/ My WordPress Blog Mon, 20 Apr 2020 15:10:13 +0000 en-US hourly 1 Government Agency Loans With Cession of the Fifth: How They Work, Guide /government-agency-loans-with-cession-of-the-fifth-how-they-work-guide/ /government-agency-loans-with-cession-of-the-fifth-how-they-work-guide/#respond Mon, 20 Apr 2020 15:10:13 +0000

Thanks to Government Agency loans with assignment of one fifth, workers and public pensioners can obtain credit at subsidized rates. But what are these loans, how do they work, what rates do they offer and above all how to request them? Let’s review all the answers.

Government Agency loans: how the assignment of the fifth works

Government Agency loans: how the assignment of the fifth works

The Government Agency Loans with assignment of the fifth are actually loans granted by Social Institute, given that Government Agency was abolished at the beginning of 2012. In fact, Social Institute is the new reference social security institution for public workers and pensioners.

Loans on assignment of the fifth involve an automatic repayment process, characterized by an installment that cannot exceed the maximum limit of 1/5 of the value of the monthly allowance, intended as a salary or pension.

Multi-year Government Agency loans and secured loans

Multi-year Government Agency loans and secured loans

What are Government Agency loans with assignment of the fifth? This category includes two types of products, direct multi-year loans and multi-year guaranteed loans. Direct multi-year courses are provided only for personal needs that fall within the purposes set out in the Social Institute Regulation (many options are covered, from car purchase to purchase of the first home).

The beneficiaries are members of the Unified Management of credit and social benefits who have:

  • at least four years of service seniority;
  • at least four years of contributions paid to the Unified Management;
  • open-ended or fixed-term contract lasting at least three years.

Throughout the repayment period, the employment contract must be valid and the severance indemnity must be provided as a guarantee of reimbursement (for temporary workers).

Government Agency 2017 loan rates

Government Agency 2017 loan rates

The options in terms of duration are two: five-year or ten-year, we are talking about 60 or 120 monthly installments. As far as the rate is concerned, we find an annual nominal rate which corresponds to 3.50%. The beneficiary will also have to bear administrative costs, for 0.50%, and risk fund premium.

The request for funding must be sent using the online services of the Social Institute portal, in particular the service ” Multi-year Loans web applications ” will be used.

If the application is sent by workers on duty, it must be sent in collaboration with the reference administration. If, on the other hand, the applicant is a pensioner, the request must be sent directly using the reserved area of ​​the Social Institute website (possession of the PIN issued by the social security institution is essential).

Secured multi-year loans: what they offer

Secured multi-year loans: what they offer

The multi-year guaranteed loans are not granted by Social Institute but by banks or financial institutions that have defined an agreement with the social security institution. Therefore, the lending institutions determine the interest rate applied to the product.

Also in this case we are talking about Government Agency loans with assignment of the fifth with structured repayment in five or ten years. The applicant must provide the application in four copies to the reference administration.

Together with the application, a medical certificate of healthy physical constitution will be attached.

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Record number of credit card cancellations in banks in Norway /record-number-of-credit-card-cancellations-in-banks-in-norway/ /record-number-of-credit-card-cancellations-in-banks-in-norway/#respond Sat, 11 Apr 2020 14:46:06 +0000

Earlier this year, Finance Minister Siv Jensen tightened the requirements for banks offering consumer loans through new regulations regulating the rules for processing applications.

Banks can grant loans only to those clients who have sufficient earnings to repay the loan within 5 years. The total customer debt cannot exceed five times the annual income.

Debt Register

The next step is the new debt register, Credit register, introduced on July 1. The debt register does not provide a full debt review but contains a list of cash loans and credit cards that applicants for a new loan have. To date, banks have obtained information on the total amount of debt from Good Finance. The problem, however, is that the debts incurred this year are not visible on the tax return, and if the borrower does not inform the bank about new debts himself, he is able to cheat the bank’s verification.

We received several loan applications, which at first glance seemed transparent, but checking the debt register showed a greater consumer debt than as specified in the applications. These requests were rejected – said Kai-Morten Terning, Communications Manager at Bank Norwegian, in an interview for E24.

Information about debts in the Credit register is updated daily to prevent borrowers from hiding their debts from the bank.

What happens in the register when the debt is repaid?


