How to Become Debt Free

The President’s plan was created to help millions of homeowners refinance or modify their mortgages.

Refinancing: Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates perhaps due to a decrease in the value of their home. A Home Affordable Refinance will help borrowers whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable mortgage.

Modification: Many homeowners are struggling to make their monthly mortgage payments either because their interest rate has increased or they have less income. A Home Affordable Modification will provide them with mortgage payments they can afford.

Who is Eligible?

Please use the self-assessment tools provided on this website to see if you are among the 7 to 9 million homeowners who can benefit from Making Home Affordable. Based on your results, we will provide suggestions about what you can do next.

FIND OUT IF YOU ARE ELIGIBLE.

Borrower Q&A

Beware of Foreclosure Rescue Scams - Help Is Free!

• There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor.
• Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay – walk away!
• Beware of anyone who says they can “save” your home if you sign or transfer over the deed to your house. Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
• Never make your mortgage payments to anyone other than your mortgage company without their approval.

Kevin Byrd
Senior Mortgage Consultant
866.970.SAVE ext 7171 Toll-free
209.983.1731  Direct 

Amerisave Mortgage Corporation

The possibility of losing your home because you can’t make the mortgage payments can be terrifying. Perhaps you’re having trouble making ends meet because you or a family member lost a job, or you’re having other financial problems. Or maybe you’re one of the many consumers who took out a mortgage that had a fixed rate for the first two or three years and then had an adjustable rate – and you want to know what your payments will be and whether you’ll be able to make them.

Regardless of the reason for your mortgage anxiety, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know how to help save your home, and how to recognize and avoid foreclosure scams.

Know Your Mortgage

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase? If you can’t tell by reading the mortgage documents you received at settlement, contact your loan servicer and ask. A loan servicer is responsible for collecting your monthly loan payments and crediting your account.

Here are some examples of types of mortgages:

• Hybrid Adjustable Rate Mortgages (ARMs): Mortgages that have fixed payments for a few years, and then turn into adjustable loans. Some are called 2/28 or 3/27 hybrid ARMs: the first number refers to the years the loan has a fixed rate and the second number refers to the years the loan has an adjustable rate. Others are 5/1 or 3/1 hybrid ARMs: the first number refers to the years the loan has a fixed rate, and the second number refers to how often the rate changes. In a 3/1 hybrid ARM, for example, the interest rate is fixed for three years, then adjusts every year thereafter.
• ARMs: Mortgages that have adjustable rates from the start, which means your payments change over time.
• Fixed Rate Mortgages: Mortgages where the rate is fixed for the life of the loan; the only change in your payment would result from changes in your taxes and insurance if you have an escrow account with your loan servicer.

If you have a hybrid ARM or an ARM and the payments will increase – and you have trouble making the increased payments – find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you’re planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you’re planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.

If You’re Behind On Your Payments

If you are having trouble making your payments, contact your loan servicer to discuss your options as early as you can. The longer you wait to call, the fewer options you will have.

Many loan servicers expanded the options available to borrowers during 2008 – it’s worth calling your servicer even if your request has been turned down before. Servicers are getting lots of calls: Be patient, and be persistent if you don’t reach your servicer on the first try.
You also may want to ask if you qualify for the “HOPE for Homeowners (H4H)” program. Congress created H4H to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. The program provides a new, 30-year fixed rate mortgage insured by the Federal Housing Administration (FHA) if you and your lender agree to certain conditions. The program expires September 30, 2011. For more information, see www.hud.gov/foreclosure.

Avoiding Default and Foreclosure

If you have fallen behind on your payments, consider discussing the following foreclosure prevention options with your loan servicer:
Reinstatement: You pay the loan servicer the entire past-due amount, plus any late fees or penalties, by a date you both agree to. This option may be appropriate if your problem paying your mortgage is temporary.

Repayment plan: Your servicer gives you a fixed amount of time to repay the amount you are behind by adding a portion of what is past due to your regular payment. This option may be appropriate if you’ve missed a small number of payments.

Forbearance: Your mortgage payments are reduced or suspended for a period you and your servicer agree to. At the end of that time, you resume making your regular payments as well as a lump sum payment or additional partial payments for a number of months to bring the loan current. Forbearance may be an option if your income is reduced temporarily (for example, you are on disability leave from a job, and you expect to go back to your full time position shortly). Forbearance isn’t going to help you if you’re in a home you can’t afford.

