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Real Estate

Epic Financial has more answers to real estate questions than anyone has time for, but we're off to a great start!

1. What will the market do in 2021?
The housing market has been cruising at a robust pace since the second half of 2020 but has encountered some speed bumps recently as rates began to rise,“ said C.A.R.President Dave Walsh. “While higher rates may slow growth in home sales temporarily, the major roadblock in the long run is a shortage of homes for sale. With inventory dropping more than half from a year ago, the market will soften in the second half of 2021 if we don’t see enough homes come on the market to meet demand. “

2. We want to buy a home but need more money for renovations. How do we pull that off?
Consider a FHA 203k loan. It allows a buyer to get more than 100% financing on a home so that repair costs can be rolled into the loan. There are specific limits on the types of repairs allowed and costs they will front, but buyers have a way of fixing up a flop and turning it into a great home, even if they have little for a down payment.
Read about 203k loans in-depth here.

Question 3: Two Stages of Qualification

PRE-QUALIFIED:

In this 1st stage, you supply a bank or lender with your overall financial situation, including your debt, income and assets. After assessing this information, a lender can give you an idea of the mortgage amount for which you qualify.

They don’t pull a credit report, and this can be done over the phone.. Visit this Trulia article for the 6 Documents You Need to Have To Apply For a Mortgage.

PRE-APPROVED:

If you really want to look at homes with LEVERAGE, get PRE-APPROVED.

In this 2nd, more complex stage, you’ll complete an official mortgage application, and then give the lender the necessary documentation to perform an extensive check on your financial background and current credit rating. The lender can then tell you the specific mortgage amount for which you are approved, and in some cases, you might be able to lock-in a specific rate.

When pre-approved, you will get a conditional agreement in writing for an exact loan amount, allowing you to look for a home at that price level or below.

Having this stage complete, sellers will know that they can confidently say ‘yes’ to an offer, and not have to wait for you to get pre-approved. Sellers LIKE this. Do it BEFORE you fall in love with a home.

Question 4: FHA Debt-to-Income..
There are actually 2 ratios, and you need to qualify on both of them.

Front End Ratio:
Traditional mortgages require that your total monthly mortgage payment not exceed 28 percent of your monthly gross income, and that your total monthly debt payments — including your mortgage, car loan, student loans and other obligations — not exceed 31 percent of your gross monthly income(Back-End Ratio).

However, the FHA increases these limits, allowing you to have a 31% housing expense ratio (Back-End Ratio) and a 43% total debt-to-income ratio.(Front-End Ratio). You can find these ratios by dividing your monthly mortgage payment by your monthly income (Front-End), or by totaling up your monthly debt payments and dividing them by your monthly income (Back End).

FHA loans also require that you carry mortgage insurance, which is included in your monthly mortgage payment. The more expensive the home you buy, the more expensive the mortgage insurance will be.
Like other loans, you are also required to carry homeowner’s insurance, which includes paying the premium at closing, and to pay your property taxes in escrow.

If you want an example of how to calculate your ratio,
visit the FHA site.

Back End Ratio: With this ratio, the lender will consider all of your monthly debts including your monthly mortgage payments. They will also factor in car payments, minimum credit card payments, and any other bills that you pay every month (aside from utilities). They will divide your total debt by your gross monthly income to come up with a percentage. This percentage is your back-end debt-to-income ratio, and it’s a key part of the FHA underwriting and approval process. Some lenders will go as high as 45% – 50%, while others are setting the bar lower at 43%.

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Interested in FHA Financing? Most people end up using FHA loans because they only require 3.5% for your down payment. A disadvantage? You could pay mortgage interest for the entire 30 year term of the loan, while others can remove mortgage interest payments when they have paid off 20% of the home’s value. But DON’T let that keep you from investigating an FHA loan solution. It is likely the one bitter pill you’ll swallow, until you refinance the loan a few years later. Better than renting!

