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KNOWLEDGEFINANCIAL.COM
INSURANCE 101: How To Buy Home Insurance? Tips to Get a Discount on Home-owner's policy. How to Reduce Your Insurance Costs; By A little
work upfront may pay off with less expensive premium ?
work upfront may pay off with less expensive premium ?
INSURANCE 101: How To Buy Home Insurance?
Homeowners' insurance is a necessity, something every property should
have. If you have a mortgage, your lender will require coverage -- and if
your home is mortgage-free than you should have coverage anyway.
But not all insurance coverage is alike. Policies and protections differ,
and so do costs. In essence, you want the most protection for the least
number of dollars.
Homeowners' insurance generally comes in standardized packages. For
instance, the most basic form, HO-1, offers protections against such
perils as fire, theft, and certain types of liability.
HO-2 is more comprehensive and includes protection against damage
from broken pipes, the weight of ice and snow, and broken hot water
heaters.
HO-3 gives more protection still: It generally includes just about
everything and excludes only earth-shaking events such as earthquakes,
floods, nuclear accidents, and wars.
To determine which policy is best for you, and to find out about other
policies, make a list of valued possessions and the types of coverage
you'd generally like to have -- and then sit down with an insurance broker
to review what's included (and excluded) from each policy form and the
other forms of coverage which may be available.
You may find all the coverage you want in a general form, or you may
determine that you need special coverage at extra cost.
Real estate brokers, attorneys, fee-only financial planners, and CPAs can
recommend local insurance brokers. Once you have some names what
questions should you ask? Here are a few to get you started:
1- What form works best in your situation?
What is included under the form you select -- and what is excluded.
2- Do you have a personal office at home? If yes, what is covered?
3- Do you have a home-based business? If yes, you may require
additional coverage specific to the type of business you operate. In this
case, think in terms of clients dropping by, business equipment,
inventory, etc.
4- Do you have antiques and jewelry? What coverage are you getting?
What coverage do you need?
5- How much personal liability protection will the policy provide? What is
the cost of additional coverage? What about an "umbrella" policy?
If you have a loss, will coverage be for actual cash value or replacement
cost? Have the insurance broker explain the difference.
6- What is the policy deductible? (Generally lower deductibles mean
higher premiums, higher deductibles result in lower premiums.) ·
7- How will the policy be paid? If your lender maintains an escrow
account, the insurance policy will be paid by the lender -- remember, the
house is security for the lender's mortgage.
If you pay for property taxes and insurance directly, you will pay the bill.
For details regarding escrow accounts and insurance requirements,
speak with your lender.
Is your home an historic property? If yes, what special coverages are
required?
8- When a policy says it covers "personal property" what does that term
mean? What does it include and exclude?
9- How can you reduce policy costs? For instance, if you buy auto and
home insurance from the same source will your combined expenses
decline?
What home improvements can you make that would result in lower
premiums?
10- How are claims handled if you have a loss? For your protection, it's a
good idea to photograph or video your home and special possessions --
and then keep such photography in a safe deposit box.
Homeowners' insurance is a necessity, something every property should
have. If you have a mortgage, your lender will require coverage -- and if
your home is mortgage-free than you should have coverage anyway.
But not all insurance coverage is alike. Policies and protections differ,
and so do costs. In essence, you want the most protection for the least
number of dollars.
Homeowners' insurance generally comes in standardized packages. For
instance, the most basic form, HO-1, offers protections against such
perils as fire, theft, and certain types of liability.
HO-2 is more comprehensive and includes protection against damage
from broken pipes, the weight of ice and snow, and broken hot water
heaters.
HO-3 gives more protection still: It generally includes just about
everything and excludes only earth-shaking events such as earthquakes,
floods, nuclear accidents, and wars.
To determine which policy is best for you, and to find out about other
policies, make a list of valued possessions and the types of coverage
you'd generally like to have -- and then sit down with an insurance broker
to review what's included (and excluded) from each policy form and the
other forms of coverage which may be available.
You may find all the coverage you want in a general form, or you may
determine that you need special coverage at extra cost.
