Financial Stability Bailout, Home Affordale Modification Program: Do You Qualify?
The eligibility limitation to Fannie/Freddie loans is only on the refinancing program (HARP), not the modification program. HAMP will apply to all mortgages originated before January 1, 2009. No loans originated after that date will be eligible. New borrowers will be accepted until December 31, 2012. Program payments will be made for up to five years after the date of entry into the HAMP. Monitoring, however, will continue for the life of the loan.
General Qualification Terms:
1. The home must be owner-occupied, single family 1 to 4 unit property (including condominium, cooperative, and manufactured home affixed to a foundation and treated as real property under current state law).
2. The home must be the primary residence (verified by tax return, credit report, and other documentation such as utility bills).
3. The home may not be investor-owned.
4. The home may not be vacant or condemned.
5. Borrowers in a current bankruptcy case are not automatically eliminated from consideration for HAMP.
6. Borrowers in active litigation regarding the mortgage loan can qualify for a modification without waiving any legal rights.
7. First lien loans must have an unpaid principal balance (prior to capitalization of the arrears) equal to less than:
a. 1 Unit—$729,750
b. 2 Units–$934,200
c. 3 Units–$1,129,250
d. 4 Units–$1,403,400
Pending Foreclosures:
Any foreclosure action will be temporarily suspended during the trial HAMP period, or while borrowers are considered for alternative foreclosure prevention options. In the event that HAMP or the alternative foreclosure prevention options fail, the foreclosure action may be resumed.
Loan to Value Ratios (LTV):
For HAMP borrowers, there is no minimum or maximum Loan to Value (LTV) ratio for eligibility purposes. Borrowers, however, can only exercise one modification of their mortgage under HAMP. If the HAMP modification fails, then there are no additional HAMP options.
Debt to Income Ratios:
Front-End DTI is the ratio of the Principal, Interest, Taxes and Insurance Payments (PITIA) to the Monthly Gross Income. PITIA is defined under the program as principal, interest, taxes, insurance (including homeowners insurance and hazard and flood insurance) and homeowners association and condominium fees. Mortgage insurance premiums (PMI Insurance) are excluded from the PITIA calculation.
The Front-End DTI Target is 31%. The Standard Waterfall step that results in a Front-End DTI closest to 41%, without going below 31%, will satisfy the Front-End DTI Target. There is no restriction on reducing Front-End DTI below 31%, but any portion of the reduction below 31% will not be covered by the Payment Reduction Cost Share offered by the Treasury.
Home Valuations:
The Servicer may use, at its discretion, either one of the government sponsored enterprises’ (GSEs) automated valuation models (AVM)-provided that the AVM Renders a reliable confidence score-or a Broker Price Opinion to determine the Property Value for the DTI Test.
As an alternative, the servicer may rely on the AVM it uses internally provided that (I) the servicer is subject to supervision by a Federal regulatory agency, (ii) the servicer’s primary Federal regulatory agency has reviewed the model and/or its validation and (iii) the AVM renders a reliable confidence score.
If the GSE or servicer AVM is unable to render a value with a reliable confidence score, the servicer must obtain an assessment of the property value utilizing a property valuation method acceptable to the servicer’s Federal regulatory agency, e.g., in accordance with the Interagency Appraisal and Evaluation Guidelines (as though such guidelines apply to loan modifications, or a Broker Price Opinion (BPO).
In all cases the property valuation may not be more than 60 days old.
Verification of Income:
The borrower’s income will be verified by requiring a signed Form 4506-T (Request for Transcript of Tax Return) and obtaining the most recent tax return on file for each borrower on the note. For wage earners, the two most recent pay stubs for each wage earner on the note will also be required. For self-employed borrowers or for non-wage income borrowers, the borrower’s income will be verified by obtaining other third-party documents that provide reasonably reliable evidence of income. Borrowers must also represent and warrant that they do not have sufficient liquid assets to make their monthly mortgage payments.
Monthly Gross Income:
The borrower’s Monthly Gross Income (MGI) is the amount before any payroll deductions and includes wages and salaries, overtime pay, commissions, fees, tips, bonuses, housing allowances, other compensation for personal services, Social Security payments, including Social Security received by adults on behalf of minors or by minors intended for their own support, annuities, insurance policies, retirement funds, pensions, disability or death benefits, unemployment benefits, rental income and any other income.
Monthly Net Income (MNI) can be used for preliminary screening and qualifications. If used, the servicer will need to multiply net income by 1.25 to get an estimate of Monthly Gross Income (MGI).
Back-End DTI:
The Back-End DTI is the ratio of the borrowers’ total monthly debt payments (such as Front-End PITIA, any mortgage insurance premiums, payments on all installment debts, monthly payments on all junior liens or mortgages, alimony, car lease payments, aggregate negative net rental income from all investment properties owned, and monthly mortgage payments for second homes) to the borrower’s MGI. The servicer must validate each monthly installment payment, revolving debt and secondary mortgage debt by pulling a credit report for each borrower or a joint report for a married couple. The servicer must also consider information obtained from the borrower orally or in writing concerning incremental monthly obligations.
