For example, mortgage-backed securities are the result of securitization. In the 1970s, the U.S. government sponsored the process in which financial lenders could sell groups of their mortgage loans as individual securities. Securitization creates liquidity for the financing institution because the resulting asset-backed securities can be sold to investors. This process provides the institution with new capital that can be used to make loans to other customers. How Does Securitization Work?...

Alternate names: Ethical investing, impact investing, socially responsible investing, values-based investing By the end of 2019, professionally managed assets using sustainable strategies grew to $17.1 trillion, a 42% increase compared to two years prior, according to the U.S. SIF Foundation. The organization also estimated that $1 out of every $3 under professional management is invested under sustainable practices. But the history of socially responsible investing, or SRI, in the United States dates back hundreds of years....

Maybe the consumer has a strict $100 budget, so, accounting for sales tax, they decide to leave out an item and purchase $80 worth of clothing, plus pay $4 in sales tax. In this scenario, the retailer arguably bears more of the tax burden, because the consumer is purchasing $20 less in merchandise. In other instances, consumers might be affected by certain taxes more than retailers. Perhaps higher business taxes lead a store to raise prices, thereby causing consumers to feel the effect of those taxes more....

Regardless of age, if you qualify as a first-time homebuyer, specific programs may be available to help you. First-time homebuyer programs, which are typically controlled at the state and local levels, provide down-payment and closing-cost assistance to first-time homebuyers. These programs are valuable resources to those who may otherwise not be able to purchase a home. The Average First-Time Homebuyer In 2021, the average age of a first-time homebuyer was 33 years old....

The Census also reports that the median monthly mortgage payment for U.S. homeowners is $1,200. That’s up slightly from the last study when the median monthly payment was $1,100. What Does Average Represent? The U.S. Census Bureau reports both the mean and the median payment. The mean is the same as average. The median is the middle value in a set of numbers. It divides the lower and higher half of values in the set....

If you want to receive any private financial aid for college, you will probably need to fill out the CSS Profile form. Nearly 400 colleges, universities, professional schools, and scholarship programs work with the College Board’s CSS Profile to assess student financial needs. The CSS Profile is designed to get a comprehensive picture of your family’s financial situation and give you the chance to explain any extenuating circumstances. Who Uses the CSS Profile Form?...

Alternate name: Homo economicus For example, if you have the opportunity to put $50 in savings or donate $50 to a charity, economic man theory suggests you’d put the $50 in savings because it helps you the most financially. It’s the “rational” optional of the two that would maximize your self-interest. How the Economic Man Theory Works The economic man theory assumes that all humans are motivated solely by self-interest, which means they will always try to maximize their wealth....

Definition and Examples of the Nominal Interest Rate Nominal interest rates are based on inflation expectations and actual inflation reported, as well as the real interest rate. Financial institutions set nominal interest rates for loans and savings accounts to ensure that they will earn, rather than lose, money in their product offerings. As a result, nominal interest rates change as often as weekly or daily. It is important to understand the nominal interest rate when you use products and services from financial institutions, as it will state the amount of interest you will pay to borrow money, or the amount you will earn on a savings account....

Title insurance, with varieties sometimes called a loan policy, lender’s policy, or owner’s policy, can help protect you and the lender from any potential disputes, debts, claims, or issues that might arise after your sale is complete. For instance: Conflicting wills Liens or judgments Previous fraud or paperwork forgery Heirs who come forth to claim the property Unpaid property taxes or fees Title insurance protects against “any issue that can prevent the seller from legally handing over the title of ownership to the homebuyer....

The cost of tuition at public and private four-year colleges and universities continues to rise roughly 55.2% to 65.8% yearly, on average. Additionally, only 6% of colleges and universities in the U.S. surveyed by GradGuard (a tuition insurance policy distributed by Allianz Global Assistance) offer full refunds for students withdrawing for qualified medical reasons. If your school does not have an adequate medical withdrawal or refund policy, this financial fail-safe can help reduce your financial burden in cases of illness or injury....

