R2I – Choosing Converters for your Electricals and Electronics

Electric power in India is different from the US in terms of both Voltage & Frequency. In US it is 120V/60Hz while India has 230V/50Hz. The plugs used for connecting are also dissimilar with US standardized on A and B types and India on C and D types. This essentially boils down to the majority of the electrical and electronics goods from US requiring a converter for use in India. Some electronic equipment, especially laptops and associated computer paraphernalia, has dual support. Usually the back panel or the AC adapter piece will indicate whether a particular equipment will work across the board sans a converter by saying input voltage to be something like “100-240V, … , 50-60Hz”.

With voltage converters for household use, the variables to note are its power rating and whether the converter is designed for continuous use. Converters (sometimes incorrectly referred to as travel adapters) that appear as large and heavy plugs are the popular variety. These are usually rated for around 50W and can function for short periods of time – the plug heats up when used for longer periods, running the risk of fire. In general, converters designed for continuous use are bulkier/heavier (the size and weight increases as the power rating goes up), pricier, and carry safety mechanisms as fuses. On the other hand, converters designed for short duration are smaller, usually rated for just 50w or so and goes for a few dollars. Exception to this is the voltage converter that seems like a travel converter but rated as high as 2000W and is in the vicinity of $10 – these are designed for heat generating appliances such as a pressing irons and hair dryers. Instead of employing an actual transformer for conversion, this device cuts off the incoming voltage at 120V required by the appliance – though the output is not a sine wave, heat generating appliances function.




In addition to the usual bunch of electronics most households tend to acquire, we also had large home appliances. Fully aware of the bulky converters required for such appliances (refrigerator, washing machine, etc), we were only too glad to give them away with the house. However, as our buyers chose not to be saddled with existing appliances, our neighbor graciously accepted our newer refrigerator and the real-estate agent donated the washing machine/dryer.

With respect to the rest of our electronics, we formed a list to work out the type of converters and the quantity. This also helped us get rid of unwanted items. Below is the list:



For the most part, the converters held up really well – we lost a couple of fuses by accidentally plugging incompatible items – the built-in fuses with the continuous converters are a godsend. Extension chords are something we completely forgot to take with us – our adapters and travel extension chords stepped up during our initial months.


R2I Finances - Options to Protect Credit

Those with a few years of residence in the US understand the value of building credit and having a stellar credit report. A good credit score makes it easier to attain credit, mortgages, loans, etc., and that too at better rates. For R2Iers, there are a couple of choices to protect the credit built up:

  1. Fraud Alerts: This allows placing an electronic red flag in the credit report – lenders are required to take steps to verify the identity of the person applying for credit in your name although the exact steps required are not spelled out. The good things about fraud alerts are that it only requires a phone call and the service is free of cost. However its ability to protect credit against identity thieves is questionable – since the identity verification steps are not spelled out, lenders can choose to ignore the alert completely, thereby compromising the purpose of the alert.
  2. Credit Freeze: Credit Freeze allows blocking credit reports – this prevents identity thefts by not allowing thieves to open a new credit account or secure a loan under your name. When a freeze is in place, opening an account in your name is not allowed. Since the credit file is locked, it translates to background checks not allowed. The owner is blocked as well unless the freeze is lifted using a pin. A confusing aspect for many is that freezing credit does not restrict one from using the credit already allotted. Further, credit freeze does not affect existing lenders access to the credit report. In short, credit freezes are the most effective way to prevent identity theft. The fee was $10 per agency and a pin and advance notice was required to be able to lift the freeze (15 minutes to 10 days depending on the state). Fee waivers apply in certain states, for a senior citizen or for a victim of identity theft. To temporarily lift and reinstate a freeze, the fee was between $10 and $12.

