Mend Your Credit by Rehabilitating a Defaulted Student Loan

Student loan

If you’ve defaulted on your student loans, you’re not alone. According to CNBC, more than 1 million people default on their student loans each year, and approximately 22% of student loan borrowers default at some time. But joining the crowd won’t help your credit or open opportunities for you in the future.

Here are some ways you can work to repair a federal student loan that you have defaulted on. For more details visit the Federal Student Aid Office’s website. If you have defaulted on a private student loan, you will need to contact your loan holder for information.

Repay the Loan in Full
The most obvious way to get your loan out of default is to pay it in full, but for most borrowers, that is not an option.

Loan Rehabilitation
To start the loan rehabilitation process, you must contact your loan holder. If you’re not sure who your loan holder is, log in to “My Federal Student Aid” to get your loan holder’s contact information.

To rehabilitate a William D. Ford Federal Direct Loan (Direct Loan) Program and Federal Family Education Loan (FFEL) Program loan, you must

  • agree in writing to make nine voluntary, reasonable, and affordable monthly payments (as determined by your loan holder) within 20 days of the due date,
  • and make all nine payments during a period of 10 consecutive months.

Your loan holder will determine a reasonable monthly payment amount that is equal to 15 percent of your annual discretionary income, divided by 12. You must provide documentation of your income to your loan holder in order to determine the amount you will pay.

If you can’t afford the initial monthly payment amount, you can ask your loan holder to calculate an alternative monthly payment based on the amount of your monthly income that remains after reasonable amounts for your monthly expenses have been subtracted. Depending on your individual circumstances, this alternative payment amount may be lower than the payment amount you were initially offered.

To rehabilitate your loan, you must choose one of the two payment amounts. Once you have made the required nine payments, your loans will no longer be in default.

To rehabilitate a defaulted Federal Perkins Loan, you must make a full monthly payment each month, within 20 days of the due date, for nine consecutive months. Your required monthly payment amount is determined by your loan holder. Find out where to go for information about your Perkins Loan.

Benefits of Loan Rehabilitation
When your loan is rehabilitated, the default status will be removed from your loan, and collection of payments through wage garnishment or Treasury offset will stop. You’ll regain eligibility for benefits that were available on the loan before you defaulted, such as deferment, forbearance, a choice of repayment plans, and loan forgiveness, and you’ll be eligible to receive federal student aid.

Also, the record of default on the rehabilitated loan will be removed from your credit history. However, your credit history will still show late payments that were reported by your loan holder before the loan went into default.

If you rehabilitate a defaulted loan and then default on that loan again, you can’t rehabilitate it a second time. Rehabilitation is a one-time opportunity.

Loan Consolidation
Consolidating your loan into one Direct Consolidation Loan allows you to pay off one or more federal student loans with a new consolidation loan.

To consolidate a defaulted federal student loan into a new Direct Consolidation Loan, you must either

• agree to repay the new Direct Consolidation Loan under an income-driven repayment plan, or
• make three consecutive, voluntary, on-time, full monthly payments on the defaulted loan before you consolidate it.

If you choose to make three payments on the defaulted loan before you consolidate it, the required payment amount will be determined by your loan holder but cannot be more than what is reasonable and affordable based on your total financial circumstances.

There are special considerations if you want to reconsolidate an existing Direct Consolidation Loan or Federal (FFEL) Consolidation Loan that is in default.

Getting Help with Your Defaulted Loan
If you need help with your defaulted loan, you will need to contact the holder of your defaulted loan. Find out who holds your loan by logging in to “My Federal Student Aid.

Clean Your Home with Household Items You Already Have on Hand

Dogs work is never done

Getting ready to do an annual fall cleaning and purge? You may have some items in your house that can do double duty – a lid may be a coaster; a sponge may be a furniture cleaner. Here are some household items that may have a second or third use, and they may just make your life a little easier.

No scrub pad? Use aluminum foil. Crumple a handful and scour to polish stainless steel pots – don’t use this on non-stick pots and pans, of course!

