Finance

Guaranteeing the Safety of Your 1031 Exchange Funds

Coins and calculatorSeveral rules govern a 1031 exchange. One of these is the 45-day rule for the identification of your replacement property. During this time, you have no access to the proceeds from the trade of your relinquished property. Most investors are anxious about losing their hard-earned cash during this period and avoid 1031 exchanges altogether.

Though this is a genuine concern, it should not stop you from benefitting from the tax breaks of a 1031 transaction. In Utah, you can find a 1031 exchange company like 1031 Exchange Place to guarantee the security of your funds.

Have a Separate Escrow Account

Some investors opt to have their funds held in one account with their intermediary to minimize costs. Still, it is safer to have a segregated escrow account that only contains your funds. Though this attracts extra fees, it enhances your funds’ security.

Opt for a Dual-signature Account

If you decide to hold your fund in your qualified intermediary’s operating account, go for a dual-signature option. This account will need two signatures before the releasing of funds. These include your signature and that of your qualified intermediary, as the company remains the account’s primary holder.

Work with a Company with Insurance and Bonds

Working with a 1031 intermediary with insurance boots your funds’ security. The fidelity bond insures the company against fraud, while the errors-and-commission insurance covers clients’ claims for fund misuse. The existence of bonds and insurance lessens the risk of loss.

With the given guidelines, you can now confidently opt for a 1031 exchange. 100% transparency from your qualified intermediary also goes a long way in giving you peace of mind. Be sure to document your terms and conditions.

October 16, 2018 at 1:00 amFinance

From an ARM to a Fixed Rate: Should You Make the Switch?

someone signing a contract When it comes to refinancing a home loan, many are considering making the switch from an adjustable-rate mortgage (ARM) to a fixed-rate loan. If you are thinking of doing the same, keep in mind that this move makes sense if the interest rates are low. You should also, however, consider your personal circumstances and know what could happen if you decide to make the switch.

The Good Points

With a fixed-rate mortgage, you’ll have a stable monthly payment, with a principal and interest rates that will remain the same throughout the life of a mortgage. This is the opposite of an ARM, with loan payments and interest rates that can fluctuate depending on the market trends.

Refinance lenders in Phoenix note that the stability of a fixed-rate loan can make it easier for you to manage your monthly budget, as you know that your loan payments will be the same every month. It can also give you peace of mind, as your rates and payments won’t increase even if the market rates go up.

What You Should Think About

When compared to the initial/introductory period of an ARM (the period where interest rates remain fixed for a certain period), fixed-rate mortgages usually have higher interest rates. They may be generally considered risk free, but you cannot take advantage of decreased payments and rates if the market interest rates fall dramatically.

How Your Finances Will Be Affected

If you decide to refinance, you will have to pay closing costs. This is why it is best to determine your goal for making the switch. You should also aim to refinance for the right reasons like shortening your current loan term or lowering your interest rate.

If you, for instance, decide to extend the loan of your term, you are likely to pay more interest rates with a new loan. This is why experts suggest resisting the urge to refinance to a 30-year loan. While this will definitely lower your monthly payments, this will also increase the total amount of interest to be paid over the life of the mortgage.

Refinancing can be a good move if you do it for the right reasons. Talk to a lender today to more about refinancing and your options.

August 31, 2018 at 9:24 amFinance

3 Tips to Avoid Missing a Mortgage Payment

Man handing out a mortgage agreementOwning a house is a fulfilling experience but owning one debt-free is even more fulfilling. If you can find a great realtor, strike a great deal on a house, and pay in cash, then good for you. But if like most homeowners, you need a mortgage to make the purchase, then you’ll need to prepare for the monthly payments.
Here are three secrets to making sure you never fall behind on your payments:

Get a house you can afford

Many homebuyers make the mistake of buying a house they can’t afford. It isn’t the home of your dreams if you can’t maintain it, pay the bills, and still pay off the mortgage. Therefore, take a hard look at your current financial position before approaching a home loan provider in Ogden to get preapproved.

