Apple Card Review – Does It Live Up to the Hype?

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Apple Card immodestly claims to “completely [rethink] everything about the credit card.” Is it correct? Maybe.

Backed by the Mastercard network, Apple Card certainly has a host of innovative features that old-fashioned credit cards don’t, such as daily cash-back and numberless physical cards. And it’s a harbinger of the cashless, contactless payments landscape to come. No serious observer can dispute that Apple Card is ahead of its time.

But any product that’s truly ahead of its time must also be competitive in the present. And beyond its novel features, Apple Card works pretty much like any other credit card. Indeed, in spite – or perhaps because – of its novel additions, it lacks some consumer-friendly features common to other popular cash-back cards and general-purpose rewards cards.

Here’s a closer look at what sets Apple Card apart, and how it stacks up against other credit cards.

Things to Keep in Mind About Apple Card

Before we dive into Apple Card’s details, two points bear mentioning.

First, though cardholders who don’t pay their statement balances in full each month are subject to interest charges that vary with their creditworthiness and prevailing benchmark rates, Apple Card charges none of the fees typically levied by credit card companies: no annual fee, no late fee, and no over-limit fee.

Second, Apple Card is designed to work with Apple Pay, which runs on Apple (Mac) hardware only. If you’re one of the many millions of iPhone users in the United States, this card is for you. If you’re an Android loyalist, you’re out of luck.

Key Features

Here’s a closer look at Apple Card’s most notable features.

Earning Cash Back

Apple Card has a three-tiered cash-back program:

  • 3% Cash Back. All purchases from Apple earn unlimited 3% cash back. These include, but are not limited to, purchases from Apple.com, physical Apple Stores, the iTunes Store, the App Store, and in-app purchases. Certain non-Apple purchases made using Apple Pay earn 3% cash-back rewards as well.
  • 2% Cash Back. All other purchases made using Apple Pay (including through your Apple phone or Apple Watch) earn unlimited 2% cash back. Hundreds of major retailer chains and brands, encompassing more than 2 million individual merchant locations online and off, accept Apple Pay. These include but aren’t limited to Walgreens, Nike, Uber Eats, Duane Reade, Amazon, and thousands of gas stations. If you’re not familiar with how Apple Pay works, see its site for details.
  • 1% Cash Back. Purchases made with merchants – online, offline, and in-app – that don’t accept Apple Pay earn an unlimited 1% cash back.

Redeeming Cash Back

Cash back earned through Apple Card purchases accrues daily. Each day a purchase posts to your account, you’ll receive the requisite cash back on your Apple Pay Cash card in the Apple Wallet app.

From there, you can use it to pay for purchases within or without the Apple ecosystem or to make payments on your Apple Card balance.

If you don’t have an Apple Pay Cash card and aren’t interested in getting one, you must accept cash back earned to your Apple Card via statement credits, which may not be much of a sacrifice.

Apple Pay Integration

Apple Card is essentially an offshoot of Apple Wallet. It’s designed for use in conjunction with Apple Pay – or, more specifically, as the user’s default Apple Pay payment method. Apple clearly expects most Apple Card transactions to be contactless, executed through a Web portal or with the tap of an iPhone.

Beyond Apple Card’s novelty as the first truly “contactless first” credit card, users benefit from Apple Pay’s stringent security features. These include:

  • Unique Device Number. Your Apple Card is issued with a unique number that’s stored in your iPhone’s Secure Element, the secure microchip that hosts the phone’s most sensitive functions.
  • Two-Factor Purchasing. Every purchase requires your unique device number, plus a unique one-time code generated on the spot.
  • Purchase Authorization Via Face ID or Touch ID. This renders stolen phones all but useless for making purchases.

Apple Card also takes data security seriously. Apple and Goldman Sachs, the card’s issuer, vow never to share customer data with third parties. Only Goldman Sachs has access to users’ transaction histories and personal information.

Physical Credit Card

Apple Card isn’t 100% virtual. The physical Apple Card is a titanium card that looks and feels just like any other premium credit card, except that it’s much sleeker. The card face is a minimalist triumph, with no cardholder name, card number, or CVV and virtually no marks to mar its metallic hue.

Apple and Goldman Sachs tout the security benefits of Apple Card’s featurelessness. Without any information to identify the card, it’s useless in the wrong hands.

Real-Time Fraud Protection

Apple Card’s real-time fraud protection feature notifies you every time your card is used to make a purchase. If something doesn’t seem right about a transaction, or you know for a fact that you didn’t make it, you can immediately initiate the dispute process by tapping the notification.

Purchase Organization and Mapping

Apple Card automatically organizes purchases by purchase category – entertainment, food and drinks, and so on – and merchant. Categories are color-coded for easy visualization and totaled monthly for easy budgeting. With features like that, who needs a paid budgeting app?

Apple Card also automatically maps purchases, showing you where you’ve spent money recently, literally. If a real-time fraud protection notification slips your notice, perhaps seeing a purchase in a city you’ve never visited will jog your memory.

Spending Summaries

Apple Card’s spending summaries, visible in the Wallet app, reveal how much you’re spending, and on what, in any given week or month. You can view spending trends over time here too, which comes in handy for the periodic budget reviews you should be doing.

Payment Due Dates & Frequency

By default, Apple Card statements are due at the end of the month. If you prefer to pay balances more frequently – and reduce interest charges when you can’t pay off your balance in full before the statement due date – you can set weekly or biweekly payments too.

Interest Calculator

Apple Card’s built-in interest calculator automatically tallies expected interest charges when you pay less than the full balance due on your card before the end of the grace period.

Credit card issuers are required to reveal on each statement the true cost of making only the minimum payment due in comparison with at least one larger monthly payment.

However, this is a far more robust and interactive interest calculator that’s significantly more likely to nudge you to boost your monthly payment.

Interest-Reduction Suggestions

If the interest calculator isn’t enough, Apple Card also provides “smart payment suggestions” that encourage cardholders to increase their monthly payments, thereby decreasing their total interest liability.

It’s not clear how Apple Card arrives at these suggestions, but they appear to be based on cardholders’ spending patterns and payment history.

Interest-Free Installment Payments

Apple Card offers interest-free monthly installment payments for select Apple products purchased through the company’s sales channels. You can easily see the size of your installments and how much you have left to pay in the app.

Text-Based Support

Apple Card has a text-based support system that’s available 24/7. If you run into an issue with the card or have a question that doesn’t concern a disputed charge, which you can handle through the real-time fraud protection interface, this is your ticket to a resolution.

Important Fees

Apple Card charges no fees to cardholders: no foreign transaction fees, balance transfer fees, or annual fees.

Advantages

These are among Apple Card’s principal advantages.

1. No Fees

Apple Card doesn’t charge any fees to cardholders. This makes it all but unique, as even avowedly low-fee cards assess fees for less common occurrences such as late and returned payments.

2. Cash Back Accrues Daily

Apple Card is among the only widely available credit cards to accrue cash back on a daily basis, rather than at the end of the statement cycle.

Although the accrual frequency doesn’t affect net cash-back earnings or cash back earning rates, it’s certainly nice to see your spending subsidized in near-real-time.

