Payday loans are also called cash advance loans, deferred deposit loans, post-dated check loans, or check advance loans. They are short-term, high-interest loans. People who use these loans tend not to have access to other types of lending, and this is a last resort to get them through to the next paycheck.
Many states consider these loans predatory because of their high interest rates and financing fees. Some states place caps on the fees and interest rates or ban this type of lending completely.
Read on to find out what a payday loan is, how they work, and other options for those who need a short-term loan or cash advance.
What Is a Payday Loan?
Payday loans, also known as cash advances, are high-interest, short-term loans, typically for $500 or less. They are notorious for having very high interest rates and fees. There are few payday loan requirements, but borrowers typically need to be over 18, have a checking account in good standing, and show that they earn a secure income.
Consumers can find these types of loans through online lenders, apps, and local brick-and-mortar merchants. The loan amount is typically paid back by direct debit once the borrower receives their next paycheck. Alternatively, loans may be secured with a post-dated check.
How Does a Payday Loan Work?
Consumers fill out an application with a lender and show proof of identity, a recent pay stub, and a bank account number if required.
Borrowers have to secure the loan with a post-dated check or agree to have the funds debited from their account when they are paid, usually in two weeks. Loans are usually between $50 and $1,000, and funds are deposited within a day or two. Borrowers can also receive cash.
People with bad credit and access to better financing tend to use these loans to help them get by temporarily. However, payday loan problems are well-known: High interest rates and exorbitant fees can trap someone in spiraling debt if they cannot repay the loan on time.
The Consumer Financial Protection Bureau states, “More than four out of five payday loans are re-borrowed within a month, usually right when the loan is due or shortly thereafter.” Borrowers then face even higher financing fees and interest rates compounding their debt load.
Many states place caps on the interest rates and fees charged for payday loans; some states, such as New York, have outlawed them completely.
What Are the Requirements for a Payday Loan?
Most working adults qualify for a payday loan. Here are the most common standards.
Age
Borrowers must be at least 18 years of age.
Proof of Income
Applicants have to show proof of income, such as a pay stub.
Citizenship
Consumers may have to show proof of U.S. citizenship.
Bank Account
Borrowers need to have a bank account that is in good standing.
Payday Loan Interest Rates
Depending on the state, interest rates for payday loans can carry a 400% annual percentage rate (APR) or more.
In states that cap interest rates on payday loans, lenders may instead charge a fee that is a percentage of the amount loaned. Finance charges can be between $15 and $30 for each $100 borrowed.
Payday Loan Amounts
Payday loan amounts are usually $100 to $1,000. In some states, a borrower is allowed only one payday loan at a time. Other states, like Texas and Nevada, offer unlimited payday loans for customers.
Alternatives to a Payday Loan
Rather than take out a high-interest payday loan, there are better options for people in a precarious financial situation.
Credit Cards
If the borrower has a credit score, using a credit card is a safer bet than a payday loan. The average credit card interest rate is around 22%, while payday loan interest can be over 400%. However, if the borrower needs the cash to pay bills such as rent or utilities, that is often not possible with a credit card.
Cash Advance Loans
A cash advance loan puts cash immediately into your bank account. These loans are offered by online lenders, such as Earnin or PayActiv. These companies don’t charge loan financing fees but ask for “tips.” So, a borrower might tip between 5 and 15% of the advance. These apps are often marketed as payroll benefits, and they charge membership and service fees.
TSP Loans
A TSP account is a tax-deferred retirement savings and investment plan that offers Federal employees the same tax advantages as a 401(k) retirement plan. If you have a TSP retirement account, you can take out a loan from that plan without having to pay tax or penalties. However, you must pay the amount back to the account within five years with interest (which will be much lower than the interest on a payday loan).
Personal Loans
For consumers with a good credit score, banks and online lenders offer unsecured or secured personal loans. Unsecured loans are not backed by any collateral and will have a higher interest rate than a secured loan, but not as high as a payday loan.
Unexpected expenses can be paid for with a personal loan and at a lower interest rate. Many people take out personal loans to pay off credit card debt because the interest rate on a personal loan is less than the interest rate paid on their credit card debt. Getting approved for a personal loan isn’t hard if you have good credit.
Loan payback terms can be between two to seven years, with loan amounts typically between $1,000 and $50,000. If you manage the payments on a personal loan responsibly, you can build up a strong credit history. That is not the case with a payday loan, which is not reported to credit rating bureaus.
Recommended: What Is a Personal Loan?
The Takeaway
Payday loans are short-term loans that cash-strapped consumers use to get by until their next paycheck. The borrower is expected to repay the loan on their next payday, or they may submit a post-dated check. Interest rates are extremely high because of the risk to the lender that the borrower will default. Unfortunately, this is often the case, and borrowers can find themselves spiraling into debt as interest and fees accumulate. For this reason, many states have banned payday loans.
Payday loans are probably the worst option for quick cash. But a SoFi Personal Loan offers fixed, competitive interest rates on loans from $5K to $100K. And there are no fees ever.
SoFi’s Personal Loan was named NerdWallet’s 2022 winner for Best Online Personal Loan overall.
FAQ
What are the requirements to get a payday loan?
Most working adults qualify for a payday loan. A borrower needs to be 18 or over, show proof of income (a paystub) and citizenship, and have a bank account.
Is proof of income a requirement for a payday loan?
A lender requires proof of income because they want to know you have the means to pay the loan back. A recent pay stub or similar documentation is typically enough.
Is taking out a payday loan a good idea?
Basically, no. A payday loan should only be used as a last resort, and if you are sure you can pay back the loan in two weeks. Even then, the interest you will pay will be much higher than a cash advance or a short-term loan from an online lender.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender. Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article. Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners. Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website . SOPL0322008
In our increasingly interconnected world, money knows no borders. However, the complex web of global financial transactions needs a reliable system to keep things running smoothly. That’s where the SWIFT code steps in.
This globally recognized code, akin to an international passport for banks, ensures that your money gets to its correct destination when you’re involved in international transactions.
So whether you’re a globetrotter managing expenses across countries, an expat sending money back home, or a business dealing with international clients, understanding the SWIFT code is crucial. Join us as we decode the SWIFT system and discover its importance in transferring money internationally.
What is SWIFT?
SWIFT stands for Society for Worldwide Interbank Financial Telecommunication, a global member-owned cooperative headquartered in Belgium. Established in the 1970s to streamline and standardize financial transactions, it is now used by over 11,000 financial institutions worldwide for international money transfers.
Understanding SWIFT Code
A SWIFT code, sometimes known as a SWIFT BIC (Bank Identifier Code) or BIC code, is a standard format of Business Identifier Codes approved by the International Organization for Standardization (ISO). It’s a unique identification code for both financial and non-financial institutions. The term ‘SWIFT’ is often used interchangeably with ‘BIC’; thus, ‘SWIFT code’, ‘SWIFT BIC code’, ‘BIC code’, and ‘SWIFT ID’ essentially refer to the same thing.
A SWIFT code consists of 8–11 characters and contains information about the specific bank and branch where an account is held. The first four characters indicate the bank code, identifying the bank’s name.
The next two characters are the country code, representing the country where the bank’s head office is located. The following two characters are the location code, which can be numeric or alphabetic and identifies the bank’s head office’s city. The final three characters, which are optional, are the branch code, identifying a specific branch of the bank.
For example, let’s say the SWIFT BIC code is ‘ABCDGB2LXXX’. Here, ‘ABCD’ is the bank code, ‘GB’ is the country code for Great Britain, ‘2L’ is the location code, and ‘XXX’ is the branch code.
Function of SWIFT Codes
The primary function of SWIFT codes is to enable international money transfers between banks efficiently and accurately. When you send money overseas, you’ll need a SWIFT BIC code to identify the recipient’s bank. This ensures that your funds are routed to the correct bank in the correct country.
