Category Archives: Personal Finance

Home improvement loan makes your home lovable place to live in!

The home improving process is quite expensive and this makes it necessary to avail loans for the purpose as this expense cannot be deferred. Financial aid in the form of grants and loans are extended to those who need to renovate their homes, beach houses and farms or any real estate. To implement the idea of renovation, most of the people depend on the home improvement loans or home improvement grants. The offer could be availed for the purpose of renovating residential buildings only and the loan is not offered to the renovation of real estate with a commercial purpose.

Home improvement grants options

Similar to educational grants and medical grants, the home improvement grants are offered by the federal government for the economic enhancement of the society. The agencies authorized by the federal government offer grants to the consumers belonging to around thousands of various categories. The purpose of the offer is to renovate the homes and the amount should be used exclusively for that. There are offers solely for supporting senior citizens and there are offers of grants to support the low income people. Besides home improvement grants, home improvement loans are much sought after by the people for renovation of their homes.

How does the home improvement loan functions?

Home improvement loan is a secured loan with some collateral as assurance. Mostly, the house that needs renovation is set as collateral for the loan. In some of the offers, the interest rates are subsidized by the federal government. The process of home improvement loan is quite a lengthy one. The loan application is approved on the basis of the credit history. The location, the present condition of the property and the expected life of the property are also some of the important factors that the lenders consider while approving the loan application at sbwire. Above all, the market value of the property is taken into account.

The offer is highly advantageous to the home owners. With the improvement on the property, the life of the property is extended. Since the home becomes more comfortable to live in, the market value of the property gets increased. As the property is set as collateral, there is no hesitation or fear of losing the money for the lenders. Most of the borrowers buy the property that is affordable and once the home mortgage is cleared, go for a home improvement loan to renovate the house to make it a lovable place to live in.

When you decide to apply for home improvement loan, it should be ensured that the repayments are affordable so that you do not feel the burden of repayments. Analyzing your renovation requirements and the expenses due to that and your resources to repay will help to make a wise decision. The purpose of renovation is to live comfortably in your home. With the financial stress haunting you, you cannot enjoy the comfort of your dear home. Borrow only what is required and not more than your needs. You can consult your financial advisor regarding the offer and get the suggestions so that the offer of home improvement loan or home improvement grant is used to maximum benefits.

Reverse mortgages- more disadvantageous than beneficial!

Reverse mortgages seem to impress people as there is a consistent source of income at one’s old age. However, the disadvantages in the offer should be studied well before deciding whether to access this offer or not. Let us first understand how the reverse mortgage functions to know whether it can be beneficial or not. Reverse mortgage is also termed as conversion mortgage. The mortgage is opposite to conventional mortgage and hence the term reverse mortgage. In this offer, the mortgage is paid by the lender at prlog to the homeowner, instead of the homebuyer repaying towards the mortgage for the home purchased.

How does the reverse mortgage function?

To put it simply, the homeowner obtains loan on the home and the lender gets the loan amount along with the interest once the property is disposed at the demise of the homeowner. The homeowners who lack sufficient funds for regular financial commitments can solve their financial problem with the support of reverse mortgages. The borrower of reverse mortgages is expected to be aged 62 years at least and must have settled a major portion of the home mortgage. Neither the income nor the medical history of the applicants is required for this mortgage.

In certain cases, the borrower needs to undergo counseling before taking the offer. The age of the applicant, the equity of the applicant on the home, and the market value of the property are the factors that determine the loan amount. The reverse mortgages are offered by both the private financial institutions and the government agencies. The loan amount is paid either fully or in regular monthly installments or through line of credit. The homeowner who applies for reverse mortgage can choose either one of the options of payment or can avail a combination of the options.

Though the offer gives financial freedom to the homeowners, the disadvantages in the offer should be considered as well before committing to it as there is the risk for your property. Since there are various options in the offer of reverse mortgages, counseling will be helpful in the decision. The process of reverse mortgages involves high cost. The application cost, the closing cost, the cost due to appraisal, credit report charges and expenses due to insurance and service charges are involved in the offer. Though the homeowner can enjoy the comfort of residing in own house, property taxes, the insurance and the repair charges are to be undertaken by the homeowner.

In case the homeowner is not regular in his payments towards these costs, there are chances that the loan might be revoked and the homeowner might become responsible for the entire loan amount. However, the homeowner can apply for rolling the expenses due to the above mentioned factors into the loan amount. The financial support that is availed through reverse mortgage is exempted from taxation. You are denied the benefits from SSI and so on due to this. The interest amount on reverse mortgages is not exempted from tax until the loan is settled completely. Analyzing the advantages and disadvantages, you should consider the option only if you are utterly in need of financial support for survival.

