Credit score needed for the Chase Sapphire Reserve card

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The Chase Sapphire Reserve® is the premium travel credit card offered by the popular credit card issuer. This card comes with a hefty $550 annual fee, but it more than makes up for it if you take advantage of its large sign-up bonus, rewards and other travel perks.

Given the impressive rewards available with the Chase Sapphire Reserve, it’s no surprise that it’s not available to just anyone. Chase requires a certain credit score along with other qualifications to be approved. Keep reading to learn what credit score you’ll need to get the Chase Sapphire Reserve card and how to boost your score to qualify.

What credit score do I need to get the Chase Sapphire Reserve card?

To qualify for the Chase Sapphire Reserve, you’ll need an excellent credit score. An excellent FICO score is considered anything 740 or higher.

But for this card, your credit score isn’t the only factor that Chase will consider. Chase has a well-known 5/24 rule that prevents someone from being approved for one of its cards if they have opened five or more credit cards within the past 24 months. Under the 5/24 rule, it doesn’t matter which issuer the card is from – any five credit cards will disqualify you.

In addition to your credit score and the 5/24 rule, Chase, like many issuers, generally considers your income and credit report data.

How can I improve my score to get this card?

The Chase Sapphire Reserve is one of the most popular luxury credit cards on the market. It offers some incredible rewards and travel perks that can more than make up for its large annual fee.

The bad news is it’s only available to borrowers with excellent credit. However, if you’ve been in the good credit range — meaning a score between 670 and 739 — you can take a few steps to boost your score up into the excellent range.

If you have a good credit score, it likely means you’re already doing a lot of things right for your credit. Below are a few additional strategies to help you boost your score a little higher.

Request a credit limit increase

Credit utilization is an important factor in determining your credit score. It makes up 30% of your FICO score, and it’s best to keep your utilization ratio below 30%.

One of the most effective ways to reduce your credit utilization is to increase the amount of credit available to you. With most credit card companies, you can request a credit limit increase in your online account or by calling the issuer.

Time your monthly payments

One of the best things you can do for your score is pay your full credit card balance each month. But if you’ve been making your payment on the due date each month, consider doing that a bit earlier.

Each month, credit card issuers report your card activity to the three credit bureaus. If your activity is reported before you’ve made your payment, then your credit report will show a balance, even if you don’t typically carry one past your due date. By paying your card off before your activity is reported to the credit bureaus, your credit report will show a lower balance and, therefore, lower credit utilization.

Become an authorized user

Becoming an authorized user on someone else’s credit score can provide a huge boost to your credit score. First, adding another credit card to your credit report increases the amount of credit available to you. And assuming there isn’t a large balance being carried on that card, you’ll see your credit utilization go down.

Another benefit of becoming an authorized user is that you’ll get credit for the payment history of that card. Assuming the primary cardholder has made all of their payments on time, those payments will benefit your credit score as well.

Monitor your credit regularly

Staying on top of your credit situation is critical when it comes to boosting your credit score. Monitoring your credit will alert you right away if anything appears on your credit report that shouldn’t be there. Many credit monitoring services also give you insight into your credit and show you what factors on your credit report may be holding your score down.

What if I have bad credit?

If you currently have bad credit or fair credit, then applying for the Chase Sapphire Reserve may not be the best choice for a while. Work on improving your credit with responsible credit use, and over time you’ll see your score climb up. While not a flashy travel card, the Capital One QuicksilverOne Cash Rewards Credit Card is a rewards card that you can typically qualify for with fair credit. You can use this or a similar card to build your credit history and score.

What can I do if Chase declines my application?

Even with a credit score above 740, you may still be denied the Chase Sapphire Reserve card. Luckily, Chase – like most major card issuers – has a reconsideration line, meaning you can call 1-888-270-2127  and ask the representative to take another look at your application.

But in some cases, it may simply be that your credit score isn’t high enough or you don’t meet one of Chase’s other requirements, such as the 5/24 rule. In that case, spend a bit more time improving your credit score to increase your chances of being approved the next time around.

Bottom line

As is the case with many premium credit cards, Chase requires an excellent credit score to qualify for the Chase Sapphire Reserve card. Given all the benefits the card comes with, it’s probably worth the effort. But if your credit score hasn’t reached 740 or higher yet, then you may need to take some additional steps to boost your score to ensure your application is approved.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Source: creditcards.com

Understanding Property Valuations

If you’re applying for a mortgage, you probably expect the lender to take a look at your income, debt, credit history, employment, and assets.

There’s another loan element the lender will consider that may be less familiar: an objective property valuation.

What Is a Property Valuation?

Sellers may use a property valuation to determine how much their house is worth and how much they can charge on the open market.

A mortgage lender’s property valuation is slightly different. It helps the lender determine the value of the property you’re hoping to buy based on factors like size, location, condition, and demand.

Why would lenders require this type of home appraisal? They want to know that the loans they offer are backed by a sufficiently valuable property so that if a borrower were to default on the loan, they can recoup their losses.

Consider this: Sellers can choose any listing price they want — whatever they think someone is willing to pay. But if the buyer needs financing, the selling price must be supported by market value (what comparable homes have recently sold for in the area) before a lender will pony up the cash for a loan.

If the home you want to buy is appraised for less than the sales price, the seller would need to lower the price to the appraised value, you would have to make up the difference, or you’d exit the deal.

Who Carries Out a Property Valuation?

A lender’s property valuation typically will be carried out by a professional appraiser assigned by a third party.

The lender, buyer, and seller are not to have any relationship with the appraiser so that the valuation is unbiased. Buyers can hire an independent appraiser, but the valuation would not be official.

