Understanding the Home Loan Application and Mortgage Approval – The Mortgage Lender Analysis

Do You Pass The Mortgage Lender Analysis? When a mortgage lender reviews a real estate loan application, the primary concern for both home loan applicant, the buyer, and the mortgage lender is to approve loan requests that show high probability of being repaid in full and on time, and to disapprove requests that are likely to result in default and eventual foreclose. How is the mortgage lenders decision made?

The mortgage lender begins the loan analysis procedure by looking at the property and the proposed financing. Using the property address and legal description, an appraiser is assigned to prepare an appraisal of the property and a title search is ordered. These steps are taken to determine the fair market value of the property and the condition of title. In the event of default, this is the collateral the lender must fall back upon to recover the loan. If the loan request is in connection with a purchase, rather than the refinancing of an existing property, the mortgage lender will know the purchase price. As a rule, home loans are made on the basis of the appraised value or purchase price, whichever is lower. If the appraised value is lower than the purchase price, the usual procedure is to require the buyer to make a larger cash down payment. The mortgage lender does not want to over-loan simply because the buyer overpaid for the property.

The year the home was built is useful in setting the loan’s maturity date. The idea is that the length of the home loan should not outlast the remaining economic life of the structure serving as collateral. Note however, chronological age is only part of this decision because age must be considered in light of the upkeep and repair of the structure and its construction quality.

Loan-to-Value Ratios

The mortgage lender next looks at the amount of down payment the borrower proposes to make, the size of the loan being requested and the amount of other financing the borrower plans to use. This information is then converted into loan-to-value ratios. As a rule, the more money the borrower places into the deal, the safer the loan is for the mortgage lender. On an uninsured home loan, the ideal loan-to-value ratio for a lender on owner-occupied residential property is 70% or less. This means the value of the property would have to fall more than 30% before the debt owed would exceed the property’s value, thus encouraging the borrower to stop making mortgage loan payments. Because of the nearly constant inflation in housing prices since the 40s, very few residential properties have fallen 30% or more in value.

Loan-to-value ratios from 70% through 80% are considered acceptable but do expose the mortgage lender to more risk. Lenders sometimes compensate by charging slightly higher interest rates. Loan-to-value ratios above 80% present even more risk of default to the lender, and the lender will either increase the interest rate charged on these home loans or require that an outside insurer, such as FHA or a private mortgage insurer, be supplied by the borrower.

Mortgage Closing Settlement Funds

The lender then wants to know if the borrower has adequate funds for settlement (the closing). Are these funds presently in a checking or savings account, or are they coming from the sale of the borrower’s present real estate property? In the latter case, the mortgage lender knows the present loan is contingent on another closing. If the down payment and settlement funds are to be borrowed, then the lender will want to be extra cautious as experience has shown that the less of his own money a borrower puts into a purchase, the higher the probability of default and foreclosure.

Purpose Of Mortgage Loan

The lender is also interested in the proposed use of the property. Mortgage lenders feel most comfortable when a home loan is for the purchase or improvement of a property the loan applicant will actually occupy. This is because owner-occupants usually have pride-of-ownership in maintaining their property and even during bad economic conditions will continue to make the monthly payments. An owner-occupant also realizes that if he/she stops paying, they will have to vacate and pay for shelter elsewhere.

If the home loan applicant intends to purchase a dwelling to rent out as an investment, the lender will be more cautious. This is because during periods of high vacancy, the property may not generate enough income to meet the loan payments. At that point, a strapped-for-cash borrower is likely to default. Note too, that lenders generally avoid loans secured by purely speculative real estate. If the value of the property drops below the amount owed, the borrower may see no further logic in making the loan payments.

Lastly the mortgage lender assesses the borrower’s attitude toward the proposed loan. A casual attitude, such as “I’m buying because real estate always goes up,” or an applicant who does not appear to understand the obligation he is undertaking would bring low rating here. Much more welcome is the home loan applicant who shows a mature attitude and understanding of the mortgage loan obligation and who exhibits a strong and logical desire for ownership.

