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What Is a Recourse Loan?

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In borrowing, there are two types of debts, recourse and nonrecourse. Recourse debt holds the person borrowing money personally liable for the debt. If you default on a recourse loan, the lender will have license, or recourse, to go after your personal assets if the collateral’s value doesn’t cover the remaining amount of the loan that is due. Recourse loans are often used to finance construction or invest in real estate. Here’s what you need to know about recourse loans, how they work and how they differ from other types of loans.

What Is a Recourse Loan?

A recourse loan is a type of loan that allows the lender to go after any of a borrower’s assets if that borrower defaults on the loan. The first choice of any lender is to seize the asset that is collateral for the loan. For example, if someone stops making payments on an auto loan, the lender would take back the car and sell it.

However, if someone defaults on a hard money loan, which is a type of recourse loan, the lender might seize the borrower’s home or other assets. Then, the lender would sell it to recover the balance of the principal due. Recourse loans also allow lenders to garnish wages or access bank accounts if the full debt obligation isn’t fulfilled.

Essentially, recourse loans help lenders recover their investments if borrowers fail to pay off their loans and the collateral value attached to those loans is not enough to cover the balance due.

How Recourse Loans Work

When a borrower takes out debt, he typically has several options. Most hard money loans are recourse loans. In other words, if the borrower fails to make payments, the lender can seize the borrower’s other assets such as his home or car and sell it to recover the money borrowed for the loan.

Lenders can go after a borrower’s other assets or take legal action against a borrower. Other assets that a lender can seize might include savings accounts and checking accounts. Depending on the situation, they may also be able to garnish a borrower’s wages or take further legal action.

When a lender writes a loan’s terms and conditions, what types of assets the lender can pursue if a debtor fails to make debt payments are listed. If you are at risk of defaulting on your loan, you may want to look at the language in your loan to see what your lender might pursue and what your options are.

Recourse Loans vs. Nonrecourse Loans

Bank repo signNonrecourse loans are also secured loans, but rather than being secured by all a person’s assets, nonrecourse loans are only secured by the asset involved as collateral. For example, a mortgage is typically a nonrecourse loan, because the lender will only go after the home if a borrower stops making payments. Similarly, most auto loans are nonrecourse loans, and the bank or lender will only be able to seize the car if the borrower stops making payments.

Nonrecourse loans are riskier for lenders because they will have fewer options for getting their money back. Therefore, most lenders will only offer nonrecourse loans to people with exceedingly high credit scores.

Types of Recourse Loans

There are several types of recourse loans that you should be aware of before taking on debt. Some of the most common recourse loans are:

  • Hard money loans. Even if someone uses their hard money loan, also known as hard cash loan, to buy a property, these types of loans are typically recourse loans.
  • Auto loans. Because cars depreciate, most auto loans are recourse loans to ensure the lender receive full debt payments.

Recourse Loans Pros and Cons

For borrowers, recourse loans have both pros and and at least one con. You should evaluate each before deciding to take out a recourse loan.

Pros

Although they may seem riskier upfront, recourse loans are still attractive to borrowers.

  • Easier underwriting and approval. Because a recourse loan is less risky for lenders, the underwriting and approval process is more manageable for borrowers to navigate.
  • Lower credit score. It’s easier for people with lower credit scores to get approved for a recourse loan. This is because more collateral is available to the lender if the borrower defaults on the loan.
  • Lower interest rate. Recourse loans typically have lower interest rates than nonrecourse loans.

Con

The one major disadvantage of a recourse loan is the risk involved. With a recourse loan, the borrower is held personally liable. This means that if the borrower does default, more than just the loan’s collateral could be at stake.

The Takeaway

Hard Money Loan signLoans can be divided into two types, recourse loans and nonrecourse loans. Recourse loans, such as hard money loans, allow the lender to pursue more than what is listed as collateral in the loan agreement if a borrower defaults on the loan. Be sure to check your state’s laws about determining when a loan is in default. While there are advantages to recourse loans, which are often used to finance construction, buy vehicles or invest in real estate, such as lower interest rates and a more straightforward approval process, they carry more risk than nonrecourse loans.

Tips on Borrowing

  • Borrowing money from a lender is a significant commitment. Consider talking to a financial advisor before you take that step to be completely clear about how it will impact your finances. Finding a financial advisor doesn’t have to be difficult. In just a few minutes our financial advisor search tool can help you find a professional in your area to work with. If you’re ready, get started now.
  • For many people, taking out a mortgage is the biggest debt they incur. Our mortgage calculator will tell you how much your monthly payments will be, based on the principal, interest rate, type of mortgage and length of the term.

Photo credit: ©iStock.com/aee_werawan, ©iStock.com/PictureLake, ©iStock.com/designer491

The post What Is a Recourse Loan? appeared first on SmartAsset Blog.

Source: smartasset.com

Increasing Your Savings on a Low-Income Salary

A low-income salary can create challenges when it comes to reaching your financial goals. You may want to take a vacation, buy a new car, or just put some cash away for a rainy day, but how can you do that with a limited income? Although you may struggle to add to your savings, there […]

The post Increasing Your Savings on a Low-Income Salary appeared first on Credit Absolute.

Source: creditabsolute.com

Credit Card Balance Transfers

Credit card balances are crippling households across the United States, giving them insurmountable debts that just keep on growing and never seem to go away. But there is some good news, as this problem has spawned a multitude of debt relief options, one of which is a credit card balance transfer.

Balance transfers are a similar and widely available option for all debtors to clear their credit card balances, reduce their interest rate, and potentially save thousands of dollars.

How Credit Card Balance Transfers Work

A balance transfer credit card allows you to transfer a balance from one or more cards to another, reducing credit card debt and all its obligations. These cards are offered by most credit card companies and come with a 0% APR on balance transfers for the first 6, 12 or 18 months.

Consumers can use this balance transfer offer to reduce interest payments, and if they continue to pay the same sum every month, all of it will go towards the principal. Without interest to eat into their monthly payment, the balance will clear quickly and cheaply.

There are a few downsides to transferring a balance, including late fees, a transfer fee and, in some cases, an annual fee.

What Happens When You Transfer a Balance on Credit Cards?

When you transfer a balance, your new lender repays your credit card debt and moves the funds onto a new card. You may incur a transfer fee and pay an annual fee, which can increase the total debt, but transferring a balance in this way allows you to take advantage of a 0% introductory APR. While this introductory period lasts, you won’t pay any interest on your debt and can focus on clearing your credit card debt step by step.

