 |
At the risk of being all subprime, all the time, this week we look at what I think are the real risks for the economy as a result of the subprime debacle. How can one side say it is a contained risk (and in one sense it is) and not a problem for the economy while another side says it will drag the US into a recession and thus be a drag on the world economy? The answers will give us a handle on the whole issue, as we look at how the problem developed. |
Learning facts about mortgages
| No one takes any responsibility for their actions. True, banks and mortgage companies have put many borrowers at risk with their loans. But where were the public, the bank regulators, the real estate agents, the mortgage brokers? Real estate agents should know about financing. Many are also mortgage brokers. And the public, what were you thinking when your income was exaggerated, or you bought a home you could not afford? Doesn’t anyone question how their loan works? Jobs were made up because they were not verified. I did these interest-only loans back in the late 1980s and we educated the borrowers and they did not have a problem. |  |
search for : mortgage companies, Real estate agents, financing, mortgage brokers, interest-only loans
Keeping Your Credit Score Above 620
 |
Having a good credit score is important because it helps you get better terms and interest rates on loans and credit. It’s also good because you’ll typically have more loan options available to you. That’s why, even if you don’t have excellent credit, it’s important to keep your score at least above 620. Recent changes in the mortgage market have caused mortgage lenders to tighten their credit standards. This has meant that folks with impaired credit, who were able to get home financing in the past, may find that getting a mortgage now may be more difficult. This is all the more reason why improving one’s credit score is so important. |
search for : good credit score
‘Structured Sales’ Aim to Ease Tax Bite, but Returns Are Slim
 |
rEager to cash out of their real estate or businesses, some property sellers are being drawn to a new strategy to help put off paying capital-gains taxes. The recent approach, called a structured sale, is being marketed more aggressively by some financial firms in the wake of the recent Internal Revenue Service clampdown on another tax-deferral strategy called a private annuity trust. The IRS and tax courts haven’t yet opined specifically on structured sales. Some tax lawyers believe the strategy is likely to pass muster if it is implemented carefully, although there’s always a risk the deals may be disallowed. The IRS declined to comment on the strategy. |
The market for structured sales is still small. But Allstate Corp., which began offering structured sales in recent years, says it expects the overall market to grow to about $14 billion within five years from about $100 million last year. Another big insurer, Prudential Financial Inc., also offers structured sales. A host of small financial firms around the country typically act as brokers to arrange the deals with individual consumers. Critics say the strategy doesn’t make sense for many property sellers. Costs can add up: The broker putting the deal together earns a commission, which is usually 4%, and there are typically set-up fees of between $500 and $1,500, plus legal and accounting fees. What’s more, the seller’s proceeds are essentially locked up in an annuity that currently pays about 4% to 5% (which is net of the commission). (more…)
search for : structured sale
Tax Tips For An Error Free Return
 |
Out of 131 million 1040s filed for 2004, there were 4 million math errors. If you make one of those 4 million errors, then mailing off your return is only the beginning of your headaches. Ernst & Young compiled a list of common errors. Some errors are simply careless. The easiest error to check if found with a a double-check of your math, the IRS does not give partial credit for getting the right formula but adding wrong. You might have done everything right, except for forgetting to carry a one, but the IRS doesn’t care. It will fine you for the difference. If, on the other hand, your careless math error leads you to overpay, who knows whether you’ll get that money back. It certainly could take a while. |
Selling Your Home Without An Agent
| It’s not surprising that some homeowners consider selling without the help of a real estate agent. Online information and even free listing services have made it easier for homeowners to circumvent the owner / agent relationship. The biggest advantage of the for-sale-by-owner strategy is saving commission. But those taking on the job themselves need to prepare for a little work to get the home sold, understanding that they will be the ones taking care of tasks ranging from marketing to showing the property to interested buyers. Here is a list of items to consider for the FSBO homeowner. |  |