First off, sorry for the length of time before the response! It has been a bit since I have had the time to log on.... TFP, how I missed you.

On to your questions....
First off, your car will be paid off soon... which means that the end of that dark, dark may be over sooner than you think. You are not used to having that extra money lying around, so you will be able to put it directly on any other debt you may carry.

First of all, I would continue to make any payments that you have on time. That is of the upmost importance.

After you have paid off your car, (only 2 more payments!) I would contact the collection agencies and offer to settle. Some may refuse-let them sweat. Take the agency that offers you the best reduction, and make your car payment and any additional moneys you can to them, get it paid off as soon as possible. Repeat the process with the other collection agencies... hopefully any that refused originally will now change thier mind. Those that did offer in the beginning may give you a higher reduction now. Make sure you continue to pay those other bills on time, but you want those collections closed as soon as possible.

After paying off the collections, start hammering on your other credit card debt. Chose one, preferable the one with the highest interest rate, take the money from the car payment and collection agency payments, and pay the beast off. Continue doing so until all of them are paid. I know, easier said than done, but this is the by-the-book (and also best, in my opinion) advice on becoming debt free. The school loan you don't want to pay off until last, because it is generally tax deductable. However, when everything else is paid, do the same to that.

As far as declaring bankruptcy, I am not sure if I would recomment that at this point. I know you may not agree with me, but you are not in that bad of a situation. You make 48k a year, and only 55k in debt. It would be much worse if you made 25k a year, or you were higher in debt. Also, it is possible for you to still have that school loan after bankruptcy. It doesn't always pay for money owed for educational purposes.

In response to the bankruptcy affecting your cousins credit, it will. It would affect yours in a much more negative manner, but his credit would show that he defaulted on a 40k loan. He is just as much responsible for repaying it as you are, and it will affect his credit in the exact same manner as defaulting on that account would affect yours.

If I can be of any more service, let me know!

You can get your credit union to trust you with a loan by having either some type of credit history, which you do not, having an established history with them, (deposit accounts), or by having a co-signer. The secured credit card will help you begin establishing credit history, as far as the amount goes, I would ask for a very small sum, depending on their minimum. $250-$500 should be enough to get you started, and they may not require a co-signer for that little. If they do, don't worry about it, it reports the same to your bureau whether it is just yours or if you have a cosigner.

Thanks for Posting!

Financial Institutions generally have issues with Manufactured homes because they are more likely to lose value (depreciate) and would be more difficult to sell if you defaulted than a conventional home. You may want to try contacting some more institutions, if you have some equity in your home, that may be used to your advantage. Generally, Banks will give you a lower rate if you owe under a certain percentage (ie 80%) of your homes value.

As far as 8.75%, It is difficult to say because you didn't state when the loan was taken out. 1 year ago, that would be high, now, that would be average, 5 years ago that would be a great rate. Of course, these are all generalizations, but they should be relatively accurate.

At the current institution I work at, we can only loan out 89% of a manufactured homes value, but you would get the same rate as any other home. I would assume that there are similar institutions out in CA.

Thanks for posting! If you need anything else, just let me know!

Oh, on a related note, a while back someone had asked if PMI was required from everyone. It is not, the current institution I work at doesn't even make you take it even if you are at 100% loan to value. (you owe exactly what the home is worth) Also, we also may not require a downpayment, depending on your credit history.

Just figured it might be a useful FYI when you are checking around for a mortgage loan.

Hey NoSoup!

A few general questions.

First, how can I obtain my credit report? Do you have to pay for this?

I have 3 credit cards, totaling about $13,000 in debt. I'm using a counsling agency. They were only able to make a deal with 2 of the cards, so the 3rd I still pay directly. Would it make sense to get out of the counsling agency and pay the cards myself? I am able to pay off the cards, at least the minimum each month.

Basically, I'm just not sure how much I benifit with this agency. It doesnt seem as if I'll pay off the cards any sooner through them. I have since cancled these cards. I was thinking of reopening the one card (its a Visa), woud this be wise? Now, I would not use it, but it seems it would be good for my credit rating to have it open.

I'm still living at home, but I am looking to move out in 6 months or so. At my current job I make around $24,000 a year. I have a car, those payments will be done in a little less than 2 years. How hard will it be to get into an apartment?

Money gives me a headache...

Well, to obtain your credit report you can either
A) Pay for it (recommended)
B) Get Declined for credit... The Institution is required to send you a notice allowing you to receive a free report, but this report won't have your scores or anything on it, simply a list of your accounts and balances.

As far as what you should do with the agency dealing with the credit cards, because I don't have all the necessary information, I would rather not comment at this point, simply so I don't point you in the wrong direction. You said that the agency worked a deal, but didn't mention the terms of the deal. If you would be able to do so, I would be more than happy to offer any advice I could.

If you pay just the minimum each month on the cards, your balance will take many years to be paid off. (if ever) Try making the minimum on the two cards that aren't too bad, and target the last one (with high interest rate, annual fee, ect.) Pay as much as you can on that card, and continue doing so until it is paid off. After it is paid, transfer that payment onto the next card, again choosing the one with the least friendly terms.

As far as "cancelling" your account, it isn't truly canceled. Granted, they may have revoked access to borrowing any more money with your request, but you account won't report closed on the bureau untill the accound is actually at a $0 balance and you request that the line of credit be closed. So, in answer to your next question, reactiviting it would not really help you build any additional credit.

Well, as you didn't state your payment history, it is difficult to deduce how hard it will be to qualify as a tenant. However, if your parents state that you have paid rent for X years, you will at least have some type of rental history as well.

To be honest, before you move out, try paying "rent," just to see if it is comfortable to you. Check around and find an apartment that is similar to one you would want to reside in, find out what the rent amount is, and pay that much more additional money on your credit cards. The reason I suggest this is due to you stating that you can pay the credit cards yourself, well.... at least the minimum. I can't think of too many more financially difficult situtations than signing a lease and having difficulty paying the rent. Make sure you stick with it, one month is a little different than 12, see if your new lifestyle is acceptable. And, you're doing nothing but helping yourself in the long run.
-Also, you may want to start stocking up on housewares, it is Expensive to move out! I know, you have probably heard it a million times, but people aren't lying. Furnature and a security deposit are a definate must, and it is always good to have a little nest egg in case something goes wrong.

Well, I hope that helps you out, sorry if I got a little long-winded, lol... it is late. If you want to repost the agency's "deal", go right ahead, I will do my best to help you out.

Thanks For Posting!

Hello everyone, I see that it has been quite some time since there has been a post on this thread, and before it falls off TFP into oblivion, just wanted to see any I can help anyone else with anything.

G'nite all!

NoSoup

One Final bump, If anyone needs anything, you are welcome to ask, if not, I am glad I was able to help in some way. I hope some of you got some useful info from this thread, it was a pleasure to write.

Thanks again, and G'nite everyone

NoSoup

because we have a new forum

*bump*

So NoSoup, I'm lookin to buy a car. I'm eighteen, a full time student (with loans) and i work full time. So the car I want is roughly 13,000 after tax, licence, etc. They tell me I need a cosigner (perfect credit isn't perfect anymore if there isn't "car credit") so I had my mom cosign and they wouldn't give it to her because she is in credit counseling? That doesn't really click in my head, so some info on that would be nice. Also, I'm probably going to go with in-house financing with the dealership. People tell me to stay away from that because it wont build my credit, but the thing is, they will report every month to the credit bureau. So it will affect my credit, right? And another question about my credit card. I heard that a good idea is to pay the minimum balance every month on the card, then pay the full amount, close the account while it's in good standing and apply for another card with a higher limit Because it looks good to have many accounts closed while in good standing? Thanks for your help :)

If I am looking to start a small business (likely set up a LLC) and need to take a loan to do so (approx $200k), what does the lendor look at to assess whether he will write the loan ? Personal assets, or the prospects of the business venture ?

