Fixed Rate Mortgage: Do the Pros Outweigh the Cons?

Mortgage RateWhile a fixed-rate mortgage offers certainty in terms of interest rates, many are still hesitant to consider this because of its higher monthly payment. The said home loan program has a higher interest rate, which then results in higher monthly payment. This is the cost of the financial certainty provided by the loan.

Constant Rates and Payment

The main benefit of a fixed rate mortgage is the same interest rates over the course of the loan. Even if the economic factors change or loan rates increase, the interest rate on your mortgage remains the same. This also means that your monthly payment will not change. This eliminates the risk that you may need to pay a higher monthly payment over the life of the loan.

Other loan programs like the adjustable rate mortgage (ARM) and interest-only mortgage have payments that are subject to change, with the possibility of increasing throughout the life of the mortgage. If the rates suddenly increase, some borrowers may not be able to afford the payments. This is especially for those who experienced changes in their financial circumstances after obtaining the mortgage.

Loan Term Options and Less Risk

There are also plenty of mortgage terms available with this loan program. Lending companies usually offer 10, 15, 20, 30, and 40 years. A shorter term comes with lower interest rates, while a longer one has high rates. A shorter term with a low rate decreases the total interest expense over the life of the loan. This, however, means paying a higher monthly payment, because you’re paying back the loan balance in a shorter amount of time.

If you’re not comfortable taking risks, you can find relief with a fixed rate mortgage. This can let you sleep better each night, knowing that your rate and payment will remain constant. If you have a 15-year fixed rate loan, this means 15 years of certainty. Your loan and payment will not be affected by fluctuations in interest rates.

While a fixed-rate loan has a higher monthly rate and monthly payment, it offers certainty with constant rates and payments. If your think this mortgage program is right for you, talk to a lender to know more about your options.

Ousting Small Business Inaccuracy with the Right Accountant

Accountant From AucklandAccounting is a way of life — for organization in small businesses, that is.

At first glance, the process seems simple enough. All you have to do is keep track of exchanges, right? But as intuitive as that sounds, precise accounting is crucial to the survival of your business, especially for start-ups. Through accurate accounting, you gain relevant data for wise financial decisions.

Simply put, there is no room for inaccuracy in accounting. So, you hire an accountant.

Whether you are hiring a full-time accountant or outsourcing one from a CPA firm, keep in mind that the right set of hands is beneficial. When it comes to selecting the one, remember the following:

Focus on the Right Qualifications

For Accounting North Ltd, a local accounting firm, there is more to accounting than just number crunching. Even the best of Auckland’s chartered accountants should possess a deep understanding of your business, directly or indirectly. From time to time, accountants must build strong connections with employees to gather data necessary for their records.

Also, since there are different forms of accounting, hire someone who as the right qualifications, background, and personality.

Figure Out What You Need

Do you know what you want in your accountant?

Refrain from just hiring someone instantly. Before you hire one, decide on the specific needs of your company. Listing down areas for improvement reflects the type of accountant for the job. For example, do you need someone to process invoices and payables or someone who can create financial statements and budgets?

Revenue alone should not determine your business’ accounting needs. You might be making big money but that does not mean you need full-time help.

Financial Analysis is a Must

Good accounting services focus on your financial health and also has the means to keep it in good condition. Ideally, you should receive key health indicators on a daily basis (e.g. net profit, gross profit margin, and aging accounts receivable) because the more information you have, the better informed your business will be.

Accounting is not always a glamorous task, but it remains an important part of your small business. Do yourself a favour and hire the RIGHT type of help.

3 Things You Must Not Do Before Applying for a Home Loan

Mortgage Form in UtahNothing is more exciting than taking your first step towards home ownership. You can’t wait to end your renting life, and start paying for something you could actually own someday. Considering the number of housing options in Utah, the property hunt gets even more thrilling.

Unless you’re well heeled enough to buy your first-ever home cash, you must be more careful with your actions. Believe it or not, your decision-making right from the start might define the quality Provo, Sandy, or Salt Lake City mortgage you could get. Altius Mortgage Group and other lending companies noted that doing the following are how not to play your cards right:

Forgoing Pre-Approval

You must know how much you can afford before you shop around. No matter how fun it is to check each property for sale and imagine your family living in it, you might be wasting time if you find out you’re not qualified to receive the necessary funds to buy it.

A pre-approval allows you get an assurance from a lender that you’re approved for a particular mortgage. You would have to provide proper documentation of your credentials to see how much you can qualify for. Although the amount quoted to you isn’t final, a pre-approval gives you an exact amount how much a lender would be willing to loan you.

Swiping Your Card for Big Purchases

As your debt-to-income ratio is important to your mortgage approval, incurring large charges on your credit cards might sabotage your chances of getting approved. Even if you have good credit, a big purchase could seriously decrease your credit score by more than 10 points. Any damage to your credit might suffice to disqualify you for a number of desirable mortgage rates.

