Understanding No Income Verification Loans

What is a stated income second mortgage? A stated income second mortgage is one that does not require the borrower to prove income stated on the application. This is most advantageous to self employed and contract workers who receive a 1099 instead of a W-2 as they would have a difficult time proving their income. Stated income mortgage loans are the most commonly used and usually the least expensive of the no documentation types of mortgages.

Mortgage lenders understand that it is difficult for individuals who are self-employed or operate a one-person firm to verify their income. Different types of no income loans are offered including state income or no income verification loans.

Inquiries should be made to a loan officer as to the types of reduced documentation information required to secure the loan. Lenders may require anywhere from 3 to 6 month reserve for principal interest taxes and insurance (p.i.t.i.). If the monthly p.i.t.i. payment is $ 2,000 a month; the lender may require proof of assets anywhere from $6,000 to $ 12,000.

A fixed rate second mortgage is a way to refinance higher adjustable rate second mortgages or home equity loans. If the interest rate on the second mortgage is below the adjustable rate, lower payments monthly would be a benefit of the second mortgage.

Home equity loans can serve a number of purposes. They can be used to reduce credit card debt, consolidate high interest credit lines, make home improvements and pursue educational endeavors.

Stated income lines are available to all borrowers but the lenders usually require the borrower to have a minimum credit score. The higher the credit score the better the interest rate offered.

A stated income second mortgage loan is suitable for borrowers who have no verifiable income and have assets to meet minimum reserve requirements of the lender. The stated income on your application must be reasonable in terms of your assets. Qualifications for no income verification loans require the borrower to have a minimum credit score. While it varies from lender to lender, most lenders will require the borrower to have a credit score above 580.

The lower the credit scores the higher the interest rate the lender will require. If your credit score is high you may be able to take advantage of a fixed rate second mortgage before the interest rates increase above 7%.

Consideration is usually given to the tax consequences of the different types of loans. A tax adviser should be consulted before a borrower commits to a mortgage whether he is a first time buyer or an experienced homeowner refinancing. 

What Are Some Advantages of Whole Life Insurance Policy?

If you have decided to take a whole life policy then you certainly should know what are some advantages of whole life insurance policy?

There are different kinds of insurance schemes and people are often confused and not able to decide which one is best for them.

They look into the premium amount and do not see the other benefits involved.

The greatest advantage of this insurance is that it adds up the cash value.

This is because you start paying your premiums a long time before you die and hence your cash value will certainly be high.

The company will also invest the amount and wait for the claim.

Since it is beneficial for them also, the policy is made such that if you live till 100, the death benefit and the cash value will be the same.

Some people believe that whole life insurance is very expensive which is not actually true.

Buying a whole life policy when young will actually end up in the policy costing less when compared to other policies. With this policy there are other benefits like the retirement assets.

If you feel that you do not require this after your retirement, you may convert it to fixed annuity to use it for other purposes.

However, you will be only converting the cash value and not face value. So it is important for you to know how much money the policy has accrued.

The whole life policy is a source for your emergency fund requirements.

It is however not a good idea to borrow against the policy unless it is very important.

You can use it as a last option if nothing else works out.

You may not have to repay the loan amount but it is necessary to pay your interest every year.

One important thing you need to consider while purchasing the policy is that you need to choose a plan that has the least possible premium.

There may be many companies offering the same policy and their prices may vary to a small extent.

So if you have really decided to get an insurance policy, it is better to meet a real person who has experience in this and will be able to explain all the terms and conditions of the policy.

You should not be confused by the names of the policies because some of them may say whole life but will have different kinds of benefits and limits which may not be convenient to you.

Why You Should Get Life Insurance

Life insurance? Well, now may be the time for you to consider buying one, if you have not considered that before. Indeed, having such insurance is a good plan.

Accidents happen.

Many a circumstance is beyond your control.

So, yes, buying the said insurance is a good way to insure that when you die, the people closest to you will not pay so much money because of your death.

Okay, what does that mean?

It means that if you have legal dependents, life insurance is quite very advantageous.

Especially if you are the breadwinner of the family-the one who makes most of the money or income for your family, then the insurance will make sure that those closest to you, your family, would not be so troubled, financially at least, when you pass away.

The said insurance is a way to allow or help in your family's survival after your death, well, at least in financial terms.

