Deciding Between Paper and Property in Real Estate Investing

Investing in real estate can be extremely lucrative and rewarding, but there are some ways to do so and avoid the headaches of tenants, repairs, maintenance and inspections. Other options include real estate in the form of financial vehicles that will reduce the headaches and still allow you to reap the rewards in an up market.

Real Estate Investment Trusts, or REITs, are the oldest form of investing in real estate via paper. These are essentially mutual funds which invest in actual property and mortgages. REITs are managed by financial professionals, qualify for special tax claims, and are more liquid than simply investing in real property directly.

Equity REITs focus on owning actual properties, and collect income from rents. Mortgage REITs financially back investments in mortgages, earning interest on loaned funds. Hybrid REITs are also available, and include characteristics of both Equity and Mortgage REITs.

REITs are closed-end funds, meaning that there are only a set number of shares available, and must be bought from or sold to other investors through a professional broker.

The biggest advantage to REITs is that they must pay out 90% or more of their taxable profits to shareholders, also known as dividends. This means that the dividends may end up providing quite a high yield. The total value of your shares in a REIT fund includes these dividends and appreciation in the price of shares. About 2/3 of your returns will be from dividends, much like small-cap stocks. However, this also means that interest rate changes directly affect these profits, and increased rates tend to cause REIT prices to fall.

Mortgage-Backed Securities, or MBS, are bonds that are supported by mortgage loans. These MBS back approximately 80% of all home mortgage loans issued on an annual basis.

A specific rate of interest is earned on MBS investments. The biggest difference between these and regular bonds is that principle repayments occur periodically throughout the life of a home mortgage loan as it is paid down – this is sometimes more advantageous to an investor than bonds that pay principal in one lump sum at the time they reach maturity.

These types of real estate investments can reduce risk largely due to the statistical effect of pooling large numbers of these properties and mortgages together. This way, no single property or mortgage can have a great effect on the returns experienced.

One important consideration is the fact that changing interest rates not only affect returns on MBS bonds, but also cause many homeowners to pay off their home loan early to refinance for a lower rate. This will significantly reduce the interest profits seen in this type of investment.

Don’t forget that an Individual Retirement Account (IRA) can be self-directed to add assets of real property. This could include homes, commercial structures and even empty land lots; this option reduces the risk of your retirement funds, and allows you to conserve your cash for more immediate expenses and other investments.

Negotiate Your Mortgage Terms with a Hardship Letter

Troubled homeowners have the tendency to avoid all collection attempts and ignore any default letters sent by their lenders. However, initiating contact with them can allow you to request altering your payment terms to fit within your changing financial situation; most will require a hardship letter to outline your current status and the reason for your default prior to changing your mortgage payments. Following are instructions on how to write this letter, and what information should be included in it:

First, it’s always best to preempt any defaulted or late payments. Sit down and take the time to communicate, in writing, with your lender to advise them of your impending hardship. You can easily stop foreclosure proceedings by letting them know of an injury or illness that has kept you from work, a family emergency, or losing your source of income. If your financial strain is a result of something that was not in your power, most lenders will tend to give you a little leeway and will prevent the situation from becoming a nasty legal battle.

Any hardship letter should include your name, address and contact information, to be inserted in a formal letter template commonly found in any computer operating software program. You should also gather the lender’s address and name to be recorded as the recipient.

Make sure your letter is short and to the point, but clearly communicates what you want them to do and why. Start by asking them to review your current financial situation and come up with a mutually agreeable payment solution to become current on your mortgage and avoid foreclosure. Clearly state that you want to meet your obligations with them, and outline the reasons you have fallen behind.

Whatever you do, don’t blame your lender for your current situation. Simply state that “I recently was laid off from my job, and am living off of unemployment in the interim.”

Next, let them know how long you expect your current situation to last, and how you plan on remedying it. An example may be: “I do not expect this circumstance to last more than three or four months, and have been actively pursuing other employment opportunities on a full-time basis.”

Finally, include a sentence that says, “To the best of my knowledge, the information included in this letter is true and accurate.” End the letter with a handwritten signature and the date. If your spouse or another party is listed on the loan as well, also have them sign and date the letter.

