What Is a Bedroom Community? All About Those In-Demand Locales Just Outside Cities

For people looking for a place to live that’s budget-friendly and near a major city, a bedroom community may be the ideal choice. It was for Susan French Gennace, a writer who grew up in Lehigh Valley, PA—a bedroom community of both Philadelphia and New York City.

“When I got a job in New York, I couldn’t afford to actually live there, so I made the commute,” she recalls.

Many people just like Gennace work for city-based companies and then head home to bedroom communities, usually within an hour’s drive, because they enjoy either the residential environment or the lower cost of housing—or both.

Simply put, “bedroom community” is used to describe a suburb or exurb populated primarily by professionals who commute to work in the city.

Characteristics of a bedroom community

Houses in these communities generally offer more space and a lower cost of living. Because there’s less hustle and bustle, people are seemingly more relaxed.

The challenge with bedroom communities, however, is that they can be a significant distance away from urban centers. So even though you get plenty of benefits, you may still have a lengthy work commute.

“Longer commutes and more traffic mean you have to leave earlier in the morning to avoid rush-hour traffic and you get home later at night—just in time to go to bed and wake up to do it all over again,” Gennace says.

Unlike large cities, bedroom communities often have limited options for entertainment, dining out, public transportation, employment opportunities, shopping, and schools.

“Residents who move to bedroom communities typically consist of couples with children where one or both parents travel to the city for their jobs,” says Dave Hyman, a Re/Max real estate agent based in Encinitas, CA. “Rather than apartments or condos, people in bedroom communities tend to live in single-family homes.”

Is a bedroom community for you?

Where you choose to live and work is obviously a personal choice, for which you must weigh both the pros and the cons. For some young adults, bedroom communities only emphasize what they’re missing.

“They are a reminder that you are somewhat close to where all the fun and action is, but far enough away that visiting the city is still a special occasion,” Gennace says. “Some people might complain how boring they are and count down the days until they can finally leave them.”

But for many working professionals, the cons of bedroom communities are minor compared to the following perks:

  • Affordability: Housing costs and taxes on property, food, and sales tend to be lower.
  • Less noise: Noise from automobile traffic, emergency vehicles, and construction projects is replaced by relative peace and quiet.
  • More privacy: Crowding is not a problem as homes tend to be more spread out, keeping nosy neighbors at bay.
  • Lower crime rates: Let’s be clear: Crime happens everywhere. But in bedroom communities, a smaller population means fewer people are behind bars.

Source: realtor.com

How to Find Move-In Ready Apartments

Sometimes life takes an unexpected turn, and you find yourself in need of an apartment, right now. Within the U.S. alone, almost 7.3 million people were displaced by natural disasters alone over the last 10 years.

When events happen that are out of your control, the ability to search quickly and easily for available places to live in your area is essential.

How we’re helping renters find an apartment fast

Apartment Guide, and our sister brand Rent.com, understand the struggle that people who have been displaced are facing in these circumstances. There’s nothing more important than finding a safe place to live for you and your family. So we’re making it easier for renters to identify apartment communities with immediate move-in ready housing.

If a natural disaster (hurricane, flood, tornado, winter weather, etc.) displaces residents, we’ll put messaging on the property pages of our websites to let renters know that these communities have available units right now.

Messages will look like this example after the Texas ice storm in February 2021:

apartment guide screen shot to find move in ready apartmentsapartment guide screen shot to find move in ready apartments

The messaging will vary depending on the situation, but you’ll be able to easily see if your desired property has any availability. You might even be able to take advantage of move-in specials, depending on the length of the lease you want.

What this means for renters

Apartment availability will always vary from property to property.

In your search, you might find a community in which you’d love to live, but then discover all of the units are currently full or uninhabitable because of the storm. In this case, the earliest availability might not be until the beginning of the new month after another tenant’s lease has expired. Depending on when you are searching, that could be only a few days or a few weeks, but neither options are favorable when you need something right now.

This new messaging helps you save time in your apartment search by showing you right at the top of the property’s page on Apartment Guide or Rent.com if there are immediate openings.

Then you can take the necessary steps to contact that property to discuss your options.

Other tips for finding an apartment fast

While the move-in-ready housing messages will help renters locate properties with availability, it’s not the only way to find apartments quickly.