First off - Wow... this has been gone for a long time, glad it returned, always willing to help!

Alright, down to business-
They may not accept her as a cosigner because people in credit couseling generally have had either credit issues in the past or are having difficulty making their payments. They still should have checked her credit, and it may be delinquencies or the like that may have disqualified her.

As far as in-house financing, BE WARY! I cannot stress this enough. If the dealership will finance the car for you without the help of a financial institution, be very, very cautious with the paperwork you sign. I have never seen, although some may exists, a dealer that offers a decent deal when doing their own financing. Be on the lookout for "processing fees, application fees, dealer fees," and other bogus fees. Also, make sure that there isn't a prepayment penalty. I remember when I was purchasing my first vehicle, I wasn't worried at all about the type of financing I got, and it can come back and bite you in the ass. Make sure when you are going about purchasing a vehicle, you don't let your personal emotions get involved, and don't let the salepeople pressure you.

As far as closing credit cards to get new ones, that is poor advice. By having more inquiries than you need on your bureau, it will pull your score down far faster than any benefit you would see from closing an account while still in good standing simply to reopen another one. If you are worried about a higher limit, just as your current card holder to raise your limit, but heed the other advise in the previous posts when dealing with credit cards.

If I can help you any more, feel free to post again!

Well, to be honest, business financing is not my expertise, but I'll do the best I can with what I have picked up over the years....

The lender will definately take a look at everything of yours (personal) to decide whether or not to do the loan. Your credit history, score, assests, liabilities, child support payments, ect.

From my understanding, certain lenders will give you a "business" loan based solely on your personal information. It is doubtful that you will get a loan for 200k w/out something as collateral, such as an office building or equipment, depending on the type of business you are getting started.

If you would like to leave more specific details on how you are setting up the business, what the business is, and what you are potentially using for collateral, I could possibly give you more specific info. Until then, if anything else arises, feel free to post!

Oddly enough, I have gotten several PMs within the last day or two inquiring about my experience, knowlege, and age.

I figured I might as well slap it up here to avoid having to reply to all of them individually.

I have been working in financial institutions for approximately 4 years now. I am well educated in most aspects of both Credit Unions and Banks. I have done many different types of loans, including RV's, Campers, Vehicles, Signature, Unsecured, First Mortgages, Second Mortgages, Home Equity Lines of Credit, and I am sure there are more, lol, but I don't think I could remember them all if I tried. I have open/closed/maintained IRA accounts, dealt with depository accounts (checking, savings, money markets, ect.) In my current position, I handle nothing but mortgages.

Nope, I do not have a college degree, although I did attend a tech school for a short period of time before deciding that in my current position, it isn't for me :D

Finally, I am 20 Years old. Actually, just turned 20 not too long ago, when I originally started this thread I was 19, I believe.

Well, lol - I hope that answers everything, if you have any more questions, feel free to either post em or PM me!

Here's something of an update.

The bonus came through such that the net amount was around US$14K. I bought a new computer and a new car, with a US$14K loan on the car.

Now I'm fed up with my landlord and I'm looking at buying a house. Okay, I'm in debt. I still have a good rating as far as I know (haven't checked since before the car purchase!) and I have enough cash in investments to pay off the car, but I've been keeping that as a cushion, and paying off the car at twice the rate contracted.

Now I've looked at a few houses. I've gotten pre-approved for US$150K, which seems in this area to not be enough. Meanwhile, it seems like too much to me. I expect I could get pre-approved for more, but the amount of monthly payment I'd be making, with PMI and taxes, would be in the range of US$1200+ at the current pre-approved amount. That's about a third of my monthly net income.

When adding in the increased utility expenses and the unknown costs of What Will Go Wrong, I'm beginning to think that some people were right to suggest to me to look at condos. That way, I'd at least start building up equity and tax advantages.

Less the retirement accounts, my net worth is a bit over $4000. This doesn't strike me as very high. Here's what I'm thinking: get a cheaper yet bigger apt. I'm moving no matter what 'cause this place is too small and I pay a premium for the location. I've queried a few apartment developments in this area, and they're all cheaper and have more sqft'age. Then use what's left after the cost of the move, plus whatever else I can save over the next year, to build some cash equity. Am I making any sense? Or would it make more sense to buy something and get equity w/o having to pay rent at the same time?

Also, what can you tell me about 80/10/10 loans? How do they compare with paying a minimum downpayment and paying PMI? I understand that the 80/10/10 loan has better tax credits.

Thanks for the update!

Alright, before I answer, I'd like just a tad bit more info, if you wouldn't mind.

1) What type of Investments are they? Stocks, Bonds, Mutual funds, IRAs?

2)What is your Interest Rate on the vehicle loan? Term of the loan?

3) How much cheaper of an apt. are you looking for? Estimated moving costs?

Just want to make sure I am giving you good info - I'll get back to you if you wouldn't mind Responding, I'd be more than happy to help!

Yes, all of that. Most of it's in a mix of a 401k, a roll-over (regular) IRA, and an index fund. The rest, around US$5K, is in growth stocks.

IIRC, it's 4.05%. Pretty damn low, no? 60 months, since I can always pay it off earlier if I want.

Prolly a couple hundred/month. Maybe $1K for moving, probably less. OTOH, I've been told to not give up so easily on a house. May take a while to find one.

Alright, a few more questions :D

As far as a downpayment is considered, are you able to put one down? How much? Is it cash that you have, or would you be cashing in your IRAs? Finally, when you purchased the new car, did you put the remains of your bonus on the car?

Thanks, I'll get back to you soon!

I should be able to put down at least 3% for the house for a FHB loan, or PERHAPS more, depending. This would be from regular investments though I understand I could pull some from the 401k.

The car had a $9K downpayment from the bonus.

Jesus, you're only 20? Wow, you know your shit :thumbsup:

I bet I'll have some more questions soon, my finances are a bit crazy at the moment.

Alrighty Denim-

If I were in your shoes, I would probably move into a cheaper apartment, and forgo the house at this point.

A condominium may be an option, but historically, they are the slowest to increase in value and fastest to decrease. They are generally difficult to turn around for a profit, and usually a pain to find a buyer for.

If you do move into a cheaper apartment save the additional money for a downpayment of a house. 1/3 of your income on just your mortgage, taxes, insurance, and PMI is a little high. The higher the downpayment, the lower your overall payment will be.

However, some people that are very good with their money have no problems with 1/3 of their income being tied up in their housing.

Here is what I would suggest:

Move into the cheaper apartment, and begin to "practice" your mortgage payments. Simply take the amount your mortgage would have been (ie $1200) and pay your rent from it, putting the rest in an account for the downpayment of a home. If you really want to try and experience what home-ownership would be like, if your rent includes utilities, take the average of your utility bills, multiply them by 1.5 or 2 (depending on the size of your apartment) and put that into the "down payment account" as well. You can also "practice" the repairs of the home, which average 2.1% of the home's value per year. for a 150k home, that comes out to $3150 a year, or an extra $262.50 a month. Granted, this figure will vary depending on the shape of your home when you purchase it, but it should give you some idea.