Financial debts need to be paid even after you die.

They do not cease to apply. They do not die with your death.

Therefore, life annuity insurance can help you with this.

Loans and mortgages can indeed be very costly to the extent that your legal dependents may not be financially prepared to pay off these debts. Mortgages alone can be as expensive as hundreds and hundreds of dollars.

So if you die, then a life insurance can be very helpful financially. It can free your family from debt and financial crises even when you are gone.

You simply cannot expect and hope that your family will easily cope, not to mention the emotional toil that will affect your family's activities of daily life.

The basic question is: how does my family benefit from my life insurance? Okay, that is a very important question. Your family's life is in a way covered by the insurance.

How? The answer is simple: the premiums, that is, cash.

The insurance provider will give your family premiums after you die. Of course, how they receive these premiums vary from provider to provider.

So think about the future-yours and your family's.

Now, consider buying life insurance. It will make you feel safer and more secured especially for your future and your family's future as well.

You will have the kind of peace of mind that nothing else could provide than having a life insurance yourself.

Five W's in Insurance

This is a new research style concept used in journalism and it is called as basic information gathering concept. What? Why? Where? Who? When? These are called as Five W's and also called as interrogative words. We will analyze the insurance in these aspects so we would gain some informative knowledge about the insurance and its benefits.

Why insurance is important to our life?

Food and water are essential to live, but for that food we should have a valued paper called money. Savings are essential for your future life and it saves you in all aspects. It is one of the saving amendments that provide future benefits in terms of money. Also, it gives protection against an undesirable event or risk and it ensures that we are protected from financial loss or harm. The benefits we obtain through policies is enormous and you receive the following benefits from policies such as, it provides you the financial security, acts as an asset saver, safety for your future, provides security to your family members, enhances security to your cute pets, reduces your income tax and also, you can avail loan through policies.

What are the different types of insurance polices available?

There are varieties of insurance policies available and each type of policies provides safety and security. Life insurance, property, health, auto, liability, credit, casualty, home insurance and there are also other types of insurance such as locked fund insurance, pet, disability, worker compensation, political risk, builders risk insurance and more.

Who is called as an insurer and insurance agent?

The person who puts the insurance policies is called as an insurer because that person has insured himself through the policy of insurance.

The agent is a person who acts as a representative between the insurer and the companies and the agent may be either an independent representative or a dedicated one.

The agent is a representative for insurer and some agents specialize in selling certain kinds of policies such as life insurance, or annuities sold to individuals, or various kinds of insurance sold to small business or corporations.

An agent usually works for an agency and most consumers interested in purchasing insurance coverage will only deal with a local agent directly.

Where to find the insurance companies?

You can find the insurance companies from agency that delivers Web-based, insurance information to individuals, families and small businesses who are in need of information.

You can find the reputed insurance companies like anthem blue cross, blue shield and more on the search engines by their respective keywords.

When to put the insurance policy?

You can put policies starting from age 18 to 65 and also, it is recommended to put insurance in between these ages to gain maximum benefit from the insurance policies.

Select the plan that best suits you and depending upon your budget, select the premium that suits you and insure yourself through policies and have a secure life.

Selling Your Life Insurance Policy

Seniors face many challenges in today's financial world of rising costs and financial losses. If you are on a fixed income, it can become especially difficult.

Offers from banks and agents to take on new loans, lines of credit, or risky financial investments will only add unnecessary debt to the burdens faced. Seniors need security, not risky spending and more borrowing.

There is an asset that you may not have thought of, that has been forgotten, or didn't know it could be done after paying for it year after year. Its your life insurance policy. Yes, your life insurance policy can be sold like any other asset.

A settlement amount much higher than a life insurance policy's surrender value can be obtained.

These life time settlements, or often called life settlements, have been attracting much more attention lately.

Like your house, stocks, bonds, precious metals, etc., life insurance policies can not only be bought, but sold to the highest bidder.

And it doesn't matter what type of policy either, whether whole, universal, convertible term, variable, survivorship, adjustable, or joint life.

When most people talk life insurance, they usually make the joke that I'm worth more dead than alive. But you can turn the death benefit you leave to your heirs into a living benefit that can be used to pay for your immediate retirement needs now.