In addition, SWIFT codes also assist in various other international financial transactions, including issuing Letters of Credit (LCs), payments for import/export purposes, and interbank transfers. They are also used in communication between banks and allow these institutions to exchange messages securely via the SWIFT network.
Where to Find SWIFT Codes
Finding the correct SWIFT code is crucial when making international transfers. You can find your bank’s SWIFT code by looking at your bank account statements or your online banking portal.
Alternatively, if you’re looking for another bank’s SWIFT code, you can use online SWIFT code databases or simply contact the specific bank directly. Just be sure to confirm the legitimacy of the SWIFT code you receive to avoid any hiccups during your transaction.
Using SWIFT Codes to Send Money Abroad
When you transfer money internationally using the SWIFT system, your bank will send a message via the SWIFT network to the recipient’s bank. This message will indicate the amount of money to be transferred and the account to be credited. The receiving bank then credits the account, and the money is transferred.
However, if the recipient’s bank does not have a direct relationship with your bank, intermediary banks might get involved, and additional fees may apply. Therefore, it’s essential to be aware of any potential charges related to SWIFT transfers.
Common Misconceptions about SWIFT Codes
Many people think that SWIFT codes are exclusive to banks, but they are used by various other financial institutions as well. Moreover, while SWIFT codes are vital for international transactions, they do not facilitate the actual transfer of funds but rather ensure that your money is sent to the correct institution.
SWIFT vs. IBAN
While both SWIFT and IBAN (International Bank Account Number) codes are used to transfer money internationally, they serve different purposes. The SWIFT code identifies a specific bank during an international transaction, while an IBAN identifies an individual account involved in the international transaction. In other words, while SWIFT codes ensure that the funds are sent to the correct bank, an IBAN ensures that the money goes to the correct bank account.
Alternatives to SWIFT for Sending or Receiving Money
While SWIFT is the standard for international wire transfers, other options may provide lower fees or faster transfer times. These alternatives include TransferWise, SEPA (Single Euro Payments Area), and various cryptocurrency solutions. However, each of these methods has its pros and cons, and the best method for transferring money will depend on your specific needs and circumstances.
Conclusion
Navigating international banking transactions need not be a Herculean task. A solid understanding of SWIFT codes and their role in global transactions can take you a long way in ensuring your international payments are processed accurately and promptly.
Frequently Asked Questions
What happens if I use the wrong SWIFT code?
If you use the wrong SWIFT code, your international money transfer might be sent to the wrong bank, causing delays. In the worst-case scenario, your money could end up in a completely different bank account. If you realize that you have used an incorrect SWIFT code, it’s important to contact your bank immediately to attempt to resolve the issue.
Are SWIFT codes the same for all branches of a bank?
Not necessarily. While the first four characters of a SWIFT code, the bank code, remain the same across all branches of a specific bank, the last three characters, the branch code, can vary. This branch code identifies the specific branch of a bank. However, not all banks have unique codes for each branch, and in such cases, a generic ‘XXX’ is used in place of the branch code.
Can I receive money internationally without a SWIFT code?
It largely depends on the country and the bank. Some countries, like those in the Eurozone, primarily use International Bank Account Numbers (IBAN) for international transfers. However, most banks and financial institutions worldwide use the SWIFT network for receiving international payments.
If your bank does not have a SWIFT code, it will likely partner with a bank that does have a SWIFT code (also known as a correspondent bank) to receive international payments.
Is the SWIFT code the same as the IBAN?
No, a SWIFT code and an IBAN serve different purposes in international transfers. A SWIFT code identifies the bank involved in the transaction, whereas an IBAN identifies the specific account within the bank. When processing international payments, you will usually need to provide both the SWIFT code and the IBAN.
Is it safe to give out my bank’s SWIFT code?
Yes, it’s safe to share your bank’s SWIFT code. It’s a public piece of information and used to identify your bank during international transactions. However, remember that other sensitive information like your bank account number should be kept confidential and only shared when necessary and with trusted entities.
What do I do if my bank does not have a SWIFT code?
If your bank doesn’t have a SWIFT code, it typically means that they’re using a partner bank to receive international payments. You should contact your bank’s customer service to understand the procedure for receiving international wire transfers. They can provide you with the partner bank’s SWIFT code and any additional information needed for the transfer.
Hello! Enjoy this post from a blog friend of mine.
I think most of us would agree that earning more would allow us to save more. Contrarily, SPENDING more is going to save you more, and I’ll illustrate how.
Fact. The average college graduate has $33,000 in student loans at graduation.
In a generation with abundant information, I’m always amazed at how the post-college world is mystified, and how the approach to student loans thus far has not been met with solutions, only an explanation of the problem.
When I finished school, I started making $20 per hour designing logos for friends and family. If I worked just 5 hours per week, I’d make $400 per month. In a year that’s $4,800. That second income, the Side-Stream, was HUGE for me.
In 4 years, I’d have earned $19,200.
So let’s talk about debt and how this $20 can earn and save money at the same time.
With an average of $33,000 and a common 6% interest rate and ten-year term, you owe just under $400 per month. But with interest added, your actual debt becomes nearly 30% higher, assuming you only pay the minimum monthly payment:
Not only are you paying for 10 YEARS (into your early 30s), but you’re paying $11,000 in interest!!!
I didn’t, and you probably don’t, have more money from work to throw on to the loan without eating less steak and more Ramen. So, the only option is to earn more. If that sounds scary, and unfamiliar, you’d be surprised to find that there are people out there that would pay you for what you do well and know, even if it’s weird (read more about skill selection mentality here):
Are you really good with your calendar?
Can you swap broken phone screens?
Are you really good at teaching the binomial equation?
You might think I’m crazy, but these are actual businesses that people are using to Side-Stream.
Related: 20+ Best Jobs That Pay $20 An Hour Or More
So, let’s say you were a Psychology Major in school, and you’re already working. But, it’s not enough, and you’re just treading water financially. You contact your local school and start tutoring at the local high school for kids interested in Psychology degrees. You earn $20/hour for 5 hours per week on your Side-Streaming skill.
You walk with $100 per week, or $400 per month, and apply ALL of it to your loan.
Look at the difference it can make on debt:
By earning on the side, and applying the entire income you’re making, which is just after only 5 hours per week, or $4,800 per year, you effectively:
Drastically reduce your debt period from 10 years to 4
Make 49 payments rather than 120, a whopping 60%reduction
Slice interest by 38%, from about $11,000 to $4,200
Pay a total of $37k versus $44k, seven-thousand dollars less
SPENDING what you earn on your loan, SAVES you big money.
For some of us, scholarships or parents got us through, debt-free…at least for the moment.
Your $33,000 debt could be credit card debt, or the new car you needed. Mathematically speaking, making more and dropping it into loans can save you THOUSANDS.
If the math doesn’t convince you, there’s another perk of Side-Streaming for $20 per hour. When I started meeting with clients, negotiating rates, networking for more work, and finding solutions to other people’s problems, I actually got better at my day job.
There’s beauty in getting paid to do what you love – work doesn’t have to feel like servitude. Because my business was growing, the experience started to bleed over and suddenly I was developing at a faster rate than my work peers.
Here’s my Top 6 reasons Side-Streaming improved my work performance:
1. I was no longer afraid to outreach, network, and find new clients.
When you are operating for yourself, your motives change. At work you can coast, but when it goes directly to your pocket, you WANT to succeed, and you’ll be shocked at how much you can grow on your own just from challenging yourself to do so. When I learned how to find people that would be interested in my service, and do it over and over, I learned how to attract and market a product. No school needed – the education was experience.
2. Creative problem solving became normal for me, and work wanted more of it!
If I was asked to create a logo for a volleyball program, I wasn’t given instructions, a deadline, and a process to get through it – I had to invent it myself and find ways to make it happen. At work, where my large corporation set the stage for me to be moderately successful, I didn’t have to do any of that. When I did it for me, and brought that skill to the office, I quickly became a top performer.