Why are Balance Transfers Beneficial?

A little later, we’ll discuss some alternatives to a balance transfer offer, all of which can help you clear your debt. However, the majority of these methods will increase your debt in the short term, prolong the time it takes to repay it or reduce your credit score. 

A balance transfer credit card does none of these things. As soon as you accept the transfer offer, you’ll have a 0% introductory APR that you can use to eliminate your debt. The balance transfer may increase your debt liabilities slightly by adding a transfer fee and an annual fee, but generally speaking, this is one of the best ways to clear your debt.

To understand why this is the case, you need to know how credit card interest works. If you have a debt of $20,000 with a variable APR rate of 20% and a minimum monthly payment of $500, you’ll repay the debt in 67 months at a cost of over $13,000 in interest.

If you move that debt to a card with a balance transfer offer of 0% APR for 12 months, and you continue to meet the $500 minimum payment, you’ll repay $5,000 and reduce the debt to $15,000. From that point on, you’ll have a smaller balance to clear, less interest to worry about, and can clear the debt completely in just a few more years.

Of course, the transfer fee will increase your balance somewhat, but this fee is minimal when compared to the money you can save. The same applies to the annual fee that these cards charge and, in many cases, you can find cards that don’t charge an annual fee at all. 

You can even find no-fee balance transfer cards, although these are rare. The BankAmericard credit card once provided a no fee transfer offer to all applicants, in addition to a $0 annual fee. However, they changed their rules in 2018 and made the card much less appealing to the average user.

Pros and Cons of Credit Card Balance Transfers

From credit score and credit limit issues to a high variable APR, late fees, and cash advance fees, there are numerous issues with these cards. However, there are just as many pros as there are cons, including the fact that they can be one of the cheapest and fastest ways to clear debt.

Pro: 0% Introductory APR

The 0% APR on balance transfers is the best thing about these credit cards and the reason they are so beneficial. However, many cards also offer 0% APR on purchases. This means that if you continue to use your card after the transfer has taken place, you won’t be charged any interest on the new credit.

With most cards, the 0% APR on purchases runs for the same length of time as the balance transfer offer. This ensures that all credit you accumulate upon opening the account will be subject to the same benefits. Of course, accumulating additional credit is not wise as it will prolong the time it takes you to repay the debt.

Pro: Can Still Get Cash Rewards

While cash rewards are rare on balance transfer cards, some of the better cards still offer them. Discover It is a great example of this. You can earn cash back every time you spend, even after initiating a balance transfer. The cash rewards scheme is one of the best in the industry and there is also a 0% APR on balance transfers during an introductory period that lasts up to 18 months.

Pro: High Credit Limit

A balance transfer card may offer you a high credit limit, one that is large enough to cover your credit card debt. You will need a good credit score to get this rate, of course, but once you do your credit card debt will clear, you can repay it, and then you’ll have a card with a high credit limit and no balance.

Throw a rewards scheme into the mix (as with the Discover It rewards card) and you’ll have turned a dire situation into a great one.

Con: Will Reduce Credit Score

A new account opening won’t impact your credit score as heavily as you may have been led to believe. In fact, the impact of a new credit card or loan is minimal at best and any effects usually disappear after just a few months. However, a balance transfer card is a different story and there are a few ways it can impact your score.

Firstly, it could reduce your credit utilization ratio. This is the amount of credit you have compared to the amount of debt you have. If you have four credit cards each with a credit limit of $20,000 and a debt of $10,000 then your score will be 50%. If you close all of these and swap them for a single card where your credit limit matches your debt, your score will be 100%.

Your credit utilization ratio points for 30% of your total FICO score and can, therefore, do some serious damage to your credit score.

Secondly, although FICO has yet to disclose specifics, a maxed-out credit card can also reduce your score. By its very nature, a balance transfer card will be maxed out or close to being maxed out, as it’s a card opened with the sole purpose of covering this debt.

Finally, if you close multiple accounts and open a new one, your account age will decrease, thus reduce your credit score further.

Con: Transfer Free

The transfer fee is a small issue, but one worth mentioning, nonetheless. This is often charged at between 3% and 5% of the total balance, but there are also minimum amounts of between $5 and $10, and you will pay the greater of the two.

This can sound like a lot. After all, for a balance transfer of $10,000, 5% will be $500. However, when you consider how much you can save over the course of the introductory period, that fee begins to look nominal.

There may also be an annual fee to consider, but if your score is high enough and you choose one of the cards listed in this guide, you can avoid this fee.

Con: Late Fees and Other Penalties

In truth, all credit cards will charge you a fee if you’re late and you will also be charged a fee every time you make a cash advance. However, the fees may be higher with balance transfer cards, especially if those cards offer generous benefits and rewards elsewhere. It’s a balancing act for the provider—an advantage here means a disadvantage there.

Con: High APR on Purchases

While many balance transfer cards offer a 0% APR on purchases for a fixed period, this rate may increase when the introductory period ends. The resulting variable APR will often be a lot larger than what you were paying before the transfer, with many credit cards charging over 25% or more on purchases.

Which Credit Cards are Best for Clearing Credit Card Debt?

Many credit card issuers have some kind of balance transfer card, but it’s worth remembering that credit card companies aren’t interested in offering these cards to current customers. You’ll need to find a new provider and if you have multiple cards with multiple providers, that can be tricky. 

Run some comparisons, check the offers against your financial situation, and pay close attention to late fees, APR on purchases, cash rewards, and the length of the 0% introductory APR rate. 

You’ll also need to find a card with a credit limit high enough to cover your current debt, and one that accepts customers with your credit score. This can be tricky, but if you shop around, you should find something. If not, focus on increasing your credit score before seeking to apply again.

Here are a few options to help you begin your search for the most suitable balance transfer card:

Discover It

  • Balance Transfer Offer: 18 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 6 months
  • Annual Fee: $0
  • Rate: Up To 24.49% Variable APR
  • Rewards: Yes

Chase Freedom Unlimited

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 5% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.24% Variable APR
  • Rewards: Yes

Citi Simplicity

  • Balance Transfer Offer: 21 Months
  • Transfer Fee: 5% on transfers
  • Purchases APR: 0% for 12 months
  • Annual Fee: $0
  • Rate: Up To 26.24% Variable APR
  • Rewards: No

Bank of America Cash Rewards

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: No

Capital One Quicksilver

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: No

Blue Cash Everyday Card from American Express

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: No

Capital One SavorOne

  • Balance Transfer Offer: 15 Months
  • Transfer Fee: 3% on transfers
  • Purchases APR: 0% for 15 months
  • Annual Fee: $0
  • Rate: Up To 25.49% Variable APR
  • Rewards: Yes

How to Clear Debt with a Balance Transfer Card

From the point of the account opening to the point that the introductory period ends, you need to focus on clearing as much of the balance as possible. Don’t concern yourself with a variable APR rate, annual fee or other issues and avoid additional APR on purchases by not using the card. Just put all extra cash you have towards the debt and reduce it one step at a time.

