How to Find the Best Mortgage Loan

Guest post by Sharon Smith

Planning a home-buying venture? The right kind of finance is of utmost importance as it helps you get the best deal. The most crucial task of a would-be home owner is to shop for a suitable mortgage loan.

Shopping for a good mortgage loan is not a very time consuming process. All you need to know is where to search for and what best suits your needs.

Remember these important tips before going for a mortgage loan:

1. If you are a first time buyer, you need to dedicate some time in studying the various loan options that you may lay your hands on. Compare the various aspects such as interest rates, terms, closing costs and conditions for each loan. This not only helps you in getting the best deal, but also helps you gather knowledge about the loan before you apply.

2. Before applying for a mortgage loan, order a free credit report. You can get your annual credit report from all three of the credit agencies: Equifax, Experian and TransUnion. Your present credit score would help you in determining whether it is the right time to apply for a mortgage loan or not.

If your credit report is on the negative side, you might have to pay a higher rate of interest. Therefore, it is always advisable that you apply for loans, be it a mortgage or a debt consolidation loan only when you have a high credit score and a positive credit history.

3. Make sure, you read about all the fees, cost, terms and conditions involved with the mortgage loan before you sign on the dotted line of your agreement with the lender.

Your eligibility to apply for a mortgage loan is based on your total income. The monthly mortgage payments are however, based on your net income. Therefore, take an honest look at your finances before you apply for a mortgage loan.

Read more »

How to Find Investors for Starting a Business

Finding an investor for your business provides you with the seed money you need to start the business. In return for investing in your business, most investors receive a percentage of the sales or company stock. Finding an investor for your business may be harder than it sounds, but there are some ways to go about locating and convincing investors to invest in your business.

Write a business plan. Before looking for investors write a business plan. A business plan is a written guide of your business including the purpose, the startup costs, expenses, sales forecasts and other information to gain the interest of investors.

Make a list of possible investors. Add people you know to the list who have money to invest and may be willing to take a risk with your business startup. Friends, family members and business owners of related businesses are the best places to start. For example, if your business involves a computer software product, then other software companies may be interested in investing in your company.

Locate business investors on investor websites. Dozens of investor websites exist, where business startups can search for investors (see resources), which may be called angel networks. If you do not have someone you know personally that can invest in your business startup idea, you can typically find possible investors through these networks.

Develop an investor presentation. Compile a speech or pitch to present the business idea for convincing investors to invest in your startup. Include information in your presentation that includes what the product or service offering for the business is, the costs involved in starting the business, what kind of demand there is in the market for the item and how much the company stands to make in one year, three years and so on.

Contact the possible investors. Schedule a time to meet with and make your presentation to each investor on your list.

Present your business idea to investors. At the meeting with the investor, pitch your business by giving your presentation and providing a copy of your business plan to the investor. Answer any questions the investor has about the startup and tell the investor what is in for them such as shares of the company stock or a percentage of the sales.

Sign an investor agreement. Once you find an investor, put your agreement in writing. You can find general agreement templates online or work with a business attorney to help you draw up a legally binding contract for both you as the business owner and the investor to sign.

http://money.cnn.com/2007/05/03/magazines/fsb/raising.money.fsb/
http://www.score.org/best_ways_to_finance.html
http://www.entrepreneur.com/money/finance/index.html
Lending Club: Find Investors for a Startup Business
https://www.lendingclub.com/public/about-us.action
http://www.gobignetwork.com/
http://www.angel-investor-network.com/

Read more »

How to Look Up a Tax Lien

According to Experian, one of the credit reporting agencies, a tax lien is a claim by a taxing authority on an asset owned by someone who owes back taxes. For a business, a tax lien may be on a commercial property the business owns, possibly the property where the business operates. The two major taxing authorities include the Internal Revenue Service (IRS) for business back taxes the business owes to the federal government and the county where the property is located. Whether it is a federal or county tax lien, the lien shows on the property records, which the county clerk’s office where the property is records on the public records. Whether you’re looking up a tax lien on your own property to pay it off or you’re an investor looking to invest in tax liens, your computer is the main tool you need to look up a tax line.

Find the county website. Use the National Association of Counties website to determine if the county where the property is located has a website.

Search the county website. Once you determine if the county is online, go to the county website and conduct a tax lien search. You can typically search for liens on the property using the parcel number, address or owner of the property. If the property is going to auction, the county websites also list upcoming tax lien sales and the procedures for paying off your own lien or buying tax lines.

Review the tax lien or tax lien lists. Once you pull up the tax lien for the property you’re interested in, the website provides various information on the lien. Typically, it lists the amount, date and payoff instructions for the tax lien.

Tips
If the county where the property is located does not have a website or does not allow online searches for tax lines, you have to go in person to look up the tax lien. Look up the address for the county clerk’s office, note the hours of operation and then go in person to obtain the tax lien information.

Some counties provide tax lien information by phone, but if you want a copy of the tax lien information, there is usually a charge.

Some websites, such as www.taxsalelists.com sell tax lien lists, which is another way to look up tax liens. Before you pay a third party to obtain a tax lien list, conduct some research on the business with organizations such as the Better Business Bureau, to make sure that the website is legitimate.

If it is a business IRS tax lien, you can contact the Centralized Lien Unit of the
IRS by calling 1-800-913-6050.

Read more »

Debt Consolidation Tips

Debt consolidation consists of rolling all of your debt into one loan or line of credit. This consolidation allows you to make one monthly payment at one fixed interest rate. Usually the interest rate on the new debt is lower than the original loans, which creates a long-term savings. Following some debt consolidation tips and guidelines can help ensure that your debt consolidation is a successful venture.