3. Getting feedback from clients, and using that data to improve the service, was a habit.
When someone tells you that they like what you’ve done, and they’d happily recommend you, it’s the best thing you can hear. When someone says they wish the work had been done a little faster, or was a little crisper – it sinks in deep. Learning to evaluate and react to my clients’ needs gave me the platform to understand and collect data and use it to create more value from my service, one that carried over into my 9-to-5.
4. I could assert my skills, knowledge, and ability to an audience of peers with confidence, and politely decline to know expertise without feeling threatened.
As a Side-Streamer, I would often get asked why my service was more than a local competitor charging half. I had to not only express why I was a good use of funds, but I had to do so with confidence, asserting my expertise, speed and performance over someone else’s. I was shy, but when it was directly for me, I learned how to do it and why it was important. From my experience with high level clients, I was better equipped to handle negotiations for raises, which netted in a $16,000 raise on day 11 on a new job.
Contrarily, I’m a graphic artist, but if someone wants me to digitally paint a family portrait, I would likely decline the project, and see if I could recommend someone that would do an excellent job. Doing this in the workplace is always smarter than BS-ing what you don’t know.
5. I became quick to ask for expectations so that I could surpass them.
When I made a few mistakes on my own, I HAD to adjust. One time, I had a project thrown in my face because I didn’t listen to my client. I forgot to ask questions about his expectations (read which questions I ask now). When I sat and digested it, I realized I hadn’t done a good job of hearing, with clarity, what he wanted. In the office, when projects came up and I took initiative, I was proactive and asked for expectations, making it really easy for me to hit the mark, and exceed it.
6. Failure was often; so was Success.
It’s common to get comfortable at work after a while, but when first starting, you’re on edge and feel like you can’t fail. When you fail, you learn, right? When you touched the hot stove, did you do it again?? Failing is how you’ll grow fastest and sometimes work won’t be the place that lets you spread your wings, they just want you to follow the leader (or system). When you Side-Stream, you can learn and learn fast through the things that work and the things that don’t. The more you fail, the more you succeed, and this wasn’t a loss of my job, it was just ‘a’ job.
So maybe it sounds like fantasy?
It’s not, and more and more people are starting a Side-Stream every day. Ordinary just isn’t what we were built for.
$20 an hour, for me, was worth much more than the financial opportunity – it was an invaluable representation that I wasn’t solely reliant on my job for income, and that to me was freedom. Could I quit? No. But I had options, and if work wouldn’t give me another raise, I could go earn it myself. If I wanted to work ten hours this week or none, I could.
School to me held freedom. Freedom to learn, or eat, or meet, or party. That’s the freedom that’s missing after school. So I started chasing that freedom.
Soon, $20 an hour turned into $60, which turned into $100.
Most starting salaries don’t allow much room for increased loan payment – there’s just not enough income to do so. You need to EARN more, to SAVE more.
With zero experience, I started helping friends, or family, with art projects. One day, someone asked me for a logo for a new company, and it wasn’t long before I was teaching others to start up a second income stream.
Often, the skills we have are just untapped. Side-Streaming isn’t about reinvention, it’s about re-connection!
If you could pay off your loans early (worth a celebration I might add), and were still making an extra $4,800 per year, what you would you use it on?
Let’s get lavish – share the luxuries of living well to you! Where would you go, what would you see, what would you buy? Do you have a side income stream? Why or why not?
Aaron Velky is a Side-Streaming educator. Side-Streaming, a website for entry-level professionals who aren’t earning enough or suffer from heavy debt, guides pupils to set up a second income and earn from pre-existing skills. Aaron’s passionate about empowering young professionals to find financial freedom, and coaches them from idea selection to finding clients and setting up business systems. Visit his site, sign up for his email list, and start Side-Streaming today at www.aaronvelky.com.
Most of us know we should save for retirement, but sometimes it’s tough to get started. If your employer sponsors a retirement plan — especially if it offers a generous match to your contributions — that’s usually the best place to begin. But even if you don’t have a retirement plan through your job, you can still save for the future. One of the best ways to do so is through a Roth IRA.
What Is a Roth IRA?
An IRA is an individual retirement arrangement, a retirement plan that gives you tax advantages when saving for retirement. There are two types of IRAs:
With a traditional IRA, the money you contribute is typically tax-deductible, but the money you pull out at retirement will be taxed at the then-current rate.
With a Roth IRA, you contribute after-tax dollars, but when you retire, you don’t have to pay taxes on the investment returns.
In other words, money in a traditional IRA is taxed when you pull it out, but the money in a Roth IRA is taxed before you put it in.
You make investments in an IRA through an individual retirement account. You have just one Roth IRA, but you can have many Roth IRA accounts. That may sound confusing, but all you really need to know is that you can have a Roth IRA account at your credit union and a different Roth IRA account at your broker, but they’ll both be part of the same individual retirement arrangement. Clear as mud?
It’s important to understand that an IRA isn’t itself an investment — it’s a place to put investments. When you open an IRA account, it’s like an empty bucket waiting to be filled. You might, for instance, buy stocks to put into your bucket, or maybe bonds. Some people use their IRA accounts to invest in real estate, and some simply let their cash sit there, earning interest on certificates of deposit.
Roth IRA Rules and Requirements
There are some restrictions on who can contribute to Roth IRAs. These arrangements are designed to help ordinary working folks to save for retirement by giving them a significant tax break. They’re not meant for people with really high incomes.
For 2012:
If your tax status is single and you earn more than $110,000 but less than $125,000, the amount you can contribute will be limited. If you earn more than $125,000, you can’t contribute to a Roth IRA at all.
If you’re married and filing jointly, your contributions are limited if your household income is more than $173,000. If you and your spouse earn more than $183,000, you can’t contribute to a Roth IRA.
These income limits are based on your modified adjusted gross income. (If you don’t know what that is, don’t worry about it unless you’re close to the limit.) Also note that Roth IRA income limits generally increase every year.
A few other useful facts:
If you’re younger than age 50, you can contribute $5,000 to your Roth IRA in 2012. If you’re over 50, you can contribute up to $6,000.
To invest in a Roth IRA in a given year, you (or your spouse) need to have earned income. In other words, you can’t fund a Roth IRA if all of the money you received that year came from an inheritance.
You can use a Roth IRA even if you have a 401(k) or other retirement plan.
You have longer than you might expect to make your Roth IRA contributions each year — you have until the tax deadline. For instance, if you want to contribute to your 2011 Roth IRA, you still can. You have until April 17th!
You may be able to convert your traditional IRA to a Roth IRA. This gets arcane, though, and is beyond the scope of this article. If you can’t figure out the IRS doc I linked to, consult a professional.
You can withdraw your contributions to a Roth IRA at any time without penalty. But if you try to withdraw the earnings (the returns on your contributions) before age 59-1/2, you’ll have to pay taxes and, probably, a 10% early-withdrawal penalty.
Lastly — and this is important for many people — if you’ve had your Roth IRA long enough, you can withdraw up to $10,000 in earnings without penalty in order to buy your first home. (You’re still taxed on that money, though.) Check out this article from The Motley Fool for more info.
There are other guidelines and provisions, but these are the basics. If you want more info, check out Publication 590 at the IRS website or contact your friendly neighborhood financial planner.
How to Open a Roth IRA Account
Opening a Roth IRA account is easy. If you’ve ever filled out a job application, applied for a credit card, or opened a bank account, you’ve got what it takes to open a Roth IRA account.
Deciding where to open your Roth IRA account is the toughest part of the process. If you already have an investment advisor, ask her for recommendations, but look for other options, too. Many banks and credit unions offer IRA accounts (though you’ll usually be able to invest only in deposit accounts, like CDs and savings accounts).
If you’re willing to make some decisions on your own, you can open an IRA account through a discount broker or mutual fund company. There are a lot of good options out there, but you might start your search with these firms:
I recommend that you set aside an hour or two some Saturday morning to explore the options over a cup of coffee and a bowl of Lucky Charms. With a little research, you should be able to find a company and program that suit your needs. When you’re shopping around for a place to open an IRA account, ask the following questions:
Is there a minimum initial investment?
