Money lender – Condenetint http://condenetint.com/ Tue, 28 Jun 2022 17:17:19 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://condenetint.com/wp-content/uploads/2021/06/cropped-icon-32x32.png Money lender – Condenetint http://condenetint.com/ 32 32 Do I have enough home equity to pay for a new roof? https://condenetint.com/do-i-have-enough-home-equity-to-pay-for-a-new-roof/ Tue, 28 Jun 2022 17:17:19 +0000 https://condenetint.com/do-i-have-enough-home-equity-to-pay-for-a-new-roof/

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

The Credible Money Coach helps the homeowner understand home equity options, like cash refinance and HELOCs, to fund needed roof repairs. (Credible)

Dear Credible Money Coach,

I recently lost my job, but I have a decent income from social security that covers my mortgage. My HOA took an assessment of $8,300 for the new roofs. I need a home equity loan. My property will be valued at $245,000. I owe $80,000. —Jacqueline

Hello Jacqueline and thank you for your question. Doing home repairs or improvements is a good reason to tap into the equity in your home. Home equity loan interest rates are generally lower than other loans you might consider for a home project, such as a Personal loan.

Let’s take a look at how your home equity works and some ways to access it, including through refinancing.

Capital requirements

Whichever method you use to access the equity in your homethe first question you need to ask yourself is whether you have enough net worth to qualify.

Generally, lenders won’t allow you to borrow more than 80% of the value of your home, although there are exceptions, such as VA loans. This means that if your home is valued at $245,000, the maximum you could borrow (including your mortgage and home equity loans) is $196,000 ($245,000 x 0.80).

Since you have an $80,000 mortgage, you have $116,000 ($196,000 – $80,000) of principal remaining. So you have more than enough to qualify for a home equity loan if that’s how you choose to pay the roof appraisal. But you also have other home equity borrowing options.

Ways to access the equity in your home

Tapping into the equity in your home can be a relatively inexpensive way to get cash when you need it. However, since you’re putting your house up as collateral, it’s wise to only spend your capital on necessities. Paying for an HOA appraisal is a good use of equity, as it will likely increase the value of your home.

You have several options for accessing your capital, including a home equity loan, home equity line of credit (HELOC), and cash refinance.

Home Equity Loan

A home equity loan is also known as a second mortgage. Like your first mortgage, your home secures a second mortgage. You will generally need good credit and a low debt-to-equity ratio to qualify.

Interest rates are generally higher for home equity loans because the lender assumes a higher risk. If you defaulted and your first mortgage lender foreclosed on your home, the second mortgage company might not get paid.

A home equity loan can be a good choice when you know exactly how much you need to borrow.

Home equity line of credit

A HELOC is another way to leverage the equity in your home. It’s secured by your home, but works more like a credit card than a mortgage. Instead of receiving a lump sum and paying it off in installments over time, you’re given a credit limit to draw on for a set “drawdown period” and then start paying off your balance.

With a HELOC, you only pay interest on the amount borrowed, not on the total amount available. Home equity lines of credit usually have variable interest rates rather than fixed rates like a mortgage. This means that your interest charges and monthly payments may change over time.

You can choose a HELOC if you are unsure of the amount you need and want the flexibility to borrow as little or as much as your approved limit.

Refinancing by collection

A cash refinance replaces your current mortgage with a new one for a higher amount, so you pocket the difference. This is a good option if refinancing gets you a lower interest rate. You can also extend your repayment term to lower your mortgage payment. Remember that this strategy means that you will pay more interest during the new life of the loan.

One last word…

Each option I’ve covered comes with closing costs in addition to interest charges, such as loan origination, underwriting, valuation, and other administrative fees.

Tapping into the equity in your home can be a smart way to pay for necessary repairs like a new roof. Just make sure you fully understand all terms, conditions and costs before borrowing against your home equity.

And it’s a good idea to compare mortgage refinance rates from several lenders. You can easily do this with Credible.