Loan modification: You and your loan servicer agree to permanently change one or more of the terms of the mortgage contract to make your payments more manageable for you. Modifications may include reducing the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A modification also may involve reducing the amount of money you owe on your primary residence by forgiving, or cancelling, a portion of the mortgage debt. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt may be excluded from income when calculating the federal taxes you owe, but it still must be reported on your federal tax return. For more information, see www.irs.gov. A loan modification may be necessary if you are facing a long-term reduction in your income or increased payments on an ARM.

Before you ask for forbearance or a loan modification, be prepared to show that you are making a good-faith effort to pay your mortgage. For example, if you can show that you’ve reduced other expenses, your loan servicer may be more likely to negotiate with you.

Selling your home: Depending on the real estate market in your area, selling your home may provide the funds you need to pay off your current mortgage debt in full.

Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to get credit, buy another home, get life insurance, or sometimes, get a job. Still, it is a legal procedure that can offer a fresh start for people who can’t satisfy their debts.
If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

To learn more about Chapter 13, visit www.usdoj.gov/ust; it’s the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that oversees bankruptcy cases and trustees.

If you have a mortgage through the Federal Housing Administration (FHA) or Veterans Administration (VA), you may have other foreclosure alternatives. Contact the FHA (www.fha.gov) or VA (www.homeloans.va.gov) to talk about them.

Contacting Your Loan Servicer

Before you have any conversation with your loan servicer, prepare. Record your income and expenses, and calculate the equity in your home. To calculate the equity, estimate the market value less the balance of your first and any second mortgage or home equity loan.

Then, write down the answers to the following questions:

• What happened to make you miss your mortgage payment(s)? Do you have any documents to back up your explanation for falling behind? How have you tried to resolve the problem?
• Is your problem temporary, long-term, or permanent? What changes in your situation do you see in the short term, and in the long term? What other financial issues may be stopping you from getting back on track with your mortgage?
• What would you like to see happen? Do you want to keep the home? What type of payment arrangement would be feasible for you?

Throughout the foreclosure prevention process:

• Keep notes of all your communications with the servicer, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome.
• Follow up any oral requests you make with a letter to the servicer. Send your letter by certified mail, “return receipt requested,” so you can document what the servicer received. Keep copies of your letter and any enclosures.
• Meet all deadlines the servicer gives you.
• Stay in your home during the process, since you may not qualify for certain types of assistance if you move out. Renting your home will change it from a primary residence to an investment property. Most likely, it will disqualify you for any additional “workout” assistance from the servicer. If you choose this route, be sure the rental income is enough to help you get and keep your loan current.

Housing and Credit Counseling

You don’t have to go through the foreclosure prevention process alone. A counselor with a housing counseling agency can assess your situation, answer your questions, go over your options, prioritize your debts, and help you prepare for discussions with your loan servicer. Housing counseling services usually are free or low cost.

While some agencies limit their counseling services to homeowners with FHA mortgages, many others offer free help to any homeowner who is having trouble making mortgage payments. Call the local office of the U.S. Department of Housing and Urban Development (www.hud.gov) or the housing authority in your state, city, or county for help in finding a legitimate housing counseling agency nearby. Or consider contacting the Homeownership Preservation Foundation (HPF) at 888-995-HOPE or www.hopenow.com. HPF is a nonprofit organization that partners with mortgage companies, local governments, and other organizations to help consumers get loan modifications and prevent foreclosures.

When choosing a counselor, beware of anyone charging large up-front fees or guaranteeing you a loan modification or other solution to stop foreclosure. They shouldn’t be charging you high fees or making any guarantees. Take your business elsewhere.

Consider Giving Up Your Home Without Foreclosure

Not every situation can be resolved through your loan servicer’s foreclosure prevention programs. If you’re not able to keep your home, or if you don’t want to keep it, consider:

Selling Your House: Your servicers might postpone foreclosure proceedings if you have a pending sales contract or if you put your home on the market. This approach works if proceeds from the sale can pay off the entire loan balance plus the expenses connected to selling the home (for example, real estate agent fees). Such a sale would allow you to avoid late and legal fees and damage to your credit rating, and protect your equity in the property.

