Where To Find Low Mortgage Refinance Rates?

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If you are looking to refinance your mortgage with your existing bank, you should consider another options as they will not give you the best rate. There are many refinancing options on the Internet now and you can find plenty of lenders who will give you low refinancing rates. You can also get these with the help of an expert.

mortgage rate

Sometimes it is not so easy to qualify for low interest mortgage rates as these refinancing loans depend on your credit ratings. But since the interest rates are very low now you may find something that will suit you just fine. Since the government stepped in, trying to make homes more affordable, the interest rates stabilized and now the mortgage market is alive again. You should really contact an expert or visit a website that has plenty of information about lowest mortgage refinance rates. You will need help in finding out are you eligible and what requirements are there for folks with bad credit. We have some good information for you here so you can save time while searching for a way to reduce your payments considerably and save money.

Low Mortgage Refinance RatesLike I said, Internet is a good place to begin searching for a good place to refinance your mortgage. There are many lenders that specialize to help people like you so even if your credit history is not so good, you may be able to refinance your mortgage. Some lenders won’t need you to go through a credit verification, believe it or not. And you have to agree that this is a good way to go as it is a fast way to stop foreclosure. Besides this, you can get some good advices from the experts so that you choose the right option for your refinancing.

You will find that some websites offer free advices, all you need to do is to go through a short, simple procedure. You can really benefit from these websites as they have professionals who assist all borrowers to get their mortgage refinancing as quickly as possible. One of the places to visit is http://www.resourcefulcapital.ca/, you will get a lot of information, useful tools, advices and options there so you will only have to choose which offer best suits your needs.

How To Avoid Surprise Mortgage Costs

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When you want to get a mortgage, there are more than few hurdles you need to jump over to get what you want. Before the agreement is reached, you can have the offers rescinded or adjusted, which may leave you without a couple of thousands dollars. So, you need to prepare yourself for these surprises and avoid losing money over surprise costs.

You Shouldn’t Tell Lies About Your Credit History

I know it is tempting to not mention your credit issues and even lie about your bankruptcy. But, if these happened recently, they will appear in your credit report. So, it’s best to be honest, you may get a better interest rate than you hoped for.

Surprise Mortgage Costs

Talk About All Your Property And Income Circumstances

Many people are not sure about their future income, especially those that changed jobs or are self-employed. If you are honest about all your circumstances, you will be prepared for anything and you won’t have to pay more on your mortgage.

Discover About Locked-in Rates

More often than not, the rate people agree to are offered for one, two or three months. You should make sure how much time you have and can you close during that period. If you can’t close, you won’t get that rate. So, ask about the rate and can it be locked in for some time, until you can finish with closing. If you get to an agreement that suits you, make sure it is in writing. Verbal agreements are not reliable simply because they are difficult to enforce.

expensive mortgage

Take Note Of The Letter Of Commitment

You need to make sure nothing will change after you made an original agreement. Many things can change before the letter of commitment, but once it has been sent, nothing should change at all. Talk to your mortgage professional and make sure the agreement will be honored.

Have Some Extra Funds Ready

This may sound obvious, but you need to have some extra funds prepared so you can pay for the closing costs, down payment and have those extra funds if any surprises occur. By doing this, you are making sure that some small detail won’t stop the entire process. You can also use those funds to cover other costs, like moving to your new place. Once you get in, who knows what needs to be changed or repaired.

When you want to plan things right, you need to take many things into account. One good way to start is to use a mortgage calculator. You can find one here http://financial-calculators.appspot.com/mortgage-calculator.html. Use it to see what awaits you in the future and where you can fit in concerning the interest rates and down-payments.

