Flexible spending credit card

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.

What Is a Flexible Spending Credit Card?

A flexible spending credit card is similar to a regular credit card, except you have a variable credit limit. This limit changes based on your income, credit score and payment history. It allows users to potentially go over their regular credit card limit if the purchase meets specific requirements. The card issuer will approve or deny the overspending purchases.

First, the user’s regular spending habits are analyzed, and then information such as their recent payment history and income are considered to decide if the purchase is acceptable. This is very different from a regular credit card that has a set limit. When users try to go over a standard credit card’s limit, they’re often denied the purchase and charged a fee.

A flexible spending credit card is not related to a flexible spending account (FSA) in any way, so don’t be confused about that. While the terms are similar, FSAs are saving accounts related to healthcare costs and insurance.

A flexible spending credit card has a limit that changes based on your income, credit score and payment history.

Flexible Spending Cards vs. No Preset Limit (NPSL) Cards

A “no preset limit” credit card (NPSL) has no stated limit attached to the credit card. In actuality, there is a limit, but that number is never shared with the cardholder. Only some NPSLs report the card limit to credit bureaus.

A flexible spending card does have a stated limit that the cardholder is aware of and that limit is reported to credit bureaus.

Both credit cards allow the user to go over their credit limit without penalty. Additionally, both kinds of cards carry some uncertainty with them. With a flexible spending card, you might not be certain that charges above your limit will be approved unless you’re confident you’ve been maintaining good credit card behavior. And with an NPSL, you never know your limit, so you’re uncertain when you’ll max it out.

Pros of Flexible Spending Cards

You Can Go Over Your Limit

With a typical credit card, you can’t go over your limit but you do get charged a fee for trying to do so. A flexible spending card lets you go over your limit (if you’ve been making frequent payments and maintaining a steady income). This is great for individuals who find themselves purchasing big-ticket items every couple of months. Rather than trying to get approved for a credit card limit increase, your flexible card lets you make the large payments when they occur.

Card Terms Are More Customized

How your flexible spending card works for you will depend on you. If you are responsible and both pay off your card every month and don’t consistently overspend for your income bracket, your occasional big purchases will be approved.

Conversely, if you start to be irresponsible with your flexible spending card, the issuer will stop approving purchases over your limit. That’s because the issuer studies your shopping habits, payment history and income to determine if you can afford to go over your limit.

Overall, a flexible spending credit card offers more customized card terms. Many people don’t want to go through the hassle of increasing their credit limit every time a big purchase comes up. Additionally, some people recognize that having a high credit limit might be too tempting. The flexible card option allows the credit card to be there as a contingency plan. You can go over when needed, but you don’t have to most of the time.

Cons of Flexible Spending Cards

You Need to Understand the Fine Print

Some of the fine print might take you by surprise. For example, these types of cards will analyze your situation every time you go over your limit. That means that just because you were approved to go over your limit before doesn’t guarantee it’ll happen the next time. Additionally, there may be fees and automatically modified limits you may want to watch out for.

Your Credit Score Might Be Affected

Unfortunately, there’s a strong possibility that a flexible spending card will negatively impact your credit score. This mostly stems from how your card’s limit is reported to the credit bureaus.

First, this type of card can impact your credit utilization ratio. Credit utilization accounts for almost one-third of your credit score. This ratio looks at how much credit you use versus how much is available to you. Ideally, you want to keep your credit utilization ratio at 30% or lower.

As flexible spending cards usually do not report the credit limit to credit bureaus, it can harm your credit score. That’s because it looks like you’re using a lot of credit without the bureau knowing your limit. For example, if you’re spending $2,000 on your flexible card when you have a limit of $10,000, that’s a decent credit utilization ratio at 20 percent. However, the credit bureau doesn’t know your limit, so it’s being recorded that you’re spending $2,000 without the benefit of the $8,000 buffer.

Alternatively, maybe your flexible spending card does report the limit to the credit bureau. In this case, if you spend way over your limit—even though it’s allowed by your card—the bureau will ding you for it. The bureau doesn’t distinguish between going over on a traditional credit card and a flexible credit card; it just sees someone that went over their allowed limit.

It’s essential you check your credit score once a month to stay on top of how your card impacts you. Note that a flexible spending credit card is sometimes reported in the “Other Debt” section of your credit report.

Pros and cons of flexible credit cards

Where to Get a Flexible Spending Credit Card

You can get a flexible spending credit card from most major financial institutions. However, this type of card isn’t just given out to anyone. It’s typically reserved for people with an excellent credit score and a good financial track record.

If you like a card and its terms but don’t want the flexible limit, you can sometimes decline the flexibility and request a hard credit limit. However, note that if you do this, you may not be able to reverse the decision.

If you ever notice that your credit card is suddenly listed as “flexible spending” in your account, you should immediately contact your card provider for more information. This occasionally happens, but it’s not something you just have to accept. You can ask for the card to be reverted to a hard-limit traditional credit card.

Be Smart With Your Card

No matter what kind of card you have, you should always be careful with your credit cards and how you use them. Always try to keep a low credit utilization ratio, and always pay off as much of your balance(s) as you can every month. You especially want to do this because you don’t want to accrue interest. Interest on credit cards can range anywhere between 15 and 24 percent. If you’re irresponsible with your card and miss payments, make late payments or max out your card, it can impact your credit score. And if you have a low credit score, it can affect your ability to get a mortgage, car financing, student loans and more. By being smart with your credit cards, you’re showing financial institutions that you can be trusted with money. To learn more about credit and credit repair, check out Lexington Law’s resources today.


Reviewed by Cynthia Thaxton, Lexington Law Firm Attorney. Written by Lexington Law.

