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Navigating A Home Transfer In Divorce | Fox Rothschild LLP

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Just about every divorce case involves a house and its corresponding mortgage.  In a small number of cases parties agree that dissolution of the marriage is also an opportune time to downsize the residence, but in most situations, at least one of the parties wants to keep the residence, even if just, “for a while.”

This is where complications can arise.  Certainly one spouse can transfer their interest in the home to the other.  Nevertheless, any such transfer comes “under and subject” to existing liens and encumbrances.  In most instances, when the parties acquired title to their home they did so subject a promissory note payable to the lender secured by a mortgage.  A mortgage is essentially a pledge of the home to secure the money due under the promissory note.

The promissory note is a “joint and several obligation.”  That means both borrowers agree that the lender has recourse against either or both of them.  So if I transfer my interest in my home to my spouse, it does not affect my duty to keep paying the old mortgage even though it’s no longer my house.

Needless to say, that issue needs to be ironed out.  Usually there is a property settlement agreement and it customarily has a clause stating that the spouse in the house will “indemnify and hold the other spouse harmless” from the obligations of that promissory note.  Understand that such a clause does nothing to assist the “out of house” spouse in the event that the spouse in the house stops paying.  That also means that many lenders look askance at borrowers who come knocking to buy a new house while they still owe money on the residence they left when in search of greener pastures.  In practical terms, if I sign an agreement transferring my home to my ex and she later stops paying the mortgage, I can expect the sheriff to come knocking on my door when the lawsuits are filed.  And my dopey “indemnification and hold harmless clause” is of no effect as a defense to the suit demanding that I pay the $200,000 still due on my now former home.  Reason; my old lender is not bound by your later agreement with my wife.

The clean solution to this dilemma is for the house to be refinanced.  A re-fi actually terminates the mortgage my spouse and I signed and substitutes a mortgage in my spouse’s name alone.  The promissory note spouse and I used to buy the home long ago is cancelled and the mortgage is recorded as “satisfied.”  My spouse walks away with a clear title (my transfer to her) and a note and mortgage in her name alone.  If she falls off the wagon and stops paying that new loan, I am clear of any suit because I’m not on the new promissory note.

Alas, as Ken Fineman, a mortgage broker with CrossCountry Mortgage noted in a recent Pennsylvania Bar Association seminar, the refinance business can be tricky.  Borrowers tend to think that a refinance is easy if the home has significant equity (market value less mortgage debt), but lenders don’t make money foreclosing on real estate.  They make their money by lending to people who have a history of paying their debts on time.  Home equity is a benefit but the real keys to a refinance are a solid credit history (of paying bills) and regular income.

Fineman discussed those two elements after noting that each lender has its own underwriting rules governing to whom they will lend and how much.  Often the trickier element of the refinance is the income history of the spouse who is getting the home in a divorce transaction.  This is also affected by what kind of loan the borrower is seeking.  FHA loans impose lower lending standards; however, the cost of the loan will be higher.  Non-FHA loans take the opposite approach.  Child support and alimony can be credited as income available to pay for the newly refinanced mortgage, but the lender wants to see not just an agreement but 3-6 months of actual compliance with the support/alimony obligation on the part of the person paying.

Payment history has recently been clouded by forbearances related to COVID-19 relief statutes.  If there has been a default but it fits within COVID-19 protections, lenders are looking for at least three (3) months of resumed payments before a refinance will move forward.  If there has been a bankruptcy, it isn’t usually possible to refinance until four (4) years after the case has closed.  If there was a short sale of property, that typically takes three years to “cleanse.”  Allowing a property to be exposed to foreclosure usually takes seven (7) years to clear for refinance.

Fineman’s takeaway was that the sooner there is contact with a mortgage broker in a divorce finance transaction the easier the process can be.  Mortgage brokers are the “guides” who lead borrowers through the morass of legal and underwriting rules.  He noted that there are times when he refers potential clients to consultants who advise clients on how to cleanse bad credit history and improve credit scores.  His lamentation was that potential clients often come to him too late in the divorce process.  Applicants often arrive with no agreement for support or payment history or with a credit history that could have been repaired but was not.

The truth is that in most cases, it becomes fairly clear early in the divorce whether one party wants the house and whether that aspiration is realistic.  The takeaway from this seminar was that once retention of the home becomes clear, it might be time to identify a mortgage broker or lender even though not all the terms of the overall settlement have been resolved.  The purpose would be so that support payment histories can be established and credit scores cleansed under the guidance of someone who knows what mortgage underwriters want to see.  To do otherwise is to risk that the refinance written so carefully into the property settlement agreement will not “fly” with potential lenders.  Bear in mind that few, if any, lenders are going to go to settlement on a refinance until all the terms of the property settlement are concluded and presented to the refi lender for review.  However, while we are all admonished to not let the cart go before the horse, this is one instance where parties should consult with lenders about whether the horse will be able to pull the cart when the credit and income histories are fully evaluated.

