Debunking credit card myths: Will I always earn bonus points with certain merchants?

Debunking credit card myths: Will I always earn bonus points with certain merchants?


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Many of the credit card offers that appear on the website are from credit card companies from which ThePointsGuy.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all credit card companies or all available credit card offers. Please view our advertising policy page for more information.

Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Source: thepointsguy.com

First Time Homebuyer? 6 Home Buying Myths to Look Out For – Redfin

Buying your first home is often a dream for many renters out there. But with all the information about how to buy a home, it can be easy to believe some of the home buying myths. Whether you’re looking to buy a house in Seattle, WA, or a condo in Miami, FL, you’ve probably heard some of the myths surrounding how much you’ll need for a down payment or how high your credit score should be. 

Before you set your sights on your dream home, make sure you know just what separates the home buying myths from the facts. You may realize that you’re able to buy your first home sooner than you think.

home-buying-myths

home-buying-myths

MYTH 1: You need a 20% down payment

The biggest home buying myth for any first time homebuyer is that you need a 20% down payment to buy a home. In many cases, your down payment can be as low as 3.5%. Common types of loans with low to no down payments include FHA, VA, and USDA loans. With FHA loans – loans designed for individuals with a low-to-moderate income level and credit score- your down payment could be as low as 3.5%. For veterans and current service members, VA loans offer no down payment mortgages, and those looking to buy a home in a rural area may qualify for a no down payment USDA loan. 

Aside from loans, down payment assistance programs can help you lower the cost of your down payment. These programs are available nationwide, statewide, or locally in your county or even city. Down payment assistance programs provide a wide range of assistance types such as second mortgages, forgivable loans, or grants covering partial to full costs of your down payment. Your real estate agent or mortgage lender can help you determine what down payment assistance you qualify for. 

If you do have the means to purchase a home with a 20% down payment, there are benefits to consider. For starters, you won’t need to factor in private mortgage insurance (PMI) to your budget. PMI is an additional cost your mortgage lender may require if your down payment is below 20% and the cost is factored into your monthly mortgage payment. However, it’s always a good idea to talk with your financial advisor or wealth manager to determine your finances and whether a 20% down payment is the right option.

MYTH 2: Renting is cheaper than buying a home

One of the most common home buying myths is that renting is cheaper than buying a home. If you’re deciding whether to make the transition from renter to buyer, you might believe that renting is the less expensive option. However, in some cities the cost of renting a home may be less than or equal to a monthly mortgage payment.

If you’re serious about buying a home, you may end up saving money in the long run if you buy a house rather than continue renting. To compare the costs of renting versus buying a home, you can use a rent vs buy calculator to determine which option works best for your circumstances.

MYTH 3: Your credit score needs to be perfect

Home buying myths centered around credit scores often run rampant, specifically the myth that you must have a great credit score to buy a home. Luckily, that’s not always the case. If your credit score is at least 580, you may qualify for a 3.5% down payment FHA loan. For those looking at USDA loans, your credit score should also be a minimum of 580. VA loans actually have no minimum credit score, but instead require lenders to look at the whole loan profile of a homebuyer.

Generally speaking, if your credit score is higher you’ll likely have more options when it comes to qualifying for a conventional loan. With a higher credit score, you may also find that the terms of your loan or interest rates are better. However, just because your credit score isn’t great doesn’t mean your homeownership dreams need to come to a halt.

MYTH 4: All mortgage lenders offer the same rate

First time home buyers may have the belief that every mortgage lender will offer you the same rate no matter where you go. When shopping for a mortgage, it’s always a good idea to get more than one quote. Not every mortgage lender will offer you the same – or even the best- loan terms. To avoid making this mistake, it’s important to get quotes from several mortgage lenders and find the one that’s best suited for your finances and homeownership goals. 

MYTH 5: Home inspections are optional

Especially if there are bidding wars, it can be tempting to skip a home inspection to make your offer stand out. However, home buying myths like these may cause more issues down the road. More often than not, mortgage lenders will require a home inspection before you buy the home, so you may not even have the chance to consider passing on a home inspection.

In the case that your lender does not require an inspection, this doesn’t mean you should skip it. It’s important to know the condition of the home you’re looking to buy. That way you’ll be aware of any damage or issues the house may have before becoming the owner. If a home inspection does find any significant damage, you may be able to negotiate with the seller to repair the issues or lower your asking price. 