Cynthia Thaxton has been with Lexington Law Firm since 2014. She attended The College of William and Mary in Williamsburg, Virginia where she graduated summa cum laude with a degree in International Relations and a minor in Arabic. Cynthia then attended law school at George Mason University School of Law, where she served as Senior Articles Editor of the George Mason Law Review and graduated cum laude. Cynthia is licensed to practice law in Utah and North Carolina.

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

Will a title loan negatively affect your credit score?

When you’re in a position where you need cash fast, title and cash loans can seem like a light at the end of the tunnel. After all, receiving all the money you need in hand is difficult to turn down and you’re sure that you can pay back the balance by your next paycheck. Even with this certainty, you may be wondering: what effect do title loans have on your credit score? Like most financial-related questions, the answer isn’t written in black in white.

What is a Title Loan?

Before we talk about the effect that title loans have on your credit, let’s explore what a title loan is and how it works. Title loans involve using the title of your car as collateral for a loan. So if you fail to pay your loan within the set agreement, you will essentially lose your vehicle.

Financial experts often consider title loans as a poor financing choice because of their high annual percentage rates, but if you know that you will have the cash to pay back the loan before the loan is due, it can be a viable solution in an urgent situation. To avoid losing your vehicle, it’s essential that you make your payments in full and early if possible.

Car Title LoansCar Title Loans

Understanding Secured & Unsecured Loans

Title loans are treated differently than traditional bank loans because they are secured. A secured loan means that you have provided your lender with collateral. In the case that you cannot manage your loan, this provides the creditor protection against their investment. These types of agreements are common with paycheck loans, pawn shop loans, car title loans, and any other loan types that require collateral.

Conversely, unsecured loans do not require any collateral. These types of loans are more traditional and provided by larger banking institutions. Instead, unsecured loans approvals are based solely on creditworthiness and trust. All unsecured loans require a credit check.

How Toes a Title Loan Affect My Credit?

Title loans don’t have a significant effect on your credit. Some title loan lenders don’t even require a credit check before they grant you an approval. This type of financing is often a solution for individuals with low credit who need money fast.

While making payments on time will generally help improve your credit, this isn’t the case with title loans. On the other side of things, occasionally missing a title loan payment will not automatically lower your score either- as long as your loan specialist does not repossess your vehicle.

The only time a lender may report your car title loan to the credit bureaus is under the circumstance of vehicle repossession. Losing your car is not only damaging to your life, but can affect your credit negatively for years.

What are my options if I can’t meet my title loan requirements?

If you find yourself in a hardship where you cannot pay your title loan it may be tempting to walk away – they don’t count against your credit score, right? Besides losing your car, failing to meet your loan agreements can negatively impact your credit and your finances.

The consequences of walking away from your title loan will ultimately depend on your agreement with your lender. In many cases, if you offer up your car for repossession voluntarily, the lender will not report the failed agreement on your credit score. However, many lenders don’t actually want your vehicle. Auctioning off your car may be less profitable than forcing you to make the payments. If this is how your lender prefers to operate, you may find difficulty in getting out of your title loan.

Before you sign any contracts, it’s important to understand the terms of your loan entirely. Your agreement should detail whether or not your lender has the right to refuse your collateral in exchange for payment. While this type of arrangement won’t necessarily affect your credit, failing to understand the terms of your agreement and communicate with your lender could have a negative impact on your finances.

Source: creditabsolute.com

Tips to Help You Get Out of Debt Quickly

Getting Out of DebtGetting Out of Debt

Getting out of debt doesn’t happen overnight, but that doesn’t mean there aren’t steps that you can take to get out of debt fast. With the right determination and dedication, you cannot only learn how to conquer your debt but create positive habits that keep you out of debt along the way.

No matter where your finances are or what your circumstance is, getting out of debt can feel overwhelming. But it doesn’t have to be that way. In fact, there are just as many people taking responsibility and control of their debt as there are people getting into debt. Not only that, but they are putting tried and true methods to use to get out of debt in a short period of time.

Are you struggling with a cycle of debt? Follow these simple steps to start eliminating your debt and take control of your finances today.

1. Stop borrowing money.

It may seem like a no-brainer, but a significant number of people fall into the habit of using debt to fund their lifestyle. If you want to get out of debt fast, the first step is avoiding any and all situations that put you in debt. This means no more applying for credit cards, financing furniture, and test driving cars that you can’t afford to pay in cash. Removing the possibility of putting additional strain on your finances will help you focus on your financial responsibilities at hand. Borrowing can also lead to a lower credit score which can make it even more difficult to get out of debt as your interest rates and payments will be much higher.

2. Start an emergency fund.

Most people are surprised that one of the first steps to get out of debt doesn’t have anything to do with making a payment to their creditors. Getting out of debt starts with making smart financial situations. “Why do I need an emergency fund?”, you might be wondering. Well, if an emergency occurs in your life where are you going to get the money to pay for it? In many cases, credit card debt begins as funding for unexpected emergencies. If you are going to get yourself out of debt, you need a safety net in case something goes wrong – emergencies funds give you the buffer you need between you and your debt.

3. Create a realistic budget

Creating a budget around your income and expenses is key to getting out of debt quickly. Having a realistic picture of your finances and what you might be able to manage concerning a payment every month can help you conquer your financial goals. The goal of creating a budget is discovering if you have a surplus (money left over) or deficit (in the negative) based on your income and bills. Over time, you want to increase your surplus to pay down your debt. There are several ways to do this, such as finding a way to earn some extra cash or eliminating unnecessary bills.