We opted for Credit Freeze, as our intention was not to apply for credit in the US for a while. Below is our experience doing this with the three major credit agencies:
  1. Equifax (Equifax Security Freeze, P.O. Box 105788, Atlanta, GA 30348. PH: 1-800-685-1111): Equifax online process was by far the easiest. The three steps involved with this online interface are:  personal info (name, DOB, ss#, address, old address), type of freeze, and payment ($10 - credit card options). Once the steps were completed, the interface returned with a pdf document confirming the freeze - Painless! The pdf doc contained the PIN required to temporarily or permanently lift the freeze
  2. Trans Union (Trans Union Security Freeze, P. O. Box 6790, Fullerton, CA 92834-6790. PH: 1-888-909-8872): Trans Union’s interface was a combination of the free annual credit report interface and the account freeze interface and thus less intuitive. Nevertheless it worked. The interface transfers to an account login for the free annual credit report. There is also the need to accept two template agreements. It then came back with a payment screen ($10 - credit card and address), and finished with a ‘Create Security Pin’ screen – the security pin needs to be memorized for use when lifting the freeze at a later time.
  3. Experian (Experian Security Freeze, P. O. Box 9554, Allen, TX 75013. PH: 1-888-397-3742): Experian’s online interface did not function for us. The interface took us to a set of links from which the freeze link can be chosen. Entered the personal info (name, address, DOB, ss#), the payment screen (credit card), and the identity verification segment with 5 questions. It returned with a screen that said ‘could not charge to credit card’. On the second attempt it said system error and to try again later. At last effort a different credit card was used - it went through but came back with a blank screen. We pursued the more involved mail-in option. It required submitting supporting documents – government photo ID, utility bill, along with personal info (name, address, old address, ss#, DOB) and the $10 check. Received an acknowledgment after two to three weeks with a PIN/confirmation number. That number is needed to lift the freeze.

Before going through this process of freezing credit, it is vital to check the existing credit reports to ensure there are no errors. This can be done very easily online and free of cost at the government website AnnualCreditReport.com, if accessing the website from within US. Otherwise only mail-in option is possible (details at www.ftc.gov). Hence, it is best to get this process done while still in the US.


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Quality Systems Inc (QSII) – Stock Analysis

Introduction:

Quality Systems Inc. (QSII) is a software company focused in the development and marketing of practice management for medical and dental group practices and hospitals throughout the US. The company founded in 1974, initially provided information systems to dental group practices and later expanded its focus to include medical practices in the mid 90’s through acquisition of two companies. This formed the basis for their highly successful NextGen product suites, which handle Medical Practice Management (MPM), Electronic Health Records (EHR), Health Information Exchange (HIE), Revenue Cycle Management (RCM), Electronic Data Interchange (EDI), and the associated connectivity services. Along with the hardware, the company provides software, connectivity, training, and other services to medical and dental group practitioners. The software creates electronic medical records, helps with appointments, billing, referrals, and insurance claims. The RCM aspect of the software helps doctors manage cash flow and collections. The HIE allows to exchange electronic medical records with other healthcare providers.

QSI has three distinct businesses:

1. Medical: The NextGen Healthcare suite serves from mid to large size group practices and the small rural hospital industry. The product provides EHR, HIE, and financial solutions for hospitals, health systems, physician practices, and other healthcare organizations. Practices can opt to run the in-house ambulatory product suite (NextGen ambulatory EHR and NextGen practice management) or select the data hosting option with low upfront costs and predictable annualized expenses. NextGen also has product suites for inpatient as well as Community Connect areas (NextGen HIE, NextGen patient portal, and NextGen health quality measures).

2. Dental: The QSI Dental suite provides solutions to both small and large dental group practices and dental practice management organizations. It consists of
  • Dental Practice Management (DPM) solutions – insurance processing and appointment scheduling, patient portal for online services, billing/accounts receivable management, centralized data management.
  • Clinical Product Suite (CPS)
  • Electronic Dental Record (EDR) services – graphical tooth charting, treatment planning, digital radiography, x-ray and imaging, and voice activated periodontal charting.
  • NextDDS Services (online software-as-a-service) – patient and multi-specialty doctor management, centralized data management, clinical management, appointment scheduling, and insurance management.
3. Practice Solutions – The RCM and EDI solutions allow medical practices to outsource their billing and collection.

The company’s growth opportunity stems from the demands of the EHR marketplace, QSI’s P3 Connectivity Suite (Provider-Patient-Payor), and practice management solutons.