The kind of valuation required by lenders depends on factors such as the type of home you’re looking to buy, the type of loan you’re applying for, your credit score, and whether you’re buying a single-family or multifamily home.

Home Appraisals, Explained

The most common kind of property valuation is an appraisal.

How Does a Home Appraisal Work?

An appraisal is an independent estimate of the home’s value by a licensed or certified real estate appraiser.

Appraisers weigh factors like location, the condition of the home, size and layout, the year it was built, and any renovations that have been done. They also consider “comps” — what similar homes in the neighborhood recently sold for — tax records, and zoning.

The appraisal will determine a market value that is either “as is” or “subject to” certain conditions, such as completion of repairs or upgrades.

Lenders rely on the appraiser’s market value to come up with the loan-to-value ratio of a property, which influences the amount they’re willing to lend and the terms of the loan.

When Does an Appraisal Happen and What Does It Cost?

The federal government no longer requires appraisals for homes that cost less than $400,000, allowing simpler evaluations to stand in their place. That said, most mortgage lenders probably will still require an appraisal.

The appraisal typically occurs once the seller has accepted an offer and is normally performed within the loan contingency date of the purchase contract, usually 21 days.

The buyer pays for the appraisal ordered through the lender. The cost depends on the type of property, city, size, and features, but for a single-family home it averages $348, according to a national survey from HomeAdvisor, an online platform for home services professionals.

A desktop appraisal may cost much less than that.

What If You Get a Low Appraisal?

If the appraised value is as much as the agreed-upon price or more, that encourages the lender to move forward with the home loan, assuming that the other aspects of the property and your application are in order.

If the appraisal comes in under the agreed-upon price, the lender may reduce the amount of the loan it’s willing to offer.

You or the sellers can dispute the appraisal with the lender or ask for a second appraisal. If the value is still too low, there are three routes:

•   You can agree to contribute the difference in cash.

•   You can try to get the seller to reduce the price.

•   You and the seller may agree to split the difference.

Buyers can back out of the deal if the contract includes an appraisal contingency. A clean offer, one with as few contingencies as possible, caught on in the recent hot market, but buyers take risks in dropping contingencies.

Alternatives to a Full Home Appraisal

In certain situations or stages of the homebuying process, you may not need to go through a full formal home appraisal. Here are some alternative methods lenders use for home valuations.

Automated Valuation Model

Algorithms take into account the size of the home, the number of bedrooms and bathrooms, comps, and other factors to estimate property value.

Some lenders of conventional mortgages using Fannie Mae or Freddie Mac’s automated underwriting systems may receive a waiver for a full appraisal, thanks to robust sales in the neighborhood to support the purchase price, the amount of the down payment, strength of the borrower, or the type of transaction.

Some lenders also use automated valuation models when deciding whether to extend or adjust a home equity line of credit.

Drive-by or Exterior-Only Appraisal

A drive-by appraisal (also known as a summary appraisal) refers to an inspection that only looks at the exterior of a home. The appraiser will photograph the front and sides of the home, as well as the street in both directions.

The appraiser takes notes on the neighborhood and the condition of the home and looks at comps when coming up with an estimated value.

Desktop Appraisal

Never having to leave the desk, an appraiser uses property tax records, comps, and other public record data in lieu of a physical property inspection.

The Federal Housing Finance Agency made desktop appraisals, implemented in March 2020 amid lockdowns and social distancing, permanent for purchase loans starting in early 2022.

That means both Fannie Mae and Freddie Mac will allow appraisals to be conducted remotely.

Broker Price Opinion

A broker price opinion is an estimate of a property’s value determined by a real estate agent or broker, rather than a licensed appraiser. A client may request this estimate to underpin a home’s listing price.

A lender may request a broker price opinion when a borrower is behind on payments, and will use the unofficial assessment to see whether the home value is below the amount of the loan, potentially making the borrower eligible to negotiate a short sale.

Broker price opinions can also be used to buy and sell mortgages on the secondary market. Lenders prefer them in these cases because a full appraisal isn’t required, and because the valuations are fast and generally less costly.

The Takeaway

An unbiased professional appraiser determines real estate valuation based on factors like home size, condition, location, and comparable sales. When big money is at stake, a lender needs to determine the true property valuation.

Before you get to the home valuation stage, the first steps to becoming a homeowner may be getting prequalified and preapproved for a mortgage loan.

SoFi offers home loans with as little as 5% down, competitive rates, and flexible terms.

It’s quick and easy to find your rate on a SoFi mortgage.


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

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

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com

How to Calculate Real Estate Taxes on Your Property

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Dig Deeper

Additional Resources

For American homeowners, real estate taxes are an immutable fact of life. Virtually every homeowner pays real estate tax — property tax, in common parlance — to at least one jurisdiction:

  • Incorporated villages, towns, boroughs, or cities
  • Counties or parishes
  • School or utility districts
  • Special tax assessment districts, whose revenues go toward specific initiatives or into specific funds

Notice that these are mainly local or regional units of government, known as tax authorities. 

State governments may pass laws that directly or indirectly impact property tax collections. But they generally don’t assess property taxes for their own purposes.

How to Calculate Real Estate Taxes on Your Property

According to the Institute on Taxation and Economic Policy, local tax authorities calculate property taxes using the following formula:

  • Assessed Value: Market value x assessment ratio
  • Taxable Value: Assessed value – exemptions
  • Property Tax Before Credits: Taxable value x total millage rate
  • Total Property Tax Owed: Property tax before credits – homestead credits and circuit breakers

Note that the values for exemptions, homestead credits, and circuit breakers can all be zero. In these cases, property tax can be calculated with an even simpler formula: assessed value x total millage rate.