4. Get organized.

There are several approaches you can take when paying off your debt. The first is making a list of your debts from smallest to largest and paying off your lowest obligations first. This is an excellent way to start eliminating your debts and reduce the number of payments you are making each month, and therefore simplifying your financial life.

The second method is known as laddering. This method is favorable because it saves you the most money over time. Start by making a list of your debts, beginning with the highest interest rate and ending with your lowest interest rate debt. Paying off your debts with the highest interest rates first makes sense financially because it saves you in costs yet to be incurred.

Regardless of the method of debt repayment you choose, or if you decided to create a systematic hybrid between the two, it’s important to stick to your commitments. Before you know it, your debt will start reducing and you will be one step closer to your financial goals.

Source: creditabsolute.com

16 Best Ways to Save Money at Pottery Barn in 2021 – Discounts & Sales

If you’ve ever gone shopping for home decor, furniture, and bedding, you’ve probably visited a Pottery Barn.

The Williams Sonoma subsidiary is best known for its upscale products and stunning floor displays. Since its founding in 1949, Pottery Barn has branched out into Pottery Barn Kids and Pottery Barn Teens to appeal to a wider audience.

Despite these changes, Pottery Barn has always maintained a premium status for their brand. But if you’re shopping on a tight budget, there are numerous creative ways to save money at Pottery Barn.

Between in-store hacks and ways to save money on furniture and home furnishings, you probably don’t have to pay full price when you hit up this popular retailer.

Best Ways to Save Money at Pottery Barn

Pottery Barn is unlikely to compete on pricing with more affordable retailers like Ikea. But you don’t have to pay full price just because a store is stylish.

Many money-saving Pottery Barn hacks can help you make your next home furnishings upgrade affordable without sacrificing quality.

1. Join The Key Loyalty Program

The easiest saving trick every shopper can use is to join The Key member rewards program. This loyalty program extends to Williams Sonoma’s family of brands, meaning it covers Williams Sonoma and Pottery Barns along with Mark and Graham, and West Elm.

Joining The Key is free. You start by picking your favorite brand and then sign up for The Key through that brand’s website. To sign up, provide your name, email, address, phone number, and birthday.

Once you’re a member, benefits include:

  • Earring 3% cash back across the family of brands
  • Getting exclusive access to new deals and releases
  • Using Pottery Barn and Williams Sonoma’s free design service

You can redeem cash back as store credit across any Williams Sonoma family store once you reach $15. You can use cash-back rewards from The Key program with your cash-back credit card rewards to increase your savings, and you can redeem your balance online or in-store.

2. Follow Local Stores on Social Media

You can follow Pottery Barn on social media if you want general updates about sales and country-wide initiatives. However, truly frugal shoppers are better off following their local stores.

Local store pages are useful for several reasons. For starters, you can reference them to find store hours or a contact number and to check whether the store’s open on holidays.

Additionally, local stores post photos of their inventory and sales. That’s when you can find specific pieces on clearance or products that are only in stock at your preferred location.

But note that not every Pottery Barn has a local Instagram, Facebook, or Twitter.

3. Sign Up for Pottery Barn Emails

If you want a low-effort way to save, sign up for the Pottery Barn email list.

Subscribers receive information about exclusive sales and promotions, so you can wait for a sale or event before you shop. You also learn about new Pottery Barn products and upcoming store events.

4. Use Online Pottery Barn Coupons

Another trick to save money at Pottery Barn is to use online coupons.

There are numerous online coupon databases you can search for deals, including:

These websites let you activate online coupon codes before shopping, potentially earning percent discounts and perks like free shipping.

Similarly, you can also use shopping browser extensions for online shopping to automatically apply available coupons at checkout. Two popular browser extensions that work with Pottery Barn are Capital One Shopping and Honey.

Both extensions apply coupon codes at checkout, ensuring you don’t miss out on savings. Both platforms also let you earn rewards by shopping at hundreds of partner retailers.

An advantage of using extensions over coupon websites is that you don’t waste time manually searching for coupon codes on the Internet. However, it’s important to note that coupon codes don’t always work, and you might find a particular website or extension works better for you than others.

Capital One Shopping compensates us when you get the Capital One Shopping extension using the links we provided.

5. Shop With Discount Gift Cards

If you shop at Pottery Barn frequently or are planning a shopping spree, buying discount gift cards is a simple way to save more money.

People regularly sell unwanted gift cards to marketplaces that then resell them at a discount. Usually, discounts range from 1% to 2%, so you can buy a $50 Pottery Barn gift card for around $48.

That’s not a lot, but for larger purchases, discount percentages often increase. For example, on some discount gift card websites, you can find $100 and $500 Pottery Barn gift cards with $10 to $20 discounts.

Some popular gift card marketplaces include:

Gift card availability and denominations vary based on supply and demand. Raise generally has the most extensive collection, and you can usually find Pottery Barn gift cards ranging from $25 to $100.

Plus, new members get a 10% discount bonus with the coupon code “FIRST” for a maximum savings of $20.

Since more significant discounts provide the most savings, the key is to plan your Pottery Barn shopping trip. That way, you know exactly how much money you need and don’t overspend on gift cards.

6. Understand Shipping Rates

At Pottery Barn, shipping costs depend on your total order price and whether you want standard shipping or next-day shipping. Standard shipping arrives in four to five business days and upgrading to next-day costs $26.

To potentially save more, consult Pottery Barn’s shipping rates and fees table. For orders under $200, you’re looking at up to $21 in shipping fees. However, orders of $200.01 or more charge 10% in shipping until you reach $3,000 or more, at which point shipping costs drop to 5% of your total order value.