Business Issues:

QSI’s NextGen Division accounted for 93.5% of total revenue in 2009, a 2% increase from 2008. That division showed strong revenue growth of almost 35% last year. As though in sync, the QSI Dental Division’s revenue decreased around 2% as a percentage of total revenue. After its acquisition of Healthcare Strategic Initiatives (HIS) and Practice Management Partners (PMP) in 2008, QSI switched to reporting performance based on its three operating segments. It also made two other acquisitions in the recent past as solutions to strengthen its NextGen offerings:
  1. Sphere – Spirit Enterprise Hospital Information System, and
  2. Opus – clinical information systems provider to the small hospital inpatient market.
NextGen division is still by far the largest unit. Following is the revenue split-up, yoy growth figures, and gross margin numbers from their Feb 2011 10Q:




The numbers demonstrate very strong growth and profit records for the NextGen unit, above average figures for the QSI Dental Division, and average numbers for the Practice Solutions Division. The profit margin numbers for Practice Solutions Division need to be tracked vigilantly as that could potentially force overall numbers down should the negative yoy trend continue.

The company has its roots in MPM but has successfully diversified their offerings to include clinical, dental, DPM, EDI, EHR, and RCM solutions. This should help the company sustain growth longer, for the new areas are low penetration high growth sectors per the following graph (QSI’s industry presentation):


Software adoption rates are still very low with small medical practices. Significant opportunity lurks in larger practices and hospitals as demonstrated by the following adoption rates:


The adoption rates are expected to accelerate in the 2011-2015 timeframe as a result of government incentives for Healthcare Information Technology (HIT) in the order of $60B. The government approach is considered “carrot and stick” – the upfront incentives serve good only if “meaningful use” is established by 2015 or else penalties kick in. QSI is expected to directly profit as medical practices scramble to fall in line with this incentive.

Overall business is divided into system sales, maintenance, EDI, RCM, and other services. Systems sales category includes software license fees, third party hardware and software, implementation, and training services related to the original purchase of software. Maintenance revenue consists of follow-up training and implementation services, annual third party license fees, hosting services, and other services revenue. The table below summarizes the revenue streams from different categories:


The revenue growth in maintenance is remarkable, yet it is a line item to track keenly going forward – as the software gets simpler, certain services such as follow on training and implementation will have less impact leaving other services like hosting to pick up the slack in order to keep the overall growth steady.

The software industry is moving to a subscription-based delivery and pricing model. QSI adopted a subscription based software-as-a-service (SaaS) delivery model with monthly subscription pricing in April 2009. The plan is to apply this model as a seeding strategy in small practices – in the absence of upfront cost they pose little risk. Although a majority of their current paying customers buys licenses to their software and subscribes for maintenance, in time a greater part of these customers will reach for the new subscription model. Also new customers, irrespective of size, will prefer the subscription model once the adoption of that variety accelerates across corporate America. This will have an initial dampening on the company’s revenue, as revenue per customer would decrease substantially. On the other hand, the maintenance and number of customers should pick up pace as customers realize the benefits of this new model – very low hardware and training costs. Nevertheless, this is something to keep tab on, going forward.


Finances:

Below is a table that summarizes Quality System’s financial position:


Year200820092010
Revenue186.5M245.5M291.8M
Net Earnings40.07M46.12M48.38M
Shares Outstanding27.77M28.40M28.80M
Earnings per Share (Normalized – one-time items removed)1.441.621.68
YOY Earnings Growth19.01%12.50%3.70%
YOY Revenue Growth18.67%31.64%18.86%
Net Profit Margin21.49%18.79%16.59%


Despite the recessionary environment, the company managed an almost 19% revenue growth. While this is far below the revenue growth level achieved in 2009, considering the business environment, it is laudable. The net profit margin presented a downward trend while earnings growth showed a big drop-off last year. This needs to be monitored for if this trend continues, it could be an indication of QSI’s difficulty in keeping prices up for its products and/or keeping costs down.

Quantitative Rating:

The spreadsheet below displays our quantitative rating summary of Quality Systems (QSI). (click for an understanding of the ratings on this spreadsheet):



QSII scores 7.5/10 on its ability to beat inflation: Return on Equity, Net Profit Margin, Free Cash Flow are all almost perfect. PEG ratio, a measure of valuation is however very rich at 1.86.

