The Earned Income Tax Credit is designed to provide tax relief for American workers with low-paying jobs. Learn whether you qualify for this tax credit.
Source CBNNews.com http://bit.ly/2Ba69Dp
الأربعاء، 23 يناير 2019
Liberty Tax Review
Whenever tax time rolls around, many people panic. Those returns should be simple to complete. All you need to do is to fill in the correct details on the correct form. It sounds easy enough, and it can be if you know exactly what forms to complete.
For most people, however, knowing what form to use and inserting the right information becomes difficult. This is not an area where you want to make a mistake, either. Leave out a vital piece of info, and it could look like you’re trying to underpay the government.
At the very least, a mistake could cost you that refund that you’ve worked so hard to earn. That’s why so many people turn to tax preparation software to help them get it right the first time.
In this Liberty Tax review, we’ll look at what the company offers and whether it lives up to its promises. Let’s examine things a little more closely before we make a final decision.
Liberty Tax Promises to Make Filing Your Returns a Breeze
Liberty Tax has a number of beneficial tools both for its basic users with less complicated returns and those with trickier finances, also providing assistance for users facing audits.
The software is built on the motto, “You do life. We do taxes,” and the services it offers aim to take the tedium of tax-filing off your shoulders.
Here are some of the features that we feel make this software an asset.
Key Features
- Ability to Import Forms: It’s not that hard to fill in the details yourself, but it’s a lot easier if the software can do it for you. With this software, you can download the W-2 from your employer. You can also download your prior return from any source.
- Credit Maximizer: The main reason that you want help with your return is so that you get the maximum refund possible. This feature analyzes your figures and ensures that every qualifying deduction or credit is accounted for.
- You Can Amend Your Return for Free: This doesn’t sound like a big deal until you consider that TaxAct software, for example, charges you $19.95 to do the same thing. Hopefully, you’ll get the return right the first time around. It’s nice to know that you have this option, however.
- Free Customer Support and Expert Advice: Maybe there’s something that you just need to check quickly. The company has several channels open to clients. You can email them, call them, use instant chat, or reach out via social media.
- Audit Assistance: This has to be one of the scariest notices that an adult can receive. It’s enough to reduce a lot of people to a nervous wreck. Liberty Tax can provide advice on how to proceed.
- Get Your Return Checked: Liberty stands behind its product. At participating branches, you can take your return to a consultant. They’ll give it the once over to check for correctness so that you have extra peace of mind before submitting it.
- Useful Online Tools: There are several calculators that make your life easier. You can get a rough idea of the refund you can expect, and there are other tools that help you prep for your return. The Tax Organizer, for example, will help you to get all the proper documents together.
Liberty Tax Lets You File Your Returns with Full Confidence
It Has a Very User-Friendly Interface
The interface has been designed to be easy to use. You don’t have to hunt around to find the right buttons – the navigation and layout are simple enough to read.
What’s more, they’ve been as sparing as possible when it comes to excess information.
You don’t have to scroll through pages of needless information to get what you need.
There is Branch Support as Well
With 4 000 local branches, you are bound to find one nearby you to consult if you get stuck.
The system has been designed so that it is easy to transfer the application from an online one to an in-person one so you get the assistance you need when you visit a branch in person.
You Can Flip Through the Application Easily
With some software, you have to work section by section, always completing one section before moving onto the next. When you’re completing a tax return, this isn’t always convenient.
Maybe you’ve forgotten to get a key piece of information, or you want to skip ahead. This software makes it easy to switch back and forth.
Get Your Refund Upfront
In some cases, you might qualify for a refund advance, and Liberty Tax will be sure to get you the money you qualify for.
The company will lend up to $3,250 as an advance on your refund if you qualify.
That’s quite a big chunk of change for an advance, one of Liberty Tax’s most appealing features.
What If Your Situation Is More Complicated?
If you have rental income or need to file in more than one state, for example, you need to choose one of the more advanced packages like the Deluxe or Premium options that Liberty Tax offers.
If you’re still concerned, you can opt to make an in-person application in a branch instead, where you can get more hands-on assistance from the Liberty’s team of professionals.