Here are a few other things that renters can do to find an apartment fast.

1. Be prepared

Although you may not have all your essentials within reach during this time, there are a few important documents you should have ready to ensure a faster process if you find the perfect place. Especially if you end up in a market that’s saturated with other renters undergoing your same experience, speeding up your rental application review is a definite plus.

Make sure you bring the same set of documents to each apartment viewing or have them ready to email to a property manager at a moment’s notice. You’ll want to have:

  • Proof of employment: This is either the last few months of pay stubs, a letter from your employer or your most recent tax return.
  • Proof of finances: Pay stubs and a recent bank statement can work together here.
  • Veterinary records (if you have a pet): Your future property manager will need proof of vaccinations before you’re allowed to have a pet.
  • Proof you’re ready to rent (if applicable): Share documentation from your previous property manager that explains why you can no longer live there and confirms you’ve been let out of your previous lease.
  • Proof of your situation: It never hurts to provide a letter documenting your situation so that a property manager gets a complete picture of you as a renter and your circumstances.

One other document you can bring with you to really speed up the review of your rental application is a credit report. Although this is something a property manager can access themselves, handing it over at the moment saves a lot of time.

2. Know what you’re looking for

The ideal way to search for apartments is online. At Apartment Guide, we allow you to narrow down your search criteria to improve the results. We’ll help you get into the neighborhoods you want, and only show the listings that align with your wish list of amenities.

Find exactly what you want with True Search

The easiest way to get started is simply using the True Search functionality on our website.

Looking for a one-bedroom apartment in Atlanta that allows dogs and is near public transportation? Simply type that in the search bar and boom, you’ll see all one-bedroom apartments in Atlanta that allow dogs and are near public transportation.

How about a studio apartment in Houston for under $1,000 that has stainless steel appliances? Same thing.

True Search can help you save time so you can find your move-in ready apartment even faster.

Use filters to your advantage

If you’d rather do it the old-fashioned way, you can still use manual filters to help in your search. To find the filters on your mobile device, click on the Filters button in the upper right of your screen. You’ll then be able to select your custom search filters.

apartment guide screenshot to filter to find an apartment fastapartment guide screenshot to filter to find an apartment fast

To best narrow down your results, it’s important to filter your search in as many areas as possible.

  • Set your price range first and be realistic.
  • Pick your preferred bedrooms and bathrooms.
  • Click on the pet-friendly filter if you’re bringing an animal with you.
  • If in-unit laundry is a die-hard amenity for you, make that selection. Skip this option if not, and you’ll get more results.
  • Click on your ideal list of extra amenities, but be selective and pick only the top choices. You’re in a hurry after all, and it helps to find areas where you could compromise.
  • Make sure results are set to sort by best match.

From there, you can click on the heart icon (if you’re signed in) to save searches you like and keep a comprehensive list.

At the same time you’re clicking on the hearts though, give the listings a call to inquire about availability. Don’t fill out the form online if you’re looking for immediate results.

3. Go on virtual tours

When you can, tour an apartment community in person. But, if you want to find an apartment fast, virtual tours will be a quicker option.

Most communities on our website give you the following virtual tour options:

  • 3D tours and videos: Use interactive 3D features to virtually explore a unit at your own pace.
  • Recorded video tours: Watch a prerecorded video tour of a leasing agent walking through the unit.
  • Live video tours: FaceTime or Zoom with a leasing agent who will walk you through the unit and grounds. This option gives you the ability to ask questions in real-time.

You’ll be able to find the virtual tour options under the Tour From Home section of the property page on our website.

4. Shop the specials

It’s also beneficial to look for specials when you’re trying to find an apartment fast. From free rent to heavy discounts, each dollar you can keep will help with the additional expenses of relocating and replacing your possessions.

This is easy to do when you search with Apartment Guide. Look for the filter called Hot Deals. Adding this to your search criteria prioritizes rentals with special offers. When clicking on a listing with a Hot Deals tag, you’ll see the specifics of the special right at the top.

apartment guide screenshot to find hot deals on a move in ready apartmentapartment guide screenshot to find hot deals on a move in ready apartment

Make sure to mention the deal when you call the property manager. Let them know where you saw it, and ensure that it’s still available should you come in to sign a lease.

