Mortgage Tips For the Self Employed – Plan Now For Future Success

Mortgage tips for the self employed can be summed up in two words: plan ahead. Self employed people face the common perception that they are high risk borrowers, based on their variable monthly incomes and on their lack of official income documentation. Lenders like to see steady monthly income from their loan applicants, and generally self employed people can’t prove they have such steady income without pay stubs and W-2s. Documenting income and preparing to apply for a loan are important steps for self employed people. Self employed people go through a different process than wage earners when applying for a home loan.Tips for the self employed, therefore, have a different focus than those for traditional loans. Wage earners should demonstrate long term employment and good credit, while self employed people have the extra responsibility of proving their monthly and annual income. They should be able to show a lender three years of financial records proving their income, up to date client contact lists, and audited financial statements verifying income.One of the main issues with self employed income is that the bank uses personal and business tax returns to determine income. Many self employed people deduct a large amount on their tax returns in order to lower their net income on which they must pay taxes. In this situation, self employed people can appear to have low income and high business expenses, reducing their chances of being approved for a loan. Suggested mortgage tips for the self employed who face the problem of artificially low income due to tax return accounting are to take fewer deductions for a period of 2-3 years prior to applying for a home loan, and to pay more federal taxes during the same period in order to report higher income.Many self employed people wear all the hats in a business, including keeping track of expenses and doing taxes. In some cases, records may not be as accurate or meticulous as a lender would like to see. For this reason, mortgage tips for the self employed always include planning ahead so that the individual can provide the necessary paperwork to the lender when applying for a home loan. While net income may appear low, records may not be available, and client lists may not be updated now, knowing that all this paperwork will be required for a mortgage allows the self employed to prepare for future homeownership.

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The Recession Hurts – Buying Health Insurance While Unemployed

With the recession upon us, unemployment has become a reality and is at an all time high. The media and organizations are getting information out to the public on how expensive health insurance can be when combined with unemployment income, or the lack of income. It is so true that health care costs are on a rise, even more so when you elect to take on the expense of COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986). Fortunately, there are other options families have to choose from. Health insurance is a necessity, like food and shelter. It is not worth the “cost” of not having health insurance. With COBRA being at the high expense that it is, most people move to alternative means of healthcare, such as a Short Term Medical (STM) or their own private health insurance plan.There is the argument that if you have a pre-existing condition you will not be able to get any coverage or have to settle for lack of coverage. This is true; if you have one of over 150 conditions out there you can become uninsurable. You will not be able to buy coverage on your own outside of the high-risk pools. COBRA has its downsides when it comes to pre-existing conditions as well. However, the most common conditions are usually covered, as well as many other conditions that could be covered, only if you work with the right health insurance agent. A truly independent agent has the ability to develop relationships with multiple carriers along with the ability to converse with them to see what the probable outcomes are. Some of my best clients are still amazed that I was able to get them coverage, often times better than what they had before despite the pre-existing condition.Another option for families who are on a tight budget is taking on a Short Term Medical (STM). Basically, you are renting a health insurance policy for catastrophic, only over a short period of time. The health insurance companies give you a break on the price because:1) The policies expire at a maximum of 6 months with an option to renew.
2) They may only provide a discount for the minor things such as, but not limited to:

Doctor Visits
Lab Work
Rx coverage
The downsides to having an STM are:1) Like COBRA, the policy eventually runs out. If you develop a health condition while on the policy and you need to continue treatment, the insurance company may turn down the renewal.
2) If the condition is on their list of conditions that are uninsurable, even if the treatment is over, a policy would not be offered for that individual.From my experience, I can tell you that it is much safer to provide your family with more permanent coverage such as a private health insurance policy. The policy can never cancel on you due to health and usage of the policy. It will also never expire on your family. This way if you move to a new employer that does not provide health insurance benefits for your family, or if you start your own business, you can still buy more catastrophic health insurance (such as a Health Savings Account (HSA) Plan) to keep premiums more affordable and have more coverage than an STM.The lack of health insurance can cause major problems. Far too often the uninsured delay the needed medical attention. As a result, adults can wind up with conditions that otherwise could have been prevented. The flip side is if you end up seeking medical attention, many people end up in debt over it.There are a couple of things you can do to have permanent insurance more affordable for your family. The first you have to do is ask yourself what is the most important thing for you to insure. This is a very good question to ask. Some people may claim going to the doctor is the most important thing for them, however you cannot buy health insurance to cover just doctor visit co-pays. There is a reason for that. We don’t buy health insurance to save $70+/- at the doctor. We would buy insurance for the big expensive claims. To make it more affordable you may have to go with a high deductible. The good news is you don’t need your deductible in cash at the time of claim. The facilities are usually reasonable with payment plan options to make it more affordable for your family. Having $5k-10K out of pocket if something happened to your family is much better than having $100,000.00 bill hanging over your head for not having insurance.Your employer is in complete control of how they distribute your health insurance coverage. This is one of the contributing problems when you become unemployed. They can make changes to the policy (i.e. deferring more cost to the employees), do away with the health insurance all together or lay you off. Unfortunately, you do not have a say so unless you are the owner or on the board of directors. It seems the problem starts when unemployment hits. In the world of health insurance, many of these problems can be prevented if families just took advantage of buying their own private health insurance policy. This way if you are employed or not, it is not a reality check. In fact, it is already factored into the monthly budget, right? You have control of the benefits by choosing the plan that best fits your needs, your wants and your budget. Work with an independent agent to be sure you have all the options.

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Health Insurance Basics – Common Definitions and Tips For First Time Buyers

