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Apache is functioning normally

June 8, 2023 by Brett Tams

Referral and Marketing Tools; TPO Products; U/W, Doc Custodian Review; DSCR and 2nd Program News

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Referral and Marketing Tools; TPO Products; U/W, Doc Custodian Review; DSCR and 2nd Program News

By:
Rob Chrisman

Wed, Jun 7 2023, 10:50 AM

Mortgage news temporarily aside, how about the government contemplating a law that would require cars to have AM radio?! AM radio goes farther than FM or cellular streaming services which is why, in out-of-the-way places, like in mountains, you can tune in to an AM station for traffic reports. If you think radio, or the mortgage process, is confusing, try visual entertainment, with too many cable channels and media outlets to fill with 24-7 options and opinions. Too many shows cast across streaming channels. Too many hours on cable TV with financial pundits offering crazy predictions, just to get on TV. I wish that I had an org chart showing who is in charge of what, and how they fit together. I now have three remotes and need to figure out the relationship between Roku, Apple TV+, Prime Video, VUDU, Discovery, YouTubeTV, Sling, Disney+, HBO Max (“Max”), Hulu, Netflix, Paramount+, Peacock, Showtime, Starz… the list goes on and on. And what the heck is BritBox anyway? (Today’s podcast can be found here and this week’s is sponsored by Built Technologies. Join Built Technologies on June 20th at 12 PM CST for an exclusive webinar that will dive into proactive portfolio monitoring as Built’s experts share best practices for achieving greater visibility into your construction portfolio. Today’s includes an interview with Milo’s Josip Rupena on the impact pricing is having on young homeownership.)

Lender and Broker Software and Services

Summer is approaching, and every extra second counts when you’re working on your tan. Utilizing digital mortgage tools can save you a lot of time, reducing turnaround times and increasing operational efficiencies. Whether you are using a hybrid or fully digital eClosing process, it’s crucial to prioritize compliance and efficiency, ensuring the correct eSignature tools and processes is a major part of that. By leveraging advanced eSignature technology, you can simplify your operations, ensure compliance, and save time. Wolters Kluwer’s ClosingCenter and SmartSign Plus allow you to improve operational efficiency by as much as 50 percent, simultaneously improving the customer experience and collecting the key data you need to remain compliant with ever-changing regulations. Learn how advanced eSignature can improve your closing process now!

In today’s ever-changing mortgage landscape, the right lending partner is essential. That’s where Flagstar Bank comes in. As the second largest warehouse lender and a $124 billion asset bank, Flagstar offers the strength, stability, and best-in-class service you’ve been looking for. Flagstar warehouses most loan types, including conventional, NonQM, and construction. Our MSR, servicer advance, and EBO financing solutions are also available. Flagstar’s warehouse platform already gives approximately 400 warehouse clients of all sizes the flexibility to fund quickly and easily. In addition, our specialized mortgage banking team may be able to help streamline operations and provide greater value for cash balances. Don’t let market turbulence hinder your growth. Instead, choose Flagstar as your lending partner and unlock a world of opportunities for your business to thrive. Contact Jeff Neufeld or Patti Robins today to discuss what Flagstar can do for you.

It’s not news to you that lenders nationwide are facing rising interest rates and falling production volumes. Let’s give those decreased production volumes some perspective, shall we? Find out right now with MMI’s monthly Mortgage Industry Benchmarks newsletter, which lets lenders and LOs compare their recent performance to their peers via production-based tiers. After significant pipeline growth in March, lenders in every tier faced a decrease in production volume in April. Lenders in MMI’s Capital Tier ($500M-$5B production/year) averaged a 14.9 percent decrease in production from March to April while LOs in the Diamond Tier ($50-100M production/year) saw a 16.9 percent decrease in their monthly production. Now that you know how some lenders and LOs fared in April, find out how you stack up against your peers. Sign up for MMI’s monthly newsletter for to find out and for more insights like these!

“Unlock the secrets to consumer’s digital financial data with AccountChek® by Informative Research! Are you facing confusion and uncertainty regarding investor programs as they relate to verifications? Our expert consultation is here to guide you towards clarity and success. Navigating the complex landscape of asset, income, and employment verification can be challenging. Do not let it hinder your operations any longer. Let the experienced AccountChek team help you understand investor programs and streamline your verification processes. Book a consultation meeting today and gain access to our industry-leading expertise to provide you with the insights and answers you need to make more loan applications eligible for the many programs that leverage digital verification data. Say goodbye to confusion and hello to efficient verification processes that seamlessly feed into investor programs. Stop wasting time and resources on guesswork. Join the satisfied lenders who have already benefited from Informative Research’s consultation services and AccountChek. Click now to schedule your meeting and discover how we can revolutionize your mortgage operations.”

“Ensure Compliance with GNMA and Safeguard Investor Interests! Noncompliance is not an option: both your auditor and GNMA require that your Document Custodian undergo regular reviews. At Richey May, we are a step ahead and have scheduled reviews for four Document Custodians beginning in September 2023. Our team of experts is well-versed in Document Custodian Procedures and has years of experience helping mortgage companies comply with these requirements. We’ll conduct a comprehensive review of your Document Custodian to ensure compliance and identify any areas needing improvement. Trust us to safeguard the interests of investors and stay compliant. To schedule a comprehensive review, reach out to us.”

We all know volumes will return eventually, so why not get ahead of your competition during this slow season to optimize your operations with CandorPLUS? CandorPLUS builds upon the popular Candor LES underwriting engine and is a Lean Six Sigma Man + Machine solution spanning the entire loan fulfillment process. Why is now the best time? The current economic environment allows for favorable pricing. Manageable volume allows time to adapt and optimize. Right size operations for the last time… No more difficult layoffs. Instantly scale without additional headcount. Faster turn times increases market share and loyalty. Click here to learn more and take advantage of our introductory pricing!

Marketing and Referral Products

You have to apply for a license to become a bona fide Unicorn Hunter, but all you need on your quest for more referrals is a phone and SimpleNexus, an nCino company’s mortgage app. SimpleNexus’ all-in-one mobile technology empowers loan officers to implement a powerful referral strategy and establish quick and constant connections with real estate agents. By supporting ongoing digital collaboration between lenders, real estate agents, and consumers, SimpleNexus transforms the time-consuming process of engaging, nurturing, and converting leads into a single-sign-on experience. Download SimpleNexus’ latest white paper, Leveraging Digital for Smarter Referral Strategies, and make some magic in your pipeline.

Here’s a true story about the power of a SmartCRM™: a loan officer we know made the President’s Club… from a hospital bed. On a mortgage company’s production cruise not long ago, a winner slipped near the pool and landed on the back of his head. He was unconscious for 20 minutes, but when he woke up, he felt fine. Turns out he wasn’t fine. In fact, he almost died and spent a year in the hospital. That same year, from his hospital bed, he originated $12 million. How? Great relationships, a great assistant, and automated marketing. His Realtors and clients had no idea he was even sick. They continued to get great service from his assistant and targeted, personalized marketing from Usherpa. According to the Loan Officer, “Without Usherpa, I’d be out of business.” Find out how to originate more loans from anywhere with this free eGuide.

Free eBook: Winning Agent Business: The Lender’s Guide to a Strong Referral Network. In today’s volatile market, a steady stream of referrals means the difference between maintaining a pipeline and scrounging for leads. And as we move towards market recovery, a robust book of business will serve as an invaluable tool to take full advantage of profitable opportunities. Real estate agents still hold the keys to the referral kingdom. To create this eBook, Maxwell interviewed agents and broker-owners across the country. The result is firsthand advice to help you better network to create a strong funnel of referral leads. Download your free copy to learn the 4 qualities real estate agents value in their lending partners, agent networking dos and don’ts, 5 ways to become a go-to lender for real estate agents, and more. Click here to download “Winning Agent Business: The Lender’s Guide to a Strong Referral Network.”

Broker and Correspondent Programs

“U.S. Bank is dedicated to ongoing affordable housing efforts, and we believe sustainable homeownership is an important means of building wealth. Our commitment starts by empowering through education. As a trusted advisor, we’ve launched an educational breakthrough series aimed at providing lenders with the tools and resources to be successful. Join our upcoming breakthrough series “NextGen Homebuyers: How to Reach the Fastest Growing Homebuyer” or our “Affordable and Community Outreach” session to understand the challenges, opportunities and how to make a positive impact in growing communities. To learn more about participating, please contact your U.S. Bank account executive.”

Happy National Homeownership Month! A month that highlights and celebrates the value that owning a home brings to families, communities, and neighborhoods across the Country. And what better way to celebrate then to announce AFR Wholesale’s next edition of our “Why Wait?” series. We invite you on June 21st at 2 PM EST. to join AFR and special guests from Fannie Mae to learn about HomeReady® and how to leverage this program. Register Today! Over our series, we want to highlight affordable financing solutions that provide homeownership opportunities to more families. This provides you with a platform to learn from and ask Fannie Mae directly how to interpret program guidelines while AFR will provide insight on how to use this program as a solution for your borrowers. This live webinar will not be recorded, so sign up today and don’t miss it! Contact AFR by going to afrwholesale.com, email [email protected] or call 1-800-375-6071.

Are you frustrated as a retail loan officer or mortgage banker with the lack of flexibility to provide custom loan options? Take control: follow the lead of over 24,000 MLOs like you who have joined the wholesale channel in the last year. Whether you open your own independent mortgage brokerage or join a team as a loan officer, you’ll have the ability to provide your clients with the personalized solutions they need. Contact our team at BeAMortgageBroker.com today and you’ll be well on your way to a more fulfilling tomorrow.

Citi Correspondent Lending continues to make supporting underserved communities and diverse markets a priority, which is why we’re very excited to announce the pilot launch of our new HomeRun program. The first in a series of planned Community Lending initiatives, this program is a portfolio Community Lending product that allows up to 97 percent LTV, requires as little as 1 percent borrower down payment contribution and has no mortgage insurance requirement. These features could help make the path to homeownership significantly more affordable for your borrowers. Please reach out to your Citi Account Executive or our National Client Services Team to learn more about this new program and timeline for participant expansion.

Non-Agency, DSCR, and 2nd Changes

A&D Mortgage launched its Second Mortgage Program, designed to help homeowners and real estate investors access affordable financing options. The program offers competitive rates and flexible terms for owner-occupied homes, second homes, and investment properties.

Max Slyusarchuk, Founder and CEO of A&D Mortgage says: “We understand that life happens, and credit scores don’t always reflect a person’s full financial picture. Our new program allows us to meet those customers where they are and provide them with the financing they need.” Borrowers can access up to 85 percent combined loan-to-value (CLTV) ratios on their primary residence or up to 75 percent CLTV on a vacation home or investment property. Borrowers must have a minimum credit score of 660 or higher, with a maximum debt-to-income (DTI) at 50 percent.

Champions Funding’s Accelerator Program has been consolidated to serve as a portfolio-building vehicle for your real estate investors. To further reduce friction in Underwriting, you are connected directly to decision-makers to further speed things up. With streamlined Non-QM products, you can qualify borrowers fast and close even faster, in as little as 5 business days.