Corporate Abuse rating is 10/10 as their executive compensation is commendable: The CEO makes around $550K, around 20 times the average worker – considering the rampant abuse regarding executive compensation in corporate America, this is a very fine number – Mr. Pat Cline, President of the company’s NexGen division makes around 50% more than the CEO which is rare.

Income generation and liquidity measure is above average at 7.3/10: QSI pays a decent 1.9% dividend. The stock is also optionable but liquidity is slightly low with the average daily volume just below 250K.

Volatility ranking is perfect at 10/10: the company has no debt, Beta is average, and grew earnings steadily in the last 5 years.

Capacity to increase dividends scored 7.7/10, which is above average: Quality System’s payout ratio is above average at 67 – company has limited ability to grow dividends unless earnings growth is sustained. The company has average 5-year average dividend growth at an annualized rate of 6.52%. Earnings however showed a very good growth rate of 14.6% in the last 5 years.

The overall quantitative rating or the ‘OFB Factor’ came in at 8.5/10, which is well above average.


Summary:

Quality Systems has an enterprise value of $2.38B and a forward PE of 31.18. Its revenue growth slowed last year but is still very healthy in the high teens range. Going forward, the company is expected to grow revenue in the high 20% range for the next two years and earnings per share is expected to keep pace. While the growth rate projections are already impressive, the real kicker is the fact QSI may have underestimated the effect of massive government incentives to its bottom line.

Quality Systems has a PEG ratio of 2.21, which indicates that the valuation is high. Our quantitative analysis showed the company as having a ‘Very Good’ rating. Although most of our other checks showed green lights, the valuation is high. We recommend adding Quality Systems to the watch list and consider purchase when the share price gets cheaper.


R2I Finances – Setup to maintain accounts in the US

Around 6.5 million Americans live overseas – more than 2% of the population. Despite this, businesses are not always comfortable serving expatriates. Some businesses accept international addresses and phone numbers while others don’t. As noted, we setup a virtual address primarily to provide a valid US address to businesses that did not accept our overseas (Kochi, India) address.

For R2Iers (Return to India), some choices exist depending on the immigration status and plans for the future and there are different ways to set things up. Maintaining financial and similar accounts in the US after R2I is a priority for many, especially for US citizens with plans to live in different parts of the world. Our mindset paralleled this and hence we looked to maintain our US accounts while in India.

