THE MONEYPAPER
555 Theodore Fremd Ave., Ste. B-103, Rye, NY 10580.
Monthly, 1 year, $108.
Vita Nelson: "As the name suggests, a revocable living trust is one that's created while you're alive and can be annulled. Generally, you'll be the trustee and beneficiary of your revocable trust. Why are these trusts increasingly popular?
- Probate avoidance. At your death, a successor trustee takes over without court oversight. If you own property in another state, that property will be subject to "ancillary" probate. If that property is held in the trust, though, another round of probate will be avoided.
- Incapacity protection. If you reach the point where you are unable to manage your own affairs, a successor trustee will step in. That trustee will have a fiduciary responsibility to act for your benefit.
If those are the pros, what are the cons?
- Lack of tax shelter. Shifting assets into a revocable trust won't save either income or estate tax. You still can (and should) implement appropriate tax-reduction strategies. Don't be lulled into a false sense of security.
- Lack of asset protection. Although assets held in an irrevocable trust generally beyond the reach of creditors, revocable trust assets are traded as if they belong to you.
If asset protection is important to you, vulnerable assets might be better off held in an irrevocable trust, a limited-liability company, or a family limited partnership.
- Paperwork commitment. After creating a revocable trust, you must make the effort to re-title assets from individual ownership to the trust. Assets not formally held in the trust will have to go through probate and won't be under the management of a successor trustee, in case of incapacity.
Certain types of holdings (retirement plans, insurance policies, annuities, jointly held property) don't go through probate anyway. If most of your wealth is in such assets, a revocable trust may not be necessary."
Consumer Reports MONEY ADVISER
101Truman Ave., Yonkers, NY 10703.
Monthly, 1 year, $24.
Boost your credit score in 3 days
Marlys Harris: "So-called "rapid rescorers" claim to raise your credit score in just a few days, helping you to qualify for a better mortgage rate. You may hear about these new credit-reporting agencies when you are applying for a loan. If you do, consider yourself lucky. These are not shady operations like many of the heavily advertised "credit repair" outfits.
Rapid rescorers will quickly fix errors and omissions in your credit report, resulting in potentially huge savings on mortgage payments, as well as on payments for credit cards and many other loans you take out down the road.
You can always make fixes on your own, of course, but the arduous process normally takes four to six weeks or longer.
More than 100 credit-reporting agencies act as middleman between mortgage lenders and the major credit bureaus. When you apply for a mortgage, your mortgage lender will have a credit agency pull and combine your credit reports from the major credit bureaus. If you have written documentation from your creditor that collections, judgments, or high balances listed on the report have, in fact, already been paid, your mortgage lender can have the credit agency expedite the correction process.
An Arizona mortgage broker who used rapid rescoring for the first time in mid-December said that his client had a credit score of 729 - one point shy of the score needed to secure a 5.8 percent mortgage rate. Two errors lowered the score: His credit report incorrectly listed a tax lien that had already been paid, and large credit-card payments were not recorded. Once proof on the lower balances and satisfied lien was submitted and his reports were update, his credit score rose by 3 points.
The result: His monthly mortgage payments dropped by an impressive $101 a month. The $200 cost of correcting and reissuing the credit reports and scores was picked up by the mortgage broker.
If you are applying for a mortgage, be sure to request a free copy of your credit report and score from your lender. (Ideally, you should order credit reports from the three bureaus a few months before applying for a mortgage.) And if you see errors, ask your lender if it works with a credit agency that offers rapid rescoring. There are no guarantees that your score will go up, and your lender may not even have heard of these agencies because they're so new. But it's worth a try.
Unfortunately, the service is not available directly to consumers. You can only work with the credit agency through your lender. "Rapid rescoring was designed primarily for modifying inaccurately reported information in a consumer's credit file when that consumer was in the middle of a loan application and needed quick assistance in getting new scores," explains Ginny Ferguson, who heads up the National Association of Mortgage Brokers Credit Score Committee.
And that's too bad for consumers."
BOTTOMLINE PERSONAL
281 Tresser Blvd., Stamford, CT 06901.
1 year, 24 issues, $59.90.
"Find foreclosed homes online at the Bank Home Direct site (www.bankhomesdirect.com). The site, which is free to consumers, helps buyers find properties...prequalify for loans...and make purchase offers - all online - on bank-owned properties and ones that have gone into foreclosure."
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