Question 5: Common Buyer Mistakes:
1. Looking at a property in its current state and deciding it can’t work for you. If you’ve seen even one Property Brothers episode, you know a home can SERIOUSLY be changed. Be flexible.
2. Talking out loud about the property AT ALL if the seller or their agent is around. Sellers can be offended by you mentioning the carpeted bathroom is gross.
3. Sleeping on it. The house the you fall in love with today and want to offer on tomorrow might be the house someone else saw yesterday and will make an offer on today.
4. Ignoring your agent’s advice on your offer price and low-balling. Sometimes a seller will counter your offer back, but some low-ball offers are rejected in silence. The seller will decide it is better to say nothing at all than to say what’s on their mind when a ridiculous offer is presented.
5. Not having all your financials completely sorted out. Beyond the pre-approval, do you have your down payment money IN THE BANK? Do you have phone numbers of your employer(s) at the ready? Do you have your bank statements printed? If it takes a week to coordinate a transfer of funds, or 10 days for a loan underwriter to even begin looking at your file because you’ve got incomplete data, you may miss a deadline from the seller, and lose the deal. Don’t overthink it either. Provide only what is asked for, and answer only what is asked. Buyers have almost literally talked themselves out of a deal.
6. Don’t take on any additional debt, or add a new credit card.
7. Change jobs unless it is the same line of work for equal or higher pay.
8. Don’t allow anyone other than the lender you are working woth to make an inquiry on your credit report.
9. Don’t change bank accounts or transfer money within existing bank accounts.
10. Purchase a car or even that nice sofa to go in the new home.

Question 6: FICO
According to the FICO website, credit utilization, and opening new credit lines are two often overlooked causes of a credit score dropping… If your credit cards are beginning to get maxed out, they see this as a red flag, regardless of whether you are paying everyone on time.

While I’m on the subject, DO NOT go car shopping, furniture shopping, or plan any big vacations that tie up your credit, or show new inquiries on your credit line... Be as quiet as a mouse while you are trying to get approved for a loan. It is okay to check your own credit, but don’t do anything that would set off inquiries in a variety of different areas. Here is how your FICO score is created.

7. Affordability
Lenders will often approve a buyer for more than they really should request. That being said, there are calculators
like this one that will tell you what you should set as a ballpark maximum home price to consider.

8. New Home Purchase
A lot of buyers don’t realize that they can have their own representation when buying new construction. In most cases the builder offers a commission or referral fee to the agent that registers the buyer. The key with new construction though is the Realtor must be there on your very first visit or the builder will not allow them to represent you and get paid. If you bring a Realtor to register you, make sure they are willing to go through all the important steps with you. (i.e. contract signing, design center, loan meetings, walk through, home inspection etc.) I always want to be there for my client to protect and advise them properly to the best of my knowledge.

9. Accept the first offer?
While it might feel tempting to decline an offer at full asking price that comes in right away, you can never be sure that another equally-great (or even better) offer is a guarantee.

A client always wants an agent to sell the apartment as fast as possible, but when an offer comes in right away, this weird paradox occurs. Instead of being happy many clients will start second-guessing things. Clients think that if one buyer comes along that quick, there will be several others just as interested, maybe even more interested. Months go by and when it sells, it was for a lower price than that first offer.
10. 403k Loans
Let’s dive straight into the 203(k) guidelines:

1. You can DIY with a 203(k) if you can show you know how to DIY. You can do the work yourself, or act as your own general contractor, if you can prove you’ve got the chops, and can get the job done on time (the maximum timeframe is six months). Of course there’s a catch: When you DIY, you can only use the 203(k) proceeds for supplies. You can’t pay yourself to do the work on your own house.

2. You can use a mini 203(k) for mini-sized projects. If you’re just doing your kitchen, bathroom, or another project that costs $35,000 or less, there’s a streamlined version of the 203(k) designed just for limited-size projects.

3. You can’t use it to buy a new-construction home. The house you’re fixing up has to be at least a year old.

4. You can’t use it to buy and install a new toilet, even one of those fancy Totos. You have to spend at least $5,000 on your renovation to use the 203(k) program. And the whole mortgage, including those remodeling costs, has to be under the FHA mortgage limit for the area where you live.

5. You can expect the lender to be up in your grill about how and when the home improvements get done. An inspector will be dispatched to your home multiple times to check in on the progress, which is why rule #7 is so important.

6. You have to keep your contractor from going on a long vacation to Europe.

Your contractor has to start work within 30 days of the loan closing.
He can’t stop working on the project for more than 30 days.
He has to get the whole job done within six months.
Doing it yourself? The same timelines apply. So no long vacations for you until the work gets done.

7. You can use the loan to make your mortgage payments if you can’t live in the house until the work is done. This is one sweet provision of the 203(k) program because it means you don’t have to make a mortgage payment on the home you’re remodeling and pay to live somewhere else while the work is going on.