Borrowers who otherwise qualify for the modification under this program, but who would have a post-modification Back-End DTI greater than or equal to 55%, will be provided with a letter stating that they are required to work with a HUD-approved counselor and the modification will not take effect until they provide a signed statement indicating that they will obtain such counseling.
Reasonably Foreseeable/Imminent Default:
Every potentially eligible borrower who calls or writes in to their servicer in reference to a modification must be screened for a hardship. This screen must ascertain whether the borrower has had a change in circumstances that causes financial hardship, or is facing a recent or imminent increase in the mortgage payment that is likely to create a financial hardship (e.g., payment rate shock). If the borrower reports a material change in circumstances, the servicer must ask about current income and assets, and current expenses as well as the specific circumstances relating to the claimed financial hardship. Each of these elements shall be verified through documentation.
If the servicer determines that that a non-defaulted borrower is facing a financial hardship is in Imminent Default and will be unable to make his or her mortgage payment in the immediate future, the servicer must apply the NPV Test.
The NPV Test:
A Standard NPV Test will be required for each loan that is in Imminent Default or is at least 60 days delinquent under the MBA delinquency calculation. This NPV Test will compare the net present value (NPV) of the cash flows expected from a modification to the net present value of cash flows expected in the absence of a modification. If the NPV of the modification scenario is greater, the NPV result is deemed positive.
The NPV Test applies to the Standard Waterfall only and does not require consideration of principal forgiveness. However, the servicer may choose to forgive principal if the servicer determines that principal forgiveness improves the likelihood of loan performance and the value of the modification. Required parameters for the NPV Test will be published in a few weeks.
If the NPV Test generates a positive result when applying the Standard Waterfall, the servicer is required to offer a HAMP to the borrower. If the NPV Test generates a negative result, modification is optional, unless prohibited by the service contracts. The monthly payment reduction incentive is available for any HAMP, whether or not NPV is positive, that meets the eligibility requirements and is performed according to the Waterfall described below.
If the NPV Test result is negative and a HAMP is not pursued, the lender/investor must seek other foreclosure prevention alternatives, including alternative modification programs, deed-in-lieu and short sale programs.
Loan Modification and Standard Waterfall:
Servicers will follow the Standard Waterfall described below to reduce the monthly payments to 31% Front-End DTI Target defined below. The initiative will reimburse lenders/investors for one half of the costs of reducing monthly mortgage payments from a level consistent with a 38% Front-End DTI Ratio (or less, if the unmodified DTI is less than 38%) down to a level consistent with a 31% Front-End DTI Ratio. This Payment Reduction Cost Share can last for up to five years from the HAMP modification effective date.
Principal Reduction Option:
There is no requirement to use principal reduction under HAMP: however, servicers may forgive principal to achieve the Front-End DTI Target.
Principal forgiveness can be used on a standalone basis or before any step in the Standards Waterfall process. If principal forgiveness is used, subsequent steps in the Standard Waterfall may not be skipped. If principal is forgiven and the rate is not reduced, the rate will be frozen at its existing level and treated as a modified rate for the purposes of the Interest Rate Cap.
In the event of principal forgiveness, the Repayment Reduction Cost Share continues to be based on the change in the borrower’s monthly payment from 38% to 31% Front-End DTI Ratio and is limited to five years.
Modification Terms:
Interest Rate Floor: THE IRF for modified loans is 2%.
Interest Rate Cap: The modified interest rate must remain in place for five years, after which time the interest rate will be gradually increased by 1% (100 basis points) per year or such lesser amount as may be needed until it reaches the IRC. The IRC for a modified loan is the lesser of the fully indexed and fully amortizing original contract rate or the Freddie Mac Primary Mortgage Market Survey rate for 30-year fixed rate conforming mortgage loans, rounded to the nearest 0.125%, as of the date that the modification document is prepared. If the modified rate exceeds the Freddie Mac Primary Mortgage Market Survey rate in effect on the date the modification document is prepared, the modified rate will be the new note rate for the remaining loan term.
Principal Forbearance: No interest will accrue on the forbearance amount. If the option to forbear principal is selected, the servicer shall forbear on collection the deferred portion of the Capitalized Balance until the earlier of the maturity of the modified loan, the sale of the property, or the pay-off or refinancing of the loan.
Redefaulting Loans: A loan will be considered to have redefaulted when the borrower reaches a 90-day delinquency status under the MBAS delinquency calculation. Redefaulting Loans will be terminated from the program, and no further payments of any kind will be made to the lender/investor, servicer, or borrower. Redefaulting Loans should be considered for other loss mitigation programs prior to being referred to foreclosure.
Trial Period Required. Successful completion of the Trial Modification Period and entry into program agreements between the Servicer and the Treasury’s financial agent are prerequisites for any payments to the lender/investor, servicer or borrower.
Modification is effective on the first calendar month following the successful completion of the Trial Period. Successful completion means that the borrower is current (under the MBA delinquency calculation) at the end of the Trial Period.