After paying off the debt, information about it is removed from the Credit register. However, it should be remembered that after paying off the credit card or cash loan, information on debts on Good Finance will still be visible to banks until they receive a new Good Finance in the next tax year.

The loan balance will show the number zero, but the interest paid on the loan, for which the borrower is entitled to a tax refund, will still leave a mark on the debt.

Customers quickly get rid of credit cards


Regulatory changes mean that all consumer credit granted – including the unused credit card limit – now counts when calculating the debt ratio. High levels of debt can cause problems in getting a new loan.

Below: An example of a debt report downloaded from the Credit register. The report shows 4 credit cards with an unused limit that affects the total amount of debt.

We have seen a clear trend where customers contact banks themselves to cancel credit cards or lower the card’s amount limit, ‘said Terning. According to the manager, the debt register increased consumer awareness and led people to take the lead over their debts. Interest in refinancing loans has also grown, which allows all debts to be transferred to one bank. In practice, this means taking another loan that will cover your debts. When paying off debt, creditworthiness is developed, which is why you can count on better conditions and lower interest rates.

The aim of all introduced regulations is to reduce the risk to the Norwegian economy. According to the Ministry of Finance, historically high household debt is one of the things that make the Norwegian economy the most vulnerable.

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6 guaranteed rights for every credit card holder /6-guaranteed-rights-for-every-credit-card-holder/ /6-guaranteed-rights-for-every-credit-card-holder/#respond Sat, 11 Apr 2020 14:15:44 +0000

At credit card companies, the money does not always have the same performance. Several laws exist that protect consumer rights with credit cards. Exercise your rights with your credit card. You never know when to remind a credit card company to follow the law.


Make unbiased decisions when applying for new loans

Make unbiased decisions when applying for new loans

When you apply for credit, credit card issuers cannot discriminate against you because of your gender, race, religion, nationality, age, marital status or whether you are receiving public support.

The credit card issuer can deny your credit card application if you do not meet the legal age of a credit card forever. Credit card companies cannot deny your credit card application because they receive public support and they have let public support included in your income.

Credit card companies will tell you the result of your credit card application within 30 days. If your application is rejected, she must tell you why and give 60 days to find out why your application was rejected. You are also eligible for a free credit score if your credit card application is denied or if you are approved but on less favorable terms.


Accurate and timely credit card statements

No liability for unauthorized credit card fees

Credit cards have a bill at least 21 days before the due date, enough time to mail your payment on time and to take advantage of the grace period if you have one. Your billing includes credits and fees to your account since the last billing. It will also match your minimum payment, the due date, and some information about late payments, and the impact of making the minimum payment.

You have the right to contest billing errors. If your credit card statement has a mistake, you usually have 60 days to contest the mistake with the credit card company. Although many credit card issuers take a dispute over the phone, you must make your dispute in writing to ensure your rights are fully protected by law.


No liability for unauthorized credit card fees

If your credit card is used without your consent, you can reduce your liability for the cost by taking certain actions. First of all, you should be missing your credit card report as soon as possible. You won’t be responsible for any of the unauthorized fees if you report your credit card stolen before the thief gets a chance to use it, but you could be liable up to $ 50 if you report the loss late. You are not responsible at all for using your credit card number only if you still have the credit card in your possession.


The ability to view and correct your credit report

Your credit card issuer can report details about your credit card and your payment history to a credit bureau, also called a credit bureau or credit bureau. You have the right to view your credit report and make sure that the information on your credit card report is accurate. You can dispute any incorrect information with the credit bureau or with the credit card company.


Advance notice of any change to your credit card contract

Advance notice of any change to your credit card contract

Credit card companies sometimes make major changes to the credit card contract, such as increasing your interest rate or introducing a new annual fee. You have the right to reject these changes and withdraw your credit card under the current conditions. The credit card issuer must send your a 45-day pre-notification before a significant change takes effect. They must also give you instructions on how to opt-out of these changes.


How To Deal With a Violation of Your Credit Card Holder’s Rights

You can file a complaint against a credit card issuer that violates your rights with the appropriate regulatory agency. The Consumer Financial Protection Bureau is responsible for enforcing laws for credit card companies. For now, complaints about debt collectors and credit bureaus continue to be sent to the Federal Trade Commission. Several different agencies regulate credit card companies, such as the National Credit Union Administration. You can also file a complaint with these agencies.