3. Solid Cash Back Rates on Apple & Apple Pay Purchases

This card earns 3% cash back on virtually all purchases within the Apple ecosystem, excluding purchases with Apple Pay merchants. This 3% category covers, but isn’t limited to, the following:

  • Apple.com purchases
  • Purchases at physical Apple Stores
  • iTunes Store purchases
  • App Store purchases
  • In-app purchases

Apple Card also earns 2% cash back on purchases made with Apple Pay merchants. So if you’re able to limit your spending to the Apple and Apple Pay ecosystems, you’ll net somewhere north of 2% cash back on this no-annual-fee card, depending on your exact spending mix.

4. Above-Average Security Features

Apple Card is more secure than your average credit card. The physical card doesn’t have a card number or CVV, so you won’t have to worry about what could happen between the moment you lose your card and the moment you freeze your account.

The virtual card is denoted by a unique device number locked away in your iPhone’s Secure Element, far from prying eyes.

Perhaps most consequentially, Apple has a strict privacy policy that forbids data sharing with third parties. There’s no need to opt out, which is often easier said than done, and only Goldman Sachs has access to your transaction history.

5. Real-Time Fraud Protection

Apple Card has another security feature worth touting: real-time fraud protection that alerts you whenever your card is used to make a purchase and lets you flag potentially fraudulent transactions with a single tap.

Compared with the traditional dispute resolution process, this is a snap, even when flagged charges turn out to be legitimate.

6. Easy, Flexible Payments

Apple Card’s default payment due date – the last day of the month – is easy to remember, even without the helpful reminders.

If you’re trying to budget on an irregular income and prefer not to wait until the end of the month to pay off your entire balance, Apple Card’s customized weekly and biweekly payment intervals have you covered.

Other credit cards let you pay off balances throughout the month, but few make it as easy as Apple Card.

7. Interest-Reduction Features

Apple Card’s interest calculator and interest-reduction suggestions are classic examples of “nudge” theory in action. By revealing just how much you’ll save over time by paying a little more upfront, these features nudge you to make smart financial decisions.

Of course, it’s always best to pay off your balance in full by the statement due date, but when unexpected expenses make that impossible, it’s nice to feel like your credit card issuer is on your side.

8. Useful Budgeting and Spending Control Features

With so many budgeting and spending control features, Apple Card feels like a personal budgeting suite with a spending aid built in.

Maybe that’s the point. Though most small-business credit cards have basic expense tracking and reporting features, Apple Card’s package is unusually robust for a consumer credit card.

If what’s keeping you from building and sticking to a household budget is the inconvenience inherent in standalone budgeting software, this is a potential game-changer.

9. Text-Based Customer Support

Apple Card’s text-based customer support is a low-friction alternative to menu-laden, over-automated phone support and unpredictable email support.

Whether this feature is as efficient as Apple and Goldman Sachs promise remains to be seen, but it’s difficult to see it being worse than the status quo – for relatively simple issues, at least.

10. No Penalty Interest Charges

Apple Card doesn’t charge penalty interest. While it’s best never to find yourself in a position where penalty interest would apply, the assurance that you won’t be unduly penalized for a lapse beyond your control is certainly welcome.

Disadvantages

Consider these potential disadvantages before applying for Apple Card.

1. Requires Apple Pay and Apple Hardware

Apple Card’s biggest drawback is its exclusivity. The card requires Apple Pay, which runs exclusively on Apple hardware, meaning it’s not appropriate for Android or Windows device users.

If you’re set on applying for Apple Card but don’t have an iPhone or other compatible Apple device, Apple Watch is your most cost-effective option. Apple Pay runs on Apple Watch just fine, and you can pick up refurbished older versions – Series 1, 2, and 3 – for less than $100.

That’s still a significant outlay, though, and no other credit card on the market requires compatible hardware.

2. Only 1% Cash Back on Non-Apple Pay Purchases

Apple Card earns just 1% cash back on non-Apple Pay purchases. If your daily, weekly, and monthly consumption habits involve merchants that mostly accept Apple Pay, you shouldn’t have trouble earning the higher 2% cash-back rate, but not all merchants do.

Square has a non-exhaustive list of major merchants that do accept Apple Pay. Do yourself a favor and review it before applying for this card.

3. Goldman Sachs’ First Credit Card

Apple Card is the first consumer credit card issued by Goldman Sachs Bank. Apple touts this as an advantage, arguing that Goldman Sachs isn’t bound by the constraints of legacy credit card issuers such as Chase and Barclays.

And it’s not as if Goldman Sachs is entirely new to the consumer finance realm. Its Marcus by Goldman Sachs loan and savings products are innovative and well-liked.

That said, it’s not hard to imagine a first-time credit card issuer experiencing some growing pains, especially given Apple Card’s novelty. At a minimum, don’t be surprised to see iterative changes to Apple Card as Goldman Sachs figures out what works and what doesn’t.

Final Word

If you’re a committed Apple Pay user with the hardware to back it up – an iPhone, Apple Watch, or maybe an iPad – then it might make sense for you to ditch your traditional credit cards and going all-in on Apple Card.

Users who restrict their spending to Apple Pay merchants only stand to earn 2% cash back across the board, about as good as it gets on a consistent basis for premium cash-back credit cards. To do better than that, you’ll need to upgrade to a premium travel rewards credit card with a hefty annual fee.

Source: moneycrashers.com

How to Refinance Your Home Mortgage – Step-by-Step Guide

Deciding to refinance your mortgage is only the beginning of the process. You’re far more likely to accomplish what you set out to achieve with your refinance — and to get a good deal in the meantime — when you understand what a mortgage refinance entails.

From decision to closing, mortgage refinancing applicants pass through four key stages on their journey to a new mortgage loan.

How to Refinance a Mortgage on Your Home

Getting a home loan of any kind is a highly involved and consequential process.

On the front end, it requires careful consideration on your part. In this case, that means weighing the pros and cons of refinancing in general and the purpose of your loan in particular.

For example, are you refinancing to get a lower rate loan (reducing borrowing costs relative to your current loan) or do you need a cash-out refinance to finance a home improvement project, which could actually entail a higher rate?

Next, you’ll need to gather all the documents and details you’ll need to apply for your loan, evaluate your loan options and calculate what your new home mortgage will cost, and then begin the process of actually shopping for and applying for your new loan — the longest step in the process.

Expect the whole endeavor to take several weeks.

1. Determining Your Loan’s Purpose & Objectives

The decision to refinance a mortgage is not one to make lightly. If you’ve decided to go through with it, you probably have a goal in mind already.

Still, before getting any deeper into the process, it’s worth reviewing your longer-term objectives and determining what you hope to get out of your refinance. You might uncover a secondary or tertiary goal or benefit that alters your approach to the process before it’s too late to change course.