Borrowers in foreclosure restart states will be considered to have failed the Trial Period if they are not current at the time the foreclosure sale is scheduled.
No payments under the program to the lender/investor, servicer or borrower will be made during the Trial Period. No payments under the program to these parties will be made if the Trial Period is not completed successfully. NO payments under the program to these parties will be made unless and until the servicer has entered into the program agreements with the Treasury’s financial agent.
Length of Trial Period: The Trial Period will last for 90 days (three payments at modified terms) or longer if necessary to comply with investor contractual obligations in the Pooling and Servicing Agreements. The borrower must be current at the end of the Trial Period to obtain the HAMP modification.
Escrows: Servicers are required to escrow for modified borrowers’ real estate taxes and mortgage-related insurance payments immediately if they have the capability of processing these payments or are already using a third-party vendor for this purpose. Servicers who do not have this capacity must implement an escrow process within six months of the program agreement.
Counseling Requirements: For borrowers with a Back-End DTI of 55% or higher, the servicer must inform the borrower of the availability and advantages of counseling and provide a list of local HUD-approved counselors. The servicer must provide the borrower with a letter stating that counseling is a requirement of the modification terms. The letter may be required by counselors in order to begin counseling. The modification will not take effect until the borrower represents in writing that he or she will obtain counseling.
Assumable: If the solidified loan was assumable prior to modification, a HAMP modification cancels this feature.
Unpaid Late Fees: Unpaid late fees will be waived for the borrower. These include late fees prior to the start of the Trial Period and accrued during the Trial Period.
Credit Report: The servicer will cover the cost of the credit report.
Servicer Compensation: Upon modification following a successful Trial Period, and contingent on signing the program servicer agreement, the servicer will receive an incentive fee of $1,000 for each eligible modification meeting HAMP guidelines. Servicers will also receive Pay for Success fees payable each 12 months for three years at $1,000 per year. Servicers will not receive Pay for Success fees for Redefaulting Loans. For loans modified while still current under the MBA delinquency calculation, the Servicer will receive a Current Borrower One-Time Incentive of $500 following successful completion of the Trial Period. Lenders that service their own (portfolio) loans are eligible for these incentives. The term servicer means the party that is responsible for performing the modification activities. Similar incentives will be paid under the HARP Program.
Borrower Cash Contributions: The investor may not require the borrower to contribute cash for eligibility or execution of a Trial or Permanent modification.
Lender/Investor Compensation: Lenders/investors will be compensated only in the event that the Front-End DTI Target or a lower Front-End DTI is achieved. Lenders/investors will follow the Standard Waterfall specified above to reach a monthly payment that satisfies the Front-End DTI Target. As described above, Treasury will provide compensation based on one half of the dollar difference between the monthly payment for a 31% Front-End DTI Ratio and the lesser of (i) the monthly payment for a 38% Front-End DTI Ratio or (ii) the borrower’s current monthly payment. This compensation will be provided for up to five years or until the loan is paid off.
Upon a modification becoming effective following successful completion of the Trial Period by a borrower who was current prior to the start of the Trial Period, lenders/investors will be paid a $1,500 Current Borrower One-Time Incentive, subject to certain de minimis constraints (discussed below). No monthly lender/investor payments will be made during the Trial Period. Monthly lender/investor payments will begin after the Trial Period is successfully completed, the servicer signs a service agreement with Treasury, and formal modification begins. No monthly lender/investor payments will be made if the Trial Period is not completed successfully.
Borrower Compensation: Borrowers will be eligible to accrue up to $1,000 each year in Pay-for-Performance Success Payments for up to five years, a total of up to $5,000 over five years, subject to certain de minimis constraints (discussed below). Accruals are based on on-time payment performance. The first annual principal balance reduction will be effective 12 months after entering the Trial Period as long as the borrower is not terminated from the program. In any given month, the borrower’s mortgage payment must be made on time, accounting for standard servicer grace periods, in order to accrue the monthly Pay for Performance Success Payment. The borrower will receive information on a monthly basis regarding the accrual of these payments.
The payment will be directed to the servicer, who will reduce the principal balance by the payment amount (but not by more than $1,000 per year) for five years if the borrower continues in the program. Payments are to be applied directly and entirely to reduce the principal balance, and any applicable prepayment penalties on partial principal prepayment made by the government must be waived. The equivalent of three months of Pay-for-Performance Success Payments will be made upon successful completion of the Trial Period, contingent upon the servicer signing a service agreement with the Treasury.
Borrowers who are terminated from the program lose their right to outstanding accruals.
De Minimis Constraint: To qualify for servicer Pay for Success payments and borrower Pay for Performance Success Payments, the modification must reduce the monthly payment by a minimum of 6 %. The monthly payment is the PITIA payment, as used in defining DTI, with the loan fully indexed and fully amortized.
When paid, servicer annual Pay for Success payments and borrower Pay for Performance Success Payments will be the lesser of (i) $1,000 or (ii) half the reduction in the borrower’s annualized monthly payment.