Forgetting to Establish Your Credit History

Your past is as important as your present financial situation. Lenders are smart enough not to depend on your flawless credit now. You must have a minimum of three credit accounts with a history of two years on each. The more information you can provide about your repayment behavior, then more confident the lender can make an intelligent decision about your approval.

Applying for a mortgage is no laughing matter. You must never take anything about it lightly, or else you’re bound to make regrets later on.

Financial Planning Through the Decades

financial goals paysonHow do you work your way towards financial independence and a comfortable retirement? It takes decades. In fact, it will take most of your working life. Your financial plan should mature as you mature in order to meet goals and prepare for what’s to come.

Here are what you should focus on depending on your age:
In Your 20’s. Most 20-somethings enjoy independence and the youthful exuberance to work and earn as much as they can. During this time, you should start being mindful of your expenses and live within your budget. While you should definitely start working on your retirement fund and emergency fund, your 20’s should be about developing your spending and saving habits to ensure future success.
In Your 30’s. Before making big finance goals, you should concentrate on paying off all debts and putting away at least six months worth of savings in an emergency fund. If you have dependents, suggests you start consulting an estate planning attorney. Start saving up for educational funds for your children, as well as diversifying your investment portfolio.
In Your 40’s. Work on saving up for early retirement, or even nest eggs for your kids. Make sure your money is always growing by opening other business ventures and setting up multiple streams of passive income.
In Your 50’s. Ideally, the kids are out of the house, you’re in a good place at work, and your finances are stable or you may have already achieved financial independence. It’s time to use some of that money for pleasure as well as make bolder investments to gain a higher reward. Make sure you update your estate planning as your net worth increases.
Personal finance doesn’t have to be complicated. The key to success is to start as soon as possible, and make goals that will make it impossible for you to live a comfortable life currently. When you’re able to adjust your finance goals according to your lifestyle, the easier it will be to put away money instead of spending it all now.

Don’t Mess with the IRS or You’ll Get a Tax Lien

IRSA federal tax lien is essentially an IRS (Internal Revenue Service) claim against your assets if you fail to pay your income taxes. If you don’t pay your required taxes, the IRS have all the right to recover your debt by claiming your assets such as any real estate you own, your car, wages, bank account, and other applicable assets.

How Do I Respond to the IRS?

Once the IRS sent you a “Notice of Intent to Levy,” you must respond to them within 30 days and your response must include the following:

  • The entire incident history
  • Your entire tax payment history
  • Why you didn’t comply with the tax code
  • Your particular reason for not paying off your taxes
  • Any proof, including documentation and witnesses that will prove your stated circumstances

McCullough & Sparks and other experts say that it is important to note that while the IRS places tax liens on debtors, it is not the only organization or agency that can file tax liens for delinquent debtors. County and state tax collection bodies could likewise place tax liens like the IRS. In addition, while the exact procedures differ from one state to another, you must respond to local and state agencies as you would respond to the IRS.

What Will Happen to You?

Tax liens can cripple you for up to 10 or more years according to the statute of limitations. As a result, you’ll have problems — if you can at all — making big purchases like cars, property, and even household items like appliances or furniture. Your case with the IRs will likewise show up in your credit report. If you don’t do anything to fix your problem with the IRS, they will seize your assets.

You should know that if you can catch a lien prior to it becoming official, you could avoid the stress and negative impact — and maybe qualify for abatement of your penalty, which can lower your total owed amount by 24% to 50%. Tax issues contain a host of complex legal issues, so if you were facing a tax lien, it would be in your best interest to get help from an asset protection lawyer to ensure that your rights will be upheld.

Financial Woes and Accounting Help

Accountant in AucklandMath and numbers are not for everyone, but some people depend upon them. Self-employed individuals in small to medium businesses and rental property owners are some examples of professionals who need to have good math skills. The finances involved in such businesses demand for such skills.

Math Help

You may have a small or medium-sized business, or you have some properties for rent here in Auckland or anywhere else in New Zealand. There may be times when you run into trouble in your company. There may also be times when you are so busy that you cannot afford time to handle your financial accounts. When those times come, you may be in need of accounting services.

Accountants to the Rescue

Accountants can help you with the complex job of handling finances and other assets. You can also consult accountants for tax or financial advice. You can also get other services accountants offer when it comes to rental returns, tax registration, business tax accounts and returns, personal tax returns, and other areas.

Asset Handler

On a more specific level, accountants can help you with handling your business assets. They have the ability to analyse your whole business. They help you with maintaining your finances and assets or making them better.

Tax Consultant

Accountants can also help with tax assessments, since they understand tax laws. They can inform you of tax breaks you and your company can benefit from. They can check your tax responsibilities and help you to comply with the law.

Accounting Advisor

Even people who are just planning to venture into business can benefit from accountants. You can get advice from them about financial concerns and help. You can learn how much you need to invest into the business and how you can ensure an increasing profit.

You do not have to hire tax or financial accountants full time. You can just get advice from them, and move forward.