Just a few examples of Hometown Equity Mortgage Niches: 100 percent FHA financing, VOE only FHA, 1-year 1099, 1- year P&L use to qualify non owner properties, business bank statements down to 20 percent expense factor, Foreign Nationals no credit, 2-1 buydown use seller concessions, Bridge first time home buyer no income / blanket loans, 5-25 units.

Gain An Edge with Angel Oak DSCR Loans: 6 Months title seasoning for cash out, calculate the Debt Service Coverage Ratio (DSCR) based on interest-only payments, Condotels allowed,

Non-permanent residents, Foreign Nationals, Business Purpose Loans (allows LOs to close DSCR loans in states that they are not licensed in).

Capital Markets

Not much to report yesterday in the absence of economic data and Federal Reserve speakers. There was some chatter that the economy may be able to avoid a recession, though I’m not quite ready to declare that it’s headed for a soft landing just yet. We did see a little “spread tightening” (Treasury yields unchanged, mortgage rates down), which is good news considering MBS spreads continue to remain at historically wide levels. That isn’t helping mortgage rates and LOs as the spread between the 30-year fixed rate mortgage and the 10-year bond yield has surpassed the highs of last year, the 2008 financial crisis, and is back at levels last seen nearly 40 years ago.

Today’s calendar kicked off with mortgage applications decreasing 1.4 percent from one week earlier, according to data from MBA. This week’s results include an adjustment for the Memorial Day holiday. We’ve also received the April trade deficit at $74.6 billion, where expectations were for $75.8 billion versus $64.2 billion in March. Later today brings the latest Bank of Canada policy decision as well as consumer credit. We begin the day with Agency MBS prices roughly unchanged from Tuesday and the 10-year yielding 3.69 after closing yesterday at 3.69 percent. The 2-year is still up around 4.52 percent, so the yield curve inversion is alive and well.

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Source: mortgagenewsdaily.com

Posted in: Refinance, Renting Tagged: 1099, 2, 2023, 30-year, 30-year fixed rate, About, Advanced, advice, advisor, affordable, affordable housing, agent, agents, All, app, apple, Applications, ask, asset, Bank, bank account, Banking, bed, best, best practices, bond, book, borrowers, bridge, Broker, brokerage, building, building wealth, Built, business, buydown, buyer, Cable, Cable TV, Capital markets, cars, CEO, Citi, closing, collaboration, collecting, Commentary, companies, company, Competition, Compliance, construction, Consumers, correspondent, Correspondent lending, country, Credit, credit score, credit scores, Crisis, curve, custom, Customer Experience, data, Debt, debt-to-income, decision, Digital, Digital mortgage, discover, disney, don'ts, dos, down payment, DTI, eclosing, Economy, education, efficient, Employment, Employment verification, Entertainment, environment, equity, estate, expectations, expense, experience, experts, Fannie Mae, Features, Federal Reserve, FHA, financial crisis, Financial Wize, FinancialWize, financing, fixed, fixed rate, Fixed rate mortgage, Flagstar, Flagstar Bank, Free, fund, funnel, good, government, great, growth, guests, guide, hold, holiday, home, home buyer, homebuyer, Homebuyers, homeowners, homeownership, homes, hours, Housing, How To, Hulu, impact, improvement, in, Income, industry, Insights, Insurance, interest, interest rates, interview, investment, Investment Properties, investment property, Investor, investors, launch, Law, Layoffs, Learn, lenders, lending, leverage, Life, list, Live, loan, Loan officer, loan officers, Loans, LOS, Make, man, market, Marketing, markets, Maxwell, MBA, MBS, Media, memorial day, mobile, Mobile App, Mobile technology, More, Mortgage, mortgage applications, Mortgage Insurance, Mortgage News, Mortgage Rates, mountains, Move, MSR, neighborhoods, netflix, networking, new, News, non-QM, oak, offers, Operations, or, payments, percent, pilot, podcast, pool, Popular, portfolio, predictions, president, Prices, proactive, products, programs, property, rate, Rates, reach, ready, Real Estate, Real Estate Agents, Real Estate Investors, Realtors, Recession, referrals, Relationships, Research, return, Review, Reviews, right, Roku, sales, save, second, second homes, secrets, seller, september, Series, shares, single, social, Social Media, Software, states, story, Strategies, streaming, summer, sustainable, Technology, The Economy, time, timeline, title, tools, TPO, Treasury, trust, tv, u.s. bank, Underwriting, vacation, vacation home, value, versus, Video, volume, warehouse lender, wealth, Webinar, white, will, Wolters Kluwer, working, young

Apache is functioning normally

June 8, 2023 by Brett Tams

LOS ANGELES — The average long-term U.S. mortgage rate rose this week to its highest level since mid March, driving up borrowing costs for prospective homebuyers facing a housing market that’s constrained by a dearth of homes for sale.

Mortgage buyer Freddie Mac said Thursday that the average rate on the benchmark 30-year home loan rose to 6.57% from 6.39% last week. The average rate a year ago was 5.10%.

High rates can add hundreds of dollars a month in costs for homebuyers, limiting how much buyers can afford in a market that remains unaffordable to many Americans after years of soaring home prices and limited housing inventory.

The median monthly payment listed on applications for home purchase loans in April rose to $2,112, up nearly 12% from a year ago and a 0.9% increase from March, the Mortgage Bankers Association said Thursday.

The average rate on a 30-year home loan has risen two weeks in a row, echoing moves in the 10-year Treasury yield, which lenders use as a guide to pricing loans.

The 10-year Treasury yield has been mostly rising of late, climbing to 3.79% in afternoon trading Thursday. Two weeks ago, it was at 3.39%.

The move up in bond yields comes as investors react to stronger-than-expected economic data and the implications that could have on whether the Federal Reserve will raise interest rates again next month.

Bond traders are also factoring in the possibility that the U.S. government may default on its debt as the White House and GOP leadership wrangle over a deal to raise the federal government’s debt ceiling so it can avoid an unprecedented default as soon as June 1.

“The U.S. economy is showing continued resilience which, combined with debt ceiling concerns, led to higher mortgage rates this week,” said Sam Khater, Freddie Mac’s chief economist.

Jitters over the possibility that the government ends up defaulting on its debt could cause creditors to ask for higher interest rates on U.S. Treasury bonds, which could lead to a “significant increase” in borrowing costs, including mortgages, said Jiayi Xu, an economist at Realtor.com.

“Resolving the debt impasse sooner, rather than later, would mitigate potential adverse effects on the housing market, which is already contending with high prices and elevated mortgage rates,” Xu said.

Investors’ expectations for future inflation, global demand for U.S. Treasurys and what the Fed does with interest rates influence rates on home loans.

The Fed has raised its benchmark interest rate 10 times in 14 months. At its last meeting of policymakers, the central bank signaled that it could finally pause its yearlong campaign of rate hikes, though a pause would likely only nudge mortgage rates slightly lower.

Low mortgage rates helped fuel the housing market for much of the past decade, easing the way for borrowers to finance ever-higher home prices. That trend began to reverse a little over a year ago, when the Fed started to hike its key short-term rate in a bid to slow the economy and cool the highest inflation in four decades.

The spring homebuying season got off to a lackluster start this year as prospective buyers grappled with higher borrowing costs and a near record-low inventory of homes on the market.

Sales of previously occupied U.S. homes fell 23.2% in the 12 months ended in April, marking nine straight months of annual sales declines of 20% or more, according to the National Association of Realtors. The national median home price fell to $388,800 last month — down 1.7% from a year earlier and the biggest year-over-year drop since January 2012.

The modest pullback in home prices reflects heated competition among buyers, especially those vying for the most affordable homes. At least one-third of the homes sold last month went for more than their list price, according to the NAR.

The average rate on 15-year fixed-rate mortgages, popular with those refinancing their homes, rose to 5.97% this week from 5.75% last week. A year ago, it averaged 4.31%, Freddie Mac said.

Source: abcnews.go.com

Posted in: Renting Tagged: 15-year, 2, 30-year, affordable, affordable homes, Applications, ask, average, Bank, bond, bond yields, bonds, borrowers, borrowing, buyer, buyers, Competition, creditors, data, Debt, debt ceiling, decades, driving, Economy, expectations, fed, Federal Reserve, Finance, Financial Wize, FinancialWize, fixed, Freddie Mac, future, government, guide, home, home loan, home loans, Home Price, home prices, home purchase, Homebuyers, homebuying, homes, homes for sale, house, Housing, Housing inventory, Housing market, in, Inflation, interest, interest rate, interest rates, inventory, investors, leadership, lenders, list, list price, loan, Loans, LOS, los angeles, low, Low inventory, low mortgage rates, LOWER, market, median home price, More, Mortgage, Mortgage Bankers Association, MORTGAGE RATE, Mortgage Rates, Mortgages, Move, NAR, National Association of Realtors, News, or, policymakers, Popular, price, Prices, Purchase, Purchase loans, Raise, rate, Rate Hikes, Rates, realtor, Realtor.com, Realtors, refinancing, Reverse, rose, sale, sales, Sam Khater, short, soaring, Spring, The Economy, the fed, trading, Treasury, Treasury bonds, Treasurys, trend, U.S. Treasury, white, white house, will

Apache is functioning normally

June 8, 2023 by Brett Tams

Have you been diagnosed with congestive heart failure?  It can make applying for life insurance coverage becomes a bit difficult.

You may be able to get it approved, however insurance companies will  be concerned about offering you coverage because of your potentially serious medical condition.

However, it is still very possible to get insured with congestive heart failure. Obviously it doesn’t mean your heart has actually failed and stopped working, or you wouldn’t be reading this information.  It simply means it isn’t working as efficiently as it once did.

That being said, CHF, along with other heart diseases like heart attacks, congenital heart disease, and coronary heart disease, are the Number One cause of death of adults in the country.  This includes both men and women.

Since this is the case, trying to get life insurance approved can be a longer process than it would normally take.  This is because of additional underwriting requirements such as medical records having to be ordered.  If the doctor’s office is slow in getting medical records to the insurance company, it will just take longer to get approved.

This means the SOONER you APPLY for coverage, the sooner the process will get started. You can complete our brief form on this page to get the ball rolling.

If the condition is severe then your type of coverage will be impacted. First off let’s look at some underwriting guidelines for life insurance on how they relate to congestive heat failure. Hopefully this gives you a idea on what is ahead on your application.

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Life Insurance Underwriting for Congestive Heart Failure

Your agent, knowing you have CHF, will ask you some pre qualifying questions when you first talk with them. Listed below are a few of them:

  • When was your congestive heart failure diagnosed?
  • Did any health issues contribute to your diagnosis of congestive heart failure?
  • Do you have high blood pressure or hypertension?
  • What tests have you had done to evaluate your condition?
  • Do you have high cholesterol?
  • Is there any history in your family with heart disease or death in the family due to heart conditions?
  • Tobacco user?
  • Are you prescribed any medicine to help with your issues?

Even though you might take some medications, beta blockers, inhibitors, or nitrates, for your condition, you still might be insurable as long as you don’t take multiples of each and have other issues that coincide with CHF.

When it comes to life insurance underwriting, the more information you can give the better. If your application doesn’t clearly describe your condition, your chances of a bad rating or rejection go way up. Make sure to fully answer all the application questions plus give any other details you think are important.