Refinancing advances a whole host of goals, some of which are complementary. For example:

  • Accelerating Payoff. A shorter loan term means fewer monthly payments and quicker payoff. It also means lower borrowing costs over the life of the loan. The principal downside: Shortening a loan’s remaining term from, say, 25 years to 15 years is likely to raise the monthly payment, even as it cuts down total interest charges.
  • Lowering the Monthly Payment. A lower monthly payment means a more affordable loan from month to month — a key benefit for borrowers struggling to live within their means. If you plan to stay in your home for at least three to five years, accepting a prepayment penalty (which is usually a bad idea) can further reduce your interest rate and your monthly payment along with it. The most significant downsides here are the possibility of higher overall borrowing costs and taking longer to pay it off if, as is often the case, you reduce your monthly payment by lengthening your loan term.
  • Lowering the Interest Rate. Even with an identical term, a lower interest rate reduces total borrowing costs and lowers the monthly payment. That’s why refinancing activity spikes when interest rates are low. Choose a shorter term and you’ll see a more drastic reduction.
  • Avoiding the Downsides of Adjustable Rates. Life is good for borrowers during the first five to seven years of the typical adjustable-rate mortgage (ARM) term when the 30-year loan rate is likely to be lower than prevailing rates on 30-year fixed-rate mortgages. The bill comes due, literally, when the time comes for the rate to adjust. If rates have risen since the loan’s origination, which is common, the monthly payment spikes. Borrowers can avoid this unwelcome development by refinancing to a fixed-rate mortgage ahead of the jump.
  • Getting Rid of FHA Mortgage Insurance. With relaxed approval standards and low down payment requirements, Federal Housing Administration (FHA) mortgage loans help lower-income, lower-asset first-time buyers afford starter homes. But they have some significant drawbacks, including pricey mortgage insurance that lasts for the life of the loan. Borrowers with sufficient equity (typically 20% or more) can put that behind them, reduce their monthly payment in the process by refinancing to a conventional mortgage, and avoid less expensive but still unwelcome private mortgage insurance (PMI).
  • Tapping Home Equity. Use a cash-out refinance loan to extract equity from your home. This type of loan allows you to borrow cash against the value of your home to fund things like home improvement projects or debt consolidation. Depending on the lender and jurisdiction, you can borrow up to 85% of your home equity (between rolled-over principal and cash proceeds) with this type of loan. But mind your other equity-tapping options: a home equity loan or home equity line of credit.

Confirming what you hope to get out of your refinance is an essential prerequisite to calculating its likely cost and choosing the optimal offer.


2. Confirm the Timing & Gather Everything You Need

With your loan’s purpose and your long-term financial objectives set, it’s time to confirm you’re ready to refinance. If yes, you must gather everything you need to apply, or at least begin thinking about how to do that.

Assessing Your Timing & Determining Whether to Wait

The purpose of your loan plays a substantial role in dictating the timing of your refinance.

For example, if your primary goal is to tap the equity in your home to finance a major home improvement project, such as a kitchen remodel or basement finish, wait until your loan-to-value ratio is low enough to produce the requisite windfall. That time might not arrive until you’ve been in your home for a decade or longer, depending on the property’s value (and change in value over time).

As a simplified example, if you accumulate an average of $5,000 in equity per year during your first decade of homeownership by making regular payments on your mortgage, you must pay your 30-year mortgage on time for 10 consecutive years to build the $50,000 needed for a major kitchen remodel (without accounting for a potential increase in equity due to a rise in market value).

By contrast, if your primary goal is to avoid a spike in your ARM payment, it’s in your interest to refinance before that happens — most often five or seven years into your original mortgage term.

But other factors can also influence the timing of your refinance or give you second thoughts about going through with it at all:

  • Your Credit Score. Because mortgage refinance loans are secured by the value of the properties they cover, their interest rates tend to be lower than riskier forms of unsecured debt, such as personal loans and credit cards. But borrower credit still plays a vital role in setting their rates. Borrowers with credit scores above 760 get the best rates, and borrowers with scores much below 680 can expect significantly higher rates. That’s not to say refinancing never makes sense for someone whose FICO score is in the mid-600s or below, only that those with the luxury to wait out the credit rebuilding or credit improvement process might want to consider it. If you’re unsure of your credit score, you can check it for free through Credit Karma.
  • Debt-to-Income Ratio. Mortgage lenders prefer borrowers with low debt-to-income ratios. Under 36% is ideal, and over 43% is likely a deal breaker for most lenders. If your debt-to-income ratio is uncomfortably high, consider putting off your refinance for six months to a year and using the time to pay down debt.
  • Work History. Fairly or not, lenders tend to be leery of borrowers who’ve recently changed jobs. If you’ve been with your current employer for two years or less, you must demonstrate that your income has been steady for longer and still might fail to qualify for the rate you expected. However, if you expect interest rates to rise in the near term, waiting out your new job could cancel out any benefits due to the higher future prevailing rates.
  • Prevailing Interest Rates. Given the considerable sums of money involved, even an incremental change to your refinance loan’s interest rate could translate to thousands or tens of thousands of dollars saved over the life of the loan. If you expect interest rates to fall in the near term, put off your refinance application. Conversely, if you believe rates will rise, don’t delay. And if the difference between your original mortgage rate and the rate you expect to receive on your refinance loan isn’t at least 1.5 percentage points, think twice about going ahead with the refinance at all. Under those circumstances, it takes longer to recoup your refinance loan’s closing costs.
  • Anticipated Time in the Home. It rarely makes sense to refinance your original mortgage if you plan to sell the home or pay off the mortgage within two years. Depending on your expected interest savings on the refinance, it can take much longer than that (upward of five years) to break even. Think carefully about how much effort you want to devote to refinancing a loan you’re going to pay off in a few years anyway.

Pro tip: If you need to give your credit score a bump, sign up for Experian Boost. It’s free and it’ll help you instantly increase your credit score.

Gathering Information & Application Materials

If and when you’re ready to go through with your refinance, you need a great deal of information and documentation before and during the application and closing processes, including:

  • Proof of Income. Depending on your employment status and sources of income, the lender will ask you to supply recent pay stubs, tax returns, or bank statements.
  • A Recent Home Appraisal. Your refinance lender will order a home appraisal before closing, so you don’t need to arrange one on your own. However, to avoid surprises, you can use open-source comparable local sales data to get an idea of your home’s likely market value.
  • Property Insurance Information. Your lender (and later, mortgage servicer) needs your homeowners insurance information to bundle your escrow payment. If it has been more than a year since you reviewed your property insurance policy, now’s the time to shop around for a better deal.

Be prepared to provide additional documentation if requested by your lender before closing. Any missing information or delays in producing documents can jeopardize the close.

Home Appraisal Blackboard Chalk Hand


3. Calculate Your Approximate Refinancing Costs

Next, use a free mortgage refinance calculator like Bank of America’s to calculate your approximate refinancing costs.

Above all else, this calculation must confirm you can afford the monthly mortgage payment on your refinance loan. If one of your aims in refinancing is to reduce the amount of interest paid over the life of your loan, this calculation can also confirm your chosen loan term and structure will achieve that.

For it to be worth it, you must at least break even on the loan after accounting for closing costs.

Calculating Your Breakeven Cost

Breakeven is a simple concept. When the total amount of interest you must pay over the life of your refinance loan matches the loan’s closing costs, you break even on the loan.