File your taxes with Liberty Tax>>
How Much Does Liberty Tax Cost?
Liberty Tax offers users 4 paid levels of service for filing their federal and state returns, ranging from as low as $14.95 to as high as $69.95 for federal returns.
- EZ package: Federal return: $14.95; state return: $39.95
- Basic package: Federal return: $28.95; state return: $39.95
- Deluxe package: Federal return: $43.95; state return: $39.95
- Premium package: Federal return: $69.95; state return: $39.95
Let’s take a closer look at all of the features that you can access with each of those levels of service. Which package is the best fit for you boils down to how complex your tax needs are.
Liberty Tax Versions
EZ
This is the software version for you if your return is simple.
You don’t get to list deductions, and there is no room for extra income, but filing with this package means there are no complications at all.
Basic
This plan encompasses a bit more than the EZ package.
The basic package is not going to be much use to you if you have a complicated tax situation, like if you have multiple sources of income.
But it does allow you to itemize your deductions a little more than the EZ package.
Deluxe
If your situation is more complex, this plan is where you should start looking.
The deluxe package is popular with those who freelance or run a small home business. It won’t handle issues related to capital gains, however.
Premium
If you want to be able to do it all, this is the package for you. The Premium plan comes with professional tax advice from Liberty’s experts and audit consultation.
It’s also a good option for those with a medium business, farmers, and those with multiple income sources.
Other Considerations
Now that we’ve gone through the pros, let’s have a look at the negatives.
- Liberty only offers paid options. Most companies allow their clients some form of basic free service. Liberty is not like most in this respect.
- The packages border on pricy. You get a lot of features, but the prices are higher as well.
- The site can be annoying because it times out quickly. If you’re inactive on the site for what seems like a few seconds, it will time out. What really annoyed us here is that it timed out even if we were checking out the “Learn More” links.
- The customer service aspect needs to be improved. Don’t get us wrong; they deliver excellent customer service, but only as long as you’re able to contact them during normal business hours. In this day and age, we expected at least a 24-hour chat option for basic queries.
The Verdict
With Liberty Tax, results and accuracy are guaranteed. The company promises to get the best possible results and create completely accurate returns.
Overall, the positives do outweigh the negatives. You’ll battle to find software with quite so many useful features built into it. You do have to pay a bit more, but you are getting a better-quality product overall.
The support hours are an annoyance, but it’s not a deal-breaker. Overall, we’d say that the experience is a positive one. We’d be confident about submitting our returns through this service.
Get started with Liberty Tax>>
The post Liberty Tax Review appeared first on Good Financial Cents.
Source Good Financial Cents http://bit.ly/2R6DRi1
FreeTaxUSA Review
Doing your own taxes can be an overwhelming and confusing task, especially if you don’t have sufficient experience in tax return filing or if you have a complicated situation. Since hiring a CPA or other professional can be cost-intensive, many people opt to undertake the task themselves.
Tax software became increasingly popular for preparing and filing federal and state returns, not only because they are reaching new levels of sophistication, but also because filing online saves time and money. It also makes tax return filing error-free.
FreeTaxUSA is one of the fastest-growing tax platforms and IRS-authorized e-file providers. Their services are reliable, and they offer free federal filing. Even if you have a complicated financial situation, FreeTaxUSA may be the most suitable tax software for you.
How it Works
FreeTaxUSA uses an interface that prepares your federal and state returns by taking an online step-by-step interview approach. As you answer questions and import your information, the software will prepare and fill out your tax return.
Upon completion of your information entry, you can review your return before submitting it to the IRS via mail or e-file. The software interface is user-friendly and intuitive.
If you have no prior experience with tax filing or software, you will be able to find your way through the process with little difficulty.
Keep in mind that the interface has a somewhat clinical appearance and doesn’t feature the same slick design and color schemes that you will see with other prominent tax software.
When you enter your information, you can import forms in PDF format from competitor platforms like TurboTax, H&R Block, and TaxAct. You can also import from your internal storage. When you fill out your information, the interface will not allow you to skip forward.
You will only be able to edit the sections that you are currently working or the ones that you already completed. FreeTaxUSA supports various complex tax situations, and you will be able to view your tax refund or liability in real time as you enter your information.