You can use the 203(k) loan to pay for up to six months of principle, interest, taxes, and insurance payments when your property is going to be uninhabitable because of the renovation work.

8. You can use it to make energy-efficiency upgrades like installing a new furnace, windows, or attic insulation. You can get a 203(k) loan to pay for 100% of the cost of energy-efficiency improvements. You don’t have to get those improvements appraised, but they do have to be cost-effective, meaning they’ll pay for themselves over their useful life. The HUD inspector will make the call.

9. You can rip the house down if you plan to build something in its place. As long as you keep the foundation of the home, you’re good to go.

10. You can have a little shop downstairs. It’s kosher to use a 203(k) loan to remodel a home that includes some commercial space, as long as you use the money only for projects in the residential part of your home and the amount of commercial space doesn’t exceed these limits:

25% for one-story building
49% for two-story
33% for three-story building
11. You can use a 203(k) for a condo unit, but … your condo building must have FHA approval — which is tough to get these days — or meet VA, Fannie Mae, or Freddie Mac guidelines. Also, your building can have no more than four units, though there can be multiple buildings in the association.

12. You can’t break these rules or the lender can take its money back. Like immediately. Your lender can also refuse to advance you any more money or apply any money left in the escrow account to reduce what you owe on the mortgage.

1. What is a Streamline Loan?

It is a tool you can use to re-finance your loan and is used in a variety of situations.
Read the full story here.

2. How far back do lenders look at bank statements?
Lenders typically look at 2 months of recent bank statements along with your mortgage application. Two months worth of bank statements is the norm because any credit accounts older than that should have shown up on your credit report.

3. What underwriters look for on your bank statements
The underwriter — the person who evaluates and approves mortgages — will look for four key things on your bank statements:

Enough cash saved up for the down payment and closing costs
The source of your down payment, which must be acceptable under the lender’s guidelines
Enough cash flow or savings to make monthly mortgage payments
“Reserves,” which are extra funds available in case of an emergency
An underwriter generally wants to see that the funds in your bank accounts are yours, and not borrowed from someone else (unless via a properly-documented down payment gift).

In other words, any funds used to qualify for the mortgage need to be “sourced and seasoned.”

4. Home equity loans vs. HELOCS
What’s the difference between a home equity loan and a HELOC?
Although these two loan products sound similar, they’re significantly different. With a home equity loan, you decide how much you want to borrow against your real estate and then make monthly payments, similar to a regular mortgage. Thus, with a home equity loan you avoid the temptation to overspend, because you’ll be borrowing a set amount. Also, because the interest rate is usually fixed, you have peace of mind knowing that the payments will remain the same.

A home equity line of credit, or HELOC, meanwhile, functions more like a credit card, because it allows you to borrow up to a certain amount (typically 75% to 85% of the appraised value of the real estate, minus what you still owe) on an as-needed basis over the term of the loan (usually five to 20 years). In fact, your lender will actually issue you a plastic card that you can use to access the money easily. A HELOC works well if you want to borrow money but don’t know exactly how much you’ll need (a common conundrum when making home improvements).

The main drawback to HELOCs? Unlike with home equity loans, interest rates on HELOCs are variable, which means they fluctuate depending on market conditions. And while many lenders offer a low “introduction” rate, it lasts only for a matter of months; after that, the interest rates will adjust—and continue to readjust—which could create problems if you don’t prepare for the potentially higher payments.

5. What closing costs are negotiable?
Many closing costs are negotiable, including some third-party fees that you can shop for like title insurance.
If you look at your Loan Estimate (LE), you’ll actually see which services you can shop for and which you cannot.
Then there are the loan costs, which you can also negotiate. But not all lenders will budge.

And some may not charge an outright fee, as it will be built into the rate. And yes, you can negotiate rates too. Also watch out for junk fees or redundant fees or anything else out of the ordinary.
You have every right to go through each and every fee and ask what it is and why it’s being charged. And they should have a good answer.

6. 20 Year Mortgages?
Sure, thee are 20 year mortgages. They save the buyer a significant amount of interest, just as a 15 year loan does, but has a lower monthly loan amount than a 15 year loan. Interest rates can range from 20-30 basis points (100ths of a point) lower than a traditional 30. If you can EASILY swing the 30, seriously consider a 20.

7. What is a Closing Disclosure?
A Closing Disclosure is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).

The lender is required to give you the Closing Disclosure at least three business days before you close on the mortgage loan.

