Category: Credit

A hosted payment page refers to a webpage, popup, or embedded section where the customer is directed when they are ready to checkout and pay for their purchase. A hosted payment page is sometimes referred to as a hosted payment gateway and is typically enabled through a third-party service — hence why it is “hosted.”

There are a few different types of hosted payment pages, including:

• iFrames: An iFrame is an HTML element that is embedded naturally into your website or online shop. Using an iFrame is a great option for a hosted payment page, as it reduces the amount of redirection the customer must go through, making the overall checkout process much smoother and more seamless.
• ‍Webpages: Many hosted payment pages redirect customers to a separate secure webpage that appears in a different tab on their desktop or mobile web browser. These types of hosted pages are typically not seen when using a mobile app, as mobile apps need an embedded or pop-up page to carry out the checkout process.
• Pop-Ups: A pop-up is a type of hosted payment page that pops up — as the name suggests — directly on the webpage or app the customer is using. This involves less redirection, though it is not quite as convenient as an iFrame.

Though there are many benefits to using a hosted payment page for your online store or merchant business (which we discuss in greater detail momentarily), one of the most important benefits is the ability to maintain PCI compliance with ease.

Since hosted payment pages are supported by third-party payment service providers, the provider is often responsible for ensuring the checkout process meets all compliance requirements. 

In turn, merchants are less burdened by costly and time-consuming compliance activities while still providing an excellent customer experience to shoppers.

How Do Hosted Payment Pages Work?

Picture the last time you made a payment online. Whether you were shopping for goods, purchasing a service, or paying a bill online, you likely encountered a hosted payment page.

To illustrate how and when hosted payment pages come into play, let’s examine four key steps in the process:

1. Once a customer has selected the products, services, or bills they would like to pay for, they must then navigate to the checkout screen. This is often initiated by a button that reads “Checkout”, “Buy Now”, or a similar phrase. Placing this button in an easy-to-find location on your website is crucial, as this is how a customer arrives at a hosted payment page.

2. The Redirection: After clicking the checkout button, a customer is then redirected to a new webpage — this webpage is often a separate tab on their web browser that opens automatically. It can also, sometimes, be a pop-up screen or form that appears on the original web page where the checkout button resides. If you are using an iFrame for your hosted payment page, you can eliminate this step entirely.

3. The Checkout Form: With the redirection or embedded iFrame complete and the new section loaded, the customer will then see a checkout form with payment options and spaces to enter their payment information. Depending on how many payment methods you have enabled in your merchant system, the customer can then select their preferred payment method and enter the necessary authentication information to initiate the transaction.

4. The Confirmation: In most cases, the hosted payment page will offer a confirmation that the transaction has been processed and approved. This is an important step in the process, as it adds clarity and transparency for the customer regarding the transaction, letting them know immediately whether or not their payment has been approved in the system.

The Benefits of a Hosted Payment Page

Merchants and other online businesses who deal with digital transactions and payment processing can greatly benefit from hosted payment pages. Understanding what advantages there are to gain is essential when deciding which payment service provider to partner with to set up a hosted payment page.

Here are three key benefits of hosted payment pages:

• Enhanced Security: When a customer enters their payment information through a hosted payment page, the customer’s data does not pass through the merchant’s or business’s website directly. As a result, the entire transaction is processed by a third-party provider and the merchant is not responsible for securely storing customer payment information. Overall, this is a much more secure system that helps to protect the customer from fraud, identity theft, and more.
• Seamless Checkouts: Hosted payment pages make the checkout process more seamless and simple for customers. One of the key reasons for this is that customers can easily select their preferred payment method and enter their information quickly and securely. A seamless experience is vital, as it ensures the customer completes the transaction and does not abandon their cart due to a confusing or time-consuming checkout process.
• More Payment Options: Hosted payment pages are essential for any merchant or business that plans to activate alternative payment methods (PayPal, Apple Pay, SEPA payments, Zelle, Klarna, etc.). Every payment service provider is different, so it is important to be diligent when researching different providers and look for one that offers the payment integrations your merchant system needs.

