How To Close A Bank Account

July 15, 2019 by  
Filed under Foreclosure

bank account

Are you getting ready to close your old bank account and transfer everything over to your new account? Are you worried you will forget something important while transitioning? Learning how to close a bank account and successfully changing to your new bank is not as complicated as you may think. However, before you make the switch, it is important to know how to deal with automatic payments, how you should handle your bank balance and what you should do with your old debit cards and checks.

How To Deal With Automatic Payments

LET YOUR CHARGES CLEAR

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Before you proceed with how to close a bank account, you first need to let any outstanding charges clear. Depending on your particular bank, this could take around 2 weeks or more. An easy way to see what the status of your remaining charges are is to look at your balance online and review your transaction history. This will give you a good idea of your bank account’s running balance and let you know which charges are remaining.

CANCEL THOSE OLD AUTOMATIC PAYMENTS

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Another important step regarding how to close a bank account is to cancel any automatic payments you have set up. You do not want to find yourself in a position where an automatic payment is coming out of your old account, resulting in an overdraft or invalid payment if it is completely closed. Any automatic payments for things, such as music streaming services, TV streaming services, credit card providers, gym memberships, student loans or anything else you may have set up, need to be canceled before you can switch them over to your new account.

It may take time to review all the companies you have automatic payments set up with, but it is well worth the effort and will save you plenty of undue stress down the line. If you are unsure if you have missed anything, look at your previous bank statements to see what automatic payments are coming out every month and ensure you make the change for all those providers.

UPDATE YOUR PAYMENT SYSTEM

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Now, the next step in how to close a bank account is to update your payment system. Once you have determined which providers you have automatic payments with and have canceled those monthly withdrawals with your old bank account, you need to transfer everything over to your new bank account.

Be sure to write when each payment is due so you can set all your new automatic payments to correlate with the proper time frame. Canceling your old automatic payments before setting up your new system will accomplish a few key things. First, you will not have to worry about making multiple payments to the same provider in the event that you missed one. You will also make sure you do not overdraw money from your low or empty old account due to a mistaken payment schedule.

REMEMBER TO CHANGE YOUR DIRECT DEPOSITS

Another important automatic payment to change when learning how to close a bank account is your direct deposit payout. If you receive direct deposits bi-weekly, monthly or at any other time, you need to speak with the payroll department for your company to keep them updated regarding your new account.

To change your system for direct deposits, you must provide the payroll representatives with the routing and account numbers for your new bank. Plan and give this information to your company before you close out your old account. It takes a bit for direct deposit payments to be switched over.

As such, it is important to make sure everything runs smoothly and you have enough time to check both your old and new accounts to see that the changes have been made—correctly. Additionally, if you have alternative income sources, like investment accounts, brokerage accounts or anything similar, make sure you update your account information so the money is directed to the right place.

Transfer Or Withdraw Your Balance

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ALWAYS TRANSFER YOUR BALANCE

Once all your old charges have cleared, you have changed your old automatic payments and set up a schedule for the new ones, it is time to transfer your remaining balance to your new bank account. Look at the terms and conditions of your accounts to make sure there are not any transfer limits. Depending on how much money you have in the old account, you may have to make the transfer in increments rather than all at the same time.

If your old bank account has a minimum balance required, leave enough in there for the time being. You can always take that lesser amount out in cash later, but you do not want to go below that minimum balance until the end of the process.

If you still have some automatic payments or charges outstanding that will not move over to your new account until the following month, make sure there is enough money in your account to cover them. It is better to have a little additional money in the old account to cover any last-minute expenses rather than deal with unwanted overdraft costs.

HOW TO CLOSE A BANK ACCOUNT

Finally, once all your payments have transitioned and any loose ends have been tied up, you can move forward with how to close a bank account. Take one last look to make sure that every automatic payment has been fulfilled and moved over to the new account. If an automatic draft is left neglected, your old bank could be forced to reopen the account to make the payment.

There are usually a few different methods you can use to close a bank account. For one, you can go to your local bank branch, speak with a representative at that location and have them close your old account for you. Alternatively, you may be able to go onto your online banking site page and close it directly from there. The way you can close your bank account will depend on the institution.

Most of the time, you will need to get in touch with the customer service representatives for your bank via the phone, mail or a secure messaging platform to submit your request to close the account. Whichever method you use for how to close a bank account, always make sure you get confirmation in writing that the account has been officially closed. You will need this documentation for your records, but it is also important if any unexpected payment issues come up later with your old account.