8. I received a revised Loan Estimate from my lender showing a higher interest rate and increased closing costs. What's up with that?
When important information changes, your lender is required to give you a revised Loan Estimate showing how this new information affects your loan terms and closing costs.

The Loan Estimate is a form that went into effect in October, 2015.

It is illegal for a lender to intentionally underestimate charges for services on the Loan Estimate, and then surprise you with higher charges on a revised Loan Estimate or Closing Disclosure. However, a lender may increase the fees it quoted you on the Loan Estimate if certain circumstances change. Here are some common reasons why the estimated charges in your Loan Estimate might increase:

You decide to change the kind of loan, for example moving from an adjustable-rate to a fixed-rate loan
You decide to reduce the amount of your down payment
The appraisal on the home you want to buy came in lower than expected
You took out a new loan or missed a payment on another loan, and your credit score has changed
Your lender could not verify your overtime, bonus, or other income
The interest rate on your loan was not locked, and locking the rate caused the points or lender credits to change
If your lender gives you a revised Loan Estimate, you should look it over to see what has changed. Ask your lender:

"Can you explain why I received a new Loan Estimate?"
"How is my loan transaction different from what I was originally expecting?"
"How does this change my loan amount, interest rate, monthly payment, cash to close, and other loan features?"
Note: You won't receive a Loan Estimate if you applied for a mortgage prior to Oct. 3, 2015, or if you're applying for a reverse mortgage

9. What information do I have to provide a lender in order to receive a Loan Estimate?

Loan officers are required to provide you with a Loan Estimate once you have provided:
your name,
your income,
your Social Security number (so the lender can pull a credit report),
the property address,
an estimate of the value of the property, and
the desired loan amount.
Your loan officer cannot require you to provide documents verifying this information before providing you with a Loan Estimate.

You can choose to give more information. The more information you can provide the loan officer about your financial situation, such as debts and nonwage income sources, the more accurate the information on your Loan Estimate is likely to be. Your Loan Estimate will also be more useful for you if you tell the loan officer what kind of loan you are interested in. You may want to let your loan officer know whether you are interested in:

A fixed or adjustable interest rate
A specific down payment amount
A specific loan type (conventional, FHA, VA, USDA, etc.)
A specific type of mortgage insurance premium (monthly, upfront, or a combination of both)
Paying points upfront to lower your interest rate
Receiving lender credits to be used toward closing costs in exchange for a higher interest rate
Paying your homeowner's insurance and/or property taxes as a part of your monthly mortgage payment rather than paying these separately yourself
Having your lender lock your interest rate, and for what timeframe

A Closing Disclosure is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).

The lender is required to give you the Closing Disclosure at least three business days before you close on the mortgage loan.

10. What do I need to know NOW about Private Mortgage Insurance (PMI)?
Such important information as this takes up more space than we have here. Check out this independent consumer page's rundown on PMI.

11. Is a reverse mortgage legit or is it a scam?
They are as legitimate as any other loan. The issues surrounding reverse mortgages stem from the ways advertisers don't make all the essential facts known in ads. For instance, these must be repaid.. Here's the rundown from the CFPB, an independent consumer watchdog.

12. Can I use a reverse mortgage loan to buy a home?
Yes. There is a “Home Equity Conversion Mortgage (HECM) for Purchase” loan that allows people 62 and older to purchase a new principal residence with HECM loan proceeds.

A “HECM for Purchase” loan requires that you be 62 years of age or older and that the home you are purchasing be your principal residence. You will need to have cash available for the down payment. There will also be closing costs, which will be higher than those with other reverse mortgage loans. Some of these closing costs may be paid by the seller (depending on your state’s laws), so it is a good idea to shop around and talk to multiple lenders after speaking with your reverse mortgage housing counselor . For HECM for Purchase loans you’ll need cash to pay the difference between the HECM proceeds and the sales price plus any closing costs.

Like all reverse mortgage loans, you will not have to make monthly payments on the HECM for Purchase loan. You will still need to fulfill the reverse mortgage requirements, such as living in the home as your principal residence, keeping the home in good condition, and paying your property taxes and homeowners/flood insurance premiums on time.

Note: Not all properties are eligible for the HECM for Purchase loan program. For example, cooperative units and some manufactured homes are ineligible for the HECM for Purchase loan program.