When Should You Use a Hosted Payment Page?

To put it simply, a hosted payment page should be used anytime a customer is expected to enter their payment information. 

As mentioned above, hosted payment pages add an extra layer of security that alleviates the merchant of some of the burdens of compliance and protects the customer against fraudulent activity. 

Moreover, hosted payment pages make it incredibly simple for merchants to integrate and offer various payment methods. In turn, the merchant can better serve their customers and expand into new regions around the world where payment accessibility may be limited.

Key Takeaways: Connect to a Vast Payment Ecosystem with Spreedly

At Spreedly, our powerful API allows our clients to connect to a range of different payment methods and payment service providers. Plus, we offer an iFrame form that you can embed directly into your site’s HTML to make the checkout process as smooth and seamless as possible for your customers.

With specialized knowledge in how to support merchants, aggregators, and fintechs, Spreedly has both the technology and expertise your business needs to enable a speedier and more secure payment system. 

By partnering with Spreedly, you can access more than 200 partner services, allowing you to orchestrate payments with hundreds of different payment gateways, payment service providers, fraud tools, and more. Spreedly’s solutions are available in more than 100 currencies, making it easy to expand and conduct business across the globe. 

Check out our powerful array of products and create an account to get started with Spreedly today.

All businesses are structured differently, therefore you need a payments strategy that can mold to your specific business structure in order to maximize profit margins. Whether you’re a merchant, marketplace, or platform our knowledgeable team of Spreedly experts can assess your business model and strategically develop a mix of solutions to drive your business forward.

Despite this, no matter your business structure, payments are at the core of each and every business model. Although payments strategies may look different across business models, the need to securely transact, successfully transact, route payments, etc. remains the same. When you integrate a payments orchestration layer into your payments stack you open your business to numerous beneficial opportunities such as expand to new markets quickly, relieve tedious demands from your development team, and grow overall revenue.

We’re re-sharing the best videos from our Business Models series which highlight specific business models and how Payments Orchestration addresses each. Watch the wrap up of our Business Models series of vlogs to clearly identify the optimized mix of solutions for your business! 

Enjoy all of the top videos from our Business Models series below!

RBC is offering a 30% transfer bonus to British Airways’ Executive Club, which is the same offer from just over a year ago. Conversion bonuses are an amazing way to boost account balances without any extra cost or effort (aside from having the transferable points readily available).

Promotional period

The promotion began on October 3, 2022 and is coming to an end next week on November 16, 2022.

Keep in mind that the most recent Avion points that are pending only posts after the monthly closing statement, not before. So if your next statement does not close on time, you will want convert before the November 16 deadline.

Minimum transfer requirement

There is a 10,000 Avion points minimum transfer requirement, with increments of 1 point thereafter. With a 1 to 1 transfer ratio, normally 10,000 Avion points equates to 10,000 Avios. Now with the 30% additional bonus, the minimum 10,000 Avion transfer now nets 13,000 Avios. The transfer bonuses can really add it with large conversions (e.g. 50,000 Avion comes out to 65,000 Avios, and so on).

Valuable program

Avios have become a valuable currency to Canadians as it is arguable the second easiest frequent flyer programs (after Air Canada’s Aeroplan) for Canadians to accrue without flying as there are a wide variety of ways to earn. Then Avios can be redeem to a wide variety of rewards options, especially being a member of Oneworld Alliance. So it is nice to see this bonus opportunity again!

Inheriting a home from a loved one can be a gift … and a challenge. There are plenty of ways to put inherited assets to good use, but capital gains taxes may put a damper on your plans. 

Understanding how capital gains taxes work can help you decide whether to move in, sell the property or gift it to a loved one. We’re going to tell you what you need to know about capital gains taxes on inherited real estate and the tax implications of inheriting a house. 

What Is the Capital Gains Tax on Inherited Property?

Capital gains tax is the tax you pay on the profit you make from the sale of an asset. The tax only applies when you sell the asset (think: houses, stocks, jewelry, etc).

