Drakula & Co. / Getty Images Taxpayers can also purchase government bonds, which aren’t savings accounts but work in a similar way. The sale of these bonds raises typically money for municipal and state governments. The interest they earn is often tax-exempt. However, some states won’t exempt interest earned on bonds issued by other states. An Example of Tax-Free Savings Accounts For example, you might be able to claim a tax deduction for money you put into a health savings account (HSA), and if you use the money to pay for qualifying medical expenses, you won’t pay taxes on your interest earnings....

Definition and Example of a Utilization Fee A utilization fee may also be known as a usage fee. If you have a revolving line of credit, you may be charged this fee when the utilization is above or below a certain minimum. As an individual borrower, this may be the more likely scenario of when you may have to pay a utilization fee. For example, a lender may charge you a utilization fee if you withdraw a large amount of money on a revolving line of credit....

The buyer cannot (or doesn’t want to) qualify for full financing from the bankThe buyer cannot fully fund the purchase by the desired closing dateThe seller wants to spread capital gains on the sale over a number of years to reduce taxesThe seller wants to lock in the sale or ensure the property sells on schedule With this strategy, a seller who owns their home outright gives the buyer a mortgage and maintains a percentage of interest in the property until the mortgage is paid off....

Learn more about what adverse possession is, the legal criteria for that classification, and how it could impact you as a property owner. Definition and Examples of Adverse Possession How Does Adverse Possession Work? Adverse possession is when a non-owner/trespasser/squatter occupies real property without permission. The owner must try to remove them during the statute of limitations period; otherwise, the person committing the possession could potentially take legal ownership. For there to be an adverse possession, however, each of these criteria must be met:...

Strelciuc Dumitru/Getty Images What Is American Express Pay It Plan It? Do you ever wish there was a way to break up your monthly payment? Or that you could put some of your bigger purchases on a payment plan instead of paying expensive interest? With certain American Express cards, the Pay It Plan It feature can help you do both. The feature is composed of two parts: Pay It: This lets you easily pay off recent charges through the American Express app....

For example, amenities frequently offered by apartments or condominium complexes are swimming pools, fitness facilities, park areas, pet spaces, and playgrounds. Many apartment complexes also try to align their amenities with the tenants they hope to attract. If an apartment complex consists mainly of one-bedroom units catering to young professionals, they may offer amenities such as co-working spaces or fitness but fewer child-friendly spaces. How Do Amenities Work? Amenities are used to create market appeal and generate more value....

When purchasing a property with a mortgage, you’ll need to have an appraisal completed before escrow can close and the keys can be exchanged. If you’re refinancing, banks will likely want an appraisal done before they allow you to withdraw any cash, although there are some properties and circumstances that make it possible to waive an appraisal when refinancing. An appraisal waiver is just as it sounds—a decision to waive or forgo the home appraisal for your transaction....

You can still be considered the driver at fault even if the police or your insurance company divide the blame 51% to you and 49% to the other party. But some types of accidents are clearer in terms of liability and fault. Rear-Ending Another Car You might have been driving too aggressively or following too closely if you hit the back of the car in front of you. Insurance companies will often assume the fault is yours when this happens....

Alternate name: Coverdell Education Savings Account, Coverdell ESAAcronym: ESA Qualified education expenses include anything required for the enrollment or attendance of the beneficiary at an eligible educational institution (primary, secondary, or higher education). For example, tuition and fees, books, uniforms, supplies and other equipment, and in some cases, the cost of room and board are qualified expenses. Public, private, secular, and religious schools are all considered eligible educational institutions. How Does an Education IRA Work?...

Alternate names: Negative equity car loan, underwater car loan Suppose you use a car loan to buy a car. You don’t have enough to pay the taxes and fees included in the purchase, so you include them in your loan. This makes your loan more than the value of the car, so you’re upside down from the beginning. How an Upside Down Car Loan Works Anytime you owe more on your car than it is worth, your loan is considered upside down....

Alternate name: break-even quantity (BEQ) How Break-Even Analysis Works There is a cost to produce any product or offer a service. A portion of the cost is fixed and another portion of the cost fluctuates based on the number of units produced. Estimating the BEP requires accurate information about fixed and variable costs. Fixed costs do not vary with sales volume and may include rent, utilities, salaries, and insurance. Variable costs fluctuate with sales volume and may include materials and labor....

But do you need insurance for an e-bike? Like the requirements above, the answer depends on where you live. However, even if e-bike insurance isn’t required in your state, you may want to consider it anyway. Your home and car insurance policies might provide some protection for an e-bike, but they can’t beat the specialized coverage of an electric bike insurance policy. Will Homeowners or Auto Insurance Cover Electric Bikes?...

One way in particular that it helps both lenders and homeowners is by allowing banks to provide 30-year mortgages. Without the financial backing of Freddie Mac, it would be too risky and expensive for banks to keep loans on their books for that long. Freddie resells the mortgage-backed securities to investors on the secondary market. This allows more investors to profit from the real estate sector. Meanwhile, Freddie uses the proceeds to buy more bank mortgages....

For example, the U.S. imposes a federal income tax on its citizens—both those who live in the U.S. and those who live abroad—as well as on its resident aliens. This income tax generates most of the U.S. government’s revenue. Generally, the jurisdiction imposing an income tax has laws in place to instruct taxpayers on how to calculate their income-tax owing. Most states have their own income tax codes that impose state-level income taxes, and some cities and counties impose additional local-level income taxes....

However, being judgment-proof won’t last forever, and the exact length of time depends on your state’s laws. Here’s what you need to know about being considered judgment-proof. Definition and Example of Being Judgment-Proof If you don’t have enough income or assets to satisfy a court judgment that’s been brought against you, you may be considered judgment-proof. Some states shield certain assets from being repossessed in a court judgment, such as homes....

It’s not hard to figure out what you owe for many debts. Your creditor makes it easy by sending you a statement, usually monthly. The statement will set out your charges, the interest that’s accrued, any fees you’ve incurred, payments you made during the billing cycle, and your balance. In other cases, the amount of your debt isn’t so obvious. This is particularly true with disputed or contingent debts. A debt is disputed when some element of the contract or agreement between the parties is unclear....

Notes payable is a valuable financial tool that business owners can use to expand their business, and they can also serve as an investment option. Learn what notes payables entail, how to utilize them for investing or for your business. Definition and Example of Notes Payable Notes payable is a liability that arises when a business borrows money and signs a written agreement with a lender to pay back the borrowed amount of money with interest at a certain date in the future....

For example, your countertops are a fixture of your home. They’re part of the permanent structure, which makes them real property. The blender on top of the countertop, though, doesn’t have to be there. You can move it around or throw it away altogether, which makes it personal property. The same is true for larger, non-built-in appliances, like your fridge and stove. Understanding the distinction between the types of property is most important when buying homeowners or renters insurance....

Not every state allows power of sale, but many do. Understanding what power of sale means for a particular mortgage loan can help you evaluate your options if you’re in danger of defaulting on a home mortgage. Power of sale, for instance, can coexist with a legal right to redemption, which can give a homeowner the option to get their home back from foreclosure if they pay the loan balance and applicable fees....

Alternate name: residual lease value For example, suppose you’ve leased a car and are turning it in. The leasing company sets the residual value of your car at 50%. If it has a manufacturer-suggested retail price (MSRP) of $38,000, your car’s residual value is $19,000. How Does Residual Value Work? The residual value is projected by the lending institution holding the lease contract. They may reference several industry resources, but every lender calculates residual value differently....