Features
Affordable Care Act
If you didn’t have healthcare coverage during the tax year, FreeTaxUSA will accommodate any fees that you may have to pay.
The platform will also assist you if you want to claim exemption from the penalty, a valuable asset to many tax filers looking to save.
Refund and Payment Options
You can use a credit or debit card to pay for FreeTaxUSA’s tax preparation and filing services.
If you are eligible for a tax refund, FreeTaxUSA can facilitate the payment through either a direct deposit into your bank account in less than 21 days or through a check, which can take up to six weeks.
Filing After Deadline
If you’ve missed the tax deadline, you may be panicking about getting your taxes filed on your own, let alone getting them filed affordably.
Luckily, FreeTaxUSA offers tax return preparation and filing services at the same price, even after the tax deadline passes.
However, they encourage their clients to file their returns as soon as possible to avoid IRS penalties.
Audit Assist
FreeTaxUSA often receives recognition for the Audit Assist services that they provide to Deluxe clients. With Audit Assist, you gain access to tax and audit specialists that will help you prepare for an IRS audit. They will answer any audit-related questions that you may have.
This service also includes access to FreeTaxUSA’s audit center, which is a knowledge bank that contains information on the audit process.
However, Audit Assist is only applicable to federal returns and not state returns, and FreeTaxUSA doesn’t offer any audit representation services.
Free Tax Calculator
By setting up a FreeTaxUSA account and entering your tax information as well as you can, you can use the platform as a calculator to estimate your taxes, determine your refund or liability, and find deductions and credits like the Child Tax Credit.
After you’ve entered your information, you will see an estimate of your taxes, refund or liability, and credits and deductions.
Since you can view this information without filing your return, you can keep it on record and edit your data before you have to submit.
Accuracy Guarantee
FreeTaxUSA accepts responsibility for all errors on the system’s end. If the IRS imposes interest or penalties for incorrect tax calculations, the company will pay them.
This feature offers peace of mind to filers who don’t want to worry about the financial repercussions of a miscalculation. As long as you’ve entered all your information correctly, you’re covered.
Free Support
Regardless of the FreeTaxUSA version that you use, you can visit their customer support page to search for support topics or email their customer support team if you have a problem.
If you are subscribed to the Deluxe plan, you get access to free support chat and the Q&A database.
Online Backup
FreeTaxUSA backs up all tax returns online and carries information over from one year to the next, even if the client uses the Free version.
If you haven’t used FreeTaxUSA the previous year, you can import your tax information in PDF format from competitor software, your internal storage, or your employer’s platform.
Uploading your PDF in this manner is incredibly easy, and it saves a lot of time.
Versions
FreeTaxUSA offers two versions: Free and Deluxe. There is not a big difference between the two of them regarding the actual process of preparation and filing.
Both support complex tax situations and schedules, and you can use either of them for federal and tax filing. State tax returns, however, cost an additional fee with either version.
One of the significant advantages of FreeTaxUSA as a whole is that both versions support Schedule C filing for self-employment income, Schedule E filing for rental property income, and Schedule D for capital gains transactions.
You can also report several K-1 related income sources with these plans. The difference between the two versions has more to do with the customer support you receive.
Free
Clients that select the Free version can prepare and file federal tax returns, they have access to FreeTaxUSA’s e-file service, and their account information is carried over to the next tax year.
Free version clients can also print their tax returns on paper or PDF, backup their completed tax returns online, and file for a federal tax extension.
As mentioned above, they can also use the free platform to prepare and file complex tax returns. State return preparation and filing are not free with this version, however, and the client has to pay $12.95 per state return.
If you are subscribed to the Free plan, you can get additional services at a nominal fee, including:
- Completed tax return amendment
- Priority customer assistance
- Professional return printing
- Return printing and binding
Audit Assist is not available to people who are subscribed to the Free addition as an included or additional service. If you need such assistance, you will have to upgrade to the Deluxe plan.
Deluxe
The Deluxe version costs $6.99 and includes everything in the Free version, as well as Audit Assist and professional printing. As is the case with the Free version, state filing also costs $12.95.