What sorts of fees will be charged to the account?
Can you make automatic contributions?
What investment options are available?
Are electronic statements available?
Search for a company that suits your needs, but don’t fret about finding a perfect match. Remember: The perfect is the enemy of the good. Find a good match, and then set your IRA account in motion. You can move your money to a new IRA account if the first company you choose isn’t a good fit.
Once you pick a place to open your IRA account, it’s time to fill out the application. Some firms want you to download forms and then mail them back. So 1999! Most places should let you apply online, though. To complete the application, you’ll need your Social Security number, bank account info (so you can transfer funds), info about your current employer, money in a bank account (depending on where you open your Roth IRA account, you might need anywhere from $25 to $3000), and about half an hour of free time.
Some applications will ask a few simple questions about your investment plans and goals. Once you complete the application, you’ll transfer money to your new account. (It’ll probably earn interest until you choose an investment.) That’s all there is to it.
I haven’t mentioned Roth IRAs around here much over the past few years. For one thing, I did a series of articles on the Roth when this site was young. I’ve always just pointed back there. For another, as my own income grew, the Roth was no longer an option. Starting next year, though, I’l be back in Roth IRA land. You can be darn sure I’ll max that sucker out every year. And so should you, if it’s an option.
Do you have a Roth IRA? Where do you have your accounts? What sorts of investments do you put in them? Any advice for newbies who want to open a Roth IRA account but don’t know where to start? Share your advice in the comments below!
I referenced in my last opinion piece in Housing Wire that the Urban Institute publishes a “monthly chart book” that is packed full of relevant data. This recent publication paints a clear picture as to why any Realtor or homebuilder should always include a nonbank lender in their referrals.
Before I open myself up to attacks here, I am using macro data from Urban Institute and there are certainly some banks who serve a broader swath of the market. But let’s start with the basics as to who really is expanding credit access in the market.
When looking at the nonbank share of all loans broken down by investor (Fannie, Freddie, and Ginnie Mae) the glaring data point that stands out is that nonbanks do well over 80% of all loans being made today. More importantly, when it comes to the Ginnie Mae programs, banks contribute only 7% of all the mortgages by the FHA, VA, and USDA. Seven percent is a glaring figure, especially when you look at the dynamics shaping the housing market.
The reason why this stands out is that the distribution of loans in the Ginnie Mae programs has the highest concentration of first-time homebuyers and the largest percentage of minorities. In the FHA program alone, 46.3% of all loans are to Hispanic and Black borrowers and with over 80% of all FHA’s purchase transactions going to first-time homebuyers, the fact that banks only do 7% of these loans is extraordinary.
Why does this all matter? Because the key regulators in Washington spend a lot of their time ingratiating themselves to the banking industry and lamenting about nonbanks. As Chris Whalen articulated in his recent op-ed, “Consumer Financial Protection Bureau head Rohit Chopra said in May that ‘a major disruption or failure of a large mortgage servicer really gives me a nightmare.’ He made these intemperate comments during CBA Live 2023, a conference hosted by the Consumer Bankers Association.”
The fact that regulators spend time “biting the hand that feeds them,” my reference to the fact that it is the nonbanks providing support for the constituency that this administration should care about and certainly not the audience at a CBA conference, is pretty alarming.
As Whalen goes on to highlight, “Chopra’s focus is political rather than on any real threat. But of course, progressive solutions require problems. Three large and mismanaged depositories failed in the first quarter of 2023, yet progressive partisans like Chopra, Treasury Secretary Janet Yellen, and Federal Housing Finance Agency head Sandra Thompson ignore the public record and continue to fret about nonexistent risk of contagion from mortgage servicers.”
I have taken a lot of negative feedback from many who are connected to the current administration about my criticism of things like LLPA fee changes. But in a similar context as Whalen, I am tiring of the politics of an administration and its regulators who focus their time on trying to reign in the independent mortgage banks (IMBs) — the very set of institutions that are responsible for ensuring that access to credit remains for American families who might otherwise be shut out of the market.
One might ask, why do IMBs do so much better here in advancing credit availability? I think it comes down to a core principal: IMBs only do mortgages. Unlike banks, they don’t do auto loans, credit cards, student loans, business lending, lines of credit and more. Banks don’t need to expand their mortgage lending businesses. In fact, the trend has been to retreat from mortgages, not embrace this segment further.
Just look at the data. When it comes to credit (FICO) scores, IMBs are significantly more aggressive. And since credit scores are lower for first-time homebuyers and trend lower in most minority segments, the IMBs naturally prevail as the best option for the homebuyer.
Or look at this data on DTI (debt to income ratio). The spread between median bank DTIs versus nonbanks in the Ginnie Mae program is significant and, frankly, will affect those on the margin of access to homeownership in a significant way.
The fact that banks are only 7% of all Ginnie Mae lending is not by accident. The reality is that they have systematically walked away from any element of mortgage lending that seems to be of greater risk. It’s frankly why companies like Wells Fargo today are a shadow of the mega-market dominators that they once were.
Whalen perhaps said it best stating, “More than any real-world problem posed by IMBs, it is the government in all of its manifestations that poses a significant risk to the world of mortgage finance and the housing sector more generally. Washington regulatory agencies seek to stifle the markets, limit liquidity and impose additional capital rules, strictures that must inevitably reduce economic growth and access to affordable housing.”
We have a labyrinth of federal regulators who failed to see how the significant rise in banks’ cost of funds, driven by the actions of the Federal Reserve, might push some banks into negative basis territory. This scenario, where they were paying depositors more than they were earning on their unhedged assets, put them out of business. And the regulators missed all of this. In all of their angst and speech-making about the risks of nonbanks, they simply overlooked three of the most expensive failures in banking history.
As I write this, I know that I too was once part of the arrogance of an administration that lectured and directed more than it listened at times. But today we face too many risks. Whalen clearly articulates how the GSEs are being directed down a path that will only decrease their relevance over time if left unchecked.
But perhaps the core message here is this: If I were a Realtor or homebuilder, I would make sure that my potential buyers, especially my first-time homebuyers, were in conversation with an IMB (or mortgage broker). If that simple step isn’t being done, then the access to credit challenges will likely only loom larger.
Remember, IMBs are not risk taking entities. They pass through the credit risk into government-backed lending institutions and they get paid a fee to service the loans for these government entities. We need regulators to stop speechmaking at banking conferences about risk here and instead applaud the critical role these companies perform.
More importantly, regulators should spend more time bolstering forms of liquidity to these entities. There are solutions that can help.
But really, the more time they spend politicizing the nonbank story, we risk more bank failures, which are truly the greater risk in the sector. Let’s applaud the IMBs for keeping the doors to homeownership open. And let’s demand that our regulators stop using political platforms to distort others’ views while not focusing on their primary responsibilities.
Accountability will only exist when stakeholders demand it.
David Stevens has held various positions in real estate finance, including serving as senior vice president of single family at Freddie Mac, executive vice president at Wells Fargo Home Mortgage, assistant secretary of Housing and FHA Commissioner, and CEO of the Mortgage Bankers Association.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the author of this story: Dave Stevens at [email protected]
To contact the editor responsible for this story: Sarah Wheeler at [email protected]
Real estate brokerage Compass has launched a unique new offering known as “Compass Bridge Loan Services” that solves the buy before you sell conundrum.
Many existing homeowners buy replacement properties when selling their current ones, but it can be tricky to time a sale and purchase concurrently.
Aside from mortgage lending issues, like coming up with a down payment and balancing two monthly mortgage payments, there’s also the other buyer/seller to worry about.
This can be especially challenging in a hot market where all-cash offers are the norm, or if competition makes things like contingencies hard to draw into the contract.
To alleviate these pressures, Compass has joined forced with two large mortgage lenders, Freedom Mortgage and Better, to help their home sellers get a bridge loan.
