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Archive for June, 2010

Monitoring your credit is one of the easiest and most effective ways of protecting your credit against errors and fraud. Monitor your credit report to catch ID fraud early.

Credit reports can be an important tool as you embark on the road to financial recovery. By regularly reviewing your credit rating and information you will be able to monitor your progress as you work towards improving your credit score and becoming more credit worthy. Credit reporting agencies sell this information to businesses that use it to evaluate your applications for loans, insurance, credit, employment or renting a home. To obtain your free national credit report as compiled by Equifax, Experian, and TransUnion, you must write to each agency. Credit reports form the basis by which a credit score is calculated.

Credit file disputes must be made in writing and sent through regular postal mail.

If you are looking for your credit information, want advice on maintaining strong credit or want tips on debt management, we have the information you need. Learn how to get your credit ranking, understand your credit score, manage credit card debt or build your credit and clean up your credit file.

A report is one of the key credit factors that are checked by reporting companies. I would suggest that you check your credit, by getting your free national credit report, before you apply for any type of loan which will check your credit score and financial information. Credit lenders will make their decision about your service by checking your financial file. Credit reporting agencies store the information and report it to others who have a permissible purpose under the law.

A credit reporting agency’s role in an investigation process is to investigate and verify the consumer’s information to determine the accuracy and completeness of any item or items by contacting the creditor and informing them of all relevant information regarding the consumer’s request for investigation.

Your credit information will reflect each of the accounts you included in your bankruptcy. Even though the bankruptcy information will remain on your credit report for seven to 10 years, you can sometimes begin rebuilding your credit soon after your debts have been discharged. Your credit report is actually a credit history, so get your free national credit report now. It is created by data about you from many different sources. Your credit report may also indicate that you have good credit, but not enough of it. For instance, if you’re applying for a car loan, the lender may be reviewing your credit report to determine if you’re capable of handling monthly payments over a period of years.

Your credit rating tracks: the types of credit you use, length of time your accounts have been open and whether you have paid your bills on time. Knowing the information on your credit report will help you know what type of loan you can qualify for and reduce your chances of being taken advantage of by predatory lenders. Your credit report, sometimes referred to as your “credit history” or “credit file”, contains personal information gathered from many sources on an ongoing basis. Most companies that have extended you credit will provide information to the three major credit reporting agencies. Your credit report will provide a list of all bank and financial accounts under your name. It will also show your bill-paying history and provide lists of companies that have made inquiries about your credit.

Your credit information maintains and provides former addresses that you have had. Having many addresses gives lenders the impression that you skip out on paying the rent and are not reliable enough to settle down. This is even more reason to get your free national credit report.

In this article, I want to tackle the legal subject of probate. This may sound like an odd topic for real estate investors, but, in fact, you can often find good investments when someone passes away.

It’s a fact of human nature that inheritors of probate estate will often want to sell that property quickly to get the money and aren’t always concerned about getting full value from the home. Or, they may live out-of-state and simply not realize the full value of the property. When these situations occur, the opportunities for bargains arise!

What is Probate? The term “probate” comes from the Latin word “probatum” meaning “prove.” In other words, the probate is a legal process by which it’s proved that a will is (or isn’t) authentic.

Specific procedures vary by state, but probate generally includes the following steps: * When a person dies, the will is filed with the local probate court (sometimes called a “surrogate” or “chancery” court). An inventory is then taken of the property. The property is appraised for its value. Assuming the will is determined valid in court, any legal debts (including death taxes) must be paid. After debts and fees are paid, the property is distributed as dictated by the will.

You may wonder what happens if the will isn’t valid or no will was left. In that case, the estate still must go through a intestacy”(“without a will”) proceeding. This means the property is distributed to the closest relatives as dictated by state law.

Since you may be involved personally in probate proceedings (as distinct from an investor’s point of view), it pays to know the advantages and disadvantages of the probate system.

Advantages of the Probate System – Probate makes sure that only your beneficiaries receive your property. In other words, it prevents fraud. Creditors have to prove their claims against the estate. The probate process can resolve any disagreements involving your estate and disposition of your assets.

Another advantage is that the probate process limits the time creditors have to make claims against the estate. There’s a “statute of limitations.” So, if creditors don’t make their claims within the specified time period, those claims are no longer enforceable.