If you find this "practice" to be comfortable to you, I would then go ahead and make your home purchase. If not, after a while you should have a substantial downpayment to purchase a home similar to the one you are "practicing" on, and yet have a much lower payment.

As far as using IRA funds to purchase a home, I wouldn't, although some situations may warrant it. From my understanding, there are certain exemptions when you utilize those funds without being the required age, and a first time home purchase generally does qualify.

Finally, on 80/10/10 mortgages, I don't really see any reason not to do them, unless the 3rd mortgage rate is very high. Personally, I would check around to find an institution that offers 2nd Mortgages up to 100% and doesn't require PMI to compare rates. Also, be very wary of closing costs and prepayment penalties.

If at any time you (or anyone else reading this) are looking into a loan and feel uncertain about the terms or just want to make sure that you aren't being cheated, I'd be more than happy to take a look at the documents. Simply send me a PM, and I can give you a fax number, you can delete all the personal information (last name, social security number, address, ect.) and you can either fax it or scan/email it to me. I must warn you, however, that I do live/work in Wisconsin, and I may not be aware of some of the laws that exist in your state.

Also, if you are wondering if a certain combination (80/10/10, 80/20, ect) will save you more money, just send me a PM with the interest rates/terms of the loan and I'll work it up and let you know what the better deal is.

If you need anything else, just let me know!

Lol, Indeed, I am - and Thanks!

Bring on the questions, I'd be more than happy to help :D

That's too sane. :D

Thanks!! And I'll be back when the situation changes.

Lol, sounds good - ironic that it only takes someone suggesting you do something to help you decide what you really want to do...

If you need anything else, let me know :D

Yeah. ;) How come others with similar income can buy a house and I can't? It's got to be possible. In a year, I'll have maybe saved up more money, but the house prices may have gone up much more. I'm feeling kinda damned either way. :(

I have a question.

fyi I'm a stubborn bastard.

There was a time when I lived on the west coast and I moved east.

The electric company sent me my final bill which was 3 or 4 times what it should have been. I'm guessing that either someone jacked my power when I wasn't at the empty house OR the electric company made a mistake (which they had done previously) and misread my power meter.

After dealing with a very rude and obnoxious electric company billing agent who refused to do anything -I vowed never to pay them. It's now 6 yeas later and because I am cleaning up my credit -I finally paid -just to get it off the books.

I still feel like I shouldn't have. The question is -Even though I paid this bill how does it effect my credit? If it's paid late EVEN THOUGH I FEEL LIKE I WAS CHEATED is there anyway to put "my side of it" in the records?

Note that I still have some of the old bills that anyone can compare what the bill should've been.

Also for future reference -what should I do when someone overcharges and I'm feeling cheated. I still have the "don't pay" mentality and it doesn't do a thing for me.

Great Idea about the practicing the mortgage payments. Had I done that earlier I would have bought a place YEARS ago.

I'm a college student thinking of buying a used car soon (somewhere in the 4-5k price range). My parents have always told me to buy cars with cash, and have always done so themselves. I could pay cash, but that would eat up most of my bank account. Is it a better idea to get a car loan and invest the money or should I pay cash?

Oh, and just a thought, but maybe this thread could get stickied. It seems to be fairly popular, though intermitantly so, and stickying it might save nosoup the trouble of bumping it constantly. I think it would be great to recognize the wonderful contribution NoSoup is making here.

Just "subscribe" to the thread, and you'll see all updates to it.

Sorry about the wait, I have been gone for a few days...

First of all, it is best to dispute it with the company and once (if) you get an answer, go from there. If you were terribly cheated/ there was a large error in their favor, and they refuse to acknowledge it, I would contact an attorney.

Unfortunately, however, in most cases it may save you much more of a headache and potentially money in the long run just to pay the bill. As I am sure you have found out, that bill has probably hurt your credit for many years now, and every loan/credit card you have taken out may have had a higher interest rate as a result.

As far as putting your side of the story on the credit bureau, it certainly is possible, although it usually isn't utilized in cases like this. Basically, all you have to do is contact the Credit Reporting agencies and say you would like to make a consumer statement on your credit bureau. They should mail you out a form, you fill it in, and mail it back. From that point forward, your bureau should have that statement attached. Most of the time this is used in cases of identity theft and/or fraud, but as far as I know you can put whatever you would like into the statement.

As far as the "don't pay" mentality, it probably feels the best at the time, but it will probably hurt you in the long run. If an account is in dispute, they shouldn't report it as delinquent to your bureau, nor send it to a collection agency. If there is anything else I can do for you, just ask!

Thanks - Many people I have suggested this to that have tried it have either quickly decided that they could easily purchase a home or realized that they are not yet ready for home ownership. Either way, they have a bit more cash in the bank to use for whatever is necessary - always a good thing :D

Well, as I am not aware of your current credit situation, I'll do the best I can with the information you provided...

Generally speaking, it certainly is a good idea to purchase vehicles with cash, as they are one of the "worst" assest you will ever have. The reasoning behind this is that they generally depreciate very quickly, and paying interest on a depreciating asset is always a good situation to avoid if possible.

Since you certainly would be paying interest on the vehicle, I would suggest that you invest that money only if you are guaranteed a higher return. If you put it into the stock market (although I believe the average return is 12% per year) you may potentially lose a good portion of those funds, and you would be in a much better position to have a free-and-clear car. However, if you can find a Certificate of Deposit or some type of Government Bond that will pay you a higher rate that the intererest rate on your loan would be, I don't see any issues with investing it and taking out a loan on the car. One thing to consider, though, is that you will have to eventually pay income tax on any money you make, and so the rate of the investment should be substantially higher than the loan.

A couple of other points -
If you are looking to build your credit, a vehicle loan would be a fine place to do so. However, you can also do a "deposit secured loan" and use your cash as collateral. This may be your best bet, as I am not sure that you would want to carry full coverage on the car, and with no lien on the vehicle, you wouldn't be required to do so. At the end of the loan, you would still have that money in whatever savings vehicle that you had chosen to keep it in (Money Market, Certificate of Deposit, ect.) as well as any interest that had accrued on it.

I hope this answers your question(s), if not, post again!

Well, I originally started this thread long before there was a finance forum, so I don't necessarily need to bump it anymore. You guys can do it for me with any questions you may have :D

However, if any of the moderators agree with you, I would have no objection with stickying it.

And I really enjoy doing this thread, I look forward to seeing if anyone has posted. In my opinion, If I can help anyone with my expertise in the field, the pleasure of doing so far outweighs the "cost" of my time...

I have been slowly rebuilding my credit over the past 2 years. I applied for a home loan, and was approved, right at 2 years ago. My credit score at that time was about 560 and I had several derogatory issues on my report, such as late payments and collections. In the past two years I have had perfect credit activity....paying bills on time, no collections, etc. My score only increased about 30 points. Last month, I had a 30 day late sent in to the credit agencies (I have disputed it because the payment was sent two weeks prior to 30 days late, but the company didnt process until it was EXACTLY 30 days late), my score dropped 62 points from 592 to 530!!!! My credit score is now lower after 2 years of perfect credit than it was when I first began my credit improvement journey.

Any advice on how to deal with this "one step forward, two steps back" journey?

Thanks!