Ready to know more? Check out these articles…

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Pakistan-IMF talks to resume on bailout https://condenetint.com/pakistan-imf-talks-to-resume-on-bailout/ Sun, 26 Jun 2022 18:41:00 +0000 https://condenetint.com/pakistan-imf-talks-to-resume-on-bailout/ ISLAMABAD: talks between Pakistan and IMF will resume after formation of new coalition government led by PM Shahbaz Sharif presented a tax-heavy budget for 2022-23 as the cash-strapped nation, reeling from its worst economic crisis, hoped to revive a $6 billion bailout by the global lender.
According to the Ministry of Finance, the IMF will hand over a policy framework to Islamabad in the coming days. Minister of Finances Miftah Ismail and the Governor of the State Bank of Pakistan will sign the contract on behalf of Pakistan. Sources said Pakistan had asked the IMF to expand the package from $6 billion to $8 billion.
The latest round of talks between Pakistan and the IMF concluded last month.
Pakistan has adjusted its budget for the next financial year to meet IMF bailout targets – doubling fuel prices, scrapping energy and fuel subsidies and increasing sales tax on produce by 11%. tankers from July 1. These are drastic measures demanded by the IMF.
The government has agreed to raise the tax collection target from Rs 7,005 billion to Rs 7,450 billion, customs collection from Rs 950 billion to Rs 1,005 billion, collection of general sales tax (TPS) from Rs 3,008 billion to Rs 3,300 billion. The income tax collection target has been set at Rs 55 billion.
The government also imposed a 10% super tax on 13 major industries: cement, sugar, steel, oil and gas, RLNG terminal, textile, banking, automotive, tobacco, fertilizer, aviation, chemicals and beverages. ]]>
Celsius hires consultants as bankruptcy looms https://condenetint.com/celsius-hires-consultants-as-bankruptcy-looms/ Fri, 24 Jun 2022 21:14:01 +0000 https://condenetint.com/celsius-hires-consultants-as-bankruptcy-looms/

Embattled cryptocurrency lender Celsius Network has hired restructuring consultants as it prepares for possible bankruptcy.

That’s according to a Friday, June 24 Wall Street Journal report, citing people familiar with the matter, who say Celsius has hired consultants from Alvarez & Marsal.

Read more: Crypto Nosedives after Celsius Collapse

Earlier this month, Celsius contacted law firm Akin Gump Strauss Hauer & Feld LLP for advice on possible restructuring plans, the Journal noted.

Celsius operates like a bank, accepting crypto deposits from retail customers and investing them in what is essentially the wholesale crypto market. It had offered annual returns as high as 18.6%, but suspended trading in June as bitcoin began to fall.

Celsius, which reportedly had 1.7 million customers at the start of the month, said “extreme market conditions” caused it to halt all withdrawals on the platform. The company’s eponymous coin lost more than 50% of its value in 24 hours.

Related: Another Firm Cuts Withdrawals, Highlighting the Dangers of Crypto Lending

The news comes a day after a report that another crypto lending platform, Voyager Digital, announced it was reducing its daily withdrawal limit to $10,000 from $25,000.

Voyager, like Celsius, had struggled since revealing exposure to potentially insolvent crypto hedge fund Three Arrows Capital, which suffered huge losses when stablecoin terraUSD and its partner cryptocurrency Luna plummeted. $48 billion last month.

See also: Crypto Lender Celsius under investigation by multiple US state regulators

Last week, securities regulators in Texas, Kentucky, Washington, New Jersey and Alabama said they were reviewing the company’s decision to suspend client redemptions.

Joseph Rotunda, director of enforcement at the Texas State Securities Board, said he was concerned “that clients – including many retail investors – may need immediate access to their assets without being able to to withdraw from their accounts”.

“The inability to access their investment can lead to significant financial consequences,” Rotunda said.

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NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.

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Rates rise for private student loans, but borrowers with good credit can still save https://condenetint.com/rates-rise-for-private-student-loans-but-borrowers-with-good-credit-can-still-save/ Wed, 22 Jun 2022 17:15:10 +0000 https://condenetint.com/rates-rise-for-private-student-loans-but-borrowers-with-good-credit-can-still-save/

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

Credible Market’s latest private student loan interest rates, updated weekly. (iStock)

Medium private student loan rates for borrowers with credit scores of 720 or higher who used the Credible Marketplace to take out student loans increased for 10-year fixed rates and 5-year variable rates during the week of June 13, 2022:

  • 10-year fixed rate: 6.30%, compared to 5.61% the previous week, +0.69
  • 5-year variable rate: 4.43%, compared to 3.67% the previous week, +0.76

With Credible, you can compare private student loan rates from multiple lenders without affecting your credit score.

