Now is the Time to Finance With a Reverse Mortgage!

A reverse mortgage is a great financial solution for homeowners who are seeking ways to keep their home, pay all their expenses and still maintain their financial independence. Now is the best time for homeowners to take advantage of this type of financing. Soon, certain changes will take place within the reverse mortgage program that will likely affect future applicants.

Current Administration Requests HECM Subsidy

Home equity conversion mortgages (HECMs), which are the most common type of reverse mortgage, have been successful in helping homeowners find a way out of financial predicaments. The program offers several advantages, but to continue offering these home loans and their benefits, the program needs money. The office of Management and Budget requested a $250 million subsidy for the HECM program in the 2011 budget. If this subsidy is not approved, major changes will go into effect that will likely reduce the effectiveness of the home equity conversion mortgage.

The principal limit factors (or PLFs), which determine the amount of money a homeowner can receive from his or her loan based on age and interest rates, were already reduced at the beginning of this year. David H. Stevens, assistant secretary of Housing for the Federal Housing Administration, said that in order for the program to successfully continue in 2011, whether the subsidy is received or not, the annual mortgage premium will have to increase from 0.5% to 1.25% and the principal limit factors will have to be reduced at least another 1-5%, depending on the homeowner's age.

What Does This Mean for HECMs?

If the $250 million subsidy is not granted, even more changes will have to take place. Without the necessary money, the principal limit factors would have to be reduced another 21% in 2011, which is unpleasant news for those in the process of obtaining reverse mortgages. Reducing the principal limit means seniors will receive significantly less money from their loan, specifically about 30% less, which equals about $23,000 to $27,000. Stevens fears that, if this change occurs, fewer homeowners will be able to take out these loans because there will not be enough to finance their homes.

Act Now to Reap the Benefits of this Loan

This type of financing is different than other home loans. Unlike most loans, homeowners do not have to pay a monthly mortgage payment. As long as the loan requirements are met, the homeowner will not owe anything on the loan until he or she no longer resides in the home. If there is sufficient equity in the home, the equity can be converted into cash that the homeowner can use for any expense. The amount the homeowner can receive depends on his or her age, home value and interest rates, and the homeowner can choose how his or her money is disbursed.

Stevens discussed how crucial the HECM program is because of the various financial setbacks seniors encounter today, including high medical bills and declines in income and savings. If all of these changes take place, it will eliminate this loan as a financial solution for many homeowners. Homeowners who want to enjoy the current benefits offered by this type of financing should speak with a loan specialist to learn more about their options.

Save Money With a VA Mortgage Refinance

Homeowners who purchased their homes with VA mortgages have experienced first hand all of the benefits this type of financing provides. There are even more benefits available to home owners who would like to refinance their current mortgages. Homeowners refinance their loans for different reasons, but they all want to save money and this type of financing provides several opportunities to do so!

Receive Money with a Cash-out Refinance!

This type of refinance loan has multiple advantages for homeowners, including allowing homeowners to cash out up to 90% of the home's value. The cash can be used on any expense the homeowner desires. The homeowner also has the option to consolidate some or all of his or her debt with this type of refinance. Consolidating multiple payments into one saves hundreds of dollars in interest and the interest paid is tax-deductible! Not to mention, debt consolidation makes life so much easier!

In addition to the aforementioned benefits, homeowners also have the option of changing the terms of their loans. If interest rates have decreased since a homeowner took out his or her original mortgage, he or she can refinance with the new, low interest rate. With a lower interest rate, the homeowner will save more money every month and thousands of dollars over the life of the loan. The homeowner can also reduce or extend his or her loan period.

Refinance Quickly with an Interest Rate Reduction Refinance Loan

This type of refinance loan, also known as the IRRRL, is for homeowners who currently have a VA mortgage. This loan allows them to refinance their current mortgage through a quicker process than other types of home loan refinances. This refinance option also allows homeowners to receive lower interest rates, which saves them money every month, as well as change other terms of their loans. In situations where homeowners are eligible, they can receive up to $500 back from these loans. This loan typically has quicker processing because there is no appraisal required and less information, such as income, needs to be verified. There are also few to no out-of-pocket costs for the homeowner.

