This topic contains 6 replies, has 4 voices, and was last updated by Anonymous 8 years ago.
- May 5, 2011 at 6:58 am #203535
ok first of all before people jump in with ”why do you want credit if you cant manage the credit you have” ill give you a bit of background.
when i left the army 7 years ago, i had nearly 20k debt and no job for about the first year. i signed up for debt management so things didn’t spiral out of controll. i then got a decent job, which im still doing to this date. i got the debt down to about 7k.
i have found that i cant get any credit while on the programme. its like im stuck. even tho im paying more than i need to to get it paid quicker, ive still got a while to go. there is a tonne of things i want to do, get a mortgage a new car etc. i just want to move forward but as long as im on the programme, im stuck.
the reason i wanted a loan was to start doing some of those things, as well as paying off the debt management.
- May 9, 2011 at 2:24 am #269176
You might be able to get short term payday loans but you would be unlikely to get any bigger loans based on your debt management plan and your credit score (which is likely quite low). There is nothing legally restricting you from getting loans. apart from that you will probably have to declare that you’re on a debt management plan on any loan application form.
I know that there are things that you need, and I know that it’s frustrating, but getting into more debt really wouldn’t be a good idea right now. You have done so well to reduce the debt to the level that you have, don’t push it back up. Tough it out as best you can, and once your credit rating is repaired then you can take out new debts and manage them responsibly.
- May 11, 2011 at 3:01 am #272135
No, unfortunately no loan company will touch you while under a debt management company. The ones that will offer you a loan are the ones that charge an upfront fee with the promise of obtaining a loan on your behalf and then will just take your money without offering you a loan – a total scam.
It will be at least 12 months after you have finished paying off your final payment to the debt management company that you will even be considered for a loan.
- May 16, 2011 at 5:37 am #428048
I got angry at my mortgage company one day, because I wanted to remove them from taking money out to pay my insurance and property taxes. They actually charged me $ 250 for this.
I was so angry, I started saving like nuts. And I started paying that money as principal. I was furious, and I was going to get my $ 250 back. In the end – I paid off that mortgage in half the time. I got my revenge. I ended up saving over 100,000 in interest alone.
Pay down. You’ll be surprised at how much less interest you’ll “sort of” throw away.
- May 16, 2011 at 5:58 am #428049
Banks are a mess right now. I think you shoud call and imply that you are thinking of defaulting on the 2nd mort. if you can’t get a 6% interest rate. If they say no, call again the next day – the answers change from day to day and depending on who you talk to.
- May 16, 2011 at 6:04 am #428050
Depending on where you live, you might be able to refi just the second loan. I got a great deal from the DVA Federal Credit Union (DVAFCU.ORG) on a second loan.
Also, don’t worry too much about the PMI if you plan to stay in the house more than five years. It is tax deductible now, like regular mortgage interest, and the points are tax deductible too. Interest rates are at a 40 year low right now – there is no better time to shop. If you refinance $ 350,000 at 5%, (both the first and the second) you will save close to $ 400 a month in interest costs, so the refi costs would be made back in about two years.
Before you do anything, look at your free credit report and make sure it is clean, and no bad debt out there, and then call the banks and shop for a refi.
- May 16, 2011 at 6:47 am #428051
Request an amortization for both the 1st and 2nd mortgage. It will give you a break down between interest/principal. If your first mortgage is 30 years, you pay about 70% in interest on the first 15 years, on the 2nd, you’ll pay 70% on the first 7.5 years. That’s how banks make their money
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