Structured settlement annuities (“structured settlements”) are an excellent source of income for mortgage lenders. They provide a steady stream of payments that are exempt from tax, making them a more reliable option than some jobs. Structured settlements are a great choice for those who have received compensatory damages, as the profits from the sale of future payments are also exempt from tax. When it comes to settlement plans, lawyers and clients are most likely familiar with a structured agreement.
This type of agreement allows claimants to receive all or part of a settlement for personal injury, wrongful death, or workers' compensation in a series of periodic income tax-free payments. Structured settlements are tax-efficient and can also have asset protection and wasteful advantages. The Supreme Court holds that the amount received in resolving a claim for late payment and liquidated damages under the Employment Age Discrimination Act does not qualify for §104.(a) (exclusion). However, with a structured settlement annuity, if a customer places all or part of their net settlement in a structured settlement annuity, the principal amount plus any interest accrued within the annuity is tax-free.
Congress passed the Recurring Payment Settlement Act of 1982 to encourage the use of structured settlements in cases of physical injury and wrongful death. Any time the source of the claim is based on personal physical injury, the principal amount of the settlement for the customer will be exempt from tax. If you are interested in selling your annuity or structured settlement payments, a representative will provide you with a free, no-obligation quote. Your lawyer is likely to have helpful opinions and will negotiate the terms of the agreement on your behalf. The choice is ultimately up to the plaintiff, and many consider a structured settlement to be much more beneficial than a lump-sum cash payment. In conclusion, structured settlements can be an excellent proof of income for mortgage lenders.
As long as you can document that you are receiving payments and that your payments are going to last a while, it should be accepted. It's even better than some jobs because it won't go away if there's a change in the economy.