| Is a Reverse Mortgage Right for You
Four important things to consider when learning about a Reverse Mortgage:
by Colby Keener
Work with a Reputable Company: Ensure that you are working with a reputable company that focuses on Reverse Mortgages. Reverse Mortgages have unique rules when compared to conventional loans. A company focused on this program will help ensure that you are provided with the most up-to-date program details available. Companies that participate in industry organizations like National Reverse Mortgage Lenders Association (NRMLA) show a vested interest in promoting the product in a resourceful and ethical way. Companies must be licensed by HUD under the FHA, and should be a member of the Better Business Bureau (Stay In-Home Mortgage is a member of the BBB through our corporate office in Washington State).
Education: Ask what resources are available to you. There are a number of valuable resources to assist you with becoming educated about these programs. Your advisor should readily provide these to you. The Reverse Mortgage industry is no longer a “cookie cutter” program and you need to be aware of the best plan for you. The availability of good information is constantly growing. There are Jumbo Loans (for higher home values), Fixed Interest Rate options, Reverse Mortgages (used to purchase 1st or 2nd homes), and other programs available. Explain your goals thoroughly and your advisor should present options that best fit your needs.
Your Advisor Relationship: Pick the right advisor for YOU. In my opinion, this is a relationship that you should have for life. This is probably the last loan you will ever need. Always ask good questions and evaluate how they are answered. Your advisor should know this product inside and out and, just as importantly, should be someone you feel comfortable dealing with. While costs are always a factor, you should never go with the lowest priced advisor, if it’s only for that reason. An advisor should understand your goals, give you options to consider, and provide information that is clear and easy to follow.
Think Outside The Box: This program works in reverse of what you have learned throughout your life. You are no longer paying a mortgage on your home —— your home is now paying you. It can be difficult to imagine adding debt back into your home, but think of this program like a tax-free savings or 401K account that you have put money into over the years. You are now at a point in your life where this money may be better utilized than sitting in your house. You can’t take your equity with you when you pass away. Be open minded about this option, you never know what life holds in the future.
| Increase Your Chances of Getting a Business Loan
| Global Economical Turmoil Affects Small Business Loan Approvals
originally published in Buzz about Business
Are you are on the verge of starting a new business or working on expanding your existing business? Since the global economical turmoil affected small business loan approvals, it is very important to understand the technicalities before applying for loans. This article will walk you through the significant factors for managing and getting your small business loans.
Small business bank loan:
A bank is the first source that crosses your mind when you start thinking about small business loans. With the current economic situation, banks are revising their rules and regulations for small business loan approvals. The following guidelines may help you understand how you can get a small business loan approved from a bank.
- Have a strong project plan that highlights your small business strength
- Learn a professional method to present your project plan and its strengths so that it gives confidence to bank managers
- Establish a relationship with your bank by meeting officials in person, speaking to them honestly, explaining your goals, and business trend (past, present and future)
- Contact as many banks as possible and understand their policy, small business loan rates and loan programs
- Identify what is expected from you and anticipate the bank’s concerns
- Be flexible on your request concerning money and other terms and conditions
Government small business loans:
There are government agencies, if you meet the criteria set by them, that can help to get your small business loan approvals.
- The Small Business administration(SBA) is an independent agency of the federal government. They counsel and guide small business entrepreneurs in various business disciplines including small business loans and finances.
- Such Government agencies, generally, coordinate with banks and guarantee them on behalf of a small business owner.
- They promise banks to pay back a portion of the money, if the owner fails to do so. To become eligible, your business must meet the standard as specified and you are required to sign a contract.
Small business loans for women:
If you are a women entrepreneur, you will be surprised to find the options that are available to obtain small business loan approvals.
- Federal government agencies like SBA, and other fund-raising organizations such as count-me-in, the women’s funding network, can guide through the special options available for women’s small business loans.
- Financial organizations like Wells Fargo, and Accion USA advise women entrepreneurs on various small business loan options to take care of their business finances.
- Low interest small business loans are established according to state policies for minority women with low incomes or no monetary support.
- Disabled loans can be availed for women entrepreneurs with physical disabilities.
Apart from these, there may be other industries like nonprofit organizations that can help in managing loans. Ensure that you provide necessary information about your business and project plan as requested in the checklist. Doing it right at the first time will save you time, money and get your small business loan approvals.
