Will you get a second stimulus check?

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

By mid-May 2020, the IRS had issued more than $218 billion in stimulus checks related to the CARES Act, and it was still working to ensure all eligible Americans received theirs. But in early August, 2020, almost five months after the CARES Act was passed, many people were wondering if they would receive a second stimulus check. Find out what’s known about stimulus checks and future financial assistance from the federal government in the article below.

Will There Be a Second Stimulus Check?

Judging on the number of bills being passed around Congress, there’s a possibility another stimulus act is coming, and it may come with a second round of stimulus checks. But the details—including how much the check will be worth and who will be eligible—depend on which of the acts ends up making it through.

Bills currently being discussed include:

By mid-May 2020, the IRS had issued more than $218 billion in stimulus checks related to the CARES Act.

The HEALS Act

The HEALS Act comes from the Republicans and is a stimulus package similar to the CARES Act. If this act passes in its current form it will include many of the details described below.

How Much Money Will People Get?

Yes, this act does include stimulus payments to many Americans. The details of how much and who might get what amount are included below.

  • Individuals making less than $75,000 per year will get $1,200.
  • Couples filing jointly and making less than $125,000 per year will get $2,400.
  • People making above those amounts may still get a check. The stimulus is reduced $5 for every $100 of income above those limits until it tapers off completely. So, someone making $80,000 per year would get $950, for example.
  • An additional $500 is also included for every dependent claimed on the person or couple’s tax return, which is different from the CARES Act, which excluded dependents over the age of 16.

Who Would Qualify?

The income and dependent restrictions explained above will determine who would qualify for the stimulus. Qualification would likely be based on tax returns or Social Security benefit statements as was the case with the CARES Act.

What Other Benefits Are Included?

The HEALS Act contains a number of other benefits and stimulus efforts for businesses, schools and workers. Some of the main provisions are highlighted below, but this is not a comprehensive list.

  • Additional unemployment benefits would be provided, but it would be less per week than under the CARES Act.
  • The act would expand the Paycheck Protection Program by another $190 billion and make it easier for businesses to comply with the payroll requirement.
  • A return-to-work bonus may be offered to unemployed workers who find new jobs.
  • Funds to schools to help support reopening efforts would be included.
  • Some protection against lawsuits related to COVID-19 would be provided for businesses.
  • The act also includes $16 billion in coronavirus testing support.

The HEROES Act

This is the stimulus act being proposed by the Democrats. It also includes stimulus payments and other benefits for individuals and businesses.

How Much Money Will People Get?

As with the other bills, the HEROES Act includes a round of stimulus payments for qualifying Americans. The details of the payment amounts being proposed are summarized below.

  • Individuals making less than $75,000 get a $1,200 check under this act.
  • Married people filing jointly making less than $125,000 total annually get a $2,400 check under this act.
  • The stimulus is reduced $5 for every $100 of income above those limits until it tapers off completely.
  • The HEROES Act provides $1,200 per dependent for the first three dependents for an individual or married couple with no age restrictions. So if you claim three children, you would get an additional $3,600 in stimulus funds.

Who Would Qualify?

The qualifications for stimulus checks would be similar to those under the HEALS and CARES Acts as represented above.

What Other Benefits Are Included?

Here are some of the other benefits included in the HEROES Act:

  • This act includes the same enhanced unemployment benefits available under CARES, just extended for a longer period of time.
  • The HEROES Act also includes expanded eligibility for the Paycheck Protection Program and a reduction in the payroll requirement.
  • An expansion and extension of the eviction moratorium and protections for renters is included in the HEROES Act but not the HEALS Act.
  • Funds to support school reopenings are also included in this act.

When Could a Second Stimulus Check Come?

When a second stimulus check might arrive depends heavily on when a bill is passed. Both the House and the Senate must pass the bill, and then it has to be signed by the president. But the hope is that it won’t take as long for the IRS to turn around payments as it did in March and April. Ideally it won’t—the IRS has now done this once already and has probably learned lessons and put a system in place that speeds up the second round.

In fact, Steven Mnuchin, the US Treasury Secretary, said that the IRS could start sending payments within a week of an act being passed. So, if the act is passed anytime in mid-September, for example, the checks could start rolling out before the calendar moved into October.

The Stimulus check process in 4 steps

Will This Be the Last Stimulus Check?

It’s pure speculation at this point to discuss a second, or even third or fourth stimulus check. But it’s not impossible. It likely depends on the state of the economy and job market as the COVID-19 pandemic continues. If future stimulus checks do come, though, they may become increasingly more targeted as time passes. For example, it’s possible stimulus funds might start to go to people who can demonstrate a need.

However, until this second act is passed and lawmakers move on to considering future bills, there’s simply no way to know.

Protecting Your Financial Status During COVID-19 and After

Whether you’re waiting for and relying on a second stimulus check or you’re beginning to see a light at the end of your own personal COVID-19 financial tunnel, it’s definitely important to keep an eye on your personal finances during these trying times. That can include checking your credit report to ensure all the information is accurate and disputing inaccurate items so they don’t drag down your score in the future. It can also include managing your debt, income and investments in the most responsible way. During COVID-19 and beyond, Lexington Law offers information that can help you navigate finances and plan for the future. Check out articles that range from student loans to mortgages, and consider our credit repair services if you need help getting your credit report back to rights.


Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

10 Best Health Care ETFs of 2021

Technological innovation is everywhere you look, especially in health care. New technologies are making simple work of some of the most pressing medical conditions known to man.

Even the COVID-19 pandemic has been proof that the health care sector is evolving, with vaccines being created and marketed within a year of the outbreak of the novel coronavirus.

Of course, the health care industry is massive. Well-researched investments in a variety of health care stocks and bonds have proven to be lucrative moves. But what if you don’t have the time or expertise to do the research it takes to make individual health care investments?

That’s where health care exchange-traded funds (ETFs) come in.

Best Health Care ETFs

Health care ETFs are funds that pool money from a large group of investors and then invest in health care stocks and other health care-focused investments.

As with any investment vehicle, not all health care ETFs are created equal. Some will come with higher costs than others, and returns on your investment will vary wildly from one fund to another.

With so many options available, it can be difficult to pin down which ETFs you should invest in. Here are some of the best options on the market today:

1. Vanguard Health Care Index Fund ETF (VHT)

  • Expense Ratio: 0.10%
  • One-Year Return: 29.89%
  • Five-Year Annualized Return: 15.10%
  • Dividend Yield: 1.42%
  • Morningstar Rating: 4 out of 5 stars
  • Top Holdings Include: Johnson & Johnson (JNJ), UnitedHealth Group (UHC), Abbott Laboratories (ABT), Thermo Fisher Scientific (TOM), Pfizer (PFE)
  • Years Up Since Inception: 14
  • Years Down Since Inception: 2

Vanguard is one of the best-known wealth managers on Wall Street. So, you can rest assured that when you invest in a health care ETF or any other Vanguard fund, your money is in good hands.

The Vanguard Health Care Index Fund ETF is focused on investing in companies that sell medical products, services, equipment, and technologies using a highly diversified portfolio.

As a Vanguard fund, the VHT comes with an incredibly low expense ratio and a strong history of providing compelling returns for investors.

Pro tip: Have you considered hiring a financial advisor but don’t want to pay the high fees? Enter Vanguard Personal Advisor Services. When you sign up, you’ll work closely with an advisor to create a custom investment plan that can help you meet your financial goals.


2. Health Care Select Sector SPDR Fund (XLV)

  • Expense Ratio: 0.12%
  • One-Year Return: 23.75%
  • Five-Year Annualized Return: 13.15%
  • Dividend Yield: 1.49%
  • Morningstar Rating: 3 out of 5 stars
  • Top Holdings Include: Johnson & Johnson (JNJ), UnitedHealth Group (UNH), Abbott Laboratories (ABT), AbbVie (ABBV), Pfizer (PFE)
  • Years Up Since Inception: 17
  • Years Down Since Inception: 5

The Health Care Select Sector SPDR Fund is offered by State Street Global Advisors, one of the largest asset management companies on Wall Street. The firm behind this health care ETF is one with pedigree.

As a passively-managed fund, the XLV was designed to track the returns of the Health Care Select Sector Index, which provides a representation of the health care sector of the S&P 500.

As a result, the XLV ETF provides diversified exposure to some of the largest U.S. health care companies. The fund provides compelling returns and relatively strong dividends for the health care industry.

As is the case with most funds provided by State Street Global Advisors, this ETF comes with incredibly low fees, far below the industry average.


3. ARK Genomic Revolution ETF (ARKG)

  • Expense Ratio: 0.75%
  • One-Year Return: 174.19%
  • Five-Year Annualized Return: 43.78%
  • Dividend Yield: 0.93%
  • Morningstar Rating: 5 out of 5 stars
  • Top Holdings Include: Teladoc Health (TDOC), Twist Bioscience (TWST), Pacific Biosciences of California (PACB), Exact Sciences (EXAS), Regeneron Pharmaceuticals (REGN)
  • Years Up Since Inception: 4
  • Years Down Since Inception: 2

The ARK Genomic Revolution ETF is offered by ARK Invest, yet another highly trusted fund manager on Wall Street.

The ETF is designed to provide diversified exposure to companies that are working to extend the length and improve the quality of life for consumers with debilitating conditions through technological and scientific innovations in genomics.

Essentially, this fund invests in companies focused on the editing of genomes, or base units within DNA, to solve some of the most pressing problems in medical science.

With genomics being a relatively new concept that’s showing incredible promise in the field of medicine, companies in the space are experiencing compelling growth, making the ARKG ETF one of the best performers on this list.

However, it’s also worth mentioning that this is one of the higher-volatility ETFs on the list, which adds to the risk of investing.


4. Fidelity MSCI Health Care Index ETF (FHLC)

  • Expense Ratio: 0.08%
  • One-Year Return: 29.76%
  • Five-Year Annualized Return: 15.11%
  • Dividend Yield: 1.46%
  • Morningstar Rating: 3 out of 5 stars
  • Top Holdings Include: Johnson & Johnson (JNJ), UnitedHealth Group (UNH), Abbott Laboratories (ABT), AbbVie (ABBV), Pfizer (PFE)
  • Years Up Since Inception: 6
  • Years Down Since Inception: 1

Fidelity is a massive company that has grown to become a household name thanks to its insurance division. It’s also one of the biggest and most well-trusted fund managers on Wall Street.