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Loans Bad Credit Online – Loans Bad Credit Online – PNC Personal loan 2021 Review | Fintech Zoom | Fintech Zoom

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Loans Bad Credit Online – Loans Bad Credit Online – PNC Personal loan 2021 Review | Fintech Zoom

Loans Bad Credit Online – PNC Personal loan 2021 Review

Top perks

Low minimum loan amount

Customers can borrow $1,000 to $20,000. That minimum loan amount of $1,000 is unusual in the personal loan industry. A low minimum threshold means you can get the cash you need to cover small emergencies without being tied down to a larger loan.

Wide range of repayment terms

You have between 6 and 60 months to repay the loan. There are pros and cons to longer repayment terms, so this flexibility allows you to customize your term to your situation.. With PNC, you have the option of designing a repayment plan that fits your monthly budget.

Joint applicants welcome

Whether you need a joint applicant’s high credit score to qualify for a lower loan interest rate or someone has decided to co-assume responsibility for a personal loan, PNC allows for joint applicants.

What could be improved

Terms depend on location

The first thing you will be asked is where you live. On its loan homepage, PNC states that “PNC product and feature availability varies by location.” While this may be good news for borrowers in some areas of the country, it could be bad for others. You’ll need to see what it means for you.

Lowest interest rate reserved

If you’re looking to borrow enough to make repairs to your roof or buy a new furnace, you might not borrow enough to qualify for PNC’s lowest advertised interest rate. That’s because that low interest rate is reserved for those borrowing more money. For example, PNC will automatically assign a $5,000 loan a higher interest rate than a $15,000 loan.

Loans Bad Credit Online – PNC Personal loan 2021 Review

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Loans Bad Credit Online – Loans Bad Credit Online – PNC Personal loan 2021 Review | Fintech Zoom

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Loans Bad Credit Online – Badger Advisors Gets Bad Review For Credit Card Refinancing | Fintech Zoom

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Loans Bad Credit Online – Badger Advisors Gets Bad Review For Credit Card Refinancing

Editorial Credit: Djomas

Badger Advisors wants you to believe they are offering credit card refinancing and have begun flooding the market with debt consolidation and credit card relief offers. The problem is that the terms and conditions are at the very least confusing, and possibly even suspect. The interest rates are so low that you would have to have near-perfect credit to be approved for one of their offers. Best 2021 Reviews, the personal finance review site, has been following Badger Advisors, Rockville Advisors, Old Dominion Associates, Sooner Partners, Snowbird Partners, Gulf Street Advisors, Memphis Associates, Safe Path Advisors, Plymouth Associates, Tate Funding, Braidwood Capital, Tiffany Funding, Nickel Advisors, Coral Funding, Neon Funding, Polk Partners, Ladder Advisors (also known as Carina Advisors, Corey Advisors, Pennon Partners, Jayhawk Advisors, Clay Advisors, Colony Associates, and Pine Advisors, etc.).

Editorial Credit: Ollyy

Credit Card Refinancing

Credit card refinancing is a possibly feasible solution for your piling credit card debt. Under credit card refinancing, all of your credit card balances go into one account where a single interest rate is charged. If you have a good enough credit score, then you may be able to qualify for credit card refinancing at low-interest rates. Just like other refinance options, credit card refinancing also entails a loan offer to pay off your debts and improve your financial health. You will then have to focus on the credit card refinancing loan only and no other credit card balance.

Another major advantage of credit card refinancing is that the interest rate will not vary over the lifecycle of the loan. This will simplify your life a lot and make debt servicing much easier since you will know how long it will take for you to pay back your loan. With variable interest rates that you often find in credit cards, you can end up incurring higher interest expenses. But with a fixed interest rate that credit card refinancing purveys, you will not have to face this unwelcome possibility.

With the right kind of credit card refinancing loan, you can possibly save hundreds and even thousands of dollars on interest expenses this way. Of course, you will have to be punctual with your monthly repayments. If the terms and conditions of your credit card refinancing loan are favorable then you may very well embark on the road to financial freedom and get there before you know it.

Is There Any Difference Between Credit Card Refinancing and Debt Consolidation?

From the aforementioned discourse, you may have realized that credit card refinancing is very similar to debt consolidation and that indeed is the case. Both are about settling all debts with one favorable loan so that you can focus on this loan only and enjoy its lenient terms and conditions to rebuild your credit score and gradually work your way towards debt freedom.

Provided the terms and conditions of your credit card refinancing loans are suitable, this financial option represents a viable route for managing and paying off your outstanding liabilities in a better way.

Why Credit Card Refinancing loan May be Better

A credit card refinancing loan may be a better choice than a balance transfer card. The idea of a balance transfer card is to take advantage of the zero APR introductory period that usually lasts from 12 to 18 months. However, there are a few caveats due to which a balance transfer card may not exactly be a good idea.

