Establishing credit is essential after marriage if you want to build a healthy financial life as well as your marital life together. You need credit to obtain credit cards, joint bank accounts, mortgage loans, car loans, etc. Thus, it is a good idea to give the first steps from the beginning so as to start building your credit right away and make good use of it whenever you need it.
Following are some tips on how to start establishing a good credit history. There is no particular order that you need to follow. However, we strongly suggest that you try to find out about your current credit situation. First of all, obtain a free copy of your credit report to see if you already have some credit history and you didn't know it.
Getting A Free Credit Report
As stated above, you need to obtain a free copy of your credit report. Why free? Because there is no reason for you to pay for information that third parties have about yourself. Regulations have recognized this and force credit bureaus to provide you with a copy of your credit report free of charge at least once a year. On some states the timeframe is even shorter and you can obtain a free copy twice a year or even more often.
In order to do so, you can contact each credit bureau directly or resort to one of the many online sites offering access to your credit report for free. These sites also offer many different services (credit related) that you may find useful. These services include: monitoring services, credit repair services, financial and legal advice, etc.
Secured Financing
Sometimes it is hard to get financing when you have no credit at all. However, it is possible to do so by offering some asset as collateral. A good idea is to use your car as collateral if you own it. There are many lenders out there that will be willing to accept a car as collateral to secure a loan. That will guarantee you both approval and advantageous terms on your loan.
An alternative for establishing credit is to apply for a secure credit card. A secure credit card will provide you with the same benefits as an unsecured credit card with the sole difference that you'll have to make a cash deposit that will act as your credit limit. Up to that amount you'll be able to use your credit card without problems. The regular payments of your credit card balance will be recorded into your credit report and consequently build a clean and positive credit history for you.
Mortgage Financing: Down Payments and Co-signing
The key to get a good credit report from scratch is to obtain a mortgage loan and keep your payments timely. To obtain a mortgage loan without credit, you can offer a high down payment that will show the lender your ability to save and thus, your ability to repay your debt. Alternatively (or jointly) you can get the aid of a co-signer with a good credit score. The co-signer will also be obliged to repay the loan in case you fail to meet the monthly payments. Thus, the lender won't have problems when it comes to approving your loan. And the monthly payments of your home loan will greatly contribute to establishing a clean and financially healthy credit report.
Showing posts with label After. Show all posts
Showing posts with label After. Show all posts
Saturday, September 29, 2012
Tuesday, June 12, 2012
What Happens After Bankruptcy If I Lost My Car?
If you have recently experienced a bankruptcy discharge, you may be asking What happens after bankruptcy if I lost my car? This is a very valid question for some who have recently had the misfortune of having to file bankruptcy.
There are times when no matter what you try to do you have no other option but to include your vehicle loan in the bankruptcy which may leave you without a car.
There may be a couple reasons you may have to include the car in your bankruptcy. One may be that the payments are simply too expensive for you to keep up with each month. Another reason may be that you have fallen too far behind on the loan payments and the only way out is to discharge the vehicle with the balance of the bankruptcy.
Now you find yourself asking, What happens after bankruptcy if I lost my car? And fortunately the answer is to secure a bankruptcy car loan for a different vehicle. Some resources will tell you that this is simply not possible but that is not always the case.
There are some car dealerships and auto brokers who have special finance departments that will work with you and your situation to help you find financing for a new vehicle.
The first place to begin is on the Internet, research local dealerships and car brokers in your area. Make a short list of the name, address and phone number of a few of these places. Call and ask to speak with the special finance department. If the establishment has one, they will put you through to a salesperson that could possibly help you.
Take note as to the character of the person you speak with in the special finance department. Notice if you feel comfortable speaking with them or if you feel that you are an inconvenience to them. This can be used as a great indicator of the type of service you may receive throughout the transaction.
You deserve to be treated with the same respect as someone who has a perfect credit score and if you do not feel this, you have a choice to move on to the next resource on your list.
Once you have found someone you feel understands and will treat you with respect, ask what paperwork you would need to bring in to have them pre-qualify you for an auto loan. Bring these items into the office and allow the salesperson to begin looking for a vehicle that will suit your needs.
There are times when no matter what you try to do you have no other option but to include your vehicle loan in the bankruptcy which may leave you without a car.
There may be a couple reasons you may have to include the car in your bankruptcy. One may be that the payments are simply too expensive for you to keep up with each month. Another reason may be that you have fallen too far behind on the loan payments and the only way out is to discharge the vehicle with the balance of the bankruptcy.
Now you find yourself asking, What happens after bankruptcy if I lost my car? And fortunately the answer is to secure a bankruptcy car loan for a different vehicle. Some resources will tell you that this is simply not possible but that is not always the case.
There are some car dealerships and auto brokers who have special finance departments that will work with you and your situation to help you find financing for a new vehicle.
The first place to begin is on the Internet, research local dealerships and car brokers in your area. Make a short list of the name, address and phone number of a few of these places. Call and ask to speak with the special finance department. If the establishment has one, they will put you through to a salesperson that could possibly help you.
Take note as to the character of the person you speak with in the special finance department. Notice if you feel comfortable speaking with them or if you feel that you are an inconvenience to them. This can be used as a great indicator of the type of service you may receive throughout the transaction.
You deserve to be treated with the same respect as someone who has a perfect credit score and if you do not feel this, you have a choice to move on to the next resource on your list.