Short Sale: Your servicers may allow you to sell the home yourself before it forecloses on the property, agreeing to forgive any shortfall between the sale price and the mortgage balance. This approach avoids a damaging foreclosure entry on your credit report. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt on your primary residence may be excluded from income when calculating the federal taxes you owe, but it still must be reported on your federal tax return. For more information, see www.irs.gov, and consider consulting a financial advisor, accountant, or attorney.

Deed in Lieu of Foreclosure: You voluntarily transfer your property title to the servicers (with the servicer’s agreement) in exchange for cancellation of the remainder of your debt. Though you lose the home, a deed in lieu of foreclosure can be less damaging to your credit than a foreclosure. You will lose any equity in the property, although under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt on your primary residence may be excluded from income when calculating the federal taxes you owe. However, it still must be reported on your federal tax return. For more information, see www.irs.gov. A deed in lieu of foreclosure may not be an option for you if other loans or obligations are secured by the property on your home.

Be Alert to Scams

Scam artists follow the headlines, and know there are homeowners falling behind in their mortgage payments or at risk for foreclosure. Their pitches may sound like a way for you to get out from under, but their intentions are as far from honorable as they can be. They mean to take your money. Among the predatory scams that have been reported are:

• The foreclosure prevention specialist: The “specialist” really is a phony counselor who charges high fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions results in saving the home. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.Some of these companies even use names with the word HOPE or HOPE NOW in them to confuse borrowers who are looking for assistance from the free 888-995-HOPE hotline.
• The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the “rescuer” walks off with most or all of the equity.
• The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.

Kevin Byrd
Senior Mortgage Consultant
Amerisave Mortgage Corporation
Learn How To Become Debt Free

Paying down debt is one of the best steps consumers can take to get through a recession.
What’s on your credit card is one of the most important types of debt to rein in. One way to get control over multiple cards with varying balances and interest rates is to transfer your balances to a new card with a lower rate. In fact, many cards advertise balance transfer rates as low as 0% for a set period, which is an appealing alternative to the annual interest rates of 15% or more.

But as is often the case with credit cards, the devil is in the details. If you are planning on a balance transfer to solve your revolving debt issues, here are a few things to consider.

Teaser rates don’t last: Thanks to the Federal Truth in Lending Act, credit card companies are required to outline the card’s fees and rates in a table called the Schumer Box. While the information has to be present in the table, it can be confusing, given the myriad of rates and percentages included in the summary. When you locate the table (often found under the “Pricing and Terms” section of the card’s introductory materials), find the section that describes the balance transfer APR (annual percentage rate). There will be a number of rates listed, one of which is the 0% APR (or other low rate) that first caught your eye. That rate is the teaser rate, and it can last for just a few months or more than a year. After that introductory period, your rate will automatically switch to the card’s higher regular rate.

Your credit score matters: Not everyone will be eligible for the lowest interest rates. In most cases, credit card companies take a tiered approach, offering consumers with high credit scores (in the 750 range) the best rates, and higher rates for those with poor credit history (in the low 600s). Which tier you qualify for is at the discretion of the credit card company, both at the time of application or at any point afterward.

Default rates can be steep: The credit card industry works under the concept of universal default, where a late payment on one card can lead to rate increases on any other card you hold. You may be less likely to miss a payment if you have a single card versus multiple cards, so consolidating your balances could help you avoid hefty default rates. But not all cards charge the same default rates, so check those before deciding on a new card.

Watch your debt-to-available-credit ratio: Part of your credit rating is based on how much of your available credit you have already used. The rule of thumb is to keep your debt-to-available-credit at around 30%. For example, if you have a $10,000 limit on a card, you’ll want to keep the balance below $3,000 to avoid any negative impacts on your credit rating. Keep that in mind when choosing the overall credit limit on your new card, or which balances you want to transfer.

Reining in your spending and setting up a strategy to quickly and effectively pay down balances is still the best long-term way to resolve debt problems. But in the meantime, transferring balances to a low-interest card may help you repay debt more quickly. By Peter McDougall

Kevin Byrd
Learn How To Become Debt Free

Are you in need of cash?
Do you want to consolidate your debts?
Are you receiving home equity loan or refinancing offers that seem too good to be true?
Does your home need repairs that contractors tell you can be easily financed?