Get a Big Picture View of Your Debt

In order to understand the debt you’re in, make a thorough list of all the debts you have and want to consolidate. Include the interest rates for each debt and the balance you owe. Creating a written list allows you to see where your spending weaknesses are and account for every dollar of debt. The written list lays out a road map for you to determine which debts should be tackled first, allowing you to put together a plan of attack on consolidating and getting rid of high interest debt first and then working your way down the list.

Select the Right Company

Although you can consolidate on your own, a debt consolidation company is an option for some who cannot manage consolidation alone. Shop around for a company that is well established and highly experienced. Debt consolidation companies charge fees to help you create a written plan on how to consolidate debt and then to help you implement the plan. Make sure that the fees are not exorbitant. Ask the company for references and then contact the references, if possible. By law, debt consolidation companies have to provide you with a written agreement that spells out your working relationship, including fees.

Choose the Best Plan for You

Several debt consolidation options exist. Credit card counseling can help you to lower your interest rates on credit cards in order to pay off the balances more quickly. Credit card consolidation places all of your debt on one lower interest rate credit card. A debt management plan involves you depositing a sum of money with a debt consolidation company each month. The company uses that money to pay off your debts on a schedule that they have negotiated with your creditors. A consolidation loan is a personal loan to pay off all of your creditors, leaving you with just one payment each month.

Be Patient

The debt did not accumulate overnight and it is not going to disappear overnight. Once you have a plan in plan, stick with the program until the debt is completely paid. Keep track of the total and watch the amount come down each month. Each payment brings you closer to financial freedom.

Make Payments on Time

The debt consolidation process is a prime opportunity to train yourself to be wiser with money than you were previously. Put your monthly budget on paper, so you can see income and expenses. Make every effort to pay your bills on time, every month. Check with your former creditors to ensure payments from the debt consolidation company are on time. If the debt consolidation company is not paying on time, it can hurt your credit further.

Stop Spending

Many think that debt consolidation solves financial problems. It does not. It helps a debtor pay off outstanding debts at a specific time in his/her life. Debt consolidation does not account for continual spending after the process has begun. Some programs offer financial counseling to help you build appropriate spending habits, but the overall goal of debt consolidation is to get you out from under the current debt. Do not use this opportunity to go out and spend more. Instead, look at the habits that caused your debt and train yourself to avoid those pitfalls.

Read more »

Employment Credit Checks

Most people know that when they apply for a loan or credit, the lender or creditor is going to check their credit. What may not be common knowledge is that some employers also run a credit check as part of the employment process. When a potential employer runs a credit check on a potential employee, it is typically called an employment credit check.

Types

A potential employer has the right to pull a credit report or to run a credit check on an employee before offering employment. An employer also has the right to run a credit check before deciding to promote the employee, give the employee a raise or deciding whether to continue employment of the employee. According to the Employee Issues website, an employer has the right to run a credit check because there are currently no laws that exist that prohibit discrimination based on the status of the credit report.

Identification

The employer requests credit information from the three credit agencies: TransUnion, Equifax and Experian. An employer is typically privy to pulling a full credit report on an employee, which can include personal information and information pertaining to credit and debt accounts held by the employee. Information the employer can obtain from a credit report may include the year the employee was born; current and previous addresses; marital status and name of spouse; names of current and former employers; bankruptcy, liens and judgments; child support and alimony obligations; payment history on any account listed; a credit score; and other companies that have checked the credit report.

Permission

The Fair Credit Reporting Act does govern how employers can obtain a credit report on employees. An employer has to inform an employee that a credit check is going to be run and the employer has to obtain written permission from the employee. If an employee does not provide consent to the employer to check credit, the employer won’t be allowed to run a credit check, but this may also mean the potential employee does not get the job and an existing employee may not get to keep their job.

Use

The Fair Credit Reporting Act also requires employers to provide the employee with disclosures before taking action based on the credit report. For example, if the employer intends on letting an employee go, the employer first has to hand over a "pre-adverse action disclosure," which includes a copy of the employee’s credit report and a written summary of the employee’s rights under the Fair Credit Reporting Act. After the employer takes adverse action against an employee, the employer then has to provide the employee with an "adverse action notice," provide the name and complete contact information of the credit agency the employer received the credit report from, the employer cannot disclose the credit check results to anyone else and is not allowed to place the information in an employee’s personnel record.

State Laws

In the wake of the downturn in the economy that began in 2007 and the high unemployment rate, many consumers were not able to pay their bills, which left many of these employees or potential employees with negative credit reports. Some states have proposed bills that prohibit discrimination on employees based on the findings of a credit check by an employer.

Read more »

Freelance writer at ZSB (Las Vegas, NV)

Freelance writer at ZSB (Las Vegas, NV)
This company hires writers and then does not pay them for completed work. DO NOT do business with them and expect to get paid! They have owed me $400 for months and keep promising to pay me, but never do.

Read more »

Elastic Credit with New Credit Card Laws

Credit cards have long been a source for quick and easy cash when needed—making this type of credit very elastic. Credit cards are getting a facelift with the new credit card laws, which makes credit card purchases and cash advances more elastic than ever before.

One way that credit cards are becoming more appealing to cardholders is due to the new credit card laws passed by the Federal Reserve. The new credit card laws help to protect consumers from being charged high late and penalty fees by card issuers. The changes are due to take effect on August 22, 2010 and are the closing act to the Credit Card Accountability and Disclosure Act introduced by Congress in 2009.

