For all mortgages having above 80 percent of the total value of the property, mortgage companies generally need to have insurance. If the buyer of the mortgage pays in advance at least 20 percent of the value of the mortgage, then an insurance policy may not be needed by the mortgage company.

But usually, paying 20 percent of the down payment cannot be afforded by buyers of the mortgage and so almost all mortgage companies need insurance and because of these insurance premiums that there is increase in the monthly payments of borrowers.

Therefore the lenders of the mortgage get to select their provider of insurance, but the mortgage borrowers are obligated to pay for the premiums. It is at this point that the argument against insurance of mortgage begins. However, by paying a mortgage premium, the buyer of the mortgage is given the right to buy the property sooner. This also makes the value of the property higher and allows the individual to upgrade to a property that is more expensive earlier than expected.

At times, the additional cost that the borrower pays because of the insurance payments to the insurance company is added to the payment every month.

Capitalized payment is the name for the payment in such cases. The borrower benefit from capitalization for the whole payment becomes tax deductible.

FHA or Federal Housing Administration guidelines must be followed by mortgage insurance. Government as well as financial institutions that are private can both provide mortgage insurance. It is on the purpose of the borrower for buying the mortgage that the premiums payable on insurance of mortgage depends. Housing mortgage premiums in general are of higher value for some purposes.

One can find the best mortgage insurance quote by searching online. There are so many websites where one can compare different mortgage insurance quotes being offered. Most mortgage insurance companies have their own websites where one can read and have more information about the insurance company he or she is planning to get mortgage insurance.

So, where can you purchase MICs?

Investing with a MIC is not as simple as walking into your bank with your chequebook. The MIC market has a smaller and more exclusive distribution channel compared to traditional paper assets. Many real estate investment companies offer MICs as part of their product line. Also many mortgage brokers and financial advisors have added MICs to their product lines in recent years. Those who haven’t likely have a contact who has access to a MIC.

So ask around.

Also understand that all MICs are not the same. Like mutual funds or stocks, different MICs have varying levels of risk. If you’re considering a MIC as an investment, you must perform a certain level of due diligence and ask the right questions to fully understand any potential risk.

Here are a list of the important questions to ask of any potential MIC investment:

1. Which mortgage position am I invested in?

This is important as in the unlikely event that borrowers from the MIC are unable to make their mortgage payments, the MIC will potentially foreclose on the property and payout the shareholders (you). If you’re in a first mortgage position, you will have first access to any monies recovered during foreclosure. In a third mortgage for example, the first and second mortgage holders have first claim on any money, likely leaving little or no money left on the table for any additional mortgage holders.

Also as important is the equity position that the borrower holds in the mortgage. If the borrowers have 5% equity instead of say, 40%, which do you think poses the greater risk to you as the bank?

2. What types of mortgages am I invested in?

MICs can invest in anything from subprime home loans (a scary proposition in light of the recent US foreclosure mess) to raw land or development loans. Also it’s important to ask what region you’re invested in. Are the fundamentals strong in that region? Do you feel comfortable that the local economic situation will create numerous financially solvent borrowers?

3. What will I receive in writing as a MIC shareholder?

Licensed and regulated investments need to either provide a prospectus or offering memorandum to potential investors. These documents should outline the answers to all of these questions plus more. Run, don’t walk, from any MIC that only offers promissory notes or nothing in writing as security. This is usually what separates legitimate MICs from frauds.

4. What is the rate of return, and is it realistic considering the types of mortgages I’m invested in?

On development or raw land loans for example, the typical annual interest rate of these loans can be anywhere from 15 – 20%, therefore a MIC invested in development loans paying 12.5% to the investor is very realistic and secure. Likewise, a MIC that claims to invest in standard residential mortgages paying 5%, but pays 10% to the investor should raise a red flag.

5. What is the track record of the company I’m investing with, and who are the executives?

Track record of the company is important, but understand the track record and experience of the executive team and the quality of the business model are more important. A company and a MIC can be new to the market, but the executives can bring a wealth of experience in the field and a viable business model. Likewise, companies with long track records can still crumble with incompetent management and an unsustainable business model.

Bottom line, trust your gut!

Wishing you clarity in all your investments.

Blake

Blake Wyatt can be reached directly at 604-374-4543.

Right now, there are roughly 30 million clients. This is undeniable proof that applying for their loan programs is really beneficial. So what are the advantages of applying for this federal program?