Find your move-in ready apartment today

Helping renters find their move-in-ready apartment is what Apartment Guide is all about. We’re here for you, with a comprehensive search, whether you’re in a rush to find an apartment fast or can take your time. Either way, we understand the importance of having a home that works for you on all levels.

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Source: apartmentguide.com

10 First Time Home Buyer Mistakes To Avoid

Buying a home of your own may make good long-term financial sense, as it is usually cheaper to own than to rent in the long term. However, buying a place for the first time is not without its challenges and problems.

And if you don’t do your homework or your due diligence before buying your house, you may end up paying too much for the property, or buying a property with all kinds of problems.

In no particular order, here are 10 common first time home buyer mistakes and how to avoid them.

If you are interested in comparing the best mortgage rates through LendingTree click here. It’s completely free.

>> MORE: 5 Signs You’re Not Ready to Buy a House

First Time Home Buyer Mistakes To Avoid

1. Not knowing your credit score before you start the home-buying process.

A big factor in determining whether you’ll be qualified for a mortgage largely depends on your credit score. Obviously, the higher your credit score, the better is your chance to get pre-approved for a mortgage loan.

However, fist time home buyers often make the mistakes of completely ignoring their credit score.

So, before you start looking for a home, it makes sense to review your credit report to know where you stand. If you have a not so stellar credit score, take steps to improve it.

Related Resources

  • Get Pre-qualified for a Mortgage Online Now
  • Compare Mortgage Rates All in One Place
  • Check Your Credit Score For Free

Your credit report should be the first place to start. Your credit report will list all the “bad stuff” that you’ll need to work on. For example if you have too much credit card debts, try to pay them off.

Click here to get a free copy of your credit report.

2. Failure to research the neighborhood.

“One of the important aspects of buying a home is learning all you can about the neighborhood. Those who live there already are a great resource,” says Bill Gassett of Max Real Estate Exposure.

Indeed, the neighborhood might look “ok” to you during the day, but “bad” at night. There might be a bar at the corner where there is a lot of noise at a certain time of the night.

You might find later, after you purchase the house, that the neighborhood is ridden with crimes. This potential for surprise is why you must research.
So, never buy a home without thoroughly understanding the overall vibe of the neighborhood.

Related: Due Diligence for Home Buyers: What You Need to Check

3. Not seeking professional advice.

Buying a home is a major financial commitment. You’re taking a significant amount of money in the form of a loan to finance the property. Every month you’ll be required to pay a certain amount of mortgage. Plus, you may have other debts that you’re paying on a monthly basis, like a car loan, student loan, etc…

Therefore, it makes sense to speak with a financial advisor before you start the home buying process. A financial advisor can review your financial situations and help you determine whether buying a home can impact your finances.

Use this financial advisor matching tool to find financial advisors in your area.

4. Not getting pre-approved for a mortgage.

Many people, especially first time home buyers, start looking for homes before they even meet with a mortgage lender. They visit properties, find the right home, and fall in love with it. But they realize later that they will not get the place, either because they can’t afford it or because they don’t have a pre-approval letter.

Because you might be competing with other buyers shopping for the exact same house, it makes sense to speak with a mortgage lender about getting pre-approved for a home loan.

Plus, having a pre-approval letter tells the seller that you’re serious and you are able to finance the property.

>> MORE: Get Pre-approved for a Mortgage.

5. Overlooking foreclosure homes.

Many first time home buyers when they’re buying a place is usually to live in. However, situations may arise (whether it’s divorce or you’re moving to another state) where you have to sell your home. But why not make a profit along the way.

And one of the best ways to maximize your chances to earn a good profit if you do decide to sell your house is to buy the property at foreclosure. Properties in foreclosures are a better value than a conventional purchase. However, that doesn’t mean they’re not risky.

Foreclosed properties are sold ‘as is’ and some may therefore have serious defects. But if you’re willing to face the risks, and have extra cash to go towards repairs, you may earn a good return on your investment.

So because you never know what your situation may be in the future, you should not overlook foreclosure properties.

6. You only get one mortgage rate quote.

Some first time home buyers unfortunately make the mistake of working with only one mortgage lender. This is a big mistake that can cost you a significant amount of money over the life of your loan. In fact, mortgage rates vary from lender to lender.

