Home Equity Loans: Fact and Fiction

Some home equity loan originators have a tendency to bend the truth, and a blog post from All Reverse Mortgage Company has reacted to this by pointing out some of the more important things potential home equity lenders need to know:

  • All lenders who originate FHA-insured home equity loans determine benefits using the same calculator – assuming they use the same birth dates coupled with the same property values. Quotes among originators vary only because of fees and rates.
  • There is no “industry standard” rate, although the range for rates and programs tend to be narrow due to the generally low number of originators and a weak secondary market for these loans.
  • Consumers and home equity loan originators have no way of finding out how many loans an originator has closed. This means an originator will be lying if he or she produces any number indicating a competitor’s closed loans.
  • It is an “ethical violation” to under-quote the rates set by the National Reverse Mortgage Lenders Association (NRMLA) while it is outright illegal to advertise rates that are not actually available.

The post goes on to advise potential home equity loan borrowers to check the Better Business Bureau website to assess a company’s rating and to check out what other customers have to say about that company. In addition, it’s also vital to consider both reverse mortgages pros and cons before deciding on it.

Debt Backslide: America in 368% More Credit Debt Compared to Q2 2009

The effects of the recession are far from over, yet many Americans are using their credit cards as if the money will just magically appear out of nowhere.

“A debt increase of $18.4 billion during a single quarter is mind boggling, especially when you consider that this increase is 368% higher than what we witnessed in the same quarter two years ago,” says CardHub.com CEO Odysseas Papadimitriou.

This is in light of a credit card debt study for the second quarter of 2011, which shows that U.S. consumers have accumulated a whopping $18.4 billion in debt for this year’s second quarter. The study also predicts that the end of 2011 will see a $54 billion increase in credit card debt compared to the debt they started out with early in the year.

To put this in perspective, we first have to compare it to 2009 – a year which saw a decrease of $10 billion at year’s end – and to 2010 – which saw a $9.1 billion increase at its end.

This is why a $54 billion credit debt rise in a single quarter; is just mind-boggling.

“There is no doubt in my mind that a lot of consumers are reverting back to pre-recession habits and that this is why we are witnessing such a dramatic increase in credit card debt (net of charge-offs),” continues Papadimitriou.

College Grants For Single Moms Under The Obama’s Initiative

Research shows that having a college degree can enable a person to earn five times more than a non-degreed individual. But with the average cost of college education is on the rise, few students are able to foot the bill for a college education. Let alone single parents who are struggling to ‘make ends meet’.

Under Obama’s initiative, colleges would consider a person’s current financial situation to make it possible for them to receive Federal student aid such as the Pell Grants, which are available for low-income students and single mothers.

College grants are awarded to eligible students on the basis of financial hardship which do not require any repayment,  lifting a huge financial burden from single mothers who wish to go back to school. This program enables single moms to obtain a grant of up to $5000 from the Federal government which can be used to pay for their college expenses i.e. tuition, books, and supplies.

In addition, the stimulus package increase in 2010 raised the Federal Pell Grant to $5,550 per year. Eligible single mothers may apply for this grant and if they qualify, this free money does not need to be repaid in any way.

To apply for the scholarship or Pell Grant, you need to complete the Free Application for Federal Student Aid, also known as the FAFSA. This form can be completed online or a paper form can be requested via mail or picked up at a local higher education institution. You should have prior tax year information and identifying documents on hand to use when completing the document.

Though the dateline for FAFSA submission is June 30, it is highly recommended that you submit your application as early as possible; as most federal student aid is given out on a first-come, first-serve basis. Do your diligent research, pay attention to the details and make sure that you’re familiarize with the Pell grant eligibility requirements.

Even if you are ineligible for the Pell grant, you may apply for federal student loans to help pay for your college education. Unlike most private loans, these federally-funded loans come with lower interest rates & better repayment plans. The 2 most popular types of federal loans are Stafford and Perkins Loans, both of which are available to single parents who need financial help paying for college – regardless of income level or credit history.

For more information about student aid and grants for single mothers, refer to the Single Mother Grants website: http://singlemothergrant.net/.

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