Property Tax Definitions

Let’s break down this formula even further:

Market Value

This is your taxing authority’s best guess at your property’s fair market value. That is, what it would sell for if someone made an offer on it tomorrow. It’s calculated using public and privileged information about your property. 

Factors that affect your home’s market value include:

  • Location
  • Values for comparable properties sold recently nearby (“comps”)
  • Recent additions or upgrades
  • General condition, which is a function of age and maintenance history

Market value is the most subjective factor in property tax calculations. It therefore plays a key role in most property tax assessment appeals.

Assessment Ratio

The assessment ratio can range from 0 to 1. Think of it as a discount to fair market value. In many jurisdictions, the assessment ratio is high, exceeding 0.9. But in others, it’s quite low — 0.2 to 0.4. 

Some states have laws that preempt dramatic changes to local assessment ratios or establish uniform ratios across jurisdictions. Others impose more complex rules that effectively limit assessment ratio increases. For instance, New York state law limits “the growth in annual levy … to the lesser of 2 percent or the Consumer Price Index (CPI), subject to certain limited exceptions and adjustments” outside the five boroughs of New York City.

Assessment ratios often vary by property type as well. For instance, commercial or agricultural property may have a lower assessment ratio than residential property.

Property Tax Exemptions

Property tax exemptions reduce assessed taxable value for select homeowner groups. Common exemptions cover:

  • Homesteads (primary residences)
  • Senior citizens, although often excluding high-income seniors
  • Disabled homeowners
  • Active-duty service members and veterans
  • Households falling below certain low-income thresholds
  • Homes that have seen energy-efficient home improvements and certain other renovations and upgrades

Millage

“Millage rate” is a fancy way of saying “tax rate.” A given property’s total millage rate is the sum of all applicable property tax rates. So, where a property lies in two overlapping tax jurisdictions, such as county and school tax districts, it could be subject to two property tax rates (or more). 

Property Tax Credits

Property tax credits directly reduce property tax liability. In some jurisdictions, homestead benefits are awarded via credits rather than exemptions. Other common property tax credits include:

  • Credits for taxes assessed by overlapping districts, such as school levy credits on county taxes
  • “First dollar” credits for improvements to vacant land
  • Lottery or gaming credits financed by receipts from state lotteries or local gaming facilities

Don’t confuse credits applied directly to property taxes with property tax credits applied to state income taxes.

Circuit Breakers

Property tax circuit breakers are special credits for low-income homeowners in high-tax jurisdictions. 

According to the Institute on Taxation and Economic Policy, a circuit breaker reduces property taxes to a predetermined maximum percentage of a taxpayer’s income. So, if your home city’s circuit breaker caps property taxes at 5% of income and you earn $50,000 annually, you can pay no more than $2,500 in property taxes each year. 

Who Is Totally Exempt From Property Tax?

Even after factoring in exemptions and credits, most middle- and high-income homeowners are required to pay at least some property tax. Very low-income homeowners who qualify for exemptions due to protected status may effectively pay no property tax.

Institutions totally exempt from property tax liability under normal circumstances include:

  • Religious organizations and houses of worship
  • Nonprofit organizations and NGOs
  • Nonprofit educational institutions and adjacent organizations

These organizations are generally exempt from other state and federal taxes as well.


How You’re Notified About Your Property Taxes

Property tax assessments become binding on a set date each year. In legal parlance, they’re said to become “attached” on this date. The attachment date varies by jurisdiction but is often the first day of the calendar year (January 1) or fiscal year (often October 1).

Proposed Property Taxes

Most jurisdictions send proposed property tax notifications late in the year prior to the binding date. If your binding date is January 1, you’ll likely receive your proposed tax notification in October or November.

The notification will be pretty detailed, with lines for all the factors involved in your property tax calculation. It’ll include assessed value (including the change from the prior year), total millage rate, exemptions, credits, homestead information, and special assessments.

Where multiple jurisdictions assess property taxes, homeowners may receive one consolidated assessment notification or multiple notifications from each jurisdiction.

Deadline to Appeal

Your proposed property tax notification will include an appeal deadline. The deadline can be as little as 30 to 45 days after you receive the notification but may be longer. Regardless, this is the most important date on your property tax calendar, so don’t forget it. Once it passes, it’s much harder — if not impossible — to appeal your property tax assessment or recover tax overages from previous years.

Tax Statements

Once your property taxes are set and the deadline for appeal has passed, you’ll receive a tax statement outlining when and how much you need to pay. Most jurisdictions accept tax payments twice per year, each accounting for half of the total. Where taxes are delinquent or special assessments required, payment sizes might be uneven.


Final Word

Local tax authorities don’t assess property taxes uniformly. Where you live has a lot to say about how much property tax you can expect to pay.

The northeastern United States is infamous for its hefty property tax burdens, while most southern and western states are much more homeowner-friendly. According to the Tax Foundation, New Jersey had the highest effective property tax rate (2.13%), followed by Illinois (1.97%) and New Hampshire (1.86%). Hawaii had the lowest effective rate (0.31%), followed by Alabama (0.37%).

But these percentages tell only part of the story. In states where property is expensive, like Hawaii and California (0.70% average effective property tax rate, per the Tax Foundation), the owner of a median-priced home could pay more in property taxes than their counterpart in a “higher-tax” state with lower property values. Just one more reason to know how to calculate your property taxes.

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Source: moneycrashers.com

What is the Capital Asset Pricing Model (CAPM)?