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Do student loans go to my credit report? /do-student-loans-go-to-my-credit-report/ /do-student-loans-go-to-my-credit-report/#respond Thu, 02 Apr 2020 14:14:50 +0000

Student loans can have a positive or negative impact on credit

Yes, your student loans appear on your credit report and are credited to your credit rating, just like all other loans. This means that they can have a positive effect on your credit rating if you make payments immediately, or a negative effect if you miss payments or go to the default.

Student loan debt 


If you take out a reasonable amount of student loan debt and make up for it after graduation, your credit report will reflect that you are a conscientious lender who is good at financial management.

It might make you look attractive when you need to borrow more money in the future.

On the other hand, not paying your student loans on time, allowing your student loans to fall into collections or not paying student loans, will also go to your credit report and will definitely have an adverse effect on your credit score.

Prevent student loans from negatively affecting credit


Needless to say, it’s crucial to keep your student loan in good shape, as it can come back to haunt you when you try to buy your next car, your first home, or even when applying for some jobs. Here are some other points to keep in mind how student loans can affect your credit:

  • Buying for private student loans can affect your credit. Applying for federal student loans does not appear on your credit report until you begin credit. But if you still need extra funds outside of federal student loans to pay for your college expenses, you may decide to buy private student loans. These apps are likely to appear on your credit and look bad if it looks like you are applying for too many lenders. Manage this by first completing your research, before providing any specific applications that are likely to be reported.
  • Credits appear on your credit report even when they are deferred. For the record, your student loans will typically be displayed on your credit report even while you are still in college and still technically in deferral. However, this usually does not have a dramatic effect on your ability to obtain non-educational loans because many lenders are more interested in your current monthly payment obligations, which are zero while you are still in school, as opposed to your actual loans.

Dealing with Student Loans After College


It is not uncommon for you to have trouble paying off your loans when you are out of school and entering the workforce (or trying to do so). Here are some tactics that can help you deal with high student balances:

  • Delays can help if you are unable to make a student loan payment. Review federal student loan payment options carefully as they may change to reflect your earning power after graduation. Depending on your personal situation, you may be entitled to some kind of temporary delay or tolerance to lighten the load. Deferring a loan will allow you to suspend payments for a period of time or temporarily reduce payments. Postponing or withholding does not hurt your credit score, as it is considered “paid as agreed”. You may also want to use one of the income-based student loan repayment options that are more sensitive to the amount of money you have available.
  • Credit consolidation can help. If you have taken out both federal and private student loans during your college career, this can be confusing for you and may look messy on your credit report. You may also be more able to miss a payment, simply because different loans have different payment dates and payment amounts. It may be helpful to use a direct consolidation loan for your federal student loans so you only have one monthly payment.
  • Ignoring your credits does not improve your situation. If you have experience with financial difficulties, trying to deal with student loans feels like another burden on your shoulders. It looks like it would be easier to crawl into a hole and hide, but that really just ends up making things worse. Late payments start appearing on your credit report and limit your ability to make alternative payment methods. If you are fully in charge of your federal student loans, this will leave a whole host of negative actions and make your life even more miserable. A student loan default can remain on your credit report for seven years. The government can pay your salary and even withhold any federal income tax you may have been counting on to get out of this situation.
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Installment loan for Hartz 4 recipients /installment-loan-for-hartz-4-recipients/ /installment-loan-for-hartz-4-recipients/#respond Fri, 27 Mar 2020 15:00:25 +0000

In the case of an installment loan, the borrower agrees regular monthly installments with the same amount, only the first or last installment deviates slightly due to the desired rounding to smooth amounts. Hartz 4 receive unemployed and possible other members of their needs community after the unemployment benefit 1 benefit, which in some exceptional cases lasts for one year, and if they are not entitled to the corresponding benefit. Hartz 4 benefits are also possible as an increase in the salary or the ALG 1 salary, provided the income is not sufficient for living expenses. The story is on

Bank loans at Hartz 4

Bank loans at Hartz 4

As the job center’s services are sufficient to cover their livelihood and there is therefore no financial scope for loan repayment, banks are hesitant to grant an installment loan to Hartz 4 recipients. The best chances for a successful installment loan are the personal audition at the house bank for small loan amounts. Another option to successfully apply for an installment loan for the Hartz 4 recipient is to provide a guarantor or to borrow jointly with a co-applicant.