The company’s MSCI Health Care Index ETF has become a prime option for retail investors who want to gain diversified exposure to the U.S. health care industry.

The ETF was designed to track the MSCI USA IMI Health Care Index, which represents the universe of investable large-cap, mid-cap, and small-cap U.S. equities in the health care sector.

As can be expected from the vast majority of Fidelity funds, the FHLC is a top performer on the market with a relatively low expense ratio.


5. iShares Nasdaq Biotechnology ETF (IBB)

  • Expense Ratio: 0.46%
  • One-Year Return: 38.14%
  • Five-Year Annualized Return: 13.38%
  • Dividend Yield: 0.19%
  • Morningstar Rating: 3 out of 5 stars
  • Top Holdings Include: Amgen (AMGN), Gilead Sciences (GILD), Illumina (ILMN), Moderna (MRNA), Vertex Pharmaceuticals (VRTX)
  • Years Up Since Inception: 15
  • Years Down Since Inception: 4

iShares has become yet another leading fund manager on Wall Street, and the firm’s Nasdaq Biotechnology ETF is yet another strong option to consider if you’re looking for diversified exposure to the U.S. health care sector.

The fund was specifically designed to provide exposure to the biotechnology and pharmaceuticals subsectors of the health care industry. It does so by investing in biotechnology and pharmaceutical companies listed on the Nasdaq.

As an iShares fund, investors will enjoy market-leading returns through a diversified portfolio of investments selected by some of the most trusted professionals on Wall Street.

The IBB expense ratio is around the industry-average ETF expense ratio of 0.44%, according to The Wall Street Journal, but the fund’s expenses are justified by its outsize returns.


6. iShares U.S. Healthcare Providers ETF (IHF)

  • Expense Ratio: 0.42%
  • One-Year Return: 31.67%
  • Five-Year Annualized Return: 16.5%
  • Dividend Yield: 0.54%
  • Morningstar Rating: 3 out of 5 stars
  • Top Holdings Include: UnitedHealth Group (UNH), CVS Health (CVS), Anthem (ANTM), HCA Healthcare (HCA), Teladoc Health (TDOC)
  • Years Up Since Inception: 13
  • Years Down Since Inception: 1

The iShares U.S. Healthcare Providers ETF is designed to provide exposure to a different area of the health care industry.

Instead of investing in companies that create treatments and therapeutic options, the IHF fund invests in companies that provide health insurance, specialized care, and diagnostics services.

To do so, the ETF invests in an index designed to track large U.S. health care providers.

The fund comes with an expense ratio that’s slightly lower than the average for ETFs while providing performance that’s hard to ignore. While IHF isn’t the best dividend payer, the iShares U.S. Healthcare Providers ETF does provide compelling returns, making it a strong pick for any health care investor’s portfolio.


7. iShares U.S. Medical Devices ETF (IHI)

  • Expense Ratio: 0.42%
  • One-Year Return: 36.77%
  • Five-Year Annualized Return: 23.60%
  • Dividend Yield: 0.50%
  • Morningstar Rating: 5 out of 5 stars
  • Top Holdings Include: Abbott Laboratories (ABT), Thermo Fisher Scientific (TMO), Medtronic (MDT), Danaher (DHR), Stryker (SYK)
  • Years Up Since Inception: 12
  • Years Down Since Inception: 2

The iShares U.S. Medical Devices ETF gives investors access to a diversified portfolio of stocks in the medical device subsector.

Investments in the company center around products like glucose monitoring devices, robotics-assisted surgery technology, and devices that improve clinical outcomes for back surgery patients.

In order to provide this exposure, the iShares U.S. Medical Devices ETF tracks an index composed of domestic medical devices companies.

While the expense ratio on the fund is about average, its performance over the past 10 years has been anything but, with annualized returns throughout the period of more than 18%, earning it a perfect five-star rating from Morningstar.


8. iShares Global Healthcare ETF (IXJ)

  • Expense Ratio: 0.46%
  • One-Year Return: 19.93%
  • Five-Year Annualized Return: 11.51%
  • Dividend Yield: 1.27%
  • Morningstar Rating: 2 out of 5 stars
  • Top Holdings Include: Johnson & Johnson (JNJ), UnitedHealth Group (UNH), Roche Holdings (ROG), Novartis (NOVN), Abbott Laboratories (ABT)
  • Years Up Since Inception: 12
  • Years Down Since Inception: 3

If you’re not interested in choosing subsectors of the health care industry to invest in and would rather have widespread exposure to all sectors of health care in all economies, whether developed or emerging, the iShares Global Healthcare ETF is a strong pick.

The ETF comes with an expense ratio that’s nearly in line with the industry average, but its holdings are some of the most diverse in the health care ETF space.

Moreover, the IXJ ETF is known to produce relatively reliable gains year after year, closing in the green in 12 of the past 15 years.


9. Invesco S&P 500 Equal Weight Health Care ETF (RYH)

  • Expense Ratio: 0.40%
  • One-Year Return: 27.93%
  • Five-Year Annualized Return: 13.81%
  • Dividend Yield: 0.51%
  • Morningstar Rating: 3 out of 5 stars
  • Top Holdings Include: Illumina (ILMN), Eli Lilly (LLY), Alexion Pharmaceuticals (ALXN), Abiomed (ABMD), Catalent (CTLT)
  • Years Up Since Inception: 11
  • Years Down Since Inception: 3

Founded in 1935, Invesco is a fund manager that’s been around the block more than a few times. It’s all but expected that the firm would make an appearance in just about any “top ETF” list.