Your right to cancel a reverse mortgage
With most reverse mortgages, you have three business days after closing to cancel the deal for any reason, without penalty. This is known as your right of “rescission.” To cancel, you must notify the lender in writing. Send your letter by certified mail, and ask for a return receipt so that you have documentation of when you sent and when the lender received your cancellation notice.

13. What is a bridge loan?
A bridge loan is a form of short-term financing that gives individuals and businesses the flexibility to borrow money for up to a year. Also referred to as bridge financing, bridging loan, interim financing, gap financing and swing loans, bridge loans are secured by collateral such as the borrower’s home or other assets. Bridge loans typically have interest rates between 6.5% and up, making them more expensive than traditional, long-term financing options.

However, the application and underwriting process for bridge loans is generally faster than for traditional loans. Plus, if you can qualify for a mortgage to purchase a new home, you can probably qualify for a bridge loan—assuming you have the required equity in your first home. This makes bridge loans a popular option for homeowners who want quick access to funds to purchase a new house before they have sold their current property.

14. What is a debt-to-income ratio?
Income ratio: Your total monthly housing expense divided by your pre-tax monthly income.
Debt ratio: Your total monthly housing expense plus any recurring debts, i.e., car payments, monthly minimum credit card payments, and other loan payments, divided by your monthly income.

Standard loan underwriting guidelines suggest a max 28 percent income ratio and 36 percent debt ratio, which may vary based on personal finances, loan program, and down payment.
While not taking on any debt and paying for everything with cash seems like a logical choice if you feel you can’t afford your lifestyle, no credit also means bad credit in the eyes of a lender. There’s bound to be a time when you can’t buy something with cash, like buying a house (in most cases). So, we recommend opening at least three credit card accounts and making occasional purchases.

To manage your debt and maintain healthy credit, keep credit card balances to less than 30 percent of your credit limit. Also, don’t close long-term credit lines, even if they’re not being used. Your longest-standing credit card account might be a huge contributor to your credit score health — and the mortgage rate you qualify for.

Investments

Whether the investment is in stocks, bonds or real estate, investing obviously can do a lot of heavy lifting for you financially, if done correctly.

1. I've never invested. What kinds of investments are there?

2. What is an annuity?

3. What is the best age to invest in an annuity?

4. What is bitcoin? Is it for real? Digital money? How does it work?

1. Investment Types
There is a different investment opportunity for every day of a year. Some wise, and some foolish, all based on risk and reward. RuleOneInvesting.com has a basic list of investment types for the rookie investor. A caviat: as in sports, a rookie needs a coach to improve. Don't jump into anything without doing significant research into the topic.

2. What is an annuity?
An annuity is a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future.
Annuities come in three main varieties—fixed, variable, and indexed—each with its own level of risk and payout potential.
The income you receive from an annuity is taxed at regular income tax rates, not long-term capital gains rates, which are usually lower.

The goal of an annuity is to provide a steady stream of income, typically during retirement. Funds accrue on a tax-deferred basis and—like 401(k) contributions—can only be withdrawn without penalty after age 59½. Unlike a traditional 401(k) account, the money you contribute to an annuity doesn't reduce your taxable income. For this reason, experts often recommend that you consider buying an annuity only after you've contributed the maximum to your pre-tax retirement accounts for the year.

3. What's the best age to invest in an annuity?
This article at investopedia suggests age 65, and then waiting as long as you can to start receiving payments.

4. What is bitcoin? Bitcoin is becoming a more legitimate currency as each year passes and more institutions get involved. But first, let's spend 7 minutes on "Bitcoin for Dummies." After watching thiat, spend 12 more minutes on this video and you'll be in the know.

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Estate Planning

Your parents, yourselves and your children Many are surprised to learn that exact order should be your priorities when it comes to estate planning. Obviously, your parents, if they need help, come first, but many people then place their children 2nd, jeopardizing their own ability to take care of themselves later in life, creating a vicious cycle of family taking care of everyone but themselves.

1. What is an annuity?

2. Can I add a loved one to my deed on the home?

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1. An annuity is a financial product that pays out a fixed amount in a series of payments. Annuities are popular — and polarizing — financial products designed specifically to provide guaranteed income.

Numerous types of annuities are available, as well as different options and contractual terms that can impact outcomes.
Annuities create contractual obligations among up to four parties: the owner, annuitant, beneficiary and issuer (such as an insurance company).