If you are a homeowner who needs money to pay bills or for home repairs, you may think a home equity loan is the answer. But not all loans and lenders are the same–you should shop around. The cost of doing business with high-cost lenders can be excessive and, sometimes, downright abusive. For example, certain lenders–often called “predatory lenders”–target homeowners who have low incomes or credit problems or who are elderly by deceiving them about loan terms or giving them loans they cannot afford to repay.

Borrowing from an unscrupulous lender, especially one who offers you a high-cost loan using your home as security, is risky business. You could lose your home and your money. Before you sign on the line,

Think about your options
Do your homework
Think twice before you sign
Know that you have rights under the law

Think about Your Options

If you’re having money problems, consider these options before you put your home on the loan line.

Talk with your creditors or with representatives of non-profit or other reputable credit or budget counseling organizations to work out a plan that reduces your bill payments to a more manageable level.

Contact your local social service agency, community or religious groups, and local or state housing agencies. They may have programs that help consumers, including the elderly and those with disabilities, with energy bills, home repairs, or other emergency needs.

Contact a local housing counseling agency to discuss your needs. Call the U.S. Department of Housing and Urban Development toll-free at 800-569-4287 or click here to find a center near you.

Talk with someone other than the lender or broker offering the loan who is knowledgeable and you trust before making any decisions. Remember, if you decide to get a home equity loan and can’t make the payments, the lender could foreclose and you would lose your home.

If you decide a loan is right for you, talk with several lenders, including at least one bank, savings and loan, or credit union in your community. Their loans may cost less than loans from finance companies. And don’t assume that if you’re on a fixed income or have credit problems, you won’t qualify for a loan from a bank, savings and loan, or credit union–they may have the loan you want!

Do Your Homework

Contact several lenders–and be very careful about dealing with a lender who just appears at your door, calls you, or sends you mail. Ask friends and family for recommendations of lenders. Talk with banks, savings and loans, credit unions, and other lenders. If you choose to use a mortgage broker, remember they arrange loans but most do not lend directly. Compare their offers with those of other direct lenders.

Be wary of home repair contractors that offer to arrange financing. You should still talk with other lenders to make sure you get the best deal. You may want to have the loan proceeds sent directly to you, not the contractor.

Comparison shop. Comparing loan plans can help you get a better deal. Whether you begin your shopping by reading ads in your local newspapers, searching on the Internet, or looking in the phone book, ask lenders to explain the best loan plans they have for you. Beware of loan terms and conditions that may mean higher costs for you. Get answers to these questions and use the worksheet to compare loan plans:

Interest Rate and Payments

What are the monthly payments? Ask yourself if you can afford them.

What is the annual percentage rate (APR) on the loan? The APR is the cost of credit, expressed as a yearly rate. You can use the APR to compare one loan with another.

Will the interest rate change during the life of the loan? If so, when, how often, and by how much?

Term of Loan

How many years will you have to repay the loan?

Is this a loan or a line of credit? A loan is for a fixed amount of money for a specific period of time; a line of credit is an amount of money you can draw as you need it.

Is there a balloon payment–a large single payment at the end of the loan term after a series of low monthly payments? When the balloon payment is due, you must pay the entire amount.

Points and Fees

What will you have to pay in points and fees? One point equals 1 percent of the loan amount (1 point on a $10,000 loan is $100). Generally, the higher the points, the lower the interest rate. If points and fees are more than 5 percent of the loan amount, ask why. Traditional financial institutions normally charge between 1 and 3 percent of the loan amount in points and fees.

Are any of the application fees refundable if you don’t get the loan?

How and how much will the the lender or broker be paid? Lenders and brokers may charge points or fees that you must pay at closing or add on to the cost of your loan, or both.

Penalties

What is the penalty for late or missed payments?

What is the penalty if you pay off or refinance the loan early (that is, is there a pre-payment penalty)?

Credit Insurance

Does the loan package include optional credit insurance, such as credit life, disability, or unemployment insurance? Depending on the type of policy, credit insurance can cover some or all of your payments if you can’t make them. Understand that you don’t have to buy optional credit insurance–that’s why it’s called “optional.” Don’t buy insurance you don’t need.

Credit insurance may be a bad deal for you, especially if the premiums are collected up-front at the closing and financed as part of the loan. If you want optional credit insurance, ask if you can pay for it on a monthly basis after the loan is approved and closed. With monthly insurance premiums, you don’t pay interest and you can decide to cancel if the premiums are too high or if you believe you no longer want the insurance.