The point in time at which you reach parity is the breakeven point. Any interest saved after the breakeven point is effectively a bonus — money you would have forfeited had you chosen not to refinance.

Two factors determine if and when the breakeven point arrives. First, a longer loan term increases the likelihood you’ll break even at some point. More important still is the magnitude of change in your loan’s interest rate. The further your refinance rate falls from your original loan’s rate, the more you save each month and the faster you can recoup your closing costs.

A good mortgage refinance calculator should automatically calculate your breakeven point. Otherwise, calculate your breakeven point by dividing your refinance loan’s closing costs by the monthly savings relative to the original loan and round the result up to the next whole number.

Because you won’t have exact figures for your loan’s closing costs or monthly savings until you’ve applied and received loan disclosures, you’re calculating an estimated breakeven range at this point.

Refinance loan closing costs typically range from 2% to 6% of the refinanced loan’s principal, depending on the origination fee and other big-ticket expenses, so run one optimistic scenario (closing costs at 2% and a short time to breakeven) and one pessimistic scenario (closing costs at 6% and a long time to breakeven). The actual outcome will likely fall somewhere in the middle.

Note that the breakeven point is why it rarely makes sense to bother refinancing if you plan to sell or pay off the loan within two years or can’t reduce your interest rate by more than 1.5 to 2 percentage points.


4. Shop, Apply, & Close

You’re now in the home stretch — ready to shop, apply, and close the deal on your refinance loan.

Follow each of these steps in order, beginning with a multipronged effort to source accurate refinance quotes, continuing through an application and evaluation marathon, and finishing up with a closing that should seem breezier than your first.

Use a Quote Finder (Online Broker) to Get Multiple Quotes Quickly

Start by using an online broker like Credible* to source multiple refinance quotes from banks and mortgage lenders without contacting each party directly. Be prepared to provide basic information about your property and objectives, such as:

  • Property type, such as single-family home or townhouse
  • Property purpose, such as primary home or vacation home
  • Loan purpose, such as lowering the monthly payment
  • Property zip code
  • Estimated property value and remaining first mortgage loan balance
  • Cash-out needs, if any
  • Basic personal information, such as estimated credit score and date of birth

If your credit is decent or better, expect to receive multiple conditional refinance offers — with some coming immediately and others trickling in by email or phone in the subsequent hours and days. You’re under no obligation to act on any, sales pressure notwithstanding, but do make note of the most appealing.

Approach Banks & Lenders You’ve Worked With Before

Next, investigate whether any financial institutions with which you have a preexisting relationship offer refinance loans, including your current mortgage lender.

Most banks and credit unions do offer refinance loans. Though their rates tend to be less competitive at a baseline than direct lenders without expensive branch offices, many offer special pricing for longtime or high-asset customers. It’s certainly worth taking the time to make a few calls or website visits.

Apply for Multiple Loans Within 14 Days

You won’t know the exact cost of any refinance offer until you officially apply and receive the formal loan disclosure all lenders must provide to every prospective borrower.

But you can’t formally apply for a refinance loan without consenting to a hard credit pull, which can temporarily depress your credit score. And you definitely shouldn’t go through with your refinance until you’ve entertained multiple offers to ensure you’re getting the best deal.

Fortunately, the major consumer credit-reporting bureaus count all applications for a specific loan type (such as mortgage refinance loans) made within a two-week period as a single application, regardless of the final application count.

In other words, get in all the refinance applications you plan to make within two weeks, and your credit report will show just a single inquiry.

Evaluate Each Offer

Evaluate the loan disclosure for each accepted application with your objectives and general financial goals in mind. If your primary goal is reducing your monthly payment, look for the loan with the lowest monthly cost.

If your primary goal is reducing your lifetime homeownership costs, look for the loan offering the most substantial interest savings (the lowest mortgage interest rate).

Regardless of your loan’s purpose, make sure you understand what (if anything) you’re obligated to pay out of pocket for your loan. Many refinance loans simply roll closing costs into the principal, raising the monthly payment and increasing lifetime interest costs.

If your goal is to get the lowest possible monthly payment and you can afford to, try paying the closing costs out of pocket.

Choose an Offer & Consider Locking Your Rate

Choose the best offer from the pack — the one that best suits your objectives. If you expect rates to move up before closing, consider the lender’s offer (if extended) to lock your rate for a predetermined period, usually 45 to 90 days.

There’s likely a fee associated with this option, but the amount saved by even marginally reducing your final interest rate will probably offset it. Assuming everything goes smoothly during closing, you shouldn’t need more than 45 days — and certainly not more than 90 days — to finish the deal.

Proceed to Closing

Once you’ve closed on the loan, that’s it — you’ve refinanced your mortgage. Your refinance lender pays off your first mortgage and originates your new loan.

Moving forward, you send payments to your refinance lender, their servicer, or another company that purchases the loan.


Final Word

If you own a home, refinancing your mortgage loan is likely the easiest route to capitalize on low interest rates. It’s probably the most profitable too.

But low prevailing interest rates aren’t the only reason to refinance your mortgage loan. Other common refinancing goals include avoiding the first upward adjustment on an ARM, reducing the monthly payment to a level that doesn’t strain your growing family’s budget, tapping the equity you’ve built in your home, and banishing FHA mortgage insurance.

And a refinance loan doesn’t need to achieve only one goal. Some of these objectives are complementary, such as reducing your monthly payment while lowering your interest rate (and lifetime borrowing costs).

Provided you make out on the deal, whether by reducing your total homeownership costs or taking your monthly payment down a peg, it’s likely worth the effort.

*Advertisement from Credible Operations, Inc. NMLS 1681276.Address: 320 Blackwell St. Ste 200, Durham, NC, 27701

Source: moneycrashers.com

7 Ways Biden Plans to Tax the Rich (And Maybe Some Not-So-Rich People)

President Biden’s latest economic “Build Back Better” package – the $1.8 trillion American Families Plan – isn’t kind to America’s upper crust. It would provide a host of perks and freebies for low- and middle-income Americans, such as guaranteed family and medical leave, free preschool and community college, limits on child-care costs, extended tax breaks, and more. But to pay for all these goodies, the Biden plan also includes a long list of tax increases for the wealthiest Americans (and, perhaps, some people who aren’t rich).

Whether any of the president’s proposed tax increases ever make it into the tax code remains to be seen. Republicans in Congress will push back hard on the tax increases. And a handful of moderate Democrats will probably join them, too. So, don’t be surprised if a fair number of the plan’s revenue raisers are dropped or amended during the congressional sausage-making process…or even if some new tax boosts are added.

While we don’t know yet which – if any – of the proposed tax increases will survive and be enacted into law, wise taxpayers will start studying the plan now so that they’re prepared for the final results (any changes probably won’t take effect until next year). To get you going in that direction, here’s a list of the 7 ways the American Families Plan could raise taxes on the rich. But even if you’re not particularly wealthy, make sure you read closely to see if you might be caught up in any of the proposed tax hikes, since a few of them could snare some not-so-rich people in addition to the one-percenters.