The Borrower Analysis

The next step is the mortgage lender to begin an analysis of the borrower, and if there is one, the co-borrower. At one time, age, sex and marital status played an important role in the lender’s decision to lend or not to lend. Often the young and the old had trouble getting home loans, as did women and persons who were single, divorced, or widowed. Today, the Federal Equal Credit Opportunity Act prohibits discrimination based on age, sex, race and marital status. Mortgage lenders are no longer permitted to discount income earned by women even if it is from part-time jobs or because the woman is of child-bearing age. Of the home applicant chooses to disclose it, alimony, separate maintenance, and child support must be counted in full. Young adults and single persons cannot be turned down because the lender feels they have not “put down roots.” Seniors cannot be turned down as long as life expectancy exceeds the early risk period of the loan and collateral is adequate. In other words, the emphasis in borrower analysis is now focused on job stability, income adequacy, net worth and credit rating.

Mortgage lenders will ask questions directed at how long the applicants have held their present jobs and the stability of those jobs themselves. The lender recognizes that loan repayment will be a regular monthly requirement and wishes to make certain the applicants have a regular monthly inflow of cash in a large enough quantity to meet the mortgage loan payment as well as their other living expenses. Thus, an applicant who possesses marketable job skills and has been regularly employed with a stable employer is considered the ideal risk. Persons whose income can rise and fall erratically, such as commissioned salespersons, present greater risk. Persons whose skills (or lack of skills) or lack of job seniority result in frequent unemployment are more likely to have difficulty repaying a home loan. The mortgage lender also inquires as to the number of dependents the applicant must support out of his or her income. This information provides some insight as to how much will be left for monthly house payments.

Home Loan Applicants’ Monthly Income

The lender looks at the amount and sources of the applicants’ income. Sheer quantity alone is not enough for home loan approval; the income sources must be stable too. Thus a lender will look carefully at overtime, bonus and commission income in order to estimate the levels at which these may reasonably be expected to continue. Interest, dividend and rental income would be considered in light of the stability of their sources also. Under the “other income” category, income from alimony, child support, social security, retirement pensions, public assistance, etc. is entered and added to the totals for the applicants.

The lender then compares what the applicants have been paying for housing with what they will be paying if the loan is approved. Included in the proposed housing expense total are principal, interest, taxes and insurance along with any assessments or homeowner association dues (such as in a condominium or town-homes). Some mortgage lenders add the monthly cost of utilities to this list.

A proposed monthly housing expense is compared to gross monthly income. A general rule of thumb is that monthly housing expense (PITI) should not exceed 25% to 30% of gross monthly income. A second guideline is that total fixed monthly expenses should not exceed 33% to 38% of income. This includes housing payments plus automobile payments, installment loan payments, alimony, child support, and investments with negative cash flows. These are general guidelines, but mortgage lenders recognize that food, health care, clothing, transportation, entertainment and income taxes must also come from the applicants’ income.

Liabilities and Assets

The lender is interested in the applicants’ sources of funds for closing and whether, once the loan is granted, the applicants have assets to fall back upon in the event of an income decrease (a job lay-off) or unexpected expenses such as hospital bills. Of particular interest is the portion of those assets that are in cash or are readily convertible into cash in a few days. These are called liquid assets. If income drops, they are much more useful in meeting living expenses and mortgage loan payments than assets that may require months to sell and convert to cash; that is, assets which are illiquid.

A mortgage lender also considers two values for life insurance holders. Cash value is the amount of money the policyholder would receive if he surrendered his/her policy or, alternatively, the amount he/she could borrow against the policy. Face amount is the amount that would be paid in the event of the insured’s death. Mortgage lenders feel most comfortable if the face amount of the policy equals or exceeds the amount of the proposed home loan. Less satisfactory are amounts less than the proposed loan or none at all. Obviously a borrower’s death is not anticipated before the loan is repaid, but lenders recognize that its possibility increases the probability of default. The likelihood of foreclosure is lessened considerably if the survivors receive life insurance benefits.

A lender is interested in the applicants’ existing debts and liabilities for two reasons. First, these items will compete each month against housing expenses for available monthly income. Thus high monthly payments may reduce the size of the loan the lender calculates that the applicants will be able to repay. The presence of monthly liabilities is not all negative: it can also show the mortgage lender that the applicants are capable of repaying their debts. Second, the mortgage applicants’ total debts are subtracted from their total assets to obtain their net worth. If the result is negative (more owed than owned), the mortgage loan request will probably be turned down as too risky. In contrast, a substantial net worth can often offset weaknesses elsewhere in the application, such as too little monthly income in relation to monthly housing expense.