Once you have found someone you feel understands and will treat you with respect, ask what paperwork you would need to bring in to have them pre-qualify you for an auto loan. Bring these items into the office and allow the salesperson to begin looking for a vehicle that will suit your needs.
Wednesday, May 2, 2012
Easy Formula For True Cash Flow After Tax Deduction Or After Tax Cash Flow
Cash flow formula makes it easier to determine whether a rental property is worth buying. Uncle Sam is kind enough to give you as a rental property investor a great deal of tax breaks by allowing you to deduct your rental property's operating expenses and mortgage payments. Even better, you can deduct depreciation, a "phantom" expense that does not actually occur.
The cash flow formula is, Rental Income - Operating Expenses - Debt Payments. However, your TRUE cash flow is calculated by adding back the tax saving Uncle Sam graciously gives you. Your tax saving is as a result of your rental loss deduction.
Cash flow formula:
Rental Income - Operating Expenses - Debt Payments
True cash flow formula:
Rental Income - Operating Expenses - Debt Payments + Tax Saving
Let's continue with an example, a 0,000 single family house with 0,000 loan amount at 30 year 5.5% interest rate. That means debt payments of ,176 annually.
For ,000 monthly rent, that is ,000 annual rental income. You can reasonably factor in the vacancy rate depending on the rental market. Let's assume 7% vacancy rate, this yields ,160 (,000 x 93%) annual income.
Operating expenses are the necessary expenses paid in order to operate the property. Such expenses include property tax, insurance, and repairs. A reasonable figure for this property is ,000.
With all these numbers, we now have a negative annual cash flow. However, a tax saving can put us back onto the positive cash flow track.
Tax deductible rental loss formula:
Rental Income - Operating Expenses - Debt Interest Payments - Depreciation
Tax saving formula:
Tax Deductible Rental Loss x Your Federal Income Tax Rate
In this example, rental income is still ,160 and operating expenses are ,000.
Mortgage payments usually consist of principle and interest payments (P+I), unless you have an interest only mortgage. The lender will provide you a 1098 form containing the mortgage interest amount for your tax purposes. This amount is gradually decreased as the mortgage term matures. Here we use ,560, the first year interest payment amount for our example.
Depreciation is a phantom expense that is not actually paid out from your pocket. The IRS rule states that the life of a residential property is 27.5 years, and only buildings rather than land is eligible for depreciation. The value of land and building ratio is usually 1:4. So the building of our 0k single family house is worth 0k. Divide 0k by 27.5 and you get the annual depreciation of ,364.
Federal income tax rate varies by individual but a good estimate is 30% in most cases.
With these, the tax deductible rental loss is ,764. (Rental income ,160 - Operating expenses ,000 - Debt interest payments ,560 - depreciation ,364). The tax saving is 9 (,764 x 30%).
As you can see, this turns your annual cash flow from - into positive 3.
We also covered a very simple cash flow formula BEFORE tax deduction in another article "Easy Formula for Rental Cash Flow".
The cash flow formula is, Rental Income - Operating Expenses - Debt Payments. However, your TRUE cash flow is calculated by adding back the tax saving Uncle Sam graciously gives you. Your tax saving is as a result of your rental loss deduction.
Cash flow formula:
Rental Income - Operating Expenses - Debt Payments
True cash flow formula:
Rental Income - Operating Expenses - Debt Payments + Tax Saving
Let's continue with an example, a 0,000 single family house with 0,000 loan amount at 30 year 5.5% interest rate. That means debt payments of ,176 annually.
For ,000 monthly rent, that is ,000 annual rental income. You can reasonably factor in the vacancy rate depending on the rental market. Let's assume 7% vacancy rate, this yields ,160 (,000 x 93%) annual income.
Operating expenses are the necessary expenses paid in order to operate the property. Such expenses include property tax, insurance, and repairs. A reasonable figure for this property is ,000.
With all these numbers, we now have a negative annual cash flow. However, a tax saving can put us back onto the positive cash flow track.
Tax deductible rental loss formula:
Rental Income - Operating Expenses - Debt Interest Payments - Depreciation
Tax saving formula:
Tax Deductible Rental Loss x Your Federal Income Tax Rate
In this example, rental income is still ,160 and operating expenses are ,000.
Mortgage payments usually consist of principle and interest payments (P+I), unless you have an interest only mortgage. The lender will provide you a 1098 form containing the mortgage interest amount for your tax purposes. This amount is gradually decreased as the mortgage term matures. Here we use ,560, the first year interest payment amount for our example.
Depreciation is a phantom expense that is not actually paid out from your pocket. The IRS rule states that the life of a residential property is 27.5 years, and only buildings rather than land is eligible for depreciation. The value of land and building ratio is usually 1:4. So the building of our 0k single family house is worth 0k. Divide 0k by 27.5 and you get the annual depreciation of ,364.
Federal income tax rate varies by individual but a good estimate is 30% in most cases.
With these, the tax deductible rental loss is ,764. (Rental income ,160 - Operating expenses ,000 - Debt interest payments ,560 - depreciation ,364). The tax saving is 9 (,764 x 30%).
As you can see, this turns your annual cash flow from - into positive 3.
We also covered a very simple cash flow formula BEFORE tax deduction in another article "Easy Formula for Rental Cash Flow".
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