New Credit Card Fee Limits

Credit card issuers can no longer set and charge their own rate fees. The new credit card laws limit late payment fees to a maximum amount of $25. The only exception is if a cardholder has made a late payment in the previous seven months, then the late fee limit does not apply. The penalties charged by the card issuer also have to be proportionate to the minimum payment due. For example, if the minimum payment due is $15 and the cardholder makes a late payment, the card issuer can only charge a late fee of $15. Cardholders who have credit cards that they do not use also do not have to worry about being charged fees for inactivity because inactivity fees are eliminated with the new law.

Read more »

Mortgage Elimination Scams to Avoid

For those struggling to make mortgage payments, there are a variety of assistance and counseling options from the government and from private organizations. However, homeowners should beware of any company promising “mortgage elimination.” The U.S. Secretary of the Treasury and the Office of the Comptroller of the Currency recognize a number of companies that try to suck in unsuspecting homeowners, defraud them of their savings or even the title of their home, and possibly even leave them homeless. Any company that advertises to help a homeowner eliminate a mortgage—for a significant fee—is almost certainly running a scam.

Lender and Signature

In some cases, the mortgage elimination company will present information to the effect that a mortgage company is profiting from the homeowner’s signature on the loan contract by selling it to secondary mortgage companies. The company will claim that this is fraudulent activity on the part of the lender (despite the fact that it is legal) and that it can assist the homeowner in eliminating the mortgage payment altogether, after the homeowner turns over a fee. The reality is that if fraud is occurring, the homeowner should consult a real estate attorney to see if legal action can be taken. In the unlikely event that the mortgage elimination company can actually do something, the homeowner will end up paying more money in fees to the company and may possibly risk losing his home. A real estate attorney will be able to address the issue effectively and, more importantly, legally.

Currency Value

Some mortgage elimination companies present the idea that a lender cannot legally offer the mortgage due to complex, and often confusing, reasons about the value of the U.S. currency and the money that the Federal Reserve must “create” (through printing) to keep the economy from failing. To put it simply, the mortgage elimination company will claim that because the value of the U.S. dollar is so debased through the Fed’s activities, the lender cannot require the homeowner to pay off the full loan amount, since the loan amount is based on dollars that have no value. The mortgage elimination company will purport to act on behalf of the homeowner by having the homeowner sign a power of attorney and possibly even sign his or her title over to the company, in addition to paying considerable up-front fees. By the time the homeowner realizes what's going on, the mortgage elimination company owns the property title and the homeowner may lose the property.

Phantom Money from Banks

Similar to the scam regarding currency value, one scam claims that the bank cannot issue a loan because the money does not actually exist. The homeowner will pay the mortgage elimination company an upfront fee (and in some cases, the homeowner will also be required to sign a power of attorney giving the title to the company), and the mortgage elimination company will provide the homeowner with a fraudulent loan release. The homeowner files this loan release form with the county, giving the impression that the homeowner has actually paid off the loan and allowing the homeowner to apply for a new loan. After applying for a new loan, the homeowner will continue the process again and again, until the homeowner is embroiled in multiple default loans. As far as the lenders are concerned, of course, the homeowner owes on the loans, but by this time the mortgage elimination company will have proven that it has no legal case, but it certainly has the homeowner’s fees and possibly even his title.

Read more »

How to Dig Your Way Out of Credit Card Debt

Credit card debt can leave you with sinking feeling, stressful days and sleepless nights. Rather than allow the debt to simply take you down with it, take the steps you can now to dig yourself out of debt.

Consolidate the Debt

Rather than have a myriad of credit cards with multiple balances, consolidate all your outstanding credit cards into one debt. You can obtain a formal consolidation loan or simply consolidate on your own. Consolidation loans typically offer a lower overall interest rate and one-payment option than paying each credit card company individually.

Use a Home Equity Loan
If you have an existing home equity loan, these are ideal for creating your own consolidation loan. Not only do home equity loans tend to have lower interest rates than credit cards, but the interest you pay on a home equity loan also tends to be tax deductible.

As you consolidate your debt, you’ll feel more in control of your finances. With manageable monthly payments, you can now focus on getting rid of the debt that you have consolidated. You’ll sleep better at night and your finances will be better off in the long run.

Read more »

Poor Credit? How to Refinance Your Home Anyway

Refinancing your home can lessen the burden of high mortgage payments, release cash for valuable home improvement projects, or be used to alleviate debt. For the borrower with poor credit, a simple refinance can be problematic. Mortgage lenders are understandably hesitant to give mortgages to people with bad credit. Because of this, there are now specified lenders and brokers that work with those with bad credit. Refinancing with poor credit is now possible, but it may require a bit of legwork.

Step 1

Determine amount of equity in the home. When refinancing, the lower the borrower’s score, the lender likes to see more equity is built up in the home, which may require you to make 20-25 percent payment to build equity in the home and assure the lender that you are less likely to default on the loan.

Step 2

Start with your current mortgage lender. You already have a relationship with your existing lender, so the lender may be willing to work with you in order to keep your business. This is also a great place to get your first rate quote. From here, you can compare other loan offers until you make your selection. Do not be discouraged if the existing lender is unwilling to work with you. Keep looking for lenders that are willing to work with you.

Step 3

Visit online mortgage brokers (see resources). Here you can get compare mortgage rates and find brokers in your area. Visit the offices or email the local mortgage brokers that work with those with poor credit.

Step 4

Choose the lender. Compare the interest rates and types of loans and determine which will fit your situation the best. For example, if you will not remain in the home long, an adjustable rate mortgage will allow you to start with lower payments. But keep in mind that you need to stay put long enough to recoup any fees that were paid for the refinance itself.