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| Economic Recovery: Now is Not the Time to Pull Back
Economic Recovery for Small Businesses: Now is Not the Time to Pull Back
Posted by on August 30, 2010 at 02:44 PM EDT
As I travel around the country, I meet many small business owners who are poised to take that next step to grow their business and create jobs. In fact, this morning’s USA Today looks at one of those business owners - Amarjit Kaur who runs a convenience store and gas station in Wood Village, OR. Amarjit has been approved for an SBA loan so she can buy the property she now leases. But today her application sits in a queue waiting for passage of the Small Business Jobs Act currently before the Senate.
Here’s what’s happening: Up until a few months ago, SBA was able to waive the fees for SBA loan borrowers. This allowed small business owners to put more money back into their business. In fact, these fee reductions will save Amarjit about $35,000. At the same time, we were able to increase the government guarantee on SBA loans, to encourage more banks and credit unions to go ahead and make SBA loans to good, creditworthy small businesses.
This worked. SBA lenders approved about 70,000 SBA Recovery loans in the hands of small businesses since the Recovery Act passed, nearly $30 billion in total. And, we brought more than 1,300 lenders back to making SBA loans at a time when other banks were cutting back their small business lending.
Unfortunately, the funding for these popular enhancements ran out at the end of May – just when small business owners like Amarjit’s needed it. With support in Congress for extending these successful loan enhancements, we started the Recovery Loan Queue, a stand-by list just like at the airport.
Today, that list is at nearly 1,000 small businesses long, including Amarjit’s, totaling almost $500 million in loans. With the passage of the Small Business Jobs Act, SBA will be able to fund these loans. Additionally, among other programs, the Act will create the Small Business Lending Fund to provide additional capital to small, community banks so they can boost their lending to small businesses locally.
As Amarjit’s story points out, now is not the time to pull back. In communities all across the country there are business owners just like her who are in a position to do exactly what our economy needs them to do – grow and create jobs. With the Small Business Jobs Act, we can be the very partner these business owners need by giving them the tools to continue to drive our economic recovery.
Karen Mills is the Administrator of the Small Business Administration
| Should Your Company Have a Social Media Policy?
Sharlyn Lauby is the president of Internal Talent Management (ITM) which specializes in employee training and human resources consulting. She authors a blog at hrbartender.com.
Companies are realizing that people are talking about them whether they like it or not. As a result, they’re deciding whether they should consider having a social media presence, and hence, a policy. A social media policy outlines for employees the corporate guidelines or principles of communicating in the online world.
Social media is quickly moving from an emerging form of communication to the mainstream. So, just like in the old days when companies had to figure out how to deal with email, now they have to figure out how to deal with Facebook and all other new media venues. Let’s talk about the Five Ws to adopting a social media policy.
1. WHY have such a policy?
As a human resources professional, I’m constantly accused of being all about policies. But besides the pre-disposition of my profession to policies, there are legitimate reasons to establish some guidelines for social media.
Unfortunately, you have to contemplate what might happen if someone says or does something stupid (like employees doing gross things to food and posting it on YouTube). So I asked one of my attorney tweeps, Eric B. Meyer, who’s an Associate in the Labor and Employment Group of Dilworth Paxson LLP, what companies should consider from a legal perspective in developing a social media policy. Meyer reminded me of two important points:
1. Employers need to be upfront with employees that they have no right to privacy with respect to social networking. “Employers reserve the right to monitor employee use of social media regardless of location (i.e. at work on a company computer or on personal time with a home computer).”
2. Employees “should be made aware that company policies on anti-harassment, ethics and company loyalty extend to all forms of communication (including social media) both inside and outside the workplace.” People need to remember that bashing your organization/boss/co-workers online can lead to consequences at work.
2. WHAT can social media do for my organization?
Shannon Seery Gude, VP of Digital for Bernard HODES Group, told me that forming a social policy should start with an understanding of how your employees are aligned with your company values. “It’s important that authenticity can exist without the need for what may be perceived as forced company morality.”
In addition, social media can strengthen your ‘brand’ not only as an employer but as a company. Take Dell for example. A recent report claims that Twitter has made Dell $1 million in revenue over the past year and a half. So what are you waiting for?
3. WHO should the policy cover?
Media is for everyone…not just your marketing department. So for it to really be effective consider expanding the policy to all employees, not just for a handful of people. One way to think of it is, while it’s called social media, it has a vibrant customer service component to it. You wouldn’t take the phone or email from your employees, so why take social media away from them.
“Companies have existing communications policies,” explains Scott Monty, head of social media at Ford Motor Company, “directives that spell out the company’s expectation when employees use the phone or email.” Since the conversation has moved to the Web, “it’s important for organizations large and small to acknowledge that and extend their existing communications policies to include online sites.”