Change A Conventional Mortgage to a VA Mortgage

Homeowners who have conventional mortgages can receive the benefits of this mortgage by refinancing their current loan to a VA mortgage. This refinance option allows the homeowner to change the terms of his or her loan, including lowering the interest rate, as well as enjoy the other benefits offered by this type of financing. These benefits include the absence of mortgage insurance and low monthly mortgage payments.

Consider a Refinance Loan to Save Money!

It is not difficult to qualify for this loan because the eligibility requirements are not very strict. Applicants must be a veteran or a current member of the military and must meet certain service requirements. The VA does not require applicants to have a high credit score, but most lenders will require a borrower to have a credit score of at least 620.

Refinancing with this type of loan has many advantages (homeowners save money!) and few requirements. A mortgage specialist can help homeowners decide which refinancing option will help him or her make the best of their mortgage!

The Advantages of Buying a Home With an FHA Loan

Buying a home is a major undertaking for both first-time home buyers and current home owners who are buying a new home. One of their main goals is finding the right type of financing for their home needs. An FHA loan is a great financing option because it has many advantages and incentives that aim to help those in the process of buying a home save money.

This Loan Saves Homeowners Money

A major expense during the home-buying process is the down payment on the new home. But, compared with other types of home loans, FHA loans tend to require lower down payments, usually around 3.5% of the purchase price. This can be a relief for first-time home buyers who do not have large sums of money upfront, as well as current homeowners looking for ways to cut back on their expenses. Spending less money on a down payment leaves borrowers with more money for other costs associated with a new home.

Because interest rates will affect a homeowner's monthly mortgage payment, rates are something to consider when choosing a home loan. Interest rates tend to fluctuate based on current market conditions and other factors. But, because the Federal Housing Administration insures this type of financing, lenders are able to offer low interest rates. Homeowners are also able to get fixed interest rates so that their interest rate will not change over time. Low, fixed interest rates will save homeowners money and leave them with more money available for their other expenses.

This Loan has Simple Qualification Guidelines

The FHA aims to make these loans affordable for different types of home buyers. Therefore, they do not have strict credit or income requirements. If an applicant has a troubled credit history, he or she may still qualify for a loan, as long as he or she has had no delinquent rent or mortgage payments in the last twelve months. Applicants with low credit scores can still qualify, but most lenders will require an applicant to have a credit score of at least 620.

This Loan has Few Requirements

The FHA requires that the applicant have an appraisal done on the home to determine the home's value and to determine that the home is safe and meets other necessary requirements. An inspection is not required, but it is highly recommended to check for any essential repairs that need to be done on the home.

There is a mortgage insurance premium that must be paid. It covers loan costs in the event of a default and is usually about 1.75% of the loan amount. The upfront portion of the insurance can be financed into the loan, which eliminates one out-of-pocket cost. Homeowners will then need to pay a monthly mortgage premium with their mortgage payment.

Consider an FHA Loan for Your Home Purchase

This type of financing is known for having high loan-to-value limits, which means that the amount of the loan can be equal to a higher percentage of the home's value compared with other types of home loans. Please note that loan limits vary by location. The federal maximum loan limit is $729, 500.

If a potential applicant finds the advantages of an FHA loan appealing, an FHA loan specialist can help them take advantage of this loan to finance his or her new home.

Top Tips For Online Financial Services

Online financial services have become a popular way for people to take care of all their monetary needs from the comforts of home. Whether it's planning for the children's future, for your own retirement, investment planning, or simply managing your assets, utilising one of several reputable financial services who have set up shop online may be worth considering. 

If you don't already have a specific service in mind for your unique financial needs, ask family and friends for their recommendations and look online for reviews and comments from those already using the service or company. 

Protecting Your Privacy First 

Protecting your privacy should be one of your top priorities at all times, as while it may be perfectly safe to do things such as your banking online through a secure, protected site with a reputable financial service, the overall safety relies greatly upon you the end user and the choices you make. Remember your financial service will not send emails asking for your password or other sensitive information, and when it doubt, always contact the company via telephone before doing anything. 

When it comes to handling your finances online, protecting your privacy also entails the important matter of keeping your passwords safe and secure. Don't choose a password with your birth date or address and instead create one that's completely unique and meaningless, writing it down and keeping it in a safe place and also changing the password every month or so. 