- This type of loan will give you leeway to purchase a house with a miniscule down payment. Future homeowners will only need to shell out a down payment worth 3% of their entire home purchase value. There are also some instances when the down payment can be given in gift form. One must be aware though that aside from the down payment amounts there are usually other fees to take care of such as insurance and processing.

- FHA loans are unlike the mortgages that have taken over the market during recent years, and these are the very loans with hidden triggers high interest rates and that inevitably caused the wave of foreclosures. A loan from the FHA will not contain any such traps hidden within the terms and conditions. The consumer can rest assured that there will be no predatory payment increases.

- A lot of lenders and banks who give out mortgage loans are very careful with screening. They sometimes need proof that the applicant has money. What this usually means is that one will need thousands stored up beyond the down payment amount just so that they could qualify for the loan. FHA mortgage program does not have this difficult requirement.

- Sub-prime financing can be replaced by an FHA approved loan. And what is good about this is that FHA rates are much lower compared to those of sub-prime mortgage. Also, one does not need to shell out for pre-payment and FHA mortgages have a secured, fixed rate.

- Those who are troubled with bankruptcy and foreclosures should look into what the FHA has to offer. Unlike with non FHA approved lenders, the Federal Housing Administration give loans to people after three years for a foreclosure, a year past bankruptcy chapter 13, and two years for a chapter 7 bankruptcy.

- A potential borrower can apply and get an FHA mortgage program by providing repayment capacity, cash to close, credit history, and collateral. However, for those who do not have conventional credit, other documents such as rental payment slips, utility receipts, and car insurance receipts.

- With this type of loan, one may be able to get a lot more money than in conventional loan packages since the qualifications are very liberal. It is very similar to loans given to first time borrowers. One can get as high as 43% of one’s monthly paycheck.

An IT graduate and loves food. Surfing the internet is one of her hobbies. Loves to play poker and her favorite pets are dogs.

The financial crisis has practically swept the entire world, affecting both large and small economies. For more visit FHA Loan Program.

1. Write out all your monthly expenses, in detail.

Do you have a mortgage or an auto note? If so, what is your interest rate? How much are your monthly payments? What is the outstanding balance on those loans? List them, in full detail.

Next, write down all your necessary monthly expenses. These expenses include things like electricity, telephone, insurance, food, etc. You should know how much you spend each month on all of these items.

After surveying your necessary monthly expenses, take a look at your discretionary monthly expenses. Discretionary expenses are those things that are optional. You don’t have to have them. But, you may enjoy them. Representative discretionary expenses include entertainment, eating out, club memberships and any impulse buys you make in a given month.

Lastly, list all of your credit card debts. Get your last monthly statement from each credit card and write down both the outstanding balance and the interest you’re paying on that balance.

2. Eliminate all non-essential expenses.

If you followed through on step one, you now have a really good idea where your money goes every month. So, go through the list and eliminate all expenses for things you can do without, at least until you get your finances under control. Consider it as a Cash Diet Plan for your spending habits.

After you’ve done away with all superfluous expenses, add up the amount you’ll save every month with those cuts. You’ll probably be surprised at the amount of money you can save every month by just exercising a little more self-control over your spending habits.

You can use the money your saving to pay off your credit card debt. After you’ve eliminated that debt you can consider adding your enjoyable but unnecessary expenses back into your budget.

3. Make your Cash Diet Plan a household project.

If you have a family, they will obviously be affected by your Cash Diet Plan. So get them involved in the planning. You’ll get rid of your debt a lot quicker if you work together on your family spending.

4. Look At cashing in your equity, if any, in assets.

You can refinance your home to take advantage of your equity and thereby lower your monthly payments. You can also use the equity in your home to get a loan and then use the loan to pay off your high interest credit card debts.

If you either don’t own a home or don’t have sufficient equity to pursue an equity loan, don’t forget about other assets you can turn into cash. Think about any antiques or collectables you own. Maybe it’s time you seriously considered selling those assets and using the cash to pay off your debts.

Prepare a list of everything you own that you can quickly and easily sell. Go through your garage and your closets. You’ll probably find some items of value that you can live without. Have a garage sale to turn those items into cash. You may even be able to sell some of them on eBay or through local consignment shops.

Yes, selling your assets is a drastic step but it may be the only thing that stands between you and bankruptcy court. The key is to begin thinking of as many ways as you possibly can to generate cash to pay down your debts as much as possible.

5. Consider consumer counseling.

There are a number of non-profit consumer credit counseling offices whose only purpose for existing is to teach consumers how to get out of debt and stay out of debt. Search for one in your local yellow pages and make an appointment.