These living benefits can be used at your discretion. You could use the money to purchase an annuity to have an income as long as you live.

The money could be used to pay for long term care and relieve your loved ones of caring for you. Or it could be used to pay for an unexpected health issue. Or maybe you need to pay for housing and travel expenses.

What if you simply don't want to pay the premiums anymore for changing circumstances.

Lets say you can no longer afford the premiums or your term policy is expiring. If your current life insurance policy is about to lapse anyway, why not get something for it.

There are alternatives and options. Selling the policy makes perfect sense if its going to lapse and you and your heirs get nothing after paying all those premiums year after year.

Also, maybe yours heirs are well off enough themselves and won't need so much money to cover your estate taxes after God calls you home.

Maybe you made a mistake and have an extra policy an agent pressured you into buying and don't want to pay the premiums anymore on the policy. You can't go back to your insurance company and ask to sell it back to them.

All the insurance company can do is give your cash surrender value to you for much less than what you could get from a settlement company.

In fact, insurance companies would rather you not know that you can sell your policy because a lot of policies simply lapse and the insurance company doesn't have to pay the policy's beneficiaries.

Whatever your need or want, selling your life insurance policy gives you another option that you may not thought was possible.

Cash Flow Notes

What are cash flow notes, and how can they actually help you make money?

These letters are actually contracts, and they exist to record a borrower's promise (and obligation) to repay a lender a specific amount of money, or to give a certain amount of money to another person.

Business letters, real estate notes, and structured settlement letters are all specific types of cash flow letters. Let's take a look at each of these types, briefly.

Different types of cash flow notes

• Business notes

Business notes are cash notes that a particular business has secured using assets owned by bad business.

There are several different types of business cash flow letters, such as factoring, purchase order funding, or seller carry back notes.

These types of letters usually require that one uses assistance from professional setup, such as financial advisors.

• Real estate notes

Real estate notes are notes that have been secured by actual property, such as a mobile home, car, house, etc. When the collateral or security on real estate notes is actual property, a trust deed or mortgage is needed.

If the borrower defaults on the loan, the lender can take that real property, sell it, and use the proceeds to help relieve the debt.

• Structured settlement notes

Structured settlement notes are given to individuals who have won a settlement from a corporation or individual in compensation for an injury caused by the negligence of the corporation or individual.

With these types of letters, injured parties are generally given annuity payments by life insurance companies over a specific period of time, instead of in one lump sum.

With these types of notes, individuals can sometimes sell part or all of their structured settlement to a private investor in exchange for a lump sum.

Cash For Insurance Annuities

An insurance annuity is an investment instrument sold by insurance companies to the public.

The investment insurance annuity may be either a fixed or a variable annuity.

If the annuity holder pays a fixed amount to an insurance company, the company in turn pays the annuity holder regular fixed monthly amounts either for a fixed time period or for the lifetime to the annuity holder or beneficiaries.

If the contract has a stipulation of lifetime monthly payments, it is called "annuitization". The company will make monthly payments to holders until their death.

If a fixed time period is chosen for the payments, the incomes will only be received until the end of the fixed time period.

The company will invest the amount obtained from the fixed annuities into government securities and bonds having low risk. On the other hand, on some annuities, holders will receive periodic payments depending on the performance of the funds or securities that the company has invested in.

These annuities are called "variable annuities".

Some annuities contain immediate periodic payout, while some have deferred. The annuity holder can obtain loan on the cash value of payments to the insurance company.

The amount borrowed is not subject to tax, but the holder needs to pay some interest on the loan amount.

If the holder dies before the repayment of the loan, that amount will be deducted from the death benefit.

On the other hand, if the annuitant wants to cash out the policy, taxes have to be paid on the excess amount received above what has been paid in premiums to the company.

The annuitant can defer tax, if any, and reduce insurance costs by converting the investment into a variable annuity. It is advisable for the annuity holder not to exchange the policy by foregoing all the financial benefits like tax exemption, regular monthly payments, etc.

Another Option for an Investor

This type of investment is designed to help a person achieve the financial stability that they need when they are unable to work.

For example, many different people obtain the money made from the policy when they retire. There are many different advantages to having these sorts of policies.

For example, loans are normally tax deferred. This means that a person does not have to pay tax on the money immediately. The taxes are usually due later which is usually after a person takes the money.