Past Credit Record

Lenders examine the applicants’ past record of debt repayment as an indicator of the future. A credit report that shows no derogatory information is most desirable. Applicants with no previous credit experience will have more weight placed on income and employment history. Applicants with a history of collections, adverse judgments or bankruptcy within the past three years will have to convince the lender that this mortgage loan will be repaid on time. Additionally, the applicants may be considered poorer risks if they have guaranteed the repayment of someone else debt by acting as a co-maker or endorser. Lastly, the lender may take into consideration whether the applicants have adequate insurance protection in the event of major medical expenses or a disability that prevents returning to work.

When a mortgage lender will not provide a loan on a property, one must seek alternative sources of financing or lose the right to purchase the home.

Everything You Ever Needed to Know About Payday Loans But Were Afraid to Ask

A payday loan is a small short term loan you can use to cover expenditure until your next payday. You can apply online and the decision to loan you the money is made almost straight away. In most cases the whole application can be completed online and the money loaned can be credited into your bank account on the same day as you make your application.

A payday loan is an unsecured loan, so it is not dependent on collateral, such as you owning a house or car etc.

Generally when you make your first application you can borrow any amount up to £300, depending on your take home pay. You are more likely to be approved the less you want to borrow, so it is advisable to borrow only what you need. Once you have successfully repaid loans with one particular company they may then offer to lend you anything up to about £750 in subsequent loans.

Payday loans can provide a useful solution for short term cash flow problems.

Who can apply for a Payday loan?

In order to be eligible for a payday loan you must be over 18 years old and in employment with a take home wage of at least £750 per month. You must also have a bank account with a valid debit card.

Even if you have bad credit history you should still be able to obtain a payday loan as long as you fulfill the above criteria.

How do you get a Payday loan?

The majority of payday loans are available online, so there is no delay with faxing or posting of documents. The application process is quick and easy to complete. You will be asked for your name, address, details about your monthly income and employment, when your next payday is, along with the amount you wish to borrow and your bank account details.

Once you have submitted your application you should hear back from the payday loan provider within minutes. They will email you with their decision to the email address you have registered with your application.

Payday loan providers partly make their decision as whether to lend you money dependent on the amount you want to borrow compared to the amount you earn. Only borrow what you need, the less you borrow the more likely that your application will be accepted and the smaller the amount of interest you will accrue.

If your application is successful you will be sent, by email, your loan agreement showing the amount that will be lent to you, the repayment date and the amount of interest you will pay on the repayment date. Along with the loan agreement you should also be sent loan conditions. These loan conditions should outline your rights under the Consumer Credit Act 1974 along with details about repaying the loan, cancelling the loan and the use the personal information you supply when applying for the payday loan.

If you are happy to proceed you sign online by providing details of your name and answering a security question such as your mothers’ maiden name. Then, email this back to the loan provider and the money will be deposited into the bank account you registered at the application process. The money can be deposited in your bank account on the same day you make the application, so this is a very fast and efficient way of borrowing money short term.

How do I repay the loan?

You will need to repay the loan amount and the interest accrued on the repayment date as specified in the loan agreement. The repayment date is usually your payday, hence the name payday loan.

The repayment will be collected by the loan provider by debiting the bank account you registered at the application process, which is the bank account into which you get your wages paid.

Repayment over a longer period

Payday loans may be extended if you find yourself in a position to be unable to satisfy all or part of the amount due on the repayment date. If this happens it is recommended that you contact your payday loan provider as soon as possible and explain your circumstances to them. They will then be able to explain your options and how to go about extending your loan.

Even if you are not able to fully settle the repayment amount, it is advisable to pay off as much as possible on the repayment date. This will help to keep the amount of interest you owe to a minimum. Some companies may charge you additional fees for extending your loan, you should check if this is the case before you sign your loan agreement.

Regulation of Payday Loan Companies

Properly regulated payday loan companies must adhere to strict laws governing the finance industry.

As with any financial product you apply for it is always advisable to check that the company offering the loan is properly regulated. The payday loan company you are applying to should show its Consumer Credit License number within its loan conditions and it should also be authorized by the Office of Fair Trading. If you are in any doubt as to whether the payday loan company you are considering applying to is fully regulated then you are within your rights to contact either of these bodies for further information.