Here are a few tips to help you clear debt after you transfer a balance:

Meet the Monthly Payment

First things first, always meet your minimum payment obligations. The 0% APR on balance transfers protects you against additional interest, but it doesn’t eliminate your repayments altogether. If you fail to meet these payments, you could find yourself in some serious hot water and may negate the balance transfer offer.

Increase Payment Frequency

It may be easier for you to repay $250 every two weeks as opposed to $500 every month. This will also allow you to use any extra funds when you have them, thus preventing you from wasting cash on luxury purchases and ensuring it goes towards your debt.

Earn More

Ask for a pay rise, take on a part-time job, work as a freelancer—do whatever it takes to earn extra cash during this period. If you commit everything you have for just 12 to 18 months you can get your troublesome debt cleared and start looking forward to a future without debt and complications, one where you have more money and more freedom.

Sell Up

It has never been easier to sell your unwanted belongings. Many apps can help you with this and you can also sell on big platforms like Facebook, eBay, and Amazon. 

Sell clothes, electronics, books, games, music—anything you no longer need that could earn you a few extra dollars. It all goes towards your debt and can help you to clear it while your introductory APR is active.

Don’t Take out a Personal Loan

While you might be tempted to use a loan to cover your debt, this is never a good idea. You should avoid using low-interest debt to replace high-interest debt, even if the latter is currently under a 0% introductory APR. 

It’s easy to get trapped in a cycle of swapping one debt for another, and it’s a cycle that ultimately leads to some high fees and even higher interest rates.

Focus on the Bigger Picture

Debt exists because we focus too much on the short-term. Rather than dismissing the idea of buying a brand-new computer we can’t afford, we fool ourselves into believing we can deal with it later and then pay for it with a credit card. This attitude can lead to persistent debt and trap you in an inescapable cycle and it’s one you need to shed if you’re going to transfer a balance.

Instead of focusing on the short term, take a look at the bigger picture. If you can’t afford it now, you probably can’t afford it later; if you can’t repay $10,000 worth of debt this year, you probably can’t handle $20,000 next year.

Alternatives to Credit Card Balance Transfers

If you have the cash and the commitment to pay your credit card debt, a balance transfer card is perfect. However, if you have a low credit score and use the card just to accumulate additional debt and buy yourself more time, it will do more harm than good. In that case, debt relief may be the better option.

These programs are designed to help you pay your debt through any means possible. There are several options available and all these are offered by specialist companies and providers, including banks and credit unions. As with balance transfer cards, however, you should do your research in advance and consider your options carefully before making a decision.

Pay More Than the Minimum

It’s an obvious and perhaps even redundant solution, but it’s one that needs to be mentioned, nonetheless. We live in a credit hungry society, one built on impulsive purchases and a buy-now-care-later attitude. A balance transfer card, in many ways, is part of this, as it’s a quick and easy solution to a long and difficult problem. And like all quick patches, it can burst at the seams if the problem isn’t controlled.

The best option, therefore, is to try and clear your debts without creating any new accounts. Do everything you can to increase your minimum payment every month. This will ensure that you pay more of the principal, with the minimum payment covering your interest obligations and everything else going towards the actual balance.

Only when this fails, when you genuinely can’t cover more than the minimum, should you look into opening a new card.

Debt Consolidation

Balance transfers are actually a form of debt consolidation, but ones that are specifically tailored to credit card debt. If you have multiple types of debt, including medical bills, student loans, and personal loans, you can use a consolidation loan to clear it.

This loan will pay off all of your debts and then give you a new one with a new provider. The provider will reduce your monthly payment and may even reduce your interest rate, allowing you to pay less and to feel like you’re getting a good deal. However, this is at the expense of a greatly increased loan term, which means you will pay considerably more over the duration of the loan.

As with everything else, a debt consolidation loan is dependent on you having a good credit score and the better your financial situation is, the better the loan rates will be.

Debt Management

Debt management can help if you don’t have the credit history required for debt consolidation. Debt management plans are provided by companies that work with your creditors to repay your debts in a way that suits you and them. You pay the debt management company, they pass your money on, and in return, they request that you abide by many strict terms and conditions, including not using your credit cards.

Many debt management programs will actually request that you close all but one of your credit cards and only use that one card in emergencies. This can greatly reduce your credit score by impacting your credit utilization ratio. What’s more, if you miss any payments your creditors may renege on their promises and revert back to the original monthly payments.

Debt Settlement

The more extreme and cheaper option of the three, but also the riskiest. Debt settlement works well with sizeable credit card debt and is even more effective if you have a history of missed payments, defaults or collections. A debt specialist may request that you stop making payments on your accounts and instead put your money into a secured account run by a third-party provider.

They will then contact your creditors and negotiate a settlement amount. This process can take several years as they’re not always successful on the first attempt but the longer they wait, the more desperate your creditors will become and the more likely they will be to accept a settlement.

Debt settlement is one of the few options that allows you to pay all your debt for much less than the original balance. However, it can harm your credit score while these debts are being repaid and this may impact your chances of getting a mortgage or a car loan for a few years.

Credit Card Balance Transfers is a post from Pocket Your Dollars.

Source: pocketyourdollars.com

Which cards earn American Express rewards points?

Information about the Amex Everyday Preferred Card and American Express Blue Card has been collected independently by CreditCards.com. The issuer did not provide the content, nor is it responsible for its accuracy.

#American Express offers a large array of cards – including everyday spending cards, travel cards, business cards and co-branded cards – that let you earn Membership Rewards points. It can be confusing to try to sift through all the offerings and figure out where all the bonuses lie, so we’ve sorted it out for you.