1 of 7

Increase the Top Income Tax Rate

picture of a calculator with buttons for adding or subtracting taxespicture of a calculator with buttons for adding or subtracting taxes

The 2017 tax reform law signed by former President Trump lowered the highest federal personal income tax rate from 39.6% to 37%. According to the White House, this rate reduction gave a married couple with $2 million of taxable income a tax cut of more than $36,400. President Biden wants to reverse the rate change and bring the top rate back up to 39.6%.

For 2021, the following taxpayers will fall within the current 37% tax bracket:

  • Single filers with taxable income over $523,600;
  • Married couples filing a joint return with taxable income over $628,300;
  • Married couples filing separate returns with taxable income over $314,150; and
  • Head-of-household filers with taxable income over $523,600.

(For the complete 2021 tax brackets, see What Are the Income Tax Brackets for 2021 vs. 2020?)

President Biden has said many times that he won’t raise taxes on anyone making less than $400,000 per year. But there have always been questions and a lack of clarity as to what this exactly means. For instance, does it apply to each individual or to each tax family? We still haven’t received a crystal-clear answer to that question. As a result, we’re not entirely sure if the president wants to adjust the starting point for the top-rate bracket to account for his $400,000 threshold. According to a report from Axios, an unnamed White House official said the 39.6% rate would only apply to single filers with taxable income over $452,700 and joint filers with taxable income exceeding $509,300. That would satisfy the president’s promise for single people, but it’s a bit trickier for married couples filing a joint return.

If the 39.6% rate kicks in on a joint return when taxable income surpasses $509,300, a married couple could end up being taxed at that rate even if both spouses earn well under $400,000 per year. For example, if Spouse A makes $270,000 and Spouse B makes $260,000, their combined income ($530,000) is over the $509,300 threshold. Using the 2021 tax brackets, they wouldn’t even make it into the 37% bracket (they’d be in the 35% bracket). So, each spouse would face a tax increase under the Biden plan, even though neither one of them earn over $400,000 per year.

To be fair, this type of “marriage penalty” exists for the current 37% tax bracket, since the minimum taxable income for joint filers is less than twice the minimum amount for single filers. However, the current brackets weren’t set up with a pledge not to raise taxes on anyone making less than $400,000 per year in the background. Perhaps the Biden administration will recognize this and eventually adjust the brackets to fix the marriage penalty issue.

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Raise the Capital Gains Tax

picture of computer screen with stock market charts showing market increasespicture of computer screen with stock market charts showing market increases

The American Families Plan also calls for an increase in the capital gains tax rate for people earning $1 million or more.

Currently, gains from the sale of stocks, mutual funds, and other capital assets that are held for at least one year (i.e., long-term capital gains) are taxed at either a 0%, 15%, or 20% rate. The highest rate (20%) is paid by wealthier taxpayers – i.e., single filers with taxable income over $445,850, head-of-household filers with taxable income over $473,750, and married couples filing a joint return with taxable income over $501,600. Gains from the sale of capital assets held for less than one year (i.e., short-term capital gains) are taxed at the ordinary income tax rates.

Under the Biden plan, anyone making more than $1 million per year would have to pay a 39.6% tax on long-term capital gains – which is almost double the current top rate. As noted above, that’s also the proposed top tax rate for ordinary income (e.g., wages). So, in effect, millionaires would completely lose the tax benefits of holding capital assets for more than one year. Plus, there’s the existing 3.8% surtax on net investment income, which would bump the overall tax rate up to 43.4% for people with income exceeding $1 million.

[Note: A summary of the American Families Plan states that application of the 3.8% surtax is “inconsistent across taxpayers due to holes in the law.” It then states that the president’s plan would apply the surtax “consistently to those making over $400,000, ensuring that all high-income Americans pay the same Medicare taxes.” No further details are provided, but this could mean expanding the surtax to cover certain income from the active participation in S corporations and limited partnerships.]

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Eliminate Stepped-Up Basis on Inherited Property

picture of a last will and testamentpicture of a last will and testament

There’s another capital gains-related tax increase in the American Families Plan – eliminating the step up in basis allowed for inherited property. Under current law, if you inherit stock, real estate, or some other capital asset, your basis in the property is increased (“stepped up”) to its fair market value on the date that the person who previously owned it died. This increase in basis also means you can immediately sell the inherited property and avoid paying capital gains tax, because there’s technically no gain to tax. Why? Because gain is generally equal to the amount you receive from the sale minus your basis in the property. Assuming you sell the property for fair market value, the sales price will equal your basis…which results in zero gain (e.g., $1,000 – $1,000 = $0).

President Biden wants to change this result. Although details are scarce at this point, the president’s plan would nullify the effects of stepped-up basis for gains of $1 million or more ($2 million or more for a married couple) – perhaps by taxing the property as if it were sold upon death. There would be exceptions to the new rules for property donated to charity and family-owned businesses and farms that the heirs continue to operate. Other yet-to-be-determined exceptions could also be added, such as for property inherited by a spouse or transferred through a trust.

This is one of the tax changes that could impact Americans making less than $400,000 per year – perhaps only indirectly. Anyone, regardless of their own income level, can inherit property. If the heir’s basis is not adjusted upward any longer, that in essence is a tax increase on him or her. If the capital gains tax is levied before the property is transfer, that could mean there’s less to inherit – which could be considered an indirect tax on the person receiving the property. It can be a bit tricky, but there’s certainly the potential for someone inheriting property who makes less than $400,000 per year getting the short end of the stick because of this Biden proposal.

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Tax Carried Interest as Ordinary Income

picture of investment fund manager looking at several computer screenspicture of investment fund manager looking at several computer screens

In certain case, an investment fund manager can treat earned income as long-term capital gain. Known as the “carried interest” loophole, this lets the fund manager take advantage of the long-term capital gains tax rates, which are usually lower than the ordinary income tax rates he or she would otherwise have to pay on the income.

The American Families Plan calls for the elimination of the carried interest rules. The Biden administration sees this change as “an important structural change that is necessary to ensure that we have a tax code that treats all workers fairly.”

For a fund manager, this change would result in a potential tax increase on the affected income of up to 19.6%. For example, assuming the income is high enough, he or she could go from a rate of 23.8% (20% capital gain rate + 3.8% surtax on net investment income) to 43.4% (39.6% ordinary tax rate + 3.8% surtax on NII).

One would think that most, if not all, fund managers earn at least $400,000 per year. But if there are any of them out there making less than that amount, then this change could raise taxes on someone making less than Biden’s $400,000 per year threshold. Yeah, it’s not likely…but it’s theoretical possible.

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Curtail Like-Kind Exchanges

picture of several office buildings with a for sale sign in front of thempicture of several office buildings with a for sale sign in front of them

If you sell real property used for business or held as an investment and then turn around and buy other business or investment property that is the same type, you’re generally not required to recognize gain or loss for tax purposes under the “like-kind” exchange rules. Properties are of “like-kind” if they’re of the same nature or character. For example, an apartment building would generally be like-kind to another apartment building. This is true even if they differ in grade or quality.

