If you are seeking a loan, make sure your credit history is in good standing before seeking a lender. This way you will be assured to receive the most options and favorable terms for your loan. Once you have confirmed your own financial profile is strong, it will be time to conduct some due diligence about your potential lender.

Here are five questions to ask your lender before committing to a loan. There may be additional questions you have pertaining to your specific situation but these questions will get you started in the right direction:

What Is the Loan Requirements/Process?

Before you start completing paperwork, it is important to contact a few lenders to see your options before committing to a loan. You should inquire about the lending requirements they have set including minimum credit score and income amounts. You should also ask about the loan process so you’ll have sufficient expectations for getting your money.

How Is the Interest Payment Calculated?

When you secure a loan, it is vital to understand the interest rate you will be paying back. If you aren’t careful, you can end up paying more in interest than you do on the actual loan. This is especially true with mortgages. Your interest rate will be determined mostly based on your credit history but you need to be sure you ask the lender how the interest will be calculated. Not all lenders use the same calculation and what you don now can hurt you financially

How Does the Repayment Play Out?

When you take out a loan, be assured it must be paid back. How you pay it back is an important consideration. You’ll need to confirm how much is due each month and how long the term of the loan stands. Some lenders will require a direct payment from your bank account while others will allow checks or online payments. Be sure you know your due date, the length of grace periods before a payment is considered late, and if you are allowed to repay your loan early. Some lenders impose penalties for early payoffs because they lose out on interest.

Is Activity Reported to the Credit Bureaus?

Not all lenders will report back to the credit bureaus with your repayment activity so it is in your best interest to ask first. When a lender reports prompt payment information to the credit reporting bureaus, it keeps your credit record up to date and can improve your credit score provided you keep up the prompt payments.

What Happens if I Skip a Payment?

While no one expects financial hardships to come, they often do happen from time to time. If you are having trouble making your loan payment during a month or for a longer stretch of time, you’ll need to know what happens if you go delinquent on your account. You’ll need to understand the consequences as well as the fees associated with late or missed payments.

5 Pieces of Information You’ll Want from Your Lender was created by and is property of American Consumer News.

In the emails from Balboa, the Anonymous poster claimed over Twitter that fraud is alleged due to the bank hiding foreclosure information from federal auditors. There were also other allegations of wrongdoing by the bank made but no specifics were provided.

A former Balboa employee has stated that certain documents were approved to be removed from the internal system because of errors pertaining to flood insurance. The employee stated the bank had approved the file removal so that the mistakes would not be detected by federal auditors. In the emails, employees were apparently discussing the reasoning behind the documentation deletion.

Bank of America did not deny the emails existed but they did take issue with wrongdoing implications. They claim the former employee of Balboa stole the documents and was essentially trying to get press over allegations that were not true. The employee contests he did not steal the documents.

The bank also said they did not send out the letters with the errors. However, another employee of Balboa insists they were sent out with the erroneous information and a subsequent letter was sent to clear up the mistakes.

Bank of America is still waiting for the damaging documents said to be coming from WikiLeaks. Founder Julian Assange has promised these would be available early in the year and would cause much damage to the bank.

Bank of America (NYSE: BAC) Leaks Suggest Fraud and More was created by and is property of American Consumer News.

These particular loans are called Pick a Pay adjustable rate loans. These loans were targeted to those who could not start with a full payment, giving them an option to pay less. The problem was that these loans offered homeowners the choice of making a regular monthly payment or a lower, more affordable one. When home owners chose the lower payment, the amount rarely covered even the interest of the loan. When these loans readjusted, payments rose so high that many homeowners could no longer keep up with them.

Many of these home loans have already been foreclosed on and Wells Fargo also agreed to a settlement for these individuals. Right around 12,000 homeowners who held these types of loans will receive payments from Wells Fargo with the bill totaling right around $32 million. On average, each home owner will receive a check for $2,650.

In a statement Jerry Brown, CA Attorney General said, “Customers were offered adjustable-rate loans, with payments that mushroomed to amounts that ultimately thousands of borrowers could not afford. Recognizing the harm caused by these loans Wells Fargo accepted responsibility and entered in this settlement with my office.”