The Capital Asset Pricing Model (CAPM) is an investment assessment formula that shines a light on the relationship between the systematic risk in a security and its estimated return. Investors use the CAPM to determine whether an investment’s expected return is the same as its risk-free return, and to determine an asset’s expected returns.

Let’s take a deeper look at the capital asset pricing model and see what it means, and how it may impact everyday investors.

Recommended: How to Evaluate a Stock Before You Buy

CAPM Defined

The Capital Asset Pricing Model makes the process of measuring investment return and risk more efficient, to determine whether a particular asset offers a good rate of return.

CAPM is especially helpful when an investor faces significant investment risk, such as when trading equity options. The formula helps the investor determine whether the transaction has an acceptable measure of risk. By using CAPM, the investor is able to accurately assess if the potential investment return on a security is worth taking on.

Evaluating the fair value of a security is an ongoing endeavor, as investment risk factors and other variables change all the time. When those risks shift (think interest rate changes, company management changes, or a geopolitical crisis erupts, among other potential threats), investors can still use the capital asset pricing model to weigh an investment against constant risk and return variables.

Investors can factor market impactors, like interest rate flows, currency valuations, and stock market cycles, among other issues, into their CAPM analysis to better weigh risk versus return. Basically, the bigger the chance of risk, the more important CAPM becomes to investors weighing that risk against potential returns.

Recommended: What Is the Average Stock Market Return?

CAPM Formula Defined

CAPM can help evaluate an investment’s viability in a time of significant market angst, by measuring three important barometers in an investment equation – risk-free return, the market risk premium, and the investment beta.

Let’s take a look at how CAPM is calculated with all three factors included.

The (capital asset pricing model) CAPM formula is represented as below:

Expected Rate of Return = Risk-Free Premium + Beta * (Market Risk Premium) Ra = Rrf + βa * (Rm – Rrf).

The calculation reflects a series of financial metrics, which taken together can offer a balanced look at a potential investment’s risk and return, with the aforementioned metrics front and center.

Risk-Free Return (Rrf)

This metric represents the value given to an investment (like a stock or commodity, for example) that guarantees a positive investment return with no risk. U.S. Treasury bond, backed by the full faith and credit of the United States government, are a good example of risk-free return in action.

Since Uncle Sam guarantees the bonds, and there is virtually zero chance of the U.S. defaulting on its debt obligations, Treasuries are considered among the safest investments available. That’s a big reason why risk-free return value reflects the yield delivered by a 10-year U.S. government bond.

The Market Risk Premium (Rm-Rrf)

This financial metric represents the return an investor earns – or anticipates earning – from owning a more risk-abundant portfolio. The MPA is an important component of CAPM , as it enables an investor to assess risk and decide if the market premium rate is superior to an investment in a risk-free investment like U.S. bonds.

The Beta (Ba)

Wall Street analysts rely on beta to weigh the volatility of a given security against a broader market.

For instance, an investor looking to buy 100 shares of an emerging biotech company can use beta to evaluate that investment and see how it may perform if the broader stock market turns volatile. In that scenario, that biotech stock’s beta may be 13%, which means it would trigger a 130% variation from any significant (based on the exact calculation) of any shift in the broader stock market. Beta is always equal to 1 in any market evaluation equation, meaning it’s parallel to any potential shifts in a broader market.

Recommended: The Basics of Calculating Portfolio Beta

CAPM Formula Explained

Factoring in each component to the CAPM equation, the resulting formula looks like this:

Expected return = Risk-free rate + (beta x market risk premium).

The risk-free component focuses on the time value of money, or the concept that a cash amount in present form is potentially higher than the same amount of cash down the road, primarily because of money’s current earnings potential. A CAPM formula may also factor in excess risks taken on by an investor.

Next, beta is assessed to figure out just how much risk is on the table relative to the broader market. For instance, if ABC stock offers more risk than the broader market, its beta is higher than 1 (one). A beta that is lower than 1 assumes the investment will curb portfolio risk, which may make a security more palatable to risk-averse investors.

With the beta calculated, beta is multiplied by the market risk premium, and the result (value) is added into the investment’s risk-free rate to provide the security’s estimated rate of return.

In conducting a CAPM exercise, the investor must acknowledge some level of risk in any investment, primarily in two ways.

•   Loss is always possible, as common market securities like stocks, commodities, funds, or currencies may lose money, making them a depreciation risk.

•   The higher level of risk in a specific security often correlates to a higher potential investment return, as history shows that specific investments carry more risks and more rewards than others (stock options and future.

Problems with the CAPM

While the CAPM is an extremely useful tool for investors, it does have some drawbacks. One such drawback is the reliance on the risk-free rate and the beta, which frequently. That means that CAPM must be constantly recalculated in order to remain useful. It also does not account for transaction costs such as taxes and fees, which could make a potential investment less favorable than the model shows.

Efficient Frontiers and the Capital Asset Pricing Model

In theory, if an investor adhered perfectly to CAPM all of their investments would exist on the efficient frontier, meaning that all returns justify the risks taken. The efficient frontier is the optimal baseline for a portfolio, Since every investment comes with some risk, it’s important to make sure that the returns correspond to the level of risk.

The Takeaway

CPAM can help investors understand how the risk and return of a given investment relate to each other. Having the answer to that question can help investors make more knowledgeable portfolio decisions on an ongoing basis.

Whether or not you’re using the CAPM to make investment decisions, a great way to start building your portfolio is by opening a brokerage account on the SoFi Invest® investment platform. SoFi Invest offers access to financial planners and educational resources you can use to develop the best investing strategy for you.