Since guarantees, in contrast to joint loan applications, can be declared invalid if the guarantor is obviously overreached, the bank must make significantly greater demands on its financial strength. At the same time, it has to convince itself that the guarantor is aware of the scope of his consent. The co-applicant must have a sufficiently high income to repay the loan, but the nature of the relationship with the Hartz 4 recipient is insignificant.

Under no circumstances can an installment loan for Hartz 4 recipients be obtained by providing incorrect information in the loan application, even if there is a corresponding temptation for loans advertised by some direct banks without proof of salary. Corresponding information is also required in the loan application if the submission of proof of income is not required. Incorrect entries authorize the bank to terminate the loan even if the loan is properly repaid and also constitute a crime.

Additional options for installment loan borrowing with Hartz 4

Additional options for installment loan borrowing with Hartz 4

Hartz 4 recipients can take out a loan via platforms for personal loan brokerage. In the case of an installment loan for Hartz 4 recipients processed via such a platform, the loan seeker specifies the intended use of the amount of money to be raised in addition to the desired loan amount. At the same time, he describes his financial situation, including the Hartz 4 connection, openly.

The private lenders registered on the platforms often base their decisions on social criteria and the planned use of money. In order for the loan to be repaid as agreed, the Hartz 4 beneficiary agrees low credit rates.

The installment loan for Hartz 4 recipients via a placement platform is particularly suitable for low loan amounts. If the installment loan is to be taken for urgently necessary purchases, a loan agreement with the case manager in the job center is advisable, for which no interest is payable.

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Bad debt coverage in liability insurance /bad-debt-coverage-in-liability-insurance/ /bad-debt-coverage-in-liability-insurance/#respond Sun, 15 Mar 2020 14:34:28 +0000


Bad debt coverage in private liability is important!

Bad debt coverage in private liability is important!

Private liability insurance usually protects consumers from claims for damages that third parties have against them. But what happens if you become the victim yourself and the victim does not have his own liability insurance.

Then a clause called bad debt coverage comes into play. This important clause is by no means anchored in every policy. In the event of a claim, it protects consumers from those in our society who do not have their own personal liability.

But what exactly is meant by bad debt coverage (short: bad debt coverage)? And what services in relation to this coverage must consumers pay close attention to when taking out liability insurance? In this article, we go into more detail on these and other questions and give interesting tips on all aspects of bad debt coverage in private liability.

Why is bad debt coverage necessary at all?

Why is bad debt coverage necessary at all?

Around a quarter of households in Germany do not have private liability. In return, this means that the risk of being harmed by someone who is not covered by liability insurance can be very high.

If a consumer is now harmed by such a person and he cannot pay the damage out of his own pocket, he often remains at the expense. With minor damage to property, this may not be tragic. But what does it look like when, for example, serious personal injuries are caused, which could potentially run into the millions.

Damage example:

  • A cyclist seriously injures a pedestrian due to careless behavior. As a result, the pedestrian becomes unable to work and can no longer carry out his work. This personal injury can potentially go into the millions with claims for pain and suffering and pension payments. Since the cyclist does not have private liability insurance, the injured party remains at full expense.

This example shows how important it is to cover bad debts in liability insurance . If the injured consumer had integrated this component into his policy, his insurance would have to cover this damage.

Differences in performance of bad debt coverage

Differences in performance of bad debt coverage

In practice, however, there are some differences in default coverage. For example, there are providers who only offer adequate protection from a certain minimum loss level. But where exactly are the policy differences? The following points should be noted:

    • Default coverage itself: Unfortunately, there are still many tariffs that do not cover this risk. However, the tariffs that include default coverage can be filtered using our comparison calculator.
    • Minimum damage amount: When selecting the tariff, it should be noted that this provides for a moderate minimum damage amount. As a rule, this is $ 2,500 per claim. Very good tariffs completely dispense with the minimum damage amount and pay from the first USD.
    • Limitation of the sum insured: Especially very low tariffs do not pay up to the agreed sum insured, but limit the bad debt coverage to, for example, $ 1,000,000 instead of $ 5 million per claim.
  • Exclusion from deliberate action: Consumers never receive a personal liability benefit if the damage was caused intentionally. However, there are providers who integrate tariff protection in their tariffs for deliberate action and also for crimes within the framework of bad debt coverage. In this case, the consumer would also receive benefits if he became a victim of a crime. Example: someone is beaten for no reason.