REMEMBER TO CLOSE CONNECTED ACCOUNTS

One element that may be easy to forget when learning how to close a bank account is to close any account connected to or associated with it. For instance, if you are closing a checking account that came with a free savings account, you need to close both at the same time. Follow the same procedures as noted above to ensure that all money has transitioned over from your old bank to the new one.

You want to make sure that any accounts with your name on them are closed; otherwise, you could be vulnerable to having your identity stolen or facing account issues down the road. This is easy enough as you can submit your request to have a connected account closed at the same time you close out your former main account. You will need to have a zero balance to close everything out once and for all.

What To Do With Debit Cards & Checks – How To Close A Bank Account

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CUT UP OLD CARDS

One final important step in how to close a bank account is to cut up your old debit cards. You do not want to use one on accident and put yourself at risk for what could be considered fraudulent charges. Nor do you want to leave old debit cards ripe for misuse by an identity thief. It is better to be safe and cut them up so that no one else can use them, either by accident or maliciously, later on.

SHRED THOSE OLD CHECKS

Remember to shred any old checks you have. You never want to forget and write a bad check accidentally, nor do you want to leave them lying around where someone could have access to them and use them fraudulently.

Conclusion

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When you receive your confirmation letter from your old bank stating your old account is closed, keep it on file in your personal records for at least a couple years. You may need it later for tax purposes, and it is always good to have on hand to refer to, just in case.

If, after closing your account, you still notice charges coming through the old bank account, get in touch with them at once to resolve the matter. Always open your new bank account before closing out the old one so you have funds at your disposal and can transition smoothly. It is wise to look at any minimum balance terms and associated fees required by your new bank so you can ensure that any transfers and new withdrawals fall within those limits.

How To Buy A Foreclosure And Other Things You Should Know

December 1, 2018 by  
Filed under Foreclosure

Buying real estate can be as exciting as it is tedious and intimidating. Deciding what property is best for you is a major decision. With such an expensive and life-changing purchase, you want to make sure you are making the best choice and avoiding as many mistakes and pitfalls as possible. One of the biggest questions a buyer should ask is how to buy a foreclosure and should you consider a foreclosure property?

When reviewing your options on homes to buy, foreclosures may be on the list. They can seem like the obvious choice, especially when the price and size of the property seem like a steal. Foreclosures can be a great deal to consider, but it’s imperative to know as much as you can about them before making your decision. Knowing how to buy a foreclosure will help you make the best financial decision.

How Foreclosures Work

Foreclosure typically happens when the owner of a property cannot pay the loan associated with the property. Ultimately, it leads to the lender taking ownership of the property and selling it to settle the balance of the debt. Once the property is in foreclosure, the original owner no longer has any rights to the property or the money they may have invested, which can lead to tensions running high during the process. Determining how to buy a foreclosure includes understanding the process of foreclosure.

STAGES OF FORECLOSURE

As a buyer, learning how to buy a foreclosure includes understanding the different stages of the process. Purchasing a foreclosure property is based on the stage the property is in. The stages of the process include:

  • Pre-Foreclosure
  • Auction
  • Real Estate Owned or REO

PRE-FORECLOSURE

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After three or more months of missed payments, a property enters pre-foreclosure. At this time, property owners receive a legal notice from their lender,   known as a Notice of Default, to advise them that the foreclosure will begin if the loan is not paid or arrangements are not made. The pre-foreclosure process usually allows for a buyer to work directly with the property owner to negotiate a purchase directly through them. If an agreement can be reached, the buyer will get the property for a great price, and the seller might save their credit from the further damage of an actual foreclosure.

AUCTION

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If the owner cannot come up with a resolution during pre-foreclosure, the lender will typically put a property up to be sold at a foreclosure auction, also known as a Trustee Sale. At this time, a property owner will receive a Notice of Sale, which will include the date and time of the property sale.

For buyers, auctions can be appealing, but it’s important to remember that you are responsible for all aspects of the property including repairs, unclear title and any other issues associated with the home. However, if the property does not receive a bid higher than the opening bid to cover the loan balance, it is usually purchased by the representative of the lender, making the property an REO or Real Estate Owned.

REAL ESTATE OWNED OR REO

real estate owned or reo

Once a property becomes REO, a lender will usually hire a real estate agent to list the property for sale. During this time, the lender normally completes the updates and repairs and works to clear the property title. For a buyer, this process can be time-consuming but can be a good fit for the right buyer. Having an attorney or real estate agent that represents you during this process would be best to ensure you receive the best deal.

Advantages and Disadvantages of Buying a Foreclosed Property

A major step in learning how to buy a foreclosure is understanding the pros and cons of purchasing one. Lenders have done a great job of renovating properties to make them more appealing to buyers so that they can minimize their loss as much as possible. As appealing as a foreclosure may be, buyers should ensure they understand the advantages and disadvantages before jumping into a purchase to avoid mistakes and make a smart decision.