Below is a summary of our experience:
  1. Government Notification: While notifications are not mandatory, it is best to notify the IRS, the state tax body, and the US consulate/embassy of change of address and residency abroad. For IRS notification, we sent in the completed Form 8882 and for the Franchise Tax Board of California, it was Form 3533. Doing so allows the tax authorities to send forms to the new address and also allows the embassy to easily track you down in case of emergencies. There is no acknowledgment with either of these forms. For US consulate/embassy notification, one can also either approach the nearest consulate with proof of citizenship (US passport) or phone in – if it is in person, passport data will be recorded at the consulate/embassy allowing for easier replacement if it is ever lost.
  2. Banking: Some banks allow online change of address only within the US while some permit online change of address to an international address. Yet other financial institutions do not support online change of address at all. We did our research on this and chose to maintain accounts with two banks – one with the address set to the virtual US address and the other to our new Indian address. Two years since R2I, we still maintain the US bank account with the virtual US address (Bank of America) but has since cancelled the other one (Chase). It is now possible to switch address online to an overseas address with Bank of America.
  3. Credit Cards: Our primary credit cards were a Visa Card and an American Express Card through a retailer. We expected the Amex card account to close automatically within a month of closing the retailer account. But, in reality that did not happen – the Amex account did not get cancelled until after 9 months. For its address change, we had to provide the US virtual address for their address change interface did not allow for country selection. The Visa card address change interface said to call them for an international address change – we ended up using our US virtual address, although in due course this should change. One caveat with using an overseas address is that certain US websites will reject your credit card for payments. For this reason, we have resisted changing our Visa card profile address.
  4. Brokerage Accounts: Our primary brokerage account (TD Ameritrade) allowed online change of address to an international address while our secondary brokerage account (E*Trade) allowed online change of address but did not allow choosing a country. We kept both our accounts – the former with our Indian address and the latter with the virtual US address. Some brokerages allow global trading (needs global trading account) at TSX (Canada), FTSE 100 (UK), CAC40 (French), Dax (German), Hang Seng (Hong Kong), and Nikkei 225 (Japan). This is a very useful option especially for expatriates who wish to diversify their asset base away from a concentration in the US dollar.
  5. Retirement Accounts: For anyone who switched employers more than once, multiple retirement accounts is a given. We had our share of multiple accounts. Here again, support for address change to an overseas address is all over the map. Some accounts accepted smoothly the new Indian address via their online interfaces. But, for certain accounts, the interface directed to call the previous employer’s 800 number. We have since managed to set it up with the right address changes for the most part. We also came to know that IRA conversions (with the same provider) using online interfaces were also not that perfect – when we first tried doing this with one account (Schwab), it returned an empty page instead of the form for online new IRA account application. Here again, we have managed to set it up after jumping through a few hoops.
  6. Others: With most other accounts, it is a question of terminating them gracefully. Although one will be in a time crunch and temptation strong to not bother with such accounts, it is best to bring them all to closure. These include things like smart cards at local toll booths, move-out inspection and arrangements to refund any security deposits, cancel accounts with any wholesale retailers, cancel auto insurance policies, canceling all utilities, and other miscellaneous things such as clearing out safe deposit boxes. While this is drudgery, the good news is that closing many of these accounts will net you a refund check as they refund your deposits or other upfront security payments.
With respect to your banking and brokerage accounts, it is also good to setup electronic fund transfer between your accounts using ACH (Automatic Clearing House), which is free in most cases. In essence, as the service levels for expatriates vary widely among businesses, it is imperative to research the service level before hand with respect to one’s banking, brokerage, retirement, and other accounts and act accordingly.


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MCAT Exam Prep Books & Resources – ISBNs and Best Prices

Medical College Admission Test (MCAT) is a standardized test for medical college admission in the US and Canada. The test may be taken up to three times in a calendar year. It is a computerized exam (since 2007) administered as many as 28 times a year by the American Association of Medical Colleges (AAMC). AAMC also administers other services for prospective medical students including the American Medical College Application Service (AMCAS), a centralized application processing service available to applicants for the first-year entering classes at participating medical schools.

Basic exam fees start at $300. Fees for other optional test related services like change of test center and late registration is another $70. International test sites have an additional $95 fee as well. There is a Fee Assistance Program (FAP) targeted towards those with extreme financial limitations that reduce the basic fee from $300 to $115.

MCAT can be attempted up to three times in a testing year and up to four times over two consecutive years. There is a lifetime limit of seven times. Note that there is access to your full testing history through AMCAS and medical schools want to see your entire testing history. So, score withholding is not an option.


MCAT has a new format as of April 2015. It has four sections:
  1. Chemical and Physical Foundations of Biological Systems, 
  2. Biological and Biochemical Foundations of Living Systems, 
  3. Psychological, Social, and Biological Foundations of Behavior, and 
  4. Critical Analysis and Reasoning Skills.
The format of the exam is as follows:



Scoring is separate for each of the four sections and the total score is the sum of the four section scores. Scores for each section can be between 118 and 132 and the total score will be between 472 and 528. There is no penalty for guessing.

Information on the format of the test and links to study resources are available at their website. Free resources at that link include several pdfs, link to the iCollaborative Pre-Health Collection of over 400 video tutorials, and Khan Academy MCAT Video Collection. Below are ISBNs and Best Prices for MCAT study resources:


