Here’s a breakdown and what you need to know as you assess your options. Look at Long-Term Returns on Mutual Funds Although past performance is no guarantee of future results, historical returns can provide reasonable expectations about the growth of an investment over time. For example, in 2021, mutual funds in seven broad categories averaged an annual return of 11.54% (see the table below), well above the average annual return over the 15 years prior to that....

In addition to setting rules for canceling PMI, the HPA requires lenders to inform borrowers about their rights. Disclosures include upfront and annual notices regarding when and how borrowers can cancel PMI. Information includes details about the amortization schedule, when to request cancellation, and any features that might limit the ability to have PMI canceled. The HPA became effective on July 29, 1999. Lenders must still provide disclosures to borrowers who took out loans before that date, however....

The settlement agent is responsible for completing the HUD-1 Settlement Statement and providing a copy to borrowers upon request. Borrowers have to act quickly if any issues are discovered since the Settlement Statement only has to be provided one day before closing. Borrowers do have the option to waive the right to receive the statement. The HUD-1 Settlement Statement was standard for nearly all real estate transactions before Oct. 3, 2015....

An adjustable-rate loan’s initial interest rate relies on the index and margin. When you sign the loan, these numbers are added to calculate your interest rate. The initial interest rate of your reverse mortgage is what you’ll be charged during the first index rate period. This could be a month or a year. If you have a fixed-rate reverse mortgage, the initial interest stays the same throughout the loan’s lifetime....

The moving average bounce trading system uses a short-term time frame and a single exponential moving average to give slightly more weight to more recent price movements. It allows traders to observe where stocks move and to time their trades with bounces as they bump against the average trade line. This method works for long or short trades, where the trader watches for specific indications on a trading chart and then trades the stock as it moves away from, reverses, and then bounces off the moving average line....

Public debt usually only refers to the national debt. Some countries also include the debt owed by states, provinces, and municipalities. Therefore, be careful when comparing public debt between countries to make sure the definitions are the same. Regardless of what it’s called, public debt is the accumulation of annual budget deficits. It’s the result of years of government leaders spending more than they take in via tax revenues. A nation’s deficit affects its debt and vice-versa....

The Rule of 78 structures interest and payments such that borrowers pay more interest at the beginning of a loan and pay less in interest as they pay down their debt. If you are far along in the debt repayment process, the Rule of 78 may reveal that paying off your loan early won’t save you that much money. Some lenders use the Rule of 78, also known as “the sum of the digits,” to figure out just how much interest a borrower has already paid on a loan....

Learn more about how the Shared National Credit Program was created and how it works. Definition of the Shared National Credit Program The Shared National Credit Program is a system that reviews the credit risk and management of large syndicated loans each year. It is intended to create a uniform system for evaluating and classifying these loans. The Shared National Credit Program was started in 1977 to create a centralized system for reviewing these types of loans....

Generally speaking, property transfers are included in the three-year rule if you transferred the property for less than fair market value. Gifts are exempt from the three-year rule if you did not have to file a gift tax return to claim the annual exclusion or did not have to pay the tax on the gift at the time you made it. However, this doesn’t include certain life insurance policies. For example, the three-year rule would still apply in the case of a policy gifted to an irrevocable life insurance trust....

Learning the TCO of a product can help you understand what it will cost you overall. You can then use that information to compare products and choose the one that best suits your budget in the short and long term. But how do you calculate TCO and what does it look like in action? Here’s all you need to know. Definition and Examples of Total Cost of Ownership (TCO) The total cost of ownership (TCO) is the cost to own an item from the day you buy it to the day you sell it, factoring in all of the related costs....

Windstorm insurance covers damage from wind events. If your home is damaged by an included peril, you start the process of reimbursement by filing a claim with your insurance policy. Before you file the claim, take video and photographic evidence of the damage. You also need to include proof of the storm, so gather any official news sources that verify the information. There may be a time limit for claims, so be sure you file a claim quickly....

Examples of current liabilities are accounts payable, short-term loans, payroll taxes payable, and income taxes payable. Any account that is payable within a year or operating cycle is a current liability. Some current asset examples are cash, accounts receivable, investments that can be liquidated, and inventory. In general, similar companies in similar industries don’t always account for both current assets and liabilities the same internally or on their financial reports....

This causes a decrease in demand, which induces an increase in supply. Businesses are less profitable and as a result, wages and employment rates decrease, further adding to the deflationary spiral. Central banks then attempt to influence spending by making it profitable to use loans while making consumers and businesses pay to keep funds in bank accounts—by introducing negative interest rates. Negative Interest Rates Interest rates are a monetary policy tool used by central banks to influence inflation throughout an economy....

In this article, we’ll explain the basics of stock options and how they work. We’ll also cover the difference between incentive stock options (ISOs) versus non-qualified stock options. Finally, you’ll learn some factors to consider if you’re trying to decide whether to exercise your options. What Are Stock Options? Stock options are contracts that give an investor the right (but not the obligation) to buy or sell a stock at a predetermined price....

First, we’ll look at the differences between a summons and a subpoena and then what to do if you receive one. What Is a Summons? In general, a summons is the beginning of a legal case. It signals the issue that needs to be adjudicated (tried in court). A summons can be used in either a civil or a criminal case. Specifically, a summons is a document that is an order by a court requiring someone to appear in court....

Job Advertisement Looks Like Your Job It can be alarming if you notice that your job is being advertised, and it’s important to take action to deal with the situation. However, don’t immediately assume that you are being replaced. In some cases, employers will add a job that’s similar or identical to an existing position and have no intention of replacing anyone in that capacity. In other cases, it’ll be obvious that your job is being advertised, as it’s a unique position such as the Director of Sales for the Eastern Region....

The goal of your cover letter is to make a case for getting selected for a job interview, so it’s important to include all required information along with a compelling argument for why you would be a strong candidate for the position. It can be time-consuming to write a custom cover letter for each job you apply for, but it’s important to take the time and effort to show the company why you are a good match....

Here are some tips and information on how much time you should consider practicing before starting to trade, the amount of money you’ll need, and methods to improve your skills over time. Time Investment Day trading isn’t a get-rich-quick scheme, nor is it something that takes years to gain consistency. Expect to spend six months to a year honing your skills and practicing a strategy before you become comfortable with it and are ready to risk your own capital using it....

It’s important that you understand the 401(k) early-withdrawal penalties and proceed carefully, whether you need a down payment for a new house, college tuition for your kids, or cash for a financial emergency. 401(k) Early-Withdrawal Penalties The tax benefits are among the biggest advantages of contributing to a 401(k) plan. Not only is each traditional 401(k) plan contribution tax-deductible, but the money also grows tax-deferred while it’s in the plan....

National governments issue debt securities known as sovereign bonds, which can be denominated in either local currency or global reserve currencies, like the U.S. dollar or euro. In addition to financing government spending programs, these bonds can be used to repay older debts that may be maturing or cover interest payments coming due. In this article, we’ll take a look at some important concepts to know when it comes to sovereign bonds (such as yields, ratings, and credit risk), as well as how investors can purchase them....