What the Tax Software Companies Don't Want You to Know

Written by Stephanie Gallagher


Continued from page 1

Why isrepparttar IRS doing this? In a nutshell, to save money. It’s cheaper, faster and easier for them to process returns electronically.

Why should you do it? Because it’s cheaper and easier to file, and you can get your refund faster.

Why arerepparttar 111792 big tax companies offering this deal? They’re trying to get you to upgrade to one of their deluxe products, which offer things like tax planning advice,repparttar 111793 ability to import data from software you used last year, etc.

Also, state tax programs are not included in this deal. Sorepparttar 111794 companies probably figure that if you use their free federal program you’ll end up buying their state one.

Remember: You must go throughrepparttar 111795 IRS official web site in order to get this deal. If you go torepparttar 111796 tax companies’ sites, you will not get this offer. In fact, some of these companies not only charge you to do your return online, but then they’ll also hit you with a fee once you try to file electronically. So you’ll pay twice if you don’t go throughrepparttar 111797 IRS web site.

Happy tax preparing!

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Mortgage Terms Explained

Written by Chris Cooper


Continued from page 1

This type of mortgage is designed to help low and moderate income people become home owners. It requires low down payments and has flexible lending requirements.

Ifrepparttar borrower defaults,repparttar 111791 government steps in and paysrepparttar 111792 guarantee. This makes it easier for lenders to write mortgages they would otherwise refuse.

Fixed Rate

Fixed rate mortgages have interest rates set forrepparttar 111793 term ofrepparttar 111794 mortgage, which can be anywhere between 5 to 30 years.

Although they can be interest only or have a balloon, they usually are conventionally amortized mortgages.

At times like now, when rates are low, most homeowners want to lock inrepparttar 111795 low fixed rates. They are popular when rates are falling, not so popular when they’re high or going up.

This type mortgage is a very good idea if you're planning to live in your house for a while.

Home Equity Line of Credit

A revolving credit line secured by your home. Because it is a mortgage, it carries a lower rate than other forms of credit and is tax deductible.

It differs from a second mortgage in that it is not for a fixed term or amount and can be kept in effect as long as you own your home.

This is used most frequently for debt consolidation and can be useful if you rip up your credit cards and userepparttar 111796 money you save on interest to invest.

Interest Only Mortgages

This is just what it says. You only pay interest,repparttar 111797 principal is never reduced.

This isrepparttar 111798 grand daddy of all balloon mortgages and you taking a big risk that your house depreciates in value rather thanrepparttar 111799 other way around.

You could very well have to come up with extra cash at closing.

The payments are much lower than on a normally amortized mortgage and if you haverepparttar 111800 discipline, it can be a useful financial planning tool.

Jumbo Mortgages

Mortgage loans over $322,700 (the limit is periodically raised). Otherwise,repparttar 111801 mortgage can be fixed or variable, balloon, etc.

Rates are usually a little higher than for smaller loans.

No Doc or Low Doc Mortgages

This refers torepparttar 111802 mortgage application, not torepparttar 111803 mortgage itself. Business owners, people living off investments, salesmen and others whose income is variable might use low or limited documentation mortgages.

Very wealthy borrowers or those who want substantial financial privacy will sometimes userepparttar 111804 no doc option.

In either case, in spite of their names some documentation is required. The lender will accept nothing less than excellent credit and even then you will pay more forrepparttar 111805 privilege.

No Money Down Mortgages

These come in two flavors: FHA type loans that allow low or moderate income borrowers to buy a house with little or nothing down andrepparttar 111806 80-20 plans, where wealthier borrowers with little money saved up finance 100% ofrepparttar 111807 purchase price.

Underrepparttar 111808 80-20 plan a first and second mortgage are issued simultaneously. The borrower avoids having to buy mortgage insurance. The two loans are designed to cost less than an 80% loan plusrepparttar 111809 insurance, otherwise they make no sense.

Ifrepparttar 111810 borrower puts some money down, you will seerepparttar 111811 mortgage referred to as 80-10-10 (the last digits will berepparttar 111812 percent of down payment) or some similar number.

It is mostly used by borrowers who haven’t saved enough for a down payment or by those who haverepparttar 111813 money, but would rather use it for other purposes.

Refinancing

This technically means getting a new mortgage at different, hopefully better terms. A lot of people use it interchangeably with obtaining a second mortgage or line of credit; in other words tapping intorepparttar 111814 equity of their house.

Second Mortgages

Secondary financing obtained by a borrower. They can be fixed in amount or takerepparttar 111815 form of a Home Equity Line of Credit, which is simply a revolving credit line secured by a house.

Homeowners use these forms of financing to consolidate bills, do home renovations, put their kids through college, etc. They are tapping intorepparttar 111816 equity they have in their house to use for other things.

This is not necessarily a great idea. You must take firm control of your finances when you start doing this or you risk either losing your house or having to raise cash to payrepparttar 111817 mortgages off when you sell.

If done properly, you can pay off your debt at a lower, tax deductible rate and invest your savings.

VA (Veteran’s Administration) Mortgages

The VA provides mortgage guarantees to active duty and ex-servicemen who meet certain eligibility requirements. (To readrepparttar 111818 requirements click here.)

Like with FHA loans,repparttar 111819 government guarantee makes it easier for low and moderate income veterans and active duty service personnel to obtain mortgages.

The current VA guarantee is $89,912. It is raised periodically.

125% Mortgages

If you want to bet house prices will rise, some lenders will lend you up to 125% ofrepparttar 111820 value of your house. If you’re right, you’re okay. Otherwise be prepared to have your checkbook available when you sell your house.

I’m sure that there are other financing options available that I haven’t covered and don’t even know about. But most ofrepparttar 111821 main financing types are covered here.



Chris Cooper is a retired attorney who is very familiar with debt, being in it too many times in his life. These articles pass on some of the knowledge he has gained striving to become debt free. He is editor-in-chief of http://www.credit-yourself.com a website devoted to debt management


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