What impact does debt payment services have (when not deliquent) on refinancing ones home?
When you refer to ?debt payment services,? I assume that you are referring to the services offered by Consumer Credit Counseling Services, or CCCS. CCCS companies offer numerous services, such as financial counseling and budget planning, as well as Debt Management Plans (DMPs). In a DMP, the CCCS would arrange a new payment amount with each of your creditors, usually based on a reduced interest rate. You would then make a single monthly payment to the CCCS which would distribute the funds to your creditors, based on the new payment amounts. A CCCS program should not affect your credit score, as a well planned CCCS plan should prevent your accounts from becoming delinquent. Since maintaining your credit rating is a major concern, as you are planning to refinance your home, make sure that the CCCS plan you are considering will keep you accounts current.
There are several drawbacks to CCCS that you must consider. First, depending on your creditors, it may not be able to reduce your monthly payments enough to improve your financial situation. Second, the average DMP takes around five years to pay off your debts, so you must be willing and able to commit to a long-term repayment plan. Most importantly, it may have a negative impact on your ability to obtain a loan. Even though CCCS programs do not generally affect your credit score, many lenders view enrolling in a CCCS program the same as filing Chapter 13 bankruptcy when making lending decisions, so you may not wish to enter into a DMP if you are planning to refinance your home in the near future.
Any debt relief option, be it CCCS, Debt Settlement, or even bankruptcy, will likely have a negative impact on your ability to refinance your home. Debt settlement programs and bankruptcy will directly have a negative impact on your credit score. CCCS will likely be considered by potential lenders as a sign of financial trouble, which could make obtaining a loan much more difficult, even though CCCS will likely not have a direct negative impact on your credit score. Since you are trying to refinance your home, I encourage you to complete the refinance before you proceed with any debt assistance program. Once you have completed your refinance, you can explore the debt relief options available to you to determine which will best assist you in resolving your financial difficulties. To review the options available to you, I encourage you to visit the Bills.com Debt Relief page at http://www.bills.com/debt-help/.
I wish you the best of luck in finding a refinance loan. If you submit your contact information on the Bills.com Savings Center, at Mortgage Quote, we can have several pre-screened mortgage brokers and lenders contact you to discuss the refinance options available to you.
I hope that the information I have provided helps you Find. Learn. Save.