After you have answers to these questions, start negotiating with more than one lender. Don’t be afraid to make lenders and brokers compete for your business by letting them know you are shopping for the best deal. Ask each lender to lower the points, fees, or interest rate. And ask each to meet–or beat–the terms of the other lenders.

Once You’ve Selected a Lender, Get the Following

A “Good Faith Estimate” of all loan charges. The estimate must be sent within 3 days of applying.

Blank copies of the forms you’ll sign at closing, when the loan is final. Study them. If you don’t understand something, ask for an explanation.

Advance copies of the forms you’ll sign at closing with the terms filled in. A week or two before closing, contact the lender to find out if there have been any changes in the Good Faith Estimate. By law, you can inspect the final settlement statement (also called the HUD-1 or HUD-1A form) one day prior to closing. Study these forms. Write down any questions you want to ask.

Think Twice before You Sign

Have a knowledgeable friend, relative, attorney, or housing counselor review the Good Faith Estimate and other loan papers before you sign the loan contract. Be sure the terms are the same ones you agreed to. For example, a lender should not promise one APR and then–without good reason–increase it at closing.

Refer to the list of questions you’ve written down. Ask where these terms are covered in the loan contract. And ask for an explanation of any dollar amount or term you don’t understand. Don’t let anyone rush you into signing the loan contract.

Make sure all promises, oral and otherwise, are put in writing. It’s only what’s in writing that counts.

Get a copy of the documents you signed before you leave the closing.

Don’t Sign on the Dotted Line if the Lender …

Tells you to falsify information on the loan application (for example, suggests that you write down more income than you really have).

Pressures you into applying for a loan for more money than you need, or one that has monthly payments larger than you can afford.

Promises one set of terms but gives you another with no good reason for the change.

Tells you to sign blank forms or forms that aren’t completely filled in. If an item is supposed to be blank, draw a line through the space and initial it.

Pressures you to sign today. A good deal today should be available tomorrow.

Know that You Have Rights under the Law

You Have 3 Business Days to Cancel the Loan

If you’re using your home as security for a home equity loan (or for a second mortgage loan or a line of credit), federal law gives you 3 business days after signing the loan papers to cancel the deal–for any reason–without penalty. You must cancel in writing. The lender must return any money you have paid to date.

Do You Think You’ve Made a Mistake?

Has the 3-day period during which you may cancel passed and you’re worried that you’ve gotten in over your head? Do you think your loan fees were too high? Do you believe you were steered into monthly payments you can’t afford? Has your lender repeatedly pressured you to refinance? Is your loan covered by insurance you don’t need or want?

If you think you’ve been taken advantage of, state and federal laws may protect you. Also, the following organizations may be able to help:

Your local or state bar association–sometimes listed under “Lawyers Referral Service” in the Yellow Pages of your phone book. The association may be able to refer you to low-cost or no-cost lawyers who can help.

Your local consumer protection agency, state attorney general’s office, or state office on aging, listed in the Blue Pages of your phone book.

Your local fair housing group or affordable housing agency, housing counseling agency, or state housing agency.

Kevin Byrd
Senior Mortgage Consultant
Amerisave Mortgage Corporation

Over the weekend, my bank — Wachovia — sent me an update about my credit card terms. With the Fed cutting rates to new lows, I thought perhaps Wachovia was informing me that the interest rate it charged me on my balance (if I had one) was going down. But that wasn’t it at all.

In turns out that Wachovia is changing its policy so that even when the Prime Rate — that rate that banks use to set consumer interest rates for everything from personal loans to mortgages to auto loans — goes below 6 percent, my default annual percentage rate will not go below 29.99 percent. (For cash advances, the interest rate is 21.15 percent.)

This percentage rate, by the way, is more than double the average of 14.33 percent, according to IndexCreditCards.com.

That suggests banks, in order to protect their own bottom lines, won’t be passing on the Fed’s low rates to consumers. By Kimberly Palmer

Has anyone else experienced changes to the credit card terms or other types of loans lately?

 Imagine being free of debt — no more sleepless nights over mounting credit card balances, no more ball-and-chain of debt feeding your anxieties, and no chance of threats from dreaded collection agencies. You can do it! Here’s the scoop — in one minute flat. Imagine being free of debt — no more sleepless nights over mounting credit card balances, no more ball-and-chain of debt feeding your anxieties, and no chance of threats from dreaded collection agencies. You can do it! Here’s the scoop — in one minute flat.

