Monday, May 9, 2011
Saturday, May 7, 2011
You Will Spend Hundreds of Thousands of Dollars in Health Care Costs During Retirement
If you think Medicare will take care of all your medical expenses in retirement, you’re wrong.
Men who retired last year at age 65 will spend $65,000 to $109,000 on health insurance premiums and out-of-pocket health care expenses, according to a study released by the Employee Benefits Research Institute in December , and that is assuming all they want is a 50% chance of having enough money. If you’re that retiree and you want to be 90% certain that you’ll have enough cash, you’ll need $124,000 to $211,000.
The statistics are even worse for women due to their longer longevity. If you’re woman and you retired at age 65 in 2010, you’ll need $88,000 to $146,000 for a 50% chance of having enough money, and $143,000 to $242,000 for a 90% chance.
If you’re married, add it up: You and your spouse combined will need as much as $388,000 in retirement just for medical expenses. That includes co-payments, insurance premiums and other nonreimbursed medical expenses. It doesn’t include the cost of long-term care.
Why so much? The reason, EBRI determined, is that Medicare covers just 64% of health care costs. Private insurance and other government programs cover 22%, and the rest, 14% is paid directly by you. If yu don't save now, you'll have to find a solution to pay for it.
The best way to get prepare is to BUILD WEALTH NOW!
Monday, May 2, 2011
Walking Away From Your House, Not Always a Good Idea!
An estimated 11 million home owners owe more on their mortgage than their property is currently worth. That’s made more home owners consider walking away from their mortgage and their home, even those who can still comfortably afford to make their payments (known as “strategic default”).
Walking away from a mortgage usually results in either a short sale or foreclosure. So what are the consequences of walking away? There may be far more consequences than what most home owners ever considered if you do not know everything yu should know.
The consequences include everything from badly affected credit to potential tax consequences and deficiency risks. Home owners' credit scores will be badly hit regardless of whether they attempt a short sale or have their property foreclosed on.
There also could be the potential for deficiency judgment, when walking away from a home, which largely varies from state to state. In some states, lenders may sue you for the difference between what you owe and what your short-sale or foreclosure proceeds are.
A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan, in full. The availability of a deficiency judgment depends on whether the lender has a recourse or nonrecourse loan, which is largely a matter of state law. In some jurisdictions, first mortgages are non-recourse loans, but second and subsequent ones are recourse loans.
Being sued for a deficiency judgment after foreclosure seems to be one of the greatest worries of homeowners in danger of losing their homes. Not only are they behind by thousands of dollars on their mortgage payment and facing a public auction of their house, the ordeal may continue even longer. If they are sued for a deficiency judgment for the amount that the bank does not recover from the sale, then they may have to pay tens of thousands of dollars years into the future for their one financial hardship that led to foreclosure.
Walking away from a mortgage usually results in either a short sale or foreclosure. So what are the consequences of walking away? There may be far more consequences than what most home owners ever considered if you do not know everything yu should know.
The consequences include everything from badly affected credit to potential tax consequences and deficiency risks. Home owners' credit scores will be badly hit regardless of whether they attempt a short sale or have their property foreclosed on.
There also could be the potential for deficiency judgment, when walking away from a home, which largely varies from state to state. In some states, lenders may sue you for the difference between what you owe and what your short-sale or foreclosure proceeds are.
A deficiency judgment is an unsecured money judgment against a borrower whose mortgage foreclosure sale did not produce sufficient funds to pay the underlying promissory note, or loan, in full. The availability of a deficiency judgment depends on whether the lender has a recourse or nonrecourse loan, which is largely a matter of state law. In some jurisdictions, first mortgages are non-recourse loans, but second and subsequent ones are recourse loans.
Being sued for a deficiency judgment after foreclosure seems to be one of the greatest worries of homeowners in danger of losing their homes. Not only are they behind by thousands of dollars on their mortgage payment and facing a public auction of their house, the ordeal may continue even longer. If they are sued for a deficiency judgment for the amount that the bank does not recover from the sale, then they may have to pay tens of thousands of dollars years into the future for their one financial hardship that led to foreclosure.