Customers Seek A Better Mortgage At iWantaBetterMortgage.Com

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Customers seeking a better mortgage or a better mortgage refinance loan have been finding greater success online with a company called iWantaBetterMortgage.Com. By cutting out the mortgage broker, iWantaBetterMortgage.Com offers customers a quick and easy way to shop online for a home mortgage. For years (and industry wide), there have always been problems with mortgage brokers selling mortgages with inflated fees and interest rates higher than a customer would need to pay. Over the years, customers have complained that mortgage brokers had talked them into getting a mortgage that they really could not afford, only find out after the fact that the mortgage lenders had hid the additional back end points and fees causing the interest rate to skyrocket. In many cases, a better mortgage could have been obtained had the customer been able to shop around. Because of this, iWantaBetterMortgage.Com has begun to capture additional market share providing the customer with that “better mortgage”.

With the new Dodd Frank rules that are in place, some mortgage lenders are being forced to not lend to qualified individuals. iWantaBetterMortgage.Com is helping customers shop multiple lenders at one time which can help eliminate the add on fees that come from independent mortgage brokers.

The new term on the street is “qualified mortgage”. Mortgage lenders are now forced to abide by a set of rules that results in what is being called the “qualified mortgage standard”. Mortgage lenders are now finding it difficult to add on additional fees, both on the front and the back end. Without these additional fees, lenders are denying home loans to an otherwise qualified borrower. So, how does a customer find that “Better Mortgage”? Consumers want a better mortgage and have begun to turn to iWantaBetterMortgage.Com.

More regulations mean fewer better mortgages.

Mortgage lenders don’t like the limits being placed on their fees, or the new debt to income requirements for a mortgage to meet the “qualified mortgage standard”. The issue at hand is that the mortgage lenders are complaining that they’ll turn away qualified deserving borrowers because of these new regulations. Lenders believe that this will slow the housing recovery and hurt the overall health of the economy. iWantaBetterMortgage.Com is now providing the link between the consumer and the lender whereby the consumer can pit home loan lenders against each other, thus lowering fees and points. Getting that better mortgage is critical to a healthy industry.

“Unless there are changes in the near future, these new rules and regulations would have a dramatic impact on credit availability for the consumers seeking a better mortgage that they are in place to protect,” said Edward Brooks, of the United Mortgage Association. He’s said that this is where a company like iWantaBetterMortgage comes in. iWantaBetterMortgage.Com takes the guesswork out of finding the best home loan for the individuals credit rating. iWantaBetterMortgage.Com can get a pre-approval for a home mortgage in less than two minutes.

Brooks testified in front of a House Hearing on home mortgages that business is improving with the high end borrower, while the lower end of the mortgage market is actually shrinking. Access to credit continues to be a problem with first time and low to moderate income borrowers unable to qualify for a home mortgage. The “ability to repay” rule could fuel this trend and further tighten credit to worthy borrowers.

How do the new rules for a qualified mortgage make it a better mortgage?

Early this year, the Consumer Financial Protection Bureau’s “qualified mortgage rule” went into effect. This rue is designed to help the consumer get a better mortgage. To be designated a qualified mortgage, a loan must fulfill certain requirements, including:

  • A 3 percent cap on points and lender’s fees for loan amounts of $100,000 or more.
  • A maximum debt-to-income ratio of 43 percent, meaning that debt payments can’t exceed 43 percent of the borrower’s before-tax income.

However, there are exceptions. The percentage cap on fees is higher for smaller loans, and some mortgages backed by Fannie Mae, Freddie Mac and the FHA can have debt-to-income ratios above 43 percent.

In a testimony in front of the House Banking Committee, some lenders complained about the 43 percent limit for debt to income ratios. They said in many cases, borrowers can get a better mortgage and afford loans at higher ratios, and wanted to be allowed leeway in their lending decisions, and not attach a hard debt to income ratio to the process. Further, lenders had asked for a debt-to-income ratio number for clarity and are now complaining about it.

What does this means for the rural borrowers?

Alfred Winningham, testifying on behalf of the Rural Bankers Association, said that the new qualified mortgage rule will restrict mortgage lending in rural areas. Mr. Winningham’s bank can’t afford the legal risks of expanding its lending efforts, although his bank is exempt from some of the rules because it underwrites fewer than 500 mortgages a year. But in 2012, Winningham’s bank closed 441 mortgages, which will leave little room for growth in mortgage lending side.

Where do Credit unions fit in?