Another great benefit of annuities is the fact that a person who takes a loan has a very high chance of being able to apply for an annuity loan.

This is a simple way to get a loan without a very high interest rate. In addition they provide a guaranteed rate of return as far as the money in the account goes.

Another benefit of such a loan is the fact that you have the ability to guarantee yourself lifetime payments. In many cases, you will have to annuitize your account in order to enjoy this benefit. However, not all companies force you to do this.

Benefits of this sort of lending vary.

They will depend on how much money you are willing to pay and what the insurance company offers. For example, some insurer's will provide them with a combined with a rate of interest.

Also this kind of credit offers more advantages than regular monetary loans do for the investor. For example, the balance of what you owe gets smaller when you make regular payments to it.

In addition, you can choose different ways to obtain the money from your account.

You can choose distribution or withdrawal. You do not have to get an annuity loan. However, they can help you save money.

This is mainly because the amount that you get is not exposed to taxes. For example, you will experience certain penalties when you withdraw money from your account early.

You will also have to pay income taxes if you decide to obtain your money through distribution.

It usually takes around five years to pay it off. However, some insurance companies offer a longer duration if your situation is slightly different.

For example, if you obtained the advance for real estate purposes, you can pay it off over a 20 year time frame.

As you can see they are certain choices you will have to mull over, to see which type of investment best suits your needs.

What Is an Annuity?

Simply put an 'annuity' is a series of payments made at regular intervals.

They have the ability of being bought and sold. Thus annuities encompass a wide variety of financial tools used to generate income.

Examples of annuities are securities, bonds and equity; all annuities are designed with respect to the fundamental time value of money.

The time value of money is vitally important to understanding annuities because an annuity is a series of payments in the future for a current investment or sacrifice.

Here's a simple example to help you to understand the time value of money:

Suppose you were owed 20 dollars, would you prefer 20 dollars repayment now or 20 dollars repayment in a month? Any rational decision maker would prefer 20 dollars now and there are a number of good reasons why.

Firstly money in your pocket today is certain whereas the money given in the future isn't.

Hence there is risk involved in you receiving a payment at a later date because of unforeseen events which could prevent you receiving your money.

Secondly inflation will devalue the dollar over time meaning the 20 dollars in a month is valued less than the 20 dollars now (in consumer terms).

This may be rather insignificant over such a short period but it's still worth taking into account especially when talking about long term annuities such as bonds. Exposure to inflation is so dangerous to annuities as it is destroys the advantage of receiving fixed payments.

Lastly there is the "opportunity cost" of leaving your money with somebody else (the marginal cost of making the decision to tie up ones fiscal resources) that the lender needs to be compensated for. This has to do with the nationally set interest rate.

The nationally set interest rate is essentially a 'risk free' interest rate (also known as the yield) offered by the government.

The nationally set interest rate is the benchmark for return by investors. This is because why would anyone accept greater risk (such as leaving funds with an individual) without being compensated at all for taking on that risk.

Thus no investor or lender will (or should) ever accept no interest on their investment (except when such investments pose other benefits).

Thus in our example a rational decision maker would accept 20 dollars now and invest it at the current interest rate hence growing their investment instead of both risking their money and losing the interest they could otherwise earn 'risk free'.

Coming back to annuities, the longer the period invested the greater the risk and also the greater the yield (return on investment).

However the fixed payments in an annuity will have a diminishing present value the further into the future they may be. i.e.

The repayments may all be of the same denomination ($200) but since they are paid in the future they will have less than $200 dollars value in present terms.

A security is a common form of annuity. It is a contractual loan agreement made by a creditor (loan issuer e.g. a bank) which can be sold.

Securities are often issued by an ADI (commercial bank) and then sold off to provide liquidity to the bank or sold off to investment banks who will then batch the securities.

Upon purchasing a security you are buying this agreement between a borrower (e.g. a person buying a house) and a creditor (e.g. a bank).

In investing in security you are giving over a lump sum (the purchase price) for a series of equal payments (aka an annuity) which are to be made by the borrower.

Securities are invaluable to the financial system as they allow liquidity (ease of access to funds/ability to sell) for commercial banks as well as other creditors and investors.