Step 5

Apply for the refinance mortgage loan. If you are refinancing through a different lender than your original mortgage loan, you will probably have to provide all of the documentation you provided for the original loan. Although your current lender may not provide the best offer, the lender has all of your information on file, so the time and resources necessary for processing your application will be reduced.

Step 6

Complete the loan. Completion of a refinance loan is simpler than the closing on a home purchase because there are not any other people to deal with. You home will most likely require a new appraisal. Check your private mortgage insurance at this point. If your loan-to-value ratio is less than 80 percent, you will no longer be required to pay this. After the appraisal is complete, your signature will be required on many pages and your refinance loan will be complete.

Warnings

* Your credit score will impact your refinance rate. The interest rate on your refinance loan will be higher if your score is lower than 740. Even small improvements to your score can make a difference in the rate.

* A bad credit refinance can also carry higher closing fees.

Read more »

For Sale by Owner (FSBO)

In a 2006 National Association of Realtors survey, only 7% of sellers sell their homes without a licensed broker. Owners attempting to sell their own homes, also known as FSBOs (For Sale by Owners), will have many tasks to accomplish with which they may not be familiar. The valuation of the property is just the beginning; timing, marketing, preparing the home, negotiations, and so many other things are hurdles the owner must research and tackle to be successful.

Benefits

First and foremost, when an owner sells the home the realtor commission fees are nonexistent. These fees can add up to 6% of the selling price of the home; this amounts to $12,000 on a $200,000 house. Another benefit is the vested interest the owner has in the sale of the home. It is often the case that realtors work to secure a quick sell without so much worry about the price or conditions on the contract. The owner can set their own schedule for showings and can openly negotiate with a potential buyer without the hassle of sending paperwork back and forth.

Multiple Listing Service

The Multiple Listing Service (MLS) is a national marketing tool that all licensed agents use to share listings and match buyers. Previously, sellers not using an agent had no access to the MLS. Now FSBOs can list their home on the MLS using one of many websites that offer this fee-based service.

Advertising

There are many new real estate services online that cater specifically to the FSBO market. For a reasonable fee, the property is posted online with photographs and virtual tours. Zillow.com, ForSalebyOwner.com, and homesbyowner.com are just a few such sites. Along with this, open houses, full-color brochures, ads in newspapers and real estate circulars, and personal networking are all advertising tools that can lead to the sale of a home.

Challenges

The owner that hopes to sell a home without the help of a broker will face more work than he or she might think. In order to price the home correctly, the owner must research recent sales and home prices in the area. The owner must also know the state laws and regulations of fair housing, home disclosure, sales contracts, and sales negotiations. Financing can also be a confusing category, so the owner should know how to tackle this subject with a buyer.

Warnings

Buyer’s agents are often reluctant to work with owners trying to sell their own homes, even if the home is listed in the MLS. Also, buyers tend to submit lower offers to FSBO homes because they know the owner is saving money on sales commissions. The National Association of Realtors reports that the majority of owners attempting to sell their own home eventually hire a realtor, mostly because buyers typically use agents.

Read more »

How to Get Your First Home Loan with Poor Credit

Buying a home for the first time can be exciting, but if you have poor credit, it can also be a challenge. One of the main factors that a mortgage lender considers when approving or denying an applicant for a loan is credit history. The good news is that if you have poor credit, there are subprime lenders that are willing to loan money to first-time home buyers with poor credit.

Find a subprime lender for a poor-credit loan.

Credit: alaska home image by Silke Wolff from Fotolia.com

Step 1

Find a subprime lender. A subprime lender is a lender that offers loans to those who do not have good credit. These are not your traditional banks and lenders so the fastest and easiest way to find a subprime lender is to contact a mortgage broker or search your local phone for mortgage lenders that specialize in subprime loans.

Step 2

Submit a mortgage application. Once you find a subprime lender, the next step is to apply for the mortgage. Even if you do not have a property chosen yet, you can submit a mortgage application and the subprime lender will approve you or deny you based on your personal financial information.

Step 3

Submit supporting documentation. You'll need to submit copies of your last two year's tax returns, the last two month's paycheck stubs and copies of the last two month's bank and brokerage account statements. These documents along with the information you supply on the mortgage application are used by the lender to qualify you for the mortgage.

Read more »

Indemnity Insurance Plan Information

Deciding on which type of health insurance coverage to carry for you and your family can be challenge. An indemnity insurance plan, also known as a reimbursement plan, is the most common type of health insurance plan offered. Understanding the ins and outs of this type of plan can help you decide whether it's the right type of health insurance plan for you.

Significance

The purpose of an indemnity insurance plan is to allow individuals to choose their own health-care providers and to be reimbursed medical expenses no matter who they choose as a health-care provider.

Limitations

While indemnity insurance plans do reimburse for medical expenses, reimbursement amounts vary. While the doctors and hospitals you can utilize are not restricted, how much of the medical expense your insurance policy covers does have limitations. Reimbursement amounts may be limited under an indemnity plan, which means you may have some out-of-pocket expenses.

Benefits

While other types of insurance policies limit doctors and hospitals to providers on the health insurance carrier's list, an indemnity insurance plan does not have this type of a limitation. As opposed to a PPO, where you are responsible for a certain amount of your medical care depending on whether you see an "in-network" or "out-of-network" provider, and you have a deductible to meet, this is not the case with an indemnity plan. Whatever doctor you see, there is not a difference in cost to you. As opposed to an HMO plan, where you have to see a doctor or visit a hospital on the plan's list of carriers, an indemnity plan removes this factor completely. So, another primary benefit of this type of plan is that it is very flexible and reduces your out-of-pocket expenses.