As long as the payday loan company you are applying to is properly regulated, there will be a recognized body to make any complaints you may have to and you can be assured that you will not be subject to any unfair practices.

What are the benefits of a Payday loan?

Fast

One of the main benefits of a payday loan is the speed at which the cash can be credited to you. The money you need can be available to you in your bank account on the same day that you make the application. This can provide valuable assistance if you have a short term cash flow problem and need money in an emergency.

Simple

The application process is very simple, it takes just minutes to apply for a payday loan and you do not have waste time posting or faxing documents to the payday loan provider, as you would with other more traditional high street loans.

Poor Credit History

Payday loans are available to people with a poor credit history. This is because payday loan companies do not solely make their decision to lend based on a persons credit history. As long as you fulfill the application criteria you have a good chance of obtaining a payday loan. For many people a payday loan may be the only way they are able to obtain credit, especially in the current financial climate where the majority of lenders are unwilling to provide loans altogether, never mind to a person with a poor credit history.

Use of the Loan Money

You do not have to tell the payday loan provider what you need the payday loan for. You can use the money for whatever you want. You may need money in an emergency which can not wait until payday for instance; emergency medical or dental treatment, to settle a bill quickly, extra spending money on holiday or even for a romantic weekend away. The choice is yours as long as you make the repayment due on the repayment date.

No Upfront Costs

There are no upfront costs associated with a payday loan. You do not pay anything back until the repayment date you have agreed to in the loan agreement.

Why does the APR appear high on payday loans?

The APR applied to payday loans appears at first glance to be high. This is very misleading, but there is a simple reason why this figure looks so high. APR is an Annual Percentage Rate, and as such is calculated over a whole year (365 days). However, a payday loan is taken usually only over a number of days or weeks.

The APR calculation was not designed to apply to very short term loans such as payday loans. It was designed to apply to long term loans in existence for a year or more. It is really a theoretical figure than enables people to compare similar longer term loan products, like mortgages or ongoing credit balances.

Rather than relying on the APR rate it is more advisable to look directly at the loan agreement to see exactly how much interest you will be charged for the period of your payday loan. Some companies have a standard interest charge for the amount you wish to borrow regardless of the duration of the loan. It is then up to you to decide whether you will be able to repay both the cash advance you receive initially and the interest amount on the repayment date.

To Conclude

Many people do not have savings or access to credit cards or more traditional loans and so the convenience of a regulated payday loan provides piece of mind should the occasion arise that they need some money quickly.

If you need money in a hurry, can not wait until payday and are confident that you can make the necessary repayments on the repayment date, this could be the ideal solution for you.

Overall, payday loans are convenient, easy to access and offer a viable option for people who require money quickly for whatever reason.

What Next in the World of Tax Preparers Oversight?

The last three weeks have been rather eventful in the world of tax preparers oversight!

It all started last March when three tax preparers filed a law-suit against the IRS, seeking to end the testing requirements that would require tax return preparers to demonstrate competency, and to maintain proficiency by taking 15 hours of continuing education courses, in order to continue preparing and file tax returns for their clients.

A couple weeks ago came the news that U.S. District Court Judge James E. Boasberg of the DC District Court had ruled in favor of the plaintiffs, declaring that contrary to the IRS’ assertions, the agency does not have statutory powers to regulate individual tax preparers. The Judge enjoined the IRS from continuing to administer tests to certify the competence of tax return preparers.

Last week it was announced that the IRS, working in conjunction with the Justice Department, had moved to lift the initial injunction, while it prepared an appeal to be filed within the next 30 days.

The lead attorney for the tax preparers who filed the suit against the IRS was confident after the initial decision emitted by Judge Boasberg was definitive and unequivocal in its intent to halt the IRS regulation requiring individual tax preparers to take a competency test, and expressed confidence that the Judge would not go back on that decision.

However, on February 1, the Judge responded to the motion from the IRS, in conjunction with Department of Justice and modified his earlier decision. At least for the time being, the IRS does not have to shut down the tax return preparers registration program but, on the other hand, under the modified decision the Judge made it non-mandatory for tax preparers to take the competency test and pay the required testing fees to the IRS. Under the Judge’s modified ruling, preparers may take the test on a voluntary basis and are not required to pay the test fees. However, tax preparers are still required to apply for and obtain a registration number, or PIN, from the IRS, in order to qualify to file tax returns.