 

Life Insurance Quotes with Congestive Heart Failure

Congestive heart failure has a wide range of different severity levels. Your life insurance quote will depend on how serious your health issues are because of your condition. Insurance companies also do not accept applicants that have recently been diagnosed with congestive heart failure because they want some time to see how the condition develops.

To avoid rejections and get the best rate, its best putting off an application for twelve months after diagnosis.. From there, your rate will depend on your condition plus your overall health.

It is even possible that you may have CHF and not even realize it because the symptoms usually don’t show up initially.  The reason they don’t is because your body and your heart can mask it at first, which is called compensation.  The symptoms will start showing up when the heart just can’t pump enough blood to the rest of your body.

These are some standard rating classes that most life insurance companies use, though every carrier determines how you’d fall into each category, I’ll explain your chances with each class.

  • Preferred Plus:  Generally impossible. Congestive heart failure is too serious a condition and carries too many health risks for applicants to receive the best possible insurance rating.
  • Preferred:  Very difficult but not impossible. If your congestive heart failure has only mild health symptoms and you are in great health otherwise, you could get a preferred rating.
  • Standard:  The likely best rating for most applicants. Applicants that only started having heart failure at 60 or older, are in good health, and have waited at least a year after being diagnosed to apply can get a standard rating.
  • Table Rating (substandard):  Many of you will end up in this class due to the health issue.
  • Declines: Most applications within 3 to 6 months of a diagnosis for congestive heart failure.  And other persons who deal with many health issues combined with history of health

If there is a situation where you do find that due to your medical condition you are declined for traditional life insurance, then our next recommendation is to look at a guaranteed issue life insurance policy.  This type life insurance application only asks a few health questions, but not to decline your application but only to determine how much and when the death benefit would be paid out.

As you are thinking about applying for life insurance, you may also try to improve your chances of getting the best rate by doing some of the following:

  • Lower your sodium intake
  • Lower your cholesterol
  • Stop smoking
  • Exercise more often
  • Eat a healthier diet
  • Keep all other medical conditions under control with responsibly taking medications
  • Continue with proper medical care by your medical professionals

These recommendations are common sense, and your doctor may have other activities and guidelines.  Even though there really isn’t a cure for congestive heart failure, the above lifestyle choices can minimize the degree of your heart deterioration, and allow you to get a lower life insurance rate.

Other Considerations as You are Applying for Life Insurance

This is common sense, but if you haven’t thought about it, now is the time to be thinking about how much death benefit you are looking to buy.  Since you have a serious medical condition, you might not be able to afford what you would want, so be realistic in also considering how much money you have to budget for a monthly life insurance payment.

Also, how long a period will you need life insurance?  Although typically no one knows for sure when their beneficiary might be filing a claim on the policy, you will need to consider whether to buy a term life insurance plan or a permanent life insurance plan.  We can help you with making this decision.

Lastly, it would be a good idea not to drop or cancel any life insurance policy you presently own.  As you get older, the premiums increase.  So if you are comparing an old policy vs a new policy, the rates on the new policy will probably be higher than what you are paying now.

 

Congestive Heart Failure Life Insurance Case Studies

Its important to understand how filling out the application can hinder or help your approval percentage. Below are instances on how to and how not to go through the process.

Case Study: Female, 63 year old, non-smoker, diagnosed with congestive heart failure at age 61, taking Beta Blockers and Ace Inhibitors, no other health issues.

This applicant was only showing mild signs of congestive heart failure and was otherwise in very good health. She had no other health issues and no family history of heart disease. However, because of her condition, she was only receiving expensive, rated life insurance offers. We advised her to request an EKG to prove that her condition was under control. With this extra information, an insurance company gave her a much less expensive standard policy.

Case Study #2:  Male, 54 year old, diagnosed with congestive heart failure at 51, father died young from heart disease, former smoker, improved health and weight since the diagnosis

This applicant had a very poor lifestyle prior to his heart failure diagnosis. He was smoking, overweight, and had high blood pressure. This combined with his family history of heart disease led to him being rejected from all his life insurance applications. However, since his diagnosis, this applicant dramatically improved his lifestyle. He lost a good deal of weight and quit smoking which made his condition much less severe. Since his health had improved we let him know it would be smart to get a written referral from his doctor stating how much healthier he is now. By reapplying with this extra certification, this applicant was able to receive a rated policy despite his relatively risky profile.

While congestive heart failure is quite serious, it is not enough to prevent you from taking out life insurance. You just need to handle your application well. To make sure the process goes smoothly, it helps to work with expert brokers that understand this condition.

Source: goodfinancialcents.com

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Apache is functioning normally

June 8, 2023 by Brett Tams

If you have a savings account, how much interest does it earn? Probably not enough. And if you don’t have a savings account, why not?

A savings account isn’t meant to make you rich. It’s a safe, if not very sexy, way to plan for your future and protect your money. But things get more interesting when you choose a high-yield savings account instead of a traditional savings account. A traditional account will pay pennies on your balance, but a high-yield savings account can help you earn extra money you’ll actually notice.

But how do you choose a savings account when there are so many out there? We did the research for you. These are the top high-yield savings accounts with the best interest rates, features, and benefits.

What’s Ahead:

Best high-yield savings accounts

The Ally Online Savings Account is our top pick for the best high-yield savings account overall because it consistently offers a competitive interest rate and includes features to help you save. For beginners, the Discover Online Savings Account might be a better option thanks to its simple platform and above-average support. The CIT Savings Account is our second runner-up because it has the highest APY of the bunch but does come with a minimum deposit requirement.

We also considered the Axos Bank High-Yield Savings Account, High-Yield Chime® Savings Account, Capital One 360 Performance Savings Account, and Marcus Online Savings Account for our list. Even though these didn’t make our top three, they’re all good choices well worth checking out.

Best overall: Ally Online Savings Account

Ally Bank's logoPros

  • No fees
  • No minimums
  • Boosters to help you save faster

Cons

  • No branch locations

Features

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 2.50%
  • Monthly fee: $0

The Ally Online Savings Account is the best high-yield savings account overall offering a generous interest rate and tons of free features to help you save. And speaking of free, this account really is. There are no monthly maintenance fees, overdraft fees, or transfer fees to deplete your earnings.

This high-yield savings account supports you to save by giving you the option to create buckets for different goals and use boosters to save faster. The boosters are:

  • Recurring Transfers – schedules automatic transfers from a linked account
  • Round Ups – rounds up your Ally debit card purchases to the nearest dollar and sends the extra to your savings
  • Surprise Savings – points out money in your checking account that isn’t being used for anything and moves it to your savings

This account is easy to open. There are no minimum balance requirements to earn interest and you can fund it with as little as $0.01. While Ally technically uses balance tiers (<$5,000, $5000 – $24,999.99, and >$25,000), all positive balances currently earn the same rate.

For help with any issues you might have, Ally offers 24/7 live customer support via chat or phone.

Learn more about the Ally Online Savings Account or read our full review.

Best for beginners: Discover Online Savings Account

Discover Bank logoPros

  • No fees
  • No minimums
  • Instant transfers between Discover accounts

Cons

  • Very few branch locations
  • No advanced savings features like buckets or round-ups

Features

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 4.00%
  • Monthly fee: $0

The Discover Online Savings Account gets pretty much everything right, from the competitive interest rate to the lack of account fees. We love this high-yield savings account for beginners because it’s easy to use and doesn’t have minimums.

There is no minimum deposit to open or minimum balance required to earn interest or avoid having your account shut down, making this the perfect option for you even if you only have a few bucks to put away right now. You can even open an account with nothing and come back later to fund it.

Although this is a pretty basic account with few bells and whistles, there’s no monthly maintenance fee to worry about and you’ll earn interest on any balance. Plus, the Discover mobile app is notoriously solid, and ditto for customer service.

Interest is compounded daily and credited monthly into your account. If you have a Discover checking account and debit card, you can easily transfer money between this and your savings account. You can also schedule automatic recurring transfers to put your saving on autopilot.

Discover does have some branch locations, but they’re really limited, so you might not have the option to manage your account in person. This account also lacks features to help organize and simplify your saving such as buckets and round-ups.

Learn more about the Discover Online Savings Account or read our full review.

Best for long-term saving: CIT Savings Connect Account

CIT Bank logoPros

  • No fees
  • No minimum balance

Cons

  • Minimum deposit required
  • No branch locations

Features

  • Minimum balance: $0
  • Minimum deposit: $100
  • APY: 4.50%
  • Monthly fee: $0

For high-interest saving, the CIT Savings Connect Account is an excellent choice. This is a newer account with a really competitive APY of 4.50%. There are no minimum balance requirements to earn this rate and you only need to deposit $100 to open. Plus, there are no monthly fees. See details here.

CIT Bank also reimburses up to $30 in third-party ATM fees per statement period and supports free mobile check deposits and external transfers.

The CIT Savings Connect account currently pays the same interest rate on all balance tiers, so you don’t have to worry about maintaining a certain balance or making regular deposits to avoid fees and earn more (although automating your saving is never a bad idea).

This basic account would be a good fit for most people, especially those looking for a fee-free option with no balance requirements. It has one of the best rates and is one of the most straightforward to open and use, so it could make a great primary or secondary savings bucket. Choose the CIT Savings Connect account if getting the best interest rate is your top priority.

CIT Bank offers a number of other savings products including stand-out money market accounts and CDs, so keep this bank in mind if you have a few different savings goals and want to make sure you’re getting the highest rates.

Learn more about the CIT Savings Connect account.

CIT Bank. Member FDIC.

CIT Savings Builder Account

And if you’re looking for another option from this online bank, you can do worse than the CIT Savings Builder Account. This high-yield savings account offers an interest rate of up to 1.00% with a low minimum initial deposit requirement of $100. There is no minimum balance required to keep your account, but your balance will determine your interest rate. See details here.

The CIT Savings Builder Account uses a tiered rate structure with a loophole. The balance tiers and interest rates are:

  • <$25,000 – 0.40% APY
  • <$25,000 – 1.00% APY if you make a monthly deposit of $100 or more
  • >$25,000 – 1.00% APY

If you can’t afford to put away more than $25,000, no worries. Just schedule an automatic transfer of at least $100 from a linked bank account to get yourself into the higher tier. This can also help you make saving a priority.

Because of the tiered interest rate structure, this high-yield savings account is ideal for people who plan to keep high balances and/or make regular contributions to their savings.

Learn more about the CIT Savings Builder Account or read our full review.

CIT Bank. Member FDIC.

Great alternatives

These accounts didn’t make our top three, but they still have a lot to offer, especially if you’re looking for an online savings account.

Axos Bank High-Yield Savings Account

Axos Bank logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $250
  • APY: Up to 0.61%
  • Monthly fees: None

An Axos Bank High-Yield Savings Account is the right high-yield savings account for anyone looking to keep a low balance. There is a minimum deposit requirement of $250 to open an account, but any amount you save will earn interest. Axos uses a tiered rate structure but actually pays the highest rates on the lowest balances. You’ll earn 0.61% as long as your account stays below $24,999.99.

Each account comes with a free ATM card upon request for easy withdrawals. Plus, you can earn a referral bonus of $20 for every friend who opens an Essential Checking account using your unique link.

Open an Axos savings account or read our full review.