Securities also happen to be one of the root causes for the 2008 financial crisis. However the most pertinent cause being a result of incentives problems and informational asymmetries.

For more information on the 2008 financial meltdown I recommend watching the documentary series "The Ascent of Money" and "Inside Job".

Equity is another form of annuity known as a perpetual annuity; equity, also known as stock, is an investment in ownership a company.

When you purchase equity many big companies (such as Telstra) issue what's known as dividends. Dividends are payments from the company to the stockholders (equity holders/owners) of that company.

Equity is known as a perpetual annuity because there is no foreseen expiry date to these payments.

This is where equity differs as an annuity to bonds or securities because securities and bonds have an expiry date and thus a fixed yield (or rate of return). The annuities of a security are no received once the loan is paid off (which is similar to a bond).

Therefore securities have an upper limit to how much capital (return on investment) they bring to the investor. Whereas equity has no upper limit a person can keep gaining on their investment hence perpetually growing return.

The drawbacks of equity are there is no requirement of a company to pay dividends (a company can choose whether or not to pay dividends at all) and on top of that an investor can lose their entire investment if the stock were to plummet in value.

Securities and bonds however do not have the same weakness they are legally enforced; if a person or corporation is to default on payments of a loan agreement in the security their own assets are liable.

This protects the investment of the investor (many securities and particularly bonds are guaranteed by government lessening the risk but not eradicating it.) making a security a 'safer' annuity than equity.

Best Ways To Sell Annuities

Do you no longer need consistent monthly payments and would instead prefer a lump sum?

If so, then you should think about selling your annuity.

Besides the reason I already mentioned there are several reasons why you would want to sell your annuity.

There are also different ways of doing it and they're all have their advantages and disadvantages. And for our professional annuity sellers, there are more ways to sell annuities invented every day.

Of all the different annuities one can purchase on the market today, they all have one important characteristic- consistent and safe periodic payments.

Consistent, safe but very conservative. Annuities are not a great long-term investment.

If you're young or have too much of your investing dollars in annuities you need to diversify. Diversify for better returns and, believe it or not, less risk.

When you're young, you don't need a safe investment. Over the long haul, a risky investment will yield more while you don't worry about the ups and downs of decades of market flux.

It's ok to have safe and consistent annuity payments but not too much so that it hinders your long-term investment potential.

Another reason to sell your annuity is to make a big purchase. You have plenty of money for what you want on paper but you only get a small percentage available to you in small payments. When you sell your annuity, you get everything.

Whether you're getting your first home or a retirement vacation home, selling your annuity can make it happen.

How do you sell your annuity? The best and easiest way is to find a big reliable company that has experience and readily available funds to buy your annuity. It's a good choice but their fee and the amount you'll get will be much lower.

A second less popular way is to sell directly to someone else. The legal procedure isn't the easiest but not impossible.

Most annuities make it easy to transfer to someone else. Of course, look out for deals that seem too good to be true. Take out an ad in the newspaper or even Ebay and offer a good deal for both of you.

Other creative ways to sell annuities include faster or bigger payments, swapping for a better annuity or using it as collateral in a loan. Say you get $1000 a month for 30 years.

If you can't outright sell the annuity for a price you're comfortable with then you might be able to get an annuity with a much bigger payment but for less years.

That's better than nothing. You can also swap annuities with a company or individual and the annuity you get is easier to unload. That's a few more transactions and probably higher transaction costs but the result is exactly what you need.

Lastly you can use your annuity for collateral on a loan.

Here you would be hedging your interest in a bad way.

You get a higher yield on your annuity but then you have to pay interest on the loan. You will get the whole lump sum so make sure you're not taking a loss overall.

This strategy works best, obviously, when there are low interest rates.

Maybe you're a selling annuities professional and hopefully you've made it all the way to this point in the article.

You may think you know all the ways to sell annuities but things are rapidly changing in marketing. You need to know about online marketing.

The main points of online marketing to sell annuities are search engine optimization, pay per click search engines, directories and email lists. Concentrate on these aspects of online marketing and you'll sell more annuities.

For several reasons, people decide to sell their annuities.

They go about it in a variety of ways without knowing the advantages and disadvantages of their method.

Going to a company, selling to another investor or getting a loan for several popular ways.