The consumer credit counselor will help you better understand your financial state of affairs. He will also help you draft a budget. The counselor will also help you prepare a debt management program. That program will help you get your credit cards paid off as quickly as possible with as low an interest rate as possible.

Your credit score will likely drop-off a couple of points after you sign up with a consumer credit counseling service. But, it won’t be nearly as bad as filing bankruptcy.

6. Take a second job.

You may already believe that you’re working too hard. But, if you’re in such financial trouble that you’re considering bankruptcy, you should look into a part-time second job. You probably won’t get one that will pay very much. But, whatever little amount of additional money you can take in to apply to your debt may just be the difference between filing bankruptcy and averting bankruptcy.

Summary

Bankruptcy is often considered an easy way out of debt. But, there are adverse results to bankruptcy. And, those consequences can follow you around for 7 to 10 years. Keep that in mind and don’t rush into the decision to file bankruptcy. Seek other choices first.

Harvey L. Cox is a licensed attorney, certified mediator and founder of NoLegalese Publishing, a self-help legal publishing site. If you want to know more about your legal rights without difficult legalese, go to NoLegalese Publishing

The Bankruptcy Code itself does not even determine when a house is considered “sold” for the purposes of a valid foreclosure sale. This means that state foreclosure laws will most likely be used in cases where borrowers attempt to pay off a loan through bankruptcy, even after a sheriff sale. Another aspect that works in favor of homeowners is that many states require an auction to be confirmed before it is valid.

This means that homeowners who file bankruptcy have rights during the foreclosure process that are safeguarded at least through the sale of the property. These rights may be guaranteed for even longer than that, depending on how the confirmation process of the auction works after the home has been sold by the courts. If there had been a bankruptcy, the lender may not just be able to sell the house and take it over right away.

Redemption rights may extend the rights of the borrowers even longer. In states that have a redemption period, the borrowers are given a set period of time in which to cure the default even after the home has been auctioned at a trustee sale. But for those homeowners in states where a redemption period is not available, filing for bankruptcy may create a pseudo-redemption period through the right to cure.

However, rulings by state courts on this issue may determine how long this extra right to cure lasts. Some courts have ruled that the foreclosure sale process is completed once the gavel falls at the auction. In these cases, filing bankruptcy will not extend the time to cure the default for any significant period of time. Once the auction has been conducted, the sale process is complete, and the right to cure has expired

Other courts, however, have ruled that the sale process is not completed until the appropriate company or government agent has executed a transfer deed after the sale, the purchase price of the auction has been paid in full, and the sale has been confirmed by the court. In these states, homeowners may be able to file bankruptcy and have the property listed as a part of the bankruptcy estate and turned over to the trustee.

If this happens, the lender and local government will not be able to move forward with any other collection activities or actions to transfer the property. The automatic stay is in effect, the homeowners have an interest in the house, and the property is now a part of the bankruptcy proceedings. If the sale is confirmed or the deed transferred after the filing, it may be reversed at a later date as a violation of the stay.

Filing bankruptcy in this situation may result in homeowners having several additional months to cure the default. While the automatic stay is in effect, the lender, new owner, or local government can perform no action to confirm the sale or remove the borrowers from the house. Even if a Chapter 13 is filed, the owners will be able to cure the default through a repayment plan — even though their home was sold at auction.

There are a whole list of problems with filing bankruptcy to stop foreclosure, but for homeowners whose financial situations have recovered and who can cure their default, it may be a decent solution. Even after a sheriff sale, borrowers may be able to submit a plan that allows them to save the home. Sometimes, just filing bankruptcy is enough to set aside a sale and give the owners more time and one more chance.

Nick writes articles on how to stop foreclosure. To read more about various methods to save a home, before or after a foreclosure auction, you can visit his website online here: http://www.foreclosurefish.com/

The State of Texas has just announced a special program where a portion of the $8000 tax credit can be used for a down payment on a purchase by advancing a portion of the tax credit at time of closing. There are some fees payable to the State of Texas and you have to go through an approved lender in order to access this program. Legacy Financial, Inc. is an approved lender with the State of Texas. The “loan” must be repaid within 90 days of closing or it becomes a second lien on the home and begins to accrue interest at 10%.

Further, for some approved lenders, there are other tax credits provided by the State of Texas for certain occupations. Under this program, the State of Texas provides up to a $2000 credit each year for the life of the loan on a first time homebuyer within certain occupations. Specific occupations include: Firemen, Police Officers, Teachers, Librarians, Public Security personnel, Jail Employees, Emergency Medical personnel are all eligible for this program. There is a detailed formula that includes income qualifying to determine the amount of the actual tax credit. Legacy Financial, Inc. is an approved lender on this program, as well.