Private student loan rates climbed for 10-year fixed-rate and 5-year variable-rate loans last week, with 5-year rates jumping more than three-quarters of a point. Rates on a 10-year fixed-rate loan rose by more than half a point. This week’s increases put rates on both loan types higher than they were last year at this time.

Still, it should be noted that borrowers with good credit may find a lower rate with a private student loan than with federal loans. For the 2022-2023 school year, federal student loan rates will range from 4.99% to 7.54%. Private student loan rates for borrowers with good to excellent credit are currently lower.

Since federal loans come with certain benefits, such as access to income-driven repayment plans, you should always exhaust federal student loan options before turning to private student loans to cover any funding shortfalls. . Private lenders such as banks, credit unions, and online lenders offer private student loans. You can use private loans to pay for education and living expenses, which may not be covered by your federal student loans.

Private student loan interest rates and terms may vary depending on your financial situation, credit history and the lender you choose.

Take a look at the rates from Credible Partner Lenders for borrowers who used the Credible Marketplace to select a lender during the week of June 13:

Private student loan rates (diploma and undergraduate)

Student Loan Weekly Rate Trends

Who sets federal and private interest rates?

Congress sets interest rates for federal student loans each year. These fixed interest rates depend on the type of federal loan you take out, your dependent status, and your school year.

Private student loan interest rates can be fixed or variable and depend on your credit, repayment term and other factors. Generally, the better your credit score, the lower your interest rate is likely to be.

You can compare rates from multiple student lenders using Credible.

How does student loan interest work?

An interest rate is a percentage of the loan periodically added to your balance – essentially the cost of borrowing money. Interest is a way lenders make money from loans. Your monthly payment often pays interest first, with the rest going to the amount you originally borrowed (the principal).

Getting a low interest rate could help you save money over the term of the loan and pay off your debt faster.

What is a fixed rate or variable rate loan?

Here is the difference between a fixed rate and a variable rate:

  • With a fixed rate, your monthly payment amount will remain the same for the duration of your loan.
  • With a floating rate, your payments can go up or down as interest rates change.

Comparing private student loan rates is easy when you use Credible.

Calculate your savings

Using a student loan interest calculator will help you estimate your monthly payments and the total amount you will owe over the term of your federal or private student loans.

Once you’ve entered your information, you’ll be able to see what your estimated monthly payment will be, the total you’ll pay in interest over the term of the loan, and the total amount you’ll repay.

About Credible

Credible is a multi-lender marketplace that allows consumers to discover the financial products best suited to their particular situation. Credible’s integrations with major lenders and credit bureaus allow consumers to quickly compare accurate and personalized loan options without putting their personal information at risk or affecting their credit score. The Credible Marketplace delivers an unparalleled customer experience, as evidenced by over 4,300 positive Trustpilot reviews and a TrustScore of 4.7/5.

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Cryptoverse: Crypto Lenders Face a DeFi Beating https://condenetint.com/cryptoverse-crypto-lenders-face-a-defi-beating/ Tue, 21 Jun 2022 05:30:00 +0000 https://condenetint.com/cryptoverse-crypto-lenders-face-a-defi-beating/

A bitcoin representation is seen in an illustrative photo taken at the Maison du Bitcoin in Paris, France, June 23, 2017. REUTERS/Benoit Tessier

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June 21 (Reuters) – Crypto lending may not be down, but it’s certainly on the ropes.

Crypto lenders have exploded over the past two years, attracting tens of billions of dollars in bitcoin, ether and other coins which they in turn loaned or invested, often in decentralized finance (DeFi) projects with exorbitant returns. Read more

But as crypto markets tumble, DeFi activity is particularly hard hit, robbing lenders of their most lucrative returns and threatening to squeeze the entire industry — reaching far beyond Celsius Network, which has made headlines last week by freezing withdrawals and transfers.

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Total value locked (TVL) on Ethereum, a metric that attempts to track the value of tokens deposited in a variety of DeFi protocols, has declined by $124 billion or 60% in the past six weeks, according to the data provider. Glassnode.

The crash came in two big crypto slices, $94 billion lost in the collapse of Project LUNA — involving the failure of stablecoin TerraUSD — and another $30 billion in mid-June, Glassnode said. , who attributed the falls to reduced risk appetite.