If you’re on a massive Pottery Barn shopping spree, consider what a 5% or 10% shipping rate does to your bill.

For example, at $2,900, you’re looking at $290 in shipping costs. However, spending $100 more to reach $3,000 brings shipping costs to $150, netting you $40 in total savings.

If you’re close to a shipping-reduction threshold but don’t need anything else, ask friends and family if they need anything or think about any upcoming gifts for birthdays and holidays. But crunch the numbers.

If buying a low-cost product still saves you significant cash, it’s worth it. You can always donate unwanted merchandise and get a charitable donation tax deduction. Just check the sale and clearance section for deals.

Finally, look for products that are available for pickup when shopping online. If you live near a Pottery Barn, making the drive is probably worth it to avoid paying for shipping.

7. Shop on Clearance

If you want to find Pottery Barn products at a discount, your best bet is to wait for a clearance sale or floor sales event.

Pottery Barn’s website has a sales section, so you can begin your search for deals online. But visiting your local Pottery Barn allows you to find markdown products the retailer doesn’t advertise online.

Occasionally, Pottery Barn also sells floor models during floor sales events. That includes furniture and other inventory previously used for in-store displays, which the company can’t sell as new. This inventory often has minor scratches or dents but is sold at a discount.

If you don’t mind buying furniture with a potential scratch or two, floor sales are worth keeping an eye on. Alternatively, check the online clearance section regularly to look for deals.

8. Shop Off-Season

Chances are you’ve tried shopping off-season to save money on clothing or back-to-school supplies. But have you ever considered shopping off-season for home decor?

Like other retailers, Pottery Barn rotates their floor displays and inventory to match the upcoming season. So you can buy a set of summer linens and bright throw pillows as you enter the fall to save money in the long run.

9. Visit a Pottery Barn Outlet Store

Pottery Barn has several outlet stores where you can find floor models, returns, overstocked inventory, and slightly damaged or worn inventory it can’t sell in regular stores.

Essentially, outlet stores help Pottery Barn liquidate excess and gently used merchandise, which means you can potentially find discounts.

Currently, the following states have one or more outlet locations:

  • Arizona
  • California
  • Georgia
  • Illinois
  • Massachusetts
  • Michigan
  • Missouri
  • New York
  • Ohio
  • Pennsylvania
  • South Carolina
  • Tennessee
  • Texas
  • Virginia

Just remember: Outlet prices aren’t always lower than the regular retailer, and you should also factor travel time into your bargain hunt. When in doubt, call ahead and ask for specific pricing on pieces you’re considering and for a store attendant to check product availability.

You can also sign up for Pottery Barn Outlet emails to receive outlet store-specific newsletters about new product arrivals and deals.

10. Buy Gently Used Pottery Barn Products

If you don’t live near an outlet, you can shop at companies that resell used and like-new Pottery Barn products at lower prices.

Several websites where you can find used Pottery Barn products include:

You can also shop on auction sites like eBay if you don’t mind bidding and potentially negotiating with sellers.

Selection can be limited when looking at resellers, but the effort is worth it if you find your next living room set or coffee table for half the price.

11. Use the Pottery Barn or Other Cash-Back Credit Card

The Pottery Barn credit card is perfect if you’re a serious Pottery Barn shopper. There are zero fees and plenty of perks. For example:

  • Earn 10% back for shopping at Pottery Barn, Pottery Barn Kids, and Pottery Barn Teens when you spend $250 or more on a single purchase.
  • Receive early access to sales, limited-edition collaborations, and information on new arrivals.
  • Shop for $0 down with 12 months of financing on purchases of $750 or more.

The 10% back in reward points is the primary selling point for this card. For example, if you spend $3,000 redesigning your living room, that’s $300 in rewards — not bad for a no-fee credit card.

However, you must spend $250 in one transaction to get the reward, which severely limits the usefulness of this card if you don’t spend much money on your Pottery Barn trips.

If that’s the case, shop with some type of cash-back credit card to maximize savings.

Cards like the Chase Freedom Unlimited® (read our Chase Freedom Unlimited review) and American Express Blue Cash Preferred® card (read our American Express Blue Cash Preferred review)  are excellent options that have welcome bonuses and cash-back rewards for everyday spending, making them a better choice if you don’t frequently shop at Pottery Barn.

12. Take Advantage of the Military Discount

If you’re an active military member or veteran, you and your family can take advantage of Pottery Barn’s 15%-off military discount. This discount also applies to Pottery Barn Kids and Teens as well as Williams Sonoma.

Plus, military members also get 10% off on electronics at Williams Sonoma.

13. Create an Online Registry

If you have an upcoming wedding or want to save money on newborn expenses, Pottery Barn has registries you can use to save money.

The Pottery Barn wedding registry helps your wedding guests shop for gifts you’re actually going to use. Plus, you can add products from any retailer in the Williams Sonoma family of brands to a single registry.

You can also ask a registry expert to help you craft a registry list that suits your style.

After the wedding date, you get a 10% completion discount for up to six months, meaning you have six months to buy out the remaining merchandise on your registry at a discount.

The baby registry from Pottery Barn Kids works the same way, except you get a 20% completion bonus.

14. Save on your New Move

Paying for moving supplies to pack and ship all your stuff adds up fast.

Thankfully, Pottery Barn has several incentives to help keep moving costs down. For starters, you get $15 off when you spend $75 or more on Sherwin-Williams paint.

Since 2 gallons of Sherwin-Williams paint typically costs between $75 and $150, depending on the paint type, that’s generally enough to paint an average-size room if you’re applying two coats.

