Getting a mortgage with frozen credit

Remember the Equifax data breach last summer? Roughly 145 million Americans had their personal information and credit data compromised, leaving them open to identity fraud and theft. As a result, U.S. credit bureaus (Experian, Equifax, and TransUnion) saw a surge in consumers signing up to freeze their accounts. Now some would-be homebuyers are running into a hurdle in the mortgage application process: frozen credit. Fortunately, you can request a temporary “thaw” that allows lenders to access your account without permanently lifting your freeze. You’ll need to contact each of the three major credit bureaus separately, and you may need to…..

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Buyers increasing down payments to gain edge

Buyers are facing heavy competition in certain U.S. housing markets, and many are increasing their down payment to gain the competitive edge. In purchase situations with multiple offers, the buyer with the larger down payment is likely to win out. In part, that’s because larger down payments suggest less risk that financing could fall through. More importantly, a higher down payment can effectively bridge any financing gaps should the home appraisal come in at less than the offered purchase price. The median down payment for homes purchased with financing in the third quarter of 2017 rose to a high of…..

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Home values could decline, thanks to tax changes

The Tax Cuts and Jobs Act, signed into law in late December, will affect millions of Americans in different ways. When it comes to real estate, legal experts suggest that the massive tax overhaul could have some unintended consequences, including discouraging homeownership and slowing the pace of home appreciation. Here’s how the new law affects homeowners: Lower limits on mortgage interest deductions: Under the new law, homeowners can deduct interest on mortgages up to $750,000, down from $1 million. The reduction makes it more expensive to borrow money for high-priced homes. Limits on SALT deductions: Previously all state and local…..

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Tax Reform May Impact Charitable Giving

As the tax reform measures were unveiled, members of the charitable community expressed alarm that the new rules could create a disincentive to donate. With the larger standard income tax deduction ($12,000 for an individual filer and $24,000 for a married couple), fewer people will realize the benefits of itemizing. Some charities fear that, absent the tax write-off, fewer people will give. Yet others argue a household’s higher net income will be a boon to non-profits. How the tax reform changes will actually impact giving remains to be seen. Here’s a summary of some ways the law might impact annual…..

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Evaluating Generation-Skipping Tax Transfers

Your current financial plan may include wealth transfers to grandchildren, great-grandchildren or other descendants, and these gifts may be subject to a generation-skipping tax (GST). The GST was created to prevent families from essentially “skipping” a generation’s worth of estate taxes as wealth is passed down. In 2017, the GST exemption (the amount that can be transferred to grandchildren without incurring a federal GST tax) was $5.45 million adjusted for inflation. Now, under the new tax reform law, the GST exemption is doubled to roughly $11.2 million. In 2026, however, the exemptions revert back to pre-2018 levels. Doubling the exemption…..

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‘Clawback’ Concerns Linger Under New Tax Law

The new tax reform package increases an individual’s lifetime exemption from roughly $5.5 million to $11.2 million, with an expiration date of December 31, 2025. For individuals who don’t expect to die in the next eight years, your gift strategy could include protecting assets from future estate taxes while still maintaining adequate resources for your lifetime. You may, for example, choose to max out your lifetime exemption now, while you are still alive, to minimize the tax burden on your heirs when you die. Let’s assume you are a high-net worth individual with no surviving spouse. If you give your…..

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Estate Planning Still Essential, Despite Increased Exemptions

The Tax Cuts and Jobs Act (TCJA) reduces individual and corporate tax rates, eliminates a bevy of deductions and makes a host of changes to how Americans can preserve their wealth. Although the act falls short of repealing the death tax, it doubles the amount an individual may transfer tax free, either in his or her lifetime or at death. Effective January 1, 2018 (and expiring December 31, 2025), the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption amounts double from an inflation-adjusted $5 million to $10 million. Taking into account inflationary adjustments, the actual…..

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Four provisions people forget to include in their estate plan

Even if you’ve created an estate plan, are you sure you have included everything you need to? There are certain provisions that people frequently forget to put in in a will or estate plan that can have a big impact on their heirs. 1. Alternate beneficiaries One of the most important things an estate plan should include is at least one alternative beneficiary in case the named beneficiary does not outlive you or is unable to claim under the will. If a will names a beneficiary who isn’t able to take possession of the property, your assets may pass as…..

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How Medicare and employer coverage coordinate

Medicare benefits start at age 65, but many people continue working past that age. That makes it important to understand how Medicare and employer coverage fit together. Depending on your circumstances, Medicare is either the primary or the secondary insurer. The primary insurer pays any medical bills first, up to the limits of its coverage. The secondary insurer covers costs the primary insurer doesn’t cover (although it may not cover all costs). Knowing whether Medicare is primary or secondary to your current coverage is crucial because it determines whether you need to sign up for Medicare Part B when you…..

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Use your will to dictate how to pay your debts

The main purpose of a will is to direct where your assets will go after you die, but it can also be used to instruct your heirs on how to pay your debts. While generally heirs cannot inherit debt, an estate’s debt can reduce what they receive. Spelling out how debt should be paid can help your heirs. If someone dies with outstanding debt, the executor is responsible for making sure those debts are paid. This may require selling assets that you would have preferred to leave to specific heirs. There are two types of debts you might leave behind:…..

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