How Much Should I Sell Structured Settlement Payments?
Based on recent news about the secondary structured settlements marketplace, you already know that transferring your future payments from your existing structured settlement to a new buyer is perfectly legal. However, if you’re selling your structured settlement, involving a broker or your attorney is highly recommended before you shop around to a number of offers. That’s because brokers and attorneys typically earn a percentage of the total purchase price. Since a broker’s fees are often tied to the purchase price, they will try to secure the largest percentage possible by offering you a deal. However, if you’re not represented and if the sale is not your idea, you may be left with little or no profit at all.
In theory, the ideal situation would be to sell structured settlement payments at a discount rate which is less than the current market value. This should make sense, right? There are many factors which go into determining the present value of a security. These include the date of the payment, the amount of interest paid on it, and any premiums paid as well as any accumulated interest. It’s also important to consider the present value of money owed on other securities and the effect it will have on your own financial future.
The biggest factor which goes into determining the present value of money is what is known as the discount rate. This term refers to the percentage of profit that a buyer will receive for selling a structured settlement payments. A discount rate may vary from one factoring company to another. This factor is often the factor which is most overlooked when it comes to selling a structured settlement payments.
The factoring industry has been caught red-handed in the past by not having a set rate for selling annuities. The buyer who was buying annuity payments had little trouble selling them to companies who were willing to buy them at very low prices. However, this practice was recently stopped due to the U.S. government which felt that these companies were abusing the tax laws by selling annuities for extremely low prices.
Some other things that you may want to consider when it comes to deciding how much you should sell Structured Settlement Payments to a factoring company are the terms that the factoring company offers. You need to make sure that you are going with a reputable and established company. Some factoring companies may offer lower rates than others. They may also want to give you more flexibility or may want you to transfer your payments into other investments like real estate.
Whatever your decision may be when considering selling Structured Settlement Payments, it’s always best to go with a broker or an independent broker because they will be able to better explain the ins and outs of the selling process. You also want to work with someone who understands the different terms and conditions that come along with this type of transaction. While there may be some risks involved in working with a broker or an independent broker, there is also the possibility of big profits. The key is to be patient during this process and not get worked up or worked out of your comfort zone.