THE PRE-CLOSURE STAGE

ADVANTAGES

  • Sellers may cover the costs for the renovations and repairs
  • Buyer may obtain normal mortgage funding
  • Sellers typically move fast during this stage to avoid further damage to their credit and to control the sale of their property
  • Sellers are legally obligated to provide buyers with all details of the home including any known issues or previous repairs

DISADVANTAGES

  • Seller may not agree to a price less than their property debt
  • Buyer's purchase price must cover the full debt, and closing costs or lender’s approval will be necessary
  • A lender can decline the negotiated price agreed to between the buyer and seller


DURING AUCTION STAGE

ADVANTAGES

  • The purchase price for the property will be the balance owed, making it a deal for the buyer
  • Cash payments are a requirement, and those without cash are usually eliminated as buyers

DISADVANTAGES

  • Purchases are same day, cash only with no financing allowed
  • The property could have back taxes, liens and there may be damage to the property by previous owners that are the responsibility of the buyer
  • Buyers make blind purchases because they are not allowed to inspect properties


 ADVANTAGES DURING REO STAGE

  • Buyer will have no liens, back taxes, and mortgages on the property and will have a clear title
  • Bank/lender will negotiate the aspects of the sale
  • Buyer can have the property inspected
  • Buyer can have mortgage financing to cover the property costs
  • The property will be clean and vacant from previous owners

How to Buy a Foreclosure

Once you learn what foreclosure is, the stages of foreclosure and the advantages and disadvantages of the process, buyers' next question usually is how to buy a foreclosure? As you’ve read, the steps to buying a foreclosed property are not typical of a normal real estate purchase because you are not purchasing a regularly listed property.

HIRE A REAL ESTATE AGENT OR BROKER

hire a real estate agent or broker

Purchasing a foreclosed property can be difficult to navigate most times. As a buyer, you need to ensure you have someone on your side that can guide you through the process and answer the tough questions. Hiring a real estate agent or broker familiar with the foreclosure process and that has your best interest will help you choose the best fit for you and your budget. They have the experience necessary to negotiate while finding the best properties in your price range.

RESEARCH LENDERS

Many buyers have the cash to purchase a foreclosure property, but those that don't will need to have financing from a mortgage lender. Buyers should research lenders to determine who has the best interest rates and promotions for financing.

GET PRE-APPROVED

If you need mortgage financing to purchase a foreclosure, you will need to provide a pre-approval letter from a lender. The letter should include the amount you are borrowing and the dates the preapproval is good for. Your pre-approval will be based on your income, credit history, employment history, and other mitigating factors. Having a pre-approval gives the seller or lender the security they need to ensure the property can be financed.

BUDGET FOR REPAIRS AND RENOVATIONS

Repairs and renovations of a foreclosure may be at the expense of the buyer. When applying for financing for the foreclosure or budgeting for a cash transaction, a buyer should budget for repairs and renovations. If you’re handy and can complete repairs yourself, you may save yourself more money. If you need significant renovations and need to hire a contractor, having the budget for it ahead of time will make your process easier, and you can get the repairs done sooner.

TIMELINE FOR REPAIRS AND RENOVATIONS

When purchasing a foreclosed property that needs repairs and renovations, a buyer should be sure they not only have the money but have the time to invest in fixing the property. Whether the buyer is handling the repairs or hiring a contractor, time will be of the essence. Be prepared if renovations take longer than expected and make room for it in your timeline.

WHERE TO FIND FORECLOSED PROPERTIES

Another step in learning how to buy a foreclosure property is to find one. So, where do you find foreclosure properties? Foreclosures can be found in a variety of ways including:

  • Online real estate websites
  • Real estate agents, especially those that specialize in foreclosures
  • Government agencies

Conclusion

Many foreclosed properties have significant value and could be a great buy for the right person. The better the deal, the better it is for the buyer, but it’s also important to remember that not all foreclosures are good deals. A buyer needs to research the real estate market and lenders, the budget for renovations and repairs and prepare for what could be a long process. Learning and understanding how to buy a foreclosure will ease your mind early on and help you make the best investment. We hope we have adequately explained how to buy a foreclosure and helped you decide if it is a good decision for you.