Use Pam or another cooking spray to dissolve soap scum. Spray your shower glass with cooking spray and leave for 30 minutes. The oil slides between the glass and the soap scum, making it easy to wash. Wipe off with soapy water (use a wet sponge with a drop of dish washing liquid).

Dog and cat hair on your furniture? Lightly dampen a sponge, and rub it across upholstery. It will easily lift pet hair.

Use baking soda to clean greasy dishes. Add two tablespoons of baking soda to the usual amount of dish washing liquid you use. It will give your detergent a powerful boost and easily clean greasy dishes.

Coffee can lids can keep your pantry and refrigerator clean. Use a plastic lid from a coffee can as a coaster. Slip it under containers that might drip – honey, jams/jellies, salad dressings. You’ve saved yourself from cleaning a sticky mess.

Dryer sheets can keep dust off your television and PC screens, which are electrically charged and attract dust. Dryer sheets remove dust and prevent it from resettling for several days. Polish glass screens with the sheets after they’ve been in the dryer, for a softer texture.

Feed your plants with water you’ve used to cook. If your water doesn’t have salt in it, it’s perfect for your plants after it’s cooled.

Freshen almost anything in your house with a cotton ball saturated with one of your favorite fragrances. Use an essential oil such as lavender, or use lemon juice or lemon, orange or cinnamon extract or vanilla. Try placing one in your vacuum cleaner to have the scent pushed throughout the room while you clean. You can also put a wet cotton ball on a shelf in your fridge to act as a deodorizer.

The good news about all of these tips is that they are easy to do and you most likely already have everything you need! They are sure to put the spring in your step when you’re spring cleaning.

Want more ideas? Check out 43 Truly Extraordinary Uses for Household Staples You Already Own.

To Buy or not to Buy? Top Reasons People Become Homeowners

Happy family at home with their dogs

If you’re on the fence about buying a home, you’ve likely done a lot of research on interest rates and home prices, and have heard about lack of inventory locally and across the U.S. What you’re hearing may be enough to make you want to put your dream of homeownership on hold.

Not so fast!

Think about all the reasons that homeownership may be right for you, including the fact that if you wait even a year, it’s predicted that you’ll face higher home prices and interest rates, and ultimately a higher monthly mortgage payment. Here are a few of the top reasons people buy homes.

Pride of ownership. You can paint the walls any color you desire, attach permanent fixtures, and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability. It’s an investment in your future. And a lot of people would say that the independence and sense of accomplishment that owning a home brings is an essential part of their way of life.

Build equity. Real estate moves in cycles, but over the years, real estate has consistently appreciated. As property value increases, you build equity in your home and your home becomes worth more than you owe. If you are renting a home, your landlord builds this equity every time you pay rent, and you get nothing in return.

Have more space. A lot of renters find they are short on space. They have few closets, no yard to call their own, and no attic, garage or basement. Many renters even pay an additional fee for a storage space on or off the property. Homeowners are often glad to have extra storage space, a place for their cars, and a yard to host barbecues, play with their kids or to run around with a new dog!

Make room for Fido. A recent survey by SunTrust Mortgage found that a third of millennials who had already purchased their first home said they were influenced by the need to have space for a dog. Not only do you get more space for your pet with a yard to play in and room to roam about, you can eliminate the pet deposit and monthly fee that a landlord tacks on to your rent payment.

Upgrade to your heart’s content. A lot of renters are not rewarded for upgrading their homes. The landlord may benefit from a fresh coat of paint, new flooring and overall upgrades that make the space a home, but there is no reward for the renter who sinks money into projects that benefit someone else’s pocketbook.

Keep your distance. Even if your new home has a small yard, if you buy a single-family home, you don’t have to deal with heavy-footed clomping walker above you, or the loud talkers below you.

There’s no single reason that makes homeownership the right option. But when you consider all the reasons that are important to you, you really have a reason to buy a home. What makes you want to be a homeowner? Call us today to get on the road to making your dream a reality!

Paint Like a Pro before You Hire One!

paint

Is painting a room or two or your entire house on your to-do list? You don’t need to hire a professional to make your home look like you did. Here are some tips for making your home improvement painting project a snap.

