Higher Mortgage Rates?

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Higher Mortgage Rates In 2013?

The news that renters and home buyers do not want to hear is that 2013 will almost certainly see higher housing costs, higher rents and various mortgage fees.

This year also sees the introduction of several new mortgage regulations, and anyone applying for a mortgage will potentially be affected by these.

English: Sign of the times - Foreclosure
English: Sign of the times – Foreclosure (Photo credit: Wikipedia)

If you apply for a FHA mortgage and have a lower down payment, you will have higher rates for your mortgage insurance.

In an ongoing effort to add to its reserves, the FHA (Federal Housing Administration) has implemented various raises to insurance premium costs since 2008, and analysts seem to think that trend will continue. One such increase will be a 0.1 percent increase in the yearly insurance premium that is added to the monthly mortgage payment of borrowers. Currently, the charge for FHA borrowers is about 1.25 percent.

Janneke Ratcliffe of UNC Chapel Hill in North Carolina points out that once rates rise, this seemingly small increase will be noticeable.

Rental prices are rising due to a poor job market, a high number of foreclosures and tight mortgage lending, and in addition, the supply of rentals is low in many areas. Real estate firm Reis pointed out that in the 4th quarter of 2012, apartment vacancies stood at 4.5 percent, an 11 year low.

Whereas earlier refinancing options have not worked effectively, President Obama is likely to push for more effective legislation to help owners with an ‘underwater’ property, predict some analysts, including Julia Gordon of the Center for American Progress.

Consumers could be affected for better or worse when a series of new mortgage regulations are introduced early this year. One of the most important is a rule stipulating that a borrower must prove to a lender that they are financially able to pay back the loan.

Mortgage rates usually go up when investors move from Treasury bonds and mortgages to stocks, and this week was no exception. A 30 year fixed mortgage increased to 3.77 percent, while a 15 year fixed increased to 3.03 percent and a 5/1 adjustable rate mortgage increased to 2.78 percent.

Why Hiring a Tax Professional is Your Best Business Option

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Whether you are self employed, run your own business or do not get taxes paid through your employer for another reason, hiring a tax professional can be a great decision and can save a good amount of stress and headaches at the end of the tax year. Here are some of the top reasons to hire a tax professional next time your tax return is due, so that your taxes don’t have to be taxing.

1. It’s their profession
Because most accountants will have spent years filling in tax forms, returns documents and producing the required evidence, they will be well abreast of current rules and regulations to make sure you are 100% above board and still getting the most for your money. Because they know the current legislation and rules, they may be able to save you a great deal of money through deductions and offsetting tax against expenses, which many small business owners are unaware of.

2. It saves you time and effort
Even if you are great at keeping your books in order and know exactly what you are doing with your tax return, by getting someone else to do it for you, you can free up your time to do what you do best – run your own business. If you are self employed or run your own small business the tax return can be extremely complicated, and it is estimated most people in this situation spend between 10 and 20 hours sorting everything out. If you view this in terms of the money you could earn if you were working rather than doing your tax return, it can make the accountants fees seem much better value for money.

3. Avoid costly mistakes
If you haven’t done a tax return before, it is highly likely you will make some mistakes when filling in your tax return. These can turn out to be very costly if you have underestimated your tax liability for the year, so use a professional to ensure you get it right first time. The added bonus of using a professional is that they will be around to answer any questions or queries that the tax office has with your submission, so that you can be left to carry on with business as usual.

4. Help with audits and other financial planning
If you are asked to be audited you can be sure it will not be a pleasant process. You will need to have a professional accountant to help you, and by already engaging with one for your tax return you will have built up a relationship with them and they will be aware of your business and better placed to help you. Accountants are also good at financial projecting, so if you are considering taking on a member of staff, expanding your office space or otherwise making a change that will impact the turnover of the business, you can enlist their help to project whether this will be a good business decision or not.

This article has been written from a Professional Cyprus Tax Firm PHS Hadjizacharias and Co. The Company is located in Cyprus and is offering Taxation, Audit, Accounting, Company formation and other corporate services for International Companies

Top 5 tips for choosing Business Accounting Software

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If your current business accounting processes are running out of steam or your business is simply growing too big for the standard accounting package you currently use, upgrading is the logical next step.

Whether you’re a small start-up or a complex enterprise, you’ll be met with myriad of software choices. Let’s look at five no-nonsense tips for choosing the right accounting software package for your needs:

  1. Identify extra features you may need – most businesses will need the basic out of the box finance package as a given which usually includes accounting, sales and purchasing management, asset registering and payroll. But do you also need stock control? What about intercompany reporting?
  2. Make sure the new software integrates with your existing processes – Let’s face it, your staff are used to doing things in a regular way and while it’s still effective, why change it? Some of the better accounting software products such as MYOB EXO Business will fit into your existing business processes and also help improve them.
  3. Multi users and security – Dealing with sensitive company financial data should be limited to those who have the rights to do so, but going a step further, you need to be able to limit what each user can access. For example, a junior accounts person should be setup with a restricted login with less access privileges than the chief financial controller.
  4. After sales support and training – learning your new accounting software and sorting out inevitable teething problems are made easier with quality support and training. Phone and email support are essential as is face to face training involving all relevant staff. This help can be particularly useful when software updates need to be applied.
  5. Speak to others in your industry – at your next networking function, actually raise the subject of accounting software. Now, you may think it’ll send people running for the toilet of a drink refill, but you’ll be surprised how many people will tell you their experience. They’ll often recommend business software experts who helped them.