“Current market conditions have put enormous pressure on operators who interact with decentralized finance protocols to generate their returns,” said Mauricio Di Bartolomeo, co-founder and chief strategy officer of crypto lender Ledn.

BITCOIN AGAINST ETHER AGAINST DOLLAR

Similarly, an index tracking crypto tokens tied to DeFi lending/borrowing protocols and exchanges, from research firm Macrohive, plunged 35% last week as investors pulled cash from the once-high sector. flight.

Some DeFi protocols or projects are starting to offer lower yields, with average lending and borrowing rates on one platform, Compound, down over the week for all but one cryptocurrency, the stablecoin Pax Dollar, found by macrohive.

In another sign of a slowdown, ether – the token that underpins the ethereum network on which many DeFi protocols run – fell last week to its lowest level against larger bitcoin peers in 14 months.

Against the dollar, bitcoin has fallen 34% so far in June, while ether is down more than 40%.

The turmoil in this part of the high-yield crypto market raises questions about the sustainability of the high interest rates that crypto lenders offer their customers, often in the double digits.

TOO GOOD TO BE TRUE?

Some market participants say that crypto lenders should inform customers about the risks of the projects their money is pumped into.

“I expect users to demand more transparency if their assets are managed in the DeFi space,” said Iakov Levin, CEO of crypto investment platform Midas Investments. “Crypto needs to come up with a more transparent model of retail returns.”

New Jersey-based Celsius, with more than $11 billion in assets on its platform, cited market volatility when it suspended redemptions last week. A data trawl shows that he has been invested in several DeFi projects that have encountered difficulties. Read more

“The DeFi market will undoubtedly suffer from this development as it also deals with cryptocurrencies and people will be more reluctant than ever to invest their assets in what they perceive to be similar ecosystems,” said Yubo Ruan, Founder and CEO of Parallel Finance, a decentralized lending protocol.

Ruan said that if the projects “promise rewards that sound too good to be true, there’s always a chance they are.”

Reuters Charts
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Reporting by Medha Singh and Lisa Mattackal in Bengaluru; Editing by Alun John and Pravin Char

Our standards: The Thomson Reuters Trust Principles.

The opinions expressed are those of the author. They do not reflect the views of Reuters News, which is committed to integrity, independence and freedom from bias by principles of trust.

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Questions about how Starling Bank granted 15,000 Covid loans per month | Banking https://condenetint.com/questions-about-how-starling-bank-granted-15000-covid-loans-per-month-banking/ Sat, 18 Jun 2022 17:34:00 +0000 https://condenetint.com/questions-about-how-starling-bank-granted-15000-covid-loans-per-month-banking/

The online bank singled out by a former government minister for the effectiveness of its anti-fraud measures has “onboarded” an average of 15,000 new customers per month during the Covid crisis, according to an analysis by the Observer.

Figures from Starling Bank’s latest annual report show the eight-year-old lender grew its business customer base from 87,000 before the pandemic to 330,000 business accounts last spring.

Banks are required by law to carry out rigorous checks on new customers to prevent fraud and money laundering.

Analysis of the bank’s annual report, confirmed by Starling, shows it took on as many as 243,000 new customers — an average of more than 15,000 per month — between November 2019 and March 2021. And that’s despite just 1,245 employees, only a fraction of whom would have checked for potential issues. .

The number of new accounts is much higher than for the UK’s biggest high street lenders. Sources from some of these banks confirmed that they normally accept between 1,500 and 8,000 new business customers per month.

Starling said he benefited from the Covid lockdown, when most major lenders closed their branches and struggled to meet demands from existing customers. The digital lender said its technology allowed it to onboard new customers, including those seeking government-backed Covid loans, at a pace that big banks relying on older technology would not have been able to. able to handle.

But the volume of new customers, as well as the increase in loans Starling has dispensed during the pandemic, have raised questions about its ability to carry out appropriate checks.

Last month the bank was accused by former minister Lord Agnew of failing to properly screen borrowers before making taxpayer-backed loans, although Starling chief executive Anne Boden has since threatened to to take legal action against the Tory peer for what she said. were “defamatory statements”.