The zero APR period may look tempting but it still may not be long enough to pay off your entire credit card debt. And that is unfortunate because once the zero APR limit expires then you will have to pay very high interest and you may even incur penalties. Then there is the question of balance transfer fees that can offset the advantages of the zero APR time frame.

Another problem is that the credit limit of the balance transfer credit card may not be big enough to accommodate all of your credit card balances. This is a real possibility since your credit card debt is high to begin with and it may not fit within the credit limit of the balance transfer card.

Then there is the danger of spending with the balance transfer credit card. The inability to control spending and use of credit cards is the very reason why people fall into credit card debt traps in the first place. This possibility is very much open and present with balance transfer cards. Instead of helping you, they may worsen your debt situation since they too are credit cards that are all too easy to misuse. What’s worse, they have exorbitant interest rates.

Such a scenario cannot transpire with a credit card refinancing loan since it is not a credit line – this loan immediately goes towards paying off your credit card balances due to which there is no peril of misuse. Instead of getting another credit card in the shape of a balance transfer card it is much safer to freeze all of your cards and repay your debts.

If you do your research on credit card refinancing then you might find that some people also include balance transfer credit cards under this heading. But due to the drawbacks mentioned above, you should try to steer clear of balance credit cards and instead take out a personal loan for the sole purpose of repaying your credit card debts.

The prime advantage of credit card refinancing is that they can provide you with a low interest rate if you have a good enough credit score.

How to Make Credit Card Refinancing a Success

While credit card refinancing provides good terms and conditions, it is not a magic elixir that will cure all of your financial woes.

To make your credit card refinancing a success, you will have to follow some good money habits and exercise discipline at the same time.

You should try to find extra sources of income. You can think about working overtime at your job if that is possible. If not, you can opt for freelancing gigs and projects. Even if you earn a few hundred dollars through this route each month, it will prove to be of great assistance in helping you become debt-free more quickly.

You should also think up ways of saving on expenses. A major reason why consumers incur enormous debts is that they do not track their spending. This is a habit that you must remedy forthwith if you wish to get out of your financial predicament quickly. No matter how little your expense, make sure you record it somewhere secure. You can utilize apps to record your transactions. Thus, you will know the areas on which your spending is inordinate. You will also be able to compare your spending with your planned budget.

You should get in touch with your financial advisor to find out whether credit card refinancing is right for you.

Loans Bad Credit Online – Badger Advisors Gets Bad Review For Credit Card Refinancing

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The Pros and Cons of Being an Authorized User on a Credit Card

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Having friends has its perks, especially if that friend lets you be an authorized user on their credit card.

If you’re thinking of asking someone you trust to be added as an authorized user on one of their cards, it’s important to know what you’re getting into with this decision. Instead of getting your own credit card, you may be thinking of taking this step so that you have access to a card when you need it. There are advantages and disadvantages to being an authorized user. Keep reading to learn the pros and cons of being an authorized user on a credit card.

What is an authorized user?

An authorized user is someone who has permission to use a credit card account. While they’re legally able to use the credit card, they’re not responsible for paying off the credit card debt. Most top credit card issuers allow their cardholders to add an authorized user to their account.

Can anyone be added as an authorized user?

Most credit card issuers have age requirements in place for authorized users. Other than that, there aren’t restrictions.

The pros of being an authorized user

Being an authorized user on a credit card has its advantages:

  • This can help build credit. For someone with little or no credit, being added as an authorized user can help them build a good credit score. That’s because many credit card companies report the history of the account on an authorized user’s credit report. This can be helpful in the future when you attempt to open your own credit card account.
  • It gives a person access to a credit card. With poor credit history or a bad credit score, it can be challenging to get a credit card. Being added as an authorized user can give you access to a credit card, which can be especially helpful during an emergency.
  • You can learn how to manage money. Being an authorized user is a great way to learn how to manage money better. You can learn how to make smart financial decisions before opening your own credit account.

The cons of being an authorized user

Here’s what you need to look out for:

  • The account holder’s actions can negatively impact your credit. If the credit cardholder misses payments or racks up a lot of debt on the card, it could negatively impact your credit. Before being added as an authorized user, it’s a smart idea to consider whether the credit cardholder is financially responsible.
  • They can remove you at any time. The credit cardholder can remove you as an authorized user at any time. When this happens, that account will no longer appear on your credit report. This is something to consider if you want to build your credit.
  • It could cause relationship issues. If you and the cardholder disagree about which charges you’ve made or how much you owe them, this could cause added stress and could lead to relationship issues. Consider setting clear boundaries and ways to track purchases made so that you minimize disagreements or confusion.

The bottom line

Being added as an authorized user may be a good option for you. But, you need to be well aware of the positives and negatives. Talk with someone you trust about this opportunity and outline expectations and rules. Then you can both decide if it’s the right move to make.

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