Real estate brokers, attorneys, fee-only financial planners, and CPAs can
recommend local insurance brokers. Once you have some names what
questions should you ask? Here are a few to get you started:
1- What form works best in your situation?
What is included under the form you select -- and what is excluded.
2- Do you have a personal office at home? If yes, what is covered?
3- Do you have a home-based business? If yes, you may require
additional coverage specific to the type of business you operate. In this
case, think in terms of clients dropping by, business equipment,
inventory, etc.
4- Do you have antiques and jewelry? What coverage are you getting?
What coverage do you need?
5- How much personal liability protection will the policy provide? What is
the cost of additional coverage? What about an "umbrella" policy?
If you have a loss, will coverage be for actual cash value or replacement
cost? Have the insurance broker explain the difference.
6- What is the policy deductible? (Generally lower deductibles mean
higher premiums, higher deductibles result in lower premiums.) ·
7- How will the policy be paid? If your lender maintains an escrow
account, the insurance policy will be paid by the lender -- remember, the
house is security for the lender's mortgage.
If you pay for property taxes and insurance directly, you will pay the bill.
For details regarding escrow accounts and insurance requirements,
speak with your lender.
Is your home an historic property? If yes, what special coverages are
required?
8- When a policy says it covers "personal property" what does that term
mean? What does it include and exclude?
9- How can you reduce policy costs? For instance, if you buy auto and
home insurance from the same source will your combined expenses
decline?
What home improvements can you make that would result in lower
premiums?
10- How are claims handled if you have a loss? For your protection, it's a
good idea to photograph or video your home and special possessions --
and then keep such photography in a safe deposit box.
Tips to Get a Discount on Homeowner's PolicySponsored By
A little work upfront may pay off with less expensive premium
If you're a first-time homebuyer overwhelmed at the prospect of closing costs,
inspection and appraisal fees, "earnest money" and -- oh, yes -- mortgage payments
-- undoubtedly you're a bit queasy about your homeowners' insurance, as well. It's
the icing on an already very expensive cake.
Rumor has it that you, the newly cash-poor homeowner, have the power to receive
discounts on your insurance policy if you take any one of a long list of measures to
improve the relative safety of your home.
At this point, you're probably willing to stand on your head if that's what it takes to
lower your monthly expenditures. None of these measures are that drastic. And
sure, they're going to cost you some money up front.
But they're a wise investment in your safety; they'll save you money in the long run;
and they'll even boost the resale value of your home come the day when you decide
to sell.
The insurance companies' rationale is simple: The more safety measures you have
in place throughout your home, the less likely they're going to have to come to your
aid following a fire, flood, theft or other major disaster.
The following list outlines some of the protections you'd be wise to investigate and
install prior to taking out your homeowners' insurance policy - or soon after you
begin coverage.
There's no blanket guarantee, of course; some insurance companies offer
discounts for these protections, and some don't. So it's clearly in your best interests
to shop around and find out who will make you the best offer for your efforts.
Security system (offers an average of between 5 percent and 15 percent discount
off your insurance policy, depending upon the provider)
Carbon monoxide detectors
Smoke detectors
Sprinkler system
Dead-bolt locks
Heat detectors
Fire extinguishers
Handrails installed alongside stairs
Fire escapes (if present) that are easily accessible
Wiring system which is both up-to-date and adequate for multiple appliances, which
prevents overloading of sockets (a fire hazard)
Well-grounded outside antenna(e)
Backyard pool (if present) surrounded by fence with a securely locked and bolted
gate
Heating system which is both updated and regularly inspected by a professional
Sidewalks outside the house are maintained and contain no large cracks, chips or
holes
Flammable substances kept outside, preferably, at relatively cool temperatures to
avoid overheating and risk of fire.
In many cases, new homeowners either have the above safety features, or they've
performed various updates to their homes, and they fail to report them to the
insurance company.
As a result, they end up paying more than they would had they spoken up. Before you
meet with an insurance agent, make a list of all of your home's features, be they
mere updates or safety features such as those listed above. List anything and
everything you can think of; you have nothing to lose but money.
