Private Mortgage Insurance
If you purchased your home paying less than 20% down, chances are you had to purchase “mortgage insurance” in order to qualify for your loan. A mortgage insurance policy protects the bank in the event they are forced to repossess your house and sell it at a loss. As with most other types of insurance, you pay a monthly premium on top of your monthly mortgage payment for this policy. A mortgage insurance policy provides the means for purchasing a house you may otherwise be unable to afford, due to a limited down payment.
Gift Giving Strategies
The federal government imposes a substantial tax on gifts of money or property above certain levels. Without such a tax someone with a sizable estate could give away a large portion of their property before death and escape death taxes altogether. For this reason, the gift tax acts more or less as a backstop to the estate tax. And yet, few people actually pay a gift tax during their lifetime. A gift program can substantially reduce overall transfer taxes; however, it requires good planning and a commitment to proceed with the gifts.
Creating A College Funding Strategy
Saving for college isn't easy, but the earlier you start the better off you'll be. For example, if you save $60 a month for 17 years earning 8% per year, you will have over $25,000 by the time college begins! Taxes will reduce the amount of the portfolio.
There are several savings and investment strategies that can help you accrue money for college.
What Is A Qualified Annuity
Many employers allow their employees to contribute to an annuity program. This becomes an investment option in a salary reduction retirement plan. Under this plan your current taxable salary is reduced and in addition it accumulates tax-deferred earnings. Some companies have added annuities to their retirement list. If you work for a non-profit organization you'll probably be able to choose either a fixed or variable annuity or both. If you have a small business, or work for yourself, you can invest in a qualified annuity by setting up a Simplified Employee Pension (SEP) or a Keogh. Many financial plans are available that you can adopt or you can use a specialist to create a plan for you.
What Is The Coverdell Education Savings Account (ESA)
One of new products that came out of the Budget Reconciliation Act of 1996 is the Coverdell ESA. The Coverdell ESA offers the potential for tax-free growth when you use the account to fund a child's qualified higher education expenses.
Managing Your Assets
When you start organizing your portfolio you will want to consider how you will be spending your money after you retire. Some money will be deposited directly into your checking account; such as Social Security where as other income could be less predictable. It is always nice to get extra income you are not counting on but you must not plan on this.
Calculating Social Security
Social Security was originally introduced in 1935 in the aftermath of the Great Depression. It was intended to provide a safety net of income to retired and disabled workers and their families. Social Security is a mandatory plan, requiring most wage earners to contribute a percentage of their yearly income to support the program. In return, they, their spouses and sometimes their dependents are eligible for retirement, disability and survivorship benefits.
Understanding The Mortgage Underwriting Process
Whether you're looking for a first mortgage on a new home or a refinance on an existing loan, the interest rate you are offered will be based on the same factors; your income compared to your mortgage payment, the value of your property compared to the liabilities placed on it, and your credit report. The “Processing” of your loan is the preparation of all relative documents to verify, prove and package all information pertinent to these factors.