When you inherit property, it becomes an asset you can sell, keep or gift to someone else – and you may be able to avoid paying capital gains tax when you sell. 

Because the IRS implements capital gains taxes on a stepped-up basis with inherited property,^[1] the property’s tax basis (typically the fair market value) is typically set the day you inherit the home. In nonfinance-speak, that means the IRS will adjust the value of the home to its value on the day you inherited it, not the day your loved one bought it.  

If you sell the house at its existing market value as soon as you inherit it, you won’t owe anything in capital gains taxes. If you hang on to the house and it increases in value, you’ll pay capital gains tax on the difference between the home’s sale price and its tax basis.

What you pay in capital gains taxes will vary based on your federal income tax rate and how long you’ve held the property. Depending on your tax filing status and taxable income, you’ll pay 0%, 15% or 20% on the profit from the sale if you kept the property for more than a year.^[2]

You could be paying 10%, 12%, 22%, 24%, 32%, 35% or 37% on the profit from the sale if you hung on to the property for less than a year.^[3] 

How Do You Calculate Capital Gains on Inherited Property?

There are a few different factors you’ll need to consider when you’re calculating the capital gains tax you may pay on the inherited property, including:

• Value of the property: The value of your property is its sales price. This amount is key to determining whether you’ll pay capital gains tax and, if so, how much you’ll pay. 
• Tax basis in the property: Your tax basis is not the home’s original purchase price. It is the home’s fair market value either on the date you inherit it or a date set by the estate’s executor. You subtract the tax basis from the sales price to determine the amount you’ll pay in capital gains tax. 
• Tax rate: If you owe capital gains tax on inherited property, your tax rate will be based on how long you’ve held the property, your filing status and your tax bracket. Keep the house for less than a year, and you’ll pay short-term capital gains tax at 10%, 12%, 22%, 24%, 32%, 35%, or 37%. Keep the house for more than a year, and you’ll pay long-term capital gains tax at 0%, 15%, or 20%.

Let’s say you inherit a home from a grandparent. The home’s fair market value (or tax basis) is $500,000. And now you have to decide. Do you sell the home ASAP or hang on to it for a while? If you sell the home at its fair market value ($500,000) as soon as you inherit it, you won’t need to pay capital gains tax. 

But if you hang on to the property for 8 months and then sell it for $550,000, you’ll pay short-term capital gains tax. 

To calculate your capital gains tax, subtract the home’s fair market value ($500,000) from the sales price ($550,000). For tax purposes, you’ll only pay capital gains tax on the $50,000 you made in profit. Next, multiply the $50,000 by your income tax bracket. If you sold the house in 2022, based on your tax bracket, you could owe: 

• $50,000 x 10% = $5,000
• $50,000 x 12% = $6,000
• $50,000 x 22% = $11,000
• $50,000 x 24% = $12,000
• $50,000 x 32% = $16,000
• $50,000 x 35% = $17,500 
• $50,000 x 37% = $18,500

Keep in mind that your filing status will also affect these calculations. 

If you waited a year or longer before you sold the home and made the same amount in profit ($50,000), you would use the following percentages to calculate your capital gains tax:

• $50,000 x 0% = $0
• $50,000 x 15% = $7,500
• $50,000 x 20% = $10,000

By the way, this works the other way around, too. If you sell the home for less than its fair market value at the time of inheritance, you can claim a capital loss deduction on your tax return.

5 Ways To Avoid Capital Gains on Inherited Property

Who wouldn’t want to avoid or reduce capital gains tax if they could? Fortunately, there are a few ways to avoid capital gains taxes on inherited property.

1. Sell the property quickly

Selling the property before it increases in value can increase your chances of avoiding capital gains taxes. If you don’t see the home as a long-term investment opportunity, this is likely the best route for you. 

But no matter how quickly you sell, you will be on the hook for short-term capital gains taxes if you profit from the sale. You’ll need to weigh the risk of paying short-term capital gains taxes against the reward of turning a profit.