Jenny Maloney, representing the American Credit Union Association, testified that current regulations create a costly and unnecessary “compliance burden.” She pointed out that “Credit unions didn’t cause the financial crisis and shouldn’t be caught in the crosshairs of regulations aimed at those entities that did.” Ms. Maloney testified that getting a better mortgage can be accomplished using online resources like iWantaBetterMortgage.Com. Companies like these can help lower costs industry wide on both the consumer and mortgage lenders end. It’s a win-win for the industry.

Whose risk is it, anyway?

It all comes down this: if the objective is to help the consumers locate a better mortgage, who should assume the risk of a bad mortgage? In past years, mortgage lenders made a lot of money giving people bad loans, and taxpayers and individual homeowners paid the bill. Congress and regulators pushed the risk back onto lenders and investors, who are now pushing back. To have a fair balance, consumers need to have the tools necessary to evaluate home loan products in an open environment. Finding a better mortgage is now easier than ever with companies like iWantaBetterMortgage.Com.

How are markets changing and where are customers going?

Not so new to the lending industry, but gaining ground fast is iWantaBetterMortgage.Com. iWantaBettterMortgage.Com is positioning itself as a major player in the Home Mortgage Lending business. Customers are demanding better mortgage products and are now finding it easier to bypass traditional mortgage brokers and go directly to the lender of their choice.

Investing In A Self Managed Super Fund Property Is Not As Scary As You Think!

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The thought of investing in Self Managed Super Fund (SMSF) property can be scary and overwhelming to many. There are many fears people have that may prevent them from pulling the trigger. Whether that may be the fear of large debts, nightmare tenants, lack of financing or their confidence with doing home repairs, investing in smsf property can be a great financial reward. There are many things to consider when making the decision to invest. Here are some tips to help you navigate your way through the world of a smsf investment rental property.

  1. Do your research – There are some crazy people who jump into real estate investing without doing proper research. Don’t be one of these people! It is always wise to make sure that you learn as much as you can before putting your money in. There are many ways to gain knowledge. Make sure you read as much as you can about real estate investing. Also, there are no better teachers than people who have done it before. Join your local real estate investment club to speak to someone one on one. They will be able to give you all the pros and cons as well as an inside look at what you are possibly getting into.
  2. Make sure you are in a financial position to make the investment – Before you get too excited about jumping into this new venture make sure that you are financial capable to do so. Look up your credit report to verify that it is clean. If you haven’t already, start saving money for a down-payment and meet with a mortgage broker to see what you can afford. It works a little differently with SMSF. In many cases you can use existing funds in your superannuation as a deposit (read more here http://redwoodadvisory.com.au/borrowing-to-invest-in-property/)
  3. Thoroughly research the houses and area you are thinking to purchase your rental property – Don’t just read what is on the paper or what you find in the internet. Go the extra mile and actually cruise through the neighborhood to get a better sense of what it would be like to live there.
  4. Look at as many houses as you can- A great tip is to find a young, new mortgage broker that is hungry for business. A seasoned, successful agent may not want to look at as many houses as you would like as a new investor. Begin cultivating successful relationships now so that you can build trust and use them in the future. When cruising neighborhoods, make note of any houses that look vacant and follow these leads up with your broker.
  5. Don’t be afraid of DIY projects – Don’t be afraid of doing repairs on your own. There are many resources out there that can help and guide you through any project. Make sure you check out your large home improvement stores, such as Home Depot or Lowes, as they provide free class tutorials on many home projects. YouTube is also a great resource to find information on home repairs. You will be impressed on what you can accomplish on your own with the right motivation and energy to learn a new skill.
  6. Have a tenant strategy before renting out your property – Before posting your property for rent, make sure you have a solid strategy. Having a strategy will help you get a quality tenant. Always screen your tenants thoroughly by making sure you get the name of their last two landlords. A current landlord may only give them a good reference if they are trying to get them out of their property.

Of course a well thought out plan is essential to your success. Contact http://www.redwoodadvisory.com.au who are SMSF specialist advisers and can help you with financial advice and assistance with borrowing for your SMSF investment property.