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Credit Reports For People With Bad Credit

February 13, 2009 by  
Filed under Credit card, Foreclosure

It is of utmost importance that one has a good credit rating. Because every aspect of your life depends on how good your credit rating is, otherwise everything would go haywire. For a good score of your credit rating, one needs to ensure that one pays the bills on time, payments are effected before due date to the debtors etc. Your credit score could also affect your lifestyle in more than one way. A bad credit would also restrict your purchases. Poor credit scoring is a deciding factor for banks to reject your loan applications. Unless they have full confidence on your credit scores, they would not want to give you the loan. All this hassle can be saved if you are smart enough to take care of your finances well. One who manages his money well would always have a sound financial record.

An individual desiring to purchase a car needs to have a good credit score and rating for his loan. The lender would not want to finance him and risk his money if your credit score is below the minimum level. A superb credit score also has other advantages. You would be charged lesser interest for the same amount of loan. In case your credit score is less, you might be present given a loan, but just imagine the interest which would be charged to you. It would be more even than the principal amount. Why get into all this . one needs to realize that lenders charge exorbitant rates of interest to people having a bad credit score.

A person thinking of purchasing his own home by applying for a loan can be benefited if he has a good credit score. Normally, banks and financiers charge around 5% as interest, if your credit score is good and you have a good financial standing. But in case of individuals having a low credit score, the same lenders would charge an exorbitant rate of 10%. The difference of 5% is absolutely high and the borrower would stand to lose only because his credit score does not support him.

Credit card debt is the cause for a poor debt. There are people who are not able to pay even the minimum amount of the credit card. It is difficult to believe whether they would ever be able to discharge their loans and debts. They are charged an inflated rate of interest around 20%. Even if they keep paying the interest for an entire life period, they would never be able to clear their debts.

On the contrary if you have a good and sound financial status, the lenders and banks would lower your interest rates say around 8% or sometimes even lower.

Your poor credit score not only affects your home loan payments, interest rates but also your car insurance premium. Insurance companies also charge lesser rate of premiums for people with a good score as compared to people with a good credit rating. One could lose hundred of dollars in just paying the insurance premiums.

A good credit score also decides whether you would be able to rent an apartment. Landlords also check on the credit score before renting out their apartments or galas. An individual with a good credit score would have to shell lesser rent as compared to a person with a bad credit rating.

Bad credit rating affects all areas of your life, be it property, premiums as well as health. This also puts extra burden and stress on an individual, thereby affecting his mental and psychological health. There are many financial counseling centers, which helps you to take control of your money. They would find out solutions thereby enabling you to accelerate your credit score.

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Foreclosure and Your Credit Report

February 11, 2009 by  
Filed under Foreclosure

People who have faced foreclosure need to hire a credit advisor who will help them clean up the tarnished report. Besides the payment defaults that appear on the report, there are other issues like” Notice of Trust Sale” and the “Trust Deed Sale” which worsens things. Since there are so many things you need to deal with, hiring a credit advisor would be beneficial and can work with you to suggest ways to improve the credit scores from the current levels.

Though a clean up will not mitigate the negative impact of the foreclosure for close to a year, you can breathe easy for the next 7 – 10 years. Since the report will reflect prominently the last year details, it is in your interest to iron out the gaps to achieve financial bliss.
The bad news is that you will encounter refusal of credit, for a car or for your personal use over the next 3 – 5 years once the foreclosure is mentioned on your credit report.

You will need to get a score of 740 or higher to avail of a 30-year home loan at fixed rate of interest and even then, banks will want a 20% margin payment upfront. Some banks may permit a score of 620 and a 10% margin payment, but the fact is that you need to clear the report of its bad elements at the earliest.

Now the question is, what can be worse – foreclosure or bankruptcy. Opinion is divided on this, though many feel that a foreclosure is viewed more seriously by the creditors, the assumption being that bankruptcy excludes the house. Borrowers need to quickly start making up on the payment of the defaulted ones to retain the house.

You have two options – to restructure the agreement to procure a lower rate of interest or to ask for some time during which the creditor accepts suspension of payments till you can start making them again. As a desperate third option, if you absolutely struggling for finances, you can request the creditor to postpone foreclosure till you can dispose off the asset. You may still not get the amount you seek and have debt to be settled, but at least you can work out a “deed in lieu of foreclosure”, wherein you pledge your house to the bank.

Many people look at bankruptcy as an option but this needs to be used as a last gambit, since it can be very destructive to your credit report. You anyways need to make the monthly payments even when you declare insolvency. The only relief is you have the court on your side till the time you make up for the missed payments.

It is better to work out a restructured plan with the creditor and start making the payments slowly over an agreed tenure. This will not impact your credit score very harshly and you can set it right in the next 12 to 18 months.You can also request for some time from the creditor, to recover from a temporary problem of finances. You however, need to then meet the commitment made without fail.

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