Archive for June, 2007
Senior Citizen Reverse Mortgage California
Find Out More About Reverse Mortgage California
Are you one of those young-at-heart senior citizens? Been waiting for the golden years of your life? We’re here to tell you about one of the advantages of being a senior home owner. If you are over the age of 62 years, you are entitled to take advantage of a reverse mortgage California. Now, you may be asking, “what on earth is a reverse mortgage California?” Well folks, you’re asking the right people! Keep reading to find out the answers to all those questions you didn’t know to ask. Learn all you can about how to make a reverse mortgage California work for you.
Reverse Mortgage California Makes You Money
OK! So you own your home - right? Well, not really… you are still paying off your original mortgage. Determined not to leave a debt for your children. We know all about this. You may have even considered refinancing your mortgage, but were probably frightened off by all this horror stories of old folks losing everything they had. That’s where a reverse mortgage California comes into the picture. A reverse mortgage California offers senior citizens a practical option of receiving monthly payments which present a useful supplemental income to assist with living expenses. Repayment of a reverse mortgage California is flexible and penalty-free. You can choose whether to pay off the loan whenever convenient for you or when you sell your home. In the event that the reverse mortgage California is left for your spouse or heir, have no fear - it provides many options to surviving spouses or heirs that many other mortgages do not allow.
Using Home Equity to Buy a Car
Consider Using a HELOC When Buying Your Next Car
A good case can be made that the flexibility and other inherent advantages of HELOC loans make them well-suited for financing automobile purchases. Here’s why:.
1. Interest Rate Advantages - The average interest rate on a HELOC is typically 1.5% - 2.0% less than the average 48-month new car loan. The spread between HELOCs and used car loans is even greater. Things to consider:
- first, take time to explore 0% or other special-financing deals that may be offered. Most often, when a choice is offered between 0% financing and a lump-sum cash discount, the buyer is better off taking the discount. However, each deal needs to be weighed on its own.
- second, interest on a HELOC is adjustable whereas the typical auto loan will carry a fixed interest rate. In a rising interest rate environment, the interest rate increases can - over time - eliminate the rate advantage of a HELOC. This is a risk you need to consider carefully.
- finally, interest paid on a HELOC loan is generally deductible on federal and state income taxes (consult your tax advisor). The benefit of this deduction varies depending on your marginal tax bracket. Here’s a table showing the effective interest rate for HELOC loans at different tax bracket levels.
2. Payment Flexibility I - The typical HELOC loan allows for interest-only payments. This can be a big flexibility advantage over the standard auto loan which requires fixed principal and interest payments. Of course, paying interest only will increase the total amount of interest you pay. We suggest that you pay your HELOC auto loan as if it were a standard auto loan and resort to the interest-only payment feature only in the event of true financial duress.
3. Payment Flexibility II - In addition to loan repayment flexibility, you also gain added flexibility when paying for the car. For instance, why not first put the car purchase on your credit card, earn significant cash back or other rewards and then pay-off the credit card with your HELOC?. This type of flexibility simply is not available with traditional auto financing methods. Here’s an article discussing benefits credit card auto purchases.
4. Title and Insurance - when you finance a car with a HELOC, title to the vehicle is in your name - not the bank or lender’s name. Auto lenders often require borrowers to maintain extra comprehensive insurance to ensure their risk is covered. When you purchase a car with a HELOC, you are in control of this and can determine what level of insurance is most cost-effective for your situation.
5. Price Negotiation - Finally, buying a car with a HELOC loan (or credit card/HELOC combination) puts you in a very favorable price negotiation position. From the dealer’s standpoint you are an attractive customer because you’re paying in cash. All discussion of dealer financing can be side-stepped and you can focus strictly on price matters.
The benefits of using a HELOC loan for a car purchase are clearly significant. However, these benefits must always be carefully weighed against the fact that your home is ultimately the collateral for the HELOC loan.
Effort to advise on risky loans runs into snag
Getting a Mortgage - Weighing Your Options
When you are ready to buy your own home, you will probably be quite excited. Owning a home is part of the American Dream. On the down side, the home will come with a variety of new responsibilities; in fact, the mortgage you get for your home is likely to be the largest debt you’ll ever have. Since most people can’t afford to pay cash for a house, they take on a mortgage. Before getting a mortgage, you should know about some of the choices you will have. Your individual finances will determine which loan is right for you. Here are a few of the common options for you to consider:
What length or term of mortgage do you want? Thirty years is the most common term, but other options are available, some as short as 10 to 15 years. In general, the longer the term, the lower your monthly payments will be. The total payoff amount will increase accordingly. An extreme example is an Interest Only Mortgage, which would never be paid off. Interest only mortgages were common before the Great Depression of the 1930’s, but a record number of foreclosures led to a change in policy. Today, these loans remain “interest only” for a specified period, commonly five to ten years.
Fixed Rate Mortgages – A fixed mortgage will lock you into one interest rate for the life of the loan. Your mortgage payment will not fluctuate over time, so the best time to lock in a fixed rate is while interest rates are low. On the flip side, because you are locked in at a certain interest rate, you may miss further declines in rates unless you refinance your mortgage.
Adjustable Rate Mortgages - Often referred to as ARMs, they are the opposite of fixed rate mortgages. As interest rates fluctuate, your interest rate and monthly payments will vary accordingly. Commonly, adjustable rate mortgages have an initial period where your rates are fixed. This period can be as short as ten months or as long as ten years, during which you’ll have a set monthly payment and stable rate of interest. Adjustable rate mortgages which remain fixed for five years or more may also be referred to as hybrid ARMs.
Most ARMs have a cap on the interest rate. There are several options, including a periodic rate cap, which limits how much your interest rates can change at a given time, a lifetime rate cap, which puts a ceiling on your interest rates, specifying the amount that your rate can increase over the life of your mortgage, and a payment cap. Payment caps are not as common, but they allow you to place a limit on the amount your monthly payment can rise over the length of your mortgage loan.