What Exactly Do You Get With A Destination Management Company

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I think we can all agree that every successful relationship is based on mutual trust. And this is why you want to go with a reliable destination management company. Quality has to be a standard and it is important that the DMC you choose knows what needs to be done and is committed to you fully.

Now, when it comes to the question what do you get from a DMC, here’s the answer. The company you hire will evaluate your needs, take into account your budget and create a proposal that will suit your requirements and possibilities. The proposal will be exactly what you need, or close, so that no money or time are wasted.

dmc

Event managers will cooperate with a DMC to make sure incentive, meeting or conference that is being organized fits the budget. This is not an easy task, but a good DMC company has experience and knowledge to use the budget as best as possible, to negotiate better rates and better terms for their client.

Once you hire a reliable company, you won’t have to lose so many resources on group travel. Everything will be much simpler and you can get a proposal within 2 days after giving information about the destination and your budget. This is the biggest benefit you will enjoy. A real value lies within DMCs experience and buying power, this is something your company and your staff can’t match.

A good event management company will know every detail about the convention center you want to use, about the hotel, entertainment and all other important things that will make or break your event. They spent weeks or months researching all these venues and they are presenting you with the options with all the details and costs. All technical aspects, logistics, planning and the target audience are studied well before the date of the event so that everything can go smooth. You will get the best value for your money and this is exactly what you get when you hire a DMC.

destination management company

It is necessary to use the services of a DMC, especially if you have a group of a hundred or more people. The amount of planning for flights, hotel rooms, transportations and other details is enormous.For example, if you need to organize an event in New York and you have 250 of your employees you want to get to a convention center, book a hotel for all of them and transport them from the airport to the hotel and to the convention center, you will need at least a dozen people working on this. You won’t be able to find a hotel that will accommodate all your employees, that’s the first obstacles. And there are many more. It would be best to simply hire a DMC New York and they will take care of everything. You won’t have to spend a lot of time on organizing all this by yourself, you won’t have to worry about the details, if everything is going to work, etc. By hiring a destination management company you are getting exactly what you want without spending too much money, time and without stressing at all.

How Leverage Is Used In Forex Trading

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To understand how leverage is used in Forex trading, you must first know what leverage itself is all about as far as forex trading is concerned.

Leverage in forex trading is the ability to increase the size of your investment or trade by using credit from a broker. You are effectively borrowing from your broker, using the funds in your account as collateral, when using leverage to trade. This collateral is what is called margin in forex trading.

The available amount of leverage is based on the margin obligation of your forex broker. While leverage is expressed as a ratio, margin requirement is usually shown as a percentage. Leverage will offer a trader the opportunity of making substantial investment just as the rates therein will help a lot of traders to increase their profits.

forex leverage

However, strategy can only be useful, if you know how leverage is used in forex trading. Here are some tactics and cautions on how leverage is used.

1. Apply Strategic Stops

You can only use leverage when you understand that your position is not harmfully affected by an investment. In the incessant forex market, strategic halts are of utmost significance. Stops can be used to defend earnings and double-check to put a ceiling on losses.

2. Put a Ceiling on Losses

A typical forex trader understands that he/she must first have the idea of how to keep losses to a minimum in order to earn huge profits sooner or later, before making use of leverage. Therefore, putting a ceiling on losses to a controllable confine earlier than they get out of hands to grind down the equity severely is crucial to the success of trading, which is the reason why forex traders study the market as well as their investment before applying leverage.

3. Use Leverage Suitable for Your Comfort Level

As a relatively cautious forex trader or investor, use the leverage that is suitable to your comfort level. In other words, use a lower level of leverage that you are comfortable with as any adverse move can wipe out your margin or equity.