If you owe money, you’ve got plenty of company. So many people are borrowing these days that more than $2 trillion in consumer debt is currently outstanding, up 23 percent since 2000. And that doesn’t even include mortgages.

Getting into debt is easy, of course. Just open your mailbox, and you’ll probably be greeted by a cascade of credit-card and mortgage-refinancing offers. But getting out is another story. These days the problem isn’t only for slackers who charge too much without a thought of how to pay it back. For even the most financially conscientious among us, a descent into debt can be triggered by unexpected medical expenses, a job loss, or a costly divorce.

For anyone who has been coasting along, making minimum monthly payments on credit cards and taking on more and more debt just to pay the bills, the time for action is now. If you find yourself in that situation, here are five steps that can help:

1. Determine how bad it is
Take an unflinching look at your bills. Add up the total balances to get a grip on how much debt you currently have outstanding. You can find out what it will cost you to pay back that debt over various time periods, using the calculators at sites such as CardWeb.com or Bankrate.com. For each credit card, put in the current balance, the interest rate, and how much of the balance you pay each month. For example, if you’ve been paying the minimum 4 percent on a balance of $10,000 at an interest rate of 18 percent, it will take you 178 months and cost you $5,916 in interest to pay off the debt. Boost your payments to 5 percent, and the term drops to 134 months and total interest payments to $4,240.

2. Don’t bet the house
It may seem tempting to take all that credit-card debt and pay it off with a home-equity loan. The rates are lower than those on credit cards, recently averaging 7.33 percent for home-equity loans and 7.04 percent for home-equity lines of credit, according to Bankrate.com. Plus the interest you pay is generally tax deductible. But using your home equity to fix a debt problem can be a big mistake, especially for people who have difficulty keeping their expenses under control.

For starters, you’d be turning an unsecured credit-card charge for last night’s pizza into a 30-year debt secured by your home. Further, human nature being what it is, once those credit cards open up, you may be sorely tempted to hit the malls. Before you know it, you may have maxed out your cards again, and now you have a home-equity loan to pay off, too.

Another bad idea: transferring your credit-card balances to a new card that promises a low interest rate or none at all for a period of time on transfers. If you read the fine print, you’ll find that if you’re late with even one payment, that deal is finished and you’re trapped with another high-interest card.

3. Put away the plastic
“Look in the mirror and say, ‘The debt stops here,’ ” suggests Amelia Warren Tyagi, co-author with Elizabeth Warren of “All Your Worth” (Free Press, 2005). If you’re carrying too much debt, she says, “you need to go to an all-cash diet.” Take those cards out of your pocket, get everyone who charges under your name on board, and assign a percentage of your monthly income to pay down the balances over the long haul; Tyagi suggests shooting for 20 percent. You can keep one card active for emergencies, but leave it at home and preferably under lock and key. This takes some doing, of course, and may require you to postpone or forgo other purchases. But it’s better to work things out on your own than under a court order.

If you cling to debt to support your lifestyle, “the stakes keep getting higher and higher,” says Nancy Castleman, a founder of Good Advice Press. Whether you’re used to using credit for the next-generation MP3 player or this season’s silk blouse, ask yourself first, “Do I really need it?”

If your problems are the result of a financial catastrophe, such as huge medical bills, don’t panic or be pressured into paying the noisiest bill collector first. Prioritize for the short-term and pay the bills that keep a roof over your head. Call the credit-card issuers to negotiate stretching out payments. One tactic is to say you’ll take up another offer and stop using their card. “You’re in a position of strength. You’re paying them,” says Scott Bilker, founder of DebtSmart.com and author of “Talk Your Way Out of Credit Card Debt” (Press One, 2003).

4. Choose your advisers wisely
Credit-counseling agencies are often touted as the place to go for advice and to set up a debt-management program. But in the past some disreputable ones have only dug consumers in deeper. A common ploy: taking your money with the promise of paying off bills, then simply pocketing the cash. The Federal Trade Commission has cracked down on some of the bad apples, but you still have to be careful. If an agency says it uses your first month’s payment to creditors for its own fee or as a “voluntary contribution,” run the other direction.