High-Yield Chime® Savings Account

Chime logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 2.00%7
  • Monthly fees: None2

The High-Yield Chime Savings Account is a great online savings account that does your saving for you. With the Round Up Transfer and Save When I Get Paid features, you can completely forget about your saving and still make progress toward your goals. Round Ups will send the spare change from your purchases right to your savings^ and Save When I Get Paid lets you transfer up to 10% of each direct deposit of $500 or more to your savings account 1. A Chime Checking Account is required to be eligible for a Savings Account. 

This account charges no maintenance fees and has no minimum deposit or balance requirements. Check out Chime checking if you like the idea of saving and banking in one place with a platform that’s easy to use*.

Read our full review.

* Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.
^ Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.
1 Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.
2 There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.
7 The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of November 17, 2022. No minimum balance required. Must have $0.01 in savings to earn interest.

Capital One 360 Performance Savings Account

Capital One logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 3.00%
  • Monthly fees: None

Opening a Capital One 360 Performance Savings account might be the way to go if you’re looking to automate your saving with a familiar consumer bank. This account pays the same interest rate of 3.00% on all balances and doesn’t cost anything to open. To stay on track with your saving, you can schedule recurring transfers from a Capital One or external account.

If you already have an account with Capital One, you’ll be able to make quick transfers from the app. Finally, there are Capital One branches and ATMs all over the country if you like the option of banking in person.

Open a Capital One savings account or read our full review.

Marcus Online Savings Account

Marcus by Goldman Sachs logoFeatures

  • Minimum balance: $0
  • Minimum deposit: $0
  • APY: 2.50%
  • Monthly fees: None

Marcus by Goldman Sachs is an online-only bank owned by investment company Goldman Sachs. A Marcus Online Savings Account is ideal for people who want control over their savings and like to strategize different ways to grow their money. This account offers a variety of tools and extensive research to help you make informed decisions with your savings and track your progress. You can even see exactly how much interest you’ve earned from the app.

You’ll earn 2.50% regardless of your balance and there’s no minimum deposit.

Open a Marcus savings account or read our full review.

What is a high-yield savings account?

A high-yield savings account offers a higher yield than traditional savings accounts. How much higher completely depends on the market and the institution, but may be as much as ten or fifteen times the average. You might also hear the term high-interest savings account used — this is the same thing.

Right now, the national average interest rate on a savings account is 0.37%, according to the Federal Deposit Insurance Corporation or FDIC. The FDIC determines rate caps each month using the average interest rates for savings accounts, checking accounts, money market accounts, and certificates of deposit across all banks and credit unions.

How savings account interest works

There are two different ways interest can work with high-yield accounts. The first is to earn a variable interest rate and the second is to earn a tiered interest rate.

A high-yield savings account with a variable rate will pay the same interest rate on any balance. A savings account that uses a tiered interest structure will determine your rate based on your average balance and pay you according to which balance tier you fall into.

With a tiered interest rate, you often earn more interest the higher your balance is. This is to incentivize people to keep more money in their accounts. With a variable interest rate, it doesn’t matter what your balance is as long as you meet the minimum balance requirements (if there are any).

To make things a little more confusing, sometimes a bank or credit union will use a tiered interest rate structure but make the interest rate the same for every balance tier. All interest rates for online savings accounts are subject to change at any time.

Before you apply for an account, find out what rate you’ll qualify for with your balance and activity. Don’t get tricked into opening a high-yield savings account for the great interest rate unless you know you’ll actually earn that rate.

For example, a bank may advertise a high-yield savings account with an interest rate of 3.00% APY, but this rate only applies to balances over $15,000. The difference between the highest and lowest interest rates can be significant, so make sure you don’t get stuck with a lousy rate.

Read more: How to get the best savings account interest rate

What is the annual percentage yield (APY)?

Annual percentage yield is the rate of return you will earn calculated as a percentage of your savings account balance. You’ve probably noticed that the APY on an account is very slightly different from the interest rate. This is because the interest rate only shows simple interest.

The annual percentage yield or APY shows how much interest you can earn each year if you don’t take any of your money out. We like to look at the annual percentage yield rather than just the interest rate because it factors in compounding interest.

To estimate how much you can earn on a high-interest savings account, multiply the APY by your balance to see how much your account will grow if you don’t touch it.

When is interest calculated?

Interest may be calculated daily, weekly, or monthly for a savings account. This is how often your balance is used to determine how much interest you’ve earned.

This frequency can affect your earnings, and daily calculation is the best-case scenario. This is because the more frequently interest is calculated, the higher your balance will be each time it happens thanks to the interest you’ve already been paid. Interest you earn on interest is referred to as compound interest.

For example, a $1,000 balance earning a 1% interest rate pays you $10 in simple interest over a year. If interest is calculated daily, that $10 becomes $10.05 a year.

Read more: Savings interest calculator

Is interest taxed?

Yes, the interest you earn from your savings account will be taxed alongside your income, no matter how much money you bring in.

How to open a high-yield savings account

The basic process for opening a savings account is pretty much the same anywhere you go.

First, you’re going to provide some personal details including your basic contact information. Once your account has been approved, you’ll choose a funding option. Your options might be:

  • ACH transfer
  • Wire transfer
  • Direct deposit
  • Check deposit (paper or mobile)
  • Cash deposit

You need to meet minimum opening deposit requirements for your account when funding. Some banks will let you open a savings account without making a deposit right away. Just make sure you know the rules for your chosen account.

If you already have an account with the bank or credit union you’ve chosen, you can link this with your new savings account either before or after funding. This will allow for easy transfers in the future.

How to use a high-yield savings account

There’s a difference between just having a high-yield savings account and using it for all its worth. Here are some ways to make the most of high-interest savings.

Emergency fund

A high-yield savings account is the perfect place to keep your emergency fund. We recommend you have one savings account where you keep at least six months of your monthly living expenses, completely separate from the rest of your cash. You can take the money out if you get sick, lose your income, or face a large unexpected expense, and your balance will grow until then.

Short-term saving

A high-interest savings account is also a great place to save for short-term goals when you don’t want to put your money on the line with higher-risk investments. These accounts are safe and liquid, so your money is there when you’re ready for it and earning interest when you’re not.

For example, if you’re saving money to buy a new car or for your wedding in the next couple of years, you may be able to get a higher rate of return by investing in a mutual fund or other securities. But in such a short period of time, you may lose money. Investments are best for savings goals more than a few years away. For shorter-term goals, savings accounts are safer.

No matter what you’re saving for, a good rule of thumb is to save as often as possible and think about it as little as possible. If you rely on yourself to remember or feel like putting away money to save, you might have more trouble meeting your goals and start feeling frustrated when you don’t see your balance go up. Instead, take advantage of features that do the work for you. To save automatically, you can:

  • Set recurring transfers
  • Split your paycheck
  • Use booster features like roundups

Read more: The best place for short-term savings

What is the withdrawal limit for savings accounts?

Most savings accounts limit the number of withdrawals you’re allowed to make. This started with Federal Regulation D.

Federal Regulation D was a rule that limited the number of withdrawals or transfers that could be made from a savings account to six per month. This included withdrawals made in person, by phone, online, or through any other type of electronic transfer. If you made more than six transfers or withdrawals in a month, your bank might have charged you an excessive withdrawal fee or closed your account. 

In April 2020, Regulation D was suspended, but many banks still choose to restrict transactions and enforce the same penalties.

What to look for in a high-yield savings account

There are certain standout features that can immediately make or break a high-yield savings account.

Here are the main things to pay attention to when shopping for a savings account.

Minimum balance requirements

How much do you realistically plan to save? This is the first question you should ask yourself before signing up for an account. Many savings accounts have minimum balance requirements, and you won’t be doing yourself any favors if you open an account and can’t meet these.

If your account does have balance requirements, you must meet them in order to:

  1. Avoid monthly maintenance fees
  2. Earn interest
  3. Keep your account

Your balance at the end of each day is used to determine if you’re meeting requirements. If you’re not, you might be penalized.

Not all high-yield savings accounts have minimum balance requirements. Especially for online savings accounts, it’s becoming more common to not have any.

Read more: How much money should you save each month?

Minimum deposit requirements

Some banks may require you to make a certain minimum deposit when signing up for your account. Failure to do so may disqualify you from opening an account or result in a fee.

A minimum deposit requirement could be anywhere from $5 to $500. Sometimes minimum deposit and minimum balance requirements are the same, and sometimes not. It’s not uncommon for a bank to have a minimum deposit requirement but no minimum balance requirement or vice versa.

Many high-yield online savings accounts have very low or no minimum deposit requirements.

Interest and APY

You’re naturally going to gravitate toward accounts with the highest interest rates, right? That’s free money that you don’t have to work for. But be sure to pay attention to the requirements to earn interest too, not just the annual percentage yield.

For example, if a bank requires you to maintain a balance you can’t maintain to earn interest, it’s probably not the right bank for you. For your first savings account, you might prefer a variable interest rate over a tiered interest rate so you don’t have to worry about if your balance is high enough to earn interest.

Some banks also reserve their best interest rates for preferred customers. This might mean you need to have another account such as a checking account or loan to qualify for the highest APY, and that might be more trouble than it’s worth.

Monthly fees

Some banks still charge monthly maintenance fees on savings accounts, but many don’t. When your goal is to earn money on your savings, monthly fees you get charged just for having an account can really get in the way.

While you should generally look for accounts that don’t charge fees, you might make an exception if a bank offers a waiver. For example, the fee may be waived if you maintain a certain minimum balance in your account for each statement cycle or make a recurring transfer from another account.

If you feel like you can easily meet the requirements to waive a fee and an account is otherwise a perfect fit, go for it.

Cash access

Most people try to ignore the money in their high-yield savings account when they can to take advantage of compound interest.

But life happens, and sometimes you need to dip into your savings. When that happens, you should have convenient access to your money. You might be able to make a withdrawal via:

  • ACH transfer
  • Cash withdrawal
  • ATM withdrawal

Most savings accounts give you the option to make a transfer from your savings to a linked checking account. This checking account can either be with the same bank or another one entirely. If with the same bank, transfers may be instant.

Some banks also offer ATM cards with high-yield savings accounts, though you may incur a fee for ATM transactions. You can also make cash withdrawals at branch locations.

Any transfers or withdrawals you make will count toward your monthly transaction limit.

Mobile apps

Almost every bank out there offers a mobile app today, but some are far better than others. As you’re researching the features of an account, always look into the app too.

Saving from your phone only works when an app does what it’s supposed to, so functionality and convenience are important. You should be able to easily access your savings account, initiate transfers, and see your balance at any time. Those are the basics. You might also want an app that will let you make mobile check deposits, create savings goals, and chat with customer support when there’s an issue.

As a rule, online banks and larger institutions tend to have the best mobile apps. But while you might be looking for an app that’s simple and straightforward to use, someone else might prefer a robust app with educational resources, features, and a variety of notifications. Check out some customer reviews to see what real users have to say about their experiences.

Sign-up bonus

Many banks and credit unions offer sign-up bonuses when you open a high-yield savings account. These offers change all the time and can be quite enticing. For example, bonuses up to $200 are not uncommon. But while sign-up bonuses are nice, they’re not more important than interest rates, fees, and minimums.

