What You Need To Know About Auto And Home Loans

What You Need To Know About Auto And Home Loans



What you​ Need to​ Know About Auto And Home Loans
Your debts can be secured or​ unsecured .​
Secured debts usually are tied to​ an​ asset,​ like your car for a​ car loan,​ or​ your house for a​ mortgage .​
If you​ stop making payments,​ lenders can repossess your car or​ foreclose on​ your house .​
Unsecured debts are not tied to​ any asset,​ and include most credit card debt,​ bills for medical care,​ signature loans,​ and debts for other types of​ services.
Most automobile financing agreements allow a​ creditor to​ repossess your car any time you're in​ default .​
No notice is​ required .​
If your car is​ repossessed,​ you​ may have to​ pay the​ balance due on​ the​ loan,​ as​ well as​ towing and storage costs,​ to​ get it​ back .​
If you​ can't do this,​ the​ creditor may sell the​ car .​
If you​ see default approaching,​ you​ may be better off selling the​ car yourself and paying off the​ debt: You'll avoid the​ added costs of​ repossession and a​ negative entry on​ your credit report.
If you​ fall behind on​ your mortgage,​ contact your lender immediately to​ avoid foreclosure .​
Most lenders are willing to​ work with you​ if​ they believe you're acting in​ good faith and the​ situation is​ temporary .​
Some lenders may reduce or​ suspend your payments for a​ short time .​
When you​ resume regular payments,​ though,​ you​ may have to​ pay an​ additional amount toward the​ past due total .​
Other lenders may agree to​ change the​ terms of​ the​ mortgage by extending the​ repayment period to​ reduce the​ monthly debt .​
Ask whether additional fees would be assessed for these changes,​ and calculate how much they total in​ the​ long term.
If you​ and your lender cannot work out a​ plan,​ contact a​ housing counseling agency .​
Some agencies limit their counseling services to​ homeowners with FHA mortgages,​ but many offer free help to​ any homeowner who's having trouble making mortgage payments .​
Call the​ local office of​ the​ Department of​ Housing and Urban Development or​ the​ housing authority in​ your state,​ city,​ or​ county for help in​ finding a​ legitimate housing counseling agency near you.
You may be able to​ lower your cost of​ credit by consolidating your debt through a​ second mortgage or​ a​ home equity line of​ credit .​
Remember that these loans require you​ to​ put up your home as​ collateral .​
If you​ can't make the​ payments — or​ if​ your payments are late — you​ could lose your home.
What's more,​ the​ costs of​ consolidation loans can add up .​
In addition to​ interest on​ the​ loans,​ you​ may have to​ pay points,​ with one point equal to​ one percent of​ the​ amount you​ borrow .​
Still,​ these loans may provide certain tax advantages that are not available with other kinds of​ credit.




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