The best and most professional way to present the letter to your lender is to send it via certified mail. Of course, you can always fax it or take it in person if you have established a personal relationship with someone in a local branch.

They key to avoiding a home foreclosure is to instill some confidence in your lender that you fully intend on paying your mortgage, but currently need some type of alteration to make it more affordable. Sending a hardship letter as soon as possible will better your chances of finding an agreeable solution you can commit to.

Individual Retirement Accounts-What Type Of Retirement Plan Will Work For You?

Some people are savers and like to keep money aside for a rainy day whereas others live for the moment and don’t know the meaning of saving. However, if you want to enjoy your retirement and unless you plan on winning the lottery it is a good idea to think ahead for your future finances. Find out about individual retirement accounts and what is the best way to go about getting one. This article will look at what an individual retirement account entails.

Most Individual retirement accounts work in much the same way as the 401K retirement plan where you take out the account with your current employer and make payments to the plan with the employer matching the funds. These funds are placed into your account before tax has been deducted. Another type of individual retirement known as the Roth plan allows you to make a saving on tax with funds put into the account after tax, withdrawing money is also tax free.

Saving in this way will pave the way for funding your costs when you
retire and also if you happen to need some ready funds for an emergency. Most individual retirement accounts will allow you to withdraw funds as a loan which can be replaced at a later date.

In addition to your retirement plan, it is always a good idea to put some of your income aside with a high interest savings account to augment your individual retirement account. Unless money is exceptionally tight, there are always little things that you can cut back on that will go a long way towards your future financial independence.

There are certain other factors that should be taken into consideration when planning which individual retirement account to choose such as healthcare costs. It is advisable to discuss this with your health care provider to find out where you stand in this instance. This is doubly important as health insurance is not always fully comprehensive and you will want to be covered in every eventuality.

For a full breakdown of your options it is well worth discussing your options with a financial advisor who can help you decide which individual retirement account is most suitable for you on all counts. An excellent resource for information on retirement planning can be found at www.investopedia.com.

Planning ahead does not have to be a drain on your bank account. With some professional advise and a few small cutbacks you can be well on your way to financial freedom when you retire without compromising your current lifestyle.

Getting The Best Cash Advance Services For Your Money

Sometimes we overspend, it is just a fact of life. So you find yourself needing some extra to tide you over until your next pay check and you have found a cash advance services company online, what do you do next? There are definitely some instant loan companies better than others and there are certain factors that you should look out for when choosing a company for cash advance services..

These companies know that you want your cash immediately without too much bother. This means that you are at their mercy in terms of interest rates which are usually disturbingly high. However, if you can find cash advance services which are upfront about repayment expectations, how long you have and how much they will be, you can be comfortable in the knowledge that you can manage the repayments without falling into further debt and no hidden small print.

The standard time limit for repayment is 2 weeks giving you time to acquire your next pay check to foot the bill. You should be looking for a cash advance payday loan company with a transparent and comprehensible agreement so you know precisely where you stand.

Try to find a company that has an easily accessible customer support service should you have any questions about the cash advance services. There should be a telephone number as well as an email so you can communicate directly. Emailing is not always appropriate especially when a query is complicated and an answer is required instantly.

If there are any complications such as your repayments being deducted form your bank account earlier than agreed or with an increased interest rate, you should be able to easily access customer support to reverse the situation and ideally be recompensed for the trouble caused. Any unauthorized changes to the contract must be fixed as soon as possible, anything else is unacceptable. Similarly, if your circumstances are such that you find yourself unable to make a payment, you should be able to discuss this with the support desk with help to make the appropriate changes so you can continue to repay your payday advance.

These days, many cash advance services will allow you to obtain an advance without prior credit check. The minimum requirement is usually that you earn at least £1000 per month. The process is usually very straightforward to eliminate unnecessary obstacles and time being wasted. You should also be able to access your account in order to keep a check on your repayments to keep you up to date.

Student Loans-All about Scholarships

Scholarships differ from student loans, in that the money granted does not need to be repaid. Scholarships are usually awarded to athletes or academic high-achievers or children of local widows. Basically, there are various kinds of scholarships for various circumstances.