Also, be aware that sign-up bonuses come with restrictions. Typically, you’ll need to maintain a certain minimum balance for a set amount of time to qualify. This may be six months or even longer. If your account balance drops below the minimum requirement at any time during the first six months, you may forfeit the bonus. Many bonuses also come with direct deposit requirements.

If you do qualify, you probably won’t get the bonus right away and may have to wait several weeks. All this to say that sign-up bonuses aren’t a good option for getting quick cash. Consider these after all of the other features we’ve outlined.

Are high-yield savings accounts safe?

Your money can’t get a lot safer than it is when it’s in a savings account.

Almost all savings accounts with banks are protected by the Federal Deposit Insurance Corporation (FDIC) and insured for up to $250,000 per depositor. This insurance coverage protects your money in the event that your bank loses money and is unable to repay its deposits. Almost all savings accounts with credit unions are protected by the National Credit Union Administration (NCUA) for up to $250,000 per depositor. This provides the same protections.

If a bank or credit union is not FDIC- or NCUA-insured, you may qualify for private deposit insurance.

Benefits of online savings accounts

High-yield savings accounts and online savings accounts are often one and the same. Here are some of the top benefits you can expect from an online savings account.

Higher interest

A traditional savings account with your bank or credit union might seem like the best choice, but you can do a lot better. Compared to traditional accounts, online savings accounts tend to offer much better interest rates, plus benefits like fewer fees, extra savings features, and the convenience of opening and managing your account completely online (or from your phone).

Online savings accounts can pay higher interest rates because digital accounts are cheaper to operate, lowering a bank’s costs and passing on the savings to you in the form of better interest.

Fewer fees

Online savings accounts almost always have lower fees than traditional savings accounts for the same reasons they can offer better rates. Many charge no monthly fees at all.

Avoiding monthly fees like maintenance fees, low balance fees, and inactivity fees can save you serious money in the long run. Plus, let you actually keep the interest you’ve earned.

Convenience

Online savings accounts are much more convenient to open and use. You can open your account online and fund it by just transferring the money from another account. Usually, all of this takes less than five minutes.

An online account lets you make deposits, transfer money, pay bills, and see your account activity at any time without the need for a phone call or visit to the bank. You can even view your account statements and track your progress. If you’re not a fan of brick-and-mortar branches, an online savings account either with a fully-digital bank or a hybrid bank could be perfect for you.

Perks and benefits

Online savings accounts tend to come with a lot of great, free features. Automatic transfers into your savings account from your checking account, mobile check deposit, and account alerts are just a few common ones.

Some online savings accounts go above and beyond this. They might offer savings support like boosters and automated tools, help you create a saving strategy with resources and insights, or the option to organize your savings into separate buckets or categories.

Read more: Best online savings accounts

Disadvantages of savings accounts

Although a great tool for saving for your future and protecting your finances, savings accounts in general do have limitations. Let’s talk about some of those here.

Limited withdrawals

One of the main disadvantages of high-yield savings accounts is limited cash access. A lot of this has to do with withdrawal restrictions.

Remember, you’re often restricted to just six transactions per statement period with a savings account. This is a limit that was originally set by the federal government that many accounts still stick to. You shouldn’t use your savings account as a secondary spending account because when you hit that limit, you risk losing the account. This is why savings accounts should be for money you don’t immediately need.

If you’re looking for a place to set aside some extra money you do plan to dip into regularly, consider a high-yield checking account instead of a savings account. While the rates for high-yield checking accounts aren’t usually as good as the rates for high-yield savings accounts, you’ll have more flexibility to spend your money.

Read more: Best high-yield checking accounts compared

Rates can change at any time

Another downside to savings accounts is that the interest rates are always variable. This means the rate you earn on your balance can change at any time, and it definitely will as the market fluctuates. It’s important to remember that you’re not locked into the annual percentage yield you sign up for when you open a high-yield savings account.

And if the rate does change, your bank doesn’t have to give you any sort of warning. Although competitive high-yield savings accounts will, for the most part, stay competitive and continue offering the highest yields compared to other accounts, there’s no telling how much you’ll earn in dividends a year from now.

You should choose a high interest rate but know that it can change and don’t rely on the dividends for income.

Security risks

With any type of financial account, there are going to be certain safety concerns. While these are really minimal with an insured savings account, you can take steps to maximize your personal security.

If an account offers multi-factor authentication, set it up (it’s free anyway). If you have the option to enroll in fraud protection, do it. Set up account alerts to notify you about suspicious activity and check your balance often to make sure everything looks good.

FDIC and NCUA protection will keep you safe from losing all of your money if your bank goes bankrupt, but it’s your responsibility to make sure your account is as safe as it can be from hackers.

Read more: How to make online banking more secure

Are high-yield savings accounts worth it?

The answer to this question is probably, but it really depends on what kind of account you choose. We’ll say it again, we always prefer an online savings account with no minimums and no fees. Even if you can’t yet afford to set much money aside, you can start earning a small amount of interest on your balance and setting those good savings habits with free accounts.

But if you open a savings account that charges monthly maintenance fees, overdraft fees, low balance fees, etc., you’re going to have to work harder to make the account worth it. Keep in mind that all of these fees can eat into and even exceed your interest earnings, causing you to lose money in the long run.

So basically, as long as you don’t make the mistake of choosing the wrong account and letting it drain your earnings, you have nothing to lose.

High-yield savings accounts vs. money market accounts (MMAs)

Which is the better option for your money right now: a high-yield savings account or a money market account?

A money market account or MMA is a special type of savings account. They typically have higher balance requirements to earn interest but may offer better interest rates than high-yield savings accounts. Usually, MMAs pay tiered variable interest rates so the more you save, the more you earn.

MMAs often come with higher fees, higher deposit requirements, and higher balance requirements than savings accounts. While they can earn more depending on the interest rate environment, right now the best rates are really comparable between high-yield savings accounts and MMAs.

Savings accounts and money market accounts have the same transaction limit of six per statement period.

Read more: 9 best money market accounts

High-yield savings accounts vs. certificates of deposit (CDs)

A certificate of deposit or CD is a type of deposit account that usually offers a fixed interest rate for a fixed term. This means that the amount of money you earn on your deposits is guaranteed for the length of the CD term.

CD terms can range from as little as one month to as much as 10 or even 20 years. During the term of the CD, you agree not to withdraw any of the money you’ve deposited. If you do need to access your money before the end of the term, you’ll pay an early withdrawal penalty fee.

Early withdrawal fees are equal to the interest you earn for a set number of days or months. For example, you may pay three months’ interest for taking money out of a one-year CD early.

Because of early withdrawal fees, you risk losing your interest in a CD, so you should only deposit money you’re absolutely certain you won’t need until the term is up.

Stick with a savings account until you have an emergency fund built up before you consider a CD. CDs can be better vehicles for long-term saving but they should not replace your emergency savings account.

Read more: Best CD rates of 2023

Source: moneyunder30.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

Loyalty? Not in the mortgage business. That is, if you actually want to save money on your home loan.

A few years back, an HSBC survey revealed that 52% of U.S. homeowners “switched providers” (sorry, they’re British) when obtaining subsequent mortgages.

This was mainly driven (53%) by the desire to get a better deal, aka a lower mortgage rate with fewer closing costs.

That survey also found that 46% of consumers investigated a mortgage switcheroo, again either to save money or to lock in a new low rate due to rising interest rates.

Other reasons homeowners decided to go with another mortgage company were because they moved and purchased a new property.

Or due to their current mortgage deal was expiring. I think they mean an adjustable-rate mortgage resetting.

Is It Bad to Switch Mortgage Lenders?

mortgage retention

A new report from Black Knight claims that loan servicers retained just 18% of the estimated 2.8 million homeowners who refinanced a mortgage in the fourth quarter of 2020, the lowest share on record.

Interestingly, those who refinanced to improve their rate and/or term were retained at a higher rate (23%) versus those pulling cash out as part of the transaction (11%).

This could be due to cash out refinances being harder to come by lately, and thus offered by fewer lenders. Or it just feeling more complex to the homeowner.

But here’s the biggie – among higher-credit quality rate and term refinances, borrowers who switched mortgage lenders received more than an eighth of a percent lower rate than those who refinanced and remained with their current lender/servicer.

In other words, you might get a lower mortgage rate if you switch mortgage lenders, instead of remaining loyal.

So is it bad to switch mortgage lenders? Not if you want to save money! Of course, your old lender might not feel the same way.

Mortgages Are Mostly a Commodity

  • Home loans aren’t all that different from one another
  • This is why lenders are increasingly coming up with unique ways to sell you one
  • The vast majority are 30-year fixed products whose only difference might be the interest rate or fees involved
  • And the majority just follow the underwriting guidelines of Fannie Mae, Freddie Mac, or HUD

It’s really no surprise that a lot of consumers don’t stay with their original mortgage lenders and/or loan servicers.

Aside from some existing lenders sometimes talking borrowers out of a refinance, the product is mostly the same no matter where you get it.

That makes customer retention difficult, especially when other lenders are aggressively marketing to homeowners.

These days, the majority of home loans are backed by the agency guidelines of Fannie Mae, Freddie Mac, or the government via FHA loans and VA loans. I think it’s something like 90% of mortgages.

This means mortgage loans are pretty homogeneous, despite what channel they’re originated in, or which institution provides the financing.

You could get the same exact home loan from a local credit union, a big bank, an online mortgage banker, or a mortgage broker.

And who really cares where you get your mortgage as long as the company is competent enough to close the thing, and honest in terms of rate and fees?

It’s not like you’re going to walk around and brag about your cool mortgage from X bank after the fact. It’s certainly not a status symbol, or a conspicuous transaction.

I’m pretty sure I’ve never had a conversation about someone’s branded mortgage before.

And I doubt an “influencer” is going to post about theirs on Instagram. Well, I take that back, they might…because someone paid them.

Mortgage Advertising Is Following the Insurance Model

  • Like mortgages, most forms of insurance are similarly boring and unoriginal
  • But that doesn’t stop mega insurers like Geico from advertising to you 24/7
  • Other insurers create catchy new names for run-of-the-mill coverage that isn’t really unique
  • Mortgage lenders are beginning to do that too in a bid to separate themselves from the crowd

This is exactly why insurance companies use celebrity endorsements and smart marketing gimmicks to get you to switch, or conversely, to stick around.

Car insurance isn’t cool or exciting and never will be, nor are mortgages, as much as I want them to be.

Ultimately, we’re all being sold the same thing, it’s just that some companies try to differentiate themselves by slapping clever names onto their products.

For example, Quicken Loan’s Rocket Mortgage is about reinventing the mortgage process, not the mortgage itself.

You’re still probably going to get a 30-year fixed home loan or some other ordinary mortgage that you would get anywhere else.

It’s just the way you get it that might change. Instead of meeting face-to-face with a banker, you might upload documents on your smartphone and authorize the release of documents electronically.

This could make the experience a lot easier and more pleasant, but it doesn’t mean you’re necessarily getting anything different.

Because everyone is basically offering their customers same thing, it comes down to price, customer service, and now perhaps clever marketing.

The one exception is portfolio home loan programs, which are actually unique to the mortgage lender providing them. These are loans kept on the originating bank’s books that contain distinct underwriting guidelines.