So, when you shop around for several lenders, you have the opportunity to compare several and different rates. Thus, you get to choose the best rates, which could save you thousands in mortgage interests.

Click here to compare mortgage rates through LendingTree. It’s completely FREE.

7. Not taking advantage of FHA loan.

Gone are the days where you’re required to put 20% down payment on a house. Nowadays, you can make a down payment as low as 3.5% of the property purchase price, thanks to the Federal Housing Administration (FHA).

Now, it’s better if you have 20% down payment, as you can pay your loan faster and have more equity in your home. And also by putting 20% down payment, you can avoid paying private mortgage insurance. But the reality is that, not too many first-time home buyers can come up with all that cash.

In this case you should not overlook the FHA loan program. In fact, “FHA loans are pretty desirable for most home buyers, because of the favorable terms they offer, including small down payments, competitive interest rates and lower closing costs than standard mortgages,” says Gassett.

He explains that “you need to have a credit score of 580 or above to get the best terms of the loan, including a down payment as little as 3.5%.” If your credit is lower, he continues, “you will need a 10% down payment.”

>> MORE: How to Save for a Down Payment on a House

When you’re renting, you’re only paying the monthly rent. That’s it. However, as a home owner, you will be responsible when things need to be fixed, like changing a heater. And if you don’t have extra money saved up, you might find yourself in a hole.

So to avoid this mistake, try to save as much money as possible. This way, you can be prepared when emergencies present themselves.

9. Applying for new credit before closing on the house.

A first time home buyer might get pre-approved for a mortgage loan, and to learn later, just before closing, that they did not get the loan. Or that they found that the mortgage rate and fees they had received in the pre-approval letter are changed.

That usually occurs when those home buyers apply for new credit between the approval and closing period. Indeed, when you apply for new credit, it not only lowers your credit score (because a new inquiry is added), but it also increases your debt.

And mortgage lenders also based their decisions on your debt-to-income ratio. So, before you add on new credit accounts or loan, wait until after closing .

Click here to compare mortgage rates through LendingTree. It’s completely FREE.

10. Overlooking state and federal housing programs.

Another first time home buyer mistake is a failure to look into their local government agencies to see if they have any first time home buyer programs for which they might qualify. If you don’t look, you’re just leaving money on the table.

There are several first time home buyer programs designed specifically for first-time buyers. Depending on your state, these programs assist with down payment, repair costs, closing costs, etc… All you need to do is to check your city or state housing programs to see if you qualify.

In summary, being a first time home buyer is quite exciting. But it is an expensive and daunting process. Luckily, if you follow the tips and avoid the mistakes mentioned above, the process will be much smoother.

Working With The Right Financial Advisor.

You can talk to a financial advisor who can review your finances and help you reach your goals (whether it is paying off debt, investing, buying a house, planning for retirement, saving, etc). Find one who meets your needs with SmartAsset’s free financial advisor matching service. You answer a few questions and they match you with up to three financial advisors in your area. So, if you want help developing a plan to reach your financial goals, get started now.

Related resources

Get Pre-qualified For A Mortgage Online Now

Compare Mortgage Rates All in One Place

Check Your Credit Score For Free

Source: growthrapidly.com

I Tried to Buy a Fake Puppy Online, & Here’s What Happened

I knew going into this adventure that I was dealing with a scam artist who was trying to cheat people out of their money by tugging at their puppy-loving heartstrings. See, I’d written a piece about this scam just a couple of weeks ago after a woman in San Diego almost fell prey to it.

While researching that story, I decided to send a text to the phone number the scammers had used in multiple eBay ads, saying they had adorable puppies named Roxy, Ricky, Rose and Tina (they had ads for at least Old English Sheepdogs and Boxers, all by these names, and were advertising them in San Diego, Baltimore and possibly other areas). The fraudulent sellers had already pulled the ads from eBay after their con was spotted by the woman in San Diego, but a few days after I sent my text inquiring if the pups were still available, I got a response.

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Here’s how it went:

puppy-scam1

Now, as I said, I already knew these folks weren’t on the pup up-and-up. I knew they were going to try to con me out of my money. The ridiculously low price for the “AKC-registered” puppies — just $320 each — was the first clue this wasn’t going to be a legit transaction.