Based on the S&P 500 Equal Weight Health Care Index, the ETF provides diversified exposure to all health care stocks listed on the S&P 500. That means when you purchase shares of RYH, you’ll be tapping into a wide range of health care stocks.

In fact, the S&P 500 represents more than 70% of the market cap of the entire U.S. stock market, which is why it’s often used as a benchmark. So, by tapping into every health care stock listed on the index, you’ll be tapping into some of the highest quality U.S. companies in the space.


10. SPDR S&P Biotech ETF (XBI)

  • Expense Ratio: 0.35%
  • One-Year Return: 66.31%
  • Five-Year Annualized Return: 22.56%
  • Dividend Yield: 0.2%
  • Morningstar Rating: 3 out of 5 stars
  • Top Holdings Include: Vir Biotechnology (VIR), Novavax (NVAX), Ligand Pharmaceuticals (LGND), Agios Pharmaceuticals (AGIO), BioCryst Pharmaceuticals (BCRX)
  • Years Up Since Inception: 11
  • Years Down Since Inception: 3

Another fund offered up by State Street Advisors, the SPDR S&P 500 Biotech ETF is an impressive option. While it’s the last on this list, it’s also been the top performer on this list over the past year and the third-best performer in terms of annualized returns.

The XBI ETF was designed to track the S&P Biotechnology Select Industry Index, an index designed to track the biotechnology subsector of the health care industry. As a result, an investment in this fund means you’ll be investing in all biotechnology companies listed on the S&P 500.

Not to mention, while returns on the XBIO have been impressive, to say the least, the expense ratio on the fund is below the industry average.

While the SPDR S&P Biotech ETF isn’t the biggest income earner on this list, it is a strong play with a relatively consistent history of producing gains far beyond those seen across the wider market.


Final Word

Health care ETFs are a great option for investors who are interested in using their investments to create some good in the world.

Not only are the top ETFs in this space known for producing incredible returns, it feels good knowing that your investment dollars are helping companies produce medications, devices, and services designed to improve quality of life and extend the length of the lives of your fellow man.

Although investing in health care ETFs is a promising way to go about building your wealth in the stock market, it’s important to remember not all ETFs are created equal. So, it’s best to do your research, looking into key stats surrounding historic performance and expenses before diving into any fund.

Nonetheless, the ETFs listed above are some of the strongest performers in the health care industry and make a great first watchlist for the newcomer to health care ETF investing.

Source: moneycrashers.com

Obama’s Broad Based Refinancing Plan

It took a few weeks, but we’ve finally got concrete details regarding the Obama Administration’s so-called “Broad Based Refinancing Plan.”

First off, homeowners with Fannie Mae and Freddie Mac-backed mortgages who are unable to refinance their mortgage to take advantage of the near-record low mortgage rates will be able to go through HARP 2.0.

HARP 2.0 was introduced back in October to address the needs of homeowners who were too deeply underwater to meet the max loan-to-value ratio cap of 125 percent.

Borrowers with underwater mortgages backed by Fannie and Freddie will continue to go through this program assuming they meet the guidelines.

So nothing really changes here, except perhaps the actual adoption of the problem, which appears to have been sluggish thus far.

Refinancing Program for Non-GSE Mortgages

What about all the underwater borrowers with non-GSE mortgages, those that are not backed by Fannie and Freddie?

Well, Obama is “calling on Congress” to pass a new refinancing program geared toward these homeowners, managed by the FHA.

It would be open to all those with non-GSE mortgages (less jumbo mortgages) who have kept up with their mortgage payments.

The big distinction here is that it requires Congressional approval, which may be an uphill battle. So really it’s just an idea at this point, not a live program.

Still, these are the proposed guidelines:

  • Borrower is current on mortgage for past 6 months and hasn’t missed more than one payment in previous 6 months.
  • Minimum credit score of 580
  • Loan amount does not exceed max conforming loan amount
  • Loan is tied to a single-family, owner-occupied property

Borrowers who meet these very simple guidelines will apply via a streamlined process designed to make it easier and cheaper to refinance.

To determine eligibility, a borrower must only prove they are currently employed. However, even the unemployed can qualify if other requirements are met and they present “limited credit risk.”

A new tax return and appraisal is not necessary to refinance.

The Obama administration will work with Congress to set loan-to-value limits for loans submitted to the program.

While a number hasn’t been set, the Administration used 140 LTV as an example, noting that mortgage lenders could write down the balance of mortgages that exceed that number.

How Will the Refinance Program Be Paid For?

Good question. Well, the cost of the refinancing program is estimated to range anywhere from $5 to $10 billion (quite a range isn’t it).

To avoid any taxpayer burden, the refinancing plan will be fully paid for by the proposed “Financial Crisis Responsibility Fee,” which imposes a fee on the largest financial institutions.

This fee will be based on the size of the institution and risk of their activities.

The FHA, who is set to manage the program, will even pay for a borrower’s closing costs if they choose to go with a shorter-term mortgage, such as a 15-year mortgage.