We’re starting to see more of them, though most lenders remain fairly cautious with the mortgage crisis still a not-too-distant memory, despite taking place a decade ago.

For example, a lot of the zero down mortgages you see are unique to the companies offering them, the latest one I came across from Ideal Credit Union.

And some of the so-called fintech disruptors like SoFi Mortgage are actually providing unique offerings like a 5/1 ARM with an interest-only option and jumbo loans as high as $3 million with just 10% down.

Be Careful Not to Pay More for the Same Exact Mortgage

  • While it’s important to use a mortgage lender you can trust
  • Such as one that can actually close your home loan competently without major delays
  • It doesn’t really matter what “brand” the mortgage it is after it funds
  • And there’s a good chance it’ll be resold to a different company shortly after closing anyway

Those exceptions aside, many of us have very similar mortgages that are only unique in terms of where they originated from.

As noted, most of today’s mortgages are conforming loans, meaning they meet the guidelines of Fannie and Freddie. Or they’re simply backed by the government via the FHA, VA, or USDA.

And just about all of them are 30-year fixed-rate loans that function exactly the same.

That’s why you have to ask yourself – if the company isn’t offering anything different, why pay more?

Might as well bargain shop and find the best mortgage rate with the lowest closing costs, instead of simply going with a household name because of a funny commercial.

At the end of the day, as long as they get you to the finish line, you’ll probably never think about your mortgage company again. Just make sure they’re reputable first…

Chances are your mortgage will be sold off in a matter of months anyway, so the company you get it from likely won’t even service it.

In fact, your final correspondence might be a notice of your home loan changing hands…

(photo: lamdogjunkie)

Source: thetruthaboutmortgage.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

Weddings are a big deal. You plan them for months or even years and invite everyone you know, then you have the highly-anticipated, heavily-photographed event and they all live happily ever after. (Cue the end credits.)

So much goes on behind the scenes before the big day, as anyone who’s ever attended or been in a wedding should know. But what you don’t really find out until you plan one for yourself is just how expensive and wasteful they can be. 

What’s Ahead:

The true cost of a wedding

When I was planning my wedding between 2018 and 2019, I learned pretty quickly what weddings actually cost. And I’m not just talking about the bill. 

Each year in the U.S., couples spend thousands of dollars on average on their weddings. In 2022, the national average price of a wedding was around $30,000, according to The Knot. Of course, these averages vary by state and city but could be much higher. And destination weddings can add another several thousand onto your final total.

And every year, these averages go up.

I didn’t know any of this when I got engaged. But once I started actually planning and crunching the numbers using quotes from vendors and venues, I realized that there was no way I could afford the “average wedding,” and I wasn’t sure I wanted to. 

Creating my lists also had me thinking about how all of these different “to-do” items would eventually become “to-dump” items. Those flowers would have to go somewhere, right? The table decorations would need to be disposed of, the cards tossed, and the wrapping paper from the gifts thrown in the trash. 

So I decided to try to do things a little differently. Both out of necessity because I was poor when we got married – like still in college, barely 22 years old poor – and out of a desire to be eco-friendy. 

I’m going to share seven real ways I made my wedding greener and some ideas for making your big day low(er)-waste too.

Read more: Are you financially ready to get engaged?

1. Swap the flowers

Sola wood flower bouquet

My flower total: $94.55

Swapping real flowers for sola wood, paper, fabric, or anything else that will last is a smart place to start. Because the fact of the matter is, flowers are incredibly expensive. And then they wilt and die, as cut plants are prone to doing.

For my flowers, I opted for sola wood. This is a material that comes from tapioca that can be treated and shaped almost like paper. It’s lightweight and looks darn close to the real thing.

I found a shop on Etsy that sold individual sola wood flowers in a bunch of different colors and varieties, and I used 24 of these for my bridal party. For myself, I purchased a pre-made sola bouquet from another store so I didn’t have to cobble one together. 

The great part about using sola or another material for your flowers isn’t just that it’s inexpensive but also that you get a keepsake.

I let my bridesmaids keep theirs as a memento and I have the leftovers in vases.

For me, that was it in the way of flowers. I used other decorations for everything else, including repurposed antiques and some DIY items. But there’s nothing saying you couldn’t go all out with the sola since it’s a fraction of the cost of live flowers.

Tip: Purchase sola flowers in large quantities to save even more, and buy them early so you can match them to your other decorations and customize them.

2. Buy your dress secondhand

My dress total: $700 (without alterations)

I know, I know. This one is a harder sell. Many brides have very clear visions in their heads about how they want their dresses to look and make them feel, and purchasing secondhand limits your options. Plus, thrifting a top or a pair of jeans is different from thrifting one of the most important outfits of your life.

But hear me out. No one is going to know someone else wore your dress before you. Wedding dresses usually get worn once, maybe twice, before collecting dust. And creating gowns is so labor and resource intensive that even repurposing one has an impact.

For my dress, I went to The Brides Project in Ann Arbor, Michigan. This is a nonprofit bridal boutique that collects donated dresses, sells them, and uses the profits for charitable causes. The Brides Project donates to the Cancer Support Community of Greater Ann Arbor and everyone who works there is a volunteer. 

Buying secondhand saves serious money and prevents a dress from being wasted. At the end of the day, I spent $700 on my dress and I loved it. This was in 2018 when the average cost of a wedding gown was right around $1,750. 

Tip: If you don’t have access to a secondhand bridal shop, check out your local consignment and thrift stores, go on eBay and Poshmark, or browse a marketplace specializing in pre-owned bridal gowns.

Secondhand marketplaces include:

Point is, you’ve got options.

3. Use one venue

Wedding venue with dance floor and tables and chairs set up

My venue total: $1,850

If you can find a venue with enough room for both your ceremony and reception, book it. This is one of the best decisions we made. Venue rental fees will eat up a big chunk of your budget no matter where you go, but choosing one for the whole event can help you save a little money and make things easier on yourself – and your guests.

With one venue, nobody has to kill time in between, you don’t have to get multiple places set up, and you don’t need to pay for twice the decorations. You save your elderly relatives from climbing into a car more than necessary and nobody gets lost.

This creates less waste and simplifies your planning. Plus, without all those cars on the road getting from one place to another, you’re not responsible for as many carbon emissions.

Tip: To pull this off, you have to love whatever venue you choose. Rather than picking a “blank canvas” venue you’d have to style from floor to ceiling, consider one with some personality. If you choose a place that suits your style, you don’t need to do as much decorating. 

We got married in a city club that had vintage art, furniture, and accents throughout, and our wedding was in spring when the flowers were blooming. It felt timeless and setup was minimal.

Overall, highly recommend. 

4. Skip (some of) the cards

My card total: $117.19

Physical engagement announcements, save-the-dates, invitations, and programs are nice to look at. But that’s a lot of material that’s probably just going to get recycled. And wow is it pricey.

The only paper I purchased was invitations and RSVPs. We ordered these from Paper Culture, a company that creates custom eco-friendly cards using recycled paper and bamboo. 

The cards included links to our wedding website where people could RSVP and find out everything they needed to about the event. We did receive some physical RSVPs back, but the majority of our guests used the website to “joyfully accept” or “regretfully decline.”

There are so many wedding planning websites and apps that organize everything from responses to registries in one place. You can pretty much skip most of the cards if you want to.

Great wedding websites include: 

  • The Knot
  • Zola
  • Joy
  • WeddingWire

Tip: Send invitations a little earlier than recommended if you’re doing digital. This will give guests more time to “save the date” and you more time to track down RSVPs. And you might need to give your tech-averse relatives a call if they don’t respond.

As for programs, you might not need them. I wrote down the schedule of events with times on an extra-large mirror (that I got on sale for $35) and displayed this centrally at the venue. I still have this mirror today, with the writing on it, on my wall.

Bonus tip: Not everybody needs a plus-one

Maybe this seems selfish, but we gave out plus-ones very sparingly. If we had met a person’s significant other, they were invited. Otherwise, we didn’t really want to give them hugs in the receiving line or pay for their dinner.

We made a note on the RSVPs that if someone wanted to request a plus-one they could, but no one actually did this. People get it. 

5. Choose food wisely 

Appetizers on trays and stands at wedding

My food total: $3,077.50

For many couples, the food and drink bill ends up being the biggest. The Knot 2022 Real Weddings Study found that the average food bill for a wedding comes out to $75 per person. 

But most people don’t go to a wedding for the food. In fact, this is often the worst part (just stating facts). Don’t put too much pressure on the meal you’re serving to be a highlight of the day or evening, and don’t fork over more cash than necessary.

That said, we decided to do a menu of just appetizers. We ordered enough that everybody would be able to pile their plates with several individual bites and have plenty to eat, but not so many that we’d have leftovers to deal with. 

Every venue is different, but ours charged a per-plate or per-head price on dinners and a per-item price on appetizers (or hors d’oeuvres if you want to be fancy). By choosing apps instead of plates, we saved a ton of money and gave our guests more options. They were able to enjoy dinner-sized portions and we still hear from people about how fun this was.

Tip: Some venues require you to use their caterers and might place a minimum on how much you need to order. Try to get this information before signing a contract to rent a venue. And if your venue doesn’t offer appetizers or you’re not into the whole strolling dinner thing, buffet-style meals can be an economical alternative to plated dinners.

For 130 guests, we could have spent over $9,000 going the traditional route. I’m glad we didn’t.

6. Ask for money

It’s not weird anymore to tell people you just want cash.

Especially if you and your partner already have most of the things you need or have been living together for a while, chances are you don’t need a gift from everybody coming to your wedding. Feel free to ask for money.

Many wedding planning websites have built-in options for collecting cash contributions (we called ours the “Honeymoon Fund” but I’ve also seen “Newlywed Fund”). This is easier for your guests because they can just virtually send cash without having to buy and wrap a gift and better for you because you can get what you really need. Bonus, there are no boxes or piles of wrapping paper to get rid of.

Tip: Don’t worry about offending anyone. A lot of your guests have been in your shoes. They know weddings are expensive and would probably be more than happy to help you out this way instead of buying you a pan or sheet set.

7. Rethink the diamond

My ring total: $2,000

Okay, so this one isn’t technically for the wedding. But it’s important.

Consider an alternative to a diamond engagement ring if you’re planning to get engaged. There are much more sustainable options out there than the standard diamond, and ones that won’t break the bank.

Moissanite is one of the trendiest non-diamond stones but precious gems like sapphires, emeralds, morganite, and opal can be fantastic choices for couples looking to save money. 

And if you love traditional diamonds, that’s great too! There are so many ways to buy diamond rings that don’t involve going to a big box store.

Tip: Antique shops and estate sales are perfect for finding vintage rings and many online retailers carry gorgeous rings without the markups you typically see. Try Blue Nile for discounted conflict-free diamonds.

You can also choose an “imperfect” diamond. This is what I did. I have a salt-and-pepper diamond from Alexis Russell and it’s pretty perfect to me. It’s certified conflict-free and made with recycled gold. 

When I got engaged in 2018, my husband spent $2,000 on this ring. That year, couples were spending over $7,800 on average for engagement rings. 

Read more: Where’s the best place to buy diamonds? 