How Compass Bridge Loan Services Works
Sign listing agreement with a Compass real estate agent
Apply for a bridge loan with any bank, including their preferred lenders
Use funds to purchase replacement property and move in when you want
Sell old property and use proceeds to pay off the bridge loan
First, the home seller signs an exclusive contract with a Compass real estate agent to sell their existing home.
Next, they apply for a bridge loan with the bank of their choice, including Compass’ vetted lenders Freedom Mortgage and Better.
Those two lenders can apparently get the job done fast, as time is often of the essence in situations like these.
For the record, Better isn’t available to customers in MA, NH, VA, and VT, but Freedom Mortgage is available nationwide.
Anyway, once approved for the bridge loan, the home seller can move into their new home using the proceeds for down payment or to simply make monthly housing payments.
To sweeten the deal, Compass agents can “front” the first six months of bridge loan payments to keep liquidity a non-issue for the cash-constrained homeowner.
Sell with Compass Concierge to Fetch a Higher Price
The company also offers a no upfront cost renovation service known as Compass Concierge
Property is prepped and renovated before being listed to get top dollar
And to ensure a quick sale without languishing on the market
Seller only pays for renovations at closing once home sells
In the meantime, a Compass real estate will work to sell the homeowner’s former property.
This may also include Compass Concierge, which is very similar to Curbio in that you can renovate your home before listing and pay the repair costs at closing.
Like Curbio, they’ll recommend what should be done to get the property up to snuff, including new floors, deep cleaning, roof repairs, bathroom and kitchen improvements, painting, and more.
The changes are aimed at improving the property value and making it sell quicker, which could reduce the time you’ve got that bridge loan open.
Speaking of, interest rates on bridge loans are notoriously higher than traditional loans because they’re only intended to be kept for a short period of time.
As such, you won’t want to keep it very long in order to protect your hard-earned money, so this type of service only works for someone looking to make a quick transaction.
The question you need to ask is if the cost outweighs the benefit – it may turn out to be cheaper to sell contingently without the bridge loan.
So be sure to do the math and run some scenarios to ensure you’re going down the right path.
Of course, there are intangibles to consider as well, like missing out on your dream house if the sellers aren’t interested in waiting around for your old home to sell.
From Compass’ perspective, it appears they’re looking to compete with all the disruptors entering the real estate space, including iBuyers like Opendoor, RedfinNow, and Zillow Offers.
These companies will buy your house and even let you trade it in for a new one, completely removing the typical obstacles associated with buying and selling homes at the same time.
Compass has already rolled out the bridge loan service in select markets nationwide and early feedback has apparently been “overwhelmingly positive.”
It’s easy to put off writing a will. The process can seem complicated, not to mention expensive. And, if you’re single and don’t own a house, you may also feel like a will is unnecessary.
But writing a will actually doesn’t have to take a lot of time, or money. And even if you don’t have a lot of assets, having a will can give you peace of mind that your preferences will be followed.
Here’s what you need to know to write your own will.
What Is a Will?
Simply defined, a will (also known as a last will and testament) is a legal document that details what you want to be done with your possessions after your death. Your will may also identify a guardian if you have young children, as well as an executor, the person who will carry out the terms of your will.
What a will doesn’t cover is any asset in which you’ve designated beneficiaries. Named beneficiaries override a will. For example, if you designate all your property to go to your parents but you have a life insurance policy in which your brother is listed as a beneficiary, your brother will get the life insurance payout while your parents would get the rest of your assets.
There are other important documents people may create at the same time as they create a will, and are all a part of an estate plan. These include:
• Living will If you were to become incapacitated, what are your preferences as far as medical treatments? This document legally outlines your wishes.
• Power of attorney If you are unable to make decisions for yourself, who has the authority to make those decisions on your behalf? Power of attorney may be divided into medical power of attorney — the person who has power to make medical decisions for you — and financial power of attorney. Both can be the same person.
• Do Not Resuscitate (DNR) order This document communicates that, in the event of your heart no longer beating or you no longer being able to breathe independently, that you do not want doctors to perform any life-saving action.
• Organ and tissue donation If you were to die, would you want your organs and tissue to be donated? Having a form explicitly stating your wishes can make it easier for loved ones to fulfill your desires, instead of guessing what they think you would have wanted.
Not all documents need to be filled out at once. For example, some people may only fill out a DNR order if they have a terminal illness or are unlikely to recover.
Recommended: Important Estate Planning Documents to Know
Dying Without a Will
Even if you think you own nothing of great value and you’re still working on money management, chances are you do your own things that matter to your family. And if you die without a will, your loved ones may become involved in a complicated court process that will freeze your assets until state inheritance laws are followed.
If you’re single and die without a will, your assets will likely go to your closest blood relatives, which may be your parents or siblings. While this may be the preferred choice for some people, having a will allows you to earmark certain assets (or pets) for a charity or close friends.
It’s also a final chance to communicate your wishes to your loved ones and allows your loved ones to avoid a potentially drawn-out court process.
Dying without a will can become even more problematic if you have children. If you die without a will, the court will appoint a guardian. And, while the court attempts to choose a guardian with the best interest of children in mind, that choice may not be the same choice you would make.
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How To Create a Will
Below are simple steps that can help you make a will.
1. Choosing How You’ll Create Your Will
For people who own a lot of property or assets, and may want to set up trusts as a way to minimize taxes and ensure their heirs follow their wishes, it can be well worth the investment to hire an attorney who can walk them through the basics of estate planning.
However, online templates and will-creating platforms can be sufficient for many people. These DIY options can be much less expensive than working directly with an attorney and are legal and binding provided they are signed appropriately. Some of these online options are even free.
Recommended: How to Write a Will Online in 8 Steps
2. Making a List of Your Assets
In order to leave property to your loved ones, you need to know exactly what you have. So it can be a good idea to start by making a list of all your significant assets, including jewelry, artwork, real estate/land, cars, and bank accounts that don’t name a beneficiary.
If you have retirement funds and/or life insurance, you don’t need to write out who is going to receive the proceeds, as these require naming beneficiaries within the account or policy.
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3. Being Specific About Who Gets What
Once you have a list of all your assets, you can decide who you would like to get what. Here, it’s helpful to be as specific as possible, such as using full names and being detailed in describing the assets.
4. Considering Guardianship
For many parents, including pet parents, guardianship can be the most fraught element of their will. This can be a decision that takes time.
For example, some parents love the bond their children have with their grandparents but worry about how aging parents would handle the physical stressors of raising young kids. Other parents may wish to appoint a sister or brother who already has children, so their own kids can be brought up alongside other children. There is no wrong answer, but thinking through contingencies and what-ifs can be helpful in making the most informed decision.
It can also be a good idea to discuss the idea of guardianship with the intended recipient. Maybe a single uncle loves your kids but is uncomfortable taking on the role of parent, or maybe grandparents have similar reservations as to their fitness for taking on the role.
Recommended: New Parent’s Guide to Setting Up a Will
5. Choosing an Executor
Naming an executor for your will is an important choice. This is the person who will make sure that the wishes laid out in your will are followed. The duties of an executor include paying any remaining bills and debts, distributing your assets, and handling probate (transferring the titling of assets).
If you wish, you can name more than one person as an executor of your will.
6. Signing Your Will and Storing it in a Safe Place
A will is only legal when it is made legal — that is, printed and signed according to instructions. You generally need to sign a will in the presence of at least two witnesses. In some cases (such as if you’re using a document called a “self-proving affidavit” to simplify the process of going through probate court), your signature must be notarized as well.
You’ll also want to make sure you keep copies as directed. Many people keep a physical copy in a safe place, as well as a digital copy. Some might also share their will with their executor, or tell them where it is so it can be easily and quickly accessed if you were to die unexpectedly.
7. Updating Your Will as Appropriate
As your life changes, you may need to return to your will and update it. This could be due to:
• Asset changes. Buying a house, opening an investment portfolio, and other financial moves may lead you to revisit your will.