The Biden plan would end this special real estate tax break for gains greater than $500,000. Since there are no income thresholds for the taxpayer, this change could potentially prevent someone making less than $400,000 per year (the $500,000 gain could be offset by other tax deductions, exemptions, or credits). Again, in most cases, wealthier people would be impacted by this change, but it’s possible that someone making less than $400,000 could also end up with a higher tax bill if this proposal became law.

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Extend Business Loss Limitation Rule

picture of worried businessman looking at bad financial statementspicture of worried businessman looking at bad financial statements

Under the 2017 tax reform law, individuals operating a trade or business can’t deduct losses exceeding $250,000 ($500,000 for joint filers) on Schedule C. The excess losses may, however, be carried forward to later tax years. This rule is currently set to expire in 2027 (it was also generally suspended by the CARES Act for the 2018 to 2020 tax years).

President Biden’s American Families Plan calls for this business loss limitation rule to be made permanent. According to the plan summary, 80% of the affected business loss deductions would go to people making over $1 million. But, once again, someone making less than $400,000 could also incur a large business loss that wouldn’t be deductible after 2026 if the Biden proposal is adopted.

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Increase Enforcement Activities

picture of yellow road sign saying "IRS Audit Ahead"picture of yellow road sign saying "IRS Audit Ahead"

Biden wants to increase tax enforcement activities aimed at high-income Americans – and give the IRS an extra $80 billion over a 10-year period to do it. While this really isn’t a tax increase, it certainly could result in wealthier Americans pay more in taxes. The idea is to “increase investment in the IRS, while ensuring that the additional resources go toward enforcement against those with the highest incomes, rather than Americans with actual income less than $400,000.” The IRS would also focus resources on large corporations, other businesses, and estates. The audit rate for Americans making less than $400,000 per year wouldn’t increase under the president’s plan.

The American Families Plan summary also states that financial institutions would be required to “report information on account flows so that earnings from investments and business activity are subject to reporting more like wages already are.” The income of wealthier Americans disproportionately comes from investments and small businesses, which are harder for the IRS to verify than other sources of income like wages. As a result, the Treasury Department estimates that up to 55% of taxes owed on some of these less visible income streams goes unpaid. And more of that unpaid tax is owed by people with higher incomes. The proposal would funnel additional information to the IRS about the hard-to-verify income without burdening taxpayers.

All-in-all, the White House claims that the increased tax enforcement efforts would raise $700 billion in revenue over a 10-year period.

Source: kiplinger.com

Does refinancing a mortgage hurt your credit?

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

Adding anything new to your credit profile can alter your score a bit, though many of these changes are temporary in nature. Refinancing your mortgage can temporarily lower your score, but how much and for how long depends on a variety of factors. Find out more below about whether refinancing your mortgage will hurt your credit and what you can do to protect your score.

What Is Refinancing?

Refinancing means taking out a new loan to pay off your old one. For example, if you owe $200,000 on a $300,000 home and your credit is good enough, you can get a different mortgage to pay off that $200,000. You then start paying the new mortgage.

Why would someone refinance a mortgage? Reasons can include:

  • To get a better interest rate if their credit or the market is more favorable
  • To get different loan terms that better match their financial goals—for example, they might refinance a 15-year mortgage to a 30-year mortgage to reduce the amount they owe each month
  • To benefit from cash-out equity—if you owe $200,000 on a home valued at $300,000, you could get a loan for more than the $200,000 you owe and get the difference back in cash to help cover a large expense

While refinancing can be beneficial, it’s not something to do lightly. It comes with expenses, such as closing costs, and does have an impact on your credit. Avoid being a serial refinancer, which is someone who is constantly turning over their mortgage into a new one.

How a Mortgage Refinance Can Damage Your Credit

The impact of a mortgage refinance (“refi”) on your credit depends on your situation and where you stand financially. Here are two specific ways refinancing your mortgage can hurt your credit.

Credit Checks

Hard inquiries can occur when someone pulls your credit report for the purpose of evaluating you for a loan. These can drop your score by a bit. The more hard inquiries on your credit report, the more your score drops, especially if the inquiries are spaced out over the course of many weeks.

Plus, a lot of inquiries on your report can make you look like a desperate borrower, which doesn’t endear you to future potential lenders.

Hard inquiries usually stay on your credit report for two years. However, they only impact your credit score for the first 12 months.

Closing a Loan Account

When you pay off your existing mortgage with a refinance, that account is closed. Eventually, it will age off of your credit report.

One of the factors that’s used to determine your credit score is the overall age of your credit. That means the total amount of time you’ve personally had any credit history, as well as the average age of your open accounts. If you refinance a mortgage, you could be losing an account with a good amount of age on it, and that can temporarily drop your score a bit.

Handle Your Refinance Like a Pro

If refinancing is the right choice for you financially, you can’t avoid the impact of closing an account and opening a new one. But there are some things you can do to help reduce the impact on your credit score.

Be Smart About the Timing

Limit how many hard inquiries are reported by timing your mortgage applications appropriately. The credit scoring models understand that consumers need to shop around for rates and terms, so they group certain types of inquiries as one event as long as they take place within a certain amount of time.

For example, mortgage applications within the same two-week time frame typically count as one inquiry for any scoring model.

You might also want to try a refinance when you haven’t recently applied for other types of credit, such as a personal loan or credit card. Disparate types of applications are listed as different hard inquiries even if you apply for them all around the same time.

Weigh the Pros and Cons

In many cases, a refinance is a negligible and temporary hit to your credit score, so if you’re going to get a good benefit from the action, you might choose to go forward. Just do your research. Use a mortgage calculator to ensure you’ll save money with a refinance before you commit to a new loan.

Don’t Forget About Refinancing Fees

You may need to pay closing costs or other fees when you refinance, so don’t forget to account for those when you’re weighing the benefits. If a refinance saves you $5,000 over the course of the loan and you’re paying $7,000 in closing costs, it’s likely not a good move.

Continue to Make Payments

Remember that your intent to refinance or even an application for a new mortgage doesn’t mean you’re off the hook for payments on your old mortgage. Don’t stop making timely payments until you’re sure the old loan has been paid off and closed.

Sometimes people don’t make a payment they owe this month because a refi is pending on the current total amount owned. But if you pay late, that can mean your payment is reported late to the credit bureaus, which can be a nasty hit to your credit score.

Don’t worry about overpaying and wasting any money on your old mortgage—if there’s a difference between your payments and the refi amount you overpay, the old mortgage company must refund that difference to you.

Once you’re set up with the new mortgage, ensure you make timely payments on that loan. Payment history is the largest factor in your credit score, so paying your bills on time and consistently is the best way to erase any temporary damage a refinance might have done to your credit score.

Check Your Credit Before and After

Being in the know about your credit score is one of the best ways to protect it, regardless of what financial actions you’re taking. Check your score before you refinance a mortgage to ensure everything’s in order and help you understand what types of mortgage might be right for you.

Check it afterward to keep an eye on things as your credit recovers from any temporary blip that might occur. If you find anything on your credit report that’s wrong or you’re surprised by a lower-than-expected credit score, you might need to do some credit repair work.

Find out more about how Lexington Law can help you address inaccurate negative items on your credit report and work toward a generally more positive credit future.


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

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

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.