The de minimis constraint does not apply to the up-front Servicer Incentive Payment, the Payment Reduction Cost Share, or the Home Price Depreciation Reserve Payment.
Disclosure: When promoting or describing loan modifications, servicers should provide borrowers with information designed to help them understand the modification terms that are being offered and the modification process. Servicers also must provide borrowers with clear and understandable written information about the material terms, costs, and risks of the modified mortgage loan in a timely manner to enable borrowers to make informed decisions.
Fair Lending: Servicers’ modifications under this program must comply with the Equal Credit Opportunity Act and the Fair Housing Act, which prohibit discrimination on a prohibited basis in connection with mortgage transactions. Loan modification programs are subject to the fair lending laws, and servicers and lenders should ensure that they do not treat a borrower less favorably than other borrowers on grounds such as race, religion, national origin, sex, marital or familial status, age, handicap, or receipt of public assistance income in connection with any loan modification. These laws also prohibit redlining.
Consumer Inquiries and Complaints: Servicers should have procedures and systems in place to be able to respond to inquiries and complaints relating to loan modifications. Servicers should ensure that such inquiries and complaints are provided fair consideration, and timely and appropriate responses and resolution.
Home Price Depreciation Payments. To encourage lenders/investors to modify more mortgages, compensation will be provided to partially offset probable losses from home price declines. This will be structured as a simple cash payment on each modified loan while the loan remains active in the program.
Payments for Short Sales and Deeds-in-Lieu: Compensation will be provided to servicers and borrowers in order to facilitate short sales or deeds-in-lieu in those cases in which borrowers either fail the net present value (NPV) test (described above) or fail to qualify for, or default under, the modification program.
Second Line Elimination Payments: To reduce the borrower’s overall indebtedness and improve loan performance, additional incentives will be provided to extinguish junior liens on homes with first-lien loans that are modified under the program.
Categories: Asset financial management, Business, Earn Money Easily, Earn extra money at home, Fafsa Financial Aid, Financial Freedom Resources, Financial Freedom Seminar, Financial Freedom Senior Funding Corporation, Financial aid calculator, Financial aid information, Financial asset management, Financial asset management system Tags: Affordale, Arrears, Bailout, Bankruptcy Case, Borrowers, Eligibility Purposes, Exercise One, Fannie Freddie, Financial, Financial Stability, Foreclosure Action, Foreclosure Prevention, Hamp, home, Ltv Ratio, Manufactured Home, Maximum Loan, Modification, Mortgage Loan, Prevention Options, Program, Program Payments, Qualify, Stability, Unpaid Principal Balance, Utility Bills, Value Ratios
UK Financials Introduce Bad Credit Secured Loans: To Meet All Your Immediate Needs
UK Financials Introduce Bad Credit Secured Loans: To Meet All Your Immediate Needs
Funds in the Times of Needs for Poor Creditors
Loans for benefit can be availed in both secured and unsecured form. A secured loan for people on benefit requires you to place collateral against the loan amount. This can be any of your property like home, car, jewelry etc. Placing collateral helps you to avail loans for people on benefit at lower interest rate and with flexible repayment duration.
The secured loans are available for a longer time period. This implied that one can repay the amount of loan in a longer period ranging between 1 to 10 years. This lessens their burden of debt redemption. The interest rates are also quite nominal for these loans. It facilitates the borrowers to raise an amount as big as 50000 pounds. The monetary position can be settled by such a big amount. However it is always suggested that one should raise a genuine amount of loan so that he can repay it to avoid any took over of his pledged asset.
Secured loans online is perfect example of modern day technology. The whole process is electronically done starting from filling up of application form, submission of various documents and then approval of loan amount and in the end of payment of her/his debt.
Thus you can deal with these loans by sitting in your bedroom. This not only saves you from physical harassment but also not kills your precious time and money. In order to avail these loans you have to satisfy following prerequisites:
a) You must be an U.K. citizen.
b) You must be residing at your current address since 6 months.
c) You must have a full time paid job.
d) You must have a bank account on your name.
e) The property to be kept as collateral should be on your name only.
The process of availing the secured loans with the online money lenders is easy and fast. Once you fill in the details in the application form, you may be asked to send in the documents related to your asset as well. Once you fax them, it hardly takes any time to assess the value of the asset. Once the asset is valuated, you are informed about the amount you can get as loan against the loan. This does not take more than 36 hours. The best part is that you can get a loan which is equivalent to the market value of your asset.
Fixed interest rates option has the interest payment to be made each month as a fixed amount for principle and interest. In the variable interest rate option one can have the interest on the principle varying according to the market conditions. This is a better option in the times of recession because the banks have been made to cut down their interest rates considerably, by the central banks of each country. The UK central bank has also official announced that the interest rates should be lowered to facilitate business.