One more thing...
Do I have any recourse with the FICO on my credit scoring? I have asked for an explanation on why my credit score is lower now after 2 years of good activity than it was when I didn't pay my bills at all and all they have said is "that is how the computer scores you". I feel like that the score should be easily explainable and not so esoteric.

I AM VERY FRUSTRATED AND CAN'T SEEM TO GET AN ANSWER!!!

Thanks for any help.

This is a great thread and very generous of NoSoup to spend so much time giving excellent advice.

Here's my delimna.

I own a $136,000 home with $106,000 debt in my mortgage.

I have foolishy maxed out two credit cards with about $10K on each. In my defense, a large portion of that was medical expenses that I wanted to avoid collection on.

The interest rates on the two cards are not terrible at 12.9% and 9.9%.

The problem is that with all of our bills I'm barely able to make the various payments every month and the two credit card payments are just killing me. It's over $400/month just to make minimum payments.

I already refinaced my home about a year ago and I know it would not be well received at that bank if I returned so soon.

I feel like I'm drowning in debt and broke all of the time even though I make 50K/year.

What should I do?

Ah, welcome to the wonderful world of your FICO score - Hey, Everyone enjoys being scored on rules they don't understand, right?

I know it can be extremely frustrating, and the exact calculations of the score are surrounded in mystery. Basically, the score is based on a variety of factors, including payment history, late payments, judgements, collections, length of credit history, amound of secured/unsecured debt, spending habits, how often you apply for credit, and even how long you are employed at the same job.

Here's the good news - derogitory marks on your bureau hurt less and less as time goes on. The best way to improve your score is to make payments on time, carry low balances on credit cards, only have a few open lines of credit, try to avoid applying for credit, and let time pass.

You didn't mention how many open lines of credit you have, nor how much you owe according to the limits, but try to keep your credit card/unsecured balances under 50% of the limit. Try and pay down all your debt, starting with high interest/close to limit credit cards, before any secured (ie vehicle) loans and finally the mortgage. As you experienced, the better your score, the more a single derogitory mark affects you. Another thing I would consider doing is closing any credit cards/unsecured loans until you are down to 2, maybe 3 open lines of credit. Also, when using credit cards in the future, it looks much better on your bureau to have to $5000.00 limit cards with balances of $2500.00 than a single card maxed out. Unfortunately, that's pretty much all the advice I can give you...

If you have any more questions, just ask!

Well, working from the information you have given me, I would suggest possibly getting a 2nd mortgage to consolidate your Credit Card debt. Because it is paid back over a longer term, your payments should be significantly lower. However, simply because you have a lower payment doesn't mean that you should make less of a payment on the balances that you owe. Hopefully, though, it will give you more spendable cash and make your debt seem less mountainous.

If this wouldn't work for you, please explain your situation with a little more detail and I'll see what I can do :D

Thanks for the quick reply!

I was thinking about doing exactly that.

If you don't mind my asking, I was wondering about the following.

What type of company should I go through to request a 2nd mortgage? I was considering online to make it easier but don't know which would be the best one.

What interest rate should I expect in the current market?

What fees and closing costs should I expect on a loan of about 30K?

What things should I avoid or be cautious of?

Thanks again, very much.

You can check online, but online companies generally have higher closing costs than brick and morter institutions. I would avoid brokers altogether, and see if you can find a bank or credit union to do it for you, as they generally charge much less in fees.

As far as the interest rate goes, it depends on your credit as well as how long you are going to have the term for. You should be able to check online for todays rate, or just give your local bank/credit union a call. Another option you may have is to obtain a "home equity line of credit," depeding on your specific situation. Without examining your finances, I unfortanately am unable to suggest a specific action for you.

As far as the fees/closing costs you should expect, I would try for under $500.00 including an appraisal. However, depending on where you live, that may seem kinda low. Try to avoid institutions that charge bogus fees (ie application fees, processing fees, broker fees, etc.)

You should definately avoid having a pre-payment penalty, as well as "bogus" fees mentioned above. Some home equity lines of credit have annual fees, and on occasion that is alright, if it is the best product to suit your needs.

I copied and pasted this from a different post, just to remind you -
"If at any time you (or anyone else reading this) are looking into a loan and feel uncertain about the terms or just want to make sure that you aren't being cheated, I'd be more than happy to take a look at the documents. Simply send me a PM, and I can give you a fax number, you can delete all the personal information (last name, social security number, address, ect.) and you can either fax it or scan/email it to me. I must warn you, however, that I do live/work in Wisconsin, and I may not be aware of some of the laws that exist in your state."

If there is anything else I can do for you, just let me know!

One last question that I forgot to ask.

Will they take the closing costs, appraisal fee,etc from the proceeds of the loan or do I need it up front?

It Depends. Providing you have the equity, the institution should be able to wrap up all the closing costs into the loan. I would imagine that you should easily be able to find somewhere that would be willing to do so.

Thanks for the response NoSoup. Very informative information.

NoSoup,

I had gone thru a broker to get my mortgage. I got a better rate than via going to the bank directly. I paid no points upfront and I paid no fee to the broker, they took a commission from the bank. In fact because I was buying a coop in NYC, it was fortuitous because she helped us secure the best loans because we needed 20% down.

I also got a rebate from the broker because of a deal with my employer which I did not know about before I signed on with her.

The first broker I saw wanted us to fill out the paperwork which we all know is MASSIVE. This one interviewed us over the phone and sent us the finished documentation to sign.

I think that it's at least worth the investigation, especially if you don't have to put out any cash.

Very True, Cynthetiq - Very occasionally you can and will find deals like this. Very seldom have I seen them, and when I have the mortgage amounts have generally been a rather large amount. As a general rule, People with larger mortgages generally pay less closing fees per thousand than people will smaller needs. As he had mentioned that he had needed only about 30k, I didn't really consider this an option, although I should have at least mentioned it. My apologies, and excellent point :D

NoSoup-

This may have been answered before but I couldn't find it using the search function. I know that when you apply for credit the dredit rating agency records that your credit report was requested and that this is bad for your dcredit rating. How long does this record of having your report requested stay on you credit report?

I believe that it stays on the bureau for 3 years, however, the most significant time is the year following the inquiry. You will be docked points if there are too many inquiries withing 3 months, 6 months, and 1 year. You will be docked more points the shorter the time frame. Hope this answers your question, if not, just ask!

Awesome, thanks!

no soup-
thank-you in advance, for this wonderful thread, and i do have a question.
my husband and i just recently, paid off all of our debt, he has been steadily paying for 2 years, through debt consolidation. we had credit cards, and a repo. we havn't missed or been late on a payment, on our new car, credit cards, or anything else for that matter. we went to see about getting a car loan, for him, because all he has wanted is a newer car (he drives a '78 firebird, i think it's time). and our credit was scores were 612, and 613, and we were turned down. how long does it usually take for your score to get better? my original score was horrible, so this is way up for me, but for him, even before consolidation, he never missed a payment. i am also curious, if consolidating hurt him, more than benefited. when we went to purchase my car, we were informed , that the consolidation, was worse than bankruptcy, or even my repo. we r also wanting to buy a house soon, will the situation above effect that as well?

No Problem - That's what I'm here for :D

This is a very tough question - I'll do my best to answer it simply...