Most scholarships focus mostly on academics, so excellent grades are a must. But that isn’t all. In order to beat out everyone with the similar SAT scores and GPAs, students also have to have other elements in their background, like an award from Westinghouse or another science competition. However, it could also be a background of excellent community service. The options have no ends.

The easiest ways to find out what is out there is by speaking to a school counselor, but do not take everything they say to heart. Usually, they find themselves to be overworked and may not always be aware of important updated information. Do some research on the internet and try to dig out hundreds of potential scholarship programs in the process.

Some scholarships have basic initial criteria like being a citizen of the United States of America and having a high school, while some require a sure acceptance at a university, as well as a set place of residence.

Scholarships are available for the children of veterans, for residents of Virginia, for those who want to major in Health Sciences – and those are just some examples. Most, but not all, require good grades, while a lot simply require the student to come from a family with low income; others may take ethnicity into consideration.

Amazing GPAs, great test scores, and an interesting personal background may not be enough for various scholarships. Some choose to grant scholarships to people because of their written essay, which can sometimes be as short as 250 words or as long as 5,000 words. The essay usually focuses on a list of the student’s merit or personal achievements, while it may also focus on the student’s world views.

The majority of scholarships are completely free; this means that money does not have to be repaid, unlike with student loans. This isn’t always the case though, since some scholarships are taxable. The IRS states that, in order to quality for tax-free scholarships, a variety of conditions must still be met. Find out what they are at: http://www.irs.gov/faqs/faq4-8.html

The only way to if you fit any of the qualifications and actually have the chance of receiving a scholarship is by digging into various programs and start applying as soon as possible. It may take a lot of effort, but it is worth it in the long run.

Handling Debt Collectors and Agencies

If you’ve come upon hard times and have not been able to keep up with your current debts, your phone is probably ringing at all hours of the day, and your mailbox is full of strongly-worded letters looking for payment. Don’t fret, however – there are options that will help you to curb some of this contact and deal directly with the debts you owe.

Legislators designed the Fair Debt Collection Practices Act just for this reason. Passed into law to protect your rights, this piece of legislation outlines how an agency is allowed to contact you and try to collect a debt.

Some of these requirements include that a debtor can only call you between the hours of 8 a.m. and 9 p.m. They may also not disclose the debt information to third parties like extended family members or your boss. These collection agencies are not allowed to threaten or harass you, and must not continue to contact you via phone if you request them to stop.

A “cease and desist” letter can be sent to any agency you feel has violated the law or harassed you when attempting to collect a debt. If you know the debt is valid, however, you may want to open the lines of communication to deal with it and find some way to pay it off. Your credit score will thank you in the end, and this is the first step in addressing your debt management plan.

You may have the option to settle the debt for less than you actually owe, or negotiate a lower rate to save money in the long-term. Another option may be to seek the services of a credit counseling or debt consolidation company.

The advantage to actually dealing with the annoying collectors is that they will stop contacting you as long as you hold up your end of the deal. However, if you don’t follow through, the calls will begin again, no doubt.

When dealing with the companies, keep a personal log of all calls made and received, the person you spoke to, and what was discussed. When an agreement is reached, ask for something in writing from them, and always keep confirmation numbers or receipts from any and all payments you make.

If the collection company doesn’t maintain their side of the agreement, this information can all become legally viable in the court of law. However, if you are honest about your situation and let them know exactly why you’ve fallen behind, they will be more likely to create a payoff plan that actually works for you.

During negotiations, don’t forget the effect the debt has and will have on your credit report; negative information can stay on your personal report for up to seven years, so ask that the company immediately report any payments you make. If you settle the debt, your report will most likely state this, but will still show that it has been paid. Of course, if you don’t want to handle these negotiations yourself, you may want to retain the services of a credit counseling service to manage any and all debt you owe.

Dealing With a Mortgage Loan Company

When it comes time to find a mortgage loan for a new property you want to buy, many lenders will be very friendly, looking for your business. However, you must always remember they are in the business of making money, and will use you to reach this goal. Even with a discounted or zero home loan rate, they will still profit from lending to you in some way. But before worrying about this fact, you’ll need to assess whether or not you are likely to be approved by your proposed financier.