Ravi Mishra is the author of loans. where visitors can apply for any type of loans online.If you want to learn more about Unsecured Tenant Loan Fair Credit, urgent loan for tenant, unsecured loan for tenants visit http://www.ukfinancials.com
UK Financials Ltd,
501, International House,
223 Regent Street, London – W1B 2QD
0871 956 2700
Ravi Mishra is the author of loans. where visitors can apply for any type of loans online.If you want to learn more about Unsecured Tenant Loan Fair Credit, urgent loan for tenant, unsecured loan for tenants visit http://www.ukfinancials.com
Categories: Asset financial management, Business, Earn Money Easily, Earn extra money at home, Fafsa Financial Aid, Financial Freedom Resources, Financial Freedom Seminar, Financial Freedom Senior Funding Corporation, Financial aid calculator, Financial aid information, Financial asset management, Financial asset management system Tags: Applicati, Application Form, Bad Credit Secured Loans, Borrowers, Collateral Loans, credit, Creditors, Current Address, Financials, Flexible Repayment, Home Car, Immediate, Interest Rate, Introduce, Loans, Loans Online, Meet, Money Lenders, Money Loans, Needs, Physical Harassment, Precious Time, Redemption, Secured, Secured Loan, Time And Money, Time Period, Uk Loans
Rebuilding Your Life Financially After Divorce And Separation
Divorce is a dreadful event emotionally for everyone involved, but it also has a huge financial impact on Australians due to our family law arrangements.
When it comes to splitting assets, everything can be considered part of the matrimonial asset pool: the home, investments, savings, and even your superannuation.
Data from the Australian Bureau of Statistics (ABS) indicates that around half of all marriages end in divorce with 47,000 divorces granted in Australia each year. When you consider this figure doesn’t include defacto couple break-ups it’s easy to see how many people are impacted by the financial ramifications of relationship breakdowns.
Financial Advice for Divorce
Rebuilding your life financially and emotionally after divorce and relationship breakdown is a difficult task. In addition to the emotional impact, your divorce and separation also has financial ramifications. Whether you were the main income earner in the household, or a stay at home mum, your financial status has changed as a result of the separation and you need to ensure that your assumptions are realistic going forward. To start rebuilding your life you need to start with a budget to ensure that you have an accurate idea about your new cost of living. Many people find that an experienced financial planner can assist them in this rebuilding phase to:
assess your income and expenses and develop a budget moving forward
help you to identify your financial goals – it is likely that these will have changed now that you are divorced
formulate a financial plan to help you secure your financial future through appropriate investing and life insurance. This may incorporate any funds received from your financial settlement.
Many people who divorce find that the financial impact can set them back years. This is particularly evident where divorce occurs later in your working life – you have less time to rebuild your finances before retirement. By getting the advice of a financial planner experienced in divorce and separation, you can make the most of a difficult situation and start getting your financial life back on track.
For more information about how to rebuild your finances after divorce, download our free ebook Divorce and Separation. In it you’ll find some great information to help you.
Financial Spectrum is an independently owned financial planning firm based in Sydney Australia.
Categories: Asset financial management, Business, Earn Money Easily, Earn extra money at home, Fafsa Financial Aid, Financial Freedom Resources, Financial Freedom Seminar, Financial Freedom Senior Funding Corporation, Financial aid calculator, Financial aid information, Financial asset management, Financial asset management system Tags: Accurate Idea, After, Asset Pool, Australian Bureau Of Statistics, Australians, Break Ups, Bureau Of Statistics, divorce, Divorce And Separation, Emotional Impact, financial advice, Financial Future, Financial Goals, Financial Impact, Financial Planner, Financial Ramifications, Financial Settlement, Financially, Home Investments, life, Rebuilding, Rebuilding Your Life, Relationship Breakdown, Relationship Breakdowns, Separation, Ups
Top 6 Myths About Financial Planning
There’s a lot of misconception about financial planning and how it can help you. Here is a list of the top 6 myths surrounding financial planning. We hope that by dispelling some of these common myths you can get a better understanding of financial advisers and how they can assist you to achieving financial prosperity and security.
Myth #1: Only people who have already accumulated wealth and/or assets can see a financial adviser
This is one of the biggest myths surrounding seeking professional financial advice. Most people believe that you need to have already established yourself financially before a financial planner can help you. Some financial advisers will only want to work with you if you have some established assets as by advising you on how to allocate this wealth this allows them to be paid. At Financial Spectrum, our financial advisers are fee-for-service, or charge a flat fee instead of earning a commission. This means that they are able to assist you in accumulating wealth through things such as setting up savings plans and budgeting, whereas other advisers won’t as they wouldn’t earn a commission for this advice. The value of advice at the early stages of your life can be just as great, if not greater than when you have already built up your wealth.
Myth #2: Financial Planners just sell their clients managed funds
Many people believe that financial planners just sell managed funds to their clients. This isn’t true. Whilst a financial adviser can recommend their clients invest in specific investments as one tool to help grow their wealth, a holistic financial planner will look at areas such as debt reduction, tax minimisation, property, shares, superannuation, insurance, and cash flow just to name a few. All of these areas are important when looking to grow and secure wealth – not just investing into products. Some financial advisers have a greater emphasis on placing their clients into managed funds as this provides them with payment via a commission. This perhaps may explain why this myth is a common one. Not all financial advisers are equal however. Financial Spectrum is in the minority when it comes to offering clients truly holistic advice. Because Financial Spectrum doesn’t earn commissions, its’ financial advisers place just as much emphasis on areas such as paying less tax and budgeting, as placing clients in managed fund investments.