MYTH 6: The listing price is non-negotiable

A home buying myth that some first time homebuyers believe is that the listing price is set in stone. Depending on the housing market, you may need to be prepared to spend more than the home’s list price or negotiate for a lower price. If you’re buying in a seller’s market– where there are more buyers than homes available- you should be prepared to make an offer that’s higher than the listing price.

If it’s a buyer’s market- where there are more homes available than buyers looking to purchase- you may be able to negotiate for a lower price than what’s listed. Either way, believing the home buying myths about listing prices may cause you to lose out or even overspend on the home of your dreams.

Source: redfin.com

I Thought I Was Too Good For Community College

4 reasons you should go to community college first

4 reasons you should go to community college firstWhether you are about to head to college (no matter what your age may be), if you have a child who is about to attend college, or if you know someone who is about to experience this, then this article is for you.

When I was around 17, I applied to several different colleges, but one mistake I made was that I didn’t even give community college a thought.

Unfortunately, there is a stigma attached to going to community college, like thinking it is for those that can’t get into a “regular” college, for those that don’t have enough money, or for those that have no other options. When, in fact, these are all far from the truth.

And, sadly, I bought into these myths and thought I was too good for community college. If you want to save money in college, community college is a great way to do that.

The stigma about going to community college is absolutely ridiculous.

And, I was a young kid, so, of course, I let other people’s opinions get to me. And, I thought everyone was right!

It isn’t just kids that believe those myths about community college, as even adults (parents or returning learners) buy into those myths.

Well, that is a big mistake!

For many people, community college should be their first choice.

College costs are increasing, and they’re not going to stop anytime soon.

According to College Board, the average yearly tuition and fees for a:

  • Private four-year college is $32,410.
  • Public four-year college for out-of-state students is $23,890.
  • Public four-year college for in-state students is $9,410.

Community college, on the other hand, is just $3,440.

Those tuition differences are huge, and just look at how much you could save if you did only your first year at community college!

For many people, going to college means taking out loans, and according to a student survey done by Nerdwallet, 48% of undergrad borrowers said they could have borrowed less and still have afforded their educations. And, 27% regretted going to a school that required them to take out loans to afford their tuition.

I know this regret personally.

I only spent one summer semester taking classes at community college, where I earned 12 credits, and I still regret not taking more. I probably could have saved over $20,000 by taking more classes at my local community college.

Yes, I could have saved that much money!

Whether you are in college already or if you haven’t started yet, taking classes at a community college can be a great way to save money.

Today, I want to talk about common myths I hear about community college, so that I can persuade more people to give it a shot. It can save you so much money, and is a great option for a lot of people.

Related content:

Here are common myths about attending community college:

But, all of my credits won’t transfer.

This is the top reason (and myth) I hear for not attending community college.

If you take the correct steps, the credits you earn at a community college will transfer.

If you decide to go to a community college first, always make sure that the 4-year college you plan on attending afterwards will accept all of your credits. It’s an easy step to take, so do not forget to look into this! You should take this step before you sign up and pay for any classes at the community college so that you are not wasting your time.

My four-year university made it easy and had a printed list of what transferred from the local community college – it’s seriously that easy! I’m sure many universities do this as well.

When I took classes for college credit in high school and at the community college, I made sure that all of the classes transferred to the university in which I was getting my degree from.

I have heard too many stories about people not checking this ahead of time and wasting years by taking classes that didn’t transfer, which means you are wasting time and money.

Make sure you get it in writing and talk to your college counselor as well about this. They can help you determine which ones will transfer and provide you proof of transferability.

Also, know that by accepting transfer credits, your four-year university is basically saying “these community college credits mean the same thing here.”

Community college won’t actually save me that much money.

I want to repeat, the average yearly tuition and fees for a:

  • Private four-year college is $32,410.
  • Public four-year college for out-of-state students is $23,890.
  • Public four-year college for in-state students is $9,410.

And, community college is $3,440.

As you can see, college tuition is a significant amount of money, and it is a drastic difference between four-year institutions and community college.

Now, the problem here is that many people “afford” college by taking out student loans, so the amount of money you are paying for college isn’t an immediate thing that you “feel” – because it’s all debt!

Note: If you are a parent and you are thinking about taking on debt to put your child through school, please, please, please consider having them attend community college first. Please, also read Should I Ruin My Retirement By Helping My Child Through College?