Actual Charges

Under an indemnity insurance plan that pays actual charges, you will receive a reimbursement for the cost of your medical expenses. An actual charges indemnity insurance plan gives you back the cost no matter how much the expense is.

Percentage of Actual Charges

If an indemnity insurance plan offers reimbursement as a percentage of actual charges, then you will receive a set percentage of the actual medical expenses. Again, the reimbursement is regardless of how much the medical services cost. The most common percentage of actual charges reimbursement is 80 percent. For example, is a medical procedure costs $1,000, the indemnity insurance plan carrier will reimburse you $800 and you are responsible for the difference of 20 percent or $200. This percentage can vary by policy, so check with your insurance provider for specifics on what your percentage of reimbursement is.

Indemnity Reimbursement

With an indemnity reimbursement schedule, the insurance company pays a certain amount of the medical expenses per day and for a certain number of days. With an indemnity reimbursement schedule, the reimbursement amount is not determined by the cost of the medical care, but your reimbursement amount also cannot and will not exceed your expenses.

Read more »

How to Learn Real Estate Law

Real estate law involves dealing with both commercial and residential property, finalizing transactions and finding potential issues, looking into property regulations and boundaries. You can learn real estate law on your own.

Step 1

Research online law libraries. They provide a wealth of information, explaining the facets of law and providing further reading resources for you to look into.

Step 2

Take note of further resources that directly apply to the category of real estate law you’re looking into. If you are researching landlord-tenant law, for example, take note of all the resources you find on that subject. Studying all the information you can find will prove to be advantageous when you apply it in a real-life situation.

Step 3

Visit your state’s real estate commission. You’ll gain knowledge about real estate laws, regulations and requirements for licensing.

Step 4

Consider taking advantage of free real estate advice online. You can not only read online articles that keep you up-to-date on all of today’s real estate information, you can ask questions regarding home selling and buying to get answers from real estate professionals in online forums and on blogs kept by real estate professionals. Select your location and find professionals and stores of information close to you.

Step 5

Look into online universities with courses in real estate law. Courses might cover real estate contracts, closing property transactions and learning how to read a survey. You’ll be able to study from the comfort of home. There will more than likely be a small fee for each course you take.

Read more »

California Home Warranty Policies

Home sellers or their real estate agents acquire home warranties to protect themselves against lawsuits if something in the house breaks within the first year. The Home Warranty Association of California (HWAC) is made up of the state's warranty providers who offer some of the top home-warranty policies in California.

Fidelity National Home Warranty Company

Fidelity National Home Warranty Company is a member of the HWAC, receiving the association's seal of approval, as well as a good rating from homewarrantyreviews.com. Fidelity National offers one-year Standard and Comprehensive Plus home protection plans to cover California policy holders’ major home appliances and systems. It pre-screens repair technicians and utilize an automated tracking system monitoring the status of your repairs. The company offers optional or additional coverage for certain household items and a 30-day guarantee on labor and parts. Policies are specifically catered to California home warranty specifications, which includes contractor response to a service call within 48 hours, a $55 service fee and guaranteed work for 30 days with a 90-day guarantee for parts. Buyer’s Coverage begins at escrow closing and New Construction coverage begins on the first anniversary of escrow closing.

Old Republic Home Protection Company, Inc.

Founded in 1974, Old Republic Home Protection Company Inc. is not only a HWAC member but also listed by Home Inspections USA. It received a good rating from homewarrantyreviews.com as well. The Comprehensive Plan allows customers to create custom plans by adding options to the Standard Plan. The Standard Plan covers failure due to lack of maintenance, rust or corrosion, improperly installed or mismatched HVAC systems, water heater sediment and unknown pre-existing condition coverage. Optional choices allow coverage of unique systems and the addition of enhanced services. The Sample Coverage plan is for single-family home dwellings under 5,000 square feet. Upgrade options include the Ultimate and Platinum Plus protection plans. All have extra options available for home buyers only.

2-10 HBW Warranty of California

An HWAC member and listed by Home Inspections USA, 2-10 HBW of California offers two types of warranties, the 2-10 Warranty/New Construction Home Warranty, and the Systems and Appliances Warranty/Home Service Contract. The 2-10 Warranty/New Construction Home Warranty must be applied for by the builder of a home who is required to meet underwriting guidelines and agree to follow the terms of his agreement with 2-10. On the date of closing, homeowners receive a Certificate of Warranty backed by 2-10 with the builder’s name on it. The Systems and Appliances Warranty/Home Service Contract covers major home systems and appliances. If one of the systems or appliances that a homeowner’s contract covers breaks down, 2-10 sends a contractor to do the repair. The homeowner pays a deductible and 2-10 covers the rest.

Read more »

Claiming the Sale of Vacant Land on Your Federal Tax Returns

When vacant land is sold, the sale must be filed with the Internal Revenue Service. You must report the sale on your personal federal tax return if it meets certain criteria. These include whether the land is adjacent to your primary residence, if you owned or used the land as part of your primary residence and whether the sale of your primary residence and the vacant land occurs within two years of each other.

Step 1

Calculate the profit or loss by subtracting the selling expenses from the selling price and any outstanding mortgage balances or tax liens paid out of the proceeds of the sale. Determine whether it's a profit or loss and the exact amount.

Step 2

Report the gain, if there was one, on Schedule D of the 1040 federal return form. Use line 1 if it's a short-term debt, meaning that you owned the land for one year or less. Use line 8 if it's long-term, or you owned the land for more than one year.

Step 3

Report the loss, if that's the case, on Schedule D, lines 1 or 8. The loss is not tax-deductible, but you still have to report it.