Myth #3: I’ve already got an accountant, so I don’t need a financial planner.
Many people already have an accountant that they know and trust for their financial needs so they don’t think that they would benefit from seeking the services of a financial planner. What most people don’t understand however, is that although it is very important that accountants and financial planners work together in partnership, both fulfil very different needs. Financial advisers are trained to take a more holistic approach to your finances than accountants are. Whereas an accountant will complete your tax return or offer advice for small business, a financial planner will work with you on understanding your life goals and help to implement a financial plan to help you achieve them.
At Financial Spectrum, we work closely in partnership with accountants to ensure that our clients receive the benefit of a team approach.
Myth #4: I don’t need a financial planner – I’m nowhere near close to retirement
A common misconception is that financial planners are only to help retirees or people starting to think about retiring. This is very far from the truth! Whilst it is true that there are many financial advisory firms whose target market are retirees, at Financial Spectrum we believe the true value of financial advice can be gained by starting early. Most of our clients are younger professionals in their 20s, 30s and 40s who are at the accumulation stage of their lives. We know that we are in the minority when it comes to our competitors but we are passionate about helping young Australians get ahead financially. We help our clients to map out the goals they want to achieve in the short, medium and long term, and work with them to implement a financial plan to help achieve these goals. Time is your biggest ally when it comes to setting yourself up financially – so don’t wait until you are in your 50s and 60s to start planning for the future!
Myth #5: Financial planners charge too much and get hefty kickbacks from companies they recommend their clients invest in
Financial planners have received a lot of bad press over the years and the result is that many Australians have a very negative view of the trustworthiness of the financial planning industry. In truth, individuals authorised to provide financial advice to people in Australia are bound by strict regulations from the Australian Securities and Investments Commission (ASIC). All remuneration received by implementing a proposed financial plan must be clearly outlined in a Statement of Advice (SoA) which must be given to the client. This enables transparency in the financial planning process so that you know exactly how much your financial adviser will be paid in relation to your financial plan.
At Financial Spectrum, we’ve gone one step further and developed a fee-for-service or a fixed fee payment structure so that we don’t receive any commissions from any investment product that we recommend to our clients. This means that our clients pay for our advice. We believe that this fee structure helps to protect our clients from potential conflicts of interest. In addition we offer a range of packages for our clients to select from so that they can feel comfortable that they’re getting value for money.
Myth #6: All financial advisers are the same. Shouldn’t I just see the adviser at my bank branch?
There are financial advisers, and then there are financial advisers. Whilst it’s true that all financial planners in Australia must be authorised under a financial planning licence from ASIC, it is important to know that there are potential conflicts of interest that may arise by seeking the services of a financial adviser who is connected to a large institution – be that a bank or other financial institution. Why? Financial advisers who are part of financial institutions who offer their own financial products (eg. life insurance and investments) will likely be restricted to a small selection of products that they can offer their clients. This means that if you went to Bank XYZ seeking advice and the financial planner at Bank XYZ identified that you need income protection – it is likely that they’ll be restricted by the XYZ Bank to only provide you with advice to obtain an XYZ Income Protection policy. The problem is that your XYZ financial adviser might know that a better policy for your situation can be provided to you by ABC Life Insurance, but because they are part of the XYZ institution, they can’t offer this policy to you.
The good news is that not all financial advisers in Australia are part of large corporations and therefore are better able to provide you with a wider selection of investment and insurance products from a range of providers in Australia. These financial advisers tend to be known as “boutique” or “privately-owned” financial planning firms as ASIC restricts the use of the word “independent”. These small boutique financial advisory firms are in the minority as many have been bought out by the larger institutions and do not have the massive monetary resources of their competitors, but they are out there and can offer you great financial advice. Financial Spectrum is one such privately-owned financial planning firm based in the Sydney CBD.
Financial Spectrum are a team of financial advisers based in Sydney, Australia. We are independently owned and stand out from the crowd in our approach to creating and managing your wealth.
We are fee-for-service and don’t rely on commissions.
Experts in:
- financial planning
- estate planning
- funds management
- insurance
- structured investments
- taxation planning
- property investment
- business succession
- crisis planning
- superannuation
Categories: Asset financial management, Business, Earn Money Easily, Earn extra money at home, Fafsa Financial Aid, Financial Freedom Resources, Financial Freedom Seminar, Financial Freedom Senior Funding Corporation, Financial aid calculator, Financial aid information, Financial asset management, Financial asset management system Tags: About, Accumulating Wealth, Assets, cash flow, Common Myths, Debt Reduction Tax, Financial, Financial Adviser, Financial Advisers, Financial Planner, Financial Planners, financial planning, Financial Prosperity, Holistic, Insurance, Investments, Many People, Misconception, Myth 2, Myths, Planning, Professional Financial Advice, Property Shares, Spectrum
Wells Fargo On Line Offers Financial Improvement
Managing your financial accounts can be very stressful. If you are not privy to industry terms and the nuances of different loans, you can quickly become swallowed up in a sea of confusion. Wells Fargo on line offers a beacon of light that will guide you to a better financial situation. Rather than feel lost in the intricate world of money, educate yourself!