  • I just watched a documentary on the dark web, and I will never feel safe using my credit card again!

  • Luckily I don’t have to worry about that. I have ExtraCredit, so I get $1,000,000 ID protection and dark web scans.

  • I need that peace of mind in my life. What else do you get with ExtraCredit?

  • It’s basically everything my credit needs. I get 28 FICO® scores, rent and utility reporting, cash rewards and even a discount to one of the leaders in credit repair.

  • It’s settled; I’m getting ExtraCredit tonight. Totally unrelated, but any suggestions for my new fear of sharks? I watched that documentary too.

  • …we live in Oklahoma.

There were more clues in their text. First, “please confirm the breed.” These folks were advertising that they had to get rid of their beloved puppies because of a recent move (thus the deep discount), not because they were breeders. Second, “just mail you with pictures.” Their English was a little faulty, which isn’t always an indicator in and of itself, but it’s something to watch for if you’re suspicious of an online transaction, as a lot of these folks operate from outside the country and English is not their first language.

Their first email came with a dozen or so pictures of the puppies, plus some questions so they’d know if I’d be a good caregiver. And, of course, the language issues continued.

Screen Shot 2016-09-15 at 11.29.10 AM

And, to get me emotionally connected, they asked me some more or less legitimate-seeming questions:

Screen Shot 2016-09-15 at 11.31.57 AM

After I answered all the questions and apparently passed muster for being able to provide a loving home, the scammers said they were arranging shipment of the pups, their toys, all their paperwork, etc., and they asked me to wire them the money through Western Union so they could get that process started:Screen Shot 2016-09-15 at 11.38.13 AMBingo. They wanted me to transfer the money to them in a way that is not easily traceable and for which I would have no recourse if they didn’t deliver the pups. As Western Union says on its website, “Western Union money transfer is the best way to send money to people you know and trust.”

But not strangers. Never, ever strangers. Why?

“If you send money to someone you do not know, you run the risk of fraud. Be cautious when a stranger asks you to send money,” the Western Union warning continues. “If you are sending money to a stranger or unknown person requires you to pay this way for goods or services before their delivery (especially offers on the Internet), for transport or insurance, payments as deposit to secure a lease for housing which you have not seen, allow payment of winnings in a lottery or betting, you run the risk of losing money. If still such a transfer is sent, you do so entirely at your own risk. Western Union is not responsible for the correct and proper delivery of goods or services paid through transfers under the brand Western Union.”

I told the “seller” via email that I was uncomfortable doing a cash transfer, but I’d be happy to pick up the puppies personally since I lived so close to Baltimore (which I don’t, actually). They said they had to leave at 4 p.m., but that they’d be happy to let me pick up the puppies at their address that didn’t actually exist. I feigned ignorance of that fact and told them I’d be driving to them soon. Of course, when I “arrived” they were nowhere to be found.

puppy-scam

And, not surprisingly, almost a week later, I’m still waiting.

The bottom line is, never, ever give cash to an online seller for goods undelivered. Always use websites you trust, and never give out any personal information that isn’t a matter of public record. And even then, be wary. Also, if you ever do meet someone to exchange goods, it’s safest to take someone with you and let at least one other person know where you will be and what time you should return.

Fortunately for the people who fall for these kinds of cash-transfer scams, they’re most likely only out the cash they gave away, and it won’t impact their credit. Where the really serious damage from scams can occur is when your identity is stolen or your credit cards are compromised.

If you think you may have fallen for a scam that has compromised your bank or credit card accounts, it’s a good idea to check your financial accounts, credit reports and credit scores frequently for any signs of trouble. Transactions you don’t recognize, unfamiliar entries on your credit report and sudden changes in credit scores are signs of fraud to be immediately addressed. You can check your financial information through your bank or credit union’s online tools. You can keep an eye on your credit by viewing two of your credit scores for free on Credit.com and requesting a copy of your free credit reports by visiting AnnualCreditReport.com.

Image: Dusko Jovic

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Source: credit.com

Financing Home Improvement Projects During Coronavirus

Many of us are home much more than usual these days, and you may be thinking about ways to improve your home — whether it’s expanding your new home office, upgrading your air conditioning, or putting in a new swimming pool for the summer. It’s easy to dream about those fun new projects, but figuring out how to pay for them can be a challenge.