Here’s a breakdown of the cards:

American Express Membership Rewards consumer credit cards

Rewards rate Introductory bonus Annual fee

Blue from American Express card

  • 2 points per dollar for eligible travel purchases booked through AmexTravel.com
  • 1 point per dollar on every purchase (Terms apply)
None
$0

Amex Everyday Preferred card

  • 3 points per dollar at U.S. supermarket purchases ($6,000 yearly purchase limit)
  • 2 points per dollar U.S. gas stations
  • 1 point per dollar other purchases
  • 50% bonus points when you make 30+ purchases per month
  • Terms apply
15,000 points if you spend $1,000 in first 3 months (Terms apply)
$95

American Express® Green Card

  • 3 points per dollar on travel, transit and restaurants worldwide
  • 1 point per dollar on other purchases
  • Terms apply
30,000 points if you spend $2,000 in first 3 months (Terms apply) $150

American Express® Gold Card

  • 4 points per dollar at restaurants worldwide
  • 4 points per dollar at U.S. supermarkets (up to $25,000 in purchases per year, then 1x)
  • 3 points per dollar on directly booked flights
  • 1 point per dollar other purchases
  • Terms apply
60,000 points if you spend $4,000 in first 6 months (Terms apply) $250

The Platinum Card® from American Express

  • 5 points per dollar on flights booked directly with airlines or with American Express Travel
  • 5 points per dollar on eligible hotels booked with American Express Travel
  • 1 point per dollar other purchases
  • Terms apply
  • 75,000 points if you spend $5,000 in first 6 months (Terms apply)
  • 10 points per dollar on eligible purchases at U.S. gas stations and U.S. supermarkets (on up to $15,000 in combined purchases) in first 6 months
$550

American Express Membership Rewards business credit cards

Rewards rate Introductory bonus Annual fee

The Blue Business® Plus Credit Card from American Express

  • 2 points per dollar on first $50,000 in purchases each year
  • 1 point per dollar thereafter
  • Terms apply
None $0

Business Green Rewards Card from American Express

  • 2 points per dollar on travel booked through American Express Travel
  • 1 point per dollar on other purchases
  • Terms apply
15,000 Membership Rewards points after you spend $3,000 in eligible purchases within the first 3 months (Terms apply) $0 intro first year, then $95

American Express® Business Gold Card

  • 4 points per dollar on two categories where your business spends the most ($150,000 yearly purchase limit)
  • 1 point per dollar other purchases
  • Terms apply
35,000 Membership Rewards points after you spend $5,000 on eligible purchases with the Business Gold Card within the first 3 months. (Terms apply) $295

The Business Platinum Card® from American Express

  • 5 points per dollar on directly booked flights and prepaid hotels through Amextravel.com
  • 2 points per dollar on travel booked through American Express travel
  • 1.5 points per dollar on qualifying purchases of $5,000 or more
  • 1 point per dollar on other purchases
  • Terms apply
85,000 Membership Rewards points after you spend $15,000 on qualifying purchases within your first 3 months (Terms apply) $595

Entry-level cards

The Blue from American Express card is an entry-level card for newbies with less-than-stellar credit scores. The card offers a paltry rate of 1 point per dollar of spending and 2 points per dollar on American Express Travel purchases and no introductory bonus. Plus, unlike other Membership Rewards cards, it doesn’t allow you to transfer points to an outside loyalty program. But you can qualify for the card with a merely average credit score, so it may be a good starting point if you can’t qualify for any other American Express card.

Everyday spending cards

Everyday spending is not a strong point in the Membership Rewards program, but Amex does offer a card that lets you earn bonus points on everyday purchases.

The American Express Everyday Preferred card gives you 3% back on U.S. supermarket purchases (up to $6,000 in purchases per year), 2% back on U.S. gas station purchases and 1% back on other purchases, plus a 50% point bonus whenever you use your card at least 30 times in a month, for a $95 annual fee (waived the first year). That’s a very generous grocery bonus – amounting to 4.5% back if you trigger the bonus every month – but it’s unfortunately capped at $6,000 in purchases, and the requirement to use the card 30 times each month is onerous.

In fact, the requirements to earn the full bonus are stringent. Unless you use the card for most of your spending, you probably will have a difficult time mustering 30 separate purchases on a single card each month. In other words – if you’re not all about earning Membership Rewards points – this is probably not the card for you.

Travel cards

American Express is the pioneer of travel rewards cards, and its offerings are strongest in this category. You have three levels of card to choose from – all of which offer extensive travel perks, bonuses focused on travel purchases and high annual fees.

The American Express Green card – the lowest tier card – is a good introduction to American Express travel benefits. The card offers a good earning rate on travel, transit and dining purchases: You earn 3x points on a wide array of travel and transit purchases, including airfare, hotel stays, subways, tolls and more. You also earn 3x points on purchases at restaurants worldwide. The remainder of your purchases earn 1 point per dollar. The card also offers a couple of fairly valuable credits, including up to $100 toward CLEAR membership and up to $100 for LoungeBuddy lounge access each year.

The card comes with a lower $150 annual fee. Altogether, it’s not a bad deal, though can find other starter travel cards with lower fees and better rewards, such as the Chase Sapphire Preferred® Card*. Also, if you’re able to foot a $150 fee, you should ask yourself whether it’s worth doling out a little extra to get much better rewards and benefits with Amex’s higher tier travel cards.

The American Express® Gold Card is a good value for middle-of-the road cardholders and comes with a $250 annual fee that’s relatively affordable, though on the high side for the level of rewards that it offers. You earn bonus points on both travel and everyday purchases – 4x at restaurants worldwide and on the first $25,000 in U.S. supermarket purchases each year, 3x on flights booked directly with the airlines and 1x on other purchases. You also get a decent 60,000-point bonus for spending $4,000 in the first six months.

And then comes the king of travel cards – the American Express Platinum card – offering a stellar 75,000-point introductory bonus (after spending $5,000 in the first six months), a litany of travel benefits and an outsized $550 annual fee. The Platinum card is squarely aimed at heavy travelers – you earn a massive 5% bonus on flights and hotels and you get some very generous travel credits, including a $200 airline fee credit, a $100 credit every four years for Global Entry, a $100 hotel fee credit and up to $200 worth of Uber credits. Also, the card grants you free lounge access – probably the most extensive lounge access package that any credit card has to offer – including Priority Pass lounges and ultra-posh Centurion lounges. The Platinum card is not for the casual traveler; however, if you travel frequently you can get more than $550 of value out of the Platinum card.

Business cards

American Express also has several business card offerings that offer American Express benefits for business owners and bonus points on business purchases. These cards are a great opportunity to earn additional introductory bonuses for cardholders who have exhausted the introductory bonuses on Amex’s consumer line of cards.