The Top 10 Reasons People don’t have Life Insurance




Top ten reasons for not buying life insurance

One thing I had to learn early in my career as a life insurance broker was that not everybody I spoke to was going to purchase a policy from me. The list of reasons people don’t get a policy is a long one, so I have narrowed it down into the top 10 (not necessarily in order of popularity):

  1. They think they don’t need it.  This is a big one, even after eliminating those in #2.  I recently spoke to a father of 5 young children who rejected my offer because he “just didn’t see a need for life insurance.”  I asked him how his wife would be able to support his 5 kids if he passed away and they no longer could depend on his income.  The bottom line is anybody who has a spouse (or significant other) and/or children that depend on his/her income should have life insurance.  There are other personal and business reasons for buying life insurance, but this one seems to be the biggest reason.
  2. They really don’t need it.  People who don’t have families dependent on their incomes usually don’t have a need for life insurance (unless they want to take advantage of the living benefits of a permanent policy, such as whole life or universal life insurance).    If there are no other needs, such as business continuation, estate protection or paying for final expenses, then they shouldn’t purchase a policy.  Any life insurance agent or broker worth his/her salt will not sell a policy to someone who doesn’t have a clear need for it.
  3. They think they can’t afford it.   Either they overestimate the cost of a policy or don’t consider that, with a minor shift in one’s budget, affording a policy is not an issue.  In the overestimating category, the 2014 Insurance Barometer Study done by LIMRA and LifeHappens.org, (see yesterday’s post) says it all – While 2 of 3 consumers say life insurance is too expensive to purchase, people tend to overestimate the cost.  In fact, a quarter of the respondents thought the price for a $250,000 term policy (that would cost $15o per year) would cost at least $1,000 annually.  In the budget-shifting category, let’s double the premium of the policy mentioned in the last paragraph to $300  annually, which would  purchase a $650,000 20 year term policy for a healthy, 30 year old male.  If this gentlemen has a family and tells me he can’t afford a policy, my first question is, “how much do you spend at Starbucks (or other coffee emporium) every morning?”  If the answer is $3  or higher, I show them that if they cut back on the daily java drinks, they can easily afford that policy.  If they don’t indulge in a daily caffeine treat, I can usually find other places to find $25 dollars a month to financially protect their families.
  4. They really can’t afford it.  Yes, sadly it’s true – there are people who can’t afford to purchase even the smallest policy (no matter how hard I try to find it in the budget).   I have seen these numbers grow since the Great Recession began.  Hopefully, these numbers will see a reversal in the near future.
  5. They procrastinate.  Okay, I know that some people would rather do anything than confront the subject of one’s mortality but, if you fall into the Need it category, you just need to bite the bullet and get it done.  Because it’s so easy to procrastinate doing something so lacking in excitement and sex appeal, a big part of my job is nudging my prospective clients and applicants along in the process until they have a policy in hand.
  6. They forgot to pay the premium and let the policy lapse.  This one baffles me.  Why would you go through the application and medical exam process and lose the policy (and all the money you spent on it to date) just because you forgot to pay the premium?  Setting up a checking account debit with the insurance company  is a foolproof way to ensure your premiums are paid.
  7. They’d rather have root canal then speak to a life insurance agent.   I’ve been to one  too many insurance company conventions and meetings and I can’t say I disagree with with this one.  However, all kidding aside, I’ve met some really great people in the business as well, and most I’ve met care a lot about doing the right thing for their clients.  In most cases, life insurance agents/brokers like to help people (albeit sometimes too aggressively, I confess).  You can shop for your agent/broker to find one you’re compatible with.  Start with one of the many online independent agents.
  8. They want to buy it but they are extremely confused about the subject.  There is a lot of information out there about the subject and a lot of opinions (e.g. the right type of policy to buy, how much coverage is needed, etc.), so it’s easy to get overwhelmed with information.  This is a great example of too much analysis leading to paralysis.  As a result, many folks start out to purchase a policy and wind up throwing their hands up and quitting the search.  My suggestion is to find an advisor you trust and seek his/her advice.
  9. They applied but didn’t take the policy because they didn’t agree with the health class assigned by the insurance company.  I wish I could say I made this one up, but  a lot of people get really upset when the insurance company puts them in a lower health class than they think they deserve.  Unfortunately, it begins with unrealistic expectations created by a quote they received.  Not everyone is in the best health class, and it’s extremely important to get the most accurate quotes up front so you don’t get disappointed when the policy is issued.
  10. They just aren’t interested in securing the financial future of their families.  Thankfully, I don’t hear this one a lot, but I have to include it on the list because I do run into people with this viewpoint from time to time.  One charming “gentleman” said to me, “I’ll be dead, so I won’t have to worry about it, will I?”  That’s one objection I won’t even try to overcome because, frankly, I don’t want to spend more time than I have to with someone like that, let alone try to sell him a policy.


About 

In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs. As a national broker, I am licensed to write life and disability insurance in all 50 states and the District of Columbia.

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Article source: http://www.lifeinsure.com/top-10-reasons-people-dont-life-insurance/

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