Month: August 2023

Apache is functioning normally

“With the refinance boom gone, fierce competition for the purchase business is causing significant margin compression,” Al Miller, national director of strategic relationship at NAF, said in the announcement.

For a standalone model, NAF and the partner company will form a mortgage banking company that can support funding loans of at least $150 million annually. The two lenders will each own 50% stake in the JV.

In a consortium model, currently popular in the title business, NAF will create a standalone mortgage banking company that will sell shares equal to 50% of the company. With this model, shares are intended to be for individual companies that have the scale for loan funding a minimum of $50 million annually and aggregate fundings for the combined owners of $300 million annually. 

NAF will consider a mortgage brokerage model if it is done based on using it for speed to market and as a strategy to evolve into the full mortgage banking model in the near future, the company said. The third model has a low barrier to entry, in which capitalization and licensing complexities are much less than the standalone model. 

With various services plus capital in place, a joint venture ramps up faster than a traditional mortgage company. At a mortgage brokerage joint venture, loan officers generally get paid a lower base salary than counterparts at traditional lenders and may get a smaller commission because the LO is doing less work finding customers since there are greater real estate agent referrals. 

While a mortgage brokerage JV model was popular during the pandemic years, a new federal regulatory regime could put the model at risk of expenses from the lack of regulatory enforcement information as well as lesser margins, as the industry’s volume is tied to housing cycle shifts. 

The partial acquisition model would be used when a company that owns and operates an independent mortgage business is looking to reduce its current capital investment and risk by selling a 50% portion of that business to NAF. After the sale, the partner would enter a standalone JV. 

This fourth model could also be used if the partner is already in a JV with a lender and that lender is willing to sell NAF their ownership. 

Founded in 2003 by Rick Arvielo and his wife, Patty Arvielo, New American Funding offers a variety of conventional, government, adjustable-rate and non-qualified mortgages. The California lender originated $15.12 billion in volume in 2022, down about half from the previous year’s $30.44 billion, data from Modex showed. 

Licensed in 50 states and Washington, D.C., the lender has 168 active branches nationwide with 1,615 sponsored MLOs, according to the NMLS.  

Source: housingwire.com

Apache is functioning normally

Last weekend, I played paintball for the second time in my life. I had great fun charging through undergrowth, hiding behind logs, and shooting my friends at close range. Paintball is a blast, but I’m amazed at how much it costs to play. We each paid $25 to use the field and an additional $25 for paint. The total cost was $50 for about five hours of playtime — roughly $10 an hour.

On the drive home, we compared the cost of paintball to the cost of laser tag. Last fall, we spent $7 per person for each twenty minute game of laser tag. That’s $21/hour — twice the cost of paintball. Some of our group felt the higher cost was worth it; others thought paintball was a much better deal.

This made me wonder: What are the hourly costs for other recreational activities? How much do we spend to have fun? Do people consider how much pastimes cost, and which would they continue to pursue if they realized how much they were spending?

I do this sort of geeky number-crunching all the time. In March, I broke down the numbers to discover how much Kris and I were spending on television. I learned that it cost us $3.16/hour for digital cable, but only $0.90/hour for Netflix. We cut back to basic cable.

Ten years ago, I paid $700 for a new bicycle, on which I’ve since logged about 3,000 miles. At roughly 15 miles per hour, that’s 200 hours of use, or $3.50/hour. That seems moderately expensive until I factor in the health benefits. But these are difficult to quantify — what do the benefits of biking save me in the long run? Calculations like this can become needlessly complex.

Still, it’s easy to estimate how much most activities cost. Here’s what I spend on various pastimes:

  • Laser tag: $20/hour
  • Paintball: $10/hour
  • Biking: $3.50/hour, but less every time I ride
  • Bowling: $5/hour
  • Neighborhood walk with Kris: free
  • Seattle Mariners game: $10/hour, plus food, plus 300+ mile round-trip
  • Portland Beavers game: $5/hour, plus food, plus short travel
  • My nephew’s t-ball game: free
  • Movie theater: $5/hour
  • Cable TV: $3/hour
  • Shows from iTunes: $2/hour
  • Netflix: $1/hour
  • Nintendo Wii: About $10/hour so far, but decreasing with time
  • Board games: $3/hour (on average)
  • Contract bridge: virtually free ($1 for a pack of cards)
  • The opera: $25/hour, plus dinner plus parking
  • Community theater: $2.50/hour

Neither laser tag nor the opera seem that appealing after running the numbers. Don’t get me wrong: I’m not saying that you should base your recreational choices solely on their hourly cost, but I do think you should keep money in mind. Try to discover inexpensive (or free!) sources of entertainment.