2. Disclaim the property 

Disclaiming a property lets you pass your ownership of a property to someone else. This can be the next person in the line of inheritance, another person of your choosing or even the state. Disclaiming a property is a drastic option that can’t be undone. Once you disclaim the property you forfeit your right to have any say in the property. If selling or maintaining the property feels like it could be more headache than it’s worth, this may be an option to consider.

State and local laws will dictate when and how you can disclaim property. You’ll usually have 9 months from the date of inheritance to disclaim the property. If you miss the deadline, you’ll remain the owner of the property.

3. Take ownership

If you make the inherited property your primary residence and live there at least 2 years before you sell it, you can qualify for an IRS capital gains exclusion (aka the Section 121 Exclusion). It’s $250,000 for a single filer or $500,000 for a couple filing jointly.^[4] Many people who inherit homes typically choose to keep their homes to temporarily save on the cost of housing. And when they’re ready to sell, they get a large tax exclusion that shrinks their capital gains tax bill.

4. Convert to a rental property

Increasing demand for rental housing has made rental properties a hot commodity. Turning an inherited property into a rental property can be a great opportunity to generate a secondary or even primary income. 

If you eventually sell the property and make a profit, you’d be responsible for capital gains tax at that time unless you opted for a 1031 exchange (aka a like-kind exchange). This option lets you avoid capital gains tax as long as you use the proceeds from the sale to purchase another investment property.^[5]

5. Deduct selling expenses

If you need to invest money into the home to sell it, you can reduce the amount you pay in capital gains tax by deducting these expenses, including home renovations, expenses tied to the sale of the home and what you spent hiring someone to help sell the property.

Alternatives to Inheritance

Another way to try and avoid capital gains taxes is to discuss estate plans with your loved one. Planning with someone who intends to leave you their property may help you avoid or reduce any associated taxes.

Gift the home before the owner’s death

Homeowners can take advantage of a variety of approaches to gift a home while they are alive. They can simply give it to you as a gift, in which case they will need to file IRS Form 709. The gift giver won’t pay gift tax as long as they don’t exceed the $12.06 million maximum lifetime gift exemption.^[6] They can sell you the home at a significant loss, but they typically can’t deduct the loss on their taxes. 

Become a joint owner

Another way to gift a home to someone is to simply add their name to the deed. This creates a joint tenancy or joint mortgage. You and the homeowner would share ownership and be responsible for the home.

Don’t Inherit Alone

Consider all your options before you decide what to do with your inherited property. If you feel overwhelmed by your choices, consult an estate or wealth planner, financial advisor and tax professional. This way, you can make an informed decision with the help of experts.

As a consumer in the real estate industry, an awareness of mortgage scams is crucial to protect yourself from falling victim to them. 

A mortgage scam is when someone intentionally misrepresents information for their own profit or benefit. There are dozens of different mortgage scams, which can be perpetrated by mortgage lenders, real estate agents, investors and others.

Mortgage scams can happen to almost anyone. In 2021, consumers reported a total of 11,578 internet real estate scams, costing victims over $350 million.^[1]

The best way to avoid succumbing to a mortgage scam is to educate yourself and stay vigilant. To help defend yourself against mortgage scammers, we’ll explain some of the most common mortgage scams and how fraudsters may try to trick you into making a bad decision.

Common Mortgage Scams

Mortgage scams can take various forms, but they often contain elements of the five most common mortgage scams.

1. Bait-and-switch

A bait-and-switch mortgage scam entails a lender falsely advertising a low interest rate to attract borrowers (the bait), then sharing a higher rate or additional fees when a borrower expresses interest or submits an application (the switch).

A lender using a bait-and-switch may claim you don’t qualify for the advertised rate or say it’s no longer available. Other red flags include evasive lenders who refuse to show the loan terms in writing, avoid answering questions or change the terms at the last minute.

Borrowers may fall for a bait-and-switch scheme because they think they won’t qualify for a better rate or because they feel invested in the loan after spending time and effort doing all the paperwork.