Basically, lenders see debt consolidation companies as a "red flag" that indicates that you may potentially have issues paying back debt that you owe. Ironically, it can have lasting effects similar to a bankruptcy, however, once all the debt is paid and the credit consolidation company stops reporting that they are paying your bills, your scores should increase relatively quickly (as opposed to an actual bankruptcy) It certainly may affect your ability to purchase a home, but I would imagine that within a year or so your credit scores should rapidly increase, providing that you continue on your excellent payment history, keep you debt minimalized, and stop working with the debt consolidation company.

Congrats on being debt free, it's an excellent place to be. In the meantime, I would suggest taking your "payments" that you were making and continue making them into a savings account, starting to accumulate money for a downpayment. Your goal should be to put as much as you can down, hopefully 20%, as that way you can avoid paying PMI (private mortgage insurance) providing that the guidelines in your state are similar to the guidelines here in Wisconsin.

The money will add up quickly, and it shouldn't really have an impact on your standard of living, as you are used to making those payments already.

Another thing you may want to consider, providing that your vehicle would make it, is to wait until you purchase a house to purchase a vehicle. If you put 20% down on a 100k house, you would have 20k in equity that you may be able to get a Home Equity Line of Credit for. If you utilize these funds to purchase your new vehicle, as it is a mortgage on your home, it is generally tax deductable.

I hope this answered your questions, if not, please feel free to post again!

thank-you! it really gives me hope that things will get better soon!

Lol, Hey - In the world of credit, time is just about the only thing that you have on your side.

It's difficult to score well when the average consumer doesn't even know what the "rules" are...

Hey guys, more questions :)

I'm being killed by my credit card debt. I know it's my own fault for getting myself into this spot, but I have got to get out of this hole. I'm trying my hardest to do this, but interest rates are killing me.

Recently I've opened up 3 new accounts so I could transfer balances over to those from higher APR accounts. But I still have a card with a $6,000 balance and 15.99% APR. This card is killing me.

I'm considering getting a $13,000 loan from my bank, with a rate of 8.99%. This is what they have listed on their website, so that may be a generic rate. I purchased my FICO score about a week ago so I could see where I stand. My score is 635. Apparently this isn't bad, but it's not good either.

My question is this. Do you think I would be approved for a loan with this FICO score?

Here's a bit more indepth info. My credit card info:

MBNA: $6,000 balance at 15.99% APR
Chase: $2,700 balance at 12.99% APR
Capital One: $3,000 balance at 8.90% APR
Bank of America: $1,200 at 0% APR until November, then it will go up to 8.99%

I also have a First USA card with a balance of $4,700 and an APR at 11%. I'm paying this card through AmeriDebt.

Oh, my car loan will be paid next May, so I'll have another $250 to put towards debt repayment.

I'm just trying to figure out what I can do :confused:

Well, it is difficult to say whether or not you would be approved or not without going very in-depth with your finances. Most likely, the most simple way to find out would be to apply. You said that your vehicle will be paid off shortly...

What kind of vehicle do you drive? Do you know the approximate value of it? Also, is it in decent running condition, or more specifically, do you think that it will last you 4-5 more years?
And when you said it would be paid in May, is that next month May or a year from now?

As far as the credit card with Ameridebt goes, what have they offered you vs what they charge? Did they reduce the interest rate, back off late fees, or are they just basically making the payments for you?

Just want to get some more info before recommending a course of action...

I have a 2001 Honda Civic. I plan on having it until it no longer runs (or can afford to buy something nicer), and Hondas are pretty good cars. 5 more years at least. I'm not sure what the value would be now.

It will be paid off next May (2005). Possibly before, I have made extra payments.

With Ameridebt they lowered the interest rate on the card from 15% to 11%. The amount gets deducted from my checking acount to Ameridebt and they pay off the CC company.

I'm worried about applying for the loan and not getting it. Because from what I understand that may lower my FICO score as well.

Well, applying for a loan and not qualifying for it won't damage your score, it is the actual application process that will (when they pull it)

I bluebooked a mid 2001 Honda Civic, and if you are confident that you will keep it for another 5 years, one option you may have is to do a consolidation loan using that as collateral. You will have a better chance to qualify than an unsecured loan, as well as most likely have a lower interest rate. I would consolidate the "worst" cards that you have (i.e. highest rates, annual fees, ect.) After doing that, take your remaining cards that you have and choose the "worst" card that you have out of those. Pay your minimum car payment, the minimum payments on all other cards, and put every dime you can afford toward the credit card that you chose to pay off. Once it is paid in full, choose your next card using the same criteria, and then attack it. As you pay off more cards completely, your monthly payments will decrease, allowing you to put all the additional funds towards principle on your debts. After all your credit cards are paid off, concentrate on your vehicle loan.

You should be able to consolidate your MBNA card, and hopefully your Chase card as well. Once paid, close the accounts until you only have 2-3 open lines of credit.

Secured credit, such as a vehicle loan, looks better to future lenders than unsecured debt, such as credit cards. By doing this, you should substantially improve your score and hopefully will qualify for Credit Cards and/or other loans with better terms in the future.

Another thing you may want to consider is dropping Ameridebt, as they probably are taking a fee with each payment, and it reflects poorly on your bureau.

I know that it may seem like a helluva long tunnel, but I promise that there is light on the other side.

If you have any more questions, just ask!

Well, I applied for a loan through my bank online yesterday and just got a call back. Wasn't approved. Oh well. Back to square one! Just need to buckle down and pay my debts.

Ameridebt doesn't take any fees. That was one thing I made sure of. I pay $79 each month, and $79 gets paid on the credit card. They do ask for a donation, to which I said no thanks...

I'm going to call up MBNA to see if they'll lower my interst rate.

If you are comfortable using your vehicle as collateral, providing that you had applied for a signature loan, call your bank back and see if they'll approve you for that. Usually the requirements for a collateralized loan are much less stringent that an unsecured loan.

I'm not sure that I would want to use my car as collateral. I don't want to take a chance with it. Just called up MBNA and I was able to lower the APR to 13.99%. Still pretty high, but better than 15.99%. Every little bit helps.


Now to do some math from that scary thread ;)

BOOO!

:D

ARGH!!! It's the scary thread!!!

Lol, it certainly isn't for the faint of heart...
Nor the mathematically Challenged :D

I could spend hours upon hours doing the math from that thread. It's pretty sweet actually.

Hours and hours doing complex mathematical equations.... Not really my cup of tea, but good luck to you!

Different strokes for different folks, I guess :D

I'm fairly new here, so if this question has been asked before I apologize. You can just direct me to the answer you gave before. :)

I have about $25,000 in credit debt. It's spread across a few credit cards and most of them are very close to max. I finally stopped using the cards a few months ago. I'm just barely getting by financially. One of my credit cards called me a few months ago to update my income info and the guy recommended I call a company called Financial Management Sevices to find out about consolidating my debt. I called my credit union and the advisor there said I should call a company called CCCS (Consumer Credit Counseling Service). Is this a good idea that I look into this? Are there companies that are better than others? What should I look for? I called CCCS and briefly spoke to someone. She said that I have to come in for a session that will cost $25. If I end up deciding to use them she said it would cost me a max of $20 a month. What should I do?

Well, I have a couple of questions for you, if you wouldn't mind...
Are you a homeowner? If so, how much equity do you have in your home?
When you say "just getting by," does that mean that you are just making the minimum payments each month?
Other than credit card debt, do you have a lot of other debt out there?
How is your credit? Do you have late payments/bankruptcy? Open Collections?

As far as debt consolidation companies go, even if they are non-profit, they are still out there to make money. Your best bet would be to find a government-backed company, as they are more likely to actually have your interests in mind, since they are paid either way.