Disadvantages of the Probate System – In the opinion of many critics, it costs way too much for the services rendered. They claim that probate provides no real benefits, except to provide lawyers with excessive fees.

An AARP study concluded that the probate process can generate legal fees of 12%-20% of the estate for the lawyer alone. It also concluded that probate can reduce the estate passing to one’s heirs by 5% or more. Source- http://www.aarp.org

In a few states, the fees are based on a percentage of the estate. Fees may be based on “gross” probate estate. Additional costs may include court costs, appraiser’s fees, etc. Also, basic fees may be set by statute. In addition, if “extraordinary” services are performed, the attorney/executor can ask for additional fees.

A second criticism in terms of the fees charged is that probate is primarily a clerical and administrative skill. Because of this fact, critics say there’s no necessity for court proceedings or the research, legal and adversarial skills of a lawyer. They make the claim that the process normally is handled by the lawyer’s secretary anyway or by a probate form preparation company. The result is that the beneficiaries end up paying far too much for the services rendered.

Critics also charge that probate proceedings consume too much time. On average, a typical probate proceeding can take between one and two years. During that time, the beneficiaries generally get nothing or, perhaps, a “family allowance” dictated by a judge.

Since probate can be expensive, I’ll give you a list of legal avoidance techniques you can use for your personal situations. Because these techniques are not the main focus of this article, I urge you to investigate them on your own. Exemption of certain small amounts of property left by will from probate (depends on state) Living trusts Transfer on death registration for stocks and bonds Gifts made while you’re alive. Joint tenancy or tenancy by the entirety Life insurance Pay-on-death financial accounts Retirement accounts

How To Find Probate Estate Properties – Such properties can be hard to find, but there are several sources you can contact.

One source is real estate agents. Contact them to let them know you’re interested in such properties, but be sure to specify the type of properties you’re seeking and how much you want to spend.

A second source is newspapers. Look at the obituary notices and then check with local property records to determine if the deceased owned local real estate.

Another source is the estate executor. An executor is the person in charge of selling the estate property so he or she is the person you’ll need to go through in order to make a buy.

A final source is public records. Wills in probate are a matter of public record, so you can check for them at the local court house or other local governmental agency.

Benefits of Buying Probate Properties – A primary advantage of buying probate properties is great prices! Prices of many of these properties can be as much as 30 to 40% below market value.

Another benefit is a big inventory. The bad news is that we all die. The good news (for the living, anyway!) is that there will always be many probate properties available.

A third advantage is that it’s a buyer’s market. Many beneficiaries don’t really want an inherited property; they simply want the cash from the sale of that property, even if it’s a below-market price.

Many beneficiaries also don’t want the responsibilities that come along with the inherited property; estate taxes, repairs, maintenance, the mortgage payments, and so forth. So, they’re willing to sell at bargain prices.

The Disadvantage of Buying Probate Properties – The identification and buying of probate properties will require patience on your part. Remember, it can take anywhere from six months to two years (or more!) to complete the probate process).

As I said earlier, know the type of probate property you’re willing to buy and the amount of money you’re willing to spend to get it. If you work with a real estate agent, communicate those guidelines to him or her so they don’t waste time on properties you’re not interested in.

Key Point: Do your research, work closely with realtors, and have patience!

In your search for solid dividend-paying companies, you will frequently encounter three special kinds of corporations. They have chosen to organize themselves under federal laws that allow them to avoid corporate taxation provided that they pay out, or distribute, the bulk of their profits to shareholders. For this reason, these companies appear frequently in lists of high-yielding dividend-payers. All three special forms of companies have ticker symbols, and their stocks trade just as other companies trade.

Here is a primer on these three special corporate forms:

Real Estate Investment Trusts (REITs)

REITs were created by Congress in 1960. They come in two flavors: Most REITs are essentially landlords, holding properties from office parks to apartments to shopping malls. A far smaller number of REITs are “mortgage REITs,” involved in real estate financing.

To qualify as a REIT, a company must distribute at least 90 percent of its taxable income in the form of dividends. Historically, most of the return from REITs has come from these dividends, although many have delivered attractive price returns to boot.

REITs are the only practical way for most individuals to invest in residential and commercial real estate developments. Real estate is often considered to be a distinct asset class (beyond the “big three” of stocks, bonds, and cash), so REITs offer the investor some diversification benefits. Current dividend yields often are 5 to 8 percent or more, right out of the gate for new buyers.