Brown went on to emphasize that none of these loans originated with Wells Fargo and that the company has been working to help troubled home owners whose loans the bank inherited. To date, in California, Wells Fargo has already helped 50,000 home owners. The bank has spent $2.9 billion to help reduce loan costs for those struggling to keep up with payments.  When the housing market and economy crashed it hit these homeowners hard and without the help many more home owners may have lost their homes.

Additionally, the bank is also working on settlements in several other states and has already helped homeowners in Florida, Texas and Nevada, to name just a few.

Wells Fargo (NYSE: WFC) Is Helping CA Home Owners Through Loan Modifications was created by and is property of American Consumer News.

The employee speaking out now works for a real estate agent. Part of her responsibilities relates to short sales for homeowners who have loans through Bank of America. The woman spoke only on the condition of anonymity for fear the lender would seek retribution through her current clients.

The former employee worked at Bank of America as part of their call center staff. She was instructed to follow a phone script which involved congratulating customers on their loan modification approval and then set up a notary to deliver paperwork to the homeowners. The woman now says she feels like the actions were not being offered as a convenience to customers but in an effort to pressure homeowners into making decisions they were not ready to make about a home loan modification.

The employee, who is bilingual, feels the worst of the pressure fell on Spanish-speaking customers who did not understand the documents they were signing because they were all written in English. The employees at the call center did not have access to the documents homeowners were receiving and therefore could not help explain what was going on. The former employee did state she did advise customers to seek outside legal advice but admits she was told by her employers not to do so. She was later fired for taking a photo on bank property.

Bank of America has addressed pressuring of homeowners’ claims by issuing the following statement: “Bank of America has a long standing tradition of providing the Hispanic community with Spanish language assistance for their home loan needs. We are always looking for opportunities to improve our communication and we will review the final permanent modification process to provide our Spanish-speaking homeowners with additional support where needed.”

Bank of America (NYSE: BAC) Reevaluating Loan Modification for Hispanic Customers was created by and is property of American Consumer News.

The Making Home Affordable program was developed to help the large amount of homeowners who were suddenly unable to meet the demands of their monthly mortgage due to the flailing economy, the high rates of unemployments, or the downfall of the mortgage industry. While Citigroup may be finding success, overall there are still many issues causing homeowners to still worry about their mortgage loan. With the rates of unemployment and the amount of people who are upside down on their home loans due to the real estate market, the Obama administration is looking to expand their mortgage assistance options.

New programs are set to be used over the next few months by a collection of lenders. Two such programs include assistance for principal reductions of mortgages and an underwater forbearance program. As homeowners are still struggling to make their monthly mortgage payments, there are some lenders who are not very keen on the new plans. Specifically many take issue with principal reductions. These lenders however are likely to offer programs in-house to help customers who can’t pay their mortgage bill each month.

One group that has used a principle reduction program is Citigroup. The company plans to continue with the program and providing their customers with solutions for assistance when they do not qualify for the Making Home Affordable program. Customers are continually seeking solutions that are quick and effective at solving their mortgage payment problems.

For homeowners who are looking for help, experts advise that consumers speak directly with their lender and inquire about the available programs. Many lenders are using a variation of different programs to help customers but not all homeowners will be eligible for each program. Homeowners are also advised to act quickly before falling behind on their debt, otherwise assistance may not be available down the road or the homeowner may not be eligible to receive help if too much time has passed.

Citigroup (NYSE: C) Successful in Modification Program was created by and is property of American Consumer News.

During the housing bubble, many people bought up houses at ridiculously low prices. They would then turn around and sell these homes for much more than they originally paid. Once the bubble burst, people that had bought up these homes were stuck with them. No one wanted to buy a home in a time where their prices were steadily declining. On top of all of this, many banks had loaned to these “bubble-buyers”, and once the bubble was gone, the buyers were unable to pay back their loans. Because of this, many banks are hesitant to loan to prospective home buyers in these tough times.

For those of you that are still in the market to buy a home, it is possible to get amazing deals as long as you look hard enough and do the right research. Most people think the best type of home to buy is a foreclosure property, but this is a common misconception. Many buyers came in to new developments and bought up the new homes, and then could not find a tenant. Because of this, there are many brand new homes sitting empty, ready to be moved in to for low prices.