With this version, clients also receive free technical and tax support.
Pros
- An affordable alternative for people with complex tax situations
- Free federal return filing and accessible state return filing
- Intuitive interface that is easy to understand
- Audit Assist for Deluxe clients
- Suitable for people with varying levels of tax situation complexity
- Supports Schedule C, D, and E
Cons
- Neither version supports all tax situations
- Customer support options are limited
- This software offers fewer features than its competitors
Should You File with FreeTaxUSA?
FreeTaxUSA has a whole host of features to benefit tax filers with both its free and premium versions. Whether you’re filing the most basic of taxes or facing an impending audit, FreeTaxUSA can help.
Overall, FreeTaxUSA is the best bet for those on a tight budget or those who have a bit of experience filing their taxes. If you fit one of those descriptions, then FreeTaxUSA could be a great affordable tool for your filing needs.
You can also use my federal income tax guide alongside FreeTaxUSA to work through your taxes this year.
Get started with FreeTaxUSA today>>
The post FreeTaxUSA Review appeared first on Good Financial Cents.
Source Good Financial Cents http://bit.ly/2B2FF6x
71% of Us Want to Do This in 2019. One Company Will Pay Us to Achieve It
What are your hopes and dreams this year?
Diet or eat healthier? Exercise more? Lose weight?
Wow, it’s almost like I’m reading your mind.
That’s because those were the top three goals for 2019, according to a survey of 2,000 people published by Inc. It found that 71% of us want to diet or eat healthier; 65% of us want to exercise more and 54% of us want to lose weight.
Unfortunately, Inc. also reports that only about 8% of us will stick to our resolutions… Fortunately? There are tools out there to help you reach success — like wellness company HealthyWage.
HealthyWage will pay you up to $10,000 when you hit your health and weight-loss goals.
Here’s how it works:
- Read our full HealthyWage review, and sign up.
- Define a goal weight and the amount of time you’ll give yourself to achieve it.
- Place a bet on yourself ranging from $20 to $500 a month.
It sounds too good to be true, right? We’ve chatted with a number people who shared their success stories, including these four women who won a collective $10,495.28 from HealthyWage.
Hey, you just might finally be able to achieve your resolutions this year!
Carson Kohler (carson@thepennyhoarder.com) is a staff writer at The Penny Hoarder. She always need motivation to get off the couch.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.
source The Penny Hoarder http://bit.ly/2sJD50K
This New Yorker Saved $120 on Her Electric Bill — in the Middle of Winter
Oh, the weather outside is frightful… yeah, that about sums it up.
It’s winter, and it’s cold outside. To keep it warm inside means your energy bill is going to skyrocket. Plus, you’re burning energy, and that’s not good for the environment.
Why not do something about that? Rebecca Rindler did. She saved $120 during a brutal New York winter last year while using energy that is environmentally friendly. Here’s how she did it.
Save Money (While Helping the Environment!)
You can use your energy bill to support renewable energy — no matter where you live.
With renewable energy company Arcadia Power, you can offset your monthly energy consumption with 100% renewable sources in about two minutes.
Rebecca Rindler, a financial services worker living in Brooklyn, New York, wanted to be able to choose where her power came from and know that she was helping promote clean, renewable energy.
Then she found a solution. Her cousin’s husband is one of the founders of renewable energy company Arcadia Power, which helps people support clean energy, no matter which company provides their power.
“I really liked Arcadia, because they use renewable energy sources, so they’re a way to improve sustainability,” she says. “That’s something that matters to me.”
Here’s where things got really interesting for Rindler. While she was feeling good about helping to fund renewable energy sources, she was about to get more good news from Arcadia.
The company signer her up for its price alerts program, which searched for providers that could supply her power at a lower cost. When they found one, they signed her up, and Rindler started paying less for her electricity.
“Basically, I did nothing,” she says. “I got this email, and then a few months later, I got another email that said, ‘Good news! We found a better rate.’”
You, too, can help fuel your home energy with renewable sources — and possibly save some money, too, just by signing up with Arcadia.
And, because you’re such a good person, the company will throw in a free $20 Amazon gift card.