Note that Sherwin-Williams is on the pricier side, so unless you’re in love with one of its colors or need high-quality paint to cover up darker colors, brands like Behr and Valspar are typically more budget-friendly.

You can also sign up for the New Mover Program to receive a welcome catalog and design advice for your new home. Pottery Barn also offers free design services to new movers.

However, the best part of the moving program is the installation service. The retailer can mount your TV, hang curtains, paint your new home, and assist with other installation and assembly for a small fee.

First, verify the Pottery Barn in your area offers this service. Then get a quote and compare the price to hiring another professional or doing the work yourself.

15. Use the Pottery Barn Employee Discount

Pottery Barn employees get up to 40% off regularly priced merchandise and an additional 20% off on clearance. So if you’re looking for a side gig and have a redesign project coming up, applying to Pottery Barn could be worth it.

Plus, you can use the extra money to help pay for your upcoming project and take the sting out of paying for it with your regular paycheck.

The Williams Sonoma family of brands hires throughout the year, especially during the holidays, so keep an eye out for job postings if you’re considering this saving trick.

16. DIY Pottery Barn Knockoffs

Crafty shoppers might be better off getting creative than paying higher prices for official Pottery Barn items.

If you’re open to a DIY project, start by searching for Pottery Barn knockoffs on Pinterest. A single search yields hundreds of knockoff ideas, tutorials, and decor ideas you can use to transform your home while staying on budget.

Some design bloggers also focus on knockoff DIYs. Knock Off Decor has a category that’s full of Pottery Barn DIY projects that can save you money.

Often, these projects involve purchasing more affordable materials from places like the dollar store or a local hardware store. Some projects simply involve upcycling existing pieces of furniture to match Pottery Barn’s aesthetic.

Just remember to consider your time and level of experience before taking on a DIY project. If you can score massive savings and enjoy working with your hands, the knock-off route is one of the best ways to decorate your home on a budget.

But if you’re busy or just all thumbs, it’s probably a waste of time.


Final Word

Saving money and scoring discounts probably aren’t the first things that come to mind when you think of Pottery Barn. But it’s possible.

However, you should still shop around, especially if you have a massive home renovation project coming up. Retailers like Wayfair, Overstock, Crate & Barrel, and even general retailers like Target often carry cheaper alternatives to Pottery Barn products.

You might have to get creative and mix and match products from different retailers to achieve that Pottery Barn aesthetic. But if shopping at Pottery Barn alternatives saves you money and matches your design vision, it’s worth the effort.

If you’re committed to Pottery Barn, give yourself as much time as you can when planning your home makeover. If you can wait a few months for a clearance event or for specific pieces to go on sale, you can furnish your home with high-quality furniture and home decor without spending a fortune.

Source: moneycrashers.com

Obama Slashes Costs for FHA Streamline Refinances to Boost Market

Last updated on August 29th, 2018

In another effort to buoy the flagging housing market, the Obama administration announced today that it would essentially be removing the upfront mortgage insurance premium on streamlined FHA refinances.

So homeowners who currently hold an FHA loan, looking to refinance into another FHA loan to lower their mortgage rate, will pay just 0.01% in upfront mortgage insurance premiums.

This represents a huge discount compared to the 1% upfront premium currently charged.

The annual mortgage insurance premium will also be slashed in half to 0.55%, which together with the upfront premium reduction is estimated to save the average FHA borrower roughly a thousand dollars annually.

In order to qualify for the new program, your FHA loan must have been originated prior to June 1, 2009.

The Obama administration believes about 2-3 million FHA borrowers will be eligible to benefit from this initiative, but only time will tell how many are really helped.

Are Future Homeowners Eating the Cost?

While this is great news for those who currently hold FHA loans, it makes you wonder if future homeowners will wind up paying for it.

Last week, the FHA announced that it would be raising upfront mortgage insurance premiums from 1% to 1.75%, beginning in April.

Additionally, the agency said it would raise the annual mortgage insurance premium by 0.10 percent for loan amounts under $625,500, and 0.35 percent for loans between $625,500 and $729,750.

The measures were taken to meet the congressionally mandated minimum for the FHA’s Mutual Mortgage Insurance (MMI) fund, which has been depleted thanks to all the recent losses on bad loans. It is expected to boost the fund by $1 billion through fiscal year 2013.

So essentially first-time homebuyers and other current homeowners who do not hold FHA loans will pay a premium to take out an FHA loan.

It seems like a bit of a shift in wealth, though it will likely result in fewer new homeowners going to the FHA for mortgage financing, which is probably the end goal.

The FHA exploded in popularity in recent years as subprime lending fell by the wayside, but the agency bit off more than it could chew. So this is likely a bid to return to a more normalized mortgage market funded by private capital.

[FHA loan vs. conventional loan]

Still, it seems a little unfair for those who don’t hold FHA loans, regardless of what good it may do.

But if you have an FHA loan, this is a great time to inquire about a streamline refinance to lower your mortgage rate and your monthly mortgage payment, without being subject to steep closing costs.

Reviewing Servicemember Foreclosures

The White House also announced that it will conduct a review of all servicemembers foreclosed on since 2006 to identify any wrongdoings.

Those found to be wrongly foreclosed on will receive compensation equal to a minimum of lost home equity, plus interest and $116,785, paid for by the nation’s top loan servicers, who were involved in the National Mortgage Settlement.

Additionally, those who were wrongfully denied a refinance will be refunded any money lost as a result.

And those who were forced to sell their homes for less than the mortgage balance due to a Permanent Change in Station will also be provided with some form of relief.

Finally, the major loan servicers will pay $10 million into the Veteran Affairs fund, which guarantees funding for the VA loan program, and certain foreclosure protections will be extended to prevent future failings.