It’s not just your lifestyle that’s been impacted by the coronavirus pandemic. Many banks, lenders, and fintech companies are changing the way they lend money to customers, so your options for financing a home improvement project may have changed.

In the first few months of the coronavirus outbreak in the United States, many lenders pulled back on Home Equity Lines of Credit and Cash Out Refinances — either halting new applications or tightening the approval criteria. The best financing options may be changing based on what’s available at a given time, so take the time to investigate what is going on in the market and what your options are. Here’s a place to start.

This article will walk you through:

  • Key questions to ask yourself when evaluating your financing options
  • 5 financing options you might be considering, and the pros and cons of each option
    • HELOC
    • Cash-out Refi
    • Personal Loan
    • Traditional Credit Card
    • Fintech Alternatives

What questions should you ask yourself when choosing a financing option for your home improvement project?

  1. Are you in a hurry to get started? Do you need to replace a major appliance immediately, or do you have some time before construction begins? Some financing is faster than others, but you may pay a price for speed.
  2. Will your costs happen all at once or overtime? If your project will have ongoing costs (like many home improvement endeavors) it might be attractive to only pay interest on what you’ve spent and to have the flexibility of revolving credit that allows you to spend, pay it back, and spend again.
  3. Is the cost of your project a sure thing or will it creep up? Even the best budgets have surprises. Choosing a more flexible financing option now may prevent you from having to apply for credit again later, which may save you money and limit hard inquiries which can ding your credit score.
  4. Do you have equity in your home you can tap into? Do you want to? Financing that relies on the equity in your home often has lower interest rates than unsecured options. If you have equity available in your home, are you comfortable using your home as collateral and potentially risking foreclosure if you can’t make your payments?
  5. How much flexibility do you need in your monthly payments? In a time of uncertainty, it may be more attractive to choose an option with fixed rates and payments that you can plan around.
  6. What is available in the market right now? In a time of unprecedented uncertainty, many lenders have temporarily stopped offering certain products or seriously raised the bar for what it takes to qualify. Make sure you aren’t counting on funding from a financing product that isn’t available anymore. What are your financing options? The news about COVID-19 changes daily, so keep in mind that the economy, stock market, and the lending policies of various lenders may change.

What are your financing options?

The news about COVID-19 changes daily, so keep in mind that the economy, stock market and the lending policies of various lenders may change.

1. Home equity line of credit (HELOC)

What is a HELOC and how does it work? A HELOC is a revolving line of credit (like a credit card), which means you can borrow as much as you need, when you need it, up to the limit on your credit line. As you pay down the balance, you can borrow more money again.

Your credit line is based on the equity in your home and your credit, so you must own your home and have some equity built up in order to qualify for a HELOC.

What are the Pros and Cons of a HELOC?

Great for:

  • Projects with ongoing expenses — flexibility to spend, pay down the balance, spend again
  • Paying less interest — lower rates than most unsecured products, and revolving structure where you only pay on the amount you’ve borrowed
  • Tax deductions — some opportunities for a tax deduction of interest, depending on how the funds are used
Not great for:
  • Renters, as they are not eligible for dwelling-secured financing
  • Homeowners worried about foreclosure risk
  • Fast funding — underwriting and appraisal process means it can take weeks to get your money
  • Payment- or rate-sensitive people — rates are typically variable so may rise
  • People looking for financing right now — several banks halted new HELOC applications in May in response to the COVID-19 pandemic so availability may be very limited.
Bottom Line on HELOCs
HELOCs are often one of the more affordable and flexible financing options for home improvement work, but it may be especially difficult to get one in the current environment and the process is lengthy compared to other options.

2. Cash-Out Refinance

What is a cash-out refinance and how does it work? A cash-out refinance is when you replace your existing mortgage with a new mortgage for more than you owe on your home. The difference goes to you in cash, which you can spend on whatever you want.

Your cash out amount is based on the equity in your home and your credit, so you must own your home and have some equity built up in order to qualify for a cash-out refinance.

