Archive for March, 2010

Are Medical Loans The Answer to Affordable Medical Treatment?

Monday, March 1st, 2010

What happens when you need medical treatment that is not covered under health insurance? Many times, people do not have adequate medial insurance coverage to take care of medically necessary procedures. Often medical treatment is needed immediately to have any chance of success, so it really isn’t viable to try to save up the money for treatment. When you can’t afford medical treatment that you need, and there isn’t an acceptable alternative treatment, getting a medical loan might be your best option.

There are a number of lenders who are willing to make loans for both medically necessary and elective medical procedures. Medical loans are funds that are advanced to a person for the specific purpose of being used for medical treatment. They are typically unsecured loans that are basted on creditworthiness. The interest rate usually reflects the going rate in the market. Additionally, many medical loans have a built-in grace period, allowing patient recovery time before repayment is required to begin.

Medical loans are often the only hope for getting needed medical treatment for those who either don’t have health insurance or do not have the funds available to pay their deductible. People with chronic illnesses often need medical loans to be able to continue treatment once their coverage is depleted.

Many people seek medical loans for elective medical procedures as well. As a rule, health insurance will not pay for any type of treatment considered to be medically unnecessary. For example, procedures such as liposuction, gastric bypass, dental cosmetic surgery, cosmetic surgery, breast enhancement, breast reduction, and other similar procedures are typically not covered by health insurance.

These types of medical procedures that are in most cases required for mental satisfaction rather than physical well-being. While no doctor would recommend these procedures as a must-have for a healthy life in most cases, most are of the opinion that such procedures can improve the morale of the person to a great extent. Hence, from a psychological point of view, such procedures do improve the quality of life of the patient.

Many special clinics have been set up with the specific purpose of providing elective medical procedures services to people who want or need them. These clinics, knowing full well that such procedures are not likely to be covered by patients’ health insurance, often provide resources for medical loans to their patients. This enables patients to find a way to afford the services they desire without having to research funding options on their own.

Credit Medical offers dental financing loans for general dentistry, cosmetic dentistry, cosmetic surgery, laser vision surgery and a variety of other elective procedures.
http://www.creditmedical.com/

Medical Loans FAQ:

Question: Can you deduct medical finance loans?
Say I had laser eye surgery done that cost $5,000 and got a loan to finance. Can I count a $5,000 amount into factoring a medical deduction ($5,000 – 7.5%*income) on my taxes? Or can I only count the amount that I’ve payed back on the loan? Or can I not even count anything towards a deduction since I took out the loan?

Answer: You should list your total unreimbursed medical expenses for the year. The fact that you had to borrow the money is of no consequence. If the surgery cost you $6,100, then that is the amount you use for the deduction. Be sure you saved receipts in case you are audited.

Question: Are there home loans that do not look at medical bills on credit?
We are wanting to buy a house but my past medical bills is lowering my credit alot. I heard that there are loans that don’t look at medical bills. Which ones?

Answer: Yes and plenty of lenders that do that exact type of loan. Medical bills are the lowest on the scale of important things to look at when deciding to loan money. Depending on which state you live, unpaid medical bills may be reported to the credit bureau but should not affect your credit score. Try to know what is the credit law in your state and ask your loan officer on how he or she can facilitate your home loan. Also there is a statute of limitation on unpaid debts set by each state.

Question: What is the best place to get dental/medical office loans?

Answer: Care Credit is the best thing to finance your loan. Don’t think of an office to finance your work. With times as bad as they are, most offices cannot afford the risk of nonpayment. People will pay their mortgage, cell phone bill, electric and water bills before paying the doctor. Many have been burned too many times now to finance much. Care credit can help you out. It’s the same thing as a credit card.

Question: Medical Loans for teens/young adults with Eating Disorder?
My friend desperately needs to go into a residential treatment facility for an Eating Disorder. The problem is her parents won’t pay for it. Is there any type of medical loan, etc. that she can take out to cover the other 20% her insurance won’t? This is vital for her recovery.

Answer: If you are having issues with her parents not being willing to pay, does this mean she is a minor or young adult? She would need to be an adult and have a cosigner with good credit if she has not established credit herself in order to get any kind of loan. Minors cannot enter a contract, so they cannot get loans to my knowledge.

I would check around for local non-profits that might offer rehabilitation services for people with eating disorders, or who might help her pay for it. Also see if your state’s Department of Rehabilitation will help out. They are there for those with disabilities. Also, your State may have a Youth and Family Services. They often help with this also.

Question: What help is out there for ones who have been laid off longer than a year, have medical bills, student loans?
You also have other bills like Insurance to pay because you have to have it. Labor Board is wanting you to go back to school, you have to pay for tuition. What you suppose to do?

Answer: Actually if you’re laid off and categorized as a displaced worker you will get a break on financial aid if you do go back to school. You should be eligible for the full amount of Pell grant and Stafford loans and since July 1, 2009, unemployment no longer needs to be counted as income on the FAFSA form. There may be worker re-training programs in your state that will also help out.