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.

Source: thetruthaboutmortgage.com

Gift Aid vs Self Help Aid For College

College tuition can be costly whether you are seeking an undergraduate and graduate degree, attending an out-of-state public university, or taking classes at a private university.

If you do not have adequate savings to pay for classes, room and board, food, travel and other necessities, then you may be considering how to pay for college.

The costs of attending college continue to rise each year for both public and private colleges and universities. The average tuition and fees at a public in-state college was $9,687 and at or private schools it $35,087 for the 2020-21 school year. Obtaining financial aid is one way students can afford to attend college.

One common type of financial aid is called gift aid and typically comes in the form of federal and state grants and a wide range of scholarships that are given by private donors, foundations, non-profit organizations and even the universities themselves.

These grants and scholarships do not have to be paid back, which is helpful for students who are on a tight budget or are considering obtaining a graduate degree.

Another type of aid is called self help aid and usually comes in a form of work study programs and student loans. Some work study programs are sponsored by the federal government and they provide part-time jobs for students who need help paying their tuition. These jobs can be either on the campus of the college or university or off campus nearby.

Self help aid also includes federal student loans which have to be paid back after a student graduates.

There are advantages and disadvantages of both gift aid and self help aid. Undergraduate and graduate students may only qualify for one type of aid, depending on their financial circumstances, where they are obtaining their college degree or other factors.

What Are The Pros and Cons of Gift Aid?

Grants and scholarships are considered gift aid. One common form of grants are called Pell grants. These are grants provided by the federal government and Pell grants are given to undergraduate students who have demonstrated financial need.

The maximum federal Pell grant award is $6,345 for the 2020–21 award year (July 1, 2020, to June 30, 2021), but amounts can change annually.

The main drawback of gift aid is that you may not know what amount you will receive and you may need to supplement paying for college by seeking more scholarships and grants or getting a part-time job.

Federal work study programs are available for both undergraduate and graduate students to help them pay for tuition and other educational costs. The program’s jobs are related to the student’s course of study and also include community service work.

Both full-time or part-time students may qualify for part-time employment while they are enrolled at their university or college and it is available to undergraduate and graduate and professional students who demonstrate financial aid.

The work study programs are operated by a college and university financial aid office and you will receive at least the federal minimum wage. These jobs are available both on-campus and off-campus which can be beneficial for students who do not have other means of transportation.

Students who work off campus typically work for a nonprofit organization or a public agency and the goal of the job is geared to be in the public interest. The number of jobs is limited, so students should apply early to ensure that they have a position for the following academic year.

Federal and Private Student Loans

Another type of self-help aid are federal and private student loans. Federal student loans are based upon the financial need of a student and their family. They are either subsidized or unsubsidized direct loans and may offer lower interest rates than private loans. One drawback is that the federal government will limit how much money you can borrow.

Undergraduate students may qualify for subsidized loans that are given based on their financial need. One benefit is that the federal government will pay the interest on these loans while you are attending school or at least taking classes half-time, during your grace period or when you have deferred the loan.

Both undergraduate and graduate students may qualify for unsubsidized loans and they are not based on financial need. These loans accrue interest while students are taking classes, during the loan’s grace period, or when you have deferred the loan.

Private student loans can be used to help make up the gap in what is needed to pay the remainder of tuition or living expenses. While both federal and private student loans may help students pay for their tuition; they must be repaid once a student graduates.

If you do not complete your course study and do not receive a degree, the student loans still have to be repaid.

Federal student loans have protections that private student loans do not offer. Students who have received federal student loans can seek several options after graduation to repay their loans including income-driven repayment programs.

Federal student loans also offer borrowers’ the ability to put loans in forbearance or deferment, allowing them to temporarily pause payments in certain situations.

Some borrowers will choose to refinance their federal student loans into new private student loans. But this option means that you lose the protection of the federal repayment plans. Private student loans have both fixed and variable interest rates.

Fixed interest rates are beneficial for people who want to know the exact amount of their loans each month helping them to budget more easily. The interest rate on variable student loans are sometimes lower than fixed rates but that means your payment amounts can fluctuate from month to month.

Shopping around can help you find the best private student loan that fits your financial needs and the amount that you can repay each month.

Qualifying For Gift Aid or Self Help Aid?

Qualifying for either gift aid or self help aid might depend on your financial circumstances. Students may want to apply early for grants, scholarships, work-study programs and student loans.

completing a FAFSA®, or Free Application for Federal Student Aid. This application must be completed every year.

Some states and colleges may have their own FAFSA deadlines , so double check to avoid missing any. Missing a deadline can mean forgoing some financial aid.

While some gift aid such as scholarships are given to students based on merit, grades or other accomplishments, grants, work study programs and student loans are typically based on your financial needs and the cost of tuition at your university.

Some universities use data from the FAFSA to determine gift aid like scholarships too. Students can also apply for scholarships and grants that aren’t associated with the FAFSA®.

Private Student Loans with SoFi

In some cases gift aid and federal aid aren’t enough to help students pay for their tuition. In that case, some students may consider private student loans.

SoFi offers private student loans with no late fees or origination fees with flexible repayment options. There are also interest rate discounts for eligible SoFi members.

Interested applicants can find out what rate and terms they could pre-qualify for in just a few minutes. Learn more.



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.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs.
SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See SoFi.com/eligibility for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

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.
Third Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
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

Creating a Debt Reduction Plan

When you’re worried about money and feel your options are limited, debt can feel like a pair of handcuffs. And if it feels like you can’t do what you want to do—which is to pay it all off and get yourself free—there’s the temptation to do nothing. But there are some things that can be helpful when crafting a debt reduction plan that will work for your situation.