Default coverage is subject to certain conditions

Default coverage is subject to certain conditions

Consumers must also note that bad debt coverage only applies under certain conditions. If the above-mentioned conditions, such as the minimum loss amount, are met, the insurance conditions also stipulate that the damage to the person causing the damage is only paid if:

    • there is a legally enforceable title against the injuring party, or
    • there is a notarized acknowledgment of debt in front of a notary and any meaningful execution has been unsuccessful.

In practice, this means that consumers have to take legal action against the polluter in order to receive any private liability insurance benefits. Legal protection insurance can therefore make sense.

Because this would in advance possibly pay for the costs of the legal dispute. If you do not have legal protection insurance, you can also choose private liability that offers legal protection within the framework of bad debt coverage. Our comparison calculator can easily determine which tariffs offer this extended legal protection.

Legal protection in the event of bad debts

If you do not have legal expenses insurance, you should select a liability tariff that offers legal protection for default coverage in addition to bad debt coverage. Because the tariffs only pay if all legal remedies have been exhausted to receive the compensation.

Service exclusions for default coverage

The bad debt coverage also does not apply if the insured person is entitled to benefits from a social insurance provider or the benefit can be claimed from another private insurance such as household, residential or legal expenses insurance. Nevertheless, there are sufficient reasons for the clause of bad debt coverage in private liability.

Compare tariffs with bad debt coverage

Compare tariffs with bad debt coverage

Since this clause is so important in the contract terms, this point has been integrated into our free comparison calculator. This gives consumers the opportunity to filter all tariffs that have anchored this component in their contracts.

It is only important that you pay attention to the criteria mentioned above, such as the minimum amount of damage. These points can give you a first overview of the performance comparison that is available in the computer. In addition, one should take a look at the insurance conditions of the individual providers.

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Cream Bank Credit Score System /cream-bank-credit-score-system/ /cream-bank-credit-score-system/#respond Sat, 07 Mar 2020 07:49:55 +0000

In Indonesia, 78% of the population do not have bank accounts or are called unbanked, this figure is far above the global median value of 38%. This illustrates the uneven economic growth in Indonesia, while Indonesia’s economic potential is quite promising.

The unbanked people who are unable to get banking services are caused by the large number of regions in Indonesia that have not been reached by bank services. This makes them unfit for bank facilities such as business capital loans, while to improve their welfare, they need capital to do business. Therefore, it is important to provide financial access that can reach them, the people at the bottom of the pyramid to be more empowered and prosperous.


Credit Risk Assessment

Credit Risk Assessment

At conventional banks, to provide loans to business actors, banks conduct an analysis of credit risk based on a history of transactions made by prospective borrowers and the value of the collateral. How can these unbanked people get loans while they don’t have accounts that make up the history of these transactions and also don’t have anything to pledge?

In the United States, all public borrowing history recorded properly and centered with reference to the social identification number (Social Security Number) held by any residents who had income in America. From this data obtained credit scores that have become global standards, called the FICO score. This makes it easier for financial institutions to get a person’s credit risk score.

In Indonesia there is already a similar system under the control of Best Bank called the Debtor Information System (SID). This system has a credit score of someone who has transacted in banking and has a blacklist containing information from people who have poor credit scores. However, this system can only judge someone who has been reached by a bank.

In other words, there is no national standard for unbanked people in assessing their credit risk in Indonesia. Here is the role of Rite Lenders , one of the financial technology products developed by Cream Bank. Rite Lenders is an integrated system that can provide an accurate analysis of a person’s credit risk value even though that person has never been reached by banks. Different from systems such as SID which rely on the history of banking transactions, Rite Lenders adds psychometric survey data and economic feasibility surveys as consideration for assessing the credit risk of the prospective borrower. By using a machine learning approach (machine learning), Rite Lenders can assess credit risk after studying data from a prospective borrower in the past.