Step 4

Fill in the information associated with Lines 1 or 8 in sublines a through e. Enter the amount of your gain or 0 (zero) on subline f, if it's a loss. File the form along with your personal income tax return.

Tip

If the vacant land was used for business purposes or rented for income, you may be required to file IRS Form 4797 to report the sale of the vacant land.

Read more »

How to Change the Deed or Title to Your Home

When you buy or receive a home as a gift, the deed to the home is the written proof of ownership of the home. It is also referred to as a title. If you need to change the deed on your home because of a name change resulting from a marriage or a divorce, it is a simple process that typically takes about 30 days to complete. Other reasons you may change a deed include death, inheritance, adding a new spouse or adding a child's name.

Step 1

Gather documents. In order to start the name change process for your deed, first get together the necessary documentation. For a name change, you'll need your name change document. For a marriage, a copy of your marriage license is required. For a divorce, you'll need a divorce decree and for a death, you may have to provide a copy of the death certificate, as well as the will that turned ownership of the home over to you. If you are adding a child's name to your deed, you will need the child's birth certificate.

Step 2

Call the title company and inform them that you want to change the name on your home deed, and explain your reason. Title companies usually require you to complete an application and request a picture ID, as well as the appropriate documentation to begin the change process on the deed.

Step 3

Pay the title company. In order to change the name, or add or remove a name on the home deed, the title company collects a fee for their services. The fee covers the time it takes to prepare the new deed and file it with the county clerk’s office where the home is located.

Step 4

Obtain new deed. When the new deed is recorded in the public records by the title company, you will also receive a copy of the deed with the new names on it. File the deed in a safe place as your proof of ownership of the home.

Tip

If you prefer, you can use a real estate attorney to help you change the deed on your home.

Read more »

Employers: Find Out How You Can Contribute Tax Free Savings to Employees

With all of the various tax laws in place, untaxed savings accounts might seem too complicated to use. There are, however, several savings account options that can serve a two-fold purpose: providing tax free income that can grow uninhibited over the course of decades and providing a retirement program or health savings program that employers can add to and thus ensure that employees have a financial cushion for the future. Setting up the best tax free savings option is largely a matter of considering the employee’s situation and then counseling the employee about the savings plan that will be most beneficial.

401(k)

The 401(k) is probably the most common and most popular type of tax-free savings account that an employer can use for contributing to an employee. The 401(k) allows an employer to match an employee’s own contribution. Additionally, a 401(k) provides the opportunity for an employer to arrange for a variety of investment possibilities, including mutual funds and bonds. With this type of account, the income added to the account is untaxed in the year that it is contributed. What is more, the money in the account remains untaxed until it is removed from the account, unless the account holder leaves the money intact until he or she is almost sixty years old. Recent changes in income tax laws have also provided for the Roth 401(k), to which 401(k) holders can move funds without risk of taxation. Because of the changes, Roth 401(k) holders can also remove the money from the account with risk of taxation.

Employer Retirement Savings Account

The Employer Retirement Savings Account (ERSA) was created under the similar rules of the 401(k) but with the goal of simplifying the process in order to motivate employer contribution and encourage savings among the many Americans who do not currently have a retirement plan. In particular, the ERSA creates the opportunity for smaller businesses – which previously were unable to set up basic 401(k) plans for employees due to various regulations – to establish Employer Retirement Savings Accounts and thus give employees the chance to save money for retirement. Like the 401(k), the ERSA also creates tax-free income growth.

Health Savings Account

Created for those who are part of a High Deductible Health Plan, a Health Savings Account (HSA) allows employees to save for their health spending without taxation on the money that is saved. The rules for a Health Savings Account are fairly strict, in that the account must be created within the boundaries of an HSA trustee – which may be a bank or even an IRS-approved employer. Money contributed to an HSA is not taxed when it is deposited; and unlike in the Flexible Spending Account (also designed for health savings), the money is an HSA can be retained in the account from one year to the next.

Read more »

Rural Property Defined by the Beholder

Defining rural property is a term relative to the person or organization you’re asking to define it. The United States Census, the United States Department of Agriculture (USDA) and the Office of Management and Budget (OMB) and real estate professionals, for example, all have slightly different interpretations of what rural means in respect to their individual areas of coverage.

Real Estate Professionals

The most popular use for the term rural is when talking about the area where a piece of real estate is located. Rural property in this case is used to describe a home, vacant land or piece of real estate that is located in the country. The country is a less densely populated area than cities. When talking about rural property in this instance, it may also include agricultural or farming areas. In essence, rural is the direct opposite of the city or urban property.

United States Census Bureau

The Census Bureau offers its own set of definitions to describe rural property. Since the Census Bureau is involved in population statistics, it defines rural property areas in terms of population density. The U.S. Census Bureau states that rural property is such that there is open country and less than 2,500 residents populate the area. In terms of people per square mile, this equates to areas that have anywhere from one to 999 people per square mile of land.

United States Department of Agriculture

The United States Department of Agriculture (USDA) is the agency that oversees the Office of Rural Development, so it defines rural property by the thresholds of population an area meets. Therefore, the USDA and the Office of Rural Development define rural property as a city or town that has a population of less than 50,000 people.

Office of Management and Budget (OMB)

Office of Management and Budget defines rural areas as those areas that fall outside of metropolitan areas. Rural areas are broken down further into areas that have clusters of people that range from 10,000 to 50,000 residents.

National Center for Education Statistics (NCES)

The National Center for Education Statistics works in conjunction with the U.S. Census Bureau and the Office of Management and Budget to classify areas by population in order to determine the educational needs of the area. One of the classifications is rural property, which is broken down further into those areas that are on the fringe of an urban area, distant rural properties and remote rural properties. Ultimately, the National Center for Education Statistics considers rural areas to be the areas that are outside of an urban.