Wells Fargo on line now offers the Smarter Credit Center. A visit to their homepage provides easy access to this valuable tool. If you want to improve your financial situation, this is the best place to start! Wells Fargo has gone to great lengths to inform customers about establishing credit and protecting their financial assets.
If you want to establish or rebuild credit, there are links that discuss how to check your credit report and how to use credit. There is even a link that shares valuable information that will let you improve credit scores. Learn the best way to utilize credit so you can reap the benefits of a high-ranking score!
Debt reduction is no easy task. Wells Fargo on line provides helpful information, starting with details about assessing your situation. You will not know where to start until you know where you stand. Each tip is easy to understand and offers suggestions that anyone can do benefit from, even if you are not familiar with the realm of finance.
Wells Fargo on line also helps you maintain your credit score and manage your debts. Start credit repair now so you can work towards a happy, stress-free future. You do not have to do it alone. Wells Fargo on line can be accessed anytime from anywhere with an internet connection. Credit repair takes time, and a quick visit to this valuable website can mean faster results.
Andre Hansen is a Norwegian author. He writes about many interesting things including banking. You can go to http://bankhelpsite.com/wells-fargo-on-line/ to read more about Wells Fargo On Line.
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Retirement Finance Planning-Tips For Planning Your Financial Future
Retirement finance planning is one of the most important activities you will ever engage in. Quite simply, if you don’t know where the money is coming from once you’ve finished working, you won’t have a very enjoyable later life.
Various occupations have different retirement ages. There might be several reasons behind a person’s retirement. Retirement surely brings significant changes in the life style of concerned person.
Gone are the days when retirement symbolizes getting older. Retired young and early is current trend.
Unfortunately, the vast majority of people get so caught up in the hustle and bustle of their daily lives that they don’t even consider having a retirement plan until it’s too late. This is one of the primary reasons that, according to the social security administration, 95% of people in the world today are either dead or dead broke by the time they hit retirement; a simply lack of planning.
Employers and employees both need to begin planning for this important event. Retirement plan service companies give a variety of choices to help employers and their employees find the best option for them in planning for their retirement.
Retirement planning services companies will help you to map out and achieve your long term goals, and formulate a way to get there. Many of these companies provide seminars to give you more info on the topic.
These agencies all have a lot of experience in planning for retirement, and they should be an essential part of your retirement planning. Each client is presented with a written financial plan and is assisted with the implementation of the selected plan.
For the purpose of pre-retirement planning, a retirement planning services company uses sophisticated planning models, research databases and comprehensive data gathering techniques. Every client receives a financial asset allocation and lifetime income protection plan.
Some retirement planning services help clients with more than 15 years of business experience, in their mid-career planning. They also assist clients in making the right financial and investment decisions, including debt reduction strategies and in projecting future retirement income needs.
Retirement planning service companies are members of the National Association of Personal Financial Advisors (NAPFA), the Financial Planning Association (FPA), and are registered investment advisors. Retirement plan services have simplified the process of selecting a retirement plan and planning out investment decisions.
Of course, before meeting with these companies to help you, you need to know your retirement goals and what they will cost you, so that you can plan your investing activities accordingly. Very simply, without knowing this info, your meeting times will not be very productive.
While you are figuring out your projected expenses, make use of a retirement planning calculator, which is a device designed specifically to help you figure out how much cash you will need when you are done working. These machines are readily available via the web.
Finally, a very popular plan you might want to consider is the Pinchot Plan for Retirement. While the specifics are far out of the scope of this article, this is a very popular plan that more and more peopele are utilizing nowadays, and you certainly would be wise to at least consider it. Hopefully these retirement and finance planning tips will help you achieve your goals for your golden years, and live the life of your dreams.
For more financial planning and retirement tips, visit online-retirement-planning.com. Learn the importance of investing in retirement planning and many more great tips to help you achieve your financial goals.
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Why The Internet Is Dynamic Wealth And The Key To Financial Growth And Security In The 21St Century
The need for money is a basic element of our society. Humans have been acquiring assets and resources since the beginning of time, but only more recently have we figured out how to acquire dynamic wealth.
The Old Way Isn’t Working Anymore
The traditional model of acquiring financial assets centers on an individual getting employed by a company that will pay that individual for his or her hours spent working for the company. It is a pretty simple model and one that has carried many members of our society through the last 200 years. But recently, this model has begun to crumble as banking, automobile production and sales, and real estate industries have experienced the largest profit losses in history.
Individuals who used to have relative job security and enough income to support their families are now finding themselves with drastically reduced income, or worse, completely unemployed. Those who are mounting up the same dead horse of finding a job with a company are hitting more and more roadblocks as unemployment rates in the United States continue to creep above 10%.