4. Do not Double Down or Average Down on a Losing Position

In an attempt to get out from a losing position, avoid averaging down or doubling down on it. The biggest trading losses happened for the reason that a rogue trader ran away and kept adding to a losing position until it became so large. This situation will be relaxed at a terrible loss. Although the view of the trader may have been right eventually, it may have been very late to salvage the situation. Therefore, it is extremely better to cut your losses and keep your account alive to trade another day than to be left expecting an unlikely miracle that will lead to a huge loss.

forex margin

Understanding how leverage is used in forex trading is imperative if you want to use leverage to trade successfully in the forex market. You can only succeed when you are equipped with necessary information. Do not trade forex with leverage without understanding how leverage is used.

How To Clear Your Credit Card Debt?

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A bad financial situation can get even worse if you don’t manage your credit cards properly. What can you do if your debt level is too high to handle? A solution to your problem is a credit card debt settlement company.

While the solution exists, this doesn’t mean that it is going to be easy to clear all your existing debts. Of course, you should do as much as you can do make this happen because it is worth it. Once you get clear of all credit card debt, you will feel great relief and accomplishment. The truth is, many cardholders are turning to credit debt settlement when their credit card debt gets out of control.

credit debt settlement

While you can effectively and quickly get rid of the debt, without declaring bankruptcy, you still have to think about the important issues regarding this whole ordeal.

One Approach

Agreement between the debtor and the creditor has to be made for the debt to be cleared completely. For example, if the cardholder is owing $5,000 and the issuing institution agrees that 60% rate will be enough to settle the debt, $3,000 is the amount the debtor has to pay to clear the debt completely.

Most often than not, debtors look for a consolidation loan, but its means they will pay 100% of their debt, plus the interest. It is much more effective to agree a reduced balance. Settlement means that a lot more money can be saved. This makes it clear that going for the biggest reduction is the most important goal for a debtor.

credit card debt

The first thing you want to do when you want to negotiate is to halt payments to the institution that issued your credit card. This may seem odd, but you want to leave an impression that you can’t repay the card. By doing this, you are actually establishing a strong position when negotiating a credit card debt settlement.

Of course, if you take this approach, you will ruin your credit score. This is worse than declaring a bankruptcy and you will have troubles getting a loan again. But,  the credit ratings effects will last for 2 years only so consider what’s best for you. If you don’t want that to happen, you should consult a company that will evaluate your condition and recommend you several options that will get you out of debt.

What To Do After You’ve Been Rejected For A Business Loan

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Operating your own business or company can be a difficult yet rewarding experience. While you may be required to invest some of your personal money in the beginning in order to get things going, your company may pay off big in the long run. Even after the startup of a company, many business owners find they must take out a Small business loan to boost their company or keep it running and flourishing. If you’ve recently applied for a commercial loan and your request was rejected, don’t worry, there are still steps you can take to ensure that you’ll receive the funds you need.

real estate loan

If you’ve been rejected for a business loan, you should:

  • Re-evaluate your business plan— The reason your request for a loan may have been rejected could be because the lender does not have enough confidence in your business plan, or is not 100% sure your idea will be successful. If a lender doesn’t think your company will succeed, they won’t believe you will have the means of actually paying any money that you borrowed back. Hash over your entire business plan from beginning to end, and correct any ambiguities. Modify parts that seem vague or superfluous to improve clarity and ensure your lender understands your plan in its entirety.

  • Re-assess the amount of money requested— You could have also been rejected because you are simply asking for too much money. It is crucial that you only ask for the bare, essential minimum that you will need. This will not only better the chances that your request will actually be approved, but also benefit your own wallet in the long run because you will be paying less back, and less interest will accrue. Go back over your plan and make some adjustments so that you can decrease the amount you are requesting.

  • Review and perfect your pitch— Practice makes perfect, so you should be sure to prepare and practice an interesting and detailed business pitch for any prospective lenders. The more you rehearse your pitch, the easier it will be to answer any possible questions the lender may have. You will also seem much more confident which will make lenders more confident in your business plan as well.

  • Apply for your loan elsewhere— Sometimes the institute you are seeking your loan from could be the problem. If you’ve only tried applying for a loan at one bank, try visiting a lender elsewhere. You may even be able to find an institute with lower interest rates, or requirements that are less strict and easier to meet.