Note, too, that you don’t have to be the owner of a brick-and-mortar business to qualify for a business card; independent contractors of all sorts may qualify.

The Blue Business Plus card is an excellent option for earning bonus points on everyday purchases – you get a 2x point bonus on your purchases, up to $50,000 each year (1x thereafter). Moreover, the card doesn’t charge an annual fee.

Like the consumer version of the card, the Business Green Rewards Card offers an insipid rewards rate of 2x points on eligible American Express Travel purchases and 1 point on the rest of your purchases, for a $95 fee. On the plus side, the annual fee is waived for the first year, and it currently comes with an offer of 15,000 Membership Rewards points after you spend $3,000 in eligible purchases within the first three months.

The Business Gold Card rewards your highest spend in two 4x bonus categories – which can include dining, gas, travel and common business purchases.

The American Express Business Platinum card offers many of the same benefits – including lounge access – as the regular Platinum card. Unforutnately, the card doesn’t offer a $200 credit for Uber rides. However, it does have one feature to its advantage: You can earn 35% of your points back when you use them for flights on a qualifying airline that you designate at the beginning of each year (when flight is booked on amextravel.com).

Essentially, you can boost the value of your points to 1.35 cents per point if you use them the right way – that’s a much better value than the consumer version of the card. Also, the card offers several generous credits targeted to business professionals: You get up to $200 each year on Dell purchases, and up to $200 in statement credits each calendar year for baggage fees and other incidentals at one selected qualifying airline. The value of the added perks can help to outweigh the card’s $595 annual fee.

Co-branded Membership Rewards cards

If the above list of Membership Rewards cards hasn’t already boggled your mind, American Express offers several co-branded cards that give you additional options for category bonuses and – most notably – additional options for earning introductory bonuses.

American Express Membership Rewards co-branded credit cards

Rewards rate Introductory bonus Annual fee
Mercedes Benz card

Mercedes-Benz card

  • 5% select Mercedes-Benz purchases
  • 1% other purchases
  • Terms apply
10,000 points if you spend $100 in first 3 months (Terms apply) $95
Ameriprise gold card

Ameriprise Financial Gold card

  • 2% U.S. restaurants and flights booked directly with airlines
  • 1% other purchases
  • Terms apply
25,000 points if you spend $1,000 in first 3 months (Terms apply) $160, $0 first year
Ameriprise platinum card

Ameriprise Financial Platinum card

  • 5% flights booked directly with airlines or with American Express Travel
  • 5% eligible hotels booked with American Express Travel
  • 1% other purchases
  • 5,000 points for every 20,000 in purchases, up to 30,000 points each year
  • Terms apply
None $550, $0 first year
Morgan Stanley card

Morgan Stanley card

  • 2% U.S. restaurants, select U.S. department stores, select car rental companies and directly purchased airfare
  • 1% other purchases
  • Terms apply
10,000 points if you spend $1,000 in first 3 months (Terms apply) $0
Chase Ink Business Preferred card

Morgan Stanley Platinum card

  • 5% flights booked directly with airlines or with American Express Travel
  • 5% eligible hotels booked with American Express Travel
  • 1% other purchases
  • Terms apply
60,000 points if you spend $5,000 in first 3 months (Terms apply) $550
Schwab Platinum card

Schwab Platinum card

  • 5% flights booked directly with airlines or with American Express Travel
  • 5% eligible hotels booked with American Express Travel
  • 1% other purchases
  • Terms apply
60,000 points if you spend $5,000 in first 3 months (Terms apply) $550

Outside of its Mercedes-Benz card – which offers a bonus on Mercedes-Benz purchases – most of these cards are tied to financial institutions and require that you have a qualifying account to apply for the card. If you can pass that hurdle, there’s a major plus to qualifying for one of these cards: They’re all considered to be separate cards from American Express’s consumer and business line of cards, which means – if you’ve already earned the bonuses on the Gold and Platinum cards – you have additional options for earning a 50,000- to 60,000-point bonus.

Which American Express card should you apply for?

Membership Rewards cards aren’t for everyone. The rewards are focused on travel purchases and the best asset of the American Express travel rewards program is its travel perks – including lounge access – rather than travel rewards. In other words, you need to be a frequent traveler to really reap the benefits of the Membership Rewards program. That said, if you fit the bill and want to maximize your points, you should consider signing up for the following:

An everyday spending card – Membership Rewards cards are not the strongest candidates for maximizing rewards on everyday spending, but if you are trying to rack up Membership Rewards points, you’ll probably want to sign up for the Amex Preferred Everyday card. If you don’t mind the $95 annual fee and you are able to use the card 30-plus times each month, the Amex Everyday Preferred card may be your best bet – with its 50% bonus, you can earn up to 4.5% back on your first $6,000 in grocery purchases and 3% back on gas purchases.

A travel card – If you travel frequently enough to use all of its credits and travel perks, the Platinum card is an exceptional value, even with its $550 annual fee. Or, if you qualify as a business owner, you might want to go with the Business Platinum card, since it’s possible to get a 35% bonus on all your redemptions for airfare with your selected, qualifying airline – you’ll need to do some math to decide which card offers the better value for you.

Note, if you don’t want to dole out the high annual fee for either of the Platinum cards, you might go with the American Express Gold Card instead – it can serve as both a travel and everyday card since it offers bonuses on flights, restaurants and U.S. supermarket purchases.

A flat-rate spending card – You should also consider adding the Blue Business Plus card to your wallet. You can rotate it with your other cards to earn a 2x point bonus on the purchases that don’t fit under any other bonus category.

One other very important consideration is timing. American Express has a very strict policy on earning introductory bonuses, only allowing you to earn the bonus on a particular card once in your lifetime. This means if you want to earn the most bonus points possible, you’ll want to keep a close eye on the value of the introductory bonus for each card and apply when the bonus is higher than average.

See related: Best ways to spend American Express points

*All information about the Chase Sapphire Preferred Card has been collected independently by CreditCards.com and has not been reviewed by the issuer. This offer is no longer available on our site.

Source: creditcards.com

Does Refinancing Hurt Your Credit?

Before you make any big financial decision, it’s crucial to learn how it may affect your credit score. If you’re looking to refinance, it’s natural to wonder if it might hurt your credit.

