Monthly Archives: November 2012

Are payday loans for everyone?

We hear a lot about payday loans nowadays, and the news is always dramatically opposite. Either a company describes how attractive their cash advance product is, or a journalist calls such operators loans sharks in a suit. So what is the truth about payday loans?

Payday loansThe first obvious thing we can observe about this question is the following. Let’s say someone is employed but he is a little tight on cash. Maybe he recently purchased a house with a mortgage so that he uses a big chunk of his income to repay that loan. After paying his expenses like food and entertainment, he has little left to spend each month, and he does not save as all his savings were put into the deposit for the house. One day his car needs repair but he does not have enough money in his account to pay for such an unexpected bill. But he needs the car to go to work as he lives in a remote area.

Where can he find the few hundred dollars or pounds he needs so that he does not jeopardize his job? Not at the bank as it often takes time for a loan to be arranged and the money to reach your bank account. On the contrary you will never have to wait more than a few hours to get the cash from a payday loan institution. Anyway banks do not offer much in terms of these cash advance loans. They may lend you a consumer loan if you want to buy a new refrigerator for instance, but they are not going to lend you a dime to pay for fixing up your automobile. The only way to get such cash on short notice unless you have wealthy friends is to get a payday loan.

On the other hand opponents of these modern financial products argue that the rates are outrageous which can lead to a downward spiral of increasing debt for the financially disadvantaged who will not be able to repay on time.  The UK as well as a number of US States is in the process of implementing laws that would impose a cap on these loans, indirectly putting a lot of payday loans operators out of business.

In addition journalists love to tell sad stories of low income people who took a 500 pounds payday loan and ended up thousands of dollars in debt a few months later, as the fees kept on adding  due to their inability to repay the loan in full on due date.

There is certainly some truth on both sides of the argument. But one thing to remember is that if there are billions of dollars lent this way every year, it means there is a large demand for them. Some people may have a genuine need for a short-term cash advance, and there is no need to make everyone’s life harder by removing the lenders who offer such loans when we need them fast.

More info: http://en.wikipedia.org/wiki/Payday_loan

Four things to consider before buying a foreclosed property

Buying a new home can be quite challenging in the existing real estate market. There has been a recent increase in the number of foreclosed properties. This means that you will have more options to choose from when you are looking to buy a home. You need to plan your budget and select the place where you would like to settle. If you are planning to buy a foreclosed property, you must make sure that you take all the necessary steps so that you don’t face problems at a later stage.

Checking your options : Check out the local foreclosure listing in your area so that you have many varieties to choose from. You can visit the local real estate offices or read the local real estate magazines as a reference. You will come to know about the prices and locations of all the foreclosed properties within your city or state.

Checking the paperwork : you must make sure that the house that you are buying has all the paperwork complete. These documents will be the required proof showing that the seller has followed the necessary foreclosure process to a tee. The rules related to foreclosure can be state-specific, otherwise you will have to go through a hectic process before you are able to buy that home.

You must check out with the broker or seller if the foreclosed property has any outstanding taxes from the previous years.

Finding a reliable real estate agent : The whole process of real estate transactions is often confusing and complicated to deal with. It becomes even more difficult when the property that you are buying was foreclosed by the bank or because of bankruptcy. You must consult an expert real estate agent who will help you in filing and settling all the required forms, agreements and payments for the foreclosed home. He will also keep you updated with all other foreclosed properties, short sale homes, bank-owned homes, and even REO properties nearby. You can compare the prices before finalizing any property.

Knowing your credit score : Before you make the decision of buying a foreclosed home, it is important that you check your credit score and standing. Having a good credit will help you in getting attractive deals.

Purchasing a foreclosed home is like a breeze. Therefore it is important that you have an idea of what to expect when you are dealing with the sellers, brokers, your personal real estate agent and the entire foreclosure process that is specific to your state.

Important links: http://portal.hud.gov/hudportal/HUD?src=/topics/avoiding_foreclosure