There’s been a spike in interest recently in 15-year mortgages, particularly for people who are refinancing. In general, the recent financial crisis has made people more wary of debt and more eager to pay it off. Back before the crisis, many people were happy to take on more debt and pay it off over a longer period of time. But today, a lot of people want to get rid of debt as quickly as possible, even
As a general rule, borrowers have to obtain private mortgage insurance if their down payment is less than 20% of the value of the home. But what many people don’t realize is that there are a number of different options for the way this insurance, called PMI, is handled. Some of these could reduce your monthly payment or save you money in the long term. PMI is a bigger issue than it used to be. For
Everyone has heard the terms “will” and “trust,” but not everyone knows the differences between the two. Both are useful estate planning devices that serve different purposes, and both can work together to create a complete estate plan. One main difference is that a will goes into effect only after you die, whereas a trust can take effect as soon as you create it. A will is a document that directs who will receive your property
When choosing a beneficiary for a retirement plan, it’s important to understand how your spouse will be treated under the plan. Surviving spouses are treated differently under 401(k)s and IRAs. In general, 401(k) plans provide protections for surviving spouses that IRAs don’t. 401(k) plans are governed by a federal law known as ERISA. Under this law, a surviving spouse is the automatic beneficiary of a retirement plan. If an employee wants to name someone other than
The new health reform law that took effect on January 1, 2011 includes free preventive services for Medicare recipients. Under the law, people with regular Medicare will no longer have to pay a co-pay, coinsurance or deductible to receive preventive services that are highly recommended by the U.S. Preventive Services Task Force – including screenings for breast cancer, colon cancer, diabetes and heart disease, as well as smoking cessation counseling. Private Medicare plans (known as Medicare
A new product is making “reverse mortgages” more affordable. Reverse mortgages typically have high fees, but the new “Saver” reverse mortgage allows borrowers to dramatically lower their upfront costs – as long as they’re willing to borrow a smaller amount. A reverse mortgage allows homeowners who are at least 62 years old to transform the equity in their home into liquid cash without having to move or make regular loan repayments. The homeowner receives a sum
The first of the 78 million baby boomers turned 65 on January 1, 2011, and about 10,000 boomers a day will be reaching that age between now and 2030. If you’re among those about to turn 65, then it’s time to think about Medicare. You become eligible for Medicare as soon as you turn 65, and delaying your enrollment can result in penalties. Medicare consists of four major programs: • Part A covers hospital stays. •
The IRS recently announced that it will adjust its use of tax liens to collect back taxes. A federal tax lien gives the IRS a claim on a delinquent taxpayer’s property for unpaid taxes. This change means the IRS won’t use a tax lien unless at least $10,000 in back taxes is owed; the previous threshold had been $5,000. In addition, the IRS says it will “withdraw” more tax liens once the back taxes have been
“Tax Freedom Day” fell on April 12 in 2011, three days later than in 2010. According to the Tax Foundation, all the money earned by taxpayers in the first 102 days of 2011 will go to pay their federal, state, and local taxes. Another statistic from the Tax Foundation: If the government were to collect enough taxes to fund all spending for 2011 (with no deficit), Tax Freedom Day would be May 23, 2011. That’s 41
Planning to rent out your vacation getaway? When it comes to taking advantage of the tax benefits, timing is an important factor. Here are two points to remember. The fourteen-day-or-ten-percent test. The IRS applies this test to determine if you use your vacation home as a personal residence. If you stay in the home more than 14 days or 10% of the total days it’s rented in a calendar year (whichever is greater), the general rule
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