Those who refinance into mortgages with terms of 20 years or less will have their closing costs paid for the FHA. The GSEs will do the same for HARP 2.0 borrowers.

The Administration hopes this will promote responsible borrowing and reduce the amount of time it takes for borrowers to get back above water.

HAMP Expansion

The existing Home Affordable Mortgage Program is also being expanded to help more borrowers receive assistance.

The first-lien mortgage debt-to-income ratio limit of 31% apparently eliminates certain borrowers from the program because it doesn’t address other monthly obligations.

So the program will consider secondary debt with more flexible debt-to-income criteria.

Additionally, rental properties will be added to the program so long as a tenant currently occupies them or the borrower intends to rent the unit.

Finally, the Treasury will offer bigger incentives to the owners of mortgages who agree to write down principal.

Currently, owners receive between 6 to 21 cents on the dollar for principal reductions. This amount will be tripled to 18 to 63 percent on the dollar.

Fannie Mae and Freddie Mac, who do not currently receive compensation for principal reductions on loan modifications, will also receive principal reduction incentives

The Losers

The obvious losers are holders of jumbo mortgages, who are more than likely homeowners in hard-hit states like California and Florida where home prices have plummeted.

There doesn’t appear to be any relief for this type of homeowner, which is certainly a concern.

Additionally, those behind on their mortgage payments won’t benefit from this new refinance program.

So really only borrowers who have been able to make their mortgage payment each month will benefit.

Also, investors who hold non-GSE loans won’t see any benefit. And those with poor credit scores will be out of luck.

In other words, plenty of homeowners will miss out here, but it’s a tall order to include everyone.

Homeowners Bill of Rights

For the record, the Obama Administration also introduced several other initiatives, including a “Homeowner Bill of Rights,” which will once again revamp and simplify mortgage disclosures.

This includes a foreclosure appeals process and guidelines that prevent conflicts of interest that wind up doing harm to homeowners, along with a joint investigation into loan origination and servicing abuses.

Major banks and the GSEs will also provide up to 12 months forbearance for unemployed borrowers.

Additionally, a pilot program that transitions foreclosed property into rental housing will be employed to stabilize neighborhoods and get the housing market out of its funk.

Final Thoughts

At first glance, it sounds like an awesome program to save housing once and for all. But upon closer inspection, a lot of homeowners are left out, as mentioned above.

Along with that, the borrowers that are targeted may not really be the ones that need help.

The reality is that millions of people who are currently behind on their mortgages are going to lose their homes. And this program won’t change that. It’s simply going to help those on the brink, or even those that don’t even necessarily need assistance to make their mortgage payments, but want to catch a break after buying at the wrong time.

Sure, if all goes well, it could reduce foreclosures to some extent, bolster home prices somewhat, and get more money flowing into the economy. But it still requires Congressional approval to work. And even then, we won’t see a housing recovery without meaningful economic improvement.

Source: thetruthaboutmortgage.com

What Is A Conventional Home Loan?

Nothing compares to scrolling through listings until you find the home with the perfect garden, garage, and floors. Then comes the less fun part: figuring out how to finance your home purchase.

For the vast majority of people, acquiring a new home means taking out a mortgage, a loan for the part of the house cost that isn’t covered by the down payment.

U.S. homeownership hovers near 66%, and millennials continue to be the biggest share of buyers. What kind of loan do most go for? The 30-year fixed-rate mortgage. But conventional loan requirements vary, and some may find that a government-sponsored loan is a better fit.

Let’s take a closer look at conventional loan requirements and the difference between FHA and conventional loans.

Conventional Mortgages Explained

Conventional mortgages are insured by private lenders, not a government agency, and are the most common type of home loan.

Then there are government-guaranteed home loans. FHA loans are more commonly used than VA loans (for service members, veterans, and eligible surviving spouses) and USDA loans (rural housing). Government loans are often easier to qualify for.

Taking out a conventional home loan means that you are making an agreement with a lender to pay back what you borrowed, with interest.

And unlike with an FHA loan, the government does not offer any assurances to the lender that you will pay back that loan. That’s why lenders look at things like your credit score and down payment when deciding whether to offer you a conventional mortgage and at what rate.

See how SoFi can help make your
dream home a reality.

Two Main Types of Conventional Loans

Fixed Rate

A conventional loan with a fixed interest rate is one in which the rate won’t change over the life of the loan. If you have a “fully amortized conventional loan,” your monthly principal and interest payment will stay the same each month.

Although fixed-rate loans can provide predictability when it comes to payments, they may initially have higher interest rates than adjustable-rate mortgages.

Fixed-rate conventional loans can be a great option for homebuyers during periods of low rates because they can lock in a rate and it won’t rise, even decades from now.

Adjustable Rate

Adjustable-rate mortgages have the same interest rate for a set period of time, and then the rate will adjust for the rest of the loan term.

The major upside to choosing an ARM is that the initial rate is usually set below prevailing interest rates and remains constant for six months to 10 years.

A 7/6 ARM of 30 years will have a fixed rate for the first seven years, and then the rate will adjust once every six months over the remaining 23 years. A 5/1 ARM will have a fixed rate for five years, followed by a variable rate that adjusts every year.

An ARM may be a good option if you’re not planning on staying in the home long term. The downside, of course, is that if you are, your interest rate could end up higher than you want it to be.