So, the timing of buying a home could not be better. Low interest rates, low home prices and an amazing amount of money available in the form of tax credits make now the time to be buying a home. Please feel free to contact us for more information and a no cost analysis to see exactly what level of tax credit you might be eligible for. Remember- the key date on the federal tax credit is November 30, 2009 where you must be closed and funded on the purchase of a home to obtain the tax credit of up to $8000.

http://www.texhomemortgages.com

http://www.legacyfinancial.com
Chad Bates is President/CEO of Texas Home Mortgage Company, Legacy Financial, Inc.

This luxury does come with some headaches. Possibly the most frustrating time for independent distributors in a Network Marketing company is the dreaded tax season. All of a sudden an entire year of little or no planning and spotty record keeping by these work at home professionals can catch up to them. The result is a mountain of stress, paperwork and accountant bills.

A possible solution is personal finance software such as Quicken or Microsoft Money. Experience will prove these do little to lesson the blow. Although useful for small to medium sized business, these programs were not designed for a home-based-businesses. Many home business owners find they are too complex, difficult to learn and filled with many features that are not needed.

Glenn Huels, along with MLM Success Tips recognized this major problem facing Network Marketing professionals and created a solution for the 39+ million distributors worldwide. The MLM Tax Helper was designed to relieve the tax time stress of being unorganized, unprepared and the total frustration with the software programs available that are just too complicated for what is needed. Having a system that is simple, very easy to use and designed specifically for a MLM business is priceless.

You will find this software is customizable for your specific business, allows you to easily enter your income and expenses for all 12 months of the year and then automatically creates for you, an income statement for all 4 quarters and the end of the year, that you can print off and give to your accountant. It also simplifies many important calculations such as the lucrative home office deduction and the mileage deduction. In addition to the software, you also receive an extensive amount of free tax help, tips and resources to help you claim all of the tax deductions you are legally entitled to, many of which most people are not aware of. All of this is compiled into a very simple, easy to use resource guide.

The software will make tax time less stressful and may enlighten the user to deductions not previously known. Improving the bottom line is always important.

David Loren Sullivan is an internet entrepreneur. As well as an affiliate of MOR Vacations and Genewize Life Sciences, he writes a blog designed to assist internet marketers.
Find a link to his blog at: http://www.TheDNAWealthCreator.com
The tax software he uses can be downloaded at: http://www.MLMBusinessBuilder.info

No, you can reduce one of your largest expenses by simply signing your name if you are a homeowner. What I am talking about is your property taxes. Each year you must pay your property taxes whether it is escrowed thru your mortgage company or you pay it out of pocket yourself. The amount of property taxes you must pay each year is set by the county’s tax assessor’s office. They decide how much you will pay based on what your neighbors are paying and what amenities your home has compared to theirs.

For example, if you have a 1200 square foot house and your neighbor’s house is 1400 square feet then in theory, your neighbor’s taxes should be higher. But if your in cook county this isn’t always the case. So normally what happens is if you believe that you have a higher than normal tax bill you are able to challenge the assessment that is used to figure out your tax bill. If the board of review finds that you are paying more than your fair share of taxes then they will lower your assessment and thereby lower your tax bill. If they find out that your taxes are not lower than everyone else they will not reassess your property and your taxes will not be changed.

Either way you will NOT get a higher tax bill. They will only look at if your taxes should be lower or should they stay the same. Now here comes the easy part, in order to challenge your taxes all you need to do is go online to your county assessor’s office and they will have forms online. Or you can call the tax assessor’s office and ask their office for the next scheduled class on lowering your property taxes. Yes, that’s right they actually have a class where you go in talk with a county attorney and they will help you fill out the paperwork to lower your taxes.

The best part is that they do all the work for you once you agree to challenge your taxes. You simply fill out the form and leave the rest to the county. See the county often raises the taxes on property and most people do not challenge the tax increase. The tiny percentage of people who challenge the taxes and get their taxes lowered is minor to the county and they still will get an overall increase in taxes.

So if you want to save a couple of bucks and you’ve got ten or fifteen minutes, take some time fill out the forms and try to get those taxes down. This applies to ANYONE who owns property and it doesn’t have to be just the property you live in. You can do rental property and investment property.

Till next time Good luck and God Bless and remember… If you have any questions about saving or selling your home or any topics on real estate that you would like to know more about please email me and I will answer your questions in this column.