The owner is the person who buys the annuity. The annuitant is the one who gets the benefit payments and is often the same as the owner. The beneficiary receives death benefits payable under the annuity contract, if applicable. The issuer is the company that issues the annuity and pays benefits when the time comes. Payment amounts in the distribution phase are based on the annuitant’s life expectancy.
Annuities are divided into two phases. The first is the accumulation phase, sometimes called the investment phase. This is the period during which contributions are made to the account and funds grow. Appreciation during this time is based on contractual guarantees or investment performance, depending on the type of annuity purchased.

The second phase is the annuitization phase. This is when payments start being made to the annuitant. These payments can be a lump sum, structured periodically or some combination of the two. The amount paid out is determined by the amount contributed, the performance of the account, the expected lifespan of the annuitant and the type of distribution elected.

There are several common distribution structures. The life option provides guaranteed regular cash payments for life, thereby eliminating longevity risk for the annuitant. This option can also be structured as a joint-life option, which provides payouts for the longer-living of two spouses, though at a lower monthly amount than it would be with a single life option.

A certain option triggers payouts for a defined amount of time — even if the annuitant passes away before that period is reached. Annuity assets can also be distributed in lump sums.

What Happens To the Money in an Annuity When You Die?
Insurance companies usually return the capital contributed to the beneficiary if the owner passes away during the accumulation phase.

Fixed Annuities
Fixed annuities are offered by life insurance companies and are contracts in which a policy owner contributes a certain amount of capital to an account. The insurance company makes a contractual guarantee that this capital will grow at a specified rate of return over time. In turn, the annuitant will be entitled to a set amount of periodic income during the distribution phase.

Variable Annuities
Variable annuities share numerous features with fixed annuities, but they differ notably based on capital appreciation and future income payments.

Variable annuities do not offer the guaranteed growth rates of fixed annuities. Instead, contract holders can access these accounts by allocating contributed funds across equities, bonds, money market products and mutual funds.

When the contract enters the distribution phase, the insurance company will provide guaranteed income based on the asset levels achieved in the capital subaccounts.

Indexed Annuities
An indexed annuity is another type of annuity contract that blends characteristics of fixed and variable contracts. These products pay interest rates dictated by security indexes such as the S&P 500.

Indexed products offer higher growth potential relative to fixed vehicles and more downside protection than fully variable products. However, this downside protection doesn’t always prevent the account from producing net losses because the contractual floor might fall below the gross contributions.

Immediate and Deferred Annuities
The annuities mentioned above can also be classified as immediate or deferred.

Immediate annuities provide a guaranteed stream of income directly following a lump sum payment to the insurance company. This compresses the accumulation phase to a single contribution, with the distribution phase starting immediately.

Deferred annuities push the distribution phase out into the future, allowing one or multiple contributions to grow during the accumulation and investment phase.

These products are often structured as tax-deferred vehicles. They allow gains on the account to compound without any tax liability until qualifying withdrawals are made beyond retirement age.

What Are the Benefits of an Annuity?
Prospective annuity buyers should consider the advantages and disadvantages of these products and the suitability for their financial needs. One of the benefits is that annuities can be safe financial instruments for people worried about market or longevity risk. Those seeking tax deferrals can also benefit from annuities that accumulate tax-free, with only distributions in retirement being subject to income tax.

What Are the Disadvantages of an Annuity?
Annuities have some drawbacks as well. For one thing, you sacrifice liquidity for capital that is contributed to these products. While most annuities have a surrender value that allows contract holders to recoup assets they’ve contributed, these often carry surrender charges or, in the case of tax-deferred annuities, penalties paid to the IRS.

Annuities are often maligned for their high expenses — and with good reason. Variable and indexed products are often marketed or positioned as alternatives to mutual funds and other securities because they provide upside exposure, and the performance of subaccounts is directly correlated to market performance.

While these products are meant to mimic the performance of traditional investment accounts, they often do so in a less efficient manner. Fees tend to be higher in these accounts, both in the form of commissions to advisors and in internal fees for the management of subaccounts.

2. Adding a loved one to a deed? Here's 5 Things You Need To Know Before You Do This.
The first thing to know? You can't take it back.
When you add someone to the deed, all or a portion of your ownership is transferred to that person. Once it's done, you can't take it back unless the person you've added provides consent to be removed from the deed. He or she can take out a loan on the property, tear it down, or even sell their share of the property. And in some cases, there's nothing you can do about it.
Read the rest

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