• Relationship changes. If you get married or have a serious partner, you may want to change your will to reflect that.
• The addition of children or pets to your family.
• The death or incapacitation of an appointed guardian.
It can also be good practice to assess your will after every life change, or every year or so. To update a will, you can either write what’s called a codicil (essentially a document stating any updates, written and signed by witnesses) or create a new will, depending on the extent of the changes.
The Takeaway
While the topic of death and end-of-life wishes can seem overwhelming, creating a will can be relatively straightforward. And, thanks to the many online templates now available, you can often make your own will for a relatively low flat fee, or even for free.
The process of writing a will typically includes coming up with a list of assets, choosing where you’d like each asset to go, as well as choosing a guardian (if you have children) and an executor of your will.
While you may not think you need a will, having one (and updating it as appropriate) can be a gift to your loved ones when they may need it most.
As you get your affairs in order, you may also want to get your financial life organized. One simple step that can help is opening an online bank account, such as SoFi Checking and Savings. With SoFi Checking and Savings, you can spend, save, and earn a competitive annual percentage yield (APY) — all in one place. Plus, you won’t pay any annoying account fees.
Better banking is here with up to 4.30% APY on SoFi Checking and Savings.
The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.
SoFi members with direct deposit can earn up to 4.30% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 6/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. 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. This article is not intended to be legal advice. Please consult an attorney for advice. SOBK0623001
Montana is a beautiful place to live, with its waterways and mountainous terrain. If you live and work in the state, you likely need a great place to park your money. The best banks in Montana give you everything you need to pay your bills and manage your money while also keeping fees to a minimum.
The banking industry in Montana is thriving, with a wide range of brick-and-mortar banks that include local, national, and regional banks. Online banking can be a great option, as well, offering reduced fees and savings interest rates that are above the national average.
14 Best Banks in Montana
This list offers a combination of different bank accounts to help you find the right combination of features to fit your needs.
1. First Interstate Bank
With branches in Montana, Arizona, Colorado, Idaho, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oregon, South Dakota, Washington, and Wyoming, First Interstate Bank has a fairly large footprint.
You’ll also get fee-free access to ATM withdrawals nationwide through the MoneyPass network. First Interstate’s free checking account waives monthly maintenance fees with direct deposit or at least a $250 daily balance. Account holders under the age of 24 also pay no service fees.
Fees:
$5 monthly service fee (waived with requirements)
$10 overdraft fee
Balance requirements:
$100 minimum deposit to open
No minimum balance requirements
ATMs:
Fee-free at First Interstate Bank ATMs
Fee-free at 37,000+ MoneyPass ATMs nationwide
$2.50 out-of-network ATM fee
Interest on balance:
Up to 0.25% APY on savings accounts
Up to 0.25% APY on money market accounts
Up to 4.29% APY on CDs
Additional perks:
Open a FirstRewards World Mastercard along with a checking account and get 5,000 bonus points
Wealth management services available
2. GO2bank
GO2bank is an online-only bank that integrates all your banking functions into its app. You’ll get most of the features you need to manage your bank account in the app, including mobile check deposit and the ability to transfer money from checking to your savings account.
But what sets GO2bank apart from other online and mobile banking options is its cash accessibility. Not only can you withdraw funds at any Allpoint ATM, but you can also deposit cash at more than 90,000 retail locations nationwide.
Fees:
$5 monthly fee
$15 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum daily balance requirement
ATMs:
Fee-free at Allpoint ATMs nationwide
$3 out-of-network ATM fee
Interest on balance:
4.50% APY on savings accounts
Additional perks:
Deposit cash at 90,000+ retail locations nationwide
Secured credit card helps you boost your credit score with no credit check required
3. U.S. Bank
Multiple national banks have branches in Montana, including U.S. Bank, which operates 21 branches across 14 towns. You’ll find ATMs across Montana, but the bank doesn’t operate in every state. You will, however, enjoy fee-free access to cash while you’re traveling through the MoneyPass network, which currently operates about 40,000 ATMs nationwide.
The U.S. Bank Smartly checking account is an interest-earning account that doesn’t charge fees, provided certain conditions are met. These conditions include having monthly electronic deposits of $1,000 or more, maintaining a minimum average balance of at least $1,500, or possessing an eligible U.S. Bank credit card. Alternatively, you can also qualify for fee-free status if you reach one of the bank’s rewards tiers.
In addition, for a limited time, you can earn a $400 sign-up bonus with qualifying activities.
Fees:
$6.95 monthly maintenance fee (waived with requirements)
$35 overdraft fee (waived up to $50)
Balance requirements:
$25 minimum opening deposit
No minimum daily balance requirement
ATMs:
Fee-free at U.S. Bank ATMs
Fee-free at MoneyPass ATMs nationwide
$2.50 fee per out-of-network ATM transaction
Interest on balance:
Up to 0.05% APY on checking accounts
0.01% APY on savings accounts
Up to 4.75% APY on CDs
Up to 4.00% APY on money market accounts
Additional perks:
Smart Rewards program helps you earn rewards for purchases
Up to $750 bonus for business checking accounts
4. Stockman Bank of Montana
Those who prefer brick-and-mortar banks should take a look at Stockman Bank of Montana. As Montana’s largest family-owned bank, Stockman Bank offers branches and ATMs throughout the state. It might not be the best option if you regularly leave Montana, though, as you’ll pay an out-of-network ATM fee of $1 per transaction in addition to third-party ATM fees.
Fees:
No monthly maintenance fees
$15 overdraft fee
Balance requirements:
$100 minimum deposit to open
No minimum balance requirements
ATMs:
Fee-free at Stockman ATMs
$1 out-of-network ATM fee
Interest on balance:
Up to 0.60% APY on savings accounts
Up to 4.39% APY on CDs
Additional perks:
High ratings for customer service
Enhanced debit card security features in mobile banking app
5. Opportunity Bank of Montana
Based in Helena, Opportunity Bank of Montana is another community bank with access to a nationwide ATM network. There are two free checking account options.
Opportunity Checking has all the basics, but Opportunity Reward Checking issues 1% unlimited cash back on qualifying purchases. To qualify for reward checking, you’ll need to receive at least $1,000 in monthly direct deposits and have at least 10 qualifying purchase transactions on your debit card.
Fees:
No monthly service fees
$30 overdraft fee
Balance requirements:
$100 minimum deposit to open
No minimum daily balance requirement
ATMs:
Fee-free at Opportunity Bank ATMs
Fee-free at MoneyPass ATMs nationwide
$2 fee for ATMs outside the Opportunity and MoneyPass networks
Interest on balance:
Rates not publicly disclosed
Additional perks:
6. Glacier Bank
It might be a regional bank, but Glacier Bank has a heavy presence in its service area. You’ll find 222 branches in Montana, Idaho, Utah, Washington, Wyoming, Colorado, Arizona, and Nevada, and you can use your ATM card at any Allpoint ATM across the globe. In addition to local bank branches, you’ll also get great deals on checking accounts, as well as savings and business banking options.
Fees:
No monthly fees
$30 overdraft fee
Balance requirements:
No minimum deposit to open
No minimum balance requirement
ATMs:
Fee-free at Glacier Bank ATMs
Fee-free at 55,000 Allpoint ATMs worldwide
$2 fee for ATMs outside of Glacier Bank and Allpoint networks
Interest on balance:
Rates not publicly disclosed
Additional perks:
New checking account comes with a thank-you gift
Robust business banking services
7. Chime
If you have direct deposit, Chime is an online banking option that’s worth considering. Chime doesn’t charge monthly service fees on its checking account, and automatic savings features can help move money from your checking account to your savings account regularly. There is no cash deposit option with Chime, but you can withdraw cash from any Allpoint ATM.