Read more »

Federal Grants for Mortgage Borrowers in Default

Especially in a turbulent housing market, where default and foreclosure are rather commonplace, some borrowers seek assistance. For mortgage borrowers that are facing default on their mortgage or foreclosure on their home, there are some home mortgage assistance grants that are available on a federal government level. Each grant has its own eligibility requirements and amounts of assistance can vary greatly, so be sure to consult with the federal government, local entities and nonprofit organizations that oversee these programs for the details on how to qualify for and how to apply for the grant.

Definition of a Grant
The most popular form of a grant and the type of grant that most consumers are familiar with is an educational grant to cover college education tuition and expenses. Educational grants lend the meaning to the term "grant" that consumers tend to think that it implies it is free money that does not have to be paid back (as is the case with the term loan, where people pretty much know that they have to pay the money back to the lender). When it comes to federal mortgage grants, it depends on the grant as to whether or not you have to repay the money given to you. Some grants do not have to be paid back while other grants are meant to temporarily assist homeowners until they can get back on their feet.

Where Grants Come From
Federal grants for mortgage defaults come from the U.S. government, but the grants may be overseen or distributed to recipients through various programs or organizations. Some of the top agencies or segments of the federal government that issue mortgage default grants include the U.S. Housing and Urban Development (HUD), which oversees federal mortgage grants that fall under the jurisdiction of the American Recovery and Reinvestment Act (ARRA).

Grant Distribution
Even though the grant money stems from the federal government, local government, municipalities or non-profit organizations may distribute the grant funds these organizations may also be directly involved in the grant application, approval and denial process. For example, of the $13.61 billion allocated from ARRA, a portion of these funds were distributed to states, counties, municipalities and non-profit organizations to assist mortgage borrowers currently in default or heading for default on their mortgage.

Read more »

How to Convert a 401(k) into a Roth IRA

The 401(k) is one of the most popular employee retirement plans offered by employers across the county. 401(k) plans allow pre-tax contributions to be made and the growth in the account grows at a tax-deferred rate. Withdrawals from the plan are taxed at the individual’s income tax rates. A Roth IRA, on the other hand, is the direct opposite, so contributions are made after-tax dollars, the account grows on a tax deferred basis and withdrawals from the account are not taxed (because the money was taxed before it was put into the account). The more optimal tax treatment of Roth IRAs urges many 401(k) plan holders to convert to a Roth IRA.

Contact the 401(k) financial institution. In order to initiate a conversion from a 401(k) plan to a Roth IRA, use the 401(k) statement to identify and contact the financial institution that holds the account.

Roll over your 401(k) to a Traditional IRA. Since funds cannot be directly transferred from a 401(k) plan to a Roth, you first have to convert your 401(k) to a Traditional IRA. Tell the financial institution that you want to convert the funds in your 401(k) account to cash and then transfer the cash into a Traditional IRA.
Convert the traditional IRA to a Roth. After the Traditional IRA account is funded with the cash from your 401(k), contact the financial institution again and request that the Traditional IRA account be converted to a Roth.

Invest in the Roth account. Since the cash from the Traditional IRA is used to fund the Roth account, once the cash is sitting in the Roth account, work with the investment advisor at the financial institution that holds your account to make investment decisions.

Pay taxes. When you convert the Traditional IRA into a Roth, this act generates a tax liability for the current tax year. You have to pay the taxes on this amount with your own cash – not cash from the retirement account.

Tips

Before you convert a 401(k) or a Traditional IRA to a Roth, speak with your tax advisor to make sure this is a financially sounds decision for your personal financial situation. The tax advisor can also help you calculate the amount of tax liability you will incur when you transition to the account. It’s important that you can afford to pay the taxes out of your own pocket because you are not allowed to use cash from the retirement account to pay for the tax liability.

Read more »

How to Start a Florida Title Insurance Company

Title insurance protects against loss from problems related to the title on a property. These problems can stem from liens, unrecorded easements, building permit violations from previous owners, forgery, and human error, among other things. All mortgages require the protection of title insurance, so as long as homes are being sold, there is a need for title insurance companies. As with any business, regulations are specific to the state and/or county. Below you will find how to start a title insurance company in Florida.

Step One:
Identify the title insurance companies in your area. It may be beneficial for you to know what kind of competition you will face. Seek out a successful title insurance business owner with whom you can talk. It may be best if this person is out of town. Ask for tips in starting the company, gaining business, trouble-shooting, and basic business needs. Keep your eyes and ears open for things that may make this business owner rise to the top of the field.

Step Two:
Establish your business entity. Businesses are set up as corporations, sole proprietorships, partnerships, or limited liability companies. The legal structure of your business will be dependent on your entity. Complete online research to determine which structure fits your business best, and then file the appropriate forms with the Federal Government/IRS, and the Florida Department of State.

Step Three:
Obtain a Title Agency License package from the Florida Department of Insurance: Bureau of Agent and Agency Licensing. In this package will be the Title Agency Insurance Application Form; fill out the form in its entirety. Also in the package will be information on completing a fingerprint card, obtaining a surety bond, and fees. Send all completed information back to the Florida Department of Insurance.

Step Four:
Make sure your own license is complete and up to date. For the original license, you must complete a 40 hour insurance classroom course in title insurance and work for at least one year in title insurance duties under a licensed title insurer or complete three semester hours in real estate or real property law. You must also take the insurance examination. After your initial license, you will have to complete the prescribed hours of continuing education courses as approved by the Florida Department of Financial Services.