Source: lexingtonlaw.com

7 Ways to Utilize Your Life Insurance Policy’s Cash Value

Permanent life insurance policies—like universal, variable and whole life—offer more than a death benefit. Some include cash value, which is a pool of money you can use while still alive. 

If you’ve had a policy for years, the cash value could be considerable. “The accumulation could be more than you put in, and this opens up all kinds of options,” says Jonathan Howard, a certified financial planner with SeaCure Advisors in Lexington, Ky. 

The cash value in permanent life insurance is your money, to be tapped as needed, but your options for doing so will depend on the type of policy and the carrier. Before doing anything, ask the insurer how much you can safely withdraw per year based on the cash value balance and policy terms. If you withdraw too much too early, the policy’s cash value could run out, forcing you to start paying more in premiums or have the coverage lapse.

If you no longer need coverage, it might be tempting to stop the policy and cash out all at once, but consider the tax ramifications, says Luke Chapman, a partner with Precision Wealth Partners in New Castle, Del. Any cash value growth above what you paid in premiums is taxed as ordinary income when withdrawn. For example, if you paid in $20,000, have $100,000 in cash value and withdraw the difference, the $80,000 of growth is taxable.

There are better ways to put that cash value to work that won’t ramp up your tax bill.

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Live Off of It

A man stacking coins.A man stacking coins.

A more tax-effective option is to withdraw only what you need each year. Howard recommends keeping some money for an emergency fund, perhaps 12 months of expenses, with the rest used to supplement your retirement income. Withdrawals draw down the tax-free premium payments first; taxes are owed only after you start withdrawing the gains.

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Borrow Money

A person ready to sign some documents to take out a loan. A person ready to sign some documents to take out a loan.

You can also tap the cash value through a policy loan. You won’t owe taxes for withdrawing gains this way. Plus, you’ll have the option to repay the money, whereas you can’t reverse withdrawals. If the money is not repaid, the death benefit will cover the loan balance when you pass away.

The insurer will charge interest for the loan. “The interest rate is determined by the policy contract and is carrier specific,” says Howard. “It’s typically 4% to 8% a year.” Policy loan rates don’t usually change with market conditions, he says, so don’t expect a deal today just because overall interest rates are low. Your remaining cash value can be used to pay the interest.

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Exchange It for an Annuity

Concept art with several people looking at charts and graphs. Concept art with several people looking at charts and graphs.

The IRS lets you swap your permanent life insurance for an annuity through a 1035 exchange, which is a tax-free transfer of one contract for another. This move can generate more retirement income. “Let’s say the max payout stream from a cash value insurance policy is $10,000 a year. Converting to an annuity might generate $12,500,” Chapman says. An annuity could also guarantee the payments will last your entire life, but you will be canceling your life insurance policy, a move that can’t be reversed.

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Convert to a New Policy to Pay for Long-Term Care

A nurse helps a woman at a nursing home.A nurse helps a woman at a nursing home.

If you’d like coverage for long-term care, consider converting your life insurance into another policy with a long-term care rider (if yours doesn’t have it already). You keep your life insurance, but part of the death benefit can be used to pay for long-term care expenses.

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Use It as Collateral

A couple sitting in front of a house.A couple sitting in front of a house.

The cash value is an asset that increases your chances of qualifying for a loan or mortgage from a lender. It can even serve as the loan’s collateral, but Chapman warns to structure the deal carefully, as there can be tax consequences. Always ask an insurance expert before using cash value this way.

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Tap It to Pay for the Policy

Concept art showing a life insurance policy document and calculator.Concept art showing a life insurance policy document and calculator.

The cash value can also be used to cover your life insurance premiums.

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Leave It Alone

A couple who are declining something while speaking with a man on a laptop. A couple who are declining something while speaking with a man on a laptop.

You aren’t forced to do anything with your cash value. Left alone, the cash value will continue to accumulate, leaving a larger inheritance for your heirs, as withdrawals and loans reduce the final death benefit.

Source: kiplinger.com

The Cost of Living in Atlanta in 2021

It’s hard to resist Atlanta’s charm, food and culture — but how does it stack up against your budget?

Atlanta is widely known for its busy airport, pollen counts, mild weather and most recently, for lending itself as the background for several Hollywood movies.

Despite being a big city, Atlanta’s southern charm remains intact as it welcomes many transplants every year. It’s hard to resist a move to Georgia capital with its diversity and robust culture, but what does that entail from a budget standpoint?

While others look to more expensive hubs like Los Angeles and New York City, Atlanta’s cost of living remains significantly more affordable while still providing a thriving economy and amenities.

Right now, for example, Atlanta rents are 49.23 percent lower on average than in New York. However, while its cost of living is 1.1 percent above the national average, this is quickly changing as housing demand increases with newcomers. Get to know the cost of living in Atlanta, from transportation to goods and services.

Housing costs in Atlanta

Atlanta’s housing market — whether you’re renting or buying — is not for the faint of heart. The average rent in Atlanta has gone up 0.11 percent to $1,655 per month for a one-bedroom in the past year. This average rent fluctuates dramatically per neighborhood and amenities offered.

Midtown, Old Fourth Ward and Buckhead are among the most expensive neighborhoods with average rents between $2,180 and $2,500 per month for a one-bedroom. Neighborhoods close to the average rent in Atlanta include Morningside, Westside, Home Park, Kirkwood, Edgewood and Lindbergh.

But if you’re looking to stay inside the city and save a little, you can find an apartment in Ormewood Park for $1,382 a month on average or Embry Hills at $1,260 per month.

The average home price in Atlanta at this time is $380,418. However, this is mainly dependent on the neighborhood. As of March 2021, home prices are up 7.7 percent compared to last year, according to Redfin. Most homes sell in less than 30 days.

cost of living in atlanta - brunch

Food costs in Atlanta

We can’t talk about Atlanta without food. The city currently houses incredible chefs across every cuisine, thanks to its diverse population. You can find anything from Southern fare to authentic Thai, Malaysian, Filipino, Mexican and more locally.

Atlanta’s cost of living for groceries is about 5 percent above the national average. Expect to see eggs for $1.25, ground beef for $4.61 a pound and bread for $3.65.

Utility costs in Atlanta

In the South, we love porch weather. Thanks to Atlanta’s mild winters, you get to enjoy the outdoors most of the year.

But, the city didn’t get its nickname “Hotlanta” for nothing, so know that in the summer, your energy bill will go up.

Thankfully, Atlanta’s utility prices are 15.3 percent below the national average. You can expect your total energy costs to be around $120.82 each month.

For the internet, the city has a limited amount of providers, but your bill will hover around $67.49 a month.

Atlanta skyline.

Transportation costs in Atlanta

Yes, the rumors are true — Atlanta’s infamous traffic is real. The city takes a spot on the worst traffic listicles year after year. The average commute is 35 minutes, according to a recent study. However, once you’re off the highway, the stress tends to diminish as you have more options to get out of your car and get around.

Hop on MARTA, Atlanta’s public transportation system, and use the rail and bus system to navigate the city. The options amount to a 49 transit score. It’s not as expansive as the subway in New York, but it makes your commute a little easier to Buckhead, Midtown, the airport and OTP (outside the perimeter).