Most adjustable-rate conventional mortgages have limits on how much the interest rate can increase over time. These caps protect a borrower from facing an unexpectedly steep rate hike.

Conventional Home Loan Requirements

Conventional mortgage requirements vary by lender, but almost all private lenders will require you to have a cash down payment, a good credit score, and sufficient income to make the monthly payments.

Many lenders that offer conventional loans require that you have enough cash to make a decent down payment. Even if you can manage it, is 20% down always best? It might be more beneficial to put down less than 20% on your dream house.

You’ll also need to demonstrate a good credit history. For example, you’ll want to show that you make loan payments on time every month.

Each conventional loan lender sets its own requirements when it comes to credit scores, but generally, the higher your credit score, the easier it will be to secure a conventional mortgage at a competitive interest rate.

Most lenders will require you to show that you have a sufficient monthly income to meet the mortgage payments. They will also require information about your employment and bank accounts.

How Do FHA and Conventional Loans Differ?

One of the main differences between FHA loans and conventional loans is that the latter are not insured by a federal agency.

FHA loans are insured by the Federal Housing Administration, so lenders take on less risk. If a borrower defaults, the FHA will help the lender recoup some of the lost costs.

FHA loans are easier to qualify for, and are geared toward lower- and middle-income homebuyers. They require at least 3.5% down.

Additionally, the loans are limited to a certain amount of money, depending on the geographic location of the house you’re buying. The lender administering the FHA loan can impose its own requirements as well.

An FHA loan can be a good option for a buyer with a lower credit score, but it also will require a more rigorous home appraisal and possibly a longer approval process than a conventional loan.

Conventional loans require private mortgage insurance if the down payment is less than 20%, but PMI will automatically terminate when the loan balance reaches 78% of the original value of the mortgaged property, unless the borrower asked to stop paying PMI once the balance reached 80% of the original property value.

FHA loans require mortgage insurance, no matter the down payment amount, and it cannot be canceled unless you refinance into a conventional loan.

The Takeaway

A conventional home loan and FHA loan differ in key ways, such as credit score requirements. If you’re ready to make your dream house a reality, you’ll want to size up your eligibility and your mortgage options.

SoFi offers fixed-rate home loans with as little as 5% down and terms of 10, 15, 20, and 30 years.

It takes just two minutes to get prequalified online.



SoFi Home Loans
Terms, conditions, and state restrictions apply. SoFi Home Loans are not available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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Source: sofi.com

How to Become a Paid Caregiver for a Family Member

Ready to stop worrying about money?
The American Council on Aging strongly recommends finding a Medicaid planner to help with applying for caregiver roles and other benefits.
Genworth, a Virginia-based provider of long-term care insurance, conducts an annual survey on the cost of care for retirees. The median price for one month in a private room in a nursing home in 2020 was ,821. A semi-private room cost ,756 a month.
Medicaid eligibility in general, not just for these programs and waivers, is not consistent across the country. A general rule of thumb as of 2021 is senior applicants can’t have more than ,382 in income and ,000 in assets.
State-specific eligibility can be found here. If a senior is already enrolled in Medicaid, the next step is contacting their state’s Medicaid office.

How to Become a Paid Caregiver for a Family Member

“The vast majority of older adults want to stay in their homes as they age, and allowing them to pay a friend or family member to help with their daily needs can make that possible,” said Susan Reinhard, senior vice president of AARP’s Public Policy Institute. “The pandemic provided a push for states to expand this option, and we hope many of them will make their policy changes permanent.
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  • Home and Community Based Services Waivers are offered by the majority of states. But many have a limited number of these waivers, so there may be a waiting list. This waiver allows the Medicaid participant to hire a friend or relative as a personal care assistant. This is also referred to as the 1915 C waiver.
  • The Self-Directed Personal Assistance Services State Plan Option allows a Medicaid participant to hire, train and pay the personal care assistant they choose. Based on the budget Medicaid offers, the participant decides what the assistant is paid. One unique part of this option is the participant pays employment taxes on the assistant. An intermediary helps with this financial aspect of the process.
  • Community First Choice, also called the 1915 state plan option, actually applies to Medicaid recipients who are in nursing homes but need personal care services. Instead of paying extra for a staff member at the facility to provide that care, this option allows friends or family to help with bathing, grooming, light housekeeping and transportation. According to the American Council on Aging, the following nine states offer this option: Alaska, California, Connecticut, Maryland, Montana, New York, Oregon, Texas, and Washington.
  • With the Caretaker Child Exception, Medicaid doesn’t pay the adult child a wage to care for their parent but allows the parent’s house to be transferred to the adult child as a form of payment. This comes into play when an elderly Medicaid participant is moving into a nursing home but wouldn’t qualify for Medicaid because they own their home.

Learn More About Medicaid 

Clients must show they need a certain level of care, and caregivers must show they are capable of providing that care. If the client needs medical care and the loved one isn’t trained for that, they cannot be designated as the caregiver.
Source: thepennyhoarder.com
Katherine Snow Smith is a staff writer for The Penny Hoarder.
“Paying family caregivers is a solution that saves states money and meets the growing need for long-term care.” <!–

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What is Debt Consolidation and How Does it Work?