ResourceISBNBest PriceDescription
The Official Guide to the MCAT Exam
  • Kindle Edition at $16.99
  • Paperback: 978-1577541332 at $25.
$16.99Guide to the content of the exam. 120 practice questions from the four sections provided in an online format that simulates the actual exam. AAMC also has plans to release a full-fledged practice exam and a question bank in November 2015.
Kaplan MCAT Complete 7-Book Subject Review: Book+Online978-1625231277$138Excellent Overall Subject Review. Three online practice tests that simulate the real test.
The Princeton Review Complete MCAT
  • Subject Review Box Set at $79
  • Complete Review at $46.
VariesGood review material and nice presentation. But, beware of several errors that can unnecessarily sidetrack you.
Kaplan MCAT Flashcards + App978-1618656216$33.24Excellent source for coverage of terms, definitions, and concepts.
Sterling MCAT Practice Questions: High-Yield MCAT QuestionsVariesReview of foundations, test-taking strategies, and 1000+ practice questions with answer explanations.
Sterling Test Prep MCAT Practice Tests: Chemical & Physical + Biological & Biochemical Foundations978-1503325036$43.134 Biological & Biochemical foundations MCAT practice tests, 4 Chemical & Physical Foundations MCAT practice tests along with complete and detailed explanations.
Examkrackers MCAT Complete Study Package978-1893858701$1701000+ MCAT questions in total. Topical questions in MCAT format.
Kaplan MCAT Practice Tests978-1419553578$15Two full-length practice tests with detailed answer explanations. Six chapters of strategies for each major section of the test.
MCAT AudioLearn - A Complete Science Review for the Medical College Admission Test on 6 Audio CDs978-1592620265$78Over 4 hours of professionally narrated 700+ page manuscript. Coverage of every theory, fact, formula, and equation for MCAT. 




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Last Updated: 04/2017.



LSAT Exam Prep Books and Resources - ISBNs and Best Prices

Law School Admission Test (LSAT) is standardized test for law school admission used in the United States, Canada, and the Caribbean. The Law School Admission Council (LSAC), a nonprofit corporation formed to standardize the admission process for law schools in the United States and Canada, administers it. All law schools approved by the American Bar Association (ABA) are LSAC members, as are Canadian law schools recognized by their territorial law societies or government agencies. LSAC also provides other valuable services, chief among them being the Credential Assembly Service (CAS) which allows streamlining of law school admission process by allowing students to have all transcripts, recommendations, and evaluations sent only once to the LSAC. They in turn consolidate all this along with the LSAT scores and writing samples (part of the LSAT test that is not scored by LSAC) into a report, which is sent to the prospective law schools the student is applying to. Using CAS has since become a requirement for JD (law school – Juris Doctor or Doctorate of Jurisprudence – equivalent to the LLB Bachelor of Law degree outside the US).

The basic fees for the LSAT test is v$180 in the US (Canada slightly higher) and $175 for the Credential Assembly Service (CAS), which is required by all US law schools for JD admission. Fees for other optional test related services such as date change and center change are $90 each. LSAC offers a fee waiver program for US citizens who can demonstrate the absolute inability to pay (tax records). LSAC also offers a free actual test (June 2007) and certain other sample test materials for free in pdf form in their website.

The test itself is very long and takes up to 7 hours to complete. It is administered four times each year and there is no score choice – all test scores from the last 5 years get reported – you can cancel scores within 6 days of taking the test, however. LSAT consists of five 35-minute sections of multiple-choice questions, and a 35-minute writing sample. The writing sample and one of the five sections are not scored. The writing sample is sent as part of the CAS report sent for law schools to evaluate. The unscored multiple-choice test is used to pretest new test questions. The multiple-choice question types may be one of the following:
  • Reading comprehension: Measures the ability to read, with understanding and insight, lengthy and complex materials similar to those encountered in law school. The section contains four sets of reading questions, each consisting of a selection of reading material and associated questions.
  • Analytical reasoning (Logic Games): Measure the ability to understand structure of relationships and to draw logical conclusions about that structure. The questions attempt to measure legal problem solving skills, by having students’ reason deductively about relationships among persons, things, or events.
  • Logical reasoning: Measure the ability to analyze, critically evaluate, and complete arguments as they occur in ordinary language. It involves reading a short passage and answering a question about it. The questions attempt to assess legal reasoning skills by having students draw well-supported conclusions, reasoning by analogy, etc.
Below are a list of ISBNs and Best Prices of study materials for the LSAT:


ResourceISBNBest PriceDescription
The Official LSAT SuperPrep: The Champion of LSAT Prep by Law School Admission Council978-0990718680$23.173 complete PrepTests. A guide to LSAT logic. Explanation of every item in all 3 tests. Sample comparative reading questions.
Official LSAT PrepTests by Law School Admission Council978-0986045516$24.4310 previously administered LSAT tests (PrepTests 62 to 71) with answer key and writing sample for each test, score conversion tables, and sample Comparative Reading questions and explanations.
Introducing the LSAT: The Fox Test Prep Quick & Dirty LSAT Primer
  • Kindle Edition at $3.99
  • Paperback: 978-1480211896 at $11.12.
$3.99Concise explanation of the tests common concepts which demystifies the confusing world of logic games, logical reasoning, and reading comprehension.
SimuGator: LSAT Proctor DVDB0033TQJTQ$22.98Test-day simulation for LSAT PrepTests.
The LSAT Trainer: A remarkable self-study guide for the self-driver student by Mike Kim978-0989081504$39.79Over 200 official LSAT questions and real-time solutions. Strategies for logical reasoning, comprehension, and logic game. Drills to develop LSAT-specific skills. Online access.
Kaplan LSAT Premier978-1419549939$29.73Six Practice Tests. Book + Online + DVD + Mobile. Interactive online companion.
Cracking the LSAT Premium Edition by Princeton Review
  • Kindle Edition at $29.99
  • Paperback: 978-0804124973 at $23.89.
$23.896 full-length practice tests with answer explanations. Strategies for high-score and video tutorials.
The PowerScore LSAT Logic Games Bible by David M. Killoran
  • Kindle Edition at $45.34
  • Paperback: 9780988758667 at $41.32.
$41.32Uses Actual Logic Games Administered in the LSAT. Detailed explanations for 30 official LSAT logic games. Game Types covered: Basic Linear, Advanced Linear, Grouping, Grouping and Linear Combo, Mapping, Pattern, Sequencing, Circular Sequencing, Numerical Distribution, and Limited Possibilities. 
The PowerScore LSAT Logical Reasoning Bible by David M. Killoran
  • Kindle Edition at $45.34
  • Paperback: 978-0991299225 at $41.43.
$41.43Best Book for the Logical Reasoning Section. Teaches how to attach and solve every type of logical reasoning questions. Coverage of all logical reasoning question types in detail.




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Last Updated: 04/2017.

Home Improvement Loans - A Primer

Home Improvement Loans come in many flavors but they are not equally beneficial to all. Some feature lower rates and tax advantages, while others not so much. Below is a summary of the different loans available along with their pros and cons which should assist prospective homeowners in their quest for a home improvement loan:

Home Equity Loan (HEL): HEL also known as closed-end loans are lump-sum loans, usually with a fixed interest rate based on prime rate plus a margin. The homeowner uses the equity of their home as collateral. As these loans are secured against the value of the property and are usually a second position lien, they are also termed second mortgages.  The loan term can be very short or as long as 30-years although it usually does not exceed the term of the primary mortgage. Except during the bubble years when total loan-to-value levels did not matter, such loans generally require 80% or less.

Pros:
  • Taxes: The interest paid on this type of home improvement loan is almost always tax-deductible.
  • Interest Rate: The rates are favorable when compared to credit card or other personal consumer loan rates.
  • Usability: There is no restriction as to how you use the loan amount. Home improvement and debt consolidation are the more common uses although it can be used for anything including paying for a vacation. While debt consolidation is a popular use, the critical downside is that in essence this converts an unsecured debt to a secured debt.
Cons: 
  • Interest Rate: Although interest rates are lower compared to credit card or other personal consumer loans that are sometimes used as home improvement loans, they have a higher interest rate when compared to the primary mortgage - since the collateral is 2nd lien, the loan is considered more risky to the lender.
  • Recourse Risk: Most home equity loans are considered recourse – the lender can hound your assets, should the collateral (2nd lien on the house) fail to realize enough value to payoff the loan amount in a foreclosure situation. This can become a nightmare especially if the primary mortgage is non-recourse: the much smaller home improvement loan being recourse jeopardizes all of one’s assets for a relatively smaller loan amount.
  • Monthly Payments: As the term of the loan is usually less (20 years is the most common) and interest rates are higher compared to a primary mortgage, monthly payments are higher compared to traditional loans.