You can sign up to qualify for your free gift card in about two minutes.
Tyler Omoth is a senior writer at The Penny Hoarder who loves soaking up the sun and finding creative ways to help others. Catch him on Twitter at @Tyomoth.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.
source The Penny Hoarder http://bit.ly/2UahNF7
This Company Paid These Women a Collective $10,495.28 to Achieve Their Health Goals
Could money motivate you to lose weight?
Honestly, you might be surprised. (The human brain is such a weird, mystical organ.)
We’ve talked to dozens of people who’ve been motivated to lose weight by making money through a wellness company called HealthyWage.
Here’s how it works:
- Read our full HealthyWage review, and sign up.
- Define a goal weight and the amount of time you’ll give yourself to achieve it.
- Place a bet on yourself ranging from $20 to $500 a month.
Depending on how much you have to lose, how long you give yourself to do it and how much money you put on the table, you could win up to $10,000.
Could it be?
We chatted with Teresa Suarez, who lost 68 pounds and won $2,415.28 through HealthyWage.
Sure, this sounds too good to be true, but we kept meeting HealthyWage winners — like Caitlin McKenna, who lost 61 pounds in nine months and banked $3,180. Kimie Pruessner signed up through her employer. It was hosting a team challenge. She hit her goal weight and earned $2,500.
Angela Harkins wanted to get healthy — and save enough money to build a home. She placed a bet on herself and won $2,400, which she put toward a down payment on her new home.
Read more about these women’s stories.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.
source The Penny Hoarder http://bit.ly/2R8QvNJ
Keeping Food Costs Down With Picky Eaters at Home
Mary writes in:
Trying to follow your food strategies but I have a very picky 6 year old and a picky 2 year old at our dinner table. They refuse to eat most things that are put in front of them and insist usually on a certain kind of mac and cheese that’s not the cheapest. Thoughts?
When our children were younger, they were somewhat picky, though they grew out of that pickiness over time.
Our strategy for picky eating children was to simply prepare and serve the meal before bringing them to the table, which meant that they could decide for themselves whether to eat what was before them. This eliminated the sense that they could dictate what they were served at meal time. Since the food was already on their plate when they sat down, they lost that sense that they could dictate what was being prepared, which helped a lot.
Another strategy we adopted was to not worry too much about how much they ate at meal times. If they didn’t eat, it was okay; they would eat when they were hungry.
Of course, that often meant that they were snacking, so we intentionally kept healthy snacks within their reach and unhealthy snacks way out of their reach. The fruit bowl was easily accessible, as were the bananas. The cookies? Not so much.
We would sometimes have meals that they loved, but most of the time, we prepared typical meals bought with low-cost ingredients. We did not let their tastes dictate our meal plan. What dictated our meal plan was low cost and healthiness.
Another strategy we found that worked well was asking that they simply eat one “real bite” of anything that they were served. That way, they could decide for themselves if it was good or not. If they ate a real bite, chewed it up, and swallowed it, we wouldn’t ask them to eat any more if they didn’t like it.
In short, part of our success with having a variety of foods at home when the kids were little was to simply find subtle ways to nip their complaints in the bud before the complaining ever had a chance to begin. If supper is already on their plate before they even think about it or get to the table, there’s not much they can really do about it. If we only ask them to eat one bite, it’s not that big of a deal – it seems far less cataclysmic than having to eat a big pile of some weird food.
As our kids got older, we gradually realized that just because we were having dinner didn’t mean that the kids were hungry right then. Often, most of the disagreements about food came from the fact that they weren’t actually hungry at all when they were being plopped down at the table and told to eat, so they’d complain about any food that wasn’t something they loved. You can’t expect a kid to be hungry when you want them to be hungry, after all, and forcing them to stay at the table under the idea that they’ll eat someday creates unnecessary conflict. Staying at the dinner table when they’re older is another matter, as you’re teaching polite behavior in society, but that’s not a useful lesson to a two-year-old.
So, here’s what I’d recommend if I were you.
First of all, I’d follow The Simple Dollar’s usual recommended meal preparation strategy. It goes like this:
Step 1: Get a grocery store flyer.
Step 2: Find sales on fresh ingredients.