Fees:
No monthly service fees
No overdraft fees
Balance requirements:
No minimum deposit to open
No minimum daily balance requirement
ATMs:
Fee-free at 60,000+ ATMs nationwide
$2.50 outside ATM fee
Interest on balance:
2.00% APY on savings accounts
Additional perks:
8. Chase
Chase Bank is another national bank with branches and ATMs in Montana. You’ll find branches in Helena and Billings. One of the best things about Chase is its nationwide presence. Chase has 4,800 branches and 16,000 ATMs spread across 48 states and the District of Columbia.
The most popular account is Chase Total Checking, which is fee-free if you receive at least $500 in electronic deposits monthly, have a daily balance of at least $1,500, or maintain an average combined balance of $5,000 across all your Chase Bank accounts.
Fees:
$12 monthly service fee (waived with requirements)
$34 overdraft fee
Balance requirements:
No minimum opening deposit
No minimum daily balance required
ATMs:
Fee-free at 15,000+ Chase ATMs
$3-$5 non-Chase ATM fee
Interest on balance:
0.01% APY on savings accounts
Up to 3.75% APY on CDs
Additional perks:
$300 bonus for new checking accounts
Autosave makes it easy to transfer funds to your savings account
9. Farmers State Bank
Another community bank is Farmers State Bank, which has locations across Montana. Farmers State Bank offers both e-banking and traditional banking services to meet all your needs. Although their checking accounts require an opening balance, you can find a fee-free option with no minimum balance requirements or fees.
Fees:
No monthly fees
Balance requirements:
$25 minimum deposit to open
No minimum balance requirement
ATMs:
Fee-free at Farmers State Bank locations
$1 non-Farmers State ATM fee
Interest on balance:
Up to 0.03% APY on savings accounts
Up to 2.27% APY on money market accounts
Up to 4.59% APY on CDs
Additional perks:
Consumer and business loans available
Scholarship program available for students
10. Trailwest Bank
Serving Ravalli, Missoula, Mineral, and Flathead Counties, Trailwest Bank is a locally owned bank with checking and savings options. One feature that sets Trailwest Bank apart is its rewards checking account. Your account comes with a debit card that issues unlimited $.10 rewards per purchase with no fees or minimum balance required.
Fees:
No monthly fees
$30 overdraft fee
Balance requirements:
$25 minimum deposit to open
No minimum daily balance requirement
ATMs:
Fee-free at Trailwest Bank locations
Fee-free at Allpoint ATMs nationwide
$2 ATM fee for transactions outside the Trailwest and Allpoint networks
Interest on balance:
Rates not publicly disclosed
Additional perks:
Wide range of personal loans available
Business checking and savings account options
11. Ally
Another online banking option is Ally, which stands apart from other online banks due to its competitive interest rates on checking accounts, savings accounts, CDs, and money market accounts.
Ally pays up to 0.25% APY on checking account balances, as well as 3.85% APY on savings accounts. One perk included with your Ally checking account is spending buckets, a tool that helps you better balance your budget.
Fees:
No monthly fees
No overdraft fees
Balance requirements:
No minimum opening deposit
No minimum daily balance requirement
ATMs:
Fee-free at 53,000+ Allpoint ATMs nationwide
Up to $10 in third-party ATM fees reimbursed monthly
Interest on balance:
0.25% APY on checking accounts
3.85% APY on savings accounts
Up to 4.80% APY on CDs
4.15% APY on money market accounts
Additional perks:
Robo Portfolios available to help you build wealth
CoverDraft helps you avoid overdrafts
12. Independence Bank
When it comes to local Montana banks, Independence Bank is a great option. You’ll find physical branch locations across Montana, each offering the in-person customer service you can only get from a brick-and-mortar bank. Independence Bank offers two checking accounts, including one fee-free option.
Fees:
No monthly maintenance fees
Balance requirements:
No minimum daily balance required
ATMs:
Fee-free at Independence Bank ATMs
Interest on balance:
Rates not publicly disclosed
Additional perks:
Robust business checking options
Special perks for account holders aged 60 and over
13. Valley Bank of Kalispell
Valley Bank of Kalispell is a community bank with more than a century of experience in the area. The bank’s main office is in downtown Kalispell, with an additional loan office in Eureka. You’ll find multiple basic checking accounts with no monthly maintenance fees, each with its own requirements and features.
Fees:
No monthly maintenance fees
Balance requirements:
$50 minimum opening deposit
No minimum balance requirements
ATMs:
Fee-free at Valley Bank ATMs
Fee-free at MoneyPass ATMs nationwide
Interest on balance:
Rates not publicly disclosed
Additional perks:
Easy check ordering
Wide variety of auto and recreational vehicle loan options
14. Wells Fargo
Wells Fargo is a national bank with branches in 4,900 branches in 37 states. You’ll get fee-free ATM use while traveling at 12,000 ATMs, but if you travel to one of the states without a Wells Fargo presence, Wells Fargo will charge a $2.50 fee for each non-Wells Fargo network ATM withdrawal.
This is in addition to the fee charged by third-party ATM providers. Currently, you can earn a $300 bonus by opening an Everyday Checking Account with a $25 deposit and receiving at least $1,000 in direct deposits within the first 90 days.
Fees:
$10 monthly fee (waived with requirements)
$35 overdraft fee
Balance requirements:
$25 minimum opening deposit
No minimum daily balance requirement
ATMs:
Fee-free at Wells Fargo ATMs nationwide
$2.50 fee for non-Wells Fargo ATM transactions
Interest on balance:
Up to 2.51% APY on savings
Up to 4.51% APY on CDs
Additional perks:
$300 bonus on new checking accounts
FICO score available in mobile banking app
How We Picked These Accounts
Banking needs vary from one person to another, so it can be tough to say what the best banks are. First, there’s the national vs. local debate. Someone who travels often might prefer a bank with branches everywhere, while others might prefer the sense of community you get with a local bank.
This list of best banks also takes into account the different banking services available. You might prioritize a free checking account over a high-yield savings account, for instance. In case you’re looking for a checking or savings account that earns money, we also included banks that pay interest on your savings account, CD, or money market account.
Frequently Asked Questions
What national banks are in Montana?
There are several national banks that have branches within the state of Montana, including U.S. Bank, Chase Bank, and Wells Fargo. If you live in Billings or Helena, Chase might work well for you, but otherwise, U.S. Bank and Wells Fargo will have the statewide coverage you need.
What is the most reliable bank?
Nothing’s guaranteed, but if you go with an FDIC-insured bank, you should be covered, even if you choose an online banking or extremely local bank. Large, corporate banks have a bigger asset base, so if stability is your biggest concern, that might be the way to go. However, there are plenty of FDIC-insured regional banks and small, local banks that are well-established and unlikely to go anywhere.
What Montana bank is ranked the best?
Opinions can vary from one source to another, so it’s important to look across multiple rankings to pull out some trends. When it comes to national banks with a large number of bank branches in Montana, U.S. Bank tops a lot of lists.
As for local banks, two banks receive quite a few mentions. Both Glacier Bank and Stockman Bank of Montana get high marks for their customer service and community focus. Since both of these options are among the best banks for keeping fees low, they’re worth considering.
What should I look for in a Montana bank?
With so many Montana banks, it can be tough to narrow it down to just one. Once you’ve ensured a bank is FDIC insured, it’s a matter of weighing the cost against the rewards. That includes perks like rewards for debit card transactions and checking accounts that pay interest. Here are some factors to consider as you’re researching the best banks.
Overall Better Fee Structure
You’ll see plenty of banks that offer free checking account options, but it’s important to look at the big picture. You’ll see account fees charged for the following:
In most cases, you won’t be penalized for not using an account as long as it doesn’t sit dormant for a while, but it’s essential to look at that. Also consider ATM availability. If you think you’ll regularly need to withdraw cash, the best checking accounts will give you fee-free access whether you’re at home or traveling.
Easy-to-Achieve Fee Waivers
Most online banks and community banks have free checking. But many national and regional banks have strings attached to their free accounts. The best checking accounts have attainable fee waivers, if any at all. Pay close attention to banks that require a lot of debit card purchases every month if you tend to spend more using cash or a credit card.