Some insurance carriers offer a discount to homeowners of properties built within
the last decade. And if your home sits nearby a fire department or even a fire
hydrant, you may apply for an additional discount; ask if the insurance provider
offers such a benefit.
You may also wish to investigate the option of combining your homeowners'
insurance and automobile insurance under one policy, which typically results in a
lower payment for you.
Another money-saving measure factor you may consider is raising your deductible,
which can lower your premium significantly. Before you sign enthusiastically on the
dotted line, however, make sure that in the event you need to use your insurance
policy that your budget will accommodate a higher deductible.
In today's competitive market, it's particularly important to shop around, because
it's quite possible you'll receive widely disparate quotes on policies that offer
essentially the same coverage. This climate is to your advantage, however.
If you don't like the quote you receive, you'll find plenty of other providers who will
offer you a potentially better quote. But before you make judgments, be sure that the
coverage you're being offered is comparable to other, more expensive policies.
A little work upfront may pay off with less expensive premium
If you're a first-time homebuyer overwhelmed at the prospect of closing costs,
inspection and appraisal fees, "earnest money" and -- oh, yes -- mortgage payments
-- undoubtedly you're a bit queasy about your homeowners' insurance, as well. It's
the icing on an already very expensive cake.
Rumor has it that you, the newly cash-poor homeowner, have the power to receive
discounts on your insurance policy if you take any one of a long list of measures to
improve the relative safety of your home.
At this point, you're probably willing to stand on your head if that's what it takes to
lower your monthly expenditures. None of these measures are that drastic. And
sure, they're going to cost you some money up front.
But they're a wise investment in your safety; they'll save you money in the long run;
and they'll even boost the resale value of your home come the day when you decide
to sell.
The insurance companies' rationale is simple: The more safety measures you have
in place throughout your home, the less likely they're going to have to come to your
aid following a fire, flood, theft or other major disaster.
The following list outlines some of the protections you'd be wise to investigate and
install prior to taking out your homeowners' insurance policy - or soon after you
begin coverage.
There's no blanket guarantee, of course; some insurance companies offer
discounts for these protections, and some don't. So it's clearly in your best interests
to shop around and find out who will make you the best offer for your efforts.
Security system (offers an average of between 5 percent and 15 percent discount
off your insurance policy, depending upon the provider)
Carbon monoxide detectors
Smoke detectors
Sprinkler system
Dead-bolt locks
Heat detectors
Fire extinguishers
Handrails installed alongside stairs
Fire escapes (if present) that are easily accessible
Wiring system which is both up-to-date and adequate for multiple appliances, which
prevents overloading of sockets (a fire hazard)
Well-grounded outside antenna(e)
Backyard pool (if present) surrounded by fence with a securely locked and bolted
gate
Heating system which is both updated and regularly inspected by a professional
Sidewalks outside the house are maintained and contain no large cracks, chips or
holes
Flammable substances kept outside, preferably, at relatively cool temperatures to
avoid overheating and risk of fire.
In many cases, new homeowners either have the above safety features, or they've
performed various updates to their homes, and they fail to report them to the
insurance company.
As a result, they end up paying more than they would had they spoken up. Before you
meet with an insurance agent, make a list of all of your home's features, be they
mere updates or safety features such as those listed above. List anything and
everything you can think of; you have nothing to lose but money.
Some insurance carriers offer a discount to homeowners of properties built within
the last decade. And if your home sits nearby a fire department or even a fire
hydrant, you may apply for an additional discount; ask if the insurance provider
offers such a benefit.
You may also wish to investigate the option of combining your homeowners'
insurance and automobile insurance under one policy, which typically results in a
lower payment for you.
Another money-saving measure factor you may consider is raising your deductible,
which can lower your premium significantly. Before you sign enthusiastically on the
dotted line, however, make sure that in the event you need to use your insurance
policy that your budget will accommodate a higher deductible.
In today's competitive market, it's particularly important to shop around, because
it's quite possible you'll receive widely disparate quotes on policies that offer
essentially the same coverage. This climate is to your advantage, however.
If you don't like the quote you receive, you'll find plenty of other providers who will
offer you a potentially better quote. But before you make judgments, be sure that the
coverage you're being offered is comparable to other, more expensive policies.