Photo credit: iStock/PeopleImages


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Source: sofi.com

Sell Your Gold Safely for a Fair Price

You’ve got some gold you want to sell. Some of your late aunt’s jewelry, maybe. Or your grandpa’s coin collection. Some old earrings that don’t have partners anymore. Or a really hideous bracelet you never wear. You could use the cash much more than the knotted lump of old chains in your jewelry box. But selling gold can be intimidating.

We’re sure you’ve seen the signs promising quick cash for gold. What about an online buyer? Maybe you got a mail solicitation. Authorities warn about ripoffs, and knowing how to get a fair price in a volatile market is a challenge. But if you have some gold jewelry or coins or other gold you would rather cash in, there are ways to sell it safely and for the best price.

The key to this transaction is your comfort level and trust that the person you’re selling to is reputable. So one of the first rules is to do your research and shop around.

Pandemic Affects Consumer Gold Sales

More and more consumers are looking to sell gold items, according to Gary Smith, past international president of the American Society of Appraisers (ASA), even if gold prices aren’t particularly high right now. Part of the reason for the heightened interest in selling? It’s a bit dark: The high number of deaths from COVID-19 has left survivors to sell property owned by their deceased relatives, Smith said.

Also, people facing financial hardship because of the pandemic are looking to sell gold and other items. “People have actually come into our facility with very low-value jewelry,” said Smith, who owns PA Gem Lab in Montoursville, PA. “They need money and they’re willing to sell grandpa’s class ring. It is a sad state and people are hurting.”

With all this need, scams abound, according to Smith. So it’s wise to be cautious when selling your gold and jewelry. As with most things, knowledge is your key to success.

Before Selling Your Gold, Talk to an Appraiser

The first step, Smith said, is to talk to an appraiser. Smith pointed to the ASA, as well as the National Association of Jewelry Appraisers and the Appraisers Association of America as the major organizations in this area. In addition, he said there’s an organization for retailers called the American Gem Society. 

Appraisers who belong to one of these organizations must abide by strict codes of conduct and ethics, Smith said. All three of these outfits maintain databases on their websites where you can find an appraiser near you. For a small fee — perhaps as low as $20 — one of these independent appraisers can give you a quick assessment of what you have and what it should fetch, along with whether a piece of jewelry has intrinsic value beyond the gold weight and if the gems are real.

That should be enough, Smith said, to give consumers what they need to know to sell their items for a fair price. A seller shouldn’t need an expensive, written appraisal, such as might be required for insurance coverage.

“Most appraisers are pretty lenient that way,” Smith said. “We’re here to help and from ASA’s standpoint, we’re here to educate the general public.” Appraisers, he said, “want people to get value for their money.”

Shop Around Before Selling Your Gold

Amanda Gizzi, spokesperson for jeweler trade organization Jewelers of America, says that getting more than one offer and selling to a reputable purchaser are important steps to selling gold and jewelry safely for a fair price.

“Shopping around is a good way to understand the average price you can expect,” Gizzi said. “If you can find a jeweler that you like to buy jewelry from, you may find you get a higher amount if you use the money toward another jewelry purchase.”
Kate Mars, who lives in Arlington, Virginia, went by recommendations from people she trusted when she sold jewelry and a coin collection from a safe deposit box left when her father died.

Through the estate lawyer, she found a coin dealer in nearby Frederick, Maryland, where the dealer gave Mars a “sense of security” as he went through her books of coins and told her what had value.

The jewelry had been appraised for the estate and none of it was particularly valuable, Mars said. She took that to a jewelry store that was recommended to her — and that had been in business for a long time. “The people were nice,” she said. “They looked everything up…Even if I could have made a few more bucks (going somewhere else), I am happy with the experience.”

They also helped by providing the documentation she needed as executor of her father’s estate.  And note that for everyone selling gold or jewelry, getting a good receipt should be part of the process. It should include all the details of the transaction, including the name and address of the buyer, the date of the sale and the weight, fineness, prices and names of all precious metals involved. 

How Much Do You Get for Selling Gold?

A variety of sources online, such as kitco.com, will give you the spot price of gold. Don’t expect to get that amount, though, for old jewelry or coins. For one thing, those are wholesale values, and you are selling to a middleman, who is going to need to make a profit when he resells your property.
Smith, the past international president of the American Society of Appraisers  said some places that post signs offering to buy gold pay just 40 to 45% of the value. Pawn shops may pay just 20%. So what’s a fair value? Consumers should sell to someone who will pay 65 to 88% of the value of an item, according to Smith.

Why can’t you get more? There are several reasons. For one, businesses that buy gold are usually required by state law to hold onto items for a set number of days before selling them, Smith said. This can be a gamble because of the volatility of gold prices. The purchaser of your gold also will likely sell to a refiner or to a middleman who sells to refiners. The gold will pass through two or three sets of hands before it is ultimately sold for its value.

“Gold jewelry isn’t always very heavy, so the price that something was purchased for will not be the same as what you sell it back for,” Gizzi said. “Remember, the retailer that buys the gold, has to process it, clean it, and oftentimes melt it down to make it into something else before they can resell it.”

Another important variable that will affect price is the gold’s purity, measured in karats. Pure gold — think bullion bars — is 24 karat. But pure gold is soft, so it’s usually mixed with other metals to make it harder and more durable such as when used in jewelry. 

The karat measurement tells you how much pure gold is in the piece. The proportions of pure gold and other metals will add up to 24. So, if your jewelry is 18K, or 18 karats, that means it has 18 parts of gold plus six parts of other kinds of metal. A 10K piece of gold is 10 parts gold with 14 parts of other metals.