Typically, your credit health will not be strongly affected by refinancing, but the answer isn’t always black and white. Whether you’re still considering your options or already made your choice, we’ve outlined what you need to know about refinancing below.

What Is Refinancing?

Refinancing is defined by taking on a new loan to pay off the balance of your existing loan balance. How you approach a refinancing decision depends on whether it’s for a home, car, student loan, or personal loan. Since refinancing is essentially replacing an existing debt obligation with another debt obligation under different terms, it’s not a decision to take lightly.

If you’re worried about how refinancing will affect your credit health, remember that there are multiple factors that play into whether or not it hurts your credit score, but the top three factors are:

1) Having a Solid Credit Score

You won’t be in a strong position to negotiate refinancing terms without decent credit.

2) Earning Sufficient Income

If you can’t prove that you can keep up with loan payments after refinancing, it won’t be possible.

3) Proving Sufficient Equity

You’ll also need to provide assurance that the payments will still be made if your income can’t cover the cost. It’s recommended that you should have at least a 20 percent equity in a property when refinancing a home.

 

criteria-for-being-able-to-refinance-successfully

 

How Does Refinancing Hurt Your Credit?

Refinancing might seem like a good option, but exactly how does refinancing hurt your credit? In short, refinancing may temporarily lower your credit score. As a reminder, the main loan-related factors that affect credit scores are credit inquiries and changes to loan balances and terms.

Credit Inquiries

Whenever you refinance, lenders run a hard credit inquiry to verify your credit score. Hard credit inquiries typically lower your credit scores by a few points. Try to avoid incurring several new inquiries by using smart rate shopping tactics. It also helps to get all your applications in during a 14–45 day window.

Keep in mind that credit inquiries made during a 14–45 day period could count as one inquiry when your scores are calculated, depending on the type of loan and its scoring model. Regardless, your credit won’t be permanently damaged because the impact of a hard inquiry on your credit decreases over time anyway.

Changes to Loan Balances and Terms

How much your credit score is impacted by changes to loan balances and terms depends on whether your refinanced loan is reported to the credit bureaus. Lenders may report it as the same loan with changes or as an entirely new loan with a new open date.

If your loan from refinancing is reported as a new loan, your credit score could be more prominently affected. This is because a new or recent open date usually means that it is a new credit obligation, therefore influencing the score more than if the terms of the existing loan are simply changed.

How Do Common Types of Refinancing Affect Your Credit?

Refinancing could help you pay off your loans quicker, which could actually improve your credit. However, there are multiple factors to keep in mind when refinancing different types of loans.

 

main-types-of-refinancing-that-can-affect-your-credit

 

Refinancing a Mortgage

Refinancing a mortgage has the biggest potential impact on your credit health, and it can definitely affect your FICO score. How can you prevent refinancing from hurting your credit too much? Try concentrating your credit inquiries when you shop mortgage rates to a 14–45 day window — this will help prevent multiple hard inquiries. Also, you can work with your lenders to avoid having them all run your credit, which could risk lowering your credit score.

If you’re unsure about when to refinance your mortgage, do your research to capitalize on the best timing. For example, refinancing your mortgage while rates are low could be a viable option for you — but it depends on your situation. Keep in mind that losing your record of paying an old mortgage on time could be harmful to your credit score. A cash-out refinance could be detrimental, too.

Refinancing an Auto Loan

As you figure out if refinancing your auto loan is worth it, be sure to do your due diligence. When refinancing an auto loan, you’re taking out a second loan to pay off your existing car debt. In some cases, refinancing a car loan could be a wise move that could reduce your interest rate or monthly payments. For example, if you’re dealing with an upside-down auto loan, you might consider refinancing.

However, there are many factors to consider before making an auto loan refinancing decision. If the loan with a lower monthly payment has a longer term agreement, will you be comfortable with that? After all, the longer it takes to pay off your car, the more likely it is to depreciate in value.

Refinancing Student Loans

When it comes to student loan refinancing, a lower interest rate could lead to major savings. Whether you’ve built up your own strong credit history or benefit from a cosigner, refinancing can be rewarding.

Usually, you can refinance both your federal and private student loans. Generally speaking, refinancing your student loans shouldn’t be detrimental in the grand scheme of your financial future. However, be aware that refinancing from a federal loan to a private loan will have an impact on the repayment options available to you. Since federal loans can offer significantly better repayment options than private loans, keep that in mind before making your decision.

Pros Cons
If the cost of borrowing is low, securing a lower interest rate is possible Credit scores can drop due to credit checks from lenders
If your credit score greatly improved, you can refinance to get a better rate Credit history can be negatively affected by closing a previous loan to refinance
Refinancing a loan can help you lower expenses in both the short term and long term Refinancing can involve fees, so be sure to do a cost-benefit analysis

How to Prevent Refinancing from Hurting Your Credit

By planning ahead, you can put yourself in a position to not let refinancing negatively affect your credit and overall financial health.

Try to prepare by reading your credit reports closely, making sure there are no errors that could keep your credit application from being approved at the best possible rate. Stay one step ahead of any errors so you still have time to dispute them. As long as you take preventative measures in the refinancing process to save yourself time and money, you shouldn’t find yourself struggling with the refinancing.

If refinancing makes sense for your situation, you shouldn’t be concerned about it hurting your credit. It might not be the most ideal situation, but it’s extremely common and typically relatively easy for your credit score to bounce back.

If you notice that your new loan from refinancing causes alarming changes when you check your credit score, be sure to reach out to your creditor or consider filing a dispute. As long as you’re prioritizing your overall financial health through smart decision making and budgeting, refinancing shouldn’t adversely hurt your credit in the long run.

 

 

 

The post Does Refinancing Hurt Your Credit? appeared first on MintLife Blog.

Source: mint.intuit.com

Learning How To Survive On A College Budget

Find out how to survive on a college budget here. This is a great list!College is expensive and everyone knows that.

Between paying for tuition, parking, textbooks, extra fees, and everything else, you also have basic living expenses to pay for as well.

All of these costs are either brand new or somewhat new to you most likely as well, so you might not even know how to survive on a budget, let alone a college budget.

Don’t worry, though, surviving on a college budget is possible. Learning how to save money in college is possible!

Related post: How I Paid Off $40,000 In Student Loans In 7 Months

Whether you are trying to survive the whole year off of what you made over the summer or if you have a steady job throughout the school year, there are ways to budget your money and not fall into any extra debt. Plus, you can still enjoy your college years on a low budget as well!

Below are my tips on how to survive on a college budget.