How to Reduce Your Insurance Costs?
With the cost of insuring homes on the rise in recent years, now is a good time to
examine your policy and look for ways to save money.
The Insurance Information Institute, a non-profit organization supported by the property
and casualty insurance business, attributes the increases to the mounting number of
catastrophes, the high cost of home repairs, and the emergence of mold claims.
So what can you do to help keep your rates reasonable? The III makes the following
suggestions:
Shop for the best deal. Get at least three quotes. See if your state department of
insurance has any price comparisons available. But don't just look at prices. Evaluate
which companies provide the best customer service and are readily available to answer
your questions.
Raise your deductible. The higher your deductible, the less premium you'll have to pay.
The III says if you raise a $500 deductible to $1000, you may save as much as 25
percent.
Buy your home and automobile policies from the same insurer. Some companies will
reduce your premium up to 15 percent if you have at least two policies from them.
Reduce the odds of being affected by a disaster. Make your home more resistant to
disasters - you might be able to save by adding storm shutters and shatter-proof glass or
reinforcing your roof.
If you live in an older home, you should consider modernizing your heating, plumbing
and electrical systems to reduce the risks of water and fire damage.
Understand the costs. The cost to rebuild your home is going to be different than what
you paid for it. Don't include the cost of the land in deciding how much coverage to
purchase.
Secure your home. Some companies offer a modest discount, usually at least 5 percent,
for installing smoke detectors, burglar alarms and dead-bolt locks. Some insurers will also
offer a discount if you install a sprinkler system and a fire and burglar alarm that rings at
the police, fire or other monitoring stations. First you'll want to research the costs
involved, and whether you'd be saving on your premiums.
Inquire about discounts. Ask your company about all potential discounts. For example,
some offer discounts to those 55 and older.
Investigate group coverage. You may be able to get a group coverage plan through your
employer or a professional or business group. See if it's a better deal than what you have.
Stay put. Many companies offer discounts for longer-term customers - sometimes up to
10 percent if you've had your policy through the company for more than six years. Be
sure to compare prices against other companies once in awhile.
Review your policy and the value of your possessions. If you sold that pair of diamond
earrings or other valuable for which you have a floater policy - additional coverage for
items not covered by a standard homeowners policy - be sure you're not paying for the
extra insurance.
Finally, when you're ready to buy a new home, be sure you factor in the cost of
homeowners insurance. The cost of your premium will depend on how much it would
cost to rebuild, and whether the house is likely to succumb to a disaster or fire.
Also, flood and earthquake damage are not covered by a standard policy. If you need
flood insurance, which costs about $400 per year, you'll want to contact the Federal
Emergency Management Agency. Most insurance companies offer a separate
earthquake policy.
With the cost of insuring homes on the rise in recent years, now is a good time to
examine your policy and look for ways to save money.
The Insurance Information Institute, a non-profit organization supported by the property
and casualty insurance business, attributes the increases to the mounting number of
catastrophes, the high cost of home repairs, and the emergence of mold claims.
So what can you do to help keep your rates reasonable? The III makes the following
suggestions:
Shop for the best deal. Get at least three quotes. See if your state department of
insurance has any price comparisons available. But don't just look at prices. Evaluate
which companies provide the best customer service and are readily available to answer
your questions.
Raise your deductible. The higher your deductible, the less premium you'll have to pay.
The III says if you raise a $500 deductible to $1000, you may save as much as 25
percent.
Buy your home and automobile policies from the same insurer. Some companies will
reduce your premium up to 15 percent if you have at least two policies from them.
Reduce the odds of being affected by a disaster. Make your home more resistant to
disasters - you might be able to save by adding storm shutters and shatter-proof glass or
reinforcing your roof.
If you live in an older home, you should consider modernizing your heating, plumbing
and electrical systems to reduce the risks of water and fire damage.
Understand the costs. The cost to rebuild your home is going to be different than what
you paid for it. Don't include the cost of the land in deciding how much coverage to
purchase.