Under the new ruling, the IRS does not have to dismantle the costly and complex program it already put in place at a cost of millions of dollars, as such steps would have proven unnecessary should the present court decision be reversed on appeal.

The IRS has indicated that it will appeal the US District Court’s ruling that the agency does not have the power to license the hundreds of thousands of tax preparers who work on individual tax return preparation, and alludes to the fact that immediate discontinuing of the tax preparer oversight program would substantially disrupt tax administration. Already, there has been a delay on the date to begin filing individual returns, which was moved to January 30. Some returns will not start being processed until later.

In light of the events that have transpired in the last few weeks, one thing is certain. The IRS will appeal the Court’s decision to suspend the RTRP competency testing and the plaintiffs who filed the initial lawsuit will probably continue to try to derail the IRS’ intentions to regulate the tax preparation industry.

But judging by opinions aired in blogs by tax practitioners who have already studied for and passed the RTRP test, the oversight program is necessary to curb potential fraud and malpractice, reduce the gross errors in tax returns that end up working to the disadvantage of the taxpayer, but above all, point to having the RTRP certification as a symbol of professional pride and demonstrated competency, which will work to the advantage of the tax professional by raising taxpayers’ trust and confidence in the work of their tax preparer..

The Right Cheap Loans For You

If you are looking for a loan, you know that one of the worst things that could happen would be if you were forced to pay more money for the loan than you wanted to pay. When this happens you are going to find out that you have trouble, so you have to be sure to do everything that you can do to make sure that you are finding cheap loans that are going to fit with your needs and be the loans that you want to have.

There are many ways to find cheap loans. First of all you have to have all of the information with you at all times. Be sure that you have planned out what you want the loan for, that you know what you are going to use the money for and what that is going to mean for you. This is very important because people who are going to get you cheap loans are going to want to know what the money is to be used for. Then, you also have to tell them how you are going to make the money to pay back your cheap loans. This is also important because the bank has to be sure that you are going to be paying them back and that they aren’t going to be losing money.

There are some things that you have to be careful of when you are looking for cheap loans. First of all you have to be very sure that you are able to pay them back, and you also have to watch carefully when they are explaining them to you. One of the dangers is that you will be offered cheap loans that don’t’ have a fixed interest rate, which means that they are going to be very cheap to you right now, but as time goes on they could get very expensive and this could happen without any warning. If this happens you are going to be in trouble, so you should do whatever you can to make sure that this doesn’t happen.

If you are paying close attention and if you are asking the right questions when it comes to your cheap loans, you should be able to handle them with no problem. You are going to want to make sure that you have all of the information that you need when it comes to your cheap loans, because you are going to need to make a good decision. It is a decision you are going to need to be able to live with. This is very important because cheap loans are not going to be easy loans to get. You are going to have to work hard, and you are going to have to make sure you are dealing with the best. If your credit is less than perfect, you may have to work even harder. However, in the end, with a long term loan, you will be glad you worked for great rates and terms.

Cheap Loans- Secured Loans Cost You Far Lesser Than Unsecured Loans

If one surveys the UK loan market, there are as many diversified loan products available as there are lending institutions. There is no dearth of good loan deals, only of good judgement. It is normally observed that first time borrowers fall prey to the trap of lenders, who despite the good credit record of the borrower let them agree for a loan at a high APR. This is mostly in the case of unsecured loans. Though, on the surface level, unsecured deals may seem tempting. But, once you go in to the depth, you find that the borrower is many times at a great loss by choosing an unsecured personal loan over a secured one.

Secured loans are cheap loans when one takes the APR charged and other charges like agreement fees, brokerage charges, and early redemption penalties into account. Since there is low risk involved in the loan deal for the lender, he offers low APRs on secured loans. The loan deal is secured by assets like home offered by the debtor. It’s the simple rule of thumb, lower the risk for the lender – lower the cost of loan for the borrower. With increasing debts and defaults on them, the rate of interest charged on unsecured loans by the lenders has increased considerably. Banks have become stringent in their credit policies as well regarding unsecured debts.