The classes won’t be as good.

I’ve heard this community college myth over and over again. Many people think that the classes won’t be “good enough” for them. That is usually far from the case, though. Your first two years, no matter where you go, are most likely going to consist of very generic classes or classes that are similar, if not the same, as ones at the four-year college you are thinking about attending.

It’s usually not until the last two years, after you get those beginner classes and electives out of the way, that your classes really begin to matter for your degree.

And, if you’re afraid you really need more of those beginner classes from a four-year college, I recommend at least taking a summer semester or two at your community college for elective classes. There are usually lots of elective options at community college, and you can at least take those at a more affordable rate. That is exactly what I did – one summer while I was attending my four-year college, I enrolled at the community college for a bunch of electives. I was able to easily, and affordably, knock out a bunch of electives.

My degree will be worth less coming from a community college.

When you graduate with a four-year degree, the school name on your diploma will be the name of the college you graduated from. It won’t say, “graduated from here but took some classes at community college.” This is because your community college credits transferred (if you followed the step above).

So, no worries here.

Nowhere on my college degree does it say that I took some classes at the community college.

Did you attend community college? Why or why not?

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Source: makingsenseofcents.com

How to Consolidate Federal Student Loans Into One Monthly Payment

If you’re one of the millions of Americans who’ve graduated with student loan debt, you’re likely making multiple loan payments. Each year you borrow for school requires taking out a separate loan. And while all the money behind federal student loans comes from the federal government, the government doesn’t directly communicate with borrowers. It assigns one of many servicers to manage student loans, billing, and payments. So if you have more than one loan, that could mean more than one servicer, which means multiple bills.

It’s easy to feel overwhelmed trying to manage so many monthly payments. That’s where student loan consolidation comes in.

About Federal Student Loan Consolidation

In essence, consolidation means combining all your current loans into a single loan. The government issues a single direct consolidation loan in the total amount of your original loans. The new consolidation loan pays off the original loans, leaving you with only the consolidation loan amount to repay. That means one monthly payment with one servicer. The new monthly payment will be roughly the same as the combined total of all the old payments unless you opt to lengthen the repayment term.

Repayment Options

In addition to simplifying your payments with a single monthly bill, you also get the option to stick with the standard 10-year repayment schedule or extend your repayment term up to 30 years. How long you can extend the repayment term depends on the repayment plan you select on your consolidation application.

The repayment options for federal student loans that apply to consolidation loans include:

  • Extended Repayment. The extended repayment plan allows you to repay your loans over up to 25 years to lower the monthly payment amount. But remember, you’ll pay back more overall because you’re accruing greater interest over a longer repayment term. You can choose to keep the monthly payment fixed for the whole 25 years or graduated, with payment amounts starting lower and gradually rising every few years. To qualify for the extended repayment plan, you must have no outstanding balance on any loan borrowed before Oct. 7, 1998, and have a balance over $30,000 on the Federal Family Education Loan Program or on federal direct loans.
  • Graduated Repayment. The graduated repayment plan allows you to start with a lower monthly bill that increases over time. You can opt to repay up to 30 years, depending on how much you owe. Check the chart for allowable time frames, depending on your amount of debt. Payments increase every two years and will never be less than the amount of monthly interest that accrues nor greater than three times the amount of any other payment.
  • Income-Driven Repayment. There are four income-driven repayment (IDR) plans, and each has its own set of advantages and disadvantages. But essentially, each of them ties your monthly payment to your income, capping it at a certain percentage of what the government considers discretionary income based on the federal poverty guidelines for your state of residence and a family of your size. Qualifications vary by plan, as does the length of time you’ll be required to repay before any remaining debt qualifies for student loan forgiveness. But you don’t have to worry too much about which plan is the best for you. When you apply for IDR, your loan servicer puts you on the lowest-monthly-payment plan you’re eligible for unless you request otherwise. Note that you must fill out a separate application for IDR.

Regardless of which plan you select, repayment generally begins within 60 days of when your new consolidation loan is disbursed (paid out).


Calculating the New Interest Rate

Federal law determines the interest rates on student loans, and they vary depending on the type of loan and year it was disbursed. As a result, multiple loans mean multiple interest rates. When you combine all your loans into one, you’re issued a single new rate. This rate is fixed for the life of the loan and calculated as the “weighted average” of all the loans you’re consolidating rounded up to the nearest one-eighth of 1%.