If you’re repaying a variety of different debts to different lenders, keeping track of them and making payments on-time each month can be a hassle. It isn’t just tough to keep track of these various debts, it’s also difficult to know which debts to prioritize in order to fast track your debt repayment. After all, each of your cards or loans have different interest rates, minimum payments, payment due dates, and loan terms.

credit card debt.

It consolidates all of those existing loans into one loan, which means you go from having several monthly payments and various interest rates to just one. This is not the same as debt or credit relief, where a credit counselor helps you reduce interest rates or eliminate debt altogether. Credit relief programs can help you consolidate your debt, but they aren’t getting you a new loan—it’s only consolidation.

While you are able to consolidate many different types of loans, the process for consolidating student loans is different. Keep reading to understand how they are different.

Applying For a Debt Consolidation Loan

When choosing a debt consolidation loan, look for one that has an interest rate and terms that fit into your overall financial picture. The overall goal when consolidating debt is to save you money, either on interest in the long term, or on monthly payments in the short term (which may end up making it more costly over the life of the loan).

Once you apply and are approved for a debt consolidation loan, it may take anywhere from a few days to a week to get your money. Sometimes the lenders will pay your debts off directly, other times they will send you the loan money, and you’ll pay the debts off yourself.

The Benefits Of Debt Consolidation

The most significant benefit of consolidating debt is that it is possible to qualify for a more competitive interest rate, which could help save money over the life of the loan. Debt consolidation loans tend to come with lower interest rates than credit cards.

A debt consolidation loan may be an option to consider if your monthly payments are feeling way too high. When you take out a new loan, you can extend the term length to reduce how much you pay every month.

It’s important to note that the longer the term length of your loan, the more you’re likely to pay in interest over the life of your loan. Still, if you’re struggling with your monthly payments, it might be worth it to consolidate your debt and extend your repayment timeline. This way, you won’t be struggling to stay afloat every month, and you’re less likely to miss payments.

Alternately, you could shorten your term length if you’re trying to aggressively pay off your debt and get rid of it more quickly. This could help reduce the cost of interest over the life of the loan.

Consolidating could potentially help improve your credit score. That’s because if you carry debt on credit cards or lines of credit, your score might suffer if you’re using more than 20% to 30% of your available credit. By taking out a consolidation loan and depending on how much you qualify for, you could be creating more available credit, instead of racking up a credit card tab.

Finally, if some of your current debts are secured loans, debt consolidation might be worth considering because they are typically unsecured loans. With secured loans, you use an asset like a home or car to guarantee the loan. If something happens and you cannot repay the loan, then the bank can seize the asset that is acting as collateral. An unsecured debt consolidation loan can help you avoid putting other assets on the line.

Consolidating Credit Card Debt

Tired of dealing with mounting credit card debt? Consolidating credit card debt is the most obvious form of debt consolidation. This is because people can save a considerable amount by consolidating their high interest credit card debt with a new lower-interest loan.

The first step is generally applying for a credit card consolidation loan. There are many banks, credit unions, and online lenders who offer loans for consolidating debt. In some cases, the application process can be completed online.

Credit Card Interest Calculator.

For example, say a borrower has $10,000 on a credit card, paying 20% in interest, and the minimum payment is 4%. If they pay the minimum statement balance each month, it would take 171 months, or 14 years and three months, to pay it back. It would cost a total of $6,989.36 in interest.

But if you consolidate that debt with a new loan that has an 8% interest rate and a 10-year term, you will pay $4,559.31 in interest. Not only would you save money in interest by consolidating your credit card debt, but you could potentially improve your credit score by paying back your consolidated loan on time.

Who is Eligible for a Personal Loan for Debt Consolidation?

Borrowers who have one or more sources of debt where the interest rate is higher than 10%, it may be worth exploring a personal loan. While there’s no guarantee that you’ll find a lower interest rate, you can’t know unless you get quotes from a few lenders. (And these days, it’s a pretty painless process because lenders often offer quotes online. If it proves difficult, find yourself a different lender.)

Those with the best credit scores will typically qualify for the best rates on their new personal loans, but don’t let an average or even low score keep you from requesting quotes. This is especially true if you have more than $10,000 in credit card debt and those cards charge exorbitant interest rates.

Also know that credit score isn’t the only data point that’ll be considered in determining whether someone qualifies for a loan and at what rate. Potential lenders typically also consider employment history and salary, and other financial information they deem important in determining loan-worthiness.

A personal loan isn’t for everyone. If you’re doing it only for convenience and there isn’t a legitimate financial motive, it’s probably not worth it. Instead, focus that energy on paying back the money you owe as efficiently as possible.

While personal loans can be a great tool to reduce interest payments, it doesn’t reduce the actual debt you owe. If you’re looking to get out of debt so you can focus on other financial goals, but the interest rates on your debt are making it nearly impossible, a personal loan could be helpful.

When Consolidating Debt Makes Sense

Which types of debt make the most sense to consolidate? Any debt that has high interest rates or unappealing terms. If the loan term is longer than you want it to be, if the interest rate is variable and you’d prefer fixed, if your loan is secured and you’d rather it not be attached to collateral—these are all reasons that might merit debt consolidation.

There are many loans to consolidate debt, but some may have their drawbacks. Make sure you shop around when looking for consolidation lenders, and only choose a reputable lender that you know you can trust.