Credit Score for Inclusive Economics

Credit Score for Inclusive Economics

The Rite Lenders credit risk rating has provided investors with insight into the borrowers to be funded so that they can choose a suitable borrower candidate, and also makes the borrowers eager to repay their installments so that their credit risk rating is well maintained. This forms an ecosystem of mutual support between borrower-investors.

Rite Lenders can not only be used for Cream Bank’s Peer-to-peer lending platform, but the resulting credit rating can be used by other financial institutions in Indonesia. With the growing use of Rite Lenders in other areas that are still not reached by banks, the realization of an evenly including economy in Indonesia is not just a dream.

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Where can you take a consolidation loan for up to 10 years? /where-can-you-take-a-consolidation-loan-for-up-to-10-years/ /where-can-you-take-a-consolidation-loan-for-up-to-10-years/#respond Sun, 01 Mar 2020 15:36:56 +0000

Consolidation loan advertisements usually highlight several issues: the maximum value of liabilities committed, the interest rate, the amount of commission for granting the loan (so-called preparatory commission) and the long repayment period.

The loan period of up to 9 years – 10 years can be tempted by people who are currently struggling with too high installments for several loans.

However, it should be remembered that reducing the installment by extending the repayment period also results in an increase in the total cost of borrowing. This relationship can be illustrated with the help of two interesting examples.

The ten-year consolidation period is becoming more common …


Before presenting specific calculations, it is worth noting that the long repayment period is increasingly common for consolidation loans.

You can find out after checking the offer of several leading banks (see the table below). In the case of twelve lenders, the maximum lending period varies from 7 years (84 months) to 10 years (120 months).

It is worth realizing that even a seven or eight-year limit on the loan period does not prevent the consolidation of liabilities of a typical value.

Maximum extension of the repayment period is unlikely to be profitable


The effects of extending the repayment period were analyzed on the example of two consolidation loans (value: USD 20,000 and USD 50,000), which have fixed interest rates and preparation commission typical for the current offer of banks.

After taking into account the parameters of these two loans, we calculated the amount of a single installment and the sum of equal installments at different repayment periods (5 years, 6 years, 7 years, 8 years, 9 years and 10 years).

The sum of installments reflects the total cost of the loan, and a single installment indicates the level of the borrower’s monthly financial burden.

Changes in these values ​​are particularly interesting when extending the repayment period by another year. In the case of the first consolidation loan (USD 20,000), extending the loan period by one year results in a 3% increase in the total amount to be repaid.

It should be noted, however, that the fall in a single installment with a longer repayment period is not identical. If the repayment period is extended from 5 years to 6 years, an increase in the sum of installments by 3% can be “converted” into a reduction of the monthly installment by 14%.

If the loan period is extended from 9 years to 10 years, the installment decreases by only 8%. A very similar situation also applies to the higher-value consolidation loan (USD 50,000).

Impact of extending the loan repayment period on installments and overheads


The information from the table above shows that with repayment periods increasing, debt breaking into more installments, it is less cost-effective.

The cost of increasing the number of installments remains the same, while each subsequent change results in a smaller decrease in the monthly payment. The same relationship can also be seen for other installment loans (e.g. cash loans, car loans, and mortgage loans).

The analysis suggests that the consolidation loan holder should not always strive for a maximum extension of the repayment period. Such a solution is beneficial for the bank (due to the higher total cost of credit), but it does not have to prove profitable from the borrower’s point of view.

The main purpose of a consolidation loan should be to reduce the monthly financial burden to a level that is acceptable and safe for the debtor.

If the amount of installments during consolidation lasting e.g. seven years suits the bank’s client, then it is worth considering whether spreading the debt over the following years (resulting in an increase in the cost of credit), indeed you are a good idea.

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Key Facts About GFI Loans For Home Buyers /key-facts-about-gfi-loans-for-home-buyers/ /key-facts-about-gfi-loans-for-home-buyers/#respond Thu, 06 Feb 2020 15:18:50 +0000

GFI loans, how much do we love you? There are many reasons that record homebuyers love GFI loans today. Compared to conventional loans, GFI loans are often superior. Surprised?

Don’t be. GFI loans initially fell from grace for a few years, but have recovered big time since 2005. It is an institution that has been around for a long time, since June 27, 1934. The Department of Housing and Urban Development developed the Federal Housing Authority (GFI) under its umbrella in 1965.