A weighted average means that instead of adding all the interest rates and dividing by the total number of loans, the interest rates owed on larger amounts are given more weight. For example, let’s say you borrowed $5,000 at 5.0% interest and $10,000 at 3.86% interest. To find the weighted average, the math would look like this:

($5,000 x 0.05) + ($10,000 x 0.0386)

_____________________________  = 0.0424

                 $5,000 + $10,000

You then take the weighted average interest rate — 4.24% — and round it up to the nearest one-eighth of 1%, which brings the total to 4.25%.

One of the myths of student loan consolidation is it results in a lower interest rate. But as you can see from the math, that’s not the case. The new rate is lower than the one on the old higher-rate loan and higher than the one on the old lower-rate loan. The idea is to keep the overall interest rate on the new direct consolidation loan the same as what you’d have paid on the total of all the old loans.


Consolidating Federal Student Loans

To consolidate your student loans, start with a print or online direct consolidation loan application. These are available from Federal Student Aid (FSA), an office of the U.S. Department of Education (DOE), at studentaid.gov. It’s free to consolidate federal student loans, so beware of anyone charging a fee to do it for you. It’s a common student loan scam. Instead, head to the FSA website and follow the instructions to complete the application yourself.

Qualifications & Eligibility

Federal student loan consolidation requires no credit check, so you can consolidate your loans even if you’ve racked up debt and your credit score has taken a hit. And you can consolidate any federal student loan you haven’t already consolidated (though there are options for reconsolidation).

When you consolidate your old loans into one new federal direct consolidation loan, your old loans no longer exist. That means you could lose certain benefits on some loans, including any of the forgiveness options available, specifically for Perkins loans if you have one or more of them. If you opt to consolidate a parent PLUS loan with other loans, you lose access to all income-based repayment programs except income-contingent repayment, which offers the least favorable repayment terms. And if you’ve made any payments toward forgiveness on an IDR program, consolidating these loans wipes out your progress.

So, it pays to know when to consolidate your student loans. However, you can opt not to include any loans you’ll lose benefits on in your new consolidation loan.

In general, there’s only one eligibility requirement for federal student loan consolidation: Your loans must be in repayment or in the grace period. That only happens when you’re no longer in school.

While you’re attending school at least half-time, your student loans are automatically placed into deferment. But once you graduate, leave school, or drop below half-time enrollment, they enter into repayment. For federal loans, you have a set window after leaving school (the grace period), during which you aren’t required to make payments. For most federal loans, the grace period is six months. You can consolidate your student loans at any time during this period.

You cannot consolidate a student loan while you’re in school. But parents can consolidate a parent PLUS loan at any time.


Reconsolidation

In general, you can’t reconsolidate a loan you already consolidated. But there are limited circumstances in which it’s allowed. These include:

  • You Want to Add a Loan That Wasn’t Originally Included. It could be one or more loans you received after the original consolidation loan. For example, you may have consolidated your undergraduate loans and then decided to go to graduate school. If you then want to consolidate your graduate school loans with your undergraduate ones, you can do that. You can also consolidate two consolidation loans. But you cannot reconsolidate a consolidation loan by itself.
  • You Want to Get an FFEL Consolidation Loan Out of Default. If you have an older Federal Family Education Loan (FFEL) Program (a discontinued loan program that includes federal Stafford loans) consolidation loan, and it’s in default, you can get out of default by reconsolidating it as a direct consolidation loan and agreeing to make three consecutive on-time payments and to repay under an IDR plan.
  • You Want to Qualify an FFEL Consolidation Loan for PSLF. To qualify for the Public Service Loan Forgiveness (PSLF) Program, you must have direct loans. Therefore, the DOE will allow you to reconsolidate your old FFEL loan to qualify.
  • You’re in the Military and Want to Qualify an FFEL Consolidation Loan for the No-Interest Accrual Benefit. During periods of qualifying active-duty military service, interest does not accrue on direct loans. So if you have an older FFEL consolidation loan, the DOE will allow you to reconsolidate it with a direct consolidation loan.