Research New Homes First
Because many of these homes have been sitting for a long period of time, their owners are desperate to unload them quickly. This means that their price could be the same or less than many of the foreclosed houses on the market.

Find Long-Time Listed Homes
If a home has been on the market for a long period of time, usually more than 90 days, their owner will probably be more likely to make a deal on the property. If this is the case, bid lower than is originally listed.

Look Into New Developments
Certain places have new developments sprouting up everywhere. Many of these developments had been in the works for a long time, way before the bubble burst. Now that the homes are built, they need people to move in. Some of these places may still be unreasonable, but if you look hard enough you may find a great deal.

While these economic times can be scary, if you use them to your advantage, you could find a great deal on a new place to live. Be careful, do research, and be smart about anything you sign.

New Homes: A Better Deal than Foreclosures? was created by and is property of American Consumer News.

Don’t Ignore The Situation
Instead of avoiding the problem when you can’t pay, you have to face it head on. Call your lender as soon as you know you will be having financial difficulties affording your car. Let the lender know why you are experiencing financial hardships (loss of job, etc…) and if you have an indication of when things will be back on track. The lender will want to be assured you have every intention of holding up you end of the agreement to pay and will likely give you some options for your situation. One idea is they will allow you to defer your payments. Instead of making a few of your regular monthly payments, they may move them to the end of your loan and give you some time to catch up. You will still be responsible for paying the deferred payments but not during the deferment period.

Refinance

Another option is refinance your loan balance and get a lower interest rate. This will help to lower your monthly payments each month to something that might be more manageable. In refinancing, you may also be able to extend the time length of your loan which will also help reduce monthly payments. Your lender should be able to discuss all of your options with you based on your financial abilities during the hardship.

Make The Sale

If none of these options will work for you, or you feel as though the vehicle you have costs you too much overall, consider selling the car – but only do so if you can be confident you can sell it for more money than you owe on the existing loan balance. If you are pretty certain that your personal finances will remain unchanged for several more months, selling the vehicle may be your best bet. Check online at the blue book values of your car and what other similar used vehicles are going for in your area. When you sell the car, pay off the balance of the loan as soon as possible to clear the debt. Shop for another vehicle that will save you money in maintenance and operating costs.

Lenders do not want to repossess. They would much rather keep a customer and work with you during financial difficulties as long as you work with them. If you avoid the obvious difficulties in paying your car note, a repossession will ruin your credit score, making it even more difficult to handle your personal finances in years to come.

Can’t Afford Your Car Note? Prevent Repossession Now was created by and is property of American Consumer News.

Many people, especially the first time home buyer may find they get more then they bargained for when applying for a loan. Completing the paperwork and even trying before hand to improve credit score and other information in order to qualify can be a tremendous effort. Going into a loan application blind can be detrimental to your qualifying for a loan.

Here are some tips as to what lenders are looking for on a loan application.

Adequacy - Mortgage lender want to make certain that you have the adequate ability to make payments each month on the interest and principal of the loan each month. Your income will largely affect this part of the process. Lenders also want to be sure that you are capable of paying for all of your property taxes and homeowner’s insurance policies.

Track Record – Mortgage lenders obviously want to know how you have paid your debts in the past. This is where your credit score and credit history report come into play. By working to improve your credit prior to applying for your mortgage, you may stand a better chance of proving a successful track record.

Collateral - Your prospective new home will require an appraisal that will assess the value of the home and the relative to the agreed upon purchase price.

Equity - The mortgage lender will take under consideration the amount of money you place towards the down payment of the home. Based on the purchase price of the home, the higher the percentage you put towards your down payment, chances are the more favorable your loan application will appear.

All of the above things together is what ultimately makes your application for financing approved or denied. There is not just one thing that will outweigh the other things. Just because you make a good income, it doesn’t erase those negative marks on your credit report. Again, being prepared to face the financing application process is one of the best things you can do to ensure you are qualified the first time. Be ready to produce plenty of information that can be verified to prove yourself worthy of a financed home loan. Typically you will be asked to produce your paycheck stubs and bank statements for varying periods of time, tax returns for the past two or three years, and lots of other information concerning your personal finances.

