a comparison to the actual numbers, an analysis of the year’s operations and relative success, and an evaluation, ultimately, of your business strategy. The success of the past year forms the basis of your business plan for the next. You are able to determine if you need to completely overhaul your “to-do” list or merely fine-tune it. You are able to focus on the past year’s strengths in order to maximize their results for the future. You are also able to isolate weaknesses or “misses” and problem-solve them to a positive resolution.
The business “flashback” in review cannot be ignored if you hope to continue to grow your business into tomorrow. The necessary steps to planning for that future can only happen once you’ve seen what came before. That is when you learn not just from your mistakes, but from your successes. It’s then you can set the new goal and create the plan. It’s then you can focus your time and resources. It’s then you can make accountability a part of the process. It’s then you can move forward with the confidence that you have planned for an incredible year ahead.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9936.shtml
Tuesday 17 March 2009
How to Choose the Right Home Business Opportunity
As the internet continues to grow and expand into almost every industry, it can be difficult to determine which home business opportunities will produce a lucrative income, and which ones are simply a waste of time. Choosing the right home business opportunity is a simple process, and you can start by choosing a niche topic or industry that you have an interest in. After a few brainstorming sessions, you'll be able to consider a variety of options in sales, marketing, affiliate products, or even creating a resource website. Here's what you need to choose the right home business opportunity:
1. Decide if you want to sell a product or a service. Products take the form of retail or consumer goods that are sold through an online storefront. Sometimes this is connected to an affiliate program, but not always; many home business owners choose to stock inventory and sell their items through eBay listings or other classifieds in order to make the sale. If you are choosing a service as a business, you may need to learn more about how the industry is doing online, and seek out additional education or training to sharpen your skills. Deciding if you want to sell a product or service is a fundamental step in your business planning, but will help you close the doors to some home business opportunities while opening up the doors to the one that suits you best.
2. Decide if you want to be an affiliate. Affiliate programs are a great way to generate a residual income since you're rarely involved with developing a product and selling it yourself. As an affiliate, you join a network of other sales people to promote a particular product and will earn a commission on each sale. Affiliate products in the digital world have become increasingly popular over the past few years as more people turn are interested in buying eBooks, podcasts, and informational services. You can set up a storefront just like an online retailer, but will link all products sold with your affiliate codes instead. Affiliate sales can be a very profitable home business opportunity and entrepreneurial venture, but you do need to remain consistent and maintain a steady marketing plan and program.
3. Consider selling information yourself. Many people turn to the web to sell knowledge and tutorials about a particular subject. Seek out your passion and turn it into a profitable home business opportunity by creating your own website. A website that can draw a large amount of traffic has a lot of potential to make money from advertising, and you may also be able to sell affiliate products through it after building a steady flow of visitors. This is a valuable home business opportunity for you if you can update your site regularly and really focus on your niche topic. Becoming an expert on a niche subject or industry is a great way to build a steady stream of visitors to your site which can lead to subscription lists, newsletters, and many opportunities to sell a product or service.
4. Set your income goals. Sometimes deciding how much you want to make over the course of a year can help you narrow down your search. For example, if you only want to make a part-time income while working a 'day job,' you would choose online business opportunities that do not require a daily commitment. This includes any retail stores or sales-oriented sites that require you to fill orders and track inventory. If you do want to focus all your energy on making a full-time income, then a complete affiliate sales and marketing program, or information product selling and services may be a good choice.
Finding the right home business opportunity can take time, and sometimes it's even a matter of trial and error. Still, you can narrow down your search with a few simple questions and focus on these key areas for the right fit.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/online_business/article_5569.shtml
1. Decide if you want to sell a product or a service. Products take the form of retail or consumer goods that are sold through an online storefront. Sometimes this is connected to an affiliate program, but not always; many home business owners choose to stock inventory and sell their items through eBay listings or other classifieds in order to make the sale. If you are choosing a service as a business, you may need to learn more about how the industry is doing online, and seek out additional education or training to sharpen your skills. Deciding if you want to sell a product or service is a fundamental step in your business planning, but will help you close the doors to some home business opportunities while opening up the doors to the one that suits you best.