Volume-weighted average pricing (VWAP) is one method of tracking a security’s price. It takes into account the number of shares that changed hands at specific prices. Definition and Example of Volume-Weighted Average Pricing Volume-weighted average pricing looks at the average price at which a security is traded during a period. This is in contrast to the pricing method, which simply reports the price at which the most recent trade occurred....

When a person’s will is presented for probate after the person’s death, the will must be “proved.” The word “probate” comes from the Latin probare, meaning to test or to prove. In probate, we are “proving” the will. Proving a Will Proving a will means that a witness to the will gives testimony to the appropriate state government official that they witnessed the signing of the will. In some states, this is the Register of Wills, and in some, it is a clerk of the Probate Court or the Surrogate’s Court....

Take it step by step so you can take care of the basics. This will ensure that you receive your final paycheck, benefits and pension funds, unemployment compensation if you’re eligible, severance pay if your employer provides it, and more. You also want to make sure you get references from your employer, if possible, so that you are ready to begin your job search. Once you’ve taken care of these details, you can prepare to start looking for a new position....

Numerous tax rules apply to completing, distributing, and filing these forms. It can help to understand the requirements and deadlines before you begin preparing them. Correctly Classify Your Workers The IRS requires that you classify your workers correctly: employee or independent contractor. It can impose fines and penalties if the worker you pay as an independent contractor should be paid as an employee. An Employee Anyone who performs services for an organization is generally an employee if the organization can control the work they do and how and when it will be done....

Learn more about time-barred debts. What Are Time-Barred Debts? Each state has a law that dictates how long a debt collector can sue you for debt collection. This timeframe is known as the statute of limitations, but can also be called a procedural rule or a statute of repose. The statute of limitations is between three and six years for most states but can be longer. Before you respond to an old debt, check the statute of limitations in your state....

It’s better not to take the job in the first place than it is to have a job that doesn’t work out a short time later. However, there are some circumstances, especially when you’re in a difficult financial situation, where it may make sense to accept a position you don’t want. When To Turn Down a Job Offer There are many good reasons to decline an offer. The job may not pay enough money, the job responsibilities might not be what you’re looking for, there may not be room to move up the career ladder, or you might not feel there is a good fit between you and your future boss, co-workers, or the company....

Maybe you’ve experienced this tension yourself if you and your friends are in different career or life stages. While you might not talk money on a regular basis, nothing highlights those differences more than deciding where to have dinner, or being invited to a destination wedding. Unaddressed, this pressure can lead to making decisions that you’ll later regret, like racking up a huge amount of credit card debt. Or it can cause resentment in your relationships if you feel that your group of friends is insensitive to your situation....

In 2019, the top 1%, or taxpayers with an AGI of $546,434, paid $612 billion in income taxes, and paid 38.8% of all federal income taxes. To contrast, the bottom 90% paid $461 billion in income taxes. However, this doesn’t take other types of taxes into account. For example, lower-income taxpayers are impacted more by regressive taxes such as payroll tax and sales tax. Federal Income Tax Brackets A single taxpayer who earns $300,000 a year will pay a top tax rate that’s higher than another taxpayer who makes $40,000 a year....

The basics of life insurance are easy to understand, but it can be difficult to know whether or when you need a policy of your own. It can also be hard to know how much coverage you might need. Here’s what you need to know so you can decide for yourself. How Does Life Insurance Work? Life insurance policies have three main characters: Life insurance provides a death benefit to the beneficiaries when the insured person dies; this is done in exchange for premium payments from the policyholder....

It’s important to be aware, however, that even though a current refinance rate may be lower than the rate on your existing mortgage, current refinance rates tend to be higher than current purchase rates. Also, one type of refinance loan is more expensive than the other. We’ll help you sort out why some refinances are more expensive, and—more importantly—what you can do to lower the cost. How Mortgage Rates Are Determined No matter what type of mortgage you’re getting—a purchase mortgage or a refinance—there are common factors that affect the rates you’re offered....