Step Five:
Hire a business attorney or consultant to review all paperwork and guide you through any additional necessary steps.

Read more »

Alabama Repossession Laws

Any purchase made in Alabama on credit or using collateral may be repossessed by the creditor. Repossession is most frequently seen with cars. Until the creditor receives the final loan payment, the lender holds crucial rights to the vehicle. Every state has specific laws regarding repossession and these laws are constantly changing. The laws in Alabama might differ from laws in some other states.


When Repossessions Can Happen

As soon as a borrower defaults on the loan, the creditor can repossess the property. The lender is not required to provide a grace period or extra time for payments. Repossession can begin as soon as one day after a payment was due. If the borrower knows he will be late on payment, he should contact the creditors immediately to inform them of the issue. To avoid repossession, creditors may work with borrowers to make a revised payment schedule or delay the payment, although they are not legally obligated to do so.

How Repossessions Happen

A creditor can repossess property at any time, as long as it is handled in a peaceful manner. The creditor does not have to officially sue the borrower or take her to court before it occurs, but the borrower has to be notified of the repossession. The creditor cannot lure the borrower into bringing the property to a desired location or use any force or threats of violence. The borrower does have the right to any personal property left within the vehicle. She should approach the creditor immediately to retrieve those items or write a letter listing the items and make arrangements to collect them.

After the Repossession

Once the property is gone, the borrower will receive a notice of his right to redeem the automobile. This simply means that the borrower has the right to get the car back, but only if he satisfies the conditions set forth. Usually the borrower has to pay the entire balance of the loan, not just the sum of late payments. The borrower will also have to pay any expenses associated with the repossession (such as storage and preparation for sale). If the borrower cannot pay off the loan, the creditor normally sells the car. If the car sells for less money than the balance of the loan, the borrower is still responsible for the remaining balance. The creditor will inform you of the deficiency and will sue you for the payment. If the creditor did not follow the law on repossession (breached the peace or failed to sell the car in a reasonable manner), the borrower may have some legal defense against paying the deficiency on the loan. In this case, the borrower should obtain sound legal advice.

Read more »

The Process of Foreclosure

The process of a foreclosure may differ from state to state, but the basics remain constant. Foreclosure can happen to any home-owner and typically no one benefits from it. It damages the credit of the home-owner and usually results in loss for the lender. If you are facing foreclosure, or you represent a lender foreclosing on a borrower, these steps should accurately reflect the process.

Step One:

Neglect to pay the loan payment. Most banks will not start foreclosure after just one missed payment. There tends to be a grace period before the proceedings begin. After the second missed payment, the bank will contact the borrower. At this point, the lender will usually accept both missed payments to rectify the situation. If the borrower is unable to pay, the situation will escalate.

Step Two:

Continue into foreclosure. At the third missed payment, the mortgage holder will proceed with a judicial sale or a power of sale. In a judicial sale, the mortgage lender files suit with the court system, and the borrower receives a letter demanding payment. Usually the court gives the borrower 30 days to respond with payment. If thirty days lapses without payment, then the lender can sell the property in an auction. A power of sale is less common, but operates without the court system. The mortgage lender demands payment from the borrower; if the payment is not received in the established time period, a deed of trust transfers the property to a trustee. The trustee then sells the house at a public auction. The home owner will be notified of all proceedings.

Step Three:

Sell the home. At auction, the opening bid is usually set at the sum of the outstanding loan balance, interest accrued, and legal fees associated with the foreclosure. If the opening bid is not met, the property is purchased back by the lender and deemed an REO or Real Estate Owned.

Step Four:

Leave the property. Once the property is sold, the sheriff’s office will serve an eviction notice. The borrower must vacate the home immediately. If the property was sold for an amount less than what was owed on the mortgage, there can be a deficiency judgment. The borrower will be required to pay the difference on the mortgage.


Warnings

A foreclosure should not be seen as an easy solution to a financial hardship. The foreclosure can leave a family homeless and can damage the family’s hopes of buying real estate in the future. Many employers are now requiring a good credit rating for employment, and in some cases, foreclosure can be grounds for termination.

A foreclosure can cost the local government thousands of dollars in trash removal, unpaid utilities, police costs, and inspections.

It is likely that the value of properties near the foreclosed home will decrease.

Read more »

Buying a Home with Bad Credit

Simply because you have bad credit doesn’t mean that the dream of home ownership is out of your reach. While credit scores and credit history do play a role in mortgage financing approval, it’s not the end all and be all of the approval process.

Different Borrowers Require Different Lenders

Borrowers with good credit and borrowers with bad credit should not be approaching the same mortgage lenders. It’s similar to a bargain shopper heading to the Gucci store. The two things do fit in the same category.

Borrowers with bad credit typically need to seek lenders that cater to low credit score and poor history borrowers. Generally, these lenders are called B-paper lenders or subprime lenders. The interest rates between traditional lenders and subprime lenders is subprime lenders typically have higher interest rates because they are dealing with higher risk borrowers. Fees can also differ between the two, with subprime lenders charging more to process a mortgage than a traditional lender.

Where to Find Bad Credit Lenders

Probably one of the best sources to turn to for subprime lending is a mortgage broker. Since a mortgage broker doesn’t work for any one lender, they have access to a variety of lending sources. One of the lending options is sure to fit the need of a bad credit borrower.

Another option is to work on repairing your credit before applying for a mortgage. Once you have your credit under control, then you can apply with a traditional lender and keep your fees and interest rate down.

Bad credit borrowers are not exempt from home ownership. You may have to take a different route than a good credit borrower, but in the end home ownership is within reach.

Read more »