Home loan lenders will look at each mortgage loan application and determine the applicant’s ability to pay back the debt. If the debt is not repaid, the lender loses money, and this is not very profitable business dealings!

Your past history must be as positive as possible, including your credit history and score found on your report. The underwriter will consider the amount of your past debts, the number of them still in effect, and your history of repaying owed debts.

Current and past income levels will also be accounted for during the underwriting process. Your lender will look at historical income levels and investment activities, current paycheck stubs and the past few years of tax returns. Any outstanding debt such as credit cards, judgments or other issues will also need to be addressed.

Everyone has financial difficulties or strains from time to time, but the most important factor will be your history in repaying debts. Have you ever purchased a home and later defaulted or been foreclosed on? If so, you’ll probably have a harder time getting approval.

Other facts considered that should be to your benefit include the amount of money you are able to put down on the property. Home loan interest rates and chances of being denied increase with the amount of the home you want to finance. 20% or 30% down payments will show you can save and invest your money intelligently, are disciplined, and will qualify you for a lower rate.

Information regarding the home is also taken into consideration. What is the assessed value versus the proposed sale price? The smaller this difference, the less likely the mortgage lender will be to get as excited about the property as you are.

This is what makes it sometimes difficult for new investors to purchase fixer-uppers. If the property is devalued due to needed repairs, you’ll need to prove you have the cash and ability to finish them and increase the value of the property. Some investors choose to take out a second mortgage on their residence to help finance these repairs.

However, if you’re wanting to continually invest in properties, you only need one or two in order to establish a great history with the mortgage company. Lenders will be much more likely to trust in your work and investment knowledge if you have never defaulted on any property they have financed for you in the past.

Great Money Saving Tips For Those Ever- Increasing Air Fares

Where distance is concerned, flying is the most economical and practical method of transport cutting your journey in half if not more. Yes, there are definitely more restrictions in terms of hand luggage due to recent events, however, it is still by far, the easiest and safest way to get to your destination.

Undoubtedly, airlines are becoming more expensive with fuel prices going through the roof and the economy in general, facing tough times but if you put the effort in, you can still find ways to reduce your air fares and make the journey less of a financial burden.

Sometimes, comfort has to be sacrificed to a degree. If your journey is not going to be too long, you can book with cheaper, budget airlines and save a packet. Ok, your trip won’t be in the lap of luxury but for a short time it is adequate and you get to your destination just as fast.

Fly from the smaller airports out of town. They are almost always cheaper to fly from, even taking into consideration the expense to get there and most have a direct, shuttle service with a reasonable fare. Be adaptable if possible with your dates and destination and saving money will be easy.

Watch out for added tax on budget flights. They may advertise a ridiculously low price then whack on a huge tax bringing it up considerably. That being said it still, usually works out cheaper but bear in mind for price comparison reasons.

There are consistently certain days of the week which are more expensive to fly than others. Try t avoid these off-peak times as there really are massive savings to be made. Fridays are usually the worst for money saving opportunities. It is great to go on your vacation in the holiday season, however, other times of the year can see a marked reduction in fares as well as other costs.

Book the unsociable hour flights including through the night for further discounts. It might be a little uncomfortable but will help your budget go further. Be prepared to catch connecting flights, again saving money. Ok, your journey will take a bit longer but you will have experienced new countries (even if it is only the airport and a little beyond) into the bargain. Try to enjoy the whole trip and be open-minded.

If you time it just right, you can find out if there are any last minute cancellations and try to get a refund on your existing ticket. O.K maybe this is not the most ethical means of getting a good deal but when times are hard, needs must.

When you fly, be sure to collect your air miles if available, this also applies to your credit card company. Always keep an eye out for any program involving air miles as an incentive, you will be glad you did when it comes to coughing up for your next flight.

When it comes to saving money when flying, it boils down to being flexible, putting the effort into price comparison, leaving no stone unturned and accepting slight discomfort. If you are willing to compromise, paying for your flights should not end in tears.

How Can I Earn A Living From My Hobby?