Choosing a health insurance plan that is right for your family can be a bit daunting…but it doesn’t have to be. Becoming familiar with the different health insurance plans that are available both for individuals and families will help you navigate the health care insurance field and make an better informed decision concerning health insurance. Read on to learn some of the health insurance basics.HOW TO CHOOSE THE BEST INSURANCE PLAN FOR YOUR NEEDSFirst, determine if short term or long term health insurance is what you need. If you are unemployed, yet hope to be hired in a few months with a company that offers group insurance, than perhaps short term health insurance is for you. Also some companies require a new employee to work for three to six months before they are eligible for health benefits. Short term could offer the temporary coverage you need. Next, decide if basic health-care coverage or comprehensive health care coverage will better meet your needs.BASIC HEALTH CARE COVERAGEThis plans covers inpatient hospitalization and out-patient surgery in case of a major accident or illness. The monthly health premiums are lower and are generally the choice for those who are primarily interested in coverage in case of severe accident or illness.COMPREHENSIVE HEALTH CARE COVERAGEThis plan covers preventative care, Dr’s visits, prescriptions, along with hospitalizations and out-patient surgery. Comprehensive health care coverage has a higher monthly premium, and it generally has a low co-pay at the time of a Dr’s appointment. This plan may be the better choice appropriate for those who have reoccurring medical expenses.AVAILABLE INDIVIDUAL AND FAMILY INSURANCE PLANSHealth care plans usually fall into two categories, indemnity or managed-care plans. They differ in regard to how bills are paid, ability to choose health care providers and out-of pocket expenses. Generally, you’ll have a broader choice of health care providers with indemnity health-care plans and less out-of -pocket expenses and less paperwork with a managed-care health insurance plan.MANAGED CARE PLANSHMO’s (Health Maintenance Organizations), PPO’s
(Preferred Provider Organizations), and POS’s (Point of Service Plans) are all managed health-care insurance plans.INDEMNITY PLANSUnder this plan, insurance companies pay their share of the cost for services after they receive a bill. This may mean that you will have to pay your bill for medical care at the time of service and then seek reimbursement from your health insurance company.WHAT ARE SOME OF THE ADVANTAGES AND DISADVANTAGES OF AN HMO PLAN?- Lower out of the pocket expenses- Fewer choices in regard to physicians and hospitals than other health insurance plans- A PCP (Primary Care Physician) is required and will meet most of your health-care needs- A referral is needed from your PCP before seeing a specialistWHAT ARE SOME OF THE ADVANTAGES AND DISADVANTAGES OF A PPO PLAN?- Health insurance companies offer a network of preferred doctors and hospitals- These health care providers offer the members services at discounted rates- Usually an annual individual or family deductible must be paid before the health insurance companies begins to pay out money for medical bills.WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF A POS?- Combines features of both the HMO and PPO plans- Members are usually required to choose a Primary Care Physician (PCP)- PCP services are not usually subject to a deductible- Preventative care visits are generally coveredHEALTH INSURANCE TERMSAs with any genre, health care insurance is filled with jargon exclusive to its field. The following is a list of terms and their meanings that will hopefully give you good grasp of health insurance terms.COINSURANCEThe percentage of medical costs you have to paying after meeting the deductible amount that is attached to your plan.CO-PAYMENTThis occurs under an HMO plan and requires a specified dollar amount be paid to the health insurance provider on each visit.COVERED BENEFITSA covered benefit must always be a medical necessity. The determination of whether something is a medical necessity or not is made by the health insurance company.DEDUCTIBLEThe amount you must pay in medical expenses before your insurance company will begin to cover your medical bills.DEPENDENTA dependent is someone other than yourself who is covered under your health insurance plan. This could include a spouse, child, unmarried partner. For children there are age limits at which they are no longer covered under a parent’s health policy.DISABILITYIn the event that you are unable to work for an extended period of time due to an injury or a medical condition, disability insurance provides funds to cover your living expenses in a specified amount.GATEKEEPER Another title for your Primary Care Provider (PCP)GROUP INSURANCE Employers often offer group insurance plans. Under group insurance an employee can generally obtain a much more affordable plan.IN NETWORK/OUT OF NETWORKIn network refers to those physicians who have been contracted under a health care plan to provide services to their members. Staying in network allows lower charges and a smaller percentage of out of pocket expenses. Conversely, going out of network generally means charges are higher and you will have to pay a greater percentage of out of pocket expenses.GRACE PERIODThis is a specified period past the due date of a premium during which coverage may not be canceled. This prevents health insurance companies from canceling your policy if payment should arrive a few days late.OPEN-ENROLLMENT PERIODGenerally, this is a once-a-year period of time that allows you to make changes to your existing health insurance coverage. (A change in marriage status or the birth of a child also allows you to modify your health insurance plan.PRE-CERTIFICATION(Pre-authorization)Before surgery or hospitalization, the insurance company must be contacted to get approval for a medical service to take place. Failure to do so typically means the insurance company will NOT pay for the service. This does not apply in an emergency situation, although the insurance company should be contacted as soon as possible.PRE-EXISTING CONDITIONA medical condition that existed before an insurance policy became effective. Most insurance companies require a three month to one year waiting period before a pre-existing condition can be covered under their plan.PREMIUMSMonthly payments for insurance coverage. Monthly payments can easily reach $100 for singles and two to three times that amount for a family.REFERRAL A written form from your Primary Care Provider to another Dr. (usually a specialist) giving consent for you to go to them for medical services.SECOND SURGERY OPINIONOn occasion an insurance company will ask you to be seen by a second Dr. to determine if the recommended procedure is necessary or if an alternate method could accomplish the same result.URC (Usual, reasonable, and customary)URC refers to the dollar amount an insurer will usually pay for a service or procedure based on what is customary for the area in which you live. An insurance company will not pay $800 for a procedure that costs only $300.HEALTH INSURANCE QUOTESBe sure that you shop around to find the best health insurance plan. Compare quotes from at least 3-5 different insurance companies before you decide to purchase.

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