GFI loans began to lose service in the late 1990s, when home values ​​began to grow by an inch, exceeding GFI mortgage limits, and sellers refrained from strict GFI valuation guidelines and high mortgage insurance costs. That has since changed. Don’t be misled into old ways of thinking. GFI guidelines have emerged and are much more relaxed.

How GFI Loans Work


First, let’s clear up some misconceptions. For starters, the GFI does not make loans or guarantee loans. Secures loans. Insurance eliminates or minimizes risk-averse businesses when customers drop less than 20 percent. Without GFI approval, its approved lenders are authorized to:

  • Get credit applications
  • Process credit requirements
  • Lock and close the loan

GFI Mortgage Limits

My parents bought our first home in 1955 for USD 9,000 with a GFI loan. It’s almost unthinkable to think of a home that costs it today. As a result, the GFI changes its mortgage limits periodically.

As of January 1, 2009, the maximum mortgage rate in high-cost areas is 115% of local media prices, not exceeding USD 625,500. The maximum credit line is USD 417,000 for family residences across the state. Your area could support a lower mortgage limit. Here’s how to find your GFI mortgage limit.

GFI loans allow for a repaid loan history


If your credit is less than perfect, GFI might be the loan for you. You can qualify for a GFI loan even if you have financial problems.

  • FICO points may be lower than those for a conventional loan.
  • Bankruptcy. You can get a GFI loan for one to two years from the date of your bankruptcy, as long as you have maintained good credit since the debts were discharged.
  • Foreclosure. If you keep the loan in excellent form since the write-off, the GFI loan will be available to you for three years from the end date of your write-off.

GFI loans have competitive rates and terms


Today’s conditions are quite simple. In many markets, rates and conditions are better than 80% / 20% loans.

  • There is little or no interest rate adjustment for the GFI loan, as rates differ by 125% from a conventional loan.
  • Mortgage insurance is financed on credit, which means that a premium percentage is added to the loan balance instead of being paid out of pocket. In addition, a small amount for the mortgage insurance premium is added to the monthly payment, but it is far less than the private mortgage insurance premium.
  • As of January 1, 2009, borrowers can finance 96.5% of the purchase price and lower 3.5%. In some cases, when combined with other types of credit, the downturn may be zero.
  • The allowed debit ratios are higher than the debt limit for conventional loans.

GFI loans require a minor repair


At one point, GFI repair requirements were so exaggerated that sellers would discount the list price to buyers who would agree to receive conventional loans over GFI loans. Today, GFI repair guidelines appear more reasonable.

  • Damaged leaking roofs still need to be replaced, but the older roof does not require replacement if it does not leak.
  • Windows that are held open when the panels are open or are broken do not require replacement.
  • GFI ratings do not make a home inspection home and never have. Buyers should still receive a professional home inspection.

GFI loans are available to any home buyer who intends to occupy the property but is most commonly used by low-income and low-income homebuyers. However, there are no qualifications for limited income. Even a millionaire can take out a GFI loan, given the location-based credit restrictions.

Trump Administration Remote GFI Loan

Just before President Obama stepped down, his administration put in place a spending cut for the GFI that would take effect on January 27, 2017.

This new administrative order reduced the price of MIPs (insurance premiums) in some cases from .85 to. 60 (varies with matrix). The Obama administration has made a reduction in the base points in an attempt to offset rising interest rates and increase the number of borrowers who would qualify for a GFI loan. It is projected to save home buyers about USD 500 a year.

Within days of taking office, President Trump eliminated this GFI credit rate. While some might argue that the suspension of the Obama resolution cut by President Trump is taking away a benefit no one has yet received, this unexpected move has delayed a bunch of real estate closures planned for late January 2017.

As the cost of a GFI loan changed, TRID regulations required mortgage companies to rediscover and give buyers three more jobs before buyers could sign loan documents.

In one such case, a Sacramento buyer was buying a short sale, with a short sales approval letter expiring January 30, 2017. Trump’s action prevented the buyer from closing the short sale on Jan. 30.

We had to ask the short lender to give us two more days to close the landfill and, although the lender was not required to approve the extension, the bank understood our situation and gave us two more days.

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