2. Foreclosure scams

Foreclosure scams attempt to take advantage of homeowners by pretending to help them avoid a foreclosure situation.

A foreclosure scam can be as simple as someone claiming to keep your home out of foreclosure for a fee or posing as your lender and asking for money to prevent foreclosure. More elaborate foreclosure scams may involve “temporarily” transferring the deed and ownership rights, with the option to rent the home or buy it back later. 

Unfortunately, once you sign the deed and transfer ownership to someone else, you surrender all your rights to the home.

Telltale signs of foreclosure scams may include someone posing as a foreclosure or mortgage consultant or anyone promising to help you avoid foreclosure in exchange for money or the deed to your house.

If you’re worried about foreclosure, contact your lender directly or speak to a U.S. Department of Housing and Urban Development (HUD) counselor to discuss your options. HUD counselors never charge a fee.

3. Loan flipping

Loan flipping (aka loan churning) happens when lenders convince borrowers to continually refinance their mortgages. Each time a borrower refinances, the lender profits from the fees they charge. While there are many legitimate reasons to refinance, which can benefit the borrower, loan flipping refers to the unethical practice of pushing borrowers to refinance when it isn’t advantageous to do so.

With loan flipping, predatory lenders use deceptive tactics to persuade borrowers to refinance, like pushing them toward a cash-out refinance or claiming there’s a new or better loan product.

Before you refinance, carefully review the new loan terms. Pay particular attention to the mortgage closing costs and fees, the interest rate, your new monthly payment amount and the length of the loan.

If a lender pushes you to take on a higher interest rate or extend the loan term, it may be a sign they’re attempting to churn the loan.

4. Reverse mortgage scams

Reverse mortgage scams tend to target older adults, with scammers profiting from the reverse mortgage payout. This type of scam can dupe victims into thinking a reverse mortgage will relieve them of a financial burden or persuade them to use the money to buy another property.

Fraudsters in reverse mortgage scams may help homeowners apply for a reverse mortgage, only to skim from the proceeds or convince homeowners to use the money they receive for a specific purpose. 

For example, unscrupulous real estate agents or lenders might push someone to use a reverse mortgage to buy a fixer-upper to flip. The scammer tells the homeowner they can make a profit without putting any money down. Sadly, the lender and real estate agent are actually conspiring to get a commission and don’t have the homeowner’s best interests in mind.

Another example of a reverse mortgage scam can come from contractors, specifically those who advise homeowners to use a reverse mortgage to pay for repairs or improvements.

Red flags for reverse mortgage scams include unsolicited offers to help you apply for one, asking for upfront payments or pushing you to use the proceeds to pay for a house or home renovations.

Though they might get a bad rap, there are plenty of times when a reverse mortgage can be the right financial decision.

5. Equity stripping

Equity stripping (aka equity skimming) scams usually impact homeowners struggling to make their mortgage payments. An investor will offer to buy the home for the remaining amount on the mortgage to help the homeowner avoid foreclosure. The investor might tell the homeowner they can repurchase the home later and continue living there if they pay rent. 

The homeowner agrees and signs the deed over to the investor, who now has the homeowner’s equity in the property. With the ownership rights to the home, the investor can then raise the rent or evict the previous homeowner, stripping them of the equity they built in the home.

Homeowners who fall for equity stripping schemes usually think the investor is buying their home for a fair price or that they’ll get to keep their home.

You might be dealing with a con artist who’s trying to steal your equity if they offer to pay off your mortgage balance or ask you to transfer ownership of your home temporarily.

How To Identify a Mortgage Scam

Regardless of the type of scam, most mortgage scams involve certain unusual requests or behaviors.

As a rule, you should always be on the lookout for giveaways that indicate you’re face-to-face with a mortgage scam in the making.