A couple things to note about these companies, though, are that they do report to your bureau that they are paying your bills for you. This can often result in a bankruptcy-like score, as well as other negative indicators that will make it more difficult for you to obtain a loan with decent terms in the near future. Also, they do make it easier usually only having you pay one bill per month, but, other than that, the services they perform are usually able to be done by the consumer, free of charge. Usually, consumers themselves are able to negotiate a lower interest rate with cards, as well as potentially overturn any late payment or over-the-limit fees. If you do decide to go with one of these companies, be very wary, and make sure that they are indeed making the minimum payment agreed upon with the credit card agencies. Too often I have seen people's credit ruined because their consolidation agency neglected to mention that their "one, low, monthly payment" neglected to cover the amount required by the credit card companies to avoid delinqueny.

If you are able to answer the above questions, I might be able to recommend a different course of action :D

Thanks for posting!

- No, I don't own a home, I rent an apartment.
- Yes, I am just making minimum payments.
- Other than credit debt, I have student loans I'm still paying back.
- I don't think my credit score is very good, but I don't know for sure. A couple of my credit cards have been lowering my credit limit as I lower the balance. I was late on a some payments a few months ago, but I've been pretty good about it lately.

I saw that somebody else mentioned locking their loans, but I have a simpler question that whether or not I should do it:

HOW do you do it? Do you have to consolidate your loans? And can you do this for private as well as government loans? I currently have two loans (one private) and I keep hearing about how the economy is so bad right now that it's a great time to lock my rates. I really don't know anything about this, so I would appreciate any information about how this works. Thanks!

This is a difficult situation. A lot of you decision should be based on your income. If you are still "keeping up with the Jones'" and making just the minimum payments, forget the Jones'. If you are pretty much barely getting by with minimal unnecessary expenditures, bankrupcty may be an option for you.

However, if you are expecting a pay increase, a new job, or an apartment with less rent is feasible, or you can cut other expenses and apply the additional funds to the credit cards, I would recommend doing that. If you feel alright about taking the inititive and contacting the credit card companies yourself, I would do that as opposed to credit counseling, but if you prefer that they do it, that's fine as well.

Simply pick the credit card with the least favorable terms (ie Interest rate, annual fee, ect.) Make only the minimum payments on all other cards and put every penny you can on that specific card. Once it is paid off, simply pay the extra money on the next card, knocking them off one by one.

I hope this helps!

First off, I am going to assume that you are speaking about educational loans, if not, just specify the type :D

To be honest, you probably would want to speak with the lenders, as they would be able to tell you much better than I. However, although I am unfamiliar with educational loans, mortgage rates have increased dramatically in the last few weeks, so you may want to check into it quickly.

Wish I could help more, but I don't want to give you any bad information :D

If there is anyone out there with more student loan experience (I never took one out) please feel free to help Supple Cow Out...

Hey great thread nosoup! I hope you can help me with my question.

I'm currently an 18 year old student with a full year of university under my belt, and no debt, but no credit either. I have become aware of an investment opportunity that will appreciate at about 10-15% every year. Obviously this is a great chance that I do not want to pass up. I have one year until the market stabilizes and then begins to climb at this new rate. What can I do in this single year to maximize my loan amount I can get from a bank, or credit union? I will be exploring other avenues for obtaining capital as well, like offering private investors a fixed 7-8% rate for the period, but would appreciate if you can think of any other ways to get some capital for this opportunity. Also my parents hold a lot of property, and will be investing as well- should I try and go through them, in a way leeching off their credit rating? Any help you could give me would be appreciated.

Hmm... well, a couple of things to point out, then I'll answer your question :D

From your post, I am going to assume that this investment opportunity will not last forever, although there will be a period of maybe 3-5ish years where you will be earning that return. If I am incorrect in my assumptions, please let me know.

"...an investment opportunity that will appreciate at about 10-15% every year"

Well, the word "will" implies that there is absolutely no question as to whether or not your investment will increase or decrease, and if there is no risk of loss at all. If this is truly the case, congratz on finding a once in a lifetime opportunity. If it isn't though, a word of caution - It may not be wise to borrow funds to invest when there is a possibility of losing the investment.

However, that aside, I would recommend that you immediately apply for 2 credit cards (if you are unable to qualify for the first one that you apply for, then get secured cards or have your parents cosign) Also, obtain a secured loan of some type, with a low balance. A small savings/cd secured loan should do. Do not allow the balance on your credit cards to exceed 40% of the credit limit at any time, and make sure all the bills that you have are paid on time every month. Also, you can pay your credit cards off in full each month if paying a little interest bothers you, but make sure that you wait until the bill comes and you do it only once per month, to ensure that it did report a balance to your credit report. Make sure you obtain credit ASAP, as you want it to report as many months as it can before you apply for the other loan.

Now, if you really have a guarenteed investment return of 10-15% with absolutely no risk of loss I would save ever penny I could get my hands on until you invest it. Picking up a second job, ect. would not be a bad idea either. Also, borrow as much money as you can from your parents to invest with. Depending on their rental property, and how quickly it is appreciating, and also how much equity they have in the properties, they may want to consider taking out additional mortgages or even selling the properties to put as much into this opportunity as possible.

If this is not too good to be true, here are some figures to get you hyped up & help you realize that this could potentially be a once in a lifetime opportunity...

At 10% (the minimum in your example!) you'll double your initial investment in less than 7 years. At 15% it would take less than 5 years to double your money. If you can get individual investors involved and pay them a flat %, I would do so, as long as the % paid is less than the minimum earned. The same side of the coin however, if you can borrow money from whereever for a lower % than the minumum earned, I would do that as well. However, putting as much "free and clear" money, money that is yours, is where you will see the greatest return.

Good luck, and if you have any more questions, please ask :D

Haha ok I was buying into some hype that was associated with my excitement. But this really is a solid investment opportunity, with suprisingly low risk, and right now after doing a fair amount of research i'm figuring that the appreciation will be somewhere between 7% and 12%, annually. Do you think private investors would invest in a flat rate of 6% or even 5%?
What in your opinion is the best way of getting that second card? I'm confident I can get a card through my local bank, but am unsure on how to get the next one. The loan you discussed is something I would get now and pay off over the year right? I'm wondering what a "secured" loan means. How can I secure a loan, and what advantages/disadvantages does this have over a non-secured loan? Sorry for all the questions, i'm relatively new to credit-debit systems because of a preference of dealing in cash.

heck if it's such a good investment there should be plenty for everyone to go around.. share the tip :)

It really depends on the investor. Nowadays, 5% is a very, very high percentage to earn if you are are basically going to guarentee them that they will not lose any money, and require either no or minimal amounts of time that money will be "locked in" with you. Basically, I think you have a pretty good shot of getting some private investors at 5% you can guarentee that they will not lose money (by replacing it with your own) and that if they do invest with you, they are only required to keep it there for 1 year or less. To be honest, unless they have some type of emergency or something, I would imagine most will keep it there untill savings/certificate of deposit rates increase dramatically. Currently, in my area, savings account rates are at about .25%, which is absolutely terrible.

It doesn't really matter where you get your second card. I would imagine that you probably need your parents to cosign for you, but that won't really be an issue as far as credit-wise, as it reports the same whether you are on it alone or you have a co-signer. You could probably check with like Capitol One or some other major credit card company.