Question: What is the interest rate usually on a medical loan?
I am being charged 9% interest on a hospital/ medical debt. I thought that interest for medical debts were low like student loans? 1% to 4%?

Answer: Even Student Loans are not that low any longer (boy do I wish they were). While they attempt to keep the rates “decent” to get people to pay, there is nothing that says that a hospital can not charge you any rate that they choose to. And should it go to collection, it would be almost guaranteed to go higher, like 18% to 22%.

Question: True/False: Medical bills and student loans don’t look as bad on your credit as consumer debt?
This is what I’ve been told, but I was wondering if you know if that’s true or not.

Answer: False they still get counted when a potential lender is calculating how much you can borrow for a car, mortgage or other loan you might try to get because they take your income and look at in relation to your total monthly payment obligations, no matter what the source of those obligations might be.

Question: Medical Loans?
I am unemployed and have been struggling for a long time now to get a job but have recently lost one because of the recession. I am now 19. I have been so depressed and have wanted cosmetic surgery for such a long time and have tried everything and can’t get a loan. I just wondered if anyone new if there was any way I could get some sort of a loan or medical loan being an unemployed student who is looking for work.

I don’t know what else to do because I am so unhappy and have no one to speak to about it, I am so unhappy with myself and feel like there is no way out. I am not a home-owner, but live with my mother and she doesn’t take it seriously at all but isn’t even in a position to help me even if she did. It seems like no one cares and I am getting worse. Is there anyone who can help me with a loan?

Answer: It doesn’t sound like you need a loan, you need to see a doctor or psychiatrist. Medical loans for cosmetic surgery (to make you happy) are reserved for folks who have full time jobs with great credit and can afford it. At 19 years old and unemployed, you are neither.

Talk to the Dr about your self esteem and possible other issues. In the mean time, formulate an educational and career goal and work towards that. It will help give you direction, purpose, and eventually allow you to be able to afford cosmetic surgery and live the life you want.

Its great being a self supporting adult, it just takes a bit of gumption, blood, sweat and even a bit of tears to get there!

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What Exactly is a Home Improvement Loan?

Monday, March 1st, 2010

A home improvement loan is actually one of the simplest ways in which you can live in your dream home. This is because it is the prime option for someone wanting to enhance the appearance of their home and also add to the value. In other words, a home improvement loan pays off in many ways. First of all, your home looks great and, second of all, the investment pays for itself because the home goes up in value.

As for how you get a home improvement loan, there are a couple of ways. The first is that you can simply go to your bank and request the money. You can do an assessment of how much work you would like to do and request that amount. The second way is to refinance your mortgage and use the equity in your home to fund your home improvement project. How you do this is you refinance for the worth of your home, you pay off our mortgage, and you then take the difference between the worth of your home and your mortgage and use that money to fund your home improvement project.

Types of home improvement

You can use your loan to fund any improvement to your home. You may want to simply improve the appearance of your home or you may have worn and broken areas that must be fixed or replace. However, the loan must make sure that the improvements that are done to the home are right with the borrower’s needs and don’t exceed the amount that the borrower is borrowing. This means you need to make sure you cover all of your improvements by not deviating from your initial plan.

For example, you may wish to add rooms onto your home. Maybe you need an extra bathroom or an extra bedroom. Perhaps you want a sun porch or a sitting room where you can sit and relax for a while. It is really up to you. Maybe your plumbing needs an overhaul or you need to put more siding on your house.

Here is a more detailed idea of what you can achieve with a home improvement loan:

- Installation of central heat and air

- Installing a fire place

- Swimming pool installation

- Rewiring the home

- Remodeling any room in the house

Loan details

There are certain details of the loan that you must be mindful of. The first thing you must keep in mind is that the interest rate of your home improvement loan is going to depend on your credit rating. If you are credit challenged, you may find that getting a competitive rate is somewhat difficult.

However, there has been an increased amount of competition between financial institutions because more and more people are looking for home improvement loans. Because of this competition, there are more options for borrowers to take advantage of. There are a number of online lending services that have added to this competition, which also increases the chances of getting an approval on a home improvement loan. The process has been simplified by these entities.

But before getting the loan, make sure you get quotes on how much it would cost you. You can assess the work yourself, but you can have a professional do it even if you do decide that it is a project you want to do all on your own. This increases your chances of being able to stay within the amount the loan is for. If you exceed your loan amount, you may not be able to pay for the remainder of your improvements. But know that if you need a home improvement loan, different lenders have different options for you.

How you can save money on home improvements and get estimates from local contractors in the Toronto’s area. They offer Home Improvement Help, Contractor Referral, Drafting Service.

Home Improvement Loan FAQ:

Question: How to get a home improvement loan?
My parents and I own 2 homes on the same lot. We haven’t had home owners insurance for over 10 years. I want to get a home improvement loan, so I can qualify for home owners insurance and improve my living situation. What can I do? I need the electric, plumbing, and the outside of my house done. No, I don’t qualify for hud.