2. Decide if you want to be an affiliate. Affiliate programs are a great way to generate a residual income since you're rarely involved with developing a product and selling it yourself. As an affiliate, you join a network of other sales people to promote a particular product and will earn a commission on each sale. Affiliate products in the digital world have become increasingly popular over the past few years as more people turn are interested in buying eBooks, podcasts, and informational services. You can set up a storefront just like an online retailer, but will link all products sold with your affiliate codes instead. Affiliate sales can be a very profitable home business opportunity and entrepreneurial venture, but you do need to remain consistent and maintain a steady marketing plan and program.
3. Consider selling information yourself. Many people turn to the web to sell knowledge and tutorials about a particular subject. Seek out your passion and turn it into a profitable home business opportunity by creating your own website. A website that can draw a large amount of traffic has a lot of potential to make money from advertising, and you may also be able to sell affiliate products through it after building a steady flow of visitors. This is a valuable home business opportunity for you if you can update your site regularly and really focus on your niche topic. Becoming an expert on a niche subject or industry is a great way to build a steady stream of visitors to your site which can lead to subscription lists, newsletters, and many opportunities to sell a product or service.
4. Set your income goals. Sometimes deciding how much you want to make over the course of a year can help you narrow down your search. For example, if you only want to make a part-time income while working a 'day job,' you would choose online business opportunities that do not require a daily commitment. This includes any retail stores or sales-oriented sites that require you to fill orders and track inventory. If you do want to focus all your energy on making a full-time income, then a complete affiliate sales and marketing program, or information product selling and services may be a good choice.
Finding the right home business opportunity can take time, and sometimes it's even a matter of trial and error. Still, you can narrow down your search with a few simple questions and focus on these key areas for the right fit.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/online_business/article_5569.shtml
Wednesday 25 February 2009
Australian Debt Consolidation
Australian debt consolidation systems work very well both for businesses and individuals, but the right plan is often a bit difficult to find. A debt consolidation loan basically replaces a high interest loan and often gives you the option of combining all your different monthly payments into a single payment that is much easier to manage. A debt consolidation loan is not a permanent solution to your debt problems and should never be seen as such. Debt consolidation loans are meant to enable you to replace high interest with lower interest payment so that you can set your financial life on track again and be able to pay off your debts. As the credit card interest debts are often in the 15% area in Australia, you will notice the benefits of paying off credit card debt with a consolidation loan that may go as low as 5% yearly interest. Many credit card owners that have two or three different cards find it difficult to manage payments as well, and the unified monthly debt consolidation loan takes care of much of these issues. The company which issues the debt consolidation loan will be willing to negotiate with you a monthly or weekly payment for the loan, which will allow for more payment flexibility. One of the most important merits of such a loan is that it diminishes the stress that appears when creditors are constantly calling about your debt and allows you to focus on improving your finances and paying off your debts.
Credit Card Debt Consolidation
The difference between the interest rates of the credit cards and those of the debt consolidation loan may just be the extra breath of air your financial life was looking for. In some cases you can save up to 10% of your interest rates, which is a lot of money when calculated on a yearly basis. Although the general trend for Australian credit cards is to lower interest rates, credit card debt consolidation is still a viable alternative. While low interest rate cards will probably be quite competitive when compared to a credit card debt consolidation, some reward program credit cards also have higher interest. In such cases, debt consolidation loans are a good method of benefiting from the points and rewards that the card offers while also keeping interest rates low. The loan however must not be seen as a perpetual solution for your financial difficulties – it should actually enable you to notice gradual improvements in your earnings and spendings balance. In many cases, a credit card debt consolidation loan should be accompanied by a life style change and a sense of determination that will help you pay off your debts soon, but without any major sacrifices.