Times are changing with regards to the world of business and money ventures. Gone are the days when it was only an elusive few who were able to build an empire from scratch and rake in the benefits. Most people have a hobby or interest that they are in love with and probably do not realise that they too can build a business their knowledge and skill.

Your expertise on your hobby is invaluable whether it is in the form of physical products or a knowledge base which you can use to teach others. The opportunities are endless and thousands are already doing it.

Have you ever been complimented on your skills? Maybe you are a budding artist or are a whiz at web designing, maybe you have always enjoyed making beautiful jewellery but never thought twice about making it for others. Well now is your chance. The world needs to see your fare and help you glean profits you never thought possible.

If you are nervous about putting all your eggs in one basket with starting up your business, why not begin slowly alongside your day job. Once you start to see results you can give up the job and put everything into your venture.

Begin with a little research. Find out what others are doing to monetize your hobby area and have a look at online websites in this field. How are they taking advantage of their skills and what form does the product take? Once you have a few solid ideas and have investigated certain demands of the subject you can get to work.

Remember that you are not limited to one area of your hobby. If your interest is making wooden toys for children, you could also branch out into selling supplies for producing the toy. You could create an ebook on the wonders of toy making, a beginners guide or a specific type of toy – if the demand is there, you can produce a product to fit.

Get the word out and build a website around your topic. Include plenty of pictures and offer a free newsletter giving handy hints and tips.

Another great way of finding potential customers, that many are making use of, is the up-and-coming blogging network. You can use a blogging platform to guide readers to your website, post to your blog everyday and get repeat visitors and even a fan base. The world is a pretty big place and with the internet at your fingertips, there should be no problem in finding people interested in what you have to offer.

When you have a skill, talent, extensive collection or knowledge of a subject, you have the all important foundations for a financially viable business. Online, you can set up shop for free using, blogs, free advertising and many more. Don’t waste anymore time dreaming about having your own business and creating your vision. Put your words into action and start making plans to turn your life around today.

Student Loans-All about PLUS Student Loans

Within the past few decades, the cost of education has risen dramatically and students who have started to rely on Stafford student loans have failed in trying to cover for most of their expenses. That’s what the Parent Loans for Undergraduate Students (PLUS) student loan program is here for.

Although the interest rate may be higher than those of other student loan programs, PLUS student loans are far more flexible and the student loans are not based on needs.

With the Federal Family Education Loan (FFEL) student loan program, private lenders pay for the student loan and the interest rate is 8.5%. Direct loan students are funded by the United States Department of Education with a direct student loan at 7.9%. This slight 0.6% difference can amount to a lot, though, even in average student loans. In just one year, a decade-long student loan of $25,000 can amount to $2050; that’s $130 in interest.

For exact calculations, play around with your own sample scenarios by using the student loan calculator at: http://www.bankrate.com/brm/mortgage-calculator.asp

With PLUS student loans, the total education cost can be borrowed, minus the amount that the student has already been awarded. PLUS money may not come cheap, but it can make a difference, depending on which school the student wishes to attend.

However, since PLUS student loans are not based on needs, they make a credit check. This does not mean that the student’s credit is taken under consideration, but the parents’ credit since they will be co-signing the promissory note. The parents hold the sole responsibility of paying back the student loan.

There are rare cases, however, where the parents’ credit history makes them ineligible; in these cases, another co-signer (a relative, perhaps) can help with the student loan. The co-signer must, however, take full legal responsibility as a co-borrower.

Interest rates aside, another change that student loan programs have gone through is the eligibility of graduate and professional students to apply for PLUS student loans. The same eligibility criteria and interest rates now apply for these students, as well; they, too, must be in an eligible institution and student loan program at least part-time.

Unlike a lot of Stafford student loan programs, PLUS student loans are repaid straight away, usually within two months after the student loan has been given. Interest starts to pile up right away, as well. Student loans are paid to the private lender, in case of FFEL student loans and to a United States Department of Education servicing center, in case of direct student loans.

Be sure to carefully and thoroughly calculate every cost involved with a PLUS student loan, and choose this student loan only as a last resort since any other student loan is sure to be less expensive.

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