Answer: Contact an insurance company directly, try to avoid an agent. Anyone can get property insurance. You just have to own property.

Banks will require you to have property insurance. They want the loan to be paid off if the house burns down. While a lender would usually require insurance, having insurance doesn’t imply that you can get a home improvement loan.

Question: Should I get home improvement loan or refinance with cash out?
I want to refinance my home to take advantage of lower interests rates. I also want to renovate my house since it has severe structural problems.

Should I refinance and get cash out to use for home improvement or should I refinance without cash out and get a separate home improvement loan?

What is the difference between the two scenarios?

Answer: A refinance with cash out would save you money in the long run. The interest rate would be lower for a 1st mortgage.

If you refinanced for a lower interest rate, you would be required to pay for the refinance and other closing cost.

Now if you turned around immediately and got a second mortgage or a Home Equity Line of Credit (HELOC) you would once again be required to pay for the loan as well as any related closing cost. On this 2nd mortgage the interest rate would be 2%-3% higher.

For any legal or tax matters you should consult with your attorney or tax consultant.

Question: Is there really a no interest government loan for home improvements?
I heard there is a no interest government loan for home improvements and you don’t have to pay it off until you sell your house. Is this true? If so, how do I apply for the loan?

Answer: Not that I’ve heard of. The only thing you can do, is certain improvements can be taken off your taxes next year at half the price you paid for them. They have to be energy efficient projects like new windows, doors, sealing up cracks, new heating system. Putting a new deck on doesn’t cut it.

Question: Can you use part of a home loan for immediate repairs?
I’m in the preliminary phases of purchasing a home. I’m researching and learning as I go. My question is, if I qualified for a $150k, would I be able to find a home that say, is $100k and use $50k for repairs/improvements? I’m finding a lot of homes that need renovations and are listed for a low price. I was just wondering if I could take out a larger loan (one that I’m still qualified for) to do improvements.

Answer: Only if the house appraises for more than the selling house. For example, if the $100K house in your example appraises for say $110,000, I would assume you would put down $10,000 and the bank will lend you the $100,000 (bringing your LTV to90%). Now, if the house appraises for say $150,000 and sells for $100,000, assuming the same 90% LTV, you would be able to borrow about $135,000, pay the house off and have $35,000 left for repairs (LTV being “Loan to Value” which is amount of mortgage compared to appraised value of the home). At best, you can only borrow up to 96.5% of the appraised value of the home (using an FHA mortgage), so you can never borrow more than it is worth.

Question: Is interest paid on Personal Loan used for Home Improvements tax deductible in US?

Answer: No. To be deductible the loan must be secured by the property. By definition a personal loan has no security other than the borrower’s word so the interest is not deductible.

Question: What is a “bid and draw schedule”?
I need to have the foundation repaired on my house and decided to take out a loan. Since I was doing that, I decided I’d repair a few more things. The problem is the only loan I could get is a home improvement loan where the bank directly pays only one contractor. The foundation company has agree to play “contractor” (no license is required in my state) and referred me to some people willing to work as subs. The loan papers ask for a “bid and draw schedule” and I don’t know what it is or what it should look like and neither does the foundation company.

Answer: The bid and draw schedule are two different things. The bid is just that, the contractors proposal in writing for the entire scope of the project. It should also state expected time of completion and warranty statement. This is your bible document in contracting someone to do a job for you.

A draw schedule is a statement in writing that your primary contractor provides to you and the bank stating the duration of the project and a list of the draws that he will expect the bank to pay, usually stated in percentages and by month. I have seen some banks that expect a very detailed draw schedule that includes any subcontractors and the amount and time frame in the project that they will expect to be paid. Your bank should have clued you in as to what exactly they wanted so I would ask your contractor for a basic schedule of payment that he expects and see if that will fly. The bank will tell you if they want more detail.

Question: Where would you find a list of government grants on the internet?
I’m looking for a site, preferably made by a reputable organization, that will tell you what government grant (not a loan, a grant) you would qualify for, given the information entered. Fastweb.com does it for scholarships, but is there any out there that would do it for grants like to start a new business or for home improvement?

Answer: No Government grants for personal use. All grants are reserved for municipalities or nonprofits. You can check with your municipality and see if they were given any for neighborhood revitalization. This could be for home improvements and or business start up.

Question: First time homebuyer and FHA 203k loan?
As a first time homebuyer should I pursue this property that requires FHA 203k financing? It is a foreclosure – I haven’t seen the house yet (going to see it this afternoon) but it is being sold ‘as is’ so I know it needs some work. We are on a strict budget – we absolutely can’t afford payments on a mortgage any higher than $140k. The listing price is $119,900 so as long as the improvements do not go over $20k we are ok. The assessed value of the home is $142k. Is this a lot to be getting into for a first time home buyer?

Answer: 20k isn’t going to go very far, the repairs would have to be extremely minor. Have a contractor give you an estimate before you commit. I have a feeling you have no idea what materials, labor and permits costs.

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