 

Use your student ID.

Your student ID is good at many places beyond just your college campus. Before you buy anything, I highly recommend seeing if a company offers a student discount.

Your student ID can be used to save money at restaurants, clothing stores, electronics (such as laptops!), at the movies, and more. You may receive a discount, free items, and more all just by flashing your student ID.

After all, you are paying to go to college and you are paying a lot. You might as well reap one benefit of paying all of those high college costs.

 

Make extra money.

You may need to look into making extra money if you just don’t have enough to survive on. I am a firm believer in making extra money and I think extra time can be wisely spent doing this.

Some online side gigs with flexible schedules include:

  • Blogging is how I make a living and just a few years ago I never thought it would be possible. I made over $150,000 last year by blogging and will make more than that in 2015. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
  • Survey companies I recommend include Survey Junkie, American Consumer Opinion, Product Report Card, Pinecone Research, Opinion Outpost, and Harris Poll Online. They’re free to join and free to use! It’s best to sign up for as many as you can because that way you can receive the most surveys and make the most money.
  • InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming coupons, and more. Also, by signing up through my link, you will receive $5.00 for free!
  • Swagbucks is something I don’t use as much, but I do earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded points called “SB” for the things you do through their website. Then, when you have enough points, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
  • Check out 75 Ways To Make Extra Money for more ideas.
  • Read Best Online Jobs For College Students

 

Use coupons to stay on a college budget.

Just like with the above, you may want to start using coupons.

By doing so, you can save money on nearly everything. You can find coupons in newspapers, online, and in the mail. They are everywhere so you should have no problem finding them and saving money today.

Related post: How To Live On One Income

 

Learn how to correctly use a credit card or don’t have one at all.

Many college students fall into credit card debt, but I don’t want you to be one of them.

Many college students will start relying on their credit cards in order to get them through their low college budget, but this can lead to thousands of dollars of credit card debt which will eventually seem impossible to get out of due to significant interest charges that keep building up.

In order to never get into this situation, you should avoid credit cards at all costs if you think you will rely on them too heavily.

You should think long and hard about whether you should have one or not. Just because many others have them doesn’t mean they know what they’re doing! However, if you think you will be good at using them, then there are many advantages of doing so.

Related post: Credit Card Mistakes That Can Lead To Debt

 

Only take out what you need in student loans.

Many students take out the full amount in student loans that they are approved for even if they only need half.

This is a HUGE mistake. You should only take out what you truly need, as you will need to pay back your student loans one day and you will most likely regret it later.

I know someone who would take out the max amount each semester and buy timeshares, go on expensive vacations, and more. It was a huge waste of money and I’m still not even sure why they thought it was a good idea.

Just think about it – If you take out an extra $2,000 a semester, that means you will most likely take out almost $20,000 over the time period that you are in college.

Do you really want to owe THAT much more in student loans?

 

Skip having a car.

Most campuses have everything you need in order to survive – food, stores, and jobs. In many cases, you do not need to have a car whatsoever.

By foregoing a car, you may save money on monthly payments, maintenance costs, car insurance, gas, and more.

Related post: Should We Get Rid Of A Car And Just Have One?

 

Eat out less.

Now, I’m not saying you should stop eating out entirely if you are trying to survive on a college budget. I know how it is to be in college and to want to hang out with everyone. These are your college years after all.

However, you should try to eat in as much as you can, make your own meals, and try to eat out only during happy hours or when food is cheaper, such as during lunch time. Eating out can ruin your college budget!

 

Have a roommate.

The more people you live with, generally the less you will pay when it comes to rent and utilities. If you are living on your own, then you may want to find roommates so that you can split the costs with them.

This will help you to lower your college budget and you may even find some awesome friends.

Related post: What I Learned Having Roommates

What college budget tips do you have?

 

The post Learning How To Survive On A College Budget appeared first on Making Sense Of Cents.

Source: makingsenseofcents.com

The Magical Third Paycheck: 5 Budgeting Hacks If You’re Paid Biweekly

If you get paid every two weeks, you’ve probably noticed extra money coming your way certain months. Maybe you even thought your company’s payroll made a mistake! But it’s no mistake. You get two magical months like this a year: when you suddenly have a third paycheck and—the best part is—your monthly bills stay the same. Yes, it’s appropriate to jump for joy—provided you have a plan for that extra income.

Why does this happen in the first place? If you’re paid biweekly, you get 26 paychecks throughout the 52-week year. That means two months out of the year, you end up getting three paychecks instead of your regular two.

Those two extra paychecks can go a long way. But without a plan in mind, they can also disappear. Fast. The first budgeting trick to saving two paychecks is to find out when they will hit your account. Grab a calendar and write down your paydays for every month in a given year and highlight the two extras. Maybe even put calendar reminders in your phone so you can track when the additional funds will hit your account. The extra paychecks will fall on different days every year, so tracking them in advance is key.

Samuel Deane, a founding partner of New York City-based wealth management firm Deane Financial, says there isn’t one correct way to budget with an extra paycheck, but that it should depend on your personal situation and financial goals. You could decide to give yourself some extra room in your budget throughout the year, for example, or use the extra money for something specific.

There are a few different ways to budget with an extra paycheck.

How can I budget for an extra paycheck? Consider these 5 budgeting hacks if you’re paid biweekly:

1. Pay down (mainly) high-interest debt

Once you’re done jumping for joy at the realization of the third paycheck, consider how your budget with an extra paycheck could help you pay down debt. “The first thing I usually tell my clients is to get rid of high-rate debt, which is usually credit card debt,” Deane says.

Before paying off debt with your new budget with an extra paycheck, make a list of all of your debts organized by balance and annual percentage rate (APR). Paying off the debt with the highest APR could save you the most money because you’re paying the most to carry a balance. Paying down a few low-APR, low-balance debts can also help you gain momentum and bring other financial benefits. For instance, if you owe close to your credit limit on a credit card, the high credit utilization—or card balance to credit limit ratio—could negatively impact your credit score.

If your budget with an extra paycheck includes debt repayment, you’ll start to owe less and have less interest accruing each month, freeing up even more cash from subsequent paychecks.

“The first thing I usually tell my clients is to get rid of high-rate debt, which is usually credit card debt.”

– Samuel Deane, a founding partner of wealth management firm Deane Financial

2. Build an emergency fund

Paying down debt isn’t the only way to budget with an extra paycheck. “Taking a look at whether you have a sufficient emergency fund is pretty important,” says Dan Stous, director of financial planning at Flagstone Financial Management.