For example, reading library books is pretty cheap. A new $25 hardback might take five hours to read, for a cost of $5/hour. If you buy the book used, you might only spend $1/hour. But if you borrow the book from the library, you get to read it for free.

The most expensive recreational activity I ever participated in was a season of city league soccer. It cost me $100 for ten games, or about $5/hour. That’s not so bad. But then I tore out my ACL, which required expensive surgery. Even with insurance, I was out $2,000. Ultimately my season of soccer cost me over $100/hour!

How much do your favorite activities cost? Which are worth it? Which are not?

This article originated with a discussion in the forums.

Source: getrichslowly.org

Apache is functioning normally

Massachusetts is one of a handful of states with a flat income tax rate. For tax year 2022, people who are required to file a Massachusetts tax return will see the entirety of their taxable income charged at a flat 5% rate. Certain types of income in the Bay State, however, are subject to a different tax rate.

The 2022 tax-filing deadline in Massachusetts was April 18, 2023. If you met certain criteria and paid 80% of your total tax bill before this date, a six-month extension to Oct. 16, 2023, was automatically provided.

Starting with income earned in 2023, an additional 4% tax on income over $1 million will be levied, making the highest tax rate in the state 9%.

Massachusetts state income tax rates and tax brackets

For tax year 2022, Massachusetts’s state income tax rate is 5% on annual gross income over $8,000.

Gross income in Massachusetts includes both earned income, such as salaries, wages, tips and commissions, and unearned income, such as interest, dividends and capital gains. The exceptions to Massachusetts’ 5% tax rate are certain types of capital gains, such as short-term capital gains and gains on collectibles, which are taxed at 12%

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Do I have to pay Massachusetts state income tax?

Anyone earning over $8,000 in Massachusetts annual gross income is required to file a state tax return.

Those earning less than this amount do not need to file a return, but they can still file a return to claim refundable tax credits.

This $8,000 income threshold is on a per-person basis, giving married couples the option to file jointly or separately.

Track your finances

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Am I a resident for Massachusetts state income tax purposes?

Resident status rules

There are two ways to be considered a full-time resident of Massachusetts. The first is to live in Massachusetts for the entire tax year, while the second is to maintain a home in Massachusetts and spend at least 184 days of the tax year in the state.

Part-year resident status rules

Part-year residents refer to individuals who either moved to the state and became residents or moved out of the state and ended their residencies within the tax year.

Nonresident status rules

If neither of the above applies, then an individual is considered a nonresident of Massachusetts. A state tax return is still required if your Massachusetts annual gross income exceeds $8,000 or the prorated personal exemption, whichever is less

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What is Massachusetts’ standard deduction?

Unlike other states, Massachusetts does not have a state standard deduction. Instead, state taxpayers can determine if they qualify for certain tax exemptions to reduce the amount of tax owed.

Anyone who files a Massachusetts state tax return is given a personal exemption amount based on their tax-filing status. Taxpayers may also be eligible for additional exemptions, such as those for having qualifying dependents or for having paid certain types of medical or dental costs throughout the tax year. Mass.gov has the full details.

Tax-filing status

Personal exemption amount

Married filing separately.

Head of household.

Married filing jointly.

What’s the filing deadline for my Massachusetts state income tax bill?

The filing deadline for 2022 Massachusetts state income tax returns was April 18, 2023.

To have qualified for a six-month extension, you must have paid at least 80% of the total amount of tax owed by that mid-April deadline. If you didn’t owe any taxes and didn’t file by the deadline, an extension to October was automatically granted.

The state extension deadline follows the federal extension deadline set by the IRS, which for the 2022 tax year is October 16, 2023.

Those who have been affected by a federally declared disaster automatically receive an extension for filing tax returns, paying their tax bill and filing a Massachusetts tax extension

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4 things to know about Massachusetts state tax

  1. Free tax-filing is available to eligible Massachusetts full-time and part-time residents through MassTaxConnect.

  2. The Massachusetts Department of Revenue encourages taxpayers to file and pay their tax returns online. Filing can be done through a tax vendor or MassTaxConnect. Paper filing options are also available.

