Getting Out of Debt Fast (business news)

February 6th, 2010 admin Posted in finance |

By Marcilio David

There seems to be so many conflicting opinions about getting out of debt fast that it’s hard to know which one is the right option for you. Many companies advertise that they offer the best solutions for getting out of debt, but how can you know until you you’ve tried it?

The truth is the best way for getting out of debt fast is the one that works with your unique financial situation in mind. After all, there’s no point in you working on a debt reduction plan that worked for your neighbor. Your income and debt levels are completely different.

It’s important to find the right method that works with your own capabilities in mind. Here are some simple tips that you can apply to your own financial situation for getting out of debt fast.

Snapshot

Reducing debt quickly is about finding ways to get your current balances down as low as possible in the shortest amount of time. This means you will need to have a clear snapshot of what your current debt levels look like today so you can begin to formulate a plan of attack.

No Credit

When you’re working on debt reduction tactics, it’s important not to keep adding to your balances. Don’t charge new purchases on credit and don’t apply for new credit. You’ll need to be focused on your goal to get out of debt for good, so avoid charging anything new.

Reduce Balances Quickly

Did you know your current credit cards are charged interest on the balance you owe daily, yet the total amount of interest isn’t shown on your account until the end of the month? This means if you can find even a little extra cash from each pay check throughout the month to put toward your debt levels, you’ll be reducing the amount of interest you’re charged each month.

The easiest way to beat the banks at their own interest game is to divide your current monthly payment by 4 and then pay this new amount on the same day every week. You’ll be amazed how much more quickly your balances fall.

Small Change

Can you afford to put $1 per week out of your current income toward your goal of getting out of debt fast? It doesn’t sound like much, but $1 can have a huge effect on reducing your balances quickly. This is especially true if you break down your current payments into smaller, weekly amounts and then add your small change to the total each week.

For example, if your current monthly payment on an account is $156, divide this figure by 4 and pay the new amount each week. This equals $39 per week and it’s a much easier amount to find out of each pay than waiting a month to find the entire monthly payment. Now add $1 to your new weekly payment and round it up to an even $40.

Your small change might not seem like much, but when you consider the effect of compounding interest, you’re reducing your balance more frequently and paying less interest overall.

Snowball Your Debts

Once you’ve paid off one of your accounts, add the entire amount you were paying off your first debt to the payment you’re making on the next debt in line. This should increase the amount you currently pay significantly, so your next balance will be paid in no time.

Patience

Be patient and persist with your goal. If you’re serious about getting out of debt fast, then always remind yourself that it took time to get into debt and it will take time to get out of it too.

Marcilio David is a cardiologist and internet entrepreneur, he is the owner of The Smart Debt Buster Guide, where you can get a lot of tips and create the right debt busting plan for you. Come and get a FREE Debt report at http://debt.multiplepage.com/

Obama Administration Introduced 2 Loan Modification Programs

By Tracey

Both mortgage modification programs were launched in March 2009 and provide finance adjustment help for those homeowners who qualify. These two modification programs are designed to provide homeowners facing possible foreclosure an opportunity to keep their home.

What Is The HAMP Program?

The HAMP Program is a mortgage modification helping homeowners who have suffered financial hardship including loss of a job, death of a spouse or loss of household income. It is a loan alteration help to get their home mortgage modified without having to refinance.

HAMP Eligibility Requirements

Must be living in your property when you apply:

Have obtained your mortgage before January 1, 2009;

Your mortgage balance is under $729,750 for a single family residence, $934,200 for a duplex, $1,129,250 for a triplex, and $1,403,400 for a 4 unit home;

Your mortgage payment (including principal, interest, taxes, insurance, home owners association dues) must exceed 31% of your gross monthly pre-tax income;

You can not afford your current mortgage payment due to a financial hardship that can be documented.

What Is The HARP Program?

The HARP Program is one of the loan modification programs intended to help those homeowners who want to refinance their mortgage but cannot because their homes value has decreased enough to prevent them from qualifying for normal Fannie Mae and Freddie Mac conventional lending loan to value guidelines. A loan changes with HARP may be the answer.

HARP Eligibility Requirements

Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac. (Contact Fannie Mae or Freddie Mac);

When applying for the HARP Program loan modification help you must be current on your mortgage payments. Current is defined as not more than 30 days late on your mortgage payment in the last 12 months. If you have had the mortgage for less than 12 months, then you cannot have missed a payment;

Your mortgage balance cannot exceed 125% of your homes value;

Your income is sufficient to pay back the new mortgage payment;

Your mortgage loan modification must improve the long term stability and affordability of your current mortgage.

Example: your current mortgage is a 10 year Interest Only Mortgage and you are making a loan modification to a 30 year fixed rate mortgage.

For the HARP program you need to contact either your current mortgage refinance lender or one of the loan modification institutes to see if you qualify. For the Federal Home Affordable Modification Program, you will need to contact your mortgage lender first - loss mitigation department to see what information you need to provide for a loan modification.

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