When to splurge

The great thing about getting married is that you get to do what you want. It’s your day. 

You and your partner can strive for a greener wedding if you feel compelled, and that can look however you want it to look. Compromising in some areas and splurging in others is the best way to have the wedding you’ve been dreaming of without too much guilt or sticker shock.

You should splurge on the parts of your wedding that matter most to you and your partner, and try to save on the things that don’t. For example, maybe you love fresh flowers. You can’t imagine a wedding without fresh flowers, so you get these and rent the rest of your decorations or buy them used.

Or maybe the pictures are most important to you. To balance out this cost, maybe you serve cupcakes or cookies instead of a tiered wedding cake. 

There are no wrong answers, as long as you’re doing what makes you happy.

Bottom line

The wedding industry is due for a shake-up, and enough people making tiny changes to their big days could have a huge impact on the planet.

With careful planning and some compromises, we were able to completely recoup what we spent on our wedding in gifts and cash contributions. That means we got married without debt, and that was worth celebrating in and of itself.

Our wedding was by no means the most eco-friendly it could have been. And if I were to plan it again today, I’d probably try to do better. But I feel good about the little changes we did make.

Read more: 

Source: moneyunder30.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

This is a guest post from Joanna Lahey, an associate professor of economics at the George H.W. Bush School of Government and Public Service at Texas A&M University and the National Bureau of Economic Research (NBER).

Ellen’s note: Joanna has written four articles about health insurance. This is the first, and every Saturday for the next month, we’ll be publishing one. Given the readers’ concern over the cost of health insurance as well as the ability to get insurance, we think her articles will be a great addition to GRS.

We save for retirement in order to smooth our consumption over time. Money saved now when we have income allows us to eat more than cat food when we’re retired and not bringing in as much.

Mikey eating cat food

Insurance works in much the same way, except instead of smoothing our consumption over time, we’re smoothing it over conditions of the world. In the good state of the world, the one in which we haven’t been hit by a bus, we spend money on insurance. In the bad state of the world, the one in which the bus hits us, the insurance company pays out money to help compensate us for our medical care.

People value this insurance because they are risk averse. For most people, losing money hurts us more than gaining the equivalent amount of money makes us happy. We’re willing to pay a little extra during good times to offset the bad times.

Of course, in reality it’s a little bit more complicated than that. Insurance companies have an incentive to keep you from getting into that bad state of the world, so they might pay for annual check-ups and other sorts of preventive care. Additionally, some people like the idea of using health insurance as a prepayment for expected medical expenses. However, preventive care and prepayment are not technically insurance even if they are bundled in with many policies. The point of insurance is to make the bad times less bad by paying for insurance during the good times and accepting a payout during the bad times.

In an ideal world, this insurance system would just work and the free market could handle everything. People would pay their expected cost of insurance into the insurance system and the insurance would pay out for the people who were unlucky enough to get hit by buses or have other health problems.

Unfortunately, there’s a problem. People who know that they are likely to use medical care value insurance more than people who believe they will never get sick. The problem arises when people know their expected medical costs better than insurance companies do. This situation is called “asymmetric information” — one party (you) knows more than the other party (the insurance company) does.

Death Spiral in the Insurance Market

In this world of asymmetric information, there is theoretically no way for an insurance company to make a profit, or to even exist in the private market. If the insurance company sells insurance at the average cost of medical care — what it expects to pay out on average — then people who know deep down that they’re healthy are going to prefer not to buy the insurance. People who know they are likely to get sick are more than willing to pay the average cost of medical care and sign up in droves. When that happens, the average cost of medical care that the insurance company sees goes up, so they have to charge higher rates for coverage. That means that the folks who expect to have ingrown toenails but no other health problems will drop coverage while the people who expect to get diabetes will stay on. That drives up the average cost of health insurance further, which means that the next healthiest group of people will stop buying coverage and only the most expensive stay on. Eventually only the most expensive person will be willing to buy insurance (and he or she probably won’t be able to afford it). The market fails, and insurance cannot be offered. The private insurance market is broken.

Asymmetric information and this “lemons problem” (the term coined in an article by George Akerlof) are why it is so very difficult to get coverage on the private market and why the coverage is so expensive. It’s also why private coverage deliberately doesn’t cover conditions like pregnancy if it can legally choose not to.

Side note: You may have noticed that even though the private health insurance market is broken, it still exists. That’s because of that risk aversion we talked about in the previous section — most people value insurance more than its expected cost. If they value it enough, they’re willing to pay more and are able to get over the death spiral. Incidentally, David Cutler, one of the main architects of the Affordable Care Act, argues that the individual mandate is not needed — we just need to get the price low enough and risk aversion will get people to buy. Jon Gruber, another of the architects, disagrees — he doesn’t think it is likely that risk aversion will overcome the adverse selection problem.

Why is Health Insurance in the U.S. Bundled With Employment?

The solution to the problem? Group markets for insurance. In a group market, people are in a group for some reason that has nothing to do with health insurance. Working for the same employer functions especially well because adults who work are healthier on average than adults who don’t work. Everyone in the group is charged the same amount for insurance, and the average cost is low enough that the downward death spiral doesn’t occur. The bigger the group, the more risk and costs are spread out and the happier the insurance company is. Large companies get cheaper insurance rates than smaller companies because it’s less likely with a large company that the boss is getting insurance because he just found out his wife has cancer (and even if he did, that cost is spread out across more workers).

Doesn’t that argue that we should have just one group for everybody? Well, yes. However, for historical reasons (price controls during WWII, as several folks pointed out in the comments of this Ask the Readers post), we ended up with our groups being attached to employment. That’s fine if you’re employed by a large firm that offers insurance (or married to someone who is), but makes things more difficult if you’re not.

Why don’t we just tear the system down and start from scratch? Well, it is difficult to destroy a private industry that is around 7 percent of our economy, especially when said industry has powerful lobbyists. It may be more efficient to have government-provided health insurance, but the costs of getting to that point would be large.

Given our current political and institutional situation, we can still get to universal health care even if single-payer insurance is unlikely. In the U.S. that means something like the Affordable Care Act, with its universal mandate, subsidies, and regulations prohibiting preexisting-condition exclusions or charging prices based on anything other than age and tobacco status. I will talk more about the basics of the Affordable Care Act in a future post.

How Much Insurance Should be Provided?

In the ideal world, insurance companies would provide full insurance. They would pay 100 percent of your medical care and maybe something to compensate you for pain and suffering. You’d have to pay a larger premium to get the insurance, but it would be worth it because if you got hit by a bus you wouldn’t be out of pocket for anything. Unfortunately, this is not an ideal world and people are flawed.

  • If you knew you were going to get compensated, you might be less careful about looking both ways before crossing the street.
  • If going to the doctor is completely free, you might go in for a sniffle right away just to be on the safe side rather than waiting a few days.
  • If someone else is paying, you might move to more expensive infertility treatments faster than if you have to pay the bill yourself.
  • Your doctor might decide to do extra tests that only have a small chance of finding anything, because why not?

We call these changes in behavior caused by the program availability “moral hazard.” Moral hazard occurs when people do bad things they wouldn’t have done if they were bearing the full cost of their actions.

Political economy side note: The trade-offs caused by moral hazard are one of the main points of disagreement between political parties. Public programs help deserving people who need help, but they can also cause people to do bad things in order to qualify for the public programs (through moral hazard). Programs that help children tend to be popular with politicians on both sides because children don’t have moral hazard with respect to government programs — they’re not the decision-makers.

In order to keep moral hazard down, it is optimal to provide less than full insurance. So insurance companies don’t pay the full amount of every bill. That’s why we have deductibles and co-payments and coinsurance.

Terms You Need to Know

Premium: The (usually monthly) amount that you pay to the insurance company to buy insurance. (Mine is $693/month for my dependents and me.)

Deductible: Some amount of money that you have to pay before the insurance starts paying anything. (Mine is $750.)

Co-payment: A flat dollar amount that you pay when you show up at the doctor (or the hospital) no matter how much your visit actually costs. (Mine is $35 for in-network and $45 for out-of-network.)

Coinsurance: After you reach your deductible, you may still be responsible for some of the costs. Coinsurance is a percent of the costs that you pay. (Mine is 30 Percent.)

Sometimes economists will group all three of these together: deductible, co-payment, and coinsurance under the umbrella term of “co-payment.” We do this because they’re all ways of cost-sharing and thus reducing moral hazard. Living in Texas, I get all three types. The bill for my daughter’s birth was $750 for the deductible, $35 co-payment for the doctor, and 30 percent coinsurance of $2,345 + $191 + $218 is $826 for my share of the rest (assuming that all of the bills have finally come in). So a total bill of $1,611.

That’s a lot of information about the basics of health insurance. Next time I will talk about the pros and cons of different kinds of insurance you can get in the U.S. (PPO, HMO, HDHP, ACO).

Source: getrichslowly.org

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Apache is functioning normally

June 7, 2023 by Brett Tams

Paying off student loan debt may seem like a small step on your financial path – but for some people, it’s a lengthy journey all on its own. A 2013 survey found that the average borrower took over 20 years to pay back their loans.

If you’d like to become debt free in your 20s, you’ll need a plan that takes into account your personal circumstances and all available repayment options. We’ll help you come up with the best strategy in the article below.

What’s Ahead:

Pros and cons of paying off student loans early

Pros

  • Save on total interest
  • Remove the psychological burden of student loans
  • Make it easier to qualify for other loans

Cons

  • May earn more money by investing extra funds
  • Can delay other financial and personal milestones
  • May miss out on future loan forgiveness opportunities

How to pay off student loans early

Paying off your student loans early is just like paying off any other debt. You’ll need to get your information together so you  know you what you’re dealing with. Then you’ll choose a loan to focus on and start paying them off one a time, paying as much extra as you can.

Two things that can make the pay off go even faster are lowering your interest rate on private loans and increasing your income. Lower interest rates means more money goes to your balance and more income will mean you can make larger payments.

Organize your loans

If you recently graduated and don’t know how to find your student loan information, log onto the Federal Student Aid (FSA) website to locate your federal loans. You will need your FSA ID and password. If you don’t remember your username or are having trouble logging in, contact the FSA at 1-800-433-3243.

The FSA website will only list your federal loans. To find your private student loans, check your official credit report from all three credit bureaus at www.AnnualCreditReport.com. Your credit report should list any private student loans taken out.

Before you start throwing extra money toward your student loans, you should figure out how much you owe. Open a spreadsheet and write down the following information for each loan:

  • Lender name
  • Monthly payment
  • Interest rate
  • Total loan amount
  • Federal or private loan

Having all the information in one place will help you determine the most efficient debt payoff strategy.

Research loan forgiveness options

If you have federal student loans, you may be eligible for several loan repayment and forgiveness programs. Taking advantage of these programs can help you pay less each month while also saving on total interest.

The Public Service Loan Forgiveness (PSLF) program will cancel any remaining balance after 120 monthly payments while working for an eligible nonprofit or government organization. Borrowers must be on an income-driven repayment plan during that time to qualify for PSLF, so their monthly payments will be lower than normal.

There are also many loan repayment programs geared toward professionals in the healthcare and legal fields. You can have tens of thousands of loans forgiven in exchange for working in an underserved community for a few years.