Secure your home. Some companies offer a modest discount, usually at least 5 percent,
for installing smoke detectors, burglar alarms and dead-bolt locks. Some insurers will also
offer a discount if you install a sprinkler system and a fire and burglar alarm that rings at
the police, fire or other monitoring stations. First you'll want to research the costs
involved, and whether you'd be saving on your premiums.
Inquire about discounts. Ask your company about all potential discounts. For example,
some offer discounts to those 55 and older.
Investigate group coverage. You may be able to get a group coverage plan through your
employer or a professional or business group. See if it's a better deal than what you have.
Stay put. Many companies offer discounts for longer-term customers - sometimes up to
10 percent if you've had your policy through the company for more than six years. Be
sure to compare prices against other companies once in awhile.
Review your policy and the value of your possessions. If you sold that pair of diamond
earrings or other valuable for which you have a floater policy - additional coverage for
items not covered by a standard homeowners policy - be sure you're not paying for the
extra insurance.
Finally, when you're ready to buy a new home, be sure you factor in the cost of
homeowners insurance. The cost of your premium will depend on how much it would
cost to rebuild, and whether the house is likely to succumb to a disaster or fire.
Also, flood and earthquake damage are not covered by a standard policy. If you need
flood insurance, which costs about $400 per year, you'll want to contact the Federal
Emergency Management Agency. Most insurance companies offer a separate
earthquake policy.
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TITLE SEARCH FINDS Cloud On Title
What Does Cloud On Title Mean?
Any document, claim, unreleased lien or encumbrance that might invalidate or impair the title to real property or make the title doubtful.
Clouds on title are usually discovered during a title search. Clouds on title are resolved through initiating a quitclaim deed or a commencement of action to quiet title.
KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Cloud On Title
A title search and title insurance are generally required by lenders as protection from any third-party claims, or clouds on title, to property that is used as collateral. Title searches and title insurance are required in the
mortgage origination process.
Blanket Lien
What Does Blanket Lien Mean?
A lien covering nearly all types of assets and collateral owned by a debtor. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Blanket Lien
A lien usually only gives the creditor the right to a specific asset. A blanket lien gives the creditor a legal interest in all the debtor's assets and other collateral. Defaulting on a debt in this situation can result in "losing
your shirt".
Lien
What Does Lien Mean?
When a creditor or bank has the right to sell the mortgaged or collateral property of those who fail to meet the obligations of a loan contract. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains:
Lien
This is typically enforced under provincial or state laws.
Encumbrance
What Does Encumbrance Mean?
A claim against a property by another party. Encumbrance usually impacts the transferability of the property. KNOWLEDGE FINANCIAL explains:
Encumbrance Also known as a lien.
Judgment Lien
What Does Judgment Lien Mean?
A court ruling that gives a creditor the right to take possession of a debtor's real property if the debtor fails to fulfill his or her contractual obligations. A judgment lien may be made against an individual or business and
allows the creditor to access the debtor's business, personal property and real estate, among other assets, to pay the judgment. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Judgment Lien
When a debtor does not make payment on a loan, the creditor may take legal action to receive the money to which they are entitled. Once the validity of the contract and non-payment is established, the court may order a
judgment lien. The actual acquisition of real property requires additional steps.
For example, a judge may place a lien on debtor's car. This way if, the debtor doesn't pay his or her creditor within a certain time period, the car is used to pay off the remaining debt.
Second Lien Debt
What Does Second Lien Debt Mean?
Debts that are subordinate to the rights of other, more senior debts issued against the same collateral, or a portion of the same collateral.
If a borrower defaults, second lien debts stand behind higher lien debts in terms of rights to collect proceeds from the debt's underlying collateral.
KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Second Lien Debt
When lenders issue loans to borrowers, they commonly require that collateral be made against the principal of the loan to ensure that the principal can be repaid in the future.
In the case of a real estate mortgage, the lender effectively places a lien on the asset so that if it is sold, the lender will be first in line to receive funds. If a second mortgage is taken out on the same property, the second
loan will be considered second lien debt to the first mortgage, and will be subordinate to the first in terms of return of principal. For this reason, second lien debt is usually considered riskier than higher lien debt and
often comes with a higher interest rate as a result.