Monday, April 25, 2011
Missed Mortgage Payments Hurt Credit Scores
Missed mortgage payments, short sales, and foreclosures will undoubtedly bring down your credit score.
Lenders use credit scores to see how credit worthy a person is. Credit scores range from 300 to 850. A mortgage makes up a big part of a person’s credit score and often is the most important part of a person’s credit profile.
And just missing a single mortgage payment by 30 days can affect a credit score. For borrowers, that can be nearly as destructive as a foreclosure to a credit score.
On the other hand, loan modifications, which is when lenders approve new loan terms, have a very, minimal” impact to credit scores, possibly dropping the borrower’s score by 10 or 15 points. So your first option should be to contact your lender/servicer and ask for a loan modification so your payment can be lower, more affordable.
A good credit score is important not just for financing home purchases, but employers increasingly check credit as well as landlords when seeking rentals. Also, poor credit scores can also mean higher costs on car loans and credit cards.
How a Credit Score Is Affected
FICO evaluated 3 various scenarios of mortgage holders, a borrower with a great credit score (780), a borrower with good credit (720), and a poor credit borrower (680) , in a study it conducted last month.
Here’s the impact FICO found:
▪ 30 days late on a mortgage payment: The 780 credit score borrower has her credit score fall to 670-690. The 720 credit score borrower has his fall to 630-650. The 680 credit score borrower falls to 600-620.
▪ Short sale, deed in lieu of foreclosure, or settlement, assuming the balance has been wiped out: The 780 credit score borrower falls to 655-675; the 720 credit score falls to 605-625; and the 680 credit score drops to 610-630.
▪ Foreclosure, or short sale with a deficiency balance owed: The 780 credit score drops to 620-640; the 720 credit score falls to 570-590; and the 680 credit score decreases to 575-595.
Lenders use credit scores to see how credit worthy a person is. Credit scores range from 300 to 850. A mortgage makes up a big part of a person’s credit score and often is the most important part of a person’s credit profile.
And just missing a single mortgage payment by 30 days can affect a credit score. For borrowers, that can be nearly as destructive as a foreclosure to a credit score.
On the other hand, loan modifications, which is when lenders approve new loan terms, have a very, minimal” impact to credit scores, possibly dropping the borrower’s score by 10 or 15 points. So your first option should be to contact your lender/servicer and ask for a loan modification so your payment can be lower, more affordable.
A good credit score is important not just for financing home purchases, but employers increasingly check credit as well as landlords when seeking rentals. Also, poor credit scores can also mean higher costs on car loans and credit cards.
How a Credit Score Is Affected
FICO evaluated 3 various scenarios of mortgage holders, a borrower with a great credit score (780), a borrower with good credit (720), and a poor credit borrower (680) , in a study it conducted last month.
Here’s the impact FICO found:
▪ 30 days late on a mortgage payment: The 780 credit score borrower has her credit score fall to 670-690. The 720 credit score borrower has his fall to 630-650. The 680 credit score borrower falls to 600-620.
▪ Short sale, deed in lieu of foreclosure, or settlement, assuming the balance has been wiped out: The 780 credit score borrower falls to 655-675; the 720 credit score falls to 605-625; and the 680 credit score drops to 610-630.
▪ Foreclosure, or short sale with a deficiency balance owed: The 780 credit score drops to 620-640; the 720 credit score falls to 570-590; and the 680 credit score decreases to 575-595.
Sunday, April 24, 2011
Don't Just Walk Away From Mortgage
Some Americans who owe more than what their house is currently worth are opting to walk away from their mortgage. But a new survey finds Americans don’t agree with home owners who make that choice.
60% of Americans say it is “never OK” for home owners to stop making payments on their mortgage, according to a new survey of 1,000 American adults by FindLaw.com, a legal information Web site. However, 34 percent say it’s OK for home owners to walk away from their mortgage if they are no longer able to make their monthly payments.
Only 3% of those surveyed said home owners should be able to walk away from their mortgage anytime they want.