Tips for Qualifying for a Mortgage was created by and is property of American Consumer News.

Here are some tips to keep in mind when preparing to borrow money from someone you know.

1. Ask yourself honestly why you need the money. If you can’t be honest and upfront about reason you need the money you are looking to borrow, you do not need to be asking for a loan.
2. Consider all of the options you can reasonably use to pay back the money before approaching someone for a loan. The lender will feel much more comfortable if you have thought the situation through prior to asking for the money.
3. Consider the consequences of reneging on the loan. No one wants to lose a close relationship over a financial situation. If you foresee any reason that would present a problem with the person you are asking, do not ask for the loan.
4. Put everything in writing just as you would with a professional lender. No matter how much the amount is, put all aspects of the agreement in writing. Make a copy for each involved party. Make sure your agreement includes:

• The names of the lender and the borrower
• The date of the loan agreement
• How much money is being borrowed
• How much the minimum regular payments will be
• Any interest rate applied to the initial loan
• The date the loan is to be repaid in full
• The timeline for making payments (weekly, monthly)
• The total amount of payments to be made

Depending on the size of the loan, the lender may not be interested in arranging a formal agreement; however, it is still a good faith effort to ensure you will not default on the loan. If the sum of money is particular large, it may be worthwhile to utilize the supervision of a lawyer to protect the interest of both parties, should something happen during the deal. It may also be important to the lender to feel confident knowing you are working on a solid plan to avoid a similar situation in the future. If you are expecting a loan from them, they are expecting not only repayment, but honesty in return.

Ultimately, your gut instinct may help you decide whether or not to approach a family member or friend for a loan. If you do not plan on sticking with your agreement or you make promises you know you can not keep, it is in everyone’s best interest that you look elsewhere for financial assistance. Respecting your family and friends and maintaining a good relationship can not be repaid if you lose their trust over a financial matter.

Having one too many credit cards could have you running for the quickest online loan you can get. A consolidation loan is one of the many debt solutions that could help you with spiralling loans and credit cards. Check out all your options which can help you get out of debt – an IVA or Debt Management might be more suitable for your financial situation.

Personal Loans: Should You Borrow Money from People You Know? was created by and is property of American Consumer News.

1. Are your credit accounts current? If your accounts are not current now, then you are not making enough money to make your mortgage. Get those balances current before applying for a credit card.
   
2. Have all of your balances been paid on time within the last 12 months? Paying on time for 12 straight months will make you an “A-Paper” borrower, something lenders consider just as important as your score. If you are an “A-Paper” borrower, you will get bumped up to the better end of loans you credit score will qualify you for. Therefore, go 12 months with timely payments to give you that extra boost regardless of your score.
3. Do you have a lot of negatives on your credit report? Negatives are usually late payments, balances over their limits, and items charged off for collections. You can “dispute” these items on your credit report and have them removed, which will make you look more attractive in the application process and raise your score at the same time. (Plus it only takes 30 days to do.)
4. How many times have you applied for credit in the last three to six months? Too many credit inquiries lowers your score and says you are trying to get yourself into a heap of debt. Try to make it through three to six months without applying for new credit before applying for a home loan.
5. How much money do you have to pay towards other credit on a monthly basis? A creditor will figure your mortgage at approximately 50% of what you make. This number varies depending on the lender. Your credit report totals all of your payments right up front. If you are paying more then 50% towards credit cards and other loans, then you will most likely be rejected for a mortgage. Ask your creditors to lower your interest rates so that the total monthly payments on your credit report will go down. Also, try to pay down as much of your credit balances as possible so that you can get a higher pre-approved mortgage amount.
6. How much longer will you be paying your car loan? If you have a car loan, and you only have one year’s worth of payments left, mortgage lenders will usually not take that debt into account when calculating your potential mortgage amount. Therefore, if you have more then one year of payments left, pay it down to one year in order to get a higher mortgage.

Remember, knowledge is power. A pre-approval letter is knowledge and it gives you bargaining power when it comes to home loans. By cleaning your credit before applying for a mortgage, you can bargain for the best loans and make the toughest home offers. Do these things before applying for a loan, and soon you will own the home of your dreams.

What Mortgage Lenders Look For was created by and is property of American Consumer News.