Note, REIT dividends do not qualify for the 15 percent federal income tax rate on most dividends. They are taxed to the shareholder as ordinary income. That is because the earnings were not taxed at the corporation’s level.

Master Limited Partnerships (MLPs)

MLPs are also a special form of structure. In fact, they are not corporations at all, but partnerships. By law, their activities are limited to the production, processing, and transport of natural resources, plus some operations in real estate.

MLPs appear mostly in the oil and gas industry. They provide small investors a way to participate in pipeline partnerships and other oil and gas operations that otherwise would not be possible. Because the shares trade, beyond the partnership distributions there is also the usual potential for capital gain or loss.

Every MLP has a general partner which manages and controls the partnership. Shareholders in MLPs (technically “unit holders”) are limited partners in the enterprise. They own an interest in the assets of the business, which in turn entitles them to dividends and other distributions, and also to benefit from depreciation of the assets of the business.

Taxation of MLPs was established in 1987 by Congress. The partnership does not pay taxes itself, so the distributions sent to unit holders do not qualify for the federal 15 percent cap on dividend income. However, not all of the distribution sent each quarter to unit holders is a “dividend.” Some of it is a return of the original capital invested. The returned capital, in effect, reduces the cost basis of the investment (as if the shareholder had spent less per share in the first place). Returned capital is not taxed in the year it is distributed, but it is taxed when the unit holder sells the shares. That is because there will appear to be more profit on the sale of the shares, since the returned capital over the years reduced the cost basis. So the returned capital is not, as is sometimes stated, non-taxable; rather the taxation is deferred. When you finally sell those shares, the taxation catches up to the capital returned over time.

Because of their unique structure and tax situation, MLPs must mail an IRS Schedule K-1 to each unit holder every year. This reports the unit holder’s share of the partnership’s taxable and non-taxable income, gain, loss, deduction, and credits. It is really not that difficult to deal with, and any competent tax preparer is familiar with K-1′s.

Business Development Companies (BDCs)

BDC’s were created by Congress in 1980 to help provide capital to small businesses. They have been much in the news lately, usually under the term “private equity,” as there have been dozens of recent deals in which companies have been “taken private.” That means that public companies-some of them quite large-have been bought in their entirety by private equity companies with huge amounts of capital at their disposal.

Many of these private equity deals have been made by companies which are truly private, but some of the private equity firms have themselves decided to go public, becoming BDCs. (Never mind that the size and nature of the resulting entity and its investments may be far outside the original purpose and spirit of the law.) When a private equity firm is itself public, that means that the individual investor has a chance to participate in “big deals” that would otherwise not be possible.

The law requires BDCs to at least annually distribute the bulk of their net investment income and capital gains to shareholders. Thus they often have attractive dividend yields. As with REITs, these dividends are not subject to the 15% cap on dividend tax rates for their recipients. And since the shares of BDCs trade, there is the potential for capital gain or loss associated with any public company.

Long term disability insurance companies provide a wider scope of options and benefits for bigger investors and policyholders, who plan to work together with the company to achieve their financial goals and objectives. By having long term protection, clients will be able to focus more on investing on themselves, after being assured that their businesses or professions are in good stable condition for the longest period of time.

One example of a long term disability insurance plan is a non-taxable monthly income, which companies provide until the client is sixty five years old. This is probably the most common long term disability insurance availed of by policyholders. However, different rules and policies apply if the client has total disability at age sixty or above.

Income benefits received from long term disability insurance companies are based on the employee’s salary after maximum short term insurance has expired. On most instances, employees are enrolled in a short term disability insurance plan promoted by their company; and this plan provides financial benefits and secures a percentage income for the employee during times of disability.

When the duration of the short term policy expires, the long term disability plan comes in and continues the benefit and income provision. These income benefits may be monthly, quarterly, semi-annually, or annually adjusted, based on the percentage change in the U.S. Consumer Price Index.

A Monthly Annuity Premium Benefit can also be opted for by individuals, to provide for a monthly contribution of an amount equal to a percentage of the person’s monthly income, set by the company upon issuance of the quote.

There is also what you call a Survivor Income Benefit, which immediately reimburses the client’s family a month after death. The benefit is equal to the policyholder’s last monthly salary multiplied by an amount set by the insurance company. It requires that the policyholder must have been disabled for at least twelve months prior to death or survived by another dependent, like an underage wife or a full-time student son.