MARTA allows frequent riders to save by offering a 7-day pass for $23.75 and a monthly pass for $95.

MARTA also connects with the Atlanta Streetcar that navigates the downtown and Edgewood neighborhoods with 12 stops. A round-trip Breeze card will cost $5 (with up to four transfers), and one ride on the Streetcar costs $1 (with no free MARTA transfers).

Atlanta’s bike score is 46, but some neighborhoods are more bike-friendly than others. Midtown, Old Fourth Ward, Inman Park and Cabbagetown have bike lanes all over that quickly drop you on the Atlanta BeltLine Eastside Trail. The BeltLine loop connects all of the city’s 45 neighborhoods. With a walk score of 55, you can also get to know the City in a Forest via foot.

If you decide to drive, motorists are wasting up to $1,043 annually and 50 hours searching for parking. You’ll also spend on average $2,233 a year on gasoline.

All in all, the cost of living for transportation in Atlanta is about 2 percent above the national average.

Atlanta skyline in Piedmont Park.

Healthcare costs in Atlanta

Whether it’s a routine check-up or a more serious health mishap, navigating healthcare systems is never easy. Since everyone’s health situations are different, it’s difficult to come up with overall healthcare spend in Atlanta, but here are some cost guidelines.

In Atlanta, you have access to quality healthcare at Emory University and Grady Memorial Hospital. Atlanta healthcare costs are 2 percent above the national average.

A regular doctor visit costs $119.80 on average while a prescription drug can set you back $459.02 on average (without insurance of some kind). You can pick up ibuprofen at your local pharmacy for $8.71 on average.

Goods and services costs in Atlanta

Beyond essential bills, Atlanta remains on par with the national average across different categories. You’ll goods and services will hover around 2.3 percent above the national average.

Atlanta’s neighborhoods are very pet-friendly, so if you get a pup to walk around the city with you, vet services cost $56.23 per visit on average.

More a movie buff? A ticket to a new release on average costs $14.15.

For exercise, you have plenty of choices from pilates, yoga studios, kickboxing and even 24/7-access facilities. A yoga class will average more than $17, but many luxury apartments in the city include a small gym as an amenity if you’re looking to stay on budget.

Luckily, you can have a great time for free as well around the city with plenty of outdoor opportunities at city parks like Piedmont Park and the Atlanta BeltLine.

Ponce City Market in Atlanta, cost of living in atlanta

Taxes in Atlanta

Understanding what county and part of the city you live in will make it easier to decipher your taxes. In Atlanta, the sales tax rate is 8.9 percent — that’s 7 percent for DeKalb and Fulton counties and 1.90 percent additional for the city of Atlanta. In this case, if you spend $100 shopping at Ponce City Market, you’ll pay $8.90 in sales tax.

The state has two sales tax holidays a year, including a back-to-school event. Georgia does not tax grocery items. However, prepared food, alcoholic beverages, dietary supplements, drugs, over-the-counter drugs and tobacco all require taxes applied to purchases. The state’s income tax rate is 5.75 percent for the highest bracket currently.

How much do I need to earn to live in Atlanta?

Most financial advisors recommend keeping your rent payment at 30 percent of your gross income or less. You would need to make at least $66,200 annually to afford a one-bedroom apartment on average in Atlanta. Currently, a one-bedroom costs $1,655 per month on average.

For perspective, an average Atlanta resident makes around $69,000 a year. Want to know where you stand with your current budget? Use our rent calculator to get a high view of how it would change after moving to Atlanta.

Living in Atlanta

Everyone says come to Atlanta in the fall for its beautiful autumn colors, crisp 70-degree weather and outdoor hiking. Yes, it’s not always “Hotlanta.” The cost of living in Atlanta offers access to big city amenities while still finding small corners for recreation and the outdoors. The city’s technology, supply chain and other industries are quickly growing for more job opportunities.

Find great apartments for rent or homes to buy in Atlanta today.

Cost of living information comes from The Council for Community and Economic Research.
Rent prices are based on a rolling weighted average from Apartment Guide and Rent.com’s multifamily rental property inventory of one-bedroom apartments in April 2021. Our team uses a weighted average formula that more accurately represents price availability for each individual unit type and reduces the influence of seasonality on rent prices in specific markets.
The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

Obama Hasn’t Refinanced His Mortgage in Seven Years

Last updated on August 10th, 2013

Despite a push to allow more Americans to refinance their mortgages (Harp 2.0), the Obamas haven’t taken the time to refinance their own, according to a disclosure released yesterday by the White House.

The financial disclosure revealed that as of the end of 2011, the 30-year mortgage (not sure if that means fixed or just refers to the term) tied to their south Chicago home, taken out in 2005, was still active.

Obama’s Mortgage Rate is 5.625%

Now we’ll assume he’s got a fixed-rate mortgage, even though that’s not entirely clear because no one is specifying.

And at 5.625%, that means he’s paying a rate nearly two percentage points above what mortgage rates are currently being offered at today for a 30-year fixed.

What we also don’t know is the loan amount. The disclosure only revealed that the loan amount is somewhere between $500,001 and $1 million.

Now assuming it’s not a jumbo loan, he could possibly snag a rate two percentage points lower than his current rate.

And I’m sure he would receive the most favorable terms, given his income, assets, employment history, etc. Being the U.S. president is pretty helpful.

Let’s do the math to see what he could save, using $600,000 as the loan amount.

Loan amount: $600,000
Current rate: 5.625%
Refinance rate: 3.75%

If he were to refinance his current loan, his monthly mortgage payment would drop from $3,453.94 to $2,778.69.

That’s a monthly savings of roughly $675, or $8,100 annually.

Not a bad haul for a making a phone call and submitting some paperwork.

[What mortgage rate can I expect?]

Obama Should Check Out 15-Year Fixed Rates

But since they’re already seven years into a 30-year mortgage, and have presumably paid a ton of interest, it would probably suit them best to take a look at a 15-year fixed mortgage instead.

[30-year vs. 15-year mortgage]

Rates on the 15-year fixed are closer to 3%, so assuming the Obamas can snag a rate at 3% even, their monthly payment would climb nearly $700 to $4,143.49, which I’m sure they could afford.

But they’d pay less than $150,000 in interest over the entire duration of the new loan, which would definitely save them some money. Probably a few hundred thousand for that matter.

And they’d own their house sooner, preferably before retiring.

So President Obama, if you’re reading this, you may want to consider shopping around for a refinance.

Don’t Be Lazy

All jokes aside, the takeaway from this story is that there are a ton of homeowners out there that don’t take the time to shop their mortgage rate.

Yes, it’s a pain in the you know what, and it may all seem rather daunting, but think about all the other “stuff” you subject yourself to in order to save a few bucks here and there.

In the grand scheme of things, you could save a ton of money while putting in a very little amount of work.

So if you haven’t refinanced yet, grab a calculator and take a look at rates to determine if it’s the right move for you.

Read more: When to refinance a mortgage.

About the Author: Colin Robertson

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

Source: thetruthaboutmortgage.com