What are the Pros and Cons of a Cash-Out Refinance?
Great for:
  • Paying less interest–rates typically lower than unsecured products and many HELOCs
  • Simplified, predictable payments — single monthly payment for your mortgage and your home improvement project, with fixed rates widely available
  • Tax deductions — some opportunities for a tax deduction of interest, depending on how the funds are used
Not Great For:
  • Renters, as they are not eligible for dwelling-secured financing
  • Homeowners worried about foreclosure risk
  • Payment- or rate-sensitive people — your rate on your entire mortgage may go up due to a higher loan amount
  • Fast funding — underwriting and appraisal process means it can take weeks to get your money
  • People looking for financing right now — due to COVID-19, many lenders have tightened requirements for mortgages in general and cash-out refis in particular
Bottom Line on Cash-Out Refinancing

Cash-out refinancing can be an affordable, fixed-rate option for financing your home improvement project but the process may take considerably longer than it would have during pre-pandemic days and the requirements may be more stringent.

3. Personal Loans

What is a Personal Loan and how does it work? Personal loans are unsecured loans that you receive as a lump sum of cash to use however you like. They typically have fixed rates and terms, which means you pay the loan back in set installments over a set period of time.

What are the Pros and Cons of a Personal Loan?

Great For:

  • Fast funding — approval process is fast and usually 100% online
  • Renters, homeowners concerned with foreclosure risk — available regardless of housing status
  • Fixed scope of work — lump sum of cash makes it harder to overspend on your project
  • Better rates than other unsecured options — rates are generally lower than traditional credit cards

Not Great For:

  • Projects with ongoing expenses or unclear scope — lump sum of money can only be used once without borrowing again. May result in additional hard inquiries and a negative impact on your score if you need more credit
  • Paying less interest — you pay interest on your total outstanding balance, regardless of how much you’ve spent
  • Some homeowners — rates are typically higher than secured options

Bottom Line on Personal Loans

Personal loans are a fast and affordable way to borrow a set amount of money. This may be a good fit for a project with a set budget or a lot of one-time, up-front cost.

4. Traditional Credit Cards

What is a traditional credit card and how does it work? Most of us are familiar with traditional credit cards. They are revolving lines of credit, which means you can spend up to your credit limit, and then pay back your outstanding balance and spend again. They can be used wherever credit cards are accepted, and some offer (expensive) cash options as well.

What are the Pros and Cons of a Traditional Credit Card?

Great For:

  • Fast funding — approval process is very fast and many cards are available for instant use
  • Projects with ongoing expenses — the flexibility to spend, pay down the balance, spend again
  • Pay for what you use — revolving structure means you only pay interest on what you’ve spent
  • Potential for attractive short term rates — promotional rates may save you money in interest if you can repay quickly

Not Great For:

  • Paying less interest — higher rates than most other options
  • Predictable payments — rates are typically variable and can rise
  • Overspenders — cards make it easy to overspend and run up unmanageable debt
  • Cash expenses — most cards have very expensive cash advances

Bottom Line on Traditional Credit Cards

Traditional credit cards are ubiquitous but expensive. They offer speed and flexibility compared to many other options but they will almost certainly cost you more money.

5. Fintech Alternatives

What alternatives are available?

Online financial technology (fintech) companies offer a variety of financing alternatives that may work well for your situation. Here are a few examples:

  • Upgrade Card
    • Upgrade Card combines the flexibility of a card (can be used wherever VISA(R) is accepted) with the low cost and predictability of a personal loan (each month, purchases are converted to a fixed-rate installment loan). This option is great for projects with ongoing expenses and for rate-sensitive people looking for quick funding.
  • Affirm or Afterpay
    • These companies offer fixed-rate installment loans at the point of sale at many retailers. This might be a great fit for a home improvement project with a big upfront cost from a single store (for example, new furniture from one retailer) but offers less flexibility than other revolving products.
  • More!
    • Fintech companies are always introducing new products, so it’s worth taking the time to see what else is out there.

Bottom Line

Financing your home improvement project during a pandemic may complicate things, but it doesn’t need to hold you back. Don’t be discouraged if the loan you’d planned to apply for isn’t available — take the time to understand your financing options and keep an open mind. There may still be a great way to get the home office or backyard of your dreams!

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Source: mint.intuit.com