Your computer should be equipped with the latest antivirus software and firewall protection in order to keep prying eyes away from your vital, personal information. Any financial services you deal with should also have a secure, encrypted website and those details should be easily visible on their website. 

Also never access any of your accounts from a computer in public places such as a cafe, coffee shop, or library. 

Online Investing 

There are currently a wide range of solutions available for those looking to invest either for growth or income potential. It is a well known fact that people today are simply not investing enough for their retirement, and with longer than ever life expectancies it is imperative to fully plan for the years ahead. 

Some online financial services to take advantage of include tax efficient investing, collective investments, and bonds. An online financial planner will be able to recommend the best course of action dependent upon your future plans and offer advice regarding potential returns as well as the level of risk involved. 

Protecting Your Future 

As we all very well know, life can often be unpredictable so it's important to protect for the future, and not just in terms of retirement but in the event of an unexpected and expensive or life changing event. 

With careful planning and attention to detail, safeguarding your family when it comes to matters such as bereavement includes preparing a will that will be tax efficient for your family and finding viable ways of reducing your IHT (Inheritance Tax) liability, all of which are possible with an experienced online financial service. 

Also be sure to take advantage of your service's resources on their website which often include helpful tips to read or download to print for later, or informative brochures, guides, and tools to give you everything you will need to make sound financial decisions.

Problems of Visitors to Canada and Medical Insurance

When visiting the beautiful country of Canada there are other things to be considered in addition to what roads to travel and what cities to visit. Canada has National Health Insurance for its residents but this does not apply to visitors. For this reason, everyone should be aware of the rules regarding visitors to Canada and medical insurance. 

When enjoying the magnificent views and other opportunities offered to the visitors, Canada is especially concerned that everyone travels safely. For this reason, there are a number of traffic laws one should be aware of. By following these laws it will be possible to avoid accidents which might lead to the necessity of medical attention. 

A person's health insurance company will be happy to tell their client if they are covered for illness or accident when visiting another country. Some require certain steps to be taken at the time of the illness or accident and will not cover the expense if this is not done. Others do not have any provision in the policy for out of country travel. This information is important to know before ever leaving home. 

With today's high cost of medical care, it is imperative that a person be covered with medical insurance at all times. When traveling out of one's home country sudden illness or some sort of an accident can easily occur. If a personal health insurance policy does not have an 'out of country' coverage than an investigation should be made for possibly purchasing a short term traveler's medical insurance. 

The doctors, hospital and pharmacies in Canada are considered some of the best in the world. Any visitor becoming ill or having an accident will receive immediate care and attention. However, if the visitor does not have health insurance to cover the cost it can be devastating to the bank account. 

It is important to talk to one's health insurance company and find out what the procedure is in paying an out of country medical provider when care is required. If they expect the patient to pay and then be reimbursed later, this can be a problem. When the bill incurred amounts to a very large sum of money sometimes there are not sufficient funds to cover it which results in a very embarrassing and awkward situation. 

To be sure one has adequate coverage while visiting Canada it is a good idea to check with a Canadian Insurance Company to obtain basic information. This information should be compared to that provided by the personal medical insurance policy. By doing this it is possible to be assured that the coverage one has is adequate. 

The problems incurred by some of the visitors to Canada and medical insurance can be avoided by adequate preparation before beginning the journey. When one considers the expense that could be incurred if there was an accident with the entire family in the car it is frightening. Ambulances, x-rays, specialists and possibly surgery can amount to a sum that it would be difficult for and individual to pay.

Difference Between an IRA and a CD

Difference Between an IRA and a CD 

We all want to enjoy our retirement, but few of us know how to save. There's a lot of technical jargon involved, but the basic concept is simple enough. Differentiating between an IRA and a CD is delicate business, as they are both very much alike. Let us first examine IRAs. There are two types of IRAs, a traditional IRA and a Roth IRA, and the difference between the two is critical. 

A traditional IRA (Individual Retirement Account) allows a person to save up for their retirement in a way that's temporarily tax free. If you put money into a traditional IRA it will be deducted from your yearly income, which means the amount won't be subject to taxation. If you are age fifty or over, you can contribute up to four thousand dollars a year into a traditional IRA. 

