Paid loss development method
Paid loss development method. Paid losses are projected to ultimate values based on historical development patterns. Historical loss development factors are reviewed and forecasted factors are selected. The selected factors are used to project ultimate paid losses. This method is most reliable when payment patterns are stable over time. The payment patterns for medical malpractice are not generally very stable, particularly for early levels of development.
Exercise purchase with refinance loan after 12 months
Perhaps the most important advantage that the purchase option offers is that the option can be exercised using a refinance loan. Most people don’t realize this, and many who do fail to grasp its implications: refinance loans don’t require down payments!
As long as the property has sufficient equity, a refinance loan avoids the need for down payment. As noted above, however, to use this tactic, the purchase option must be at least 12 months old. Lenders who accept this approach will also place the burden of proof on the investor. It is up to the investor to prove that the purchase option is at least one year old. Investors interested in this approach should follow these tips:
1. Notarize the option contract. The notary public will certify the date; the notary will also record in their files the date that he or she notarized your contract.
2. Record the notarized contract. The option is a legal instrument that can be recorded with the county recorder of deeds. In addition to documenting your contract date, recording the contract notifies other potential sellers that you already have the property under contract, at least through the duration of the option term.
3. Keep option payment check. Obviously, you shouldn’t pay with cash. Most people use a personal check; once this check cycles through your account and is returned to you by the bank, keep it as further proof that you made an option payment. You may also want to consider using a money order or cashier’s check; in such cases, make sure that you keep your check receipt.
HA ·