Alternative To Managing Debt
Too often these days borrowers find themselves the victims of a money management system that simply does not work. The current magic bullet to get the average consumer is a mortgage loan that pays off one Debt while allowing the overspending and Debt building use of the credit cord. Face it. We are a borrowing nation and we are in trouble. The current plague is known as the interest only mortgage.
Loan companies continue to extend credit that reaches well beyond acceptable debt-to-income ratios – a dangerous practice to be sure. The average consumer owing more than ever as they find themselves slowly being buried beneath ever-increasing credit card debt. It starts early on. Recruiters lining the halls of campus buildings, handing out applications for major credit cards, promising credit to young, naive college students. Other consumers, not in college, but still a part of the overly zealous spending public, also continue to flash their plastic as they buy their way further into debt. What is their ultimate plan for managing credit card debt? They will use an interest only mortgage to pay off the credit card debt that they continue to accrue but can’t really afford, ending up with credit card debt that isn’t really going down and a mortgage loan that continues to go up. As I said, a money management system that is doomed.
The upside to the interest only mortgage is the way that it takes a non-deductible burgeoning debt and turns it into a tax deductible burgeoning debt. Cool, huh? Not really. If you are spending more than you can afford, the interest only mortgage makes no sense to anyone but the mortgage company. They really don’t want you to cut back your spending and manage your assets wisely. After all, such a competent financial decision on your part would mean less income on their part.
Instead of taking the lemming approach of using mortgage companies that advertise their services of providing interest only mortgages in order to allow consumers with bad credit records to pay off their outstanding credit card debt, consumers should instead be encouraged to consider how they spend their income. Learning to not overspend would solve the problems both now and in the future, where the interest only mortgage offers no long term solutions on any level to any consumer. It’s simply a bad deal.
Sure, it is risky to finance consumers with bad credit. But a mortgage indicates that there is a piece of good, solid collateral here. Risking a solid viable asset for an interest only loan is the classic text-book example of poor judgment. Incurring a mortgage debt at any time is something that should be carefully considered and if the consumer doesn’t have a clear understanding of the concepts surrounding mortgages and interests, they can decisions that will affect them negatively for years to come – especially in the financial realm. Unfortunately, most of those affected by decisions like interest only mortgages are already in the bad risk/bad credit/bad decision making history and so they feel cornered, without anywhere to turn.
It is completely mind boggling that with all the layers of regulations and statistics that are flashed to the public and published concerning good and bad credit ratings that the notion of an interest only loan is even legal. Where are the leaders who are supposed to predict and protect the lending industry? Certainly not paying attention to this concept, that is for sure! Maybe Alan Greenspan dozed off during the introduction of this particular mortgage loan option, but one thing is for sure – someone should wake him before the mortgage brokers find another brilliant idea to bring consumer debt to an even higher all-time high!
Clinton Maxwell
http://www.articlesbase.com/finance-articles/Alternative-to-managing-debt-91462.html
Is "Precision Debt Relief" legit?I've looked through, trying to find good ways to consolidate and manage my credit cards; canceling them and making the payments, consolidating them, etc. It all looks like I'm still going to have a massive amount of payment, thanks to very high interest rates. I found this site called Precision Debt Relief (http://www.PrecisionDebtRelief.com) that seems to offer a different way of managing debt. I've heard of a lot of things like these, and I know that a few of them are scams. Does anyone know anything about this one, or of any other alternative methods that can work?
Go to http://www.incharge.org, I've used them before and paid off about 30k in less than 5 years. I've never heard or used the one you are refering to so can't vouch for them. In the time that I used incharge I never had a problem with them and their cs reps were always helpful when ever I had a question. One the that you should stay away from is the debt reduction companies as these all force your payments to go 90 days past due then attempt to settle with the credit card companies. When this happens it completely ruins your credit score and you will have to report that as income come tax time. The only thing that reflects on your credit report from them is something along the lines of under debt management. My credit score actually went up about 60 points the time that I was with them.References : http://www.incharge.org
of course this is a scam.
companies like this go in and wreck your credit and take your money. they do nothing that you can’t do yourself. they just call your creditors and ask for lower rates, lower payments, etc. often, they aren’t worth the damage they cause.
try to get a personal line of credit from your bank or credit union. you can usually get more favorable terms from a bank that you’ve had a relationship with.
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I’ve also heard about a few of these companies.
It looks legit, and the method they use probably works, it makes sense anyway.
Contact a financial adviser or a company that will know or something and make sure from them.
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