  3. Massachusetts offers payment plans for people who can’t afford their tax bills. If you owe $5,000 or less, you can sign up for a plan online. People with higher tax bills should reach out to DOR collections for more information  

  4. Check the status of your Massachusetts state tax return online or by phone at 617-887-6367 Monday through Friday, 9 a.m. to 4 p.m. Eastern time.

Source: nerdwallet.com

Apache is functioning normally

When I first got started in the financial planning industry, I had the opportunity to sit in on a joint meeting between my clients and a wealth management specialist that came down from my home office.

The nature of the meeting was to discuss some estate planning strategies that my clients were interested in to protect their assets.

Ironically, the one item in the meeting that really stuck out of me wasn’t anything related to estate planning (at least directly).

The specialist, who was also very versed in insurance, had made a strong case that my clients needed an umbrella policy.

At the time I was young and realized that I didn’t even know what an umbrella policy was. The wealth specialist had shared instance after instance of why umbrella polices make sense for almost everyone, especially how inexpensive they are.

Personal umbrella insurance policies are often misinterpreted by consumer and are surrounded by myths so often that people can fail to recognize the importance of having additional coverage when they need it most. I”m amazed of how many people I come across that don’t really understand the basics and benefits of umbrella policies. (I guess I can’t be too amazed since I didn’t know about them. In my defense, I was only 24 🙂 )

Umbrella insurance policies are thought to be too expensive to afford for average-income consumers and are too complicated to fit in with the insurance coverage you already have. But for many, the added protection of an umbrella policy may be just what your family needs.

What Is an Umbrella Policy?

Umbrella insurance policies essentially rest on your existing insurance policies for your vehicles and your home. They provide extra protection in the event of a situation not fully covered by your normal insurance. Umbrella policies cover the gaps left by your existing insurance coverage.

How Does an Umbrella Insurance Policy Protect You?

For instance, in the event you are sued for liability in an auto accident and the judgment is declared against you for $500,000 but you only have $200,000 worth of liability coverage. The rest of the money would have to come out of your own pocket unless you had the umbrella coverage to fall back on. Without the additional umbrella insurance protection, you are susceptible to losing all of your assets to pay off the outstanding debts, including your home.

Umbrella policies generally pay an additional $1-$2 million on top of your current insurance policy. In some cases, a $5 million policy is available.

How Much is an Umbrella Policy?

The cost of umbrella insurance coverage is not as expensive as some think. Premiums can range between $200-$300 a year for a million dollar’s worth of coverage over existing insurance policies. When we bought our first $1 million umbrella policy 6 years ago, our premium was only about $200 and I want to say it was less. Actual premium costs are dependent on a number of factors including the current insurance company you are using and the personal risk factors involved in your situation. The amount you pay will also be dictated by your credit score.

Umbrella policies typically carry very high deductible amounts, usually several hundred thousand dollars, because they are designed to be used only when all other insurance policies have been drained. An umbrella policy will require you to have both homeowners and auto insurance coverage in amounts equal to the amount of your deductible. Discounts can be obtained on the umbrella policies if you have the same insurance carrier for all of your coverage policies. Recently, we increased our umbrella policy coverage with our insurance agent. Since we already had the rest of our coverage with them, we were able to get a decent discount for it.

Do You Need Umbrella Insurance Coverage?

There is no right answer to this question as every individual situation dictates a different need for insurance. It is worthy to note that in today’s society lawsuits are commonplace and in the event an incident does occur, it is necessary to have the right protection to cover yourself, your family, and protect your assets and interests with the right insurance. That has been the motivating force in why we took out a larger umbrella policy and why I encourage my clients to at least consider purchasing one.

Consumers will need to determine their own risks for added protection such as the amount of time they spend driving their vehicles, the risk of people getting injured on their property, and the general nature of your financial and personal situation. You also need to check in with the terms of your existing insurance coverage.

If there are any gaps where coverage for specific incidents are not covered, such as being self-employed and having clientele regularly in your home, you may want to consider the options for umbrella insurance coverage. After an incident, it can be too late to protect yourself so check into the benefits of additional umbrella insurance coverage for the peace of mind it can offer.
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Source: goodfinancialcents.com

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