Online Financial Tips

Archive for February, 2012

Life insurance companies view applications for insurance as a risk analysis. Simply put, what is the risk that you will die during the term of the policy, an act that will require the insurance company to pay the death benefit? To determine this, there are seven general categories people look at.

1. Smoker vs Non-Smoker

Yes, those annoying anti-smoking commercials are telling the truth. Puffing on a coffin nail will shorten your life span and cause a host of health issues that can, well, put you in a coffin. If you smoke, you can expect to pay much higher rates for life insurance.

2. Blood – And You Thought Vampires Were Interested In It!

The number one killer in our country is heart disease. Upwards of 600,000 people die from heart problems each and every year. As you might imagine, this is of great interest to life insurance companies when it comes to evaluating health risks. To determine your heart health, they will look at your blood pressure, cholesterol and triglyceride levels. If they are high, your rates will be as well.

3. Checking Those LBs

Being overweight is not good for your health. That being said, so many Americans are overweight that life insurance companies have learned to be more liberal when considering this factor. After all, they wouldn’t have many clients if they excluded heafty Americans.

4. Income and lifestyle

Do you life a stressful life or not? Stress is a huge health risk. By evaluating your income and lifestyle, companies can asses whether the risk of you having critical health issues is higher or not.

5. Overall Health

Isn’t it interesting this is so far down the list of factors considered? As long as you don’t smoke, have normal blood pressure, acceptable cholesterol and triglyceride levels as well as normal weight, you are probably going to live a long and healthy life. Good for you!

6. Family’s medical history

If everyone in your family drops dead at 50 from some genetic issue, you are going to have problems getting insurance.

7. Hazardous professions and hobbies

If you work in demolitions, are a bomb maker or some such risky profession, the risk of you passing away suddenly are obviously higher. Given this, your rates will be as well.

If you want to minimize the cost of life insurance, you should give some serious thought to these seven categories. Get them under control and you can get your rates under control as well.

If you are a home searcher and want to find some of the best and hottest deals in the market, then there is just one word that should ring in your mind, and that is foreclosure. Foreclosed homes are often listed for values that are way under their market value. And that makes them the best deals. The only task that remains at hand is that of finding the best foreclosure listing that can get you even closure to landing a foreclosed home. But before you start off, you should know in advance that the whole process is demanding and tiring, and it will take a good amount of your time. But all that is perfectly expected as in the end, it all pays off and in a big way.

Foreclosure listings are usually indicated in most magazines and newsletters. But with the infiltration of the internet into our daily lives, you can look at listings posted on websites. Usually, you have the choice to find any foreclosed home in the country, though the ones narrowing on a specific state, or county, might be of more essence as the assumption made is that you know the location that you want to live in even before finding the foreclosures.

One quality that is mostly demanding is that of patience as it is what you will need as you go through the foreclosure listings. There may be houses that are sweetly priced, but if you waited, you could snag an even sweeter one. So it’s highly recommended that you do not settle for the first listing you get. Rummage through some pages and you will be assured of getting a deal too good for words. But don’t take too long as a good house might just pass you by. Ensure that you have the foreclosures you have narrowed on inspected for professional approval before buying.

Exchange Traded Funds (ETFs) represent a bundle of assets that look a lot like a mutual fund, only they may be traded during the day just like ordinary stocks (mutual fund units may only be redeemed at the end of the day). ETFs have gained a reputation as a low cost, tax efficient alternative to mutual funds. The only problem with this perception is that it may not be accurate. ETFs that invest in currencies or commodities can create bizarre tax ramifications to which the capital gains tax rate rules simply do not apply. This article will address the tax implications of investing in three forms of ETFs: Plain Vanilla (bundles of company stocks), Currency and Commodity ETFs.

Plain Vanilla ETF
A Plain Vanilla ETF gives the investor a tiny piece of various companies that are held in the fund. Like an Index Mutual Fund a Plain Vanilla ETF is a type of investment company which invests its funds in stocks that mirror some particular market index, such as the S&P 500 or the NASDAQ 100. Plain Vanilla ETFs can be grouped into four basic categories: Broad-Based ETFs, Fixed Income ETFs, International ETFs and Sector ETFs. Broad-Based ETFs follow specific indexes styles such as growth indexes, value indexes, small-cap, mid-cap and large- cap indexes. Fixed Income ETFs track indexes for corporate and Treasury bonds. International ETFs track indexes for foreign countries as well as international regions (i.e. Asia). Sector ETFs track indexes for specific industries such as health care.

Currency ETF
Currency ETFs aren’t funds at all but, rather, trusts or limited partnerships that pass income and gains through to their investors. Accordingly, each owner of a Currency ETF takes into account his or her pro rata share of the ETF’s income, gain, loss, deductions and other items for the calendar year. If you are an investor in a Currency ETF you will receive a K-1 for the year. This K-1 will itemize each specific type of income and expense passed through to you, the investor. The tax treatment of such income or gains depends on the Fund’s underlying positions, so you must read the prospectus to understand the tax treatment of such income, expense, gain or loss. Currency ETFs allow you to capitalize on the strength of foreign currencies relative to the U.S. dollar. Whenever a U.S. investor buys a currency ETF, they are automatically short the dollar in the corresponding currency. This type of strategy allows you to hedge against weakness in the dollar. Currency ETFs can be taxed in eight different ways. Currency ETFs can be taxed as long-term capital gains, short-term capital gains, ordinary income, interest income, part capital gains/part ordinary income, phantom interest (interest not received) and phantom ordinary income (mark to market gains for futures contracts). Currency ETFs can create bizarre tax treatment that even your CPU would not understand.