4. WHERE should you let employees know about this policy?
When you give all of your employees the ability to interact with the whole world…well, then you have to provide them with some training on how to use it properly and effectively. A great example is Zappos. They encourage all of their employees to have Twitter accounts so they can interact with current and potential customers. And, they actually train their employees on the proper use of Twitter during new-hire orientation.
Zappos CEO Tony Hsieh says that their company uses Twitter in a big way. “We’ve found that it’s a great way to form more personal connections with both employees and customers.”
5. WHEN is the right time to implement a policy?
The time to think about drafting a social media policy is now. Twitter is growing at a rate of 1,382%, and it’s just one of the many social networking applications in the market. Companies are using social media tools to establish value in terms of marketing and branding.
Social media or new media is really media. Plain and simple. Many organizations with any kind of formal structure have a policy in place for working with media. You know, the policy that says any requests from the media need to be directed to the Corporate Director of XYZ for response. Add to that, the communication policies you have in place. The ones that say you won’t do anything illegal, immoral, unethical, etc. So this is really no different. Social media is merely an extension of what you currently have in place.
Monty agrees. “If anything, existing policies should already be in place; amending them to include the changes to communications platforms and anticipating future changes – should occur ASAP.”
So it’s time for companies to start thinking about social media in the same context as all other forms of communication. According to Gude, “the case has been made that common sense should be all that is needed, but when done right, formal policies can drive effective practices.” That means developing guidelines for its use, training people to leverage the benefits, and proactively creating a positive social media presence for the organization.
by Colleen King, LA Insurance Examiner
Most people hear the word annuity and either 1. Don't know what it is or 2. Are afraid of it because of something they heard about annuities or 3. Their stock broker can't sell it so they are talked out of it or it's not even brought up.
Don't get me wrong, annuities are not a 'one size fits all' product. They are an insurance product and they used to be very limited in how they were designed. You had either a fixed or a variable annuity (fixed have a specified interest rate and variables are invested in the stock market) and once upon a time, you had to have a minimum of $100,000 to start with. Then, once you 'annuitized' your annuity, meaning you started life time payouts of a specified amount per month, if you passed away six months later, too bad--the money was gone.
Now, you can open some with as little as $2000, some products you have the option of adding to (flexible premium products) and for some they can be a great option to move your old job's 401k or 403b to if you leave the company. Lots of people are using them for IRAs if they can't stomach the risk with the stock market.
Bottom line is you need to know the particulars of what you are looking at.
- Is your principal guaranteed? in a fixed or fixed indexed annuity it is. In a variable annuity, it generally is not unless you buy a specific rider.
- What is the surrender period? The surrender period is how long you have to leave your money in this before you can take it without being hit with penalties. I generally don't go over 10 years, depending on the person's situation. But there are some with 15-17 year surrender periods, and unscrupulous agents are selling them to people in their late 70s or older. Totally inappropriate!
- Can I get any of my money if I have an emergency? I always advise my clients that this is NOT the place to put your emergency fund, but if you really miscalculate and it's imperative you break into that, most annuities allow you to access 10% of your principal per year without triggering the annuitization or payout flow.
There are other considerations, but annuities are being looked at by many when looking for a conservative component to add to their retirement portfolio. They can provide a steady income stream in your 'golden' years over your remaining lifetime or now there are variations on how these can work when taking payments. I've integrated them into my own strategy and good thing I did. Too bad I didn't move more money into these before the latest market debacle.
| Selling Health Insurance Across States
Finally, someone with huge credibility in health care reform talks about the selling across states
LA Insurance Examiner Colleen King
I recently brought up in an Examiner article the problem with being able to buy plans from other states. I've not seen anyone else really talk about this as yet. Finally, one of the leading authorities on health care reform and the insurance industry in general has brought the 800 pound gorilla into the room as well. To review, here's the problem.
Robert Laszewski writes about the problem in his December 8 blog article, so check it out here. This is one of the main cost saving mechanisms existing in keeping insurance costs down today and it would be blown out of the water almost immediately if you could buy across state lines. The other thing that comes into play are state mandated services. Because insurance is regulated state by state, plan structures vary. Some states have very few required services, some have more than 50.
