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Homeowners Brace for Cash Crunch as HELOCs Come Due

During the height of the housing bubble, home equity lines of credit (HELOCs) were an extremely popular way for homeowners to tap into their home equity to fund a variety of purchases, such as home improvements and education expenses. In fact, $265 billion in outstanding HELOCs were originated between 2005 and 2008. (Source: Experian, May 2015) Unfortunately, many homeowners who took out HELOCs during this time period now find themselves bracing for a cash crunch as these loans enter their repayment phases.

What is a HELOC?

A HELOC is a revolving line of credit based on the amount of equity in your home. With a HELOC, you can borrow what you need (up to the maximum allowed) when you need it (subject to any time limit on the borrowing period--typically 10 years). With a HELOC, you can use the line of credit while making interest-only payments.

What is the "repayment phase"?

If You Get an IRS Notice, Here’s What to Do

 

Each year the IRS mails millions of notices and letters to taxpayers. If you receive a notice from the IRS, here is what you should do:

What is the Roth IRA five-year rule?

Actually, there are two five-year rules you need to know about. The first five-year rule determines when you can begin receiving tax-free qualified distributions from your Roth IRA. Withdrawals from your Roth IRA--including both your contributions and any investment earnings--are completely tax and penalty free if you satisfy a five-year holding period and one of the following also applies:

What is the Roth 401(k) five-year rule?

The Roth 401(k) five-year rule determines when you can begin receiving tax-free qualified distributions from your 401(k) plan Roth account. While it's similar to the five-year rule that applies to Roth IRAs, there are important differences.

Withdrawals from your Roth 401(k) plan account--including both your contributions and any investment earnings--are completely tax and penalty free if you satisfy a five-year holding period and one of the following also applies:

Prepaid Funeral Arrangements Can Have Grave Consequences

An important part of estate planning involves consideration of funeral or memorial arrangements, including paying for some or all of the costs in advance. Planning ahead not only spares your survivors from the stress of making these decisions, but prepaying for your services relieves your survivors from the burden of worrying about money during an otherwise difficult time.

Prepaid agreement

One way to prepay your funeral is by entering into a pre-need agreement with a funeral home of your choice. The funeral home may agree to "lock in" costs for future funeral or burial services at an agreed-upon price. This is often done through a trust or other arrangement that you can fund with cash, bonds, or life insurance. At your death, the funds are disbursed to pay for your funeral according to the terms of the agreement.

But before entering into a prepaid arrangement, you may want to get answers to the following questions:

Five Steps to Tame Financial Stress

Do you sometimes lie awake at night thinking about bills that need to be paid? Does it feel as though you're drowning in debt? If this describes you, you might take solace in the fact that you're not alone. A recent report released by the American Psychological Association (APA) showed that 72% of adults feel stressed about money at least some of the time, and 22% said the amount of stress they experienced was extreme.1

The bad news is that stress can be responsible for multiple health problems, including fatigue, headaches, and depression. And, over time, stress can contribute to more significant health issues, including high blood pressure and heart disease.2 The good news is that there are some simple steps you can take to reduce or eliminate some of the financial stress in your life.

1. Stop and assess

What's New in the Housing Market for 2015?

Home buyers and sellers finally have reason to celebrate in 2015. After almost a decade of limping along toward recovery, it seems as though the housing market has finally hit a more comfortable stride. According to the S&P/Case-Shiller Home Price Indices, well-known gauges of the U.S. housing market, real estate is finally showing healthy signs of improvement.

Data released by Case-Shiller at the end of April indicates that home prices have continued to rise across the United States. (Source: S&P/Case-Shiller Home Price Indices, April 2015) And as it turns out, no one factor is responsible for the trend. Rather, a variety of factors are being credited for the recovery.

Low mortgage interest rates