Prioritizing Expenses

Before you start prioritizing expenses, it’s important to have a clear understanding of what income is available and how much is being spent. This can be done with pen and paper, or by leveraging an all-in-one app, such as SoFi Relay.

Keeping a roof over their head is a number one priority for most people. Mortgage lenders are not very patient when it comes to getting their money, and failing to make a house payment can leave a big black mark on a person’s credit record. For renters, paying the property owner on time each month may have a positive impact on their credit report.

Making sure a car loan and car insurance are current, especially if that’s the only way to get to work, might be next in order of importance. After that come big debts, such as student loans, but those may be eligible for student loan forgiveness depending on the type of loan and if the qualifications for forgiveness are met. Refinancing student loans into one manageable payment might be worth considering if that would save money with a lower interest rate or a shorter loan term. (For federal student loan borrowers, though, refinancing may not be the best option right now since the CARES Act has offered some relief through September 30, 2021.)

Making a plan to tackle credit card debt is also important. Each month, making the monthly minimum payment is important, otherwise, a person’s credit report can quickly reflect any lack of payment . And to manage the outstanding balances on those credit cards, it may be time to work out a new payment plan to get out from under credit card debt.

Once all that information is accounted for, moving forward with a personal debt reduction plan will make it easier to deal with all those long-term bills and relieve debt-related worry.

There are four popular approaches to knocking down debt. The debt avalanche method is probably best suited to those who are analytical, disciplined, and want to pay off their debt in the most efficient manner based solely on the math.

The debt snowball method takes human behavior into consideration and focuses on maintaining motivation as a person pays off their debt.

The debt fireball method is a hybrid approach that combines aspects of the snowball and avalanche methods.

And a personal loan may be an option for those who have a solid financial history or whose credit score has improved since they first signed up for their high-interest loans and credit cards.

Here’s how each strategy typically works.

Debt Avalanche

This method puts the focus on interest rates rather than the balance that’s owed on each bill.

1. The first step is collecting all debt statements (e.g., credit card, auto loan, student loan) and determining the interest rate being charged on each debt.
2. Making a list of all those bills is next, looking past the total amount owed on each debt. This method puts the debt with the highest interest rate in the spotlight, so that one will be at the top of the list, with the other debts listed in order of interest rate, second highest to lowest.
3. Some things to keep in mind might be any fees, prepayment penalties, or tax strategies that could make one debt more or less expensive than the others. When using a balance transfer credit card to save money on any particular debt, reprioritizing the list once the introductory rate runs out and a higher rate kicks in plays a part in how this method works.
4. Continuing to pay the minimum on each bill—on time, every month—is important. But paying extra (as much as possible) toward the bill at the top of the list will help that debt be paid off as quickly as possible.
5. When the first debt is paid off, moving on to the next debt on the list and starting to pay extra there will start the process over again. Money will be saved as each of those high-interest loans and credit cards are eliminated, which can allow all the bills to be paid off sooner.

Debt Snowball

This approach can be effective in getting a handle on debt by slowly reducing the number of bills there are to deal with each month.

1. This method also starts with collecting debt statements and making a list of those debts, but instead of listing them in order of interest rate, organizing them from the smallest debt to the largest (total amount owed, not monthly payment amount).
2. Continuing to pay the minimum—on time, every month—but paying as much extra as possible toward the smallest debt on the list is key to this method. (If possible, completely paying off the balance on that very first bill might provide some sweet momentum to get started.)
3. As with the debt avalanche method above, paying attention to fees, penalties, and tax strategies may determine which debt gets paid first.
4. Moving on to the next debt on the list, and so on, will keep this method in motion. Keeping track of paid-off debts with a visual tracker might help with motivation.
5. No longer using credit cards that have been paid off is a good way to stay out of debt for the long term. And having a goal to set up an emergency fund to cover unexpected expenses—a medical bill or car repair, for example—to stay on track is a good way to stay ahead of the game.

Debt Fireball

This strategy is a hybrid approach of the snowball and avalanche methods. It separates debt into two categories and can be helpful when blazing through costly “bad debt” quickly.

1. Categorizing all debt as either “good” or “bad.” “Good” debt is generally in the form of things that have potential to increase net worth, such as student loans, business loans, or mortgages, for example. “Bad” debt, on the other hand, is normally considered to be debt incurred for a depreciating asset, like car loans and credit card debt. As this list is being developed, identifying all debt with an interest rate of 7% or higher is likely the “bad” debt that may be beneficial to focus on first.
2. Listing bad debts from smallest to largest based on their outstanding balances will provide the working order.
3. Making the minimum monthly payment on all outstanding debts—on time, every month—then funneling any excess funds to the smallest of the bad debts is the focus of this method.
4. When that balance is paid in full, going on to the next smallest on the bad-debt list will keep the fireball momentum until all the bad debt is repaid.
5. When that’s done, paying off good debt on the normal schedule can be a smart way to invest in the future. Applying everything that was being paid toward the bad debt to a financial goal, such as saving for a house—or paying off a mortgage, starting a business, or saving for retirement, for example, is a good way to look forward to a financially secure future.

Personal Loan

Consolidating debts at a lower interest rate or with a shorter term offers another option to pay those debts off in less time than expected.