So, whenever there is choice between secured and unsecured loans, compare loans extensively. Secured loans may fetch you the following advantages that an unsecured might not.

  • Easier to obtain- You don’t really have to “hunt” for lenders in case of secured loans. Owning a home in UK and willingness to pledge it as collateral is in itself a big enough invitation for varied loan quotes from lenders. The creditors may offer you cheap loans if you are a homeowner. So, procuring a secured personal loan is not such a daunting task as availing an unsecured loan.
  • Hefty amounts can be procured- You can raise huge funds from the equity available in your home. In case of unsecured loans, on the other hand, the loan amount approved is generally small. For major financial requirements, like buying another house, property, starting a new business, going for further studies, etc, secured loan is a viable solution.
  • Long loan tenure- It is always better to repay the hefty amounts in small installments over a prolonged period. Secured loans allow this freedom to the borrower. This makes the installments easy to pay for the borrower. This feature is not there is the case of unsecured personal loans. So, compare loans on this parameter as well.
  • So, before availing any loan, compare loans to get cheap loans. After all, by availing a loan, you are incurring debts that have to be paid back. And, the more the flexibility of loan conditions, the more ease you’ll find in making regular installments.

6 Surprising Truths About Tax Preparers

Choosing the right tax preparer for your business is a decision best not left until April. A former tax preparer and small business mastermind offers insights into the secret world of tax preparers.

1. All tax preparers are not created equal.

It stands to reason, somewhere in the country is the Worst Tax Preparer. The bad news is you may have already booked your appointment with him. Preparing taxes is a complex activity. So complex that many of us simply throw in the towel, pack up our receipts, and head for the nearest tax office. When you arrive at the office, you fully expect our tax preparer to be highly competent and completely vested in getting you the best deal in town.

Back in my tax preparing days, I worked for one of the big name tax preparation franchises both as a preparer and as a tax return editor. I worked with seasoned professionals and total neophytes. I well remember the first time I stepped up to the plate as a new preparer. I was terrified. Terrified the customer would know I was inexperienced. Terrified I’d make a huge blunder and the customer would pick up on it. Terrified the more experienced preparers would laugh at my mistakes.

I quickly realized that as inexperienced as I was, I still knew way more than my clients did. And because the franchise had great systems, others would be checking and re-checking my work so my mistakes and oversights would be caught before I did any damage to the client.

As a tax return editor, I saw and corrected more mistakes than you would feel comfortable knowing about. Which brings me to a very important point, tax preparation is not a cut and dried, read the manual, do the formulas, follow the instructions, and poof! you’re done kind of activity. The tax codes in this country are complex and open to interpretation.

Tax preparers have a wide range of experience from none to grizzled veteran. They also span the continuum from ethical to completely fraudulent. The more complex your return, the more you need a veteran preparer. And if your preparer tells you about this great deduction that you can take and it sounds suspicious to you, listen to your intuition. It’s the difference between paying a little bit now or paying a whole lot later.

2. Tax preparers are not business experts.

The only business experts in the world are those who are running successful businesses. Tax preparers are trained to understand taxes. They’re trained to know the proper forms and deductions. They’re trained to help you with tax planning. They are not trained to understand how business works.

Now, you may have a tax preparer who is also a successful business owner. Many CPA’s, accountants, bookkeepers, and tax preparers do run their own businesses. They’re in a much better position to help you with your taxes because they understand the day to day challenges of running a business.

Understand that having your taxes prepared by a big name franchise, although it does ensure that your return is accurate, does not mean that your return is prepared in a way that is best for your business. Only a preparer who understands business can prepare a return that works for your business.

3. Hiring a tax preparer doesn’t mean you’re excused from understanding taxes.

I’ve seen it so many times. I sit down with a client to talk about finances or taxes. As I talk, the head is nodding, the mouth is saying, “uh huh, uh huh”, but what they’re really focused on is the pen in their hand. They don’t want to understand, they just want to sign off on the paperwork and be done with it. “That’s what I hire you for”, they say.