Sub Prime Mortgages – Sub prime mortgages are intended for people with past credit problems. If you have made a number of late payments, or have had other credit issues which caused your credit score to drop below 620, you may need to look for a lender that specializes in sub prime mortgages. This kind of mortgage loan tends to carry higher interest rates than a conventional mortgage; however, since different lenders use different risk criteria to determine eligibility, you should be able shop a variety of lenders and find some bargains.
Be sure to compare several mortgage companies. You can get free mortgage quotes online and choose the lender who offers you the best rate and terms. You will also begin to get a picture of your credit. If necessary, you can find ways to increase your credit score. A little effort now will pay off later when it’s time to make that first mortgage payment.
What happens when a second mortgage debt is written off?
Scenario: Our second mortgage was an original $20,000,00 loan which has now escalated to $35,000,00. The mortgage company I dealt with is going to charge off this month. My husband is disabled and 1 child is disabled. The loan is in my husband’s name but the deed is in my name. I understand we will receive a 1099-C form. But what happens to the charge off with a lien on the house. I understand the debt is written off. But how does it affect me and will it come off in 7 years?
Solution: Your lender or mortgage company having written off your second mortgage or declared it as a charge-off, the debt will be considered as uncollectible. This indicates that the unpaid loan balance will be reported as a loss when the lender uses an accounting method for calculation of taxes.
Every year the lender/mortgage company files a Profit and Loss Statement with the Internal Revenue Service. All of the year’s bad debts including individual charged-off accounts are added up as an item in the Loss section of the Profit and Loss Statement. But this does not mean that the lender cannot collect the debt from you. Even after declaring a charge-off, the lender may hand over your debt to a collection agency.
Moreover, until and unless the lender issues a 1099-C form, you cannot consider the debt as forgiven. And, even if your lender does not send you the form, he may have sent it to the Internal Revenue Service. Therefore, you should claim the unpaid balance on the second mortgage or the charged-off amount as income on your income tax return in the year the debt has been forgiven.
Once you pay income tax on the forgiven debt, the lender should not come after the unpaid balance again. But the unpaid debt gets reflected on your credit report as a negative item. And, it would take you almost 7 years to remove a charge-off from the report. This affects your chances of qualifying for loans at reasonable rates of interest.
However, you can pay off the second mortgage balance in full and update the charge-off as “Paid Charge-off” on your credit report. Or else, you can make a partial payment towards the unpaid debt. This would get reflected on your report as a “Settled Charge-off”. Until and unless the charge-off is paid or settled, you cannot remove the lien on your home. So, even if the loan is in your husband’s name, you can pay it off to remove the charge-off and get clear title to the property.
Once you have settled the charge-off after paying taxes on the forgiven debt, you can file an amended return with a written proof of the settled debt. This will help you to get back a part or the entire taxes paid on the settled debt. But there is a statute of limitation which allows you to claim the refund on such taxes within a period of 3 years of claiming the cancelled debt as income.
What Are The Best Buy To Let Mortgages
Searching for the best buy to let mortgage deal can take a lot of time and energy as there are so many different products available on the market. It really is worth spending time researching all of the available deals and the more time you take analysing the market, the more experince you will gain and the process will become easier and easier. Don’t forget that getting the very best mortgage deal for your own persnal circumstances will determine your own success as a property investor…so take your time. Now here is a tip: When you are doing your research of available products, have at hand a buy to let mortgage calculator so that you can analyse and compare the different deals with relative ease.
Buy To Let Investment
A property purchase is a very large investment. It doesn’t matter if you are purchasing for your own use or whether you are buying to let out it is an investment which should be taken with extreme care and attention. Securing the best buy to let mortgage product can ensure that you maximise the profit on your property investment so the right advice and guidance is very important. When you have found the right buy to let deal - take action! Don’t wait…make your move. To do this, you will need to have your funds in place so that you can clinch the deal before your competition moves in. Buy to let is a long term investment so you need the same ‘mind-set’ when you purchase property as you would to if you were making a large investment in the stock market.
Buy To Let Rate
Its true that Buy to let mortgage lenders will offer their best buy to let mortgage rates via buy to let mortgage brokers. The broker may charge a fee for their services. Don’t be immediately put off by this as you may find that overall, the deal is better than a regular high street bank offer and the savings can be much more particularly if the broker has exclusive access to some of the best offers. Use an on-line buy to let quote system to compare mortgage products, rates and options. Firstly, it is obviously advantageous for you to secure a mortgage deal with interest rates set as low as possible. However, there may be other aspects to deals whcih may be more attractive to you even though the rates are not the best. Also, depending on your view on how the economy may be expected to perform within the next five or ten years, you may be tempted to lock into a fixed rate for a limited time period, the better to insulate yourself against potential interest rate shocks.
Buy To Let Lender
Lenders normally suggest that the rental income each month represents at least 130 per cent of the monthly mortgage payment. Lenders will calculate the absolute maximum buy to let mortgage laon based upon the potential income achieved from the property.
Buy To Let Products
Some mortgage brokers, may be able to source exclusive mortgage products and reach formal mortgage offer stage in less time than if you were to approach a mortgage lender directly. The most successful landlords will use some of the best buy to let mortgages to fund their buy to lets and with buy to let mortgage products becoming more sophisticated and competitive the right buy to let financing can ensure you maintain your investment property portfolios in such a way that you are always working to the most optimum cashflow situation. Bear in mind that the buy to let mortgage industry is very competitive with new products being launched on a very regular basis.
By coincidence it could be either of these, but the best buy to let mortgage is the one that meets all of your individual circumstances and needs.