So PLEASE take a moment to review Robert's article, he puts it so well.
| Extending the Good News for Homebuyers
Extending the Good News for Homebuyers
Printed in Real Estate and Living
By Lawrence Yun, Chief Economist, NAR Research
Let’s first turn to the terrific news regarding the housing stimulus. Earlier this month, the U.S. Congress overwhelmingly passed and the president signed into law new measures to maintain the momentum for a housing market recovery. The homebuyer tax credit, originally scheduled to expire at the end of November, will now be available through the middle of next year and more potential buyers will be able to take advantage of it. The income limit was also increased, and many move-up buyers—not just first timer purchasers— also will qualify. Furthermore, loan limits will not shrink as was planned for next year; in high-cost areas, the loan limit will remain at near $730,000 in 2010, thereby permitting more consumers to tap into the historically low mortgage rates.
As most of us are aware, the housing market recovery to date has been concentrated in the lower-end starter home segment. While the mid-priced market has begun to show signs of life, it is still far below normal activity. The upper-end remains sluggish. Therefore, enlarging the tax credit to include move-up buyers will add the necessary “juice” to broaden the recovery. The accompanying increased velocity in home sales will mean more economic activity. Also, even though there may be less impact in the overall net inventory (a person sells before buying so it looks as a “wash” on inventory), the months’ supply will fall because of rising sales.
Adding it all up, home sales are now expected to get a boost by roughly 15 percent next year. Existing-home sales are forecast to post 5.7 million units in 2010 (up from 5 million units in 2009). New home sales will also rise, reaching 550,000 (from 400,000). More importantly, inventory will likely fall to a 6-7 months’ supply by the middle of next year. That draw down of inventory means that that there are likely to be modest home price gains. Roughly speaking a 2-5 percent price gain is likely in many parts of the country in the next year.
Rising home values will prevent home prices from overcorrecting even further. Home prices have, indeed, been overcorrecting and have led to sizable destruction in middle-class housing related wealth. By contrast, stock market and financial wealth have experienced spectacular gains in the past nine months. Despite those gains, however, consumer confidence still continues to tread near historic lows.
As always, there are some caveats. Despite the very positive news on the housing stimulus, there remain significant risks to the forecast. Mortgage rates will rise from their rock-bottom points as we move into the next year. The Federal Reserve will slowly start the unwinding of its mortgage-backed security purchases. Also, consumer prices will be watched for any sign of accelerating inflation. Bond investors, therefore, will be cautious about lending at such a low rates. The labor market is another worry. Though anticipated, the rising unemployment rate is a painful reminder that not all is well. The unemployment rate in October zoomed into double digits - 10.2 percent, its highest level since 1983. And the climb is not over yet – look for unemployment to hit 10.4 percent before reversing.
Despite the risks of rising mortgage rates and rising unemployment, the housing outlook has significantly improved. As the fear of falling home values disappears, that one key negative factor that has held back home sales will no longer be in play. Happier days are ahead.
For more insights from Dr. Yun, please visit www.realtor.org/research.
Information provided by the National Association of REALTORS. For more
information on these stories and more, go to www.realtor.org
| Healtcare Reform How Many are Uninsured
The big health care reform story seems to always revert to the number of 'uninsured' both in California and the entire country. And the number we hear nationally is about 47-48 million. What's the real story?
Well, on a national perspective, here's the breakdown:
- 17 million, or 34%, are eligible for public/government programs but aren't enrolled.
- 15 million, 31%, are make enough money to afford coverage, either through their job related plan or an individual plan, but don't want to spend the money.
- 7 million, or 16%, are 'short term' uninsured, which means either in between jobs or in the waiting period for their group health plan.
That leaves 9 million, or 19%, that are truly uninsured or insurable. That's where we need something to help people out.
The proportions are similar in California--of the 6.7 million uninsured here:
- 3 million, or 44%, are eligible for public programs but not enrolled.
- 2 million/29%, have the money to pay for coverage but don't want to pay for it.
- 7 million are in that short term category again.
- Leaving 1 million, or 14% of Californians that are referred to as the 'hard core uninsurables.'
According to Aetna, 3.8 million of these uninsured people on average earn over $75,000 per year. On top of that, 60% of these uninsured people are full time employees. What their data didn't indicate was the differentiation between whether or not their employers offered coverage or not, and how much the employees' portion would be. Some times group health coverage can be too expensive, even when the employer is paying the minimum 50%, or a defined contribution of a specific dollar amount.
Personally, if you can't eat it or wear it, I don't like to spend money on it either. But, not having health insurance is going to impede my ability to buy things I can eat and wear if something big happens. Guess you have to pick your priorities at some point. I know not everyone can afford extensive coverage right now, but there are affordable plans that would protect many of you from huge bills if something major happened, so you need to consider it.
Colleen King Insurance
| Health care reform and the passage of H.R. 3962--what now?