1. Gathering debt statements and totaling up the debts to be paid off is the first step.
2. To have an idea of interest rates that might be available (most lenders will offer a range), making sure the information on credit reports is accurate is the next important step. Any errors found on a credit report can be reported to the credit reporting agency.
3. Looking at a variety of lenders to find the best interest rates and terms available will help when setting a goal to find a manageable payment while paying off the debt load as quickly as possible.
4. Considering member benefits or other perks that lenders may offer, such as a hardship deferral or a discount on a future loan might make a difference when choosing a lender. Then, applying for the loan that best suits the borrower’s needs is the next step in the process.
5. Paying off old debts with the personal loan and staying current with the new loan payments will help keep things manageable. Sticking to a budget that prevents the same spending mistakes from being made again is important to keeping debt at bay.

Personal loans used for debt consolidation can help pull everything together for those who find it easier to keep up with just one monthly payment. A bonus is that because the interest rates for personal loans are typically lower than credit card interest rates, the amount paid on the total debt may be less than what would have been paid just by plugging away at those individual debts. For those who qualify for a rate that’s less than their credit card rates, a personal loan can make sense.

The Takeaway

With an unsecured personal loan from SoFi, debts can be consolidated and paid off in a way that works for your income, budget, and timeline.

Whatever payoff method you choose, the point is to do something. Having a debt reduction plan in place is key to getting rid of those financial handcuffs and being able to look forward to a successful financial future. Planning ahead, saving for specific goals, and sticking with a budget will go a long way to minimizing dependence on credit cards or high-interest loans in the future.

Ready to tackle your debt head-on? A personal loan from SoFi can help you consolidate your debt into one easy-to-manage monthly payment.



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.

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.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
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.

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.
SoFi’s Relay tool offers users the ability to connect both in-house accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a Vantage Score® based on TransUnion™ (the “Processing Agent”) data.
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.

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Source: sofi.com

Travel Often? Make Sure Your Credit Card Has These 6 Features

Americans are lucky to be offered hundreds of competing credit cards, but it can be difficult to find the right one to suit your needs. Therefore, it’s important to know what your spending habits are in order to choose the card that makes the most sense for you.

Cardholders who carry a balance should look for a card with the lowest interest rate, and possibly one with 0% APR introductory financing. A lower interest rate means you will pay less money toward interest charges as you pay down the balance. Meanwhile, those who can avoid interest charges by paying their balances in full every month should choose a card that offers the most valuable rewards in the form of points, miles or cash back.

Make sure you also generally meet the credit issuer’s criteria. It’s a good idea to know what your credit score is so that you can target your search to a card you’re more likely to get approved for.

You should consider any benefits offered by the card, such as purchase protection or travel insurance. Finally, applicants should also take into account any applicable fees — such as annual fees and foreign transaction fees.

Source: credit.com

Tips for Getting Approved for a Mortgage

When you start your home buying journey, you’ll notice advertisements of beautiful homes accompanied by happy families that make it seem like there is an abundance of lenders waiting to hand you the keys to your new home.

The truth is, getting approved for a mortgage is not always easy, and getting financed for such large amounts of money can be risky. If your home-buying fantasies have been interrupted by application denials, it’s time to take control of your borrowing power and find out what you can do to turn those “no’s” into a “yes.”

1. Document Your Income

Borrowers mistakenly downplay the importance of a stable income history, especially if they have a high credit score or large bank balance. No matter how favorable your credit and financial status may seem, you will be subject to income scrutiny. Be prepared to prove your income by providing tax documents for the last two and three years and paycheck stubs from the past few months. You may also be asked to provide a list of all your debts, including auto loans, credit cards, alimony, and student loans, and a list of your assets, including investment accounts, auto titles, real estate, and bank statements.

In addition to proving that you have adequate income to cover the loan, lenders will verify that you’ve been working in the same field for at least two years – the longer you’ve been working for the same employer, the better.

Getting a MortgageGetting a Mortgage

2. Shine Up Your Credit History

Maintaining a positive history while you apply for home loans is especially important. Lenders want to see that you have a good record of paying your bills on time. Before you apply for a mortgage, review your credit report. Give your credit a boost by keeping your credit card utilization below 30%. If you have any past debts, pay them. Lenders want to see a flawless credit history for the past 12+ months – the longer you go without a negative mark on your report, the better.

Keep in mind that lenders may re-check your credit score during the application process, so make sure all your accounts are on-time and current and avoid any other large purchases that could affect your score until after you receive an approval.

For credit repair assistance, contact Credit Absolute.

3. Two is Better than One

If you don’t have income high enough to qualify for type of loan you need, a cosigner with an adequate amount of disposable income to be considered on your mortgage may help your approval rating – regardless of whether this person will be helping you make your payments or living with you. In some cases, a cosigner with a positive credit history can help someone with less-than-perfect credit. However, he/she should keep in mind that they are guaranteeing to your lender that the mortgage payments will be paid in full and on-time.

4. Offer a Larger Down Payment

If you can pay for a percentage of the home on your own, your application for the rest of your home financing just may tilt in your favor. The larger personal investment you have in the house, the less likely you will walk away from the property and let it go into foreclosure.

Having a significant amount of cash is also a strong indicator of how you handle your finances. Banks don’t just want to hand anyone a loan; they want to provide financing to people that are guaranteed to pay them back.

5. Consider a Smaller Loan

While your pre-approval may indicate that you qualify for a loan up to $250,000, you want to tread carefully in asking for the highest loan amount. In fact, the closer you get to your limit, the more difficult it is to get approved.

If you don’t qualify for the mortgage that you want and you aren’t willing to wait, try setting your sights on a less-expensive property. Consider a townhouse instead of a house, accept fewer bathrooms and bedrooms, or move to a neighborhood further away to give you more options. For a more drastic approach, consider a different area of the country where homes are more affordable until you can trade up or build your financial history.

Source: creditabsolute.com