Make biweekly payments

Talk to your lender about making biweekly payments instead of paying monthly. It’s simple; you pay half your mortgage due every two weeks. This will make the monthly payments easier on your budget.

Save more money and make extra payments

One of the reasons people struggle to make payments is because they’re spending money they shouldn’t be. You can take a different approach by finding small ways to save money and using that money to pay off your mortgage instead. Bringing lunch to work, for instance, helps you save a few dollars every day. Allocate those dollars to your mortgage payments and you’ll end up paying off your home loan earlier.

Being able to pay off your mortgage can bring a huge sense of freedom and fulfillment. By making a few deliberate decisions, you can ensure that you make your monthly payments and clear your mortgage earlier than you expected.

August 10, 2018 at 2:03 pmFinance

You Need an SR22 to Earn Back Your Driving Privileges

Man driving a carIt’s easy to ignore the convenience that comes with having a driving license until you lose it. Major or repeated traffic violations can lead to the suspension of your license. Driving on a suspended license can make a bad situation worse and could have you facing some jail time.

If you rack up too many traffic violations, there’s a likelihood that you’ll get your license revoked or suspended. In such a case, having an SR22 insurance in Aurora, Chicago can help you earn back the driving privileges you once had.

What is SR22 Insurance?

Technically, this is not an insurance plan but rather a proof that you have valid insurance coverage. See, after a major traffic violation such as a DUI, at fault accident, or reckless driving, the state considers you a high-risk driver. Since high-risk drivers are at a great risk of causing accidents on the road, your insurance premiums are likely to be higher than normal.

The state needs written confirmation from your insurer that you are adequately insured before they can let you get back on the road. SR22 insurance is simply your insurer writing to the state authorities and notifying them of your coverage.

Does SR22 Carry Extra Costs?

Traffic infractions don’t paint you as the most careful driver, especially when you pose a grave danger to other road users. So, the state makes you jump through hoops before letting you back behind the wheel. You know, with the hopes that you’ve learned your lessons and will be a better driver.

Well, the insurance company will charge you a filing fee but the cost of the fee is quite negligible. What makes SR22 insurance expensive is your high-risk status. You’re likely to make more claims than the average driver and as such, insurance companies adjust your rates upwards as a precaution.

Other than keeping you safe, being careful on the road bears additional benefits that extend beyond your health and well-being.

August 5, 2018 at 1:00 amFinance

Guide to a Healthy Borrower-Lender Partnership

Mortgage Loan FinancingA banker will want to protect customers’ deposits, earn lucrative amounts of interest and see their financials investment flourish. They will also want borrowers to prosper, create more accounts with them and become long-term partners. But lenders and bankers should reach an arrangement so their finances could flourish. This is a step-by-step guide towards creating a healthy financial relationship.

Avoid surprises

It’s prudent that you reveal everything to your banker every time you face a financial crisis. Forbes advises that you write your proposal early enough. Explain why you need the money and how you plan to repay the loan. Back up your proposal with evidence and facts. This gives your lender an easy time to assess the viability of your loan and make an informed decision.

Know your loan type

Loans vary in terms and purpose. Choose a package that best suits your financial problems. If you apply for a mortgage or VA loan program, you should remember that they could last for several years. Unlike other small business loans, their terms of payment can be different. Applying for the wrong loan type will not only have adverse effects on your finances but its likely to strain your relationship with your lender.

Know your banker

It pays to know your banker. Even before you drop your proposal at their offices, book an appointment and meet over a cup of coffee. Get to know if your lender has your financial interest at heart. Top bankers will strive to support your business financially. They will also advise you on the right loan amount so you can comfortably sustain your business parallel to the loan repayment.

An excellent borrower-lender relationship doesn’t just keep your lender aware of your business operations, progress, and performance but also enables them to study your financial situation. This protects you from the tedious and challenging loan application process that an ordinary or new borrower will go through before getting approved.

July 19, 2018 at 1:00 amFinance

A Quick Guide to Paying Your Business Loan

Close up image of a bank facadeWhether you own a spa, an online dress shop, or a restaurant, you know too well that starting a business is difficult. And among the challenges you might have faced is the funding. Thankfully, many providers offer loan packages to budding business professionals.

