Get a free quote

To read a lot of the literature available on the Internet, you may think there is rarely a good reason or a good time to sell your settlement or annuity.  While it is true, there are costs associated with such a transaction, there are several situations, particularly in the current sluggish economy, where selling your settlement or annuity for a lump sum could ultimately save you money.

Is it time to sell out your settlement?

If You Need to Buy a House

If your family situation has changed, or you have gone through a major relocation you may be looking at the real estate market right now.   Although it may seem daunting due to recent price plunges in markets across the country, the fact is that now that the housing bubble has popped you can actually find good deals.  Mortgage rates are at all time lows, but they are extremely difficult to obtain. The days of creative financing and low down

payments are gone.  However, if you have the money to put 20 percent down, you
can get great deals at some of the lowest mortgage rates in history.

The housing market is down, but appears poised to recover.
The National Association of Realtors Housing Affordability Index is the lower
this year than in any previously published years, but it is starting to show
some upticks. The National Association of Home Builders is predicting a dramatic
increase in new housing and existing home sales during the next two years, also
an indication prices are likely to start heading upwards.   At the same time,
the NAHB is predicting an increase in fixed rate mortgages from 5.15 to 5.74
percent and in arms from 4.84 percent to 5.25 percent during the next two
years.

Consumers must simply weigh the cost of selling an annuity or settlement against paying higher housing costs and higher interest rates.  This depends on each individuals situation and the amount they would pay on a house, but certainly could be a money saver in many cases.

A Need for Credit

If you are self employed, run a small business, or have urgent need to make a major purchase, chances are you are relying or under normal circumstances would rely on a credit card.  According to the National Small Business Association, credit cards are now the most common source of financing for small businesses. However, the availability of this source of funding is drying up or becoming extremely expensive.

Lawmakers passed sweeping credit card reforms this year that will limit the industrys ability to raise rates and fees.  Ahead of these regulations being enacted, issuers have cut credit lines and are increasing rates rapidly.  According to Creditcard.coms Weekly Credit Card Rate Report, the national average on credit cards is 12.64 percent and appears to be trending upward.  These costs need to be weighed against the cost of selling an annuity
or settlements.

Paying for College

If you have a child, or a number of children you are expecting to send to college, this may be one of the most beneficial reasons to sell off an annuity.

Many states now have college pre-payment plans where you
can pay tuition now, and lock in the tuition rate, regardless of future
increases.  According to the College Board’s Annual Trends in College Pricing
Report, tuition at four year public colleges rose at an annual rate of 6.4
percent, grossly outpacing inflation year after year.  Two year public college
tuition’sare up 4.7 percent.  Using a lump sum to lock in tuition early can save
tens of thousands of dollars.

While there may be a depth of financial information out there about the pitfalls of selling off your settlements, there are some distinct advantages as well. Like any other major transaction it pays to do your homework.   Only you know exactly what your financial situation is, but a reputable firm will work with you to figure out your needs, the costs, and how best to maximize your financial potential.   A bad economy may just translate
into a good time to put your money to work.

At Sovereign Funding Group we will help you make an informed decision when you
consider selling a structured
settlement. Call us today at 877-836-4661.

Comments are closed.