Some people considering a personal loan feel overwhelmed by having multiple debt payments every month. A personal loan could lighten this load for two reasons. For one, it may be possible to lower the interest paid on the debt, which means it’s potentially possible to save money in interest over time.

Secondly, it can also make it possible to opt for a shorter term, which could mean paying off credit card debt years ahead of schedule. If it’s possible to get lower interest than you have on your current debt, or a shorter term on your debt to pay it off faster, a personal loan could be worth looking into.

On the other hand, you’ll also want to be careful about fees that might come with your new loan, separate from the interest rate you’ll pay. For example, some online lenders charge a fee just to take out a personal loan, and some don’t, so you’ll want to do your research.

Debt Consolidation for Student Loans

It’s possible to consolidate student loans like other forms of debt. Consolidating student loans with a private lender is often referred to as “refinancing.”

If you have only federal student loans, you can consolidate them with a Direct Consolidation Loan. This program allows borrowers to combine all their federal loan into a single, consolidated loan. The new interest rate is the weighted average of the existing loans, so it won’t result in a decreased interest rate. Direct Consolidation loans still qualify for many federal loan protections and programs.

Borrowers with both private and federal loans are able to roll them all into one refinanced loan with a private lender. Student loan refinancing could potentially allow you to qualify for a lower interest rate than the federal loan consolidation program.

The major drawback is that refinancing your federal loans with a private lender means you give up your federal student loan protections, including access to the income-driven repayment programs, deferment, and forbearance.

The Takeaway

Debt consolidation allows borrowers to combine a variety of debts, like credit cards, into a new loan. Ideally, this new loan has a lower interest rate or more preferable terms to help streamline the repayment process.

In the long term, debt consolidation could potentially help people spend less money over the life of the loan, if they are able to secure a lower interest rate on the consolidation loan.

One type of debt consolidation is student loan refinancing. This could help borrowers streamline their student loan repayment by consolidating debt into one loan. Depending on the terms and interest rates, borrowers could also spend less money in interest long-term.

Thinking about consolidating your debt or refinancing your student loans? SoFi loans can help you get there—and may save you money along the way.



SoFi Loan Products
SoFi loans are originated by SoFi Lending Corp (dba SoFi), a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law, license # 6054612; NMLS # 1121636 . For additional product-specific legal and licensing information, see SoFi.com/legal.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’swebsite .
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi Student Loan Refinance
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. A hard credit pull, which may impact your credit score, is required if you apply for a SoFi product after being pre-qualified.
IF YOU ARE LOOKING TO REFINANCE FEDERAL STUDENT LOANS PLEASE BE AWARE OF RECENT LEGISLATIVE CHANGES THAT HAVE SUSPENDED ALL FEDERAL STUDENT LOAN PAYMENTS AND WAIVED INTEREST CHARGES ON FEDERALLY HELD LOANS UNTIL THE END OF SEPTEMBER DUE TO COVID-19. PLEASE CAREFULLY CONSIDER THESE CHANGES BEFORE REFINANCING FEDERALLY HELD LOANS WITH SOFI, SINCE IN DOING SO YOU WILL NO LONGER QUALIFY FOR THE FEDERAL LOAN PAYMENT SUSPENSION, INTEREST WAIVER, OR ANY OTHER CURRENT OR FUTURE BENEFITS APPLICABLE TO FEDERAL LOANS. CLICK HERE FOR MORE INFORMATION.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit.
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Source: sofi.com

OhmConnect Will Pay Californians to Skip Laundry Day

As if you needed another excuse to not do the laundry today, here’s a totally valid one — Californians can actually make money for skipping a load.

How? Well, just by wearing your jeans a third (or fourth) time, you’d be giving the energy grid a break. And one company wants to say thanks — in cold hard cash.

If you have a utility account with PG&E, SDG&E or Southern California Edison (which cover nearly every county in California), a company called OhmConnect will pay you to hold off on doing laundry.

OhmConnect is a free service that will text you when a lot of people in your area are using power. Your job is to simply use less electricity for about an hour a week. You could turn off your A/C, grill chicken outside for dinner or — you guessed it — wait to do your laundry until tomorrow, during odd hours.

Here’s How to Get Cash from OhmConnect

  1. Sign up for a free OhmConnect account here.
  2. Sync it with your online utility account through PG&E, SDG&E or Southern California Edison. You must have an online account with one of these electric companies to qualify for OhmConnect.
  3. Wait for OhmConnect to text you during high-energy-consumption hours
  4. Head outside, or at least turn the TV off until the hour is up. Heck, you can even play games on your phone during this hour — just resist plugging in any electronics.
  5. Profit! OhmConnect rewards you with cash, prizes, gift cards and more.

This all works because the California electricity market (or California ISO) pays OhmConnect to help them avoid turning on an expensive, dirty power plant. The company then passes the savings on to you.

If you want to automate the process, you can even connect a smart thermostat or plug and let OhmConnect do this automatically. Even connecting some of your biggest energy-hogging devices to a smart plug can help you save $350 a year — effortlessly.

But you don’t need a smart device to save: The more you do, the more money you can make.

Enter your ZIP code here to open a free OhmConnect account, then sync it with your online utility account to start earning cash. Your whites can wait until tomorrow.

Kari Faber is a staff writer at The Penny Hoarder.

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Source: thepennyhoarder.com