Big mistake. I could be sentencing them to time in a federal prison. Trusting someone else to the point where you abdicate all responsibility and have no knowledge of what you’re signing or what is being done in your name is a recipe for a big fat slice of disaster. That’s how embezzlement happens-I trust Mary completely. Bob always takes care of that. And it’s also how business owners end up in trouble-What do you mean he took a deduction for my Chihuahua as a guard dog? Hey, why didn’t I get a deduction for my new computer?

You have to know enough about taxes to be able to read your return intelligently so you know what you’re signing. You also need to know enough about taxes so you know what your tax preparer needs to know to prepare your return accurately and to your best advantage.

And don’t get your education from your buddies. I heard a lot about these “special deductions” you can take. Usually the information is not based on facts or tax codes. It’s a conglomeration of bad information that can get you into tax trouble.

4. Your tax preparer shouldn’t be the one telling you how your business is doing.

It hits them hard. They couldn’t be more shocked if you’d hit them upside the head with a dead fish. “I owe how much!”, they gasp. “How can that be? I don’t have any money!” Then the desperation sets in. The tax preparer is accused of not doing a good enough job. “You must have missed something.” Or, they dig deep trying to think of anything, anything at all, that can lower their tax liability. “Did I mention that vacation, I mean, business trip I took to the Caribbean? That’s deductible right?”

If the only time you know how your business is doing is on April 15th, you’re doing yourself a huge disservice. If you’re not tracking your tax liability and making plans to satisfy that liability, you’re in for a very long, painful, tortuous lesson delivered at the hands of the Internal Revenue Service. You will pay. You will pay way more than if you’d planned ahead. And it will take you forever to get caught up.

5. Why getting your tax return prepared shouldn’t be an errand you run on your lunch break.

I was in a client’s office one day getting her books closed out for the year so she could have her tax return prepared. I overheard a woman in the next office telling someone, “I’m just going to run out and get my taxes done.” I was horrified. Having your taxes prepared is not something you just “run out” and get done like an oil change. Good tax preparers are like good hair stylists. They have followings. People pre-book them.

If you just “run out” and have your taxes done, who do you think you’ll get as a tax preparer? The best and the brightest? Hardly. You’ll get the first year preparers who haven’t built up a following. The ones who are fresh out of tax class and generally have no experience preparing tax returns or running a business. The ones who don’t have the expertise to know the ins and outs of interpreting tax codes to your best advantage while still keeping you within the law. Sure everyone deserves a chance to gain experience but do you really want to be the first patient a surgeon operates on?

6. Procrastination is your worst enemy.

It’s April 14th. You think you probably should get your tax stuff together pretty soon. So, you work late into the night, gathering receipts, pawing through stacks of paper, digging under the seat of your car until finally you’ve got everything you need. Off you go on your lunch break on April 15th to get your return prepared. Your tax preparer, who has been working at a feverish pitch for weeks, has deep circles under her eyes, her hands are shaking from lack of sleep and too much caffeine, and you notice a small stream of drool running down her chin. “Oh look,” she exclaims laughing maniacally, “Another return!”. And you think to yourself, “What’s her problem?”.

You, my procrastinating friend, are her problem. Now she’s got to frantically race around trying to keep you out of trouble because you didn’t have the courtesy or forethought to be prepared well ahead of the deadline. And then she’ll have to listen to you whine because now all of a sudden you have to come up with thousands of dollars that you didn’t know you owed.

Do yourself a favor, get your return done early. If you owe money, you don’t have to send it until April 15th. At least you’ll know that your return was prepared by a tax preparer who wasn’t fatigued, you’ll know ahead of time what you owe, and you’ll have it off your mind so you can focus on other important things. Like getting your oil changed on your lunch break.

Getting a Cheap Loan & Improving Your Credit Rating to Ensure Your Loan is Competitive

Securing a Cheap Loan

With the current financial crisis constraining the amount of money banks presently lend due to the amount of capital reserves they require to satisfy regulating bodies, credit is not flowing as freely as it once was. Whilst London Inter-Bank Offering Rates (LIBOR) have dropped over the past year simple supply and demand is making loans less affordable at a time when they should technically be at their lowest levels. Basically the present   demand is high from the residential and business loan sectors, however the recent stress test revealed that capital reserves need to mitigate such crisis being sparked again, thus forcing banks to further reign in their lending.