And now that your business is earning, it is time to pay back. This might sound like a challenge, but if you keep your thoughts organized, this should not be difficult. ARF Financial will say the same.

So whether you have turned to spa financial solutions or to a friend who has helped you build that dream shop, here are the ways you can make payment much easier.

1. Go for flexible terms.

This is something you should do before you sign the fine print and receive the check. Make sure that the terms of payment provide you some leeway or breathing space.

But if you have already signed the agreement and are now struggling with payment, you could still talk to your lender and ask if you may refinance your loan. Always take note of the interest rates.

2. Save up.

This is among the first and intuitive things you should be doing. Set aside a specific amount of money every month dedicated for loan repayment. This should be easy, especially if you are the type of person who really saves up for something.

3. Automate it.

If you can at least project how much earnings you will get monthly and how much leeway you will have, you could pay your loan automatically. You just have to talk to your bank and the lender and tell them that the loan amount will be taken automatically from your account every month.

These are just some of the things to keep in mind if you want to pay your business loan efficiently. Stay dedicated and committed; you will get through it.

June 27, 2018 at 1:00 amFinance

Home Loan Mistakes to Avoid

money on the table and a house in the backgroundApplying for a home loan comes hand in hand with shopping for a new property, unless, of course, you are one of the lucky 1% of the population who can afford and pay with straight cold cash. Realistically, having a home loan, let alone applying for one, is a process that most people can easily go through if they follow the right process.

Knowing the mistakes to avoid when applying for a home loan in Portland is important, especially if this is your first time. Primary Residential Mortgage, Inc. cites some of them.

Not shopping for the best loan

As a first-time home loan applicant, you must shop around for the best deal on the market. Take your time and educate yourself about the trend that you need to know. That way, it will be easier to choose something that you won’t regret in the long run.

Having a bad credit

Having a bad credit before you apply for a home loan is almost always the reason people get their applications rejected. Make sure your credit score is admirable, if not reasonable enough, to impress the lender.

Not being able to budget properly

Have a weekly or monthly budget and stick with it for a long time. Doing so can help you manage your monthly expenses, including the mortgage fees and other initial payments that you would need to make upon application.

Not locking your mortgage rate

Mortgage rates fluctuate depending on the current market standing. Therefore, it’s a must to lock down your rates, lest you want to be surprised with an inflated rate in a few years’ time.

Mistakes are bound to happen, especially for first-time mortgage applicants. However, avoiding mistakes is always possible if you know what you should do.

May 24, 2018 at 11:58 amFinance

A Guide to the Various Types of Auto Loans

Approved Car Loan ApplicationAbout 85% of new car purchases are financed through loans. Approximately half of the people who borrow money to buy a car get their loans from car dealerships while the rest get their financing from credit unions and banks.

There is an 80% chance that you will be borrowing cash for you to get the keys to your new ride. As such, it pays to understand the various types of loans as well as the best auto loan rate in Utah. That said, this article focuses on your auto loan options.

Unsecured vs. secured auto loans

With a secured loan, the car acts as the collateral to the loan. That means the financing company has the security interest indicated in vehicle title. So if you default payment, the financing institution will seize the vehicle.

Other financing institutions offer unsecured loans. This means the lending institution has no security control over the vehicle. Consequently, these loans are only offered to people with substantial assets and income, as well as those with high credit scores. Additionally, due to their high-risk nature, these loans come at a significantly high-interest rate in comparison to the secured loan.

Simple interest vs. pre-computed interest

Pre-computed interest is calculated based on the total amount of the interest rate over the period of the loan. The total figure is then divided by the number of months you will be paying the loan. That means your monthly payments will include the specific amount of interest regardless of the remaining loan balance.

Simple interest loan, on the other hand, calculates the interest rate based on the outstanding loan balance. That means, if you took a car loan for $10,000 and you now have an outstanding amount of $5,000, the interest will be calculated based on the $5,000 and not $10,000.