Step 3: Do some recipe research.
Step 4: Create a week-long meal plan.
Step 5: Make a shopping list from the meal plan.
Step 6: Go grocery shopping – and stick to your list.
Our meal planning starts with grabbing a grocery store flyer from which we identify items that are on sale. We then base our meal plan for the week on those on-sale items and then prepare a grocery list from that meal plan (which means the grocery list is automatically full of on-sale items), after which we just go to the store and stick to the list.
As you’re following that plan, you should, of course, keep what your family likes in mind, but that doesn’t mean it has to dictate all of your meals. Naturally, if you see some of the ingredients of a meal that your children love and they’re on sale, you should pick those up. However, that shouldn’t dictate your full meal plan, nor should it. You should choose other meals that involve on-sale elements and serve them as described above, putting them on the table and on their plate before they even sit down at the table.
Another good strategy is to stock up hard on a family favorite if you notice that it’s on sale. If you do see the kind of mac and cheese that your children like on sale, stock up. Buy several boxes of that macaroni and cheese at once and stow it away for future meals. Since it’s essentially nonperishable, you don’t have to eat it every day.
We do this with quite a few items at the store. Things like canned diced tomatoes, dry beans, dry rice, and flour are always bought in large quantities (as are virtually all household supplies).
When it actually comes time to prepare a meal, just prepare the whole meal and put some on their plate before bringing them to the table. Don’t discuss what you’re having beforehand – if they ask, just tell them briefly and matter-of-factly and leave it at that. Most of the time, they won’t pay any attention at all unless they’re really hungry.
If they don’t want to eat what you made, simply say, “If you eat one bite of each of those things, you can get down and play and Mommy will be happy.” This worked wonders for our kids. Often, as I noted earlier, they just weren’t hungry at meal time and directed that toward not liking the food.
Some kids are simply “grazers,” and the best way to handle that is to just have plenty of healthy snacks around. Keep apples and bananas on hand and make it clear that those are their snack time choices. Don’t make cookies and candy available with ease – not only are they unhealthy, they’re more expensive than apples and bananas.
These were the strategies we used when our kids were younger and it worked well. Our kids are pretty adventurous eaters these days now that one’s a teenager, one’s a pre-teen, and the other one is in upper elementary. They like things like sushi and lychee and kimchi and pickled garlic and curry, believe it or not, and they’re pretty happy with almost everything we make for dinner.
Good luck!
More by Trent Hamm:
- Lessons From the Average American’s Food Expenses
- $1 Meal Tactics: Saving Big on Food Costs, a Buck at a Time
- How I Shop: Specific Tricks for Your Next Trip to the Grocery Store
The post Keeping Food Costs Down With Picky Eaters at Home appeared first on The Simple Dollar.
Source The Simple Dollar http://bit.ly/2TgytdW
Sick of Sneaky ATM Fees? Here’s How to Never Pay One Again
ATM fees are annoying.
You just needed $10 in cash. Then you wound up forking over nearly $5 in fees.
And that’s no exaggeration. The average total cost of taking cash from an out-of-network ATM is $4.68, according to a recent Bankrate survey.
Want to avoid those unnecessary fees? There’s an easier way than driving around town to get to an in-network ATM. You can simply keep your money in an account that doesn’t charge those fees — like the Aspiration Account.
With Aspiration, you’ll face no ATM fees — domestic or international. ATMs in-network are free, and Aspiration will reimburse you the fees for out-of-network ATMs monthly.
Other perks? You’ll never pay a monthly maintenance fee, a minimum balance fee or an overdraft fee. Oh, and you’ll earn 1% APY interest on your account’s balance.
Yup. It’s that simple to start living a fee-free life thanks to Aspiration.
Carson Kohler (carson@thepennyhoarder.com) is a staff writer at The Penny Hoarder. In the spirit of transparency, she banks with Aspiration and has loved her experience.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
The Penny Hoarder Promise: We provide accurate, reliable information. Here’s why you can trust us and how we make money.
source The Penny Hoarder http://bit.ly/2DtEJd9
Six Reasons to Think Twice Before Taking Out a Reverse Mortgage
A reverse mortgage can provide older homeowners with an economic lifeline, but there are reasons to be cautious before you trade an interest in your home for the luxury of no longer making loan payments.