Wash your walls. Wash your walls to ensure they are clean before you start. And vacuum floors and dust where you need to. A clean surface makes for a better paint job.

Remove wall plates, light switch covers, etc. Don’t tempt fate by trying to paint around wall plates. You’ll save a lot of time in touchups and and trying to scrape paint off of these if you just take them off.

Use primer. Primer isn’t something to use if you choose. It provides a good surface to hold the paint and it brings out the paint’s true colors. You spent a lot of time picking the perfect color. Let it shine through.

Use an edge pad. Create smooth lines around door frames, ceilings and corners to bring everything together with an edge pad.

Buy enough paint. Professional painters say you’ll need one gallon for every 400 square feet. If your walls are textured, not primed or have other details, they may require more. Better to be safe than sorry. Get a little extra in case you need it and for touchups later.

Pick the right paint. Semi-gloss is good for high traffic areas. If you have kids, it’s the best choice. But don’t hesitate to ask at the home improvement store or paint store about the best kind of paint to use for your project. They love to dish the dirt on the right paint for different jobs.

Paint when the air is dry. If you are expecting a humid day, skip painting. Your paint will dry faster if you paint when it’s not humid.

Let your paint dry. Don’t be in a hurry. Let your paint dry completely before you fix a spot or add another coat. If it’s not completely dry, you run the risk of leaving marks or streaks.

Use a roller. You can cover a lot more space in a lot less time with a roller rather than a brush. Save the brush for smaller areas and use a roller to cover the walls.

You don’t have to hire a pro. Just paint like one! 

Home Buying Secrets for Any Market

Family With Children And Pet Dog Outside House On Moving Day

There are some good things to do before buying a home, even if you think you are “just contemplating buying.” Especially in a market as tight as the one we are in today, you want to be ready when you find your dream home or you realize you’re ready to make an offer. Here are some home buying secrets to keep in mind. But don’t go it alone. 

1. Don’t go it alone. You’ll want a good team on your side when you make a purchase as big as this. Work with a mortgage loan officer and real estate agent to make sure you’re educated along the way. You want to make decisions thoughtfully and efficiently every step of the way.

2. Keep your money where it is. Don’t make any big purchases or move your money within three to six months of buying your home. This means, even if you’re just thinking about buying, leave your money in the bank. It’s easy to get a good loan and have the necessary paper trail if you don’t make any big financial moves.

3. Get pre-approved. This means a lender has looked at your financial information and has let you know how much you can afford and how much they will lend you. Now is the time to really sit down and go over all fees, interest rates, types of loans, etc. Do this before you start shopping for a home. Make sure you are pre-approved. It is different than pre-qualified.

4. Don’t try to time the market. You’ll never be able to figure out the perfect time to buy a home if you’re trying to time the housing market. The best time to buy is when you find the right home and you can afford it. Like all investment markets, real estate is cyclical.

5. Don’t buy the biggest house. Buy the best! You want a home that is appealing to you and to others when you go to re-sell. Your home only goes up in value as much as the homes around you. You don’t necessarily want to have the most expensive house on the block.

6. Factor in all costs. Don’t forget to include your utilities, taxes, maintenance, homeowners association fees, insurance and all other costs that go into homeownership when you are budgeting for your house. It’s important to be able to pay for all costs, not only the mortgage.

7. Get a home inspection done. OF COURSE, you’ll want to have an unbiased home inspector check out your home. An inspection can save you thousands of dollars, provide you with negotiation options and even help you decide a particular house is not for you. Click here to read more about hiring a home inspector.

8. Bid right. You should base your opening bid on a couple of factors – what you can afford and what the property is worth. Be fair and reasonable. Check to see what other homes in the area are going for, what the square footage is worth, and what could add to the value of the home or take away from the value of a home. Be specific about your number so the seller takes your seriously.

For most people a home is the biggest purchase they will ever make. Make sure you make the right move by being ready when the time is right. If you have questions one of our loan officers would be happy to discuss your questions, concerns and options.