An emergency fund of three to six months of your regular expenses can help you weather financial setbacks, such as a lost job or medical emergency, without having to take on new debt. Keeping these funds separate from your regular checking and savings accounts can help you keep them earmarked for the unexpected (and reduce the temptation to dip into them for non-emergency expenses). Places to keep your emergency fund include a high-yield savings account, certificate of deposit or money market account.

Sunny skies are the right time to save for a rainy day.

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If creating an emergency fund or adding to an existing one is on your to-do list, a budgeting trick to save two paychecks is to automatically transfer your extra paychecks into your emergency fund account.

3. Save for a big goal

If you want to save for a goal like a new car or home, or contribute to tax-advantaged retirement accounts, contributing two full paychecks out of 26 can be a good start. “If a client is debt-free and doing well, they might be able to focus on other goals,” Deane says. If you’ve got a financial goal in mind, a budgeting hack if you’re paid biweekly is to transfer your two extra paychecks from your checking account to a savings or retirement account right away.

Using your extra paycheck to save for a goal, like a new home or new car, is a smart budgeting hack if you're paid biweekly.

If you have a 401(k) through an employer and already contribute enough to get your maximum annual match, Deane says you may want to consider a Roth IRA. A Roth IRA is for retirement, but it also allows first-time homebuyers who have held their account for at least five years to withdraw up to $10,000 to buy a home, Deane says. Your budget with an extra paycheck could then go to either major goal.

Even loftier, “you could put aside money to start a business,” Deane says. If you plan on starting a business someday you could put away the paychecks annually and let those savings build as start-up capital.

4. Get ahead on bills

If you already have an emergency fund, are currently debt-free and are making good progress on your savings goals, try this budgeting hack if you’re paid biweekly and get a third paycheck: Pay certain monthly bills ahead of time.

“If you have the ability to prepay some of your bills, it can ease anxiety in the coming months,” Deane says.

Before using this budgeting hack if you’re paid biweekly, check with your providers to confirm that you will not be met with a prepayment penalty, and get up to speed on any prepayment limitations. Some providers may even offer a discount or incentive if you pay something like a car insurance bill all at once. You could also explore whether or not prepaying your bills makes sense for utilities, your cellphone or rent.

5. Fund much-needed rewards

If you’re looking for budgeting hacks if you’re paid biweekly, consider that managing money isn’t only about dollars and cents. Emotions often play an important part in personal finance, and they’re often the root cause of people’s decisions. Accepting this fact could be an important part of successfully managing your money.

“From an emotional and behavioral standpoint, people should reward themselves for being responsible,” Stous says. “Basically, treat yourself.”

Perhaps you need a vacation from the daily grind, want to enrich or educate yourself or your family or simply want to get a date night at your favorite restaurant on the calendar. A budgeting trick to save two paychecks could be supplemented with some spending on yourself.

“If you have an extra paycheck and a debt reduction goal, then maybe you apply the whole thing toward that goal. On the other hand, maybe you have a goal to retire in 10 years and you’re off track. Then, it’d be wise to put that money, or at least a portion of it, toward that goal.”

– Dan Stous, director of financial planning at Flagstone Financial Management

There’s no one-size-fits-all budgeting trick to save two paychecks

When you’re deciding how to budget with an extra paycheck, you might find yourself going back and forth between options.

“If you have an extra paycheck and a debt-reduction goal, then maybe you apply the whole thing toward that goal,” Stous says. “On the other hand, maybe you have a goal to retire in 10 years and you’re off track. Then, it’d be wise to put that money, or at least a portion of it, toward that goal.”

Even though budgeting solutions are not the same for everyone, being disciplined and proactive about the savings opportunity of a third paycheck can help you form a strong foundation for your financial future.

The post The Magical Third Paycheck: 5 Budgeting Hacks If You’re Paid Biweekly appeared first on Discover Bank – Banking Topics Blog.

Source: discover.com

My Husband Bought a Retirement Property, but Only Put His Name on the Deed. Will His Adult Children Inherit This Home?

Marketwatch's The MoneyistMarketWatch

Dear Moneyist,

My husband and I have been married for 25 years. We do not have children together, but he has children from a previous marriage.

We are retired now, and he bought property in Florida for us to live in. My name is not on the deed of the property, and he has not made a will yet. I keep complaining to him about it.

If he should die without a will, will his adult children and grandchildren be entitled to the property and house? Hopefully, you will be able to answer this question and set my mind at ease.

Carla

Dear Carla,

Your husband appears to have control issues at worst or, at best, problems with being direct and transparent. This is not the way to deal with a family property, especially after 25 years of marriage. If your husband wants his children to inherit his estate when he is gone, he should discuss it with you like a man (or woman), face to face, and you should outline a plan for your future together. But this game of cat and mouse, where he makes unilateral decisions about your future, is not a respectful or helpful way to conduct a 25-year marriage.

Not knowing if you’re going to have a place to live after your husband dies, assuming he predeceases you, creates a constant feeling of unease. The whole point of saving for retirement and being fortunate enough to retire comfortably is that you can see out your final years together with the knowledge that you will both be financially secure. Only one person in this relationship knows what that feels like — and, given that you have raised this issue with him, he is aware that you do not enjoy that same peace of mind.

Florida is an equitable distribution state and, for the most part, divides property 50/50. Here’s the legal interpretation from Schnauss Naugle Law in Jacksonville, Fla.: “If the decedent’s homestead property was titled in the decedent’s name alone, and if the decedent was survived by a spouse and descendants, the surviving spouse will have the use of the homestead property for his or her lifetime only (or a life estate), with the decedent’s descendants to receive the decedents’ homestead property only after the surviving spouse dies.”

You will have the right to live in this property for the remainder of your life. If you divorce, however, anything purchased during your marriage is considered marital property, and even though this home was purchased in your husband’s name only, it would be divided 50/50. In Florida, “equitable distribution” is mostly treated as “equal distribution.” According to this interpretation of family law in Florida by Arwani Law: “Even if he purchases the car with his own money and puts the car title in his wife’s name, it is still considered marital property.”

And as most lawyers will tell you, a lack of communication is one way of buying a ticket to divorce.

The post My Husband Bought a Retirement Property, but Only Put His Name on the Deed. Will His Adult Children Inherit This Home? appeared first on Real Estate News & Insights | realtor.com®.

Source: realtor.com