Reverse mortgages allow you to tap into home equity, which is the difference between your home’s market value and the amount you owe. In order to qualify, you need to be at least 62 years old and have enough equity to justify a loan. Borrowers typically stop making mortgage payments and may receive a lump sum or a line of credit from the lender. However, interest will be added to the loan balance over time, gradually decreasing your home equity.
The loan must be repaid when the home is no longer the borrower’s owner’s primary residence, explains Mark Goldman, a loan officer with C2 Financial. Despite their benefits, reverse mortgages aren’t a good choice for everyone. What follows are potential downsides for consumers.
You’ll pay substantial fees.
Reverse mortgage lending fees typically are more expensive than the fees for traditional home loans, reports the Consumer Financial Protection Bureau. Your upfront costs will include lending fees, mortgage insurance, and real estate closing costs. Most borrowers wrap these expenses into the loan. Each month, interest and mortgage insurance charges will be based on your loan balance. The amount you pay compounds over time, which can get costly.
You’ll continue to have out-of-pocket expenses.
A reverse mortgage can help you avoid mortgage payments, but it won’t relieve you of property tax and homeowner insurance payments, Goldman says. To qualify for a reverse mortgage, you must show that you have the resources to pay ongoing property charges.
In addition, you’ll have to maintain your home so that the property doesn’t lose value. If you don’t meet these obligations, your reverse mortgage could go into default. This could force you to sell. In some cases, the home could go into foreclosure.
You may find the terms of your loan confusing.
Some seniors don’t fully understand the terms of their reverse home loans. New York attorney David Reischer, CEO of LegalAdvice.com, warns that some lenders sell reverse mortgages to people who don’t truly need them.
“Selling reverse mortgages is big business and it is incumbent on the borrower to seek counsel from informed family and friends that can be trusted,” he says.
According to complaints logged by the Consumer Financial Protection Bureau, many consumers become frustrated when they’re unable to refinance their reverse loans because there’s no longer sufficient equity in their homes. They didn’t realize that reverse loans could substantially decrease their equity over time.
Because there have been many changes to reverse mortgages over the years, it can be difficult for a layman “to keep up with all of the moving parts,” says Steven J. Sless, national reverse mortgage director for US Mortgage Corporation. “It has become a tool that is used more by the financially savvy.”
You must beware of scams.
The Federal Bureau of Investigation urges consumers to beware of scams when they shop for reverse mortgages. In some scams, seniors are presented with offers of free homes, investment opportunities, or foreclosure assistance. They may be targeted through investment seminars, television ads, or mailer advertisements.
Some reverse mortgage lenders may attempt to sell other financial products — such as annuities — that the borrowers don’t truly need, Sless says. It’s important to make sure you question anything you don’t understand. If you have a trusted friend, family member, or financial advisor, seek their input before you accept the loan.
“A reverse mortgage isn’t something a senior should make a quick decision on,” Sless says.
Your mobility will be restricted.
A reverse mortgage is a good idea only for people who plan to remain in their homes. Once you take out a reverse mortgage, you must maintain the home as your primary residence or repay the loan. Make sure there’s nothing that will compel you to move in the near future.
For example, if you’re thinking of moving to be closer to your grandchildren or other relatives, a reverse mortgage may be the wrong choice. If your children have left home and you’re thinking of moving to a smaller residence, having a reverse mortgage could spoil your plans.
“These loans are designed for people who intend to stay in their homes indefinitely,” says Goldman.
Your heirs may be disappointed.
Many people leave their homes to their heirs when they die. If you have a reverse mortgage, there could be very little equity value left in the home upon your death. In some cases, the value of the home isn’t even great enough to cover the amount owed to the lender when the home is sold. The lender will absorb the loss, but your heirs may be disappointed to learn they’ve inherited a home that has little or no value, once the loan is repaid.
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- Should You Pay Off Your Mortgage Early?
The post Six Reasons to Think Twice Before Taking Out a Reverse Mortgage appeared first on The Simple Dollar.
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