Posts Tagged: ‘Refinance’

Basics of Negotiating with Collection Agencies

May 10, 2013 Posted by Andre Hemmersbach

These simple tactics work on unsecured debt only, mainly credit cards to include department store cards, medical bills and bounced checks. You cannot negotiate on Liens, Judgments and other items.

Remember you always want to negotiate for removal of the derogatory item.

  • An old unpaid collections account is far better for your credit score than a recent paid collection account.  A paid collections account is a negative mark on your report, therefore always negotiate for the removal of the derogatory item!

There are two basic methods to negotiate with collection agencies.

First of all you will want to negotiate with a manager, not some customer service rep as they usually don’t have the authority. It’s also important to only work with them via written letters or email so you have a paper trail.

1)      Payment in Full. Let’s say you have a $500 debt with an agency. Offer them $200 to settle the debt and to have the item removed from the Big Three (Trans Union, Equifax and Experian). They have probably only paid pennies on the dollar so trust me, they are profiting and willing to work with you most of the time. Do not let them simply update the item to a paid collection or paid account.

2)      Set up a payment plan. If you don’t have the cash on hand offer to make monthly payments  which you can afford and make sure to get the agreement in writing! It can be a simple written contract which states that the collection or derogatory rating will be removed after the agreed upon amount is paid in full.

If you have any questions regarding this or any other tips on increasing your credit score please call me.

Refinance Strategies That Pay

September 10, 2010 Posted by Andre Hemmersbach

Just because rates are lower does not mean that you will save money doing a refinance. Careful consideration should be given to a number of factors. If your loan officer is not asking the following questions while discussing a refinance, find a loan officer who you know and trust to help you make a solid financial decision: How long you have had your current loan? How long you are planning to stay in the property? Does it make sense to pay points or do a “No closing cost loan”?
Working with an experienced loan officer that can figure out your total cost over your financial time horizon is extremely important. Also understanding your loan balance at the end of that time horizon is a consideration that must be examined if you want to make a wise decision.
The following are a couple of refinance strategies we are advising our client to consider depending on their personal objectives.
Cash-In Refinance: In last year’s fourth quarter nearly one third of all refinances had principle reductions.
This is where a borrower actually pays “cash-in” instead of the standard “cash-out” transaction to lower the balance of the current loan. The idea is that you may get a better return for your money in your mortgage savings than you would in an investment account. Two scenarios where this could save money is in the removal of Private Mortgage Insurance (PMI) and lowering your loan amount from a “Non-Conforming Loan” (greater than $729,750) or a “Jumbo Loan” (greater than $417,000).
Term Reduction: Rates are so low that some borrowers can actually keep their payments very close to the same level they now have but go to a 15 year term. This not only saves in over all interest expense over the life of the loan but usually nets the client another half of a percent off the current 30 year rate.
Refinance and invest the savings: As a loan officer that uses a consultative approach to my business, I always explain options. My clients are amazed when I show them the long term benefits of refinancing to a lower rate and then continuing to pay the old payment. It’s absolutely astonishing what happens when you super amortize (prepay) your loan.
I would be honored to help you review your mortgage and create a personalized plan for your financial situation.