Tax Lien
What Does Tax Lien Mean?
A claim imposed by the federal government to liquidate a person's property until the tax and debt owed is fully paid. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Tax Lien
Tax liens can be purchased from the government in the form of an investment.
Tax Lien Certificate
What Does Tax Lien Certificate Mean?
A certificate of claim against property that has a lien placed upon it as a result of unpaid property taxes.
KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Tax Lien Certificate
Available in many states, this certificate allows the owner to collect unpaid taxes in addition to a set level of interest. These investments are not insured or necessarily backed by property, and therefore great risks are
involved with each purchase.
What Does Cloud On Title Mean?
Any document, claim, unreleased lien or encumbrance that might invalidate or impair the title to real property or make the title doubtful.
Clouds on title are usually discovered during a title search. Clouds on title are resolved through initiating a quitclaim deed or a commencement of action to quiet title.
KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Cloud On Title
A title search and title insurance are generally required by lenders as protection from any third-party claims, or clouds on title, to property that is used as collateral. Title searches and title insurance are required in the
mortgage origination process.
Blanket Lien
What Does Blanket Lien Mean?
A lien covering nearly all types of assets and collateral owned by a debtor. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Blanket Lien
A lien usually only gives the creditor the right to a specific asset. A blanket lien gives the creditor a legal interest in all the debtor's assets and other collateral. Defaulting on a debt in this situation can result in "losing
your shirt".
Lien
What Does Lien Mean?
When a creditor or bank has the right to sell the mortgaged or collateral property of those who fail to meet the obligations of a loan contract. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains:
Lien
This is typically enforced under provincial or state laws.
Encumbrance
What Does Encumbrance Mean?
A claim against a property by another party. Encumbrance usually impacts the transferability of the property. KNOWLEDGE FINANCIAL explains:
Encumbrance Also known as a lien.
Judgment Lien
What Does Judgment Lien Mean?
A court ruling that gives a creditor the right to take possession of a debtor's real property if the debtor fails to fulfill his or her contractual obligations. A judgment lien may be made against an individual or business and
allows the creditor to access the debtor's business, personal property and real estate, among other assets, to pay the judgment. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Judgment Lien
When a debtor does not make payment on a loan, the creditor may take legal action to receive the money to which they are entitled. Once the validity of the contract and non-payment is established, the court may order a
judgment lien. The actual acquisition of real property requires additional steps.
For example, a judge may place a lien on debtor's car. This way if, the debtor doesn't pay his or her creditor within a certain time period, the car is used to pay off the remaining debt.
Second Lien Debt
What Does Second Lien Debt Mean?
Debts that are subordinate to the rights of other, more senior debts issued against the same collateral, or a portion of the same collateral.
If a borrower defaults, second lien debts stand behind higher lien debts in terms of rights to collect proceeds from the debt's underlying collateral.
KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Second Lien Debt
When lenders issue loans to borrowers, they commonly require that collateral be made against the principal of the loan to ensure that the principal can be repaid in the future.
In the case of a real estate mortgage, the lender effectively places a lien on the asset so that if it is sold, the lender will be first in line to receive funds. If a second mortgage is taken out on the same property, the second
loan will be considered second lien debt to the first mortgage, and will be subordinate to the first in terms of return of principal. For this reason, second lien debt is usually considered riskier than higher lien debt and
often comes with a higher interest rate as a result.
Tax Lien
What Does Tax Lien Mean?
A claim imposed by the federal government to liquidate a person's property until the tax and debt owed is fully paid. KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Tax Lien
Tax liens can be purchased from the government in the form of an investment.
Tax Lien Certificate
What Does Tax Lien Certificate Mean?
A certificate of claim against property that has a lien placed upon it as a result of unpaid property taxes.
KNOWLEDGE FINANCIAL GROUP / KNOWLEDGEFINANCIAL.COM explains
Tax Lien Certificate
Available in many states, this certificate allows the owner to collect unpaid taxes in addition to a set level of interest. These investments are not insured or necessarily backed by property, and therefore great risks are
involved with each purchase.