A secured loan is basically money borrowed to you with the lender using something as collateral. Some examples of secured loans would be a car loan, a mortgage loan, or a savings/cd secured loan. In your situation, I probably would do the cd secured loan. Basically, you should be able to go into a local bank/credit union and and give them $500 dollars to put into a certificate of deposit. Put it in for 1 year, and at the same time apply for a cd secured loan. What they do is freeze the funds in that CD, so you cannot withdraw the funds without paying off the loan (however, you can use those funds to pay off the loan if you must) I would apply for a $500 Cd secured loan, with the amortization being either 6 months or 1 year if they'll allow it. There is a very high likelyhood of it being approved without a co-signer, as the bank gets their money even you default on your loan. Then just make your payments (on time) each month till it is paid in full.

Secured credit is usually looked upon as "good" credit on your bureau, as opposed to unsecured credit (ie credit cards, personal loans, or any other debt that you carry that has only your promise to pay backing it up)

Don't worry about the questions, that's what I'm here for :D

If you need anything else, please don't hesitate to ask...

Cynthetiq is right, lol... feel free to let us know what the investment is - if you don't want "everyone" to know... feel free to send me a PM :D

heh, I guess it can't do any harm in telling people. Just a few weeks ago, Latvia officially became a European Union member. This has many interesting repurcussions for this former soviet state. Along with a dropping in trade barriers, there are many regulations and measures that are being put in place that will put an end to the rampant money laundering and other such corruption that is just dying out now in Latvia. To eliminate liquid assets, various organizations have been purchasing expensive cars, property, and the like. Property is increasing in value at 30% per quarter presently. This is the unstable market that will either bottom out or collapse outright in about a year. I've just returned from Latvia myself, and have talked to more than a few prominent members of real estate and investment, and they agree about the current situation (sidenote- to deal with corruption, latvian legislation has increased various taxes to the point where if you dealt legally and recorded all your income, you would be taxed for over 100% of your total revenue)
This is why I need to wait about a year for property prices to fall again to a reasonable level. That'll be the time to purchase as much property as I can. Why? Because as a new member of the EU, Latvia is a prime location for development, and has most of the infrastructure already constucted for furthur growth. New EU restrictions and regulations are giving the economy a fresh start. Free trade will allow for greatly increased economic activity. It's a country on the brink of a economic boom. You just can't buy land in Germany, or Poland, or France at any reasonable price. If you buy land within 100Km of Riga, it will appreciate easily over 6% a year- most likely in my estimate to be at 7-12%.
Well at least that's my take on it. Feel free to shoot it down, if there are glaring holes in my analysis i wouldn't mind being made aware of them so I don't lose my money.

Lol, that was unexpected, but thanks for the tip. Unfortunately, I am not too familiar with situations like this, so before I give an opinion or decide whether or not it could potentially be something I want to invest it, I should do a little research.

Thanks for posting, and if you need anything else, please ask :D

Okay, new question.

This may have been asked before, but I didn't see it, so I apologize if it has been.

I have two student loans- one for each year I was in school. They are both through the same place- Iowa Student Loan.

There is an option to consolidate my loans on the website. What does that mean and should I do it?

as with FaderMonkey, i didn't bother to check through all of the past questions, so if my question has been asked before, I'm sorry too.
i was thinking that it would be good for me to get a credit card to start building some credit. i'm 20, i know i wouldn't use it for stuff that i didn't already have money for, mainly just for building credit and maybe internet purchases.
i applied for a student card and got rejected. when i called to find out why, they said it was because of my student loan. i have a government student loan now for almost $10,000, but i am not paying it off now because i am still in school.
i was wondering if my applying online would have had anything to do with my rejection. if i was to go in to the bank and apply in person would they be more appathetic to the student loan issue? i would like to get a card from this bank as it's the bank i deal with regularly and i really like them. if they turn me down in person, might i have better chances somewhere else?
thanks.

skier, not to be a wet blanket, but your idea doesn't hold water.

First off, the yield on a 10 year US Treasury is closing in on 5% right now. That's backed by the full faith of the government of the United States. You, on the other hand have no assets and no way to guarantee your investors their money back. That would make you a sub-junk level borrower if you were a corporation. You will need to offer sky-hgh rates to people to take a risk on you.

Second off there is absolutely no way to know if a land investment will appreciate, especially one in a near-third-world nation. Take a look at Tokyo real estate values over the last 20 years. Still think land always appreciates? What will happen to your money in the event of civil unrest?

Third, you will be "investing" in a highly ILLIQUID asset. You may or may not make some positive net return with time, but it likely won't be available during much of the holding period.

Finally, please summarize in one paragraph what will happen to your holdings in the event of a Latvian currency devaluation. If you can't do that much then you better think doubly hard about what you're getting into.

Basically if you were to consolidate the two loans, you would take them both and just have one larger loan. I would certainly check into it, and if consolidating them offers you better terms than you currently have (ie lower interest rate, lower payments, ect) then I would go ahead and do it. If the terms are not favorable, I would hold off.

If you have any more questions, please ask!

Well, excellent choice by choosing to begin building your credit. You may not have been turned down solely due to your student loan, but that may have played a role in it. I would imagine that a large factor would be the lack of credit history that you have.

If you want the credit card through that specific bank, I would go into the office and apply for a secured credit card. Basically, they'll take some of your money (amounts may vary, depending on the institution) and freeze it. Then they'll give you a credit card for that amount, so that if you don't pay your bills, they still have the money to pay for it. It will most likely report just as a normal credit card, and after a bit with that card you should be able to obtain an unsecured card, providing that you want one.

I would imagine that they have the same underwriting guidelines no matter how you apply, so re-applying for the same card in person probably won't make too much of a difference. The secured card is your best bet to build up credit without a co-signer.

If you have any more questions, just ask :D

Ok, I accept that I would be an extremely unsatisfactory borrower. I would like to say also that while the yield curve is at about 4.75% for a 10 year bond, it is only 1.84% for a single year. Offer a 6% rate compounded every year for 10 years and you have a much better interest rate (albiet extremely risky) than a guaranteed 5% gain over 10 years that is rock solid. It barely covers inflation.

Good thing I don't have to deal in absolutes. I have already assesed risk vs. benefit. Sure, there is a chance that there could be civil unrest, or a flood, or maybe some outdated russian nuclear missle will misfire onto the property. I've just been to Latvia, and talking to people from all walks of life there. Lawyers, real estate agents, improverished seniors that live with my grandfather in an aging planned apartment complex, young men in pubs. I heard no mutterings of despair, no longing to overthrow the government. The joining with the EU has been something to celebrate, and there was anticipation in the air. True there are a few dissidents, but they are few and far between- mostly russian immigrants angry at the loss of russian being taught in schools. I do not feel that there is much risk to this opportunity I see unfolding in front of me.

I'm trying to figure out what you were thinking when you typed out illiquid in bold. I've never heard the term, but I think you mean that the assest has little liquidity. I agree that compared to, say, certificates of deposit, or stocks and bonds, land makes a quite solid investment. But property and houses are far more liquid than some other items of investment however, like valuable paintings, commercial buildings, and antiques. I feel that by purchasing property and marking it up 8-12% (depending on the market), in less than 2 years it will be sold again, leaving me with this extra that I can return to investors (if they feel inclined to risk their money with me) or just take for myself.