Copyright 2006 Virtual Office Space
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_6397.shtml
Credit Card Debt Consolidation
The difference between the interest rates of the credit cards and those of the debt consolidation loan may just be the extra breath of air your financial life was looking for. In some cases you can save up to 10% of your interest rates, which is a lot of money when calculated on a yearly basis. Although the general trend for Australian credit cards is to lower interest rates, credit card debt consolidation is still a viable alternative. While low interest rate cards will probably be quite competitive when compared to a credit card debt consolidation, some reward program credit cards also have higher interest. In such cases, debt consolidation loans are a good method of benefiting from the points and rewards that the card offers while also keeping interest rates low. The loan however must not be seen as a perpetual solution for your financial difficulties – it should actually enable you to notice gradual improvements in your earnings and spendings balance. In many cases, a credit card debt consolidation loan should be accompanied by a life style change and a sense of determination that will help you pay off your debts soon, but without any major sacrifices.
Copyright 2006 Virtual Office Space
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_6397.shtml
Thursday 19 February 2009
Government To Make Billions From The Mortgage Crisis
The mortgage crisis has had a negative impact on everyone, not just homeowners. Elected officials are working hard to pass legislation that is designed to prevent future banking debacles. Unfortunately, history has proven that when legislators over-regulate banks that it tightens the reins on lending. This is done by raising the bar on what it takes to qualify for a mortgage or installment loan. Predictably, it’s the middle class that will feel the pinch more than anyone. Specifically, it’s the middle-class, self employed small business owner that be injured the worst.
Most people are aware that you can reduce your taxes by deducting expenses and qualified charitable contributions. What most people don’t realize is that small business owners live and die by those deductions. Tax rates have risen on the self employed more than any other segment in our society. To counter these tax hikes, legislators created more “loop-holes” write off’s and deductions for small business owners to use.
For this reason, small business owners rely on creative CPA’s to maximize their deductions in order to show less income and pay less taxes.There are nearly 23 million small businesses in America and over 35 million sole-proprietors and almost every one of them employ savvy CPA’s to keep them in the black. The draw-back is that by doing this most self employed borrowers are unable to prove enough income on paper when applying for a loan or a mortgage.
Traditional mortgage lending practices of yester-year required that borrower’s prove sufficient income when taking out a loan. Over the years, taxes have risen for small business owners at staggering rates, far above what they have for W2 employees. At the same time the self employed borrower's “provable” income has dwindled proportionately. Under traditional banking rules most of the self-employed people wouldn’t be able to qualify for business loans or mortgages. This would ultimately force small business owners out of business and cripple our would economy.
This new business paradigm literally forced the banking industry to create lending products that catered to small business owners who could not prove all of their income. These products were called “stated” income loans and did not require borrowers who had good credit to prove their income. These products originally required good credit and sufficient assets in order to qualify for them. Responsible guidelines and common sense underwriting kept default rates on these products in line with conventional mortgages. Unfortunately, as competition for this segment of borrowers stiffened between lenders the stringency to qualify for these mortgages softened, thus the mortgage crisis.
It is exactly this type of loan that our law-makers are trying to do away with through legislation. The new mortgage bill being bounced around has specific remedies for irresponsible lending. Meaning, if a bank loans you money and it can be proven in court (attorneys like this law by the way) that the bank was irresponsible in doing so they could be penalized. The definition of “irresponsible” is did the borrower have the capacity to repay the loan, meaning did they prove enough income. This bill will kill stated income loans, period.
So where does this leave the responsible self employed borrowers who needed these loans to live and operate their businesses? This leaves them with higher taxes. Should this bill pass self employed borrowers will be forced to claim more income each year on their tax returns in order to qualify for car loans, mortgages and even business loans. This will negate any of the loop-holes and deductions they were promised in lieu of higher taxes.