  • Try getting the funds you need elsewhere— If you’ve reviewed your plan, perfected your pitch, and made as many adjustments as you possibly can and you still can’t get access to the funds you need for your business, it may be that a business loan simply isn’t the right plan of action for you. Consider other forms of receiving the money you need, like borrowing from friends or family, or recruiting sponsors or investors. These alternative plans may be even better for you because they have the possibility of no interest.

 

It’s not the end of the world if you get rejected for your commercial loan. With these tips, you’ll be able to get back on track to getting your financing.

Author Bio:

James Somerhalder is a writer and passionate blogger who loves to write for finance related blogs .He is well qualified with master degree in finance that helps him to make his financial planning properly. Apart from blogging he loves music, gardening and writing.

U.S. Estate Planning For Non-Citizen Spouses

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As cross-border specialists, one of our key concerns in working with each client is the question of citizenship. This is especially true for estate planning, as developing a plan without taking into account citizenship could have dire tax consequences and create hardship for a surviving spouse.

According to current estate tax law, an immediate tax can be enforced on assets passed to a spouse who is a foreign citizen. Cross-border estate planning plays an important role in preventing a hefty tax bill due to these U.S. estate tax rules. If you’re in a similar situation, here’s what you need to know.

Estate Planning Basics

When we work with a married couple to develop an estate plan, one of our key goals is to preserve and protect assets for the surviving spouse and children. Fortunately, with advanced planning, federal estate taxes can often be reduced or avoided.

Currently, if you die with a taxable estate worth over $5.34 million, the IRS can take 40% of the excess. One common approach to avoid this federal estate tax rule is to give away some of your assets to children and grandchildren upon your death, either directly of through trusts, with the remainder going to your surviving spouse. You can bequeath an unlimited amount to your spouse free of federal estate taxes—as long as your spouse is a U.S. citizen.

You can also gift away an unlimited amount to your spouse before you die without incurring a federal gift tax if he/she is an U.S. citizen. This ability to make unlimited, tax-free wealth transfers to your spouse is known as the “unlimited marital deduction.” This privilege is an essential part of many estate and gift tax planning strategies.

The Citizenship Conundrum

Unfortunately, traditional estate tax planning strategies that work for most married couples—such as the unlimited marital deduction—are not available when one spouse is not a U.S. citizen. In 1988, the U.S. Congress eliminated the unlimited marital deduction for when a U.S. citizen spouse passed property to a surviving non-citizen spouse. This has resulted in a significant dilemma and substantial federal estate tax rates for those leaving assets to a spouse who doesn’t hold U.S. citizenship. Further, when the marital transfer rules changed, a new rule was also introduced that limits the transfer of assets directly to a noncitizen spouse to no more than $100,000 per year without incurring any tax.

Let’s look at an example to see the impact this would have. Let’s say a U.S. citizen husband passes away, leaving $5.34 million to his children and the remaining $1.5 million to his non-citizen wife. Given the $5.34 million federal estate tax exemption, the amount left to the children is free from federal estate taxes; however, the $1.5 million left to the non-citizen spouse is not exempt. What’s the damage? $600,000 ($1.5 million x 40%) in federal estate taxes! Let’s say the husband leaves his entire estate worth $6.84 million to his non-citizen wife. The federal estate tax is still $600,000 because the initial $5.34 million is protected by the federal estate tax exemption.

Another problem that arises is that U.S. assets bequeathed to a surviving non-citizen spouse using the estate tax exemption may still be subject to estate taxes upon the death of that non-citizen spouse. This is because a non-citizen spouse who is not “domiciled” in the U.S. will only have a $60,000 lifetime exemption instead of the $5.34 million exemption.

Planning Options

What are some estate planning options if you or your spouse don’t qualify for the unlimited marital deduction? Let’s return to our example.