We are talking devaluation, not depreciation, right? If the latvian government decides for some strange reason to devalue it's currency, I would not be concerned. If their financial department feels the boost to exports and trade would be worth the tradeoff to currency, i'd be happy with that. I would change my asking price to euros, being that potential buyers would be coming from established european union members. Also, the bank of latvia is converting to euros, and current proposals are saying this will happen by 2008.

If you are talking about the depreciation of the Lat, I can say that I would just be fucked- and would have to cut my losses, and work myself out of debt, depending on the severity of that loss, it could be anywhere between 10K and 150K. Which would really suck. But it's a risk that I feel is small enough to be overcome by benefit.

P.S.- Actually i'm not really sure how U.S. treasury bonds appreciate- could it really be 5% compounded annually? You would double your investment in only 15 years. If you took a 20 year bond, at 5.45%, at the end of the 20 years you'd have almost 3 times your initial investment. This can't be right.

Interest rates are expressed as an annual yield on US treasuries and notes. Thus if you bought a 10 year at auction, and the yield was 4.75%, you would receive that amount annually.

You can ask to be paid for your properties in any currency you want, but unless you're moving overseas you will ultimately have to repatriate that money into dollars. Can you see what would happen if one day 10 "Lats" (sorry, I don't know the real Latvian currency) bought a US dollar, but a week later it took 100 Lats?

I still maintain that overseas RE is a highly illiquid asset. You're telling your lenders they can have their money back when they want it, but you have no way to return it that quickly. What if there's a dip in the Latvian market and somebody wants their bucks back at that time? You would be forced to sell at poor sale prices. That presents a tremendous risk to your enterprise, even though long term your concept could be a succesful one.

Also, you seem to be ignoring transaction costs. Buying something one year and selling a year or two later will be expensive. I doubt you can do it for under 10% of the transaction cost.

Best wishes, and good luck with your investments.

Ok, point taken, eribrav. Fluctuating exchange rates could result in a lower return or in an extreme case, a loss. I feel confident in the future strength of the Lat, but I can see how this raises risk for the investment.
To deal with the problem of low liquidity, I was intending to reach out to many lenders for small sums, not a few lenders with a considerable sums invested in each property. This would let me be more flexible if an investor got "cold feet" and decided to pull out- I would take what surplus I have and give that to them, but still retaining ownership of the investment to sell at the right time.

I'm unsure how transaction costs would eat away as much as 10% of the total value. I hope you can explain this to me more, I appreciate your constructive critism. Currently I see about 4-5% going to the realtor, and 1-2% in exchange fees. I'd like to know what other costs are associated with this sort of thing, as I am new to all of this and i'd like to get started with both feet firmly planted on the ground.

thanks for the info, i didn't even know about secured credit cards.

No Problem, that's what I'm here for :D

If you need anything else, please ask!

Actually skier when I said 10% I was estimating what the total cost would be for both ends of the transaction (i.e. the buy and the sell).

i have been thinking lately, if i were to get a secured credit card, would i get that money back sometime? like how would they decide? as i built good credit would they one day just give me my money back or something? or would it be when i cancelled the card?

Although this answer is not universal, usually you get your money back when you cancel your card. Another option would be to re-apply for the card with your bank, and after reviewing your credit history, they'll decide if they are able to release your money.

In my experience, usually you are able to get your money back after 6 months, as that is how long it takes for you to obtain a credit score.

thanks again. :icare:

getting a loan with no credit...
 

Ok, some background info. I'm 18 turing 19 in August, and I don't have any credit yet. I live in British Columbia so I can't technecially get any until I'm 19 anyways. But I desperately need a car (both my jobs have been working early/late and the buses don't always run early enough/late enough for me - i live in a small town) and therefore I need a loan to get one...
I am willing to wait until I'm 19 to get a loan (I realize if I wanted to do it before then, I would need a co-signer, which I don't have), but I've been told that even then it will be really hard for me to get a loan (even though it won't be for very much - something around the $5000 range). So here is my question....any advice for how I can get a car/loan without the advantage of having credit/a co-signer? I don't really want to have to wait to build up my credit either, I would love to have a car asap if I can.....
I work two jobs, both are very reliable and I'm making a decent amount of money. Even after paying rent, cell phone bill, etc, I still have about $300-$400 left over each month, so i could more than afford to pay off a loan, but it just doesn't seem like I'm going to be given one!!!

Help! Any advice would be greatly appreciated!!! :D

Re: getting a loan with no credit...
 

I hate to be the bearer of bad news....

It will be extremely difficult to obtain a loan without credit. You might be able to with one of the high risk auto lenders that usually advertise "No Credit, Bad Credit, ect is fine! 29.9% Interest... " If you do decide to go with a high rate loan, after six-seven months you should have a score that will allow you (hopefully) to refinance for a lower rate. However, if you are going to be paying much more than you need to, you may not even want to refinance.

You might just want to by a "beater" until you have enough money saved up to buy the car, or at least put a large amount down, as financial instiutions are more likely to lend if you have a lower LTV (loan to value ratio)


I would suggest beginning to build your credit ASAP, the easiest way is likely with a secured credit card. If you have any more questions, please ask! :D

Okay here is one for you. Should I buy a new Motorcycle through the Yamaha finance program at 3.9% for 2 years or go through the local credit union I belong to checking to see if they have a comparable rate and time frame? <p>Credit rating is good and I am already approved through the Yamaha program I just haven't pulled the trigger yet. Paying it off won't be a problem, my sister and I are on track to receive money from a trust. <p>Last thing who sould I go talk to about a Roth IRA (Don't know if this is up your alley but who knows)?

In University, they practically threw a credit card at me (no secuity, no income information, no credit history (not even student loans), as far as I remember). It was a small limit. Is this a Canada/US difference, or was I just lucky?

In University - you crazy foreigners :D

Some credit card companies will send out solicitations for credit cards for people with no credit, but there are usually A) Very high interest rates or B) Annual Fees. C) Other undesireable terms

Combined with a (usually) small credit limit, they usually are not worth your time.

My roomate recently got a credit card offer that gave him an initial credit limit of $300.00.
However, there was a $95.00 Annual fee (to be paid when activated) a $65.00 Activation fee, and a $45 Dollar Processing Fee. Basically, it was "Sign here and pay us $205.00... plus interest at 29.99%" The Kicker was that it was all taken as a cash advance, and a 5% cash advance fee was to be added to the balance as well, as well as interest beginning immediately.

Er... sorry, got a bit off topic there. Indeed, you can get a credit card without credit, but a vehicle loan (other than the high risk places) are usually a different story...

Well, is the motorcycle loan 3.9 fixed for 2 years? At the end of the two years, is the loan required to be paid off, or is it just an introductory rate that increases after 2 years?

If you are going to pay it off before the 3.9% changes, It is likely that you won't find a better deal than that, although it doesn't hurt to call around and see what rates other institutions offer.

As far as the Roth IRA, it depends on what you want to do with that money. If you just want it to sit in a money market account or Certificate of Deposit, you can probably just go to your Credit Union to get set up. If you would prefer to put it into the stock market, a financial planner would be more up your alley. If you are unsure of what you want to do, speak with an investment planner to get all your options, but take what he says with a grain of salt, as he is trying to sell you on what he gets paid on.

If I didn't clarify enough or you have any more questions, please don't be afraid to post :D

Fixed for two but then it jumps if not paid off so I guess that is motivation to get it paid off.<p>As far as the IRA goes yeah just sit on it I want my money to make money not play around in the market. Thanks for your help.