Arthur Veal is owner of We Buy Houses Home Services. We Buy Houses Home Services is a real estate investment company that specializes in renting to own and selling on terms. They have helped hundreds of families sell their houses on terms. They also specialize in private mortgages and work with several passive investors through their site at http://www.earnasecuredreturn.com

Tax Deduction checklist

* Form 1098, or your mortgage statement.
* Form 1098 if you purchased a home in previous tax year, and prior tax return if you refinanced in prior year and are deducting points on that loan over its life,
* Investment interest expense: Brokers’ statements showing any margin interest paid and loan statements for loans taken out to purchase investments
* Losses due to theft etc. with description of property and insurance reports showing reimbursement or any cancelled checks showing value of property.
* Charitable donations: bills receipts or cancelled checks for cash donations, mileage records for charitable purposes, receipts from charitable agency with estimated value in the case of property donations, prior years’ tax returns for any unused charitable contributions.
* All work related expenses : Reimbursement check stubs or reports from employer, union dues, receipts bills or invoices for supplies, gifts to clients, any uniforms or special clothing, seminars attended, professional publications and books. Travel information including invoices receipts etc for transportation, lodging, restaurants, parking etc. Any job search expenses and job related educational expenses.
* Misc. deductions like Tax preparation fees, cost of income tax return preparation software and books, Safe deposit box rental fees from bank. IRA custodial fees, investment advice costs.
* Last year’s state income tax return, Forms W-2 and any cancelled checks for state estimates you’ve paid.
* Medical and dental expenses including Form SSA-1099, year-end pay stub for premiums paid through your after tax wages Mileage records for trips to the doctor, clinics, etc.
* Real estate tax collector bills or cancelled checks and Form 1098 or closing statement if you bought, sold, or refinanced property in the tax year.
* Any tax bills or cancelled checks for personal property tax like automobiles etc.
* Employee SSN and wages paid during tax year to any household employees.
* Records showing any estimated tax payments or overpayments for prior years.
* If you want your refund to be deposited into your bank account you need the Routing number and Bank account number.
* Any foreign bank account information with name, location account number and account value.

You could save huge in tax preparation fees by being a bit organized. You can save a lot of time by getting all your required documents in order before you go to a tax preparer or start your tax return online.

See here for a complete Checklist for Tax Preparation.

Ron Robson is a management consultant. Visit his website exclusively devoted to TaxTime at Tax-Easy.com

It is common knowledge that in periods of low house price inflation, home reversions can become the favourable option as opposed to the roll-up lifetime mortgage.

The two comparable equity release schemes can experience different fortunes in such a static housing climate.

In summary, a home reversion scheme involves selling a percentage of the value of the property to the reversion company in exchange for a lease for life.

Therefore, in times of low house price growth the reversion company will not make as greater profit, as they will not benefit from the property value increasing.

In contrast, a roll-up lifetime mortgage in times of low house price inflation would suffer. Due to the nature of the plan & with the annual compounding of the interest, it would result in the ever increasing debt catching up with the property value quicker than if the house price was increasing.

From a lifetime mortgage lenders point of view this scenario could eventually invoke the ‘no negative equity guarantee’ on a more common basis. This could then have a knock on effect on the lifetime mortgage company’s product structure & pricings in the future.

We have already seen the impact of potential future costs on this market with the recent withdrawal of some of the equity release companies

Therefore, home reversion plans are based more on the expectations of house prices, whilst lifetime mortgages are driven more by interest rates.

So, do home reversion plans now offer better value for money in the current economic climate?

Well, recent research, commissioned by Bridgewater Equity Release, seems to suggest exactly this.
Previously, equity release schemes were criticised for offering poor value for money, but the research from Bridgewater equity release now is dispelling this myth.

Home reversion schemes are roughly paying anywhere between 40% and 60% of the current market value of the property.

To determine the capital amount the customer receives, the provider would assess how much they feel the house price will increase over the life expectancy of the customer.

Home reversion schemes were the first type of lifetime mortgage product in the market with Hodge Lifetime being one of the forerunners.

So, could the equity release market now start turning full circle?

About The Author:
Mark Greggs is the founder of Equity Release Supermarket who were recently accredited ‘Best Financial Advisers’ at the Equity Release Awards 2008.
Mark is an experienced Independent Financial Adviser who has now been providing quality equity release advice for the past 8 years.
Gained with this experience is exclusivity to deals with some of the UK’s leading financial providers. Mark aims to pass on his experience in assisting the over 55’s decide whether equity release is the right choice for them.
For further information or to compare equity release deals available go to: -

http://www.equityreleasesupermarket.co.uk