This means the government will rake in billions in extra revenue as a result of this bill. For example, let’s assume that a small business owner claimed $40,000 in income last year after deductions and business expenses. If she was in a 40% tax bracket she would pay roughly $16,000 in taxes. Under the new banking guidelines that same business owner may have to claim $80,000 In order to qualify for mortgages, car loans and business loans. Assuming she’s in the same tax bracket, she would now have to pay $32,000 in taxes.
Multiply $32,000 by 23 million business owners and that’s one huge pay-day for Uncle Sam. You can bet that the Senators pushing this bill through congress are well aware of this left handed tax raise. You will never hear them mention it either, I wonder why?. You will hear about the naughty lenders that put good wholesome red blooded Americans in the street through predatory lending practices. You will never hear about the 20 million business owners who paid their mortgages on time and actually need these loans to stay in business.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9792.shtml
Most people are aware that you can reduce your taxes by deducting expenses and qualified charitable contributions. What most people don’t realize is that small business owners live and die by those deductions. Tax rates have risen on the self employed more than any other segment in our society. To counter these tax hikes, legislators created more “loop-holes” write off’s and deductions for small business owners to use.
For this reason, small business owners rely on creative CPA’s to maximize their deductions in order to show less income and pay less taxes.There are nearly 23 million small businesses in America and over 35 million sole-proprietors and almost every one of them employ savvy CPA’s to keep them in the black. The draw-back is that by doing this most self employed borrowers are unable to prove enough income on paper when applying for a loan or a mortgage.
Traditional mortgage lending practices of yester-year required that borrower’s prove sufficient income when taking out a loan. Over the years, taxes have risen for small business owners at staggering rates, far above what they have for W2 employees. At the same time the self employed borrower's “provable” income has dwindled proportionately. Under traditional banking rules most of the self-employed people wouldn’t be able to qualify for business loans or mortgages. This would ultimately force small business owners out of business and cripple our would economy.
This new business paradigm literally forced the banking industry to create lending products that catered to small business owners who could not prove all of their income. These products were called “stated” income loans and did not require borrowers who had good credit to prove their income. These products originally required good credit and sufficient assets in order to qualify for them. Responsible guidelines and common sense underwriting kept default rates on these products in line with conventional mortgages. Unfortunately, as competition for this segment of borrowers stiffened between lenders the stringency to qualify for these mortgages softened, thus the mortgage crisis.
It is exactly this type of loan that our law-makers are trying to do away with through legislation. The new mortgage bill being bounced around has specific remedies for irresponsible lending. Meaning, if a bank loans you money and it can be proven in court (attorneys like this law by the way) that the bank was irresponsible in doing so they could be penalized. The definition of “irresponsible” is did the borrower have the capacity to repay the loan, meaning did they prove enough income. This bill will kill stated income loans, period.
So where does this leave the responsible self employed borrowers who needed these loans to live and operate their businesses? This leaves them with higher taxes. Should this bill pass self employed borrowers will be forced to claim more income each year on their tax returns in order to qualify for car loans, mortgages and even business loans. This will negate any of the loop-holes and deductions they were promised in lieu of higher taxes.
This means the government will rake in billions in extra revenue as a result of this bill. For example, let’s assume that a small business owner claimed $40,000 in income last year after deductions and business expenses. If she was in a 40% tax bracket she would pay roughly $16,000 in taxes. Under the new banking guidelines that same business owner may have to claim $80,000 In order to qualify for mortgages, car loans and business loans. Assuming she’s in the same tax bracket, she would now have to pay $32,000 in taxes.
Multiply $32,000 by 23 million business owners and that’s one huge pay-day for Uncle Sam. You can bet that the Senators pushing this bill through congress are well aware of this left handed tax raise. You will never hear them mention it either, I wonder why?. You will hear about the naughty lenders that put good wholesome red blooded Americans in the street through predatory lending practices. You will never hear about the 20 million business owners who paid their mortgages on time and actually need these loans to stay in business.
----------------------------------------
Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9792.shtml
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