Long term disability insurance companies always innovate to maintain quality service and provide maximum benefits to their investors. Insurance companies have different sectors, which provide specifically for various client needs of supplemental help, health and life insurance, disability, mental incapacitation, and family life. It is important to know some aspects about the company you are investing in to ensure that it can provide for your long term financial insurance objectives and goals.

The company profile is the identity of long term disability insurance companies. It defines the reputation and reliability of the company to provide good products and quality services, according to the needs of policyholders and at the exact time they need it. Be sure to familiarize yourself with what your insurance company is trying to achieve for its own growth and especially for yours as a client.

Check the company’s business descriptions to determine whether the variety of products and services offered coincide with your professional or business requirements. Mutual funds, annuities, real estate or retail security brokerage, asset management, and banking and trust services are just some of the descriptions available; so assess whether a certain long term disability insurance company can best accommodate you and your very own business description.

Choosing the specific title will trigger the sectors that the insurance company has to assist you with in your period of disability. These sectors will then operate and ensure the financial security of your business evocative to the sectors’ line of expertise.

You have insurance on yourself, your house, your car and other things. Why not have pet bird insurance? That is only if you have a pet bird. Pet insurance for birds can take the worry out of owning one of these beautiful creatures. You know how much an emergency visit to the hospital can cost for a human. Your pet bird can also rack up quite a bill if you have to take them to the vet for an emergency visit. Pet bird insurance can provide coverage for this. You never know when your bird is going to get sick or how severe it will be.

Birds make beautiful pets that can bring hours of enjoyment to the owner and family. They don’t have to be walked outside in crappy weather or put on a leash like a dog. You don’t have to worry about them coming home pregnant like a cat and having a litter of kittens. Like all other pets in the world, birds are vulnerable to catching a disease of major concern as well as minor things. Covering your little friend with bird insurance is a smart move. What you should look for when considering pet insurance for birds.

You should try and find an insurance plan for birds that will cover medical treatment for emergencies such as accidents and when the bird is so sick it needs surgery. The insurance for your pet bird should also have provisions for minor treatments as well as fees associated to x-rays and stays in the vet hospital if necessary. A good pet bird insurance policy will also cover such things that are common with birds. Some examples are when the bird is picking its own feathers, an egg gets stuck in them which is known as egg binding, neoplasia surgery and other things.

A good avian insurance policy will pay up to 90% of the vet bill or that percentage of the bird insurance according to the schedule of benefits of the policy. Just like with people, you can also add riders to the bird insurance policy. You may want to add routine care to your coverage. This will cover routine exams. It will also most likely cover other things such as clipping their wings so they don’t fly away from you, Blood tests and more. You will surprised at how affordable a good pet insurance policy can be and what it will cover.

If you are a Houston resident in search of a home owner insurance quote, you have probably heard the same advice repeatedly – shop around. Of course you need to shop around; otherwise, you may purchase a home owner insurance policy from an insurance company, only to later find you could have purchased the same home owner insurance policy from another insurance company – cheaper.

Check out these tips and tricks to get the best home owner insurance quote for your Houston home.

Don’t overlook the little guy.

Maybe you’re tempted to make an appointment with a large, well-known home owner insurance company in Houston; however, by choosing a skilled independent insurance agent, not only are you getting more personal, one-on-one attention, but you can also take advantage of the several different home owner insurance companies in Houston with which the independent agent is familiar and do business with.

Pay attention to discounts.

Pay real attention to discounts – don’t just accept what the insurance company offers and move on. Home owner insurance companies offer the normal discounts for safety features, sturdy building materials, and the age of your home. If you have an excellent claims history, however, make sure your home owner insurance agent is aware of it. Stellar claims histories usually help get you additional discounts.

Control yourself.

Once you’ve gotten your Houston home owner insurance quote, and your policy has taken effect, you may – sooner or later – find that you aren’t at all pleased with the policy. When this is the case, many of us are tempted to call the insurance company, give them a piece of our minds, and cancel the policy. First, take a deep breath. Call your insurance company to determine if the policy can be corrected, or altered, to your needs and expectations. If not, politely say goodbye and begin shopping for a new policy. Never cancel your current policy before securing yourself a new one.