Choose a loan repayment strategy

If you want to pay off your loans ahead of schedule, you can choose between the debt snowball or debt avalanche method.

The debt snowball method involves paying extra on the loan with the lowest loan balance. Once that loan is paid off, you will add extra money to the loan with the next smallest balance. The debt snowball method has been proven to be more motivating to borrowers.

The debt avalanche method means adding extra to the loan with the highest interest rate. Once you pay off that loan, you will focus on the loan with the next highest interest rate. The avalanche strategy will result in saving the most money on total interest, though it may take you more time to repay individual loan balances.

Refinance private student loans

Borrowers with private student loans may be able to refinance those loans to a lower interest rate, saving them more interest in the long run. Start by comparing your current interest rates to overall market rates. If your rates are higher than what other lenders are offering, it may be time to refinance. Use our student loan refinancing calculator to see how much you could save.

If you have multiple private loans with high interest rates, you may be able to refinance all of those loans into one loan with the same lender. This will also simplify repayment.

Borrowers with federal student loans should think twice before refinancing, as those loans will then be converted into private loans. Once you refinance federal loans, you will lose all the perks and benefits like income-driven repayment plans, loan forgiveness programs and long deferment and forbearance options. It’s best to leave federal loans as they are.

If you need to refinance your private student loans here’s our list the best companies for student loan refinancing.

When making extra student loan payments, it’s important to ensure that these funds are being diverted correctly. Some lenders will take the extra funds and apply it to the next monthly payment instead of adding it to the principal.

Contact the lender and ask them how to ensure your extra payment will go toward the principal. Then, double check each month to verify that your payment has been applied correctly.

Find ways to earn more money

If you can’t afford to pay extra on your loans and want to, it’s time to evaluate your budget. But as inflation continues to plague regular Americans, cutting expenses may not be enough. Getting a side hustle or increasing your salary may be the only way to funnel more money toward your loans.

Here are some ideas for how to make extra money.

What about Biden’s student loan forgiveness program?

As of early this year, there is a new plan being discussed for those on income driven paymen plans. With this new plan, payments for undergrad would be set at 5% of your discretionary income (this is government speak for “take home pay minus a small amount for basic living expenses”) and after you’ve made payments for 20 years any remaining balance is forgiven.

Graduate loan payments would be 10% of discretionary income and those who borrowed less than $12,000 would only have to make payments for 10 years before forgiveness would set in.

Summary

Paying off your student loans early may seem like the best financial decision you can make – but don’t do it at the expense of your other life goals. For example, if you want to buy a house, you will have to save for a down payment. If you want to quit your job and become self-employed, you may need some start-up funds.

Also, don’t forget to invest for retirement while paying off your loans. The power of compound interest means you can reap huge rewards when you start investing early. You should also have a substantial emergency fund in place before you pay extra on your loans. This will prevent you from having to take on more debt if something unexpected happens.

Related

Source: moneyunder30.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

You’ve found the ideal house in a great location. Before you start packing your moving boxes, make sure it’s a sound investment too. Most of us wouldn’t dream of buying a used car without a mechanical checkup. Yet with only a couple of 20-minute walk-throughs, we consider buying a home that’s much more expensive.

That makes little sense to Joseph Zagone with CENTURY 21 Aspen Real Estate in Ruidoso, New Mexico. “An inspection is one of the best investments a buyer can make,” he says.
Inspection Protection image 1

Here’s what you should know—and what not to ask.

What to Expect: The inspector will check all components in your house, leaving termite, septic system, and well inspections to specialists. (Here is a list of checkpoints.) A typical inspection costs $300–$400 and takes about three hours. Even if you’re an out of state buyer, arrange to tag along, Zagone says. You can see problems firsthand and you may learn valuable things such as where to find the water shutoffs.

Why it Pays: Experienced do-it-yourselfer Rebecca Anderson didn’t think an inspection would find anything she hadn’t noticed—until the inspector opened up the furnace and discovered a cracked heat exchanger. The upshot? The sellers threw in half the cost of a new furnace.

The Forbidden Question: Only one question is off-limits: “Should I buy this house or not?” That decision is yours alone. “I tell them to read the report completely and call me with questions,” says Gary Havens, owner of Good Havens Home Inspections in greater Minneapolis/St. Paul. “If I feel real comfortable about it, I’ll say I’d feel good about my kids buying it.”

The Seller’s Role: There is nothing to keep a seller from being present for the inspection too, though Zagone doesn’t encourage it. He prefers to help his potential seller line up a handyman beforehand to repair any existing problems. It’s also wise to initiate a separate inspection of your own. Learn more on Ccentury21.com under the “Selling Advice” tab.

Joe Zagone CENTURY 21 Aspen Real Estate, Ruidoso, New Mexico; www.joezagonerealestate.com

HIS CODE: “I want to know about any problems and have them remedied before I place a house on the market. My goal is win-win negotiating, to sell a sound house with no surprises at the correct price.”

OFF-HOURS: In the winter Joe serves as a certified ski instructor on nearby slopes. In warmer weather—even in winter—he makes good use of the seven golf courses in his area.

WHAT GOT HIM INTO REAL ESTATE: “My dad wasan engineer and later a real estate agent in this area. I took economics and marketing in college and worked as a carpenter’s helper in the summers. It all added up to a great background for becoming an agent. I love it.” He’s been in real estate 30 years and has been the top-producing CENTURY 21® Professional Champion in New Mexico for seven of the last eight years. He and his wife, Joan—also a Sales Professional—have five children.

Source: century21.com

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Apache is functioning normally

June 7, 2023 by Brett Tams

Most mortgage lenders offer both home purchase loans and refinances. But Direct Access Funding is all about the refis.

In fact, the Southern California based lender refers to itself as a the “refinance division” of its parent company.

Seeing that most refinances are driven by the desire to obtain a lower mortgage rate, there’s a good chance their pricing is competitive.

They say they’ve got the best refinancing rates period and quality customer service to boot, which their reviews seem to back up.

So if you’re an existing homeowner looking for a better mortgage, they could be worth looking into. Let’s dig into the details.

Direct Access Funding Fast Facts

  • A direct-to-consumer mortgage lender that offers home refinance loans
  • Founded in 1998, headquartered in Irvine, California
  • The refinance division of Absolute Home Mortgage Corporation
  • Licensed to do business in 15 states and the District of Columbia
  • Their parent company funded $2 billion in home loans last year
  • Claim to offer the best mortgage refinance rates

As the name implies, Direct Access Funding is a direct-to-consumer mortgage lender based in Irvine, California, which is in the heart of Orange County.

Instead of a physical branch network, they work remotely with customers from a central call center to help you process and close your loan.

The company is located near many other mortgage lenders, including CashCall Mortgage, ClearPath Lending, loanDepot, and Watermark Home Loans.

As noted, they dabble only in mortgage refinancing, meaning their target market is existing homeowners as opposed to home buyers.

They are actually a division of Absolute Home Mortgage Corporation based out of Fairfield, New Jersey, which originated about $2 billion in home loans last year.

They’re currently licensed to do business in 15 states and the District of Columbia.

Those states include Arizona, California Colorado, Connecticut, Delaware, Florida, Illinois, Maryland, New Jersey, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, and Virginia.

How to Apply with Direct Access Funding

To get started, you can call them on the phone or simply visit their website and begin on your own.

Your best move might be to get in touch with a licensed loan officer first to discuss mortgage rates, lender fees, and overall eligibility.

Once you get the information you need to proceed, you can fill out their digital mortgage application online.

It allows you to complete the form 1003 electronically, eSign disclosures, and upload supporting documents via a secure portal.

Once your loan is submitted, you’ll be able to manage your loan online from start to finish.

It’s unclear if the processing and underwriting of your loan is completed in-house or at their parent company’s headquarters.

Regardless, their goal is to make refinancing stress-free and they employ the latest technology and solutions to make that happen.

Because they focus on existing homeowners only, the process should be faster than traditional banks and lenders.

Loan Programs Offered by Direct Access Funding

  • Rate and term refinances
  • Cash out refinances
  • Streamline refinances
  • No cost refinances
  • Conforming loans backed by Fannie Mae and Freddie Mac
  • FHA loans
  • Fixed-rate mortgages in various loan terms

Direct Access Funding seems to be solely focused on mortgage refinances for existing homeowners.

This includes rate and term refinances, cash out refinances, and streamline refinances.

They can also structure your loan as a no cost refinance through the use of lender credits so nothing needs to be paid out of pocket.

In terms of loan types, I believe they only originate conforming loans backed by Fannie Mae and Freddie Mac, along with FHA loans.

It’s unclear if they offer VA loans or jumbo loans as well.

You can get a fixed-rate mortgage such as a 30-year fixed or a 15-year fixed, and possibly an adjustable-rate mortgage too.

They lend on primary residences, second homes, and investment properties, including condos/townhomes.

All in all, their product menu isn’t vast but should cover most of the population.

Direct Access Funding Mortgage Rates

While they claim to have the “best” mortgage rates for a refinance loan, they don’t list their rates online. At least not on their website.

However, you might find them on third-party websites alongside other lenders in mortgage rate tables.

My assumption is their rates are very competitive since they’re a branchless, refinance-only lender.

And because refis are generally pursued to save money, they will need to beat your existing rate to earn your business.

But do take the time to compare their quote to other lenders to be sure. And also ask about any lender fees, such as a loan origination fee or application fee.

I’d classify them as a low-cost mortgage lender because of their lightweight business model (lack of branches and advertising), which is a good thing if you’re looking for lowest possible rate/fee.

Direct Access Funding Reviews

On Experience.com, Direct Access Funding has an impressive 4.91-star rating out of a possible 5 from over 1,000 customer reviews.

You are able to filter the reviews by loan officer to see how certain individuals have performed in the past. If a certain person stands out, be sure to ask for them when calling in.

Over at Google, they have an even better 4.9-star rating from nearly 200 reviews, which is pretty close to perfection.

Lastly, they’ve got a 4.9 rating on Bankrate from 15 reviews, with 100% of reviewers indicating they’d recommend the company to others.

Their parent company Absolute Home Mortgage Corp. is an accredited company with the Better Business Bureau (since 2013) and currently holds an ‘A+’ rating based on complaint history.

All of these reviews give them some legitimacy, even if they’re not a household name like some of the larger lenders out there.

In closing, Direct Access Funding seems to be a streamlined refinance shop that could be a good fit for an existing homeowner looking for a lower mortgage rate or cash out.

They’re probably best suited for those with plain vanilla loan scenarios (e.g. W-2 employee, conforming loan amount, single-family residence).

If that’s you, they might be able to beat your existing mortgage rate and save you money each month.

But those with more complex loan scenarios (self-employed borrowers, investors, jumbos) may want to look elsewhere.

Direct Access Funding Pros and Cons

The Pros

  • Can apply for a home loan online in minutes without a human
  • Offer a digital mortgage application (paperless process)
  • Say they offer the best refinance rates
  • Excellent reviews from past customers
  • Parent company is accredited, A+ BBB rating

The Cons

  • Not licensed in all states
  • No branch locations
  • Only offer refinancing products (not home purchase loans)
  • No mention of lender fees

Source: thetruthaboutmortgage.com

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