Should You Sell Your Gold Online?

Like with almost every other business transaction, the internet is an option for selling your gold. Ebay, for example, has a marketplace where sellers can send a photograph of their item and receive a quote — without sending in their item. Notably, their buyback partner, APMEX, only accepts bars, coins and rounds.
If you have coins or bullion, Smith said, selling the items on eBay is “better than a pawn shop.” But he prefers local in-person transactions to online sales. “Basically you know who you are dealing with,” he explained. “I guess I’m old school inasmuch as I like to deal face to face. If I don’t get that ‘warm fuzzy vibe of trust’ I go elsewhere.”

Special caution is warranted, though, if you elect to mail your items to a potential purchaser as part of an online sale. Make sure to take photographs of your items and make a list before mailing them out. Also, you should insure the package before mailing it.

Check Businesses Before Selling Your Gold

And as long as we’re discussing precautions, with potentially significant amounts of money changing hands, you want to do at least as much due diligence as if you were, say, trading in a car. In addition to professional associations and recommendations, you can check with the Better Business Bureau to find out if there are complaints against a business you’re considering, and if so, how they were resolved.

It’s smart to weigh your gold before taking it to a buyer — a kitchen or postal scale should give you a reasonable idea of the weight of your items. And make sure that when the buyer is weighing the gold, you pay attention to the procedure.

Is Selling Your Gold a Good Idea?

Is now the right time to sell? Should you wait for the price to go up, or will waiting risk losing money if the price goes down?

“Selling gold now is a good idea for those who need cash or want to use the gold to reinvest in a newer piece of jewelry,” Gizzi said. “Outdated jewelry that is broken or single earrings also make great items to sell.”

That being said, it’s possible to have regrets. “Always remember that once the piece is gone, you can rarely get it back,” Gizzi explained. “Just because a piece of jewelry is outdated, doesn’t mean that it won’t come back.” 

Source: kiplinger.com

What Is a Piggyback Mortgage Loan?

At its simplest, a piggyback mortgage can be defined as a second mortgage, typically a home equity loan or home equity line of credit (HELOC).

Piggyback mortgage loans might be a smart option for homebuyers looking to finance a home without a large down payment. They are taken out at the same time as main mortgages and may save homebuyers money over the life of their loans by not having to pay for private mortgage insurance (PMI).

Read on to learn more about what a piggyback loan is and how it works.

What Is a Piggyback Loan?

Homebuyers can use a piggyback mortgage loan to fund the purchase of a property. Essentially, they take out a primary loan and then a second loan, “the piggyback loan,” to fund the rest of the purchase.

Using the strategy helps homebuyers reduce their mortgage costs, such as by not needing a 20% down payment to qualify. It also helps them avoid the need for private mortgage insurance, which is usually required for those who don’t have a 20% down payment.

How Do Piggyback Loans Work?

When appropriate for a homebuyer’s unique situation, a piggyback mortgage might potentially save the borrower in monthly costs and reduce the total amount of a down payment.

Here’s an example to consider of how they work:

Jerry is buying a home for $400,000. He doesn’t want to put down more than $40,000 for the down payment. This eliminates several mortgage types. He works with his lender to secure a first mortgage for $320,000, then another to secure a piggyback mortgage of $40,000 and finishes the financing process with his down payment of $40,000.

Piggyback home loans were a popular option for homebuyers and lenders during the housing boom of the early 2000s. But when the housing market crashed in the late 2000s, piggyback loans became less popular, as a lack of equity proved homeowners more vulnerable to loan defaults.

Fast forward to today’s housing market and piggybacks are starting to become a viable and acceptable option again.

Recommended: Guide to Buying, Selling, and Updating Your Home

Types of Piggyback Loans

A 80/10/10 Piggyback Loan

There are different piggyback mortgage arrangements, but an 80/10/10 loan tends to be the most common. In this scenario, a first mortgage represents 80% of the home’s value, while a home equity loan or HELOC makes up another 10%. The down payment covers the remaining 10%.

In addition to avoiding PMI, homebuyers may use this piggyback home loan to avoid the mortgage limits standard in their area.

A 75/15/10 Piggyback Loan

A loan with a 75/15/10 split is another popular piggyback loan option. In this case, a first mortgage represents 75% of the home’s value, while a home equity loan accounts for another 15%. And like the 80/10/10 split, the remaining 10% is the down payment.

For example, a $300,000 75/15/10 loan would break down like this:

Main loan (75%): $225,000
Second loan (15%): $45,000
Down payment (10%): $30,000

80/10/10 Piggyback Loan 75/15/10 Piggyback Loan
Structure: 80% primary loan
10% HELOC
10% down payment
75% primary loan
15% HELOC
10% down payment
Typical use: Commonly used to avoid PMI and stay under jumbo loan limits Commonly used when purchasing a condo to avoid higher mortgage rates

The Potential Benefits and Disadvantages of a Piggyback Mortgage

A piggyback mortgage may help homebuyers avoid monthly private mortgage insurance payments and reduce their down payment. But that’s not to say an 80/10/10 loan doesn’t come with its own potentially negative costs.

There are pros and cons of piggyback mortgages to be aware of before deciding on a mortgage type.

Piggyback Mortgage Benefits

Allows for retention of liquid assets. Some lenders request a downpayment of 20% of the home’s purchase price. With the average American home price at nearly $303,288, this can be a difficult sum of money to save. A piggyback mortgage may help homebuyers secure their real estate dreams with less cash.

Possibly no PMI required. In what may be the largest motivator in securing a piggyback mortgage, homebuyers may not be required to pay PMI, or private mortgage insurance, when taking out two loans. PMI is required until 20% of a home’s value is paid, either with a down payment or by paying down the loan’s principal over the life of the loan.