Necessary Documentation

Before you sit down to complete the consolidation application, you must gather all the required documents. You won’t be able to save your progress and return to it later. The information you need includes:

  • Your Certified FSA ID. You’ll need your login information to complete and submit the consolidation application. If you don’t already have a verified login ID for accessing the FSA website, get one first. The Social Security Administration must specifically verify your identity, so it could take several days.
  • Personal Information. You must provide your permanent address, email address, and telephone number.
  • Financial Information. If you want to repay your consolidation loan under one of the IDR plans, you must provide information about your income. You can use your adjusted gross income from your most recent income tax return, which you can retrieve electronically from the IRS during the application process. If your income has changed significantly from what you reported on your tax return, you must provide your two most recent pay stubs. Because some IDR plans use both your and your spouse’s income when calculating your monthly payments, be prepared to provide spousal information if you filed a joint tax return. If you filed separately, you need your spouse’s Social Security number so the DOE can access their tax return. If their income has changed significantly since filing their taxes, you can choose instead to provide their most recent pay stubs.
  • Spousal Signature. If you’re married and opt to repay through an IDR plan, your spouse must sign your application since some IDR plans include spousal income in their monthly payment calculations. Your spouse doesn’t have to be present when you fill out the application, but the DOE won’t process your application until it’s co-signed. However, unlike a traditional cosigner, your spouse isn’t obligated to repay your loans.

The Application Process

After you’ve gathered everything you need, complete the consolidation loan application online at the FSA website or print and mail a paper copy. You must complete the online process in one session, which takes about 30 minutes and consists of seven general steps:

  1. Select Your Loans. Enter which loans you want to consolidate. Remember, you don’t have to consolidate all your loans if you have loans with perks you want to retain, such as Perkins loans, or any you’ve already been paying on under an IDR program.
  2. Select a Servicer. You can select the agency you want to manage your loans from the provided list of federal student loan servicers. Although your loan servicer manages your billing and repayment, they don’t have control over your loan terms, as the federal government establishes them. So if you’re happy with your current servicer, there’s no need to switch. However, if you’re unhappy, consolidation provides one of the only ways to change your servicer. Common reasons for complaints include the failure to provide information about repayment options and misapplication of payments.
  3. Choose a Student Loan Repayment Plan. You can opt to continue repaying your loans on the standard 10-year repayment plan or select any other plans for repaying federal direct student loans: graduated repayment, extended repayment, or one of the IDR plans. If you choose an IDR plan, you must also fill out an income-driven repayment plan request.
  4. Read All the Terms. Before submitting your application, be sure you understand all the terms and conditions. Once you sign the application, it becomes a binding contract. And once you consolidate your loans, you won’t be able to undo it.
  5. Sign Your Application. The DOE can’t process your application without a signature, whether handwritten or electronic. If you’re married and applying for repayment under an IDR plan, your spouse must also sign.
  6. Continue Making Payments. It takes 30 to 90 days to process your consolidation application and grant your new loan to pay off your old ones. Your new loan servicer will let you know when your first payment is due. If any of your loans are in the grace period, you can let your servicer know you want to delay your application until the grace period has ended. However, if you’re already in repayment, you must continue to make payments on your old loans until your new consolidation loan is processed. If you’re unable to make payments, you can apply for a deferment or forbearance.
  7. Contact Your Student Loan Servicer With Any Questions. If you have any questions about your application or continuing to make payments, contact the servicer you selected on your application to manage your loans. If you need their contact information, you can find it on FSA’s website. To ask questions about consolidating your loans before applying, contact the student loan support center at 800-557-7394.

Final Word

Although figuring out the best way to pay back your student loans can be complicated, consolidation doesn’t have to be. Fortunately, it’s an easy, straightforward process that generally simplifies repayment.

Just keep in mind that as tempting as it can be to extend your repayment term to get lower monthly payments, if you can afford them on the 10-year repayment schedule, it’s best to stick with it. If you’re seriously struggling to make your monthly payment, IDR, with its 25- and 30-year repayment schedules, can help. But if you can make your payment — even if it’s a bit of a stretch — you’ll save far more in the long run if you pay off your loan as quickly as possible.

Source: moneycrashers.com

US travelers join 20 other nations on the Philippines’ travel ban list

US travelers join 20 other nations on the Philippines’ travel ban list



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Many of the credit card offers that appear on the website are from credit card companies from which ThePointsGuy.com receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This site does not include all credit card companies or all available credit card offers. Please view our advertising policy page for more information.

Editorial Note: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Source: thepointsguy.com