Kevin Hollinrake, chairman of the parliamentary group for fair commercial banking, said Starling had some questions to answer. “Public scrutiny should always accompany public money. While I have yet to see strong evidence of inappropriate lending, Starling urgently needs to answer some very valid questions, including its current and future default and fraud rates on government-backed loans,” a- he declared.

Before the pandemic, Starling had loaned just £23m, excluding loans bought from other companies. By June 2021, according to a company business update, he had handed out £1.6bn in rebound loans. The scheme, introduced by Chancellor Rishi Sunak, offered up to £50,000 per customer. The loans were distributed by leading banks, which charge interest – albeit at a reduced rate of 2.5% – in return for distributing the money, but the taxpayer is required to repay 100% if customers are lacking.

Starling, which was founded by Boden, a former executive of the Royal Bank of Scotland and Allied Irish Banks, in 2014, said its systems were designed and built to regularly handle customer volumes at this level and more. Again. A spokesperson said it had “one of the best banking platforms in the world, which we built from the ground up” and that its systems “have been designed and built to routinely process customer volumes at this level. and more”.

Every loan application had been checked for fraud flags, Starling said, and it claimed to have more checks in place than most other lenders, and more than the program required. He said that, for example, he automatically checks rebound applicants against the Companies House register, checking the company’s start date.

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Legislature Approves Green Energy Funding Program | Greene County https://condenetint.com/legislature-approves-green-energy-funding-program-greene-county/ Fri, 17 Jun 2022 05:30:00 +0000 https://condenetint.com/legislature-approves-green-energy-funding-program-greene-county/

CATSKILL — The Greene County Legislature on Wednesday gave the green light to a green energy financing program that will allow investors to obtain loans for the renovation of environmentally friendly buildings.

The Legislature on Wednesday unanimously approved Local Law Number 2 of 2022 to establish the Energize NY Open C-PACE fundraising program in the county.

Under the program, private lenders are encouraged to provide loans that will be used for energy efficiency projects.

“There are developers we have in the county who want to invest a lot of money,” Greene County Legislative Speaker Patrick Linger said after Wednesday’s meeting. “This is an avenue of financing that will essentially put the lenders of this financing ahead of everyone else who will get a guaranteed payment. They offer a reduced rate and tax benefits. Right now we have an investment company that is ready to invest $25 million in the county and they had asked us to pass that, so it was available.

Local law notes that it is state and county policy to advance renewable energy improvements and reduce greenhouse gas emissions.

“The municipality believes it can implement this policy by providing property-assessed clean energy financing to qualified homeowners for the installation of renewable energy systems and energy efficiency measures,” according to the statement. law.

The C-PACE program allows lenders to hold a lien on a property that is preferable to the terms of a lien held by a mortgagee. The borrower would then repay the loan to the private lender through a special appraisal process.

“The county has to give approval, but beyond that we don’t really have a function,” Linger said. “We just have to give approval to have this type of loan in the county.”

The County will be a third-party beneficiary of C-PACE agreements between Qualified Owners and Financiers, with no financial risk or administrative costs to the County.

In May, developers of the new Wylder Windham resort appeared before the Legislature to ask the county to approve the C-PACE program.

Alex Libin of Wylder Hotels said if the hotel was able to secure projected C-PACE funding of $4 million, the county would receive 1.25% of revenue from the project, totaling $50,000 for the county.

The $27 million renovation project at the former Thompson House Resort by Wylder Hotel is set to pay off this summer, as the new 110-room Wylder Windham resort is set to open on July 13.

Wylder Windham is hosting an open house for potential new staff members Saturday from noon to 5 p.m. at the resort site at 19 Route 296 in Windham.

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to your wealth: Interest rate risk explained | Silver https://condenetint.com/to-your-wealth-interest-rate-risk-explained-silver/ Sun, 12 Jun 2022 05:15:00 +0000 https://condenetint.com/to-your-wealth-interest-rate-risk-explained-silver/

Since the start of the year, the Bloomberg US Aggregate Bond Index has lost nearly 9% of its value, which may surprise you if you don’t realize that bonds can lose money. Today I would like to explain how bonds can lose value when interest rates rise.