PMI payments can add a substantial amount to a monthly payment and, just like interest, it’s money that won’t be recouped by the homeowner when it’s time to sell. With an 80/10/10 loan, both loans meet the requirements to forgo PMI.

Potential tax deductions. Purchasing a home provides homeowners with a list of potential tax deductions . Not only is there potential for the interest on the main mortgage loan to be tax deductible, the interest on a qualified second mortgage may also be deductible.

Potential Downsides of Piggyback Mortgages

Not everyone qualifies. Piggyback mortgages can be risky for lenders. Without PMI, there is an increased risk of a financial loss. This is why they’re typically only granted to applicants with superb credit. Even if it’s the best option, there’s no guarantee that a lender will agree to a piggyback loan scenario.

Additional closing costs and fees. One major downfall of a piggyback loan is that there are always two loans involved. This means a homebuyer will have to pay closing costs and fees on two loans at closing. While the down payment may be smaller, the additional expenses might outweigh the initial savings.

Savings could end up being minimal or lost. Before deciding on a piggyback loan arrangement, a homebuyer may want to estimate the potential savings. While this type of loan has the potential to save money in the beginning, homeowners could end up paying more as the years and payments go on, especially because second mortgages tend to have higher interest rates.

To quickly make an assessment, make sure the monthly payment of the second mortgage is less than the applicable PMI would have been on a different type of loan.

Pros of Piggyback Loans Cons of Piggyback Loans
Secure a home purchase with less cash Only applicants with excellent credit may qualify
Possible elimination of PMI requirements Extra closing costs and fees may apply
Could qualify for additional tax deductions A second mortgage could cost more money over the entire loan term

Qualifying for a Piggyback Mortgage

It’s essential to keep in mind that you’re applying for two mortgages simultaneously when you apply for a piggyback home loan. While every lender may have a different set of requirements to qualify, you usually need to meet the following criteria for approval:

•   Your debt-to-income (DTI) ratio should not exceed 28%. Lenders look at your DTI ratio — the total of your monthly debt payments divided by your gross monthly income — to ensure you can make your mortgage payments. Therefore, both loan payments and all of your other debt payments shouldn’t equal more than 28% of your income.

•   Your credit score should be close to excellent. Because you are taking out two separate loans, your risk of default increases. To account for this increase, lenders require a good credit score, usually over 680, to qualify. A higher credit score means you’re more creditworthy and less likely to default on your payments.

Before you apply for a piggyback loan, make sure you understand all of the requirements to qualify.

Refinancing a Piggyback Mortgage

Sometimes home owners will seek to refinance their mortgage when they have built up enough equity in their home. Refinancing can help homeowners save money on their loans if they receive a lower interest rate or better terms.

But, if you have a piggyback mortgage, refinancing could pose a challenge. It’s often tricky to refinance a piggyback loan because both lenders have to approve. In addition, if your home has dropped in value, your lenders may even be less enticed to approve your refinance.

On the other hand, if you’re taking out a big enough loan to cover both mortgages, it may help your chances of approval.

Is a Piggyback Mortgage a Good Option?

Not sure if a piggyback mortgage is the best option? It may be worth considering in the following scenarios:

If you have minimal down payment resources: Saving up for a down payment can take years, but a piggyback mortgage may mean the homebuyer can sign a contract years sooner than any other type of mortgage.

If you need more space for less cash: Piggyback loans often allow homeowners to buy larger, recently updated or more ideally located homes than with a conventional mortgage loan. This advantage can make for a smart financial move if the home is expected to quickly build equity.

If your credit is a match: It’s traditionally more difficult to qualify for a piggyback loan than other types of mortgages. For most lenders, a homebuyer will need:

•   10% down payment

•   Stable income and employment (proven by tax records)

•   Debt-to-income ratio of 43% or less

Piggyback Mortgage Alternatives

A piggyback mortgage certainly isn’t the only type offered to hopeful homebuyers. There are other types of mortgage loans homebuyers may also want to consider.

Conventional or Fixed-Rate Mortgage

This type of loan typically still requires PMI if the down payment is less than 20% of the home’s purchase price, but it is the most common type of mortgage loan by far. They’re often preferred because of their consistent monthly principal and interest payments.

Conventional loans are available in various terms, though 15 years and 30 years are the most popular.

Adjustable-Rate Mortgage

Also known as an ARM, an adjustable rate mortgage may help homebuyers save in interest rates over the life of their loan, but the interest rate will only remain the same for a certain period of time, typically for one year up to just a few years.

After the initial term, rate adjustments reflect changes in the index (a benchmark interest rate) the lender uses and the margin (a number of percentage points) added by the lender.

Interest-Only Mortgage

For some homebuyers, an interest-only mortgage can provide a path to homeownership that other types of mortgages might not. During the first five years (some lenders allow up to 10 years), homeowners are only required to pay the interest portion of their monthly payments and put off paying the principal portion until they’re better financially situated.

FHA Loan

Guaranteed by the Federal Housing Administration , FHA loans include built-in mortgage insurance, which makes these loans less of a risk to the lender. So while it’s not possible to save on monthly insurance payments, homebuyers may still want to consider this type of loan due to the low down payment requirements.

