FOR IMMEDIATE RELEASE: March 6, 2017
Contact: James Hallinan (505) 660-2216
In the ABC’s of Consumer Protection, “B” is for Borrowing
Albuquerque, NM – On the second day of National Consumer Protection Week, Attorney General Hector Balderas released consumer protection guidelines for successful borrowing for New Mexico families.
“Borrowing money is a part of everyday life and I want New Mexico families to make the most advantageous decisions for their finances and future success,” Attorney General Balderas said.
No matter what kind of loan or contract you are signing, read the fine print. It might be long and boring but that is where you will find the details about your agreement. Knowing exactly what you are signing may help you avoid disaster later. Many details contained in the small print may not be good for you, but good for the lender, while you may not have the opportunity to change these terms, it’s important to understand the terms of the loan. If you don’t understand something contained in the contract, ask questions.
Know how much you can afford. Before getting into any lending situation, know how much you can afford to pay. Consider the total monthly payment. It’s important to consider the monthly payment in relation to the other debts you owe—make sure you can repay the loan before you take it. Understand what happens if you fail to make your payments—will the entire amount become due? Will you be able to afford the late fees? What happens if you default entirely?
Ask about the total cost of the loan. A Some loans with extremely high interest rates could wind up costing you more than is reasonable and could even trap you into a cycle of debt. It’s best to use high interest rate loans only in cases of true emergency and should be paid off as soon as possible. Often you can limit the amount of extra interest you pay simply by paying off the debt early… but make sure there is not a fee for early repayment!
Getting the best deals on credit means improving your credit score. It’s important to know your credit score so you can either leverage it, if it’s good, or work to improve it, if it’s low. The big three credit reporting agencies must to give you a one free credit report per year. Go here to get your free reports every year: https://www.annualcreditreport.com/index.action. People with the best credit ratings almost always get the best interest rates and most favorable terms, but sometimes lenders don’t tell you that. Have your credit report with you and make sure the lender knows your score.
Protect your credit rating, by checking your credit report and make sure there isn’t anything that is incorrect or not yours. If there are debts listed on your credit score that are not yours, you should dispute that report. Go here for guidance from the Federal Trade Commission on how to dispute your report: https://www.consumer.ftc.gov/articles/0151-disputing-errors-credit-reports
Surviving foreclosure. For most of us, the largest purchase we will ever make is our home. And for almost all of us, that purchase is made by financing it. Sometimes, that financing turns out to be too much and we fall behind in our payments or default completely. When that happens, don’t give up. There are many companies out there that offer foreclosure aide. But determining which ones are legitimate and which ones are scams can be confusing.
Don’t fall victim to scammers. There are many companies out there who say they will help you with your foreclosure but really don’t and they may even make your situation worse. Usually, legitimate foreclosure aide services will not ask for your payment upfront. Federal law says that you don’t have to pay for help unless and until your bank makes you a loan modification or other offer that you want to take.
You should never stop communicating with your lender. You have the right to continue to talk to your lender throughout the foreclosure process. Often, scammers will tell you to stop talking to your lender so you don’t discover that they are not communicating with your lender either. By keeping in touch with your lender, you will know what kind of offers you may be considered and your lender will know that you are still interested in help and haven’t given up. Lack of communication with your lender could lead to an unnecessary foreclosure.
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