These clues include:

• Demanding a fee in advance: There are plenty of fees when you take out a mortgage, but you won’t pay them in advance. Steer clear of anyone who demands an upfront fee for a home loan. The exception is giving legitimate  mortgage lenders a good faith or upfront deposit to begin working on your loan. This deposit will go toward your closing costs. It’s recommended to verify that the lender accepts deposits and the specific costs the deposit covers.  
• Recommending you stop contact with your lender or other advisors: If you have a question or concern about your mortgage, your lender or trusted financial advisor should be who you speak to. In fact, it’s illegal for someone to tell you to stop communicating with your lender or mortgage servicer.^[2]
• Advising you to stop making mortgage payments: You should always try to make your mortgage payments. Anyone who advises you to stop making mortgage payments is likely attempting to take advantage of you. Only your lender can permit a temporary pause on mortgage payments, and it should always be in writing.
• Telling you to send your mortgage payment to anyone other than your loan servicer: Mortgage spoofing is a scam where someone pretends to be your lender, using official-looking phone numbers, email addresses and logos. Spoofers may try to deceive you into thinking you’re speaking to your lender, then tell you to send payments to them. Never send your payment to anyone besides your usual lender. If you’re ever in doubt, contact your lender directly.
• Telling you your credit score doesn’t matter: Lenders use your credit score to determine whether you qualify for a mortgage. If someone tells you about a loan where your credit score doesn’t matter, it should serve as a warning that you may be dealing with a scam artist or loan shark.
• Any offer that’s too good to be true: You know how the saying goes: if it’s too good to be true, it probably is. Avoid any offers of something for nothing, interest rates that are unusually low and anyone claiming they can fix your problems.

Understand who is at higher risk

While no one is immune to mortgage scams, certain groups of homeowners are more vulnerable to attacks by swindlers.

People who are at higher risk for mortgage scams include:

• First-time home buyers
• Anyone experiencing mortgage delinquency
• Homeowners over the age of 62 (the minimum age required for a home equity conversion mortgage)
• Homeowners who are behind on their bills or struggling financially

If you find yourself among these higher-risk groups, it’s crucial to remain vigilant when shopping for a mortgage. Always check to make sure you’re working with a licensed, reputable lender by looking at their website, checking their credentials and reading online reviews.

How to Avoid Mortgage Scams

Avoiding a mortgage scam is partly in your power. The more you know, the more likely you’ll be to stop an attempted scam in its tracks.

Use the following tips to help avoid mortgage scams:

• Avoid unsolicited offers: If you receive a solicitation from someone offering to help you solve a problem, it could be a scam. Unless you reach out and ask, it’s best to avoid any offers to provide you with mortgage relief, a way out of foreclosure or other unsolicited pitches.
• Verify professional credentials: Do your research and make sure the person you’re speaking to is qualified and licensed. You can verify mortgage professionals on the Nationwide Multistate Licensing System (NMLS) website. Real estate professionals can be verified online by visiting the state real estate commission’s website.
• Shop multiple mortgage lenders: Mortgage lenders should never discourage you from exploring your options. Before agreeing to a mortgage, shop around and get quotes from multiple lenders. To ensure the mortgage is legit, use the NMLS search to verify your mortgage broker. For additional guidance, here are three tips for choosing a mortgage lender.

How to Report a Mortgage Scam

Mortgage scammers can target anyone and strike anytime. Even those who are well-prepared can fall victim to mortgage fraud, which is why you should act swiftly if you (or someone you know) suspect mortgage fraud is occurring. 

You can report a mortgage scam by:

• Contacting your mortgage lender
• Reporting suspected fraud to local law enforcement, the Federal Bureau of Investigation (FBI), HUD and the Federal Trade Commission (FTC) – either online or by phone
• Notifying your state’s attorney general or department of consumer affairs
• Consulting a HUD-certified counselor 

Be the First Line of Defense

Mortgage scams are scary, but you can take solace in knowing you’re the first and strongest line of defense against fraud. Recognizing the red flags associated with mortgage scams can help you defend yourself from connivers and crooks. So trust your instincts and avoid anyone who makes unsolicited offers, discourages you from speaking to your lender or gets too pushy.

physixfan      2022-11-08     2022-11-08