Many home owners are currently facing very difficult and complicated situations involving their home mortgage, in some cases even including the threat of foreclosure. But before making any major decisions, home owners should consult with financial and legal professionals, including accountants, real estate attorneys, financial advisers, short sale/distressed property experts and real estate advisors. Any major change to a mortgage situation could lead to serious and unanticipated consequences involving taxes owed, contract law, credit scores, ability to borrow in the future, potential for lawsuits, and much more.
60% of Americans say it is “never OK” for home owners to stop making payments on their mortgage, according to a new survey of 1,000 American adults by FindLaw.com, a legal information Web site. However, 34 percent say it’s OK for home owners to walk away from their mortgage if they are no longer able to make their monthly payments.
Only 3% of those surveyed said home owners should be able to walk away from their mortgage anytime they want.
Many home owners are currently facing very difficult and complicated situations involving their home mortgage, in some cases even including the threat of foreclosure. But before making any major decisions, home owners should consult with financial and legal professionals, including accountants, real estate attorneys, financial advisers, short sale/distressed property experts and real estate advisors. Any major change to a mortgage situation could lead to serious and unanticipated consequences involving taxes owed, contract law, credit scores, ability to borrow in the future, potential for lawsuits, and much more.
Landlord Investment Tips
Have you ever thought about investing in rental property? Apartment buildings, condominiums, rental housing... all of these properties can be lucrative investments. Or they can be disastrous money pits!!!
TIPS!
1.Have a property management firm screen your tenants
2.Require that your tenants have renter's insurance
3.Make sure your property is protected for vandalism due to the tenant not taking care of the rental
4.Make sure you have insurance that covers you for fair rental loss
5.Make sure you have adequate limits of liability
TIPS!
1.Have a property management firm screen your tenants
2.Require that your tenants have renter's insurance
3.Make sure your property is protected for vandalism due to the tenant not taking care of the rental
4.Make sure you have insurance that covers you for fair rental loss
5.Make sure you have adequate limits of liability
Report Unveils Tactics of Loan Scammers
One in nine home owners are more than 90 days behind on their mortgage payments, which has prompted loan modification scams that promise to rescue home owners from foreclosure doom to skyrocket.
Four fair housing organizations released findings this week uncovering some of the most popular loan modification scam tactics after a yearlong investigation of about 80 companies.
According to the report, some of the common scam tactics used were:
Four fair housing organizations released findings this week uncovering some of the most popular loan modification scam tactics after a yearlong investigation of about 80 companies.
According to the report, some of the common scam tactics used were:
- 55% required an upfront fee to begin work or required a low initial fee to conduct minimal work — such as reviewing loan documents — on behalf of defaulting home owners.
- 43% guaranteed or promised they would be able to secure a loan modification even prior to learning about the home owner's financial limitations.
- 24% advised or encouraged home owners to stop making their mortgage payments or to stop contacting their lenders.
- 16% guaranteed a loan with a lower interest rate, between 2 and 6 percent.
- 12% discouraged home owners from getting free help from government-approved housing counseling agencies.
Don't trust anyone, BUT YOURSELF. Banks have been doing loan modifications for decades, and there has never been a need for loan modification companies. Just pick up the phone and your banks will be eager to listen to your circumstances, and guide you through the process to see if you can qualify. If successful you will see your monethly payment reduced. The bank will be better off to have you keep on making the mortgage payment as opposed to going through the headache and costly foreclosure process.
The only people who won't qualify are those who:
- Are not honest and thruthfiul
- Don't have a legitimate financial hardship
- Are too messy with their finances, not just the mortgage, but also have liens on their house, owe taxes to the IRS, and are obviously not serious about their finances.
- Loss of Job
- Mandatory Job Relocation
- Reduced Employment Income
- Reduced Self-Employment Income
- Military Service
- Business Failure
- Damage to Property
- Severe Illness/Incapacity
- Medical Bills
- Divorce or Separation
- Death of a Spouse
- Death of Family Members
- Inheritance Tax
- Payment Increase/Mortgage Adjustment
- Insurance or Tax Increase
- Too Much Debt
- Incarceration
If you want to use one of these causes to help make the case for either loan modification or a short sale, you need to be able to show to the lender's satisfaction both the cause and the degree of the hardship. Be serious and you will get what you want.
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