Well, it squeaked by, 220-215, but the House bill 3962 passed. What does this all mean? And who does Nancy Pelosi think she's kidding when she celebrates the 'bi-partisan' passage--only one Republican voted for it, so I think she's stretching it a bit, don't you?
Well, if the Senate figures out a way to come up with their version of a bill, then we will see something potentially, but most of what is included in this bill would not take effect until 2012 or 2013. For a quick synopsis of some of HR 3962's more interesting points, check it out here. You can also click on a link in this article for the full text if you aren't busy.
I've yet to understand why it take 1,990 pages and I'm pretty sure most people voting didn't read it all. How could they? Here are some points from Arthur D. Postal's article on the Life and Health National Underwriter site that you need to know about:
"H.R. 3962 would:
- Forbid plans from basing premiums or denials of care on factors such as pre-existing conditions, race, or gender.
- Limit use of age rating.
- Cap patients' out-of-pocket expenses.
- Require health plans for children to cover dental, hearing and vision care.
- Require health plans offered through the exchange system, and, eventually, employer plans, to cover preventive care at no cost to the patient.
- Close the Medicare Part D prescription drug program “doughnut hole" -- the coverage gap that enrollees experience when coverage for routine prescription expenses has run out but catastrophic coverage has not yet kicked in.
- Provide “affordability credits” to help individuals and families who meet income requirements pay their health insurance premiums, and provide health insurance subsidies for small businesses.
- Require the Secretary of Health and Human Services to negotiate drug prices on behalf of Medicare beneficiaries.
- Expand Medicaid.
House Democratic leaders say they will pay for the new costs in the bill by making Medicare and Medicaid more efficient; imposing a 5.4% tax surcharge on individuals with adjusted gross incomes over $500,000 and married couples with adjusted gross incomes over $1 million; and adopting “other tax measures.”
Now remember, the more you want a plan to cover, the more it's going to cost--this is crucial for people to understand. Just like insurance now, if you buy it with the idea of it covering the bigger things, and not every office visit, your monthly premium will be more affordable. The current talk is that the upcoming plans will have a lot of mandated services covered, and that will drive up the cost. Does everybody really need everything? Stay tuned!
| Healthcare Reform-Where it's going
By Colleen King, LA Insurance Examiner
I had the pleasure of attending Warnerfest, an industry event put on annually by Warner Pacific. This year it was held at the Reagan Library. WP is a wonderful general agency that helps agents in the field with their group health insurance business. This event usually has a motivational speaker and is more sales oriented, but this year, given the anxieties of the unknown in health care reform co-CEOs John and David Nelson were able to bring out former Senator Tom Daschle to speak. He's still involved on a near daily basis on the discussions in Washington on how the eventual reform is to be shaped.
With about 700 agents in the room, we were happy to hear he fully feels that the independent agent will have a role going forward, including being able to sell the 'public option,' whatever that ends of up being, if that ends up being. In the two main bills out, that provision is included. Sen. Daschle says that the public option that is now being discussed will be a 'Medicare look alike.' The question then came up that geez, Medicare is underfunded and going broke, how is this going to work? That remains to be seen. He presented some very interesting facts:
There are 43 million beneficiaries on Medicare. When Medicare was first created in 1965, the average life expectancy was 65, now it's up to the late 70s. The original price tag was estimated to be $9 billion a year, it's actually $90 billion. 1% of the population accounts for 30% of expenditures, and 5 chronic diseases account for 70% of the expenses. Diabetics account for 35% of the Medicare expenses.
So why not more focus on preventive in the current Medicare structure? There will be more focus on preventive in the 'public option' if that comes to pass. Go figure--an ounce of prevention being worth a pound of cure? Carriers are trying to do more in that direction, so if there ends up being a public option, i hope that will be taken into consideration as well.
One reason a public option is being considered is to present 'competition' and keep the insurance companies 'honest.' Well, the Senator brought up some great points. How do you compete with the government, which can print money, make the rules, doesn't have to negotiate with doctors on rates and then on top of it, is the regulator/referee of the system? Rumor has it that Medicare may need to contract and negotiate with physicians and hospitals at some point; good luck with that.
So overall, he felt before that there was a 60/40 chance of reform passing this year, he now feels is about 55/45. He feels agents are an integral part of the chain, that private insurers have to remain viable and that there will NEVER be a single payer system. Pre-existing condition exclusions will need to go away, there needs to be an individual mandate, i.e. personal responsibility, that people take look out for themselves somewhat rather than relying on the government or their employer. So stay tuned!
Colleen King Insurance