Commodity ETFs
Like Currency ETFs, Commodity ETFs are not funds but, rather, trusts of limited partnerships that pass income and gains through to their investors. Accordingly, each owner of a Commodity ETF takes into account his or her pro rata share of the ETF’s income, gain, loss, deductions and other items for the calendar year. If you are an investor in a Currency ETF you will receive a K-1 for the year. This K-1 will itemize each specific type of income and expense passed through to you, the investor. The tax treatment of such income or gains depends on the Fund’s underlying positions, so you must read the prospectus to understand the tax treatment of such income, expense, gain or loss. Commodities are tangible assets used to manufacture and produce goods or services. Specific examples of basic commodity categories include agriculture, energy, livestock, metals, timber and textiles. In the agriculture segment, familiar commodities include cotton, coffee, and wheat. In the energy area, examples of commodities include natural gas and crude oil. In a Commodity ETF you are investing in a basket of commodities, which is good as it provides diversification for your commodity investment portfolio. For commodity ETFs that utilize futures contracts 60% of any gains are taxed at the long-term capital gains rate while the remaining 40% of gains are taxed as short term, which are subject to the investor’s ordinary income tax rate. A commodity ETF may be subject to phantom income on mark to market gains required to be recognized by the fund. If the ETF actually holds a basket of precious metals for more than a year, such gains are subject to a 28% capital gains tax rate.

What I want you to take away from this article is to tread lightly when investing in Currency or Commodity ETFs. You must thoroughly understand what type of income the ETF investment will generate and what your tax rate will be for the various types of income generated by the ETF. With tax rising you don’t want to be surprised on April 15th by the tax effects of your ETF investment.

Federal Government is offering various home mortgage programs to all those homeowners who are not able to pay their monthly payments on time. These programs can quickly help you to make the best decision with lower cost and strives with the best one to avail

The common features of Mortgage Modification Program are:

A car loans after a bankruptcy is one way to help build back your credit history. In fact, once your bankruptcy closes, you can apply for a car loan the next day. To get approved with the best rates for your car loan, follow these tips.

Review Your Credit Report

Before you start applying for a car loan, check out your credit report and make sure all your accounts are in order. It is not uncommon after a bankruptcy to see open accounts that should be closed, which hurt your credit rating.

While looking at your credit report, consider adding a page explaining the situation that resulted in your bankruptcy. If there were extenuating circumstances, lenders may approve you for a better rate than under normal conditions.

Plan Your Car Purchase

Before purchasing a vehicle, decide what you can afford in a monthly car loan payment. This will help you decide which financing package is best for you. Both the loan amount and length of payments will determine your monthly payments, so there is flexibility in determining which vehicle you can afford to purchase.

Use A Car Loan Lender

Car loan lenders make their money by finding you a loan. Car loan lenders work with several financing partners to back loans with all types of credit risk, including bankruptcies.

Online car loan lenders deal with thousands of loans, and can usually find you a better deal than your local car dealerships. Online car loan lenders will send you a check when you are approved, basically making you a pre-approved car loan buyer.

Explain Your Situation

Car loan applications will ask if you have ever declared bankruptcy and why. This is your chance to explain what led up to the situation and what steps you have taken to resolve your credit situation. Be sure to include improvements in your financial history too.

Consider Refinancing

Once you are approved for a car loan, keep your eye on future refinancing. By making regular payments on all your bills, in a year’s time you could qualify for significantly lower interest rates. In three years, you can build your credit score to near excellent and qualify for even lower rates.

To view our list of recommended auto loan companies online, visit this page:
Recommended Auto Loan
Companies Online.

Very few college students have any established credit when starting out in higher education. This does not mean there are no loans or grants available. You have several choices of no credit check student loans to choose from. There are also grants and scholarships available both from the federal government and the respective colleges and universities.

Perkins Loans

One of the most popular no credit check student loans is the Perkins Loan. This is a combination of a government and college based loan that is approved through the college or university. The student receives up to $4,000 from this loan. It is awarded to those that show they have the greatest need for the educational funds. Once the student graduates repayment does not begin for nine months. This gives the graduate time to find a job or look consolidating and refinancing educational debt. Because this loan is granted on a first come first serve basis it is best to apply early.

Stafford Loans

The Stafford Loan is another federally subsidized loan available based on financial need. The key feature of this no credit check student loans is that the government pays the interest until graduation. There is also an unsubsidized Stafford Loan available to those students who are not as desperate for funds. In this case the student is responsible for all the interest and loan payments start immediately after graduation. These loans do not award the borrower a large sum like the Perkins Loans do and usually additional funding is required.

Pell Grant

This is one of the best known no credit check student loans. Millions of students a year receive funds from this grant. Technically this is a grant and not a loan so there is no credit check. A student qualifies based on their income level. As long as the student remains in school there is no repayment on this grant.

Along with the aforementioned loans and grant there are several other loans and grants available at the state level. Of course colleges and universities also have loans and scholarships available to their students. There are also federal and state loans for specific fields of study such as nurses and teachers.