As a reminder, bonds are simply loans from a lender to a borrower. Unlike your mortgage where you are the borrower, owning bonds means that you are usually the lender to businesses or government entities that will eventually repay you the original loan amount plus interest. Much like a mortgage, there is an interest rate charged to the borrower as well as a specific term over which payments will be made. A key difference is usually that the principal amount is not repaid until the end of the loan rather than along the way. Until maturity, you simply receive interest payments.

As interest rates fluctuate, the value of the bond you own changes inversely to interest rates, as there is an active market of buyers and sellers who are constantly reassessing the value of your bonds. depending on various factors. The most relevant factor for today’s article is the current interest rate versus the original interest rate on your bond.

People also read…

A simple example is the best way to understand this relationship. Imagine that you own a bond paying one percent interest that you bought two years ago for $100. Fast forward to today and new bonds maturing at the same time as your original bond are paying 2.5% interest and selling for $100 each. If you wanted to sell your 1% bond, you would need to sell it for less than $100 to make it attractive to potential buyers. You might be able to sell it for $97 to make it competitive with a new bond. The drop in price represents interest rate risk and would be an actual loss if you sold the bond.

This interest rate risk applies not only to individual bonds, but also to bond mutual funds made up of a basket of individual bonds. Bond funds have a higher turnover of their underlying bonds, so the proceeds from maturing bonds can be reinvested in new bonds at higher rates, helping to offset some of the price declines.

In addition to understanding how rising interest rates affect the value of your bonds, which increases the likelihood of sticking with your investment strategy, there are a few other strategies you can consider such as holding bonds at shorter term that are less sensitive to interest rates. As rates rise, bank CDs or fixed annuities may also become more attractive. My colleague, Mike Haubrich, wrote in April about Series I Savings Bonds, which are also worth considering. Nobody likes to lose money on their investments, but understanding why it happens can lessen the psychological impact.

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3 lessons you need to learn if you want to become a millionaire real estate investor https://condenetint.com/3-lessons-you-need-to-learn-if-you-want-to-become-a-millionaire-real-estate-investor/ Thu, 09 Jun 2022 13:30:00 +0000 https://condenetint.com/3-lessons-you-need-to-learn-if-you-want-to-become-a-millionaire-real-estate-investor/

Becoming a real estate millionaire is easier than ever. Property prices are in the midst of a long-term uptrend, and so are rents. You can potentially get a fixed payment loan to buy a property that will increase in value while generating more cash flow each year.

Of course, you can’t just snap your fingers and own profitable real estate. Here are some tips for becoming a long-term real estate millionaire.

Image source: Getty Images.

1. Use debt well

This may seem counter-intuitive to seasoned stock investors. We certainly don’t recommend trading stocks on margin or racking up a lot of credit card debt. So what gives?

The difference is the cost and the warranty. Credit card debt is expensive and that interest quickly accrues against you. Trading stocks on margin can also get you excited quickly. You are required to keep a certain amount of capital in the stock, and if it drops enough, the broker will sell your shares. Even stocks with good long-term potential can be volatile in the short term.

Real estate is stable and generates cash flow. Prices will probably never drop enough to cause the lender to call back your loan or mortgage, and rental income can be used to make your loan payments. Even better, the interest on your loan payments can be deducted from your taxes, even if the tenant actually makes the payment.

Let’s say that over five to 10 years, you amass $1 million in real estate with a 20% down payment. Over time, as long as you manage the property well and keep it occupied, the tenants will pay off the debt and you will become a millionaire with a $200,000 investment. And that’s not even including cash flow or tax savings.

2. Make smart tax decisions

The first level of smart tax management is simple: write off everything you can as fast as possible. Keep track of all relevant expenses. And hire a good CPA.

The next level is more difficult, but perhaps that is what separates future millionaire investors from amateurs. When you sell a property, use a 1031 exchange to funnel the proceeds directly into a new property, with no capital gains tax or recapture of depreciation.

The 1031 exchange rule is similar to an IRA or 401(k) retirement account. This will allow you to continue building your wealth without having to stop and pay 25% or more in taxes.

The catch is that when you finally sell the property, your cost base will be so low and the years of depreciation to be recouped will be so high that you could end up paying tax on almost the entire amount of the sale. .

The solution to this problem is morbid, but it works. Do not sell the property while you are alive. If you continue to trade for larger properties and eventually own millions of dollars worth of real estate at miniscule cost, you will be losing way too much money to the IRS by selling.