One way of reigning in that lending is by lending money to people with superior credit ratings. By getting yourself a credit check you substantially improve your chances of securing a loan that you require whether it be for home improvements, car finance, or even a holiday. Don’t forget that making an application for credit goes against your score so ensure that your credit rating is in a suitable position prior application, otherwise you could further damage your chances for future loans and credit such as mortgages, gym memberships, mobile phones etc…

Businesses and consumers simply want to know what that means to them and why the loans at present are not as cheap as they should be!

The money markets and LIBOR rate dictate the rate at which banks lend to one another, and even with what appears the bottom of the recession being hit lenders are still cautious on who they lend to and for what period of time. So even though you see the Bank of England Base Rate set by the Monetary Policy Committee set currently at 0.5% this does not mean your rate will be anything near this as wider economic factor influence that rate that filters down through to consumers and businesses.

Before Applying for the Loan

Even before you apply for a loan get a credit check to determine if you would even be considered by the lender, as a meaningless application could further hinder you rating and make future loans difficult to attain.

What if my Credit Rating is poor?

If your credit rating is poor there are a number of ways to improve your score prior your application for credit here are a brief few things you can do.

  • Clear CCJ’s.
  • Ensure you are on the Electoral Register
  • Time your application well – moving house can be a factor.
  • Clear previous debts & use expensive high rate credit cards (Just for one month).
  • Never miss a payment.
  • Check your address on all active accounts.

How do I get a Cheap Loan

Using loan comparison sites can help you compare secured and unsecured loans, credit cards, prepaid cards and payday loans, but these sites don’t always display all caveats. Remember its not just the rate that will make the loan cheap for yourself. More companies seem to be using set up fees and early repayment charges to earn extra money from those who only require a loan over the short term. Please consider the following:

  • You need to compare the APR to determine the true cost of the loan.
  • Look into the ability to make overpayment’s without penalty charges, as this will substantially reduce the capital owed, further reducing the interest paid, meaning your loan cost has been reduced.
  • Check for lenders who are willing to match or even beat rates on the high street in order to attain your custom, after all they are still competing for your custom.
  • Limit the amount you need to borrow on high APR – don’t just use one source, couple an interest free credit card with a higher APR loan if that is all that’s available as one will offset the other.

Getting a loan over a certain amount can sometimes be more beneficial than getting a smaller loan due to administration charges and other governing factors, so bear this in mind when applying for a loan [http://www.loanrunner.co.uk/loans], therefore it can be cheaper to get a larger loan and then simply make an overpayment offset the induced interest.

Fast Money Recap – The Basics

Many people nowadays want to earn fast money. One of the ways to accomplish that is by learning the trend in the stock market. One of the most watched business programs in the United States is the Fast Money program by CNBC. Did you miss an episode? Do not worry; you can always watch it through Fast Money Recap.

If you want to stay updated on the stock trading trends, then the program to watch is Fast Money Recap. The show airs for about 60 minutes and is shot on location at NASDAQ Market Site, New York City. It is produced by CNBC and serves as a ticker that shows index symbols and security similar to an old telegraph messaging set-up. Tickers flashed on the program uses information from various third-party companies like the American Stock Exchange (AMEX), the NASDAQ, the New York Stock Exchange and Reuters. In other words it serves as a business news band around the globe. The said ticker is now shown in between commercial breaks.

They even have blogs to keep its viewers updated with how the money moves in the stock market. This American stock trading show has been in live telecast for almost six years or from 2006. Getting a large following the program has undergone re-formats to suit trader’s choices. The program also talks about exchange-traded funds, commodities and options trading as well. There are usually Wall Street trading experts that will discuss about how-to invest well, technical analysis on the economy and merits of the debate regarding a certain sector or stock.

Why watch Fast Money Recap? This has everything a serious trader needs: the views of each stock owner on their stocks, stock predictions and disclosures by the traders. Most traders would watch this an hour the trading closes to know how the stock market did for that day. This will give you an in-depth knowledge on how to earn money fast in the stock market, which trends to follow and what other investment schemes are effective for you.

You can get updates of Fast Money Recap through their blogs, or it can be sent straight on your mobile phone. Get the leverage in getting informed regarding business and stock trading news. Knowing how to invest, when to place your hard-earned money online and in the stock market will spell the difference between wealth and bankruptcy so make sure that you are armed with knowledge before investing.