Based on recent article on the secondary real estate market for structured settlements, you already know that legally transferring your structured settlements to an investor is perfectly legal. However, if you’re selling your structured settlements, involving yourself with a broker or a dedicated structured settlement specialist who specializes in these types of financial transactions is highly recommended before you even shop around. You see, many brokers and settlement specialists work on commission and can inflate the amount of value you stand to gain or lose by making you sign for too large of a deal. Here are some things to remember when considering this option:
– Know the Annual Percentage Rate (APR) for your chosen annuity. This is the current amount of interest you will be paid on your settlement. Most annuities come with fixed rates and won’t change over the years; however, as the value of the annuity increases, the discount rate is changed, which can result in an under appreciation of your settlement’s value. Calculate the actual sum of value you stand to gain before considering any potential discounts.
– How will you get paid? In a nutshell, brokers and factoring companies will charge you a fee to list your settlement for sale to them; they will also require that you agree to purchase their “call” option or put your payments into an account with them. The actual fees you pay may vary, so it’s a good idea to shop around and compare a number of deals before deciding how to sell structured settlement payments.
– Who would you choose to buy your structured settlements from? You may have concerns about third-party organizations buying your payments because of the high commissions. However, you need to remember that the factoring companies are not selling anything and simply purchasing an option from you, so they are not going to charge you high commissions. Also, some of the bigger discount rate banks do not deal with third-party organizations. When shopping for a buyer for your payments, you should ask about this option so that you don’t waste time researching a company that may not be the best match.
– What if your court approval is not required? You may be wondering if it is possible to sell structured settlement payments without the need for court approval. The truth is, there are companies available that can buy them without a court approval, but you will most likely have to pay a much higher commission than if you used a broker or factoring company. You will also face additional fees to list your settlement. You should carefully consider whether or not your court approval is necessary before deciding whether to pursue a sale with these companies.
When considering how to sell structured settlement payment rights, be sure to keep in mind all of your options. You may feel trapped by the payments you agreed to with your original lender, but this should not be the case. There are a variety of options that will allow you to free yourself from the payments you have to make. If you think about your financial situation honestly, you should be able to decide which plan is best for you.