Other Options to Consider

Some other alternatives to a piggyback mortgage might include:

•   Speaking to a lender about PMI-free options

•   Quickly paying down a loan balance until 20% of a home’s value is paid off and PMI is no longer required

•   Refinancing (if a home’s value has significantly increased) and allowing the loan to fall under the percentage requirements for PMI

•   Saving for a larger down payment and reducing the need for PMI

The Takeaway

Before signing on for a piggyback mortgage, it’s always recommended that a homebuyer fully understand all of their mortgage options. While a second mortgage might be the best option for one homebuyer, it could be the worst option for another. If a piggyback mortgage is selected, understanding its benefits and potential setbacks may help avoid financial surprises down the line.

SoFi offers a variety of mortgage loan options for homebuyers securing their first mortgage or homeowners interested in refinancing their current home. There is an easy online application process and you can keep even more money in your pocket with SoFi’s low, competitive rates.

Explore mortgage options at SoFi. 


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

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

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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Source: sofi.com

Stock Market Today: Dow Extends Slide After Rally Attempt Fizzles

The major indexes looked ready to put an end to their recent mini-slump Thursday, but early gains turned to ash despite some good news on the jobs front.

The Labor Department said that initial filings for unemployment benefits during the week ended Sept. 4 declined by 35,000 to a pandemic-low 310,000 – below expectations for 335,000 claims.

Nonetheless, the Dow Jones Industrial Average, ahead by as much as 169 points (roughly 0.5%) in morning trade, swung to a 151-point, 0.4% loss to 34,879 for its fourth consecutive decline. The S&P 500 (-0.5% to 4,493) and Nasdaq Composite (-0.3% to 15,248) similarly flipped from green to red.

The potential of an earlier slowing of Federal Reserve stimulus might still be on investors’ minds, as the European Central Bank said today that it will pare back a similar asset-purchasing mechanism.

“Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favorable financing conditions can be maintained with a moderately lower pace of net asset purchases under the (pandemic emergency purchase program) than in the previous two quarters,” the ECB said.

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“The Fed has to taper regardless of labor markets,” says Tony Roth, chief investment officer of wealth services firm Wilmington Trust. “There is so much wage pricing pressure that the Fed needs the option to raise rates. They can’t do that if they have not moved far into tapering, but we will see it by the end of the year and the equities markets have already priced this in.”

Also of note: Several carriers, including United Airlines (UAL, +2.3%) and American Airlines (AAL, +5.6%), revised their quarterly forecasts lower Thursday, saying that growing COVID cases had weighed on bookings. While the industry’s stocks actually rose in response, the news could serve as an economic red flag.

Other news in the stock market today:

  • The small-cap Russell 2000 held onto gains until the final minutes of the day, eventually sustaining a marginal loss to 2,249.
  • Lululemon Athletica (LULU, +10.5%) shares took off in response to a beat-and-raise second-quarter earnings report. LULU said Q2 revenues grew 61% to $1.45 billion and adjusted earnings popped 123% to $1.65 per share – those figures beat respective expectations for $1.34 billion and $1.19 per share. Lululemon also raised its forecast for Q3 2021, expecting revenues between $1.40 billion and $1.43 billion, and adjusted earnings per share (EPS) of $1.33 to $1.38. William Blair analysts were among the pros chiming in with praise Thursday, reiterating their Outperform (Buy) rating “given continued upside potential to estimates alongside the brand’s long-term growth runway, exceptional connection with consumers and tangential opportunities to broaden lululemon’s global TAM to $3 trillion.”
  • GameStop (GME, +0.2%) looked like it was going to be in for a long day after it reported growing Q2 sales but a steeper-than-expected loss and provided a disappointing post-earnings call. “As the board lays groundwork to transform GameStop into a ‘technology’ company that delights gamers, many details still remain a mystery, particularly as the shift toward game downloads, streaming and cloud services picks up steam,” says Baird analyst Colin Sebastian, who does not have a rating on GME shares. “We appreciate more details on infrastructure build-out, filling management roles, and expanding the product catalog, but it looks more like the strategy is to create a slimmed-down, omni-channel version of Best Buy. We encourage Mr. Cohen to be a little more transparent with his plans if he wants support from longer-term oriented investors.” Nonetheless, GME erased early losses of more than 10% by the close.
  • U.S. crude futures dropped by 2.0% to $67.87 per barrel after China announced plans to tap state oil reserves.
  • Gold futures bounced back a little, gaining 0.4% to $1,799.50.
  • The CBOE Volatility Index (VIX) climbed 4.3% to 18.74.
  • Bitcoin made a slight 0.3% improvement to $46,573.60. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)
stock chart for 090921stock chart for 090921

Make the Most of a Difficult Road Ahead

The market has its work cut out for it.

A team of Bank of America Securities analysts, for instance, says it believes the S&P 500 will hit 4,250 by year’s end, and 4,600 by the end of 2022 – that’s a respective 5.4% decline and 2.4% improvement from current levels.

“Sentiment is all but euphoric with our Sell Side Indicator closer to a sell signal than at any point since 2007,” BofA’s team says. “Wage/input cost inflation and supply chain shifts are starting to weigh on margins. Interest rate risk is at a record high … and valuations leave no margin for error.”

Not exactly an ideal situation for picking stocks.

BofA suggests inflation-protected yield, which you can find among these inflation-fighting funds, as well as small-cap stocks, given more attractive valuations at present and a tighter tether to U.S. GDP growth.

However, if you’re looking for stock picks on the road typically more traveled, consider taking a gander at investors who are plunking down tens and even hundreds of millions of dollars into their best ideas.

Institutional investors, hedge funds and billionaires have unique access to research and insights that most of us simply don’t, and that alone makes their choices worth a closer examination. Read on as we explore 25 of their highest-conviction stock picks – bets that all grew to some extent during the most recent quarter.

Source: kiplinger.com