So, there we have 5 brief but very important considerations to take into account (bad pun intended) to help you make the right decision. Making the wrong choice of software can lead to headaches further down the track and even worse, you could end up making some bad business decisions because of it. Take the time to weigh-up the functions and features you need and look for a product which comes with upgradable modules you can ‘snap’ in as and when you need them.

If you’re looking for a consultant who can scope, design, implement and configure a business accounting software solution specialising in MYOB EXO, try Horizon Business Systems, a Perth based, MYOB Platinum Partner.

Chris Christie and Taxes At 10% Realistic Or Rediculous

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A ten percent income tax for every citizen in New Jersey is Governor Chris Christie‘s plan. His belief is that to change the present economic crisis requires a radical approach to income taxes. A fiscal conservative he proposing to cut the state’s spending at the same time he is promoting income tax cuts.

Christie views himself as an economic visionary who is willing to take tough actions to pull his state out of its economic quagmire. His speaking engagements on radio, television, and at town hall meetings make him appear as a current Republican candidate for president, but his goal is the 2016 election. He is confident his plan will work for New Jersey and the Nation. In California, Illinois, and New York, Democratic governors are taking an opposite approach to his plan. They are raising taxes for all citizens and making sure the upper-class proportionally pay an equal share of their taxes. These Democratic governors want to lower the deficits in their states. Borrowing on empty bank accounts will only create more debt. States cannot be competitive if their economic standing is low and they have no money for their states infrastructure and basic needs.

Tax policies, which put on increased burden a state’s ability to be economically solvent are seen by many leaders as unrealistic. His plan which borrows from a bankrupt account may not be what New Jersey needs. His plan is radical, but similar to elective surgery the people of his state may want a second opinion.

 

 

Small Money Mistakes With Large Financial Consequences

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All of us are liable to make mistakes every now and then; after all, we’re only human. But there are some seemingly small mistakes that can snowball into something big and bring irreparable consequences to businesses.

If you have typos in a book report, or forget to pay a bill on time, it is easy to be forgiven for these minor errors. However, when you are part of a large company, a simple mistake can turn into a million dollar lawsuit that can render your business helpless or bring it to the brink of bankruptcy.

Listed below are some of examples of little mistakes that resulted in some of the most terrifying losses for businesses.

Website Blunder

In 2006, Alitalia made one wrong move on their website that cost the company millions of dollars. By leaving out a couple of zero’s in the cost of their Toronto to Cyprus fare, the company had to shoulder 2,000 tickets at only $39, when in fact the tickets were worth $3,900. A $3,900 plane ticket for $39!  Surely you won’t find a bigger discount out there.

In light of this huge slip-up, Alitalia tried their best to cancel all the tickets purchased at the incorrect price.  Eventually, though, they had to honor the $39 price tag to appease their disgruntled customers and protect their company name. Now, you do the math.  For 2,000 tickets, Alitalia had to cover roughly $7.72 million from their own funds.

Wrong Move on the Stock Market

One stock broker in Japan will probably never forget the fateful day in 2006 when he encoded the wrong digits on his stock market ledger. Instead of selling each share of J-Com stock for ¥610,000, he ended up selling 610,000 shares for a measly ¥1 with a few doomed key strokes. Despite attempts to correct the oversight, the error was not corrected in time and cost the company a whopping $240 million.

Wrong Punctuation

Surely all of us misplaces a comma from time to time, but no businessman would want to forget this grave error in comma placement.  In a contract with Aliant Inc, Rogers Communications made a tiny error in one clause that resulted in an 18-month long court battle which required them to pay an additional $2.13 million to Aliant. The culprit? A simple comma that should not have been present in the first place!

A Grave Oversight that Clouded Sunny Hawaii

Back in 2009, Hawaii was experiencing a daunting budget deficit made infinitely worse because of a small clerical error.  As the 2009 fiscal year was about to come to a close, one government department posted an $8 million growth, when in actuality the department was facing a $34 million budget deficit. Before they even realized what had happened, the Hawaiian government spent the money, digging themselves further into debt.

Looking at these examples might give you pause and serve as a reminder to be extra careful from now on and avoid following in their footsteps.

If you love to budget and the idea of a misplaced decimal point haunts your dreams, you may be a natural born accountant. Take a look at your options for accounting degrees online, such as these accounting associate’s programs.