For starters, our married couple could take steps to have the wife become an American citizen before her husband’s death. Another alternative is to set up a Qualified Domestic Trust (QDOT), which would enable our couple to defer the estate tax until the death of the surviving non-citizen spouse. How does it work? A QDOT allows for assets to be held in trust for the noncitizen spouse without incurring an estate tax, thereby putting off taxation until the spouse’s death or assets are withdrawn. This would also provide an annual income stream for the wife and allow extra time for her American citizenship to come through. Under the Canadian Income Tax Act, a properly structured QDOT can also qualify as a spousal trust.

If certain qualifications are met, another cross-border approach we take with our clients is to look at the marital credit of the U.S./Canada Tax Treaty. It’s important to note that this route and the QDOT option cannot be used together.

Another consideration is to introduce a gifting strategy where the husband gifts property to his wife; as much as $100,000 per year would be allowable as a tax-free transfer under current tax law. Such gifts can help reduce the amount of assets passed to a non-citizen spouse and also help mitigate tax issues down the road.

In addition to these options, there are a number of cross-border planning approaches that can be established in advance as part of a total financial planning process. Life insurance, real estate and retirement plans should all be examined to look at opportunities to protect assets from taxable events upon death.

We advise families that a careful, advanced planning approach is the key to avoiding potential pitfalls when a spouse is not a U.S. citizen. After all, one of our most essential roles as an advisor is to help minimize the negative impact of estate taxes for a family and a surviving spouse dealing with the loss of a loved one.

Have Questions? Visit us online; www.cardinalpointwealth.com

About the Author: Terry Ritchie is the Director of Cross-Border Wealth Services at Cardinal Point Capital Management Inc., a cross-border wealth management firm with offices in the United States and Canada. Terry has been providing Canada-U.S. cross-border financial, investment, tax, transition, and estate planning services to affluent families for over 25 years. He is active as an author, speaker and educator on international tax and financial planning matters.

Buy To Let Mortgages As Business Opportunity

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In order to qualify for a buy to let mortgage you will be assessed on the estimated rent you will collect and not your personal income. When you estimate the rent to be higher than the actual mortgage payment you will likely receive approval from the mortgage lender.

Historically around 90 per cent of landlords were excluded from qualifying for buy to let mortgages because this financing was based on income. Most lenders will require the rent of the mortgaged property to be at least 125 per cent of the mortgage payment. That means a mortgage payment of five hundred pounds per month necessitates a rent payment of six hundred and twenty-five pounds.

The ARLA (Association of Residential Letting Agents) states that landlords need to be able to charge a gross rent of between 130 per cent and 150 per cent of the mortgage repayments on the rental property. The reason for this higher differential is to ensure a profit to landlords that can carry payments through periods where the property is without a tenant, cover maintenance costs and insurance on the property. If you have a letting agent assisting you with the day to day management of your investment property they routinely charge about 10 per cent of the rent or 15 per cent if they need to take care of repairs and complaints.

Since lending criteria has recently changed new investors have been snapping up properties and investors in the market have increased. The buy to let scheme is definitely not a get rich quick plan, but more of a long term investment, especially with so many properties available for rent to potential tenants. BTL brokers have been facilitating by to let mortgages for many potential purchasers of these properties.

If you plan to invest in a buy to let property you will need to cover the lean times with back up contingency funds. The ideal cushion is three months’ worth of mortgage payments. If you cannot afford this, then you should not be putting yourself in a buy to let situation. If you are concerned about losing money during periods where you have no tenants you can obtain special insurance that can cover mortgage payments on your unoccupied property.

For the lucky and savvy investor, buying a property in a buy to let hot spot can mean serious profits. Buy to let mortgages can help you to purchase a property that can be a great investment but you need to do your research first before making a purchase decision. Contact a letting agent in your local area to get the latest information on the demographics of renters in your area so that you can make an informed decision.

Once you made the final decision to start looking around for a buy to let property, you will also need to contact a BTL broker to help you with buy to let mortgages. You can choose from fixed, tracker, variable and discounted mortgage products. Flexible mortgages can be a good choice because you can take payment holidays, overpay, underpay and borrow back from your mortgage if there is a daily interest calculation. Flexibility is the key to the ideal mortgage and a BTL broker like Brooklands Commercial Finance can help you to do just that.