If you withdraw your money from a traditional IRA before you are sixty, you'll get hit with a ten percent penalty. Keep in mind that, regardless of when you decide to take the money out of your traditional IRA, once it's out it's taxable. Occasionally the ten percent fee for early withdrawal is lifted if you're using the money for educational purposes or buying a house. 

The second type is called a Roth IRA, named after the Senator William Roth. One big advantage of a Roth IRA is that you can take out your direct contribution (the money you put in minus any profits) tax free whenever the urge strikes you, and you can collect the profits tax free after five years. The disadvantage is that Roth IRAs are not tax deductible, and the money won't be subtracted from your yearly income. 

Another disadvantage of choosing a Roth IRA applies to wealthy individuals. Possibly because the Roth IRA was created to lend a helping hand to middle class Americans, there is an income limit that you can't exceed. If you make over one hundred and five thousand dollars per year, a Roth IRA is not for you. For joint filers the limit is one hundred and sixty six thousand dollars. 

A CD (Certificate of Deposit) is a way to invest money that is insured by the banks. A CD is viewed as a safe and steady way to make money, as it generates more profit than a savings account but less than some risky investments. The best part about CDs is that they are mostly risk free, but it's important to note that there are strict penalties for withdrawing the cash before the term ends. 

Whether it's in a CD, IRA, or a 401k (where your employer contributes money to match your own), you should be putting away at least ten percent of your yearly income for retirement. Saving for retirement is the most important thing a young person can do. We work hard in the hopes that we can enjoy our golden years in financial security, but the only way that's going to happen is if we start now.

Revealed! Information on Dealing With an IRS Audit

An IRS audit is a harrowing experience for most people who have been through it and one of the reasons for this is the stark ignorance that most people carry about their rights in an IRS audit. Fortunately, the IRS is bound by this information and even if you don't know them the IRS is still expected to respect them. One of the most important right that you have as a tax payer is to get all the information about what the IRS is doing in and what is about to happen in the audit procedure. The IRS owes you a complete explanation so do not hesitate to ask for it. You also have the right to seek advice from an accountant or a tax attorney like in the case of legal proceedings alternatively you can also have these professionals represent you. 

You have the right to claim any deductions that were not granted to you and that you are eligible for on your original tax return. If you are facing problems with your IRS agent you can also file a request with the national office of the IRS to notify them of your problem. When dealing with the IRS, your rights can be one of the most potent weapons in your arsenal; these rights ensure that you are treated fairly by the IRS auditor. 

Now let's talk about what you should do when you receive an IRS audit notification. These flowing steps will help you to gain edge over another tax payer ho does not know how to handle an IRS audit. 

If you think you need time to jog your memory about your tax records and why they were accomplished in a certain way or if you need some time to collect the necessary documents to support your case you can ask for a postponement of your audit. It is best to tread into this field well prepared so take some time if you need it. 

When you are going through an IRS audit it is crucial to read IRS Publication 1. This booklet is the Taxpayer's Bill of Rights and it will give you in depth information on what the US government provides its tax payers. 

Another important step to take care of during an IRS tax audit is to meet the counsel; you should do this even if you are being represented by a tax attorney or an accountant. This will help you to come up with strategies to deal with the various points that the IRS auditor is bound to brig up. 

You will be asked to bring certain documents by the IRS auditors it is imperative that you only carry the specified documents; carrying additional material may lead to bigger hassles. Remember even though you are not intentionally trying to conceal any information; there is certainly no need to furnish more details to the auditor than what are required to provide according to the audit notice. Providing additional information will be an open invitation to the auditor to probe further and you certainly don't want this. Let him/her be content with the information that they planned on delving in. 

Finally, like all other IRS related issues being prepared is the best way to handle an IRS audit tactfully and quickly. Ensure that you have all the relevant documents needed to support all the claims made in your tax returns. 

If you think that the matter is to complex for you to handle, you can always get in touch with a Dallas tax attorney if you live in Dallas/ Fortworth. On a concluding note, things may sometimes get heated up but threatening to punch the auditor or bad mouthing him will land you in more trouble o be professional. Do not lie because this can have grave implications and may IRS mega issues can be dealt with easily by simply telling the truth. So if you have received an IRS tax audit notice start preparing right away.