Instead, take out a loan on the property and distribute the funds to yourself. You can then use the money while the tenants make loan payments. When you die and the property passes to your heirs, they will be able to increase the base cost regardless of the current market value of the property.

But it is almost impossible to do all this on your own. Hire a good CPA and a good lawyer, and let them handle the details.

3. Stay consistent

Consistency is the key to real estate investing. Stick to a profitable niche where you have a circle of skill. Only buy properties if they are performing satisfactorily. Establish and adhere to standards for new tenants. Don’t overpay your low-rate debts and pay off your high-rate debts quickly.

Many successful real estate investors stumble when they deviate from their plan. Investors who have made a ton of money on multifamily decide to buy a medical practice. Those who only buy bargains pay for a new luxury building. And those who are not used to having a few months of vacation lower their standards and find themselves with a bad tenant.

Spend time creating the best plan that will work for you. Be open to change if you grow personally, but otherwise stick to the long-term plan.

]]> Can changing jobs prevent you from getting a mortgage? https://condenetint.com/can-changing-jobs-prevent-you-from-getting-a-mortgage/ Tue, 07 Jun 2022 20:53:03 +0000 https://condenetint.com/can-changing-jobs-prevent-you-from-getting-a-mortgage/

Accepting a new job can be exciting. But if getting a new contract coincides with your home buying plans, it may affect your ability to get a mortgage, even if you make more money in your new job.

When you apply for a home loan, lenders take a deep look at your financial history, including your current job, to see if you can handle the monthly mortgage payments.

“Any changes in your income and employment can affect your ability to get a mortgage,” says Esther Phillipssenior vice president of Chicago-based Key Mortgage Services.

The ramifications can range from having to provide additional documentation to not being approved for the loan, Phillips says.

“Don’t assume just because you were approved in a previous position that the underwriting guidelines will treat your new position the same, even if you make more money,” says Phillips.

Changing jobs when applying for a mortgage is not a deal breaker, but it can introduce a level of uncertainty that could cause lenders to act more cautiously. Below are some factors to consider when considering taking on a new job when buying a home.

Timing is everything

When you changed jobs is critical information when applying for a mortgage.

(Getty Pictures)

When applying for a mortgage, when you changed jobs is crucial.

Change job before applying for a mortgage may have little or no impact on a person’s ability to obtain a loan. But moving to a new position during the application process “comes with a lot more complications and timing implications,” says Phillips.

Additionally, if a homebuyer completely changes occupations, a lender might consider their work history to be more shaky.

Lenders will review the details

It’s the details of your situation that matter.

(Getty Pictures)

It’s the details of your work situation that matter, including whether you receive a salary, hourly wage, or bonuses/commissions.

Dj Olhausen, a Realty ONE Group Pacific Realtor®, says moving to a lower-paying position can reduce a homebuyer’s eligibility for a loan. Another example is when an employee moves from a salaried or hourly job to a commission-based sales position.

“These types of moves can seem risky to a lender,” says Olhausen.

Another reason loan applicants could lose their eligibility is if they start their own business and are now considered self-employed.

“This type of transition from a W-2 to a freelance position can also be considered an increased risk,” says Olhausen.

Different underwriting guidelines are associated with different types of employment, Phillips says. For example, an independent home buyer will generally need to provide a two-year income history.

For someone moving from wage to wage employment with no variability in income, “the impact is usually minimal and may require little more than documenting past and new jobs,” says Phillips.

Make sure to be transparent

The first step is to contact your lender and explain your professional situation.

(Getty Pictures)

Whenever potential buyers consider changing jobs, it’s important that they be transparent with their lender.

“The first step is to contact your lender and explain your professional situation to them,” says Olhausen. “Many times, if the new position is in a similar industry, or is considered similar to your old job, the mortgage process may not be affected.”

When you contact your lender, you should be prepared to explain why you are considering changing jobs.

It’s important to be transparent and detailed with your lender about your job and income because “your loan officer can outline all of your options and let you know if and when you should change jobs during the funding process. of the house,” says Phillips.

“If there are issues, it makes sense to discuss them ahead of time rather than taking your lender by surprise,” says Olhausen. “Just be sure to be upfront with the lender so they can help you navigate this situation.”

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