Regardless of the auto loan that you want, shopping around is worth your while. Picking a loan is not just another paperwork procedure in car purchasing process. The loan is a purchase by itself and is likely to cost you thousands of dollars.

April 7, 2018 at 1:00 amFinance

How to Qualify for a Jumbo Loan?

Man computing using a calculatorA jumbo loan is the kind of mortgage you need to buy a property with a jumbo price. It chiefly refers to the size of the loan, but its classification depends on what’s considered the “conforming loan” in the region. In Utah, the difference jumbo and FHA loan limits can be about $150,000.

Unlike conforming loans, jumbo loans are not guaranteed by the government. In other words, the lenders that issue them a big risk appetite. Considering they don’t follow the underwriting guidelines of Fannie Mae and Freddie Mac, qualifying for a jumbo mortgage is harder than usual. As only a few lenders offer jumbo loans, their interest rates are naturally higher.

If you’re planning to apply for this kind of mortgage in Salt Lake City, here’s what most lenders are looking for:

Extra-Large Down Payment

Jumbo loan lenders might be open to taking greater risks, but they’re not willing to provide 100% financing. In most cases, you’re expected to put down at least 20% of the total property’s price. On the bright side, you won’t have to pay for private mortgage insurance for years, which offers no personal benefit to you.

Low Debt-to-Income Ratio

Applying for this mortgage puts your income under closer scrutiny. Your prospective lender will go great lengths to make sure you have an unquestionable capacity to repay for it. Apart from providing evidence of your employment and earning potential, you’ll also need to provide plenty of other assets.

Excellent Credit Score

Of course, stellar credit standing is a prerequisite for jumbo loan approval. The lowest FICO score to qualify for it is 700. Obtain a copy of your credit report and identify any error in your file before speaking with a lender.

Most people don’t qualify for jumbo loans for good reasons. Securing a mortgage of such size is a privilege, which can be abused without stringent qualifications.

March 30, 2018 at 1:00 amFinance

Top Options for Financial and Retirement Planning

coins in a jar labeled retirementThere was a time when people could make do with their Social Security checks and any pension plan their company has when they retire. That time has passed.

Rising costs for basic needs make financial and retirement planning necessary. Among the top options for you are IRAs, Roth IRAs, and 401(k)s. Here are the pros and cons to help you decide.

IRAs

The IRA or Individual Retirement Account is a good option if you have some money to put away and you want to be in control. You can choose where to put it, such as a bank or brokerage firm. You can also put in cash, stocks, or bonds. The good thing about IRAs is you pay taxes on your investments when you are ready to use the money. You can also add IRA contributions to your tax deductions if you don’t have a 401(k).

The problem is that the IRS limits your yearly contribution to just $5,500 if you’re not yet 50 years old. The limit rises to $6,500 once you hit 50 years old. You also pay a penalty if you take money out of the IRA before the age of 59.

Roth IRAs

A Roth IRA is a good option if you are young, you have some extra money, and you expect your income to rise. This is because your taxes will probably be higher when you get older. Putting money aside now while you pay lower taxes means you’ll have more money in the account by the time you retire. They are like regular IRAs except that you pay taxes on your contributions.

However, you do not have to pay taxes when you use the money after retirement age. The good thing about a Roth IRA is you can withdraw money from the account at any time without penalty. The bad thing is you have the same limits as a regular IRA in terms of the amount you can contribute to an account.

401(k)s

A 401(k) is a retirement plan sponsored by your employer. They deduct your contributions from your pay automatically. You can contribute up to $18,500 a year ($24,500 if you are over 50) to an account. Whatever you contribute is exempt from taxes, although you do pay taxes when you withdraw the money. The employer may also choose to match your contributions, so this is free money.

The problem is you do not get to choose where to invest the money. The employer might also require that you stay with the company for a set number of years before they can get the employer contributions. The fees for managing a 401(k) plan can be high as well.

Choosing the right plan will depend on many factors. The top options are generally sound, but it will still depend on your situation. Consult with a financial expert to get some pieces of advice on financial and retirement planning.

March 22, 2018 at 9:30 amFinance