If you're a professional, you can maximize the power of the web. So now you know and now you should go get your payment.

How to Sell Your Annuity?

Some people are not satisfied with their annuity payments.

The reasons may vary and in case be that the person is facing a financial crisis or perhaps he/she wants to invest on a certain kind of business.

The solution would be to sell your annuity.

Unless you have outstanding annuity loans, this would be possible. You can receive early payout once you go for this option.

All you have to do is find a company or individual who is willing to purchase the annuity. Aside from the reasons mentioned earlier, the money can also be used to for buying a new home, education, and for any other endeavor.

The original plan when you purchased the annuity is to receive monthly or yearly payments after retirement.

Others receive annuities from personal injuries and the monthly payments are made to benefit both the claimant and the defendant.

The incremental payments can be used for medicine and for other financial obligations.

The annuity plan can be obtained from a certain insurance company.

You can cash out at least half of the amount due through annuity loans.

This is a great option because the transaction is not subject to any tax.

However, you should be aware that once you secure the loan, you have to make timely payments.

Failure to do so will result to charging of penalty and incomes taxes. Besides, you will be unable to sell the annuity if you still have an outstanding balance.

If you want to sell your annuity, there is a need to repay the loan as stipulated in the terms and conditions.

In most cases, the loans are payable in five years but it can be extended if the loan money is going to be used for purchasing primary residence.

Never apply for the loan unless you're sure that you can repay on time, or you'll suffer the consequences.

Just in case you don't have any outstanding loans, you can roll over or transfer the plan to another company without any problems.

Talk to the insurer about it and be sure to choose a company that offers the best rate. Selling annuities is quite common these days because most people want to hold a large amount rather than receive smaller payouts.

Selling annuities should only be a last resort.

You should always stick with the original plan and that is to receive incremental payments to ensure financial stability after retirement. In the case of annuities given due to personal injuries, the money can be used for rehabilitation and other personal expenses.

The plan should only be sold when there is an extreme need of money; that way, your investment will not go to waste.

Always look after the security of your future. After retirement, it is the time for you to enjoy life to the fullest.

With a steady amount of cash flow, you will have enough to cover for utilities, food, and other expenses.

If you're lucky, the annuity you've purchased may already include life insurance.

Make an informed decision and before selling the plan, be sure to talk with a lawyer.

An Annuity Loan Guide

The Basics

A form of investment, an annuity is grounded on the insured paying the insurer monies, which the insurer will invest. Sometimes the insured makes a lump-sum payment; at other times payments are made over a period of time. Regardless, funds can always be added during the term of the annuity.

Though typically a date is set for the principal and the interest earned on it to be repaid to the insured, there are also provisions allowing the insured to claim all or a portion of the monies beforehand. However, if monies are claimed by the insured before age 59.5, a penalty will be imposed on them.

One of the biggest advantage to obtaining an annuity loan is that the monies in it are not taxable until claimed by the insured, and therefore are growing at a higher rate than normal. Insurers offer both fixed rate and variable rate annuities: which one suits you best depends on your financial state and your goals for the future.

The Difference Between Fixed Rate and Variable Rate Annuities

With fixed rate annuities, the insurer guarantees a minimum interest rate on the money invested. The interest rate can be changed, but it can never be lower than the minimum guaranteed rate.

This is a strong feature due to the fluctuations in the economy and is attractive to individuals who are not risk takers.

The insured's money is put into several different investments when a variable rate annuity is chosen and the interest rate earned thereon fluctuates.

The insured has some control over the principal invested in the annuity, and can therefore direct that it be moved from one money market instrument to another. Individuals should have an above-average knowledge of investment instruments and sufficient funds to bear some loss before choosing a variable rate annuity.

Annuity Payouts

The insured has several options to choose regarding annuity payouts. One is taking the funds in a lump sum; however, this is not a popular option because the entire payout is taxed in the year it is taken.

Much more popular is setting up an arrangement where the annuity is repaid throughout the life of the insured. If this is selected, monthly payments will be dispersed to the insured based on his or her age.

This option is commonly chosen by individuals who are concerned that their retirement pay will run out early and they will have little, if any, other financial resources available.

There is also an option allowing the insured to choose the amount of payment received monthly. Of course, if this option is selected, there is a chance that the insured will outlive the annuity funds.