Bad Credit: Options for Refinancing a Mortgage

Like many people, the recession hit me pretty hard. Thanks to a job loss, I got behind on some of my credit cards. Even though I did mange to make the mortgage payment every month, my credit rating nose-dived. While things did get better, I still wondered if it would be possible to refinance my mortgage with bad credit. After talking with a few lenders, I found out that my situation was not unique. I also found lenders who were willing to work with me. I managed to get terms that will save me money over the life of that mortgage. If your credit has taken a beating, don't assume that refinancing is out of the question. I'll share how I researched options and found a lender who offered a good deal. You could find that refinancing your mortgage is within your reach.

6 Reasons To Consider A Lump Sum Payment Instead Of A Traditional Pension


If you are going to be retiring in the near future, you may be wondering whether to accept pension benefits from your employer or to request that you be given a lump sum in lieu of a pension. This can be a difficult and confusing decision to make, so make certain that you consider several factors before making a final decision. Following are six good reasons to consider opting for a lump sum settlement rather than structured annuity or pension payments.

You'll Have More Control Over Your Investments

A lump sum payment will provide you with broader investment options that you'd have if you were drawing your investment funds from monthly payments. If you are receiving payments from an annuity fund or pension plan, for instance, investment decisions are made independent of your input, and you'll receive the same amount no matter what happens in the stock market or in commodities futures. If you are a skilled investor, you could probably increase your lump sum significantly by making a few prudent investments.

Your Heirs May Benefit More

Although most payments from pension funds will revert to your spouse in the event of your death, the payments will stop when your spouse dies. Opting for a lump sum instead of monthly payments will allow you to name a beneficiary for the funds after you and your spouse are gone. You should also strongly consider the lump sum option if you are in poor health.

You Can Use it to Pay Down Debt

If you have accrued significant debt over the years, you may be better off financially using the funds from a lump sum settlement to pay off as much debt as possible. This way, you'll free yourself from high interest rates and the hassle of making multiple monthly payments. Also, there's a certain sense of accomplishment that comes from being free of major debt obligations that can contribute greatly to your quality of life.

You Can Use it to Buy a House

If you don't already own a home, using a lump sum settlement to purchase one may be the best financial move that you can take after you retire. Depending on where you are located, you may receive certain property tax breaks after you pass the age of 65. Another option is to purchase rental properties with your lump sum settlement or purchase a vacation home. You can even buy an RV and set off to explore the continent if you're longing to experience life on the road.

You're Protected in Case Your Company Goes Under

Although the Pension Benefit Guaranty Corporation (PBGC) was established in 1974 as a way to provide protection for retirees in the event that the companies responsible for paying their pensions went under, there have been indications that a high number of underfunded pension plans has the potential to completely drain this fund. Taking a lump sum settlement will protect you from the possibility of PBGC funds being drained by the overabundance of underfunded pension plans or by companies that have gone out of business. Even if your company seems financially healthy right now, it's difficult to predict what the next few decades will bring.

You May Be Able to Defer Taxes on It

It may be possible for you to defer taxes on the taxable part of your lump sum settlement if you request that your employer place the taxable portion directly into an IRA. Because tax laws can change on a yearly basis, make certain that you discuss your tax situation thoroughly with a qualified professional before you decide in favor of accepting a lump sum.

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19 February 2015