What you Should Know Before you Borrow Money by Patty Baldwin and Lori Chambers - HTML preview

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What You Should Know BEFORE You Borrow Money

By Patty Baldwin and Lori Chambers

Copyright 2005

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What You Should Know BEFORE You Borrow Money

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Copyright © 2005

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What You Should Know BEFORE You Borrow Money

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Table of Contents

Please Read This FIRST............................................................................................... 2

Introduction....................................................................................................................... 6

When and Why Borrow Money....................................................................................... 7

What Type Of Loan Do I Need?.................................................................................... 13

Secured Loans ........................................................................................................................................ 13

Mortgage................................................................................................................................................. 13

Are You Ready for a Home Mortgage Loan? ................................................................................... 13

Second Mortgage ................................................................................................................................... 15

Home Equity....................................................................................................................................... 15

Line of Credit ..................................................................................................................................... 16

Vehicle Loans ......................................................................................................................................... 17

Title Loans.......................................................................................................................................... 17

Unsecured Loans................................................................................................................................ 17

Personal Loans ....................................................................................................................................... 17

What Should I Know Before I Shop For A Lender? ................................................... 19

Advance Fee Loans ................................................................................................................................ 19

How to protect yourself from advance-fee predators:....................................................................... 20

Mortgage Loans ..................................................................................................................................... 21

Fixed Rate Mortgage vs. Variable Rate Mortgage............................................................................ 22

Understanding a Second Mortgage ................................................................................................... 22

Shorter Terms..................................................................................................................................... 23

Conventional Home Loan ..................................................................................................................... 24

Balloon Mortgage .............................................................................................................................. 24

FHA Home Loan.................................................................................................................................... 24

VA Loans ................................................................................................................................................ 26

Contract for Deed .................................................................................................................................. 26

How to Qualify for a Home Mortgage Loan ................................................................ 28

Save a Sizeable Down Payment ......................................................................................................... 28

You May Have To Accept a Higher Interest Rate on Your Mortgage Loan .................................... 29

Copyright © 2005

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What You Should Know BEFORE You Borrow Money

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Vehicle Loans .................................................................................................................. 30

Be Sure You Understand the Offer Before Signing On the Line for an Auto Loan ........................ 33

Never Agree To a Pre-Computed Auto Loan .................................................................................... 34

Hold Out For the Best Offer ................................................................................................................. 35

Title Loans.............................................................................................................................................. 35

Interest Rates ......................................................................................................................................... 35

Credit Rating.......................................................................................................................................... 36

Fair Credit Reporting Act/ FCRA ..................................................................................................... 36

Don’t Let A Divorce Ruin Your Good Credit Rating! ....................................................................... 39

How To Build A Lender-Friendly Credit Report ............................................................................... 40

Collateral ............................................................................................................................................ 42

Important Things to look for in a Lender ........................................................................................... 42

Where Should I obtain a Loan?..................................................................................... 43

Family or Friends .................................................................................................................................. 43

Commercial Banks................................................................................................................................. 44

Finance Companies................................................................................................................................ 44

Credit Card Companies ........................................................................................................................ 45

The Pitfalls of the % APR Credit Card ............................................................................................... 46

Online Credit Card Application: the Easiest Way to a Customer’s Heart....................................... 47

Cash It Back with Credit Cards ........................................................................................................... 49

Borrowing Money For a Business ................................................................................. 52

Leasing Companies................................................................................................................................ 52

Private Investors .................................................................................................................................... 52

State and Local Government Lending Programs ............................................................................... 52

Partnership............................................................................................................................................. 53

How Do I Apply for a Loan?.......................................................................................... 54

Business Loan......................................................................................................................................... 54

Home Loans............................................................................................................................................ 55

Cleaning Up Your Credit ............................................................................................... 58

Your Credit Report Can Be The Envy Of All Your Neighbors! ....................................................... 58

Getting Your Credit Report.................................................................................................................. 60

Avoiding Credit Repair Scams ............................................................................................................. 60

Credit Scores .......................................................................................................................................... 62

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What You Should Know BEFORE You Borrow Money

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Why Your Checking Account Is Vital To Your Credit History ........................................................ 68

Three Mistakes That Could Hurt Your Credit Score......................................................................... 69

Mistake # 1 ......................................................................................................................................... 69

Mistake # 2 ......................................................................................................................................... 70

Mistake # 3 ......................................................................................................................................... 70

Last Words from Patty and Lori................................................................................... 72

Copyright © 2005

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What You Should Know BEFORE You Borrow Money

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