Fortunately, there is a new model on the rise and that model is dynamic wealth creation. Tired of the instability and limitations of the traditional model, entrepreneurs are embracing the power of the Internet to forge new ways of generating wealth.
An Internet of a Billion Customers
With the Internet firmly planted in our new society, there are boundless wealth creation opportunities for the motivated entrepreneur. In the 21st century, individuals seeking goods or services rarely turns to the phone book any more. Instead, they turn to the Internet where they have access to more choices than their local business and service markets have to offer. This means that via the power of the Internet, the entrepreneur of today:
• has instant access to over 1.5 billion internet users worldwide.
• can sell products remotely without a brick and mortar storefront.
• can use powerful social marketing tools such as MySpace, Facebook and Twitter to sell products.
• has reach over a global audience and the potential to sell product around the clock.
Increased Mobility Means Greater Freedom
The Internet is now widely available throughout the world. Even some of the most remote corners of the globe, one can find Internet connectivity and Internet support on mobile devices. This represents a huge potential for personal freedom as entrepreneurs can now work from any location that has Internet access. Why stay chained to an office or even the home when you can take your laptop and mobile device with you and earn money while kicking back on vacation?
The new spirit and model of entrepreneurship matched with the power of the Internet is a new horizon for individuals who are motivated to earn wealth but frustrated by the limitations of the old way.
Ready to set sail for a new horizon? Join the ultimate marketing network at http://www.rossbucks.com and get the skills and support you need to develop a powerful system for generating dynamic wealth.
Categories: Asset financial management, Business, Earn Money Easily, Earn extra money at home, Fafsa Financial Aid, Financial Freedom Resources, Financial Freedom Seminar, Financial Freedom Senior Funding Corporation, Financial aid calculator, Financial aid information, Financial asset management, Financial asset management system Tags: 21St, 21st Century, Automobile Production, Automobile Sales, Basic Element, Beginning Of Time, Century, Dead Horse, Dynamic, Financial, Financial Assets, Finding A Job, growth, Instant Access, internet, Internet Entrepreneur, Internet Users Worldwide, Job Security, New Model, New Ways, Phone Book, Roadblocks, security, Service Markets, Traditional Model, Unemployment Rates, wealth, Wealth Creation Opportunities
Why Business Credit Is One Of Its Key Assets When It Comes To Success
New businesses are seldom profitable at first, and even a successful business can have dry periods where profits are not enough to cover necessary financial; obligations. Many businesses use a business credit card for their expense accounts. This is why it so important to have the business credit necessary to utilize financing options when the need arises.
Borrowing money is one of the most common sources of funding for a small business, but obtaining a loan is not always easy. Even getting a business credit card can have stringent requirements. Before approaching a lender for a loan, it is a good idea to understand as much as possible about the factors the lender will evaluate when considering your business credit loan application.
The lender will undoubtedly consider your business’s ability to repay the loan. After all, this is the biggest risk and source of profitability for the lender. They generally seek two sources of repayment: cash flow from the business, plus a secondary source such as collateral. Select lenders will also make approval decisions based on credit alone.
Credit history is therefore very important to business credit. One of the first thinks a lender will determine when a person or business requests a loan is whether their personal and business credit is positive or not. You should probably obtain a copy of your personal and/or business credit report and review the information yourself before submitting an application.
A business credit line can give a business the flexibility and adaptability it needs to remain viable. This is an excellent financial asset for any small business to have. The funds from a business line can be used for a variety of purchases, including growth, renovations, payroll, inventory or marketing. A business credit line gives your company the flexibility and stability it needs to be successful.
A business credit line offers a lump sum of pre approved money. This is essentially the same as applying for a large loan, even if you don’t have a need for the funds. But that’s the great part. You can utilize as much of the credit line as you need, leaving the rest in the account. Should the need for extra money occur, you already have the pre approved balance that you can withdraw from virtually instantaneously. With your business line of credit, you always have a pre approved balance waiting for you. This means you wont have to go through another loan process, or face the possibility of being denied should your credit change.
You are not charged interest on the unused portion of the credit line. You can write checks or withdraw cash out of your business credit line balance. Your business line of credit can be paid back at any time to increase your available credit.
A business credit line strengthens a small business with a great measure of security and protection. A business owner can relax about future unpredictable events by knowing he or she has the access to the finances to cover them. Furthermore, it is like having instant funding should the business choose to make innovations for its growth.
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Categories: Asset financial management, Business, Earn Money Easily, Earn extra money at home, Fafsa Financial Aid, Financial Freedom Resources, Financial Freedom Seminar, Financial Freedom Senior Funding Corporation, Financial aid calculator, Financial aid information, Financial asset management, Financial asset management system Tags: Approval Decisions, Approved Money, Assets, Borrowing Money, Business, Business Credit Card, Business Credit Line, Business Credit Report, Business Line, Business Requests, Comes, credit, Credit Loan, Dry Periods, Financial Asset, Financial Obligations, Financing Options, Loan Application, Lump Sum, New Businesses, Secondary Source, Sources Of Funding, Stringent Requirements, Success, Successful Business