Home Equity Line of Credit (HELOC): HELOC or open-ended loans are lines of credit from which the borrower can borrow any amount up to the credit limit during the draw period (typically 5 to 20 years). The interest rate on the borrowed amount is variable although it is based on an index such as prime rate plus a margin. The collateral is the borrower’s equity in the homeowner’s house. Repayment terms are also flexible with a minimum monthly payment requirement. HELOC was trendy among homeowners earlier and viewed as a low cost debt with features allowing flexibility comparable to a credit card debt. The popularity has since dampened somewhat following the mortgage crisis and the HELOC freeze action initiated by many lenders in the 2008-2009 timeframe.

Pros:
  • Taxes: The interest paid on this home improvement loan type is almost always tax deductible.
  • Interest Rate: The rates are favorable compared to credit card or other personal consumer loan rates. Further, when weighed against Home Equity Loans (HELs), variable interest rate is a desirable feature in a prolonged low interest rate environment.
  • Usability: This provides the flexibility to obtain up to the max amount any time during the draw period, in effect making it ideal as a lower cost emergency line of credit.
Cons:
  • Interest Rate: They usually command a higher interest rate compared to the primary mortgage and carry the risk of rising costs in a rising interest rate environment.
  • Recourse Risk: Most home equity loans are considered recourse – the lender can hound your assets, should the collateral (2nd lien on the house) fail to realize enough value to payoff the loan amount in a foreclosure situation. Here again, the possibility of the primary mortgage being non-recourse but the much smaller HELOC being recourse and thereby risking all of one’s assets for a small loan amount exists.
  • Freeze Risk: As the lender can freeze their line of credit at any time there does not exist a guaranteed line of credit with a HELOC.  Many homeowners experienced this unpleasant surprise in 2008 when HELOCs were frozen en masse by many major lenders (Countrywide, Citigroup, Washington Mutual, etc.).
Cash-out Refinancing: Cash-out refinancing is a type of refinancing where the loan amount is more than that required to pay out existing liens, providing the borrower the flexibility to use the balance amount (subject to fees) for any purpose including home improvements. Lender requirements on the loan-to-value ratio determine the amount that can be borrowed. Interest rates are higher compared to the straight rate-and-term refinancing but usually lower compared to home equity loans – the lenders risk is higher as loan-to-value ratio increase.

Pros:
  • Taxes: The interest paid on this loan is tax deductible.
  • Convenience: Since this is a replacement for the first mortgage compared to an additional mortgage with other options, there is just one payment due every month.
Cons:
  • Costs: Compared to HEL and HELOC, loan costs are higher as it is the primary mortgage.
  • Effect of Resetting: In spite of the number of years that has gone into paying the existing primary mortgage, refinancing will reset the loan term thereby extending the mortgage period compared to the existing loan.
FHA 203K Refinancing: This is a combination of the government insured FHA refinance and a home improvement loan. The main differences between this home improvement loan type and other options listed above are that interest rates are generally lower, and the loan value is based on the improved value of the home.

Pros:
  • Taxes: The interest paid on this loan is tax deductible.
  • Higher Loan to Value Ratio: The maximum loan amount can be 110% of the improved value of the home.
  • Interest Rate: Interest rate is lower compared to all other options.

Cons:
  • Availability: Only a limited number of lenders approved by the government do FHA 203K refinancing loans.
  • Use Restrictions: The homeowner is required to do the home improvements pledged when applying for the loan. Also, only certain types of improvements approved by FHA are allowed. Using a contractor can also be a requirement in some cases.
  • Costs: Costs are slightly higher compared to closing costs of a conventional refinance.
  • Private Mortgage Insurance (PMI) Requirement: PMI is required for a minimum of 5 years, independent of the loan to value ratio. With other options, PMI is required only if the loan to value ratio goes over 80%.
Related Posts:
Last Updated: 03/2012. 


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