You can check credentials at The Association of Independent Consumer Credit Counseling Agencies (www.aiccca.org) and the National Foundation for Credit Counseling (www.nfcc.org), whose members are supposed to adhere to certain standards. Also ask your state attorney general’s office or local Better Business Bureau about complaints. And don’t hesitate to shop around, which you can do by phone. In particular, ask about fees, which can vary from agency to agency.

Be aware that even the best credit-counseling agency is limited in what it can do for you. It can’t do anything about secured loans, that is, your mortgage or a car loan, nor can it reduce interest on student loans. It can negotiate with credit-card companies, hospitals, department stores, and lawyers, but many aren’t yielding as much as they once did. In a study of people who’ve used credit counseling, Jinhee Kim of the University of Maryland found the best results came about when people sought counseling early on and, most important, stayed with it.

It generally takes about five years to pay off debts with a debt-management plan. Agencies get most of their funds from the creditors they negotiate with, but you may also have to pay fees, often about $75 to start and $50 a month after that.

5. Choose the Money Merge Account System
United First Financial™ can help you achieve your financial goals through the strategic interest cancellation and wealth-building power of the revolutionary Money Merge Account™ program.

You can save time and interest on nearly every debt you have. The key is to make your money work smarter with little impact to your standard of living. The Money Merge Account program calculates the fastest way to pay off your mortgage and consumer debt, and build a substantial savings nest egg based on your specific income, payments, living expenses and financial goals. You never have to guess which loans to pay off first, when to pay or how much extra to send.

Make believe you’ve paid off credit cards, student loans or anything else you owe. How would you restructure your life? Would you feel free to take a chance on a new career? To move to a new place? To retire early?

Would you create a financial plan for all the money you used to throw at monthly payments? Or would you slide slowly back into debt?

“The people who have a game plan are much less likely to wind up in trouble again,” said Robert D. Manning, the author of “Credit Card Nation: The Consequences of America’s Dangerous Addiction to Credit.”

We put up with so much just because we need to pay the bills: abusive lenders, bad jobs, bad marriages. It’s easy to fantasize about their absence. But what takes their place?

What would you do if you could build wealth and eliminate debt simultaneously, by putting your money to work for you? Would you take a family vacation? Start a college fund? Invest in real estate?

In 2006 I was introduced to United First Financial™ . U1st is helping my family achieve our financial goals through the strategic interest cancellation and wealth-building power of the revolutionary Money Merge Account™ program.

I now on track to pay off my mortgage 18 years faster and all my other debt.
After a year and a half it is right on track. I had been using ver 3.0 but just got my free upgrade to the ver. 4.0 MMA. WOW it’s a huge difference in the upgrade.

• Comprehensive budgeting system, fine-tuned to the sensitivity of my goals
• Enhanced calculations to pay down debt
• Software settings that allow how aggressively I want to pay down debt & build wealth
• Ability to pay down multiple properties at the same time
• Text messaging bill pay
• New unbelievable user-friendly software interface
• Ongoing financial education and coaching
• Live toll-free client support ****

You can save time and interest on nearly every debt you have. The key is to make your money work smarter with little impact to your standard of living. The Money Merge Account program calculates the fastest way to pay off your mortgage and consumer debt, and build a substantial savings nest egg based on your specific income, payments, living expenses and financial goals. You never have to guess which loans to pay off first, when to pay or how much extra to send.

Most of the people I show this program to get it! but some don’t.

Some people would rather continue doing whatever it is there doing, hoping for a different result. I encourage everyone that has any type of debt to at least take 15 minutes to get a free analysis to see if they can eliminate the interest on that debt and pay it off faster. Image driving down the freeway and you rolled down the window and your $100.00 bill few out, would you stop to get it? Well paying interest on debt is like throwing money out the window while driving down the freeway.

The Money Merge Account program goes beyond helping individuals and families achieve success paying down debt—it also makes it possible to accumulate wealth targeted to each client’s personal financial goals. Simply enter your financial goals, whether it’s to pay off a vacation home, fund early retirement or pursue your wildest dream. Enter all the variables: principal, interest rate, term—even cash rewards on credit cards

Using this information, the Money Merge Account program calculates how to pay off debt with some of the fastest payoff results imaginable—and build a substantial savings nest egg.

The Money Merge Account program offers enhanced features that truly take your financial life to a new level: A Consumer Bailout package for Main street homeowners.