Some fee waivers will also require a minimum daily balance. This goes for both checking and savings accounts. Before choosing an account, make sure you can maintain that balance, day after day, or be prepared to pay the fee.
Low (or No) Minimum Deposits
Banks often require a small deposit on the account holder’s part to establish checking and savings. But you’ll find plenty of free online banking and smaller local banks that waive the minimum deposit to let you get started with no money whatsoever.
Among the banks that require an opening deposit, though, you’ll find options with small requirements. You might find a bank that lets you open a savings account with just $25 or $50 with a free or low deposit to establish checking. If it’s lower than what you’d put into savings with a different bank, that small checking deposit might be worth it.
Competitive Interest Rates
In addition to fees, you’ll also need to look at the return you’ll get on your savings. The best savings accounts offer a high yield without requiring a ridiculously high balance. Take a look at the interest rate and compare it to other banks to make sure you’re getting the best deal.
Variety of Accounts and Loans
Whether the account pays a higher interest rate is a great consideration, but there’s a benefit to having a one-stop shop. You might find community banks and credit unions offer highly competitive interest rate options on personal loans.
Being an account holder might even get you a discount on auto loans and mortgages. Although you can always shop for loans with other banks, some people prefer to have everything in one place.
Digital banking
Over the years, banking has moved to mobile devices and websites. Whether you go with a large or small bank, take a quick look at the digital offerings. The app should make it easy to pay bills, transfer funds, and keep an eye on your accounts. You might find an online bank gives you better options in this area, particularly if you don’t need to visit a local branch and you rarely deposit cash.
Most importantly, make sure the bank’s mobile app works with your particular mobile device. The app can’t help you at all if you can’t access it. Even if you rarely use the app, it’s a handy tool to have if you suddenly need to take a look at your account when you’re away from your computer.
The best savings accounts and checking accounts offer all the amenities you need while also keeping your balances strong. With so many banks and credit unions in Montana, it’s fairly easy to find a solution that will meet your own needs.
Splitting assets and moving out can be messy during a breakup, even more so if you are buying a house during a divorce. While separation can complicate the home-buying process, it can still be done.
Before you consider buying a house during a divorce, here are some tips to keep in mind.
Buying a House During Divorce or After Separation: What to Consider
Moving forward as quickly as possible may be tempting, but buying a house during a divorce or after separation can get complicated. It’s possible to buy a house if you aren’t legally separated, but there are many factors to consider.
1. Finalize Your Legal Documents
First and foremost, your mortgage lender will require your legal separation agreement. This is a court-ordered document used to divide assets, debts, and other responsibilities between a couple.
A mortgage is a big financial obligation and your lender will want to make sure you are capable of qualifying for a mortgage as a single homeowner.
2. Figure Out Your Financials
Next, you should figure out exactly how much you can afford. Divorce typically comes with fees and ongoing costs like attorney fees, child support, or alimony, so it’s important to find out what you’re responsible for before determining what you can afford.
Tip: If you are responsible for an existing mortgage, it will be included in your debt-to-income (DTI) ratio and could make it more difficult to buy a home during a divorce. However, if the court awarded your spouse the property, then the lender may exclude that from your DTI.
3. Remove Yourself From First Mortgage
If your spouse was given the house, you will want to make sure you remove yourself from that mortgage so that you are not legally responsible for making monthly payments. This can be done by using a quitclaim deed or by refinancing.
4. Keep Records of Payment History
If you are making payments to your spouse, this will be included in your monthly debt amount. However, if you receive monthly payments, then this can count as qualifying income. Keep records of any payment history and bring this along with your legal separation agreement to your mortgage lender.
5. Get Pre-Approved
After the divorce is finalized, you can take the first step toward getting a mortgage by getting pre-approved. A pre-approval letter can help while shopping for a home. Not only does it say how much you can afford to borrow, but it also lets sellers know that you are a serious buyer.
Is It a Good Idea to Buy a House During a Divorce?
Buying a house during a divorce is possible, but it will be more of a challenge.
If you live in a community property state, then you and your spouse must sign and notarize a quitclaim deed. A quitclaim deed transfers any interest your spouse has in the property over to you or vice versa.
Community property law says that couples who acquire property during a legal marriage own the property equally, and if a quitclaim deed is not signed, then your ex-spouse will have equal rights to your new home.
As a married couple, your spouse’s debts could also affect your ability to qualify for a government-backed mortgage. Lenders calculate your DTI using both your income and debts. If your ex is on the mortgage and has a high DTI, this could also raise your household DTI.
Evaluate your financials and determine whether this is a good time to purchase a home. While you may be able to qualify for a mortgage, it may be better to build your credit score and save money. Improving your credit score and making a larger down payment could make your monthly mortgage payment more affordable.
Are you in the market for a home loan? Total Mortgage’s loan experts are standing by to help you understand your options. We have branches across the country.
What If You Decide to Stay in Your Old Home After the Divorce?
During a divorce, the easiest way to divide the house is to sell it and divide the proceeds. But what if you want to stay in your home?
If both names are on the title, then you both have equal rights to stay in the home after a divorce. However, equal distribution of assets is typically handled in court during a divorce. For example, a judge could award you a percentage of the property based on your income or how much of the mortgage you personally paid.
If both parties want the house, then a court will decide who gets it and at what cost. If you keep the home, you may have to buy out your spouse. However, the court also takes financial viability and children into consideration.
Can You Buy a House With a New Partner Before Your Divorce?
There is no law saying you cannot purchase a home with a new partner before your divorce, but you and your ex must cooperate so that your new home is not viewed as a marital asset.
A quitclaim deed will need to be signed to transfer any interest in the property, even in community property states. You should also be careful of what funds you use to purchase your new home, like the down payment, closing costs, and other fees. The court could decide those funds were community property, which may complicate the entire process.
Consider a Home Loan With Total Mortgage
Divorces can be messy. Before buying a home during a divorce, you need to make sure you can afford a mortgage, especially if you have additional divorce obligations. A certified divorce real estate expert and a divorce attorney can help you maneuver through this process.
If you’re ready to move forward, Total Mortgage has your back. Start your application with Total Mortgage today and get your free rate quote in minutes.
Despite mortgage rates reaching the highest level in 14 years, mortgage applications increased 4.2% from the prior week, according to the latest Mortgage Bankers Association (MBA) survey for the week ending June 17.
“Mortgage rates continued to surge last week, with the 30-year fixed mortgage rate jumping 33 basis points to 5.98% – the highest since November 2008 and the largest single-week increase since 2009,” Joel Kan, associate vice president of economic and industry forecasting for the trade group, said in a statement.
Rates for mortgage loans were strongly impacted by tightening monetary policy to combat rising inflation. On June 10, the U.S. Consumer Price Index showed an 8.6% increase year-over-year in May, the highest level in four decades. Consequently, the Federal Reserve raised the federal funds rate by 75 basis points last week, a rate hike not seen since 1994. Another 0.75% hike is expected from the Fed’s meeting in July.
With mortgage rates now at almost double what they were a year ago, refinancing applications decreased 3% from the prior week and were 77% lower than the same week in 2021. Refis were 29.7% of total applications last week, decreasing from 31.7% the previous week, the survey shows.
Meanwhile, the seasonally adjusted purchase index ticked up 8% from the prior week but was 9.4% down from the same week a year ago. According to Kan, purchase applications increased for the second straight week, driven mainly by conventional applications.
Higher rates usually cool off prices, and Kan noted a potential trend in this week’s data. “The average loan size, at just over $420,000, is well below its $460,000 peak earlier this year and is potentially a sign that home price growth is moderating,” the economist said.
Here’s how home price appreciation impacts taxes – And what that means for servicers
Real estate prices (and home appreciation) have been on a tear over the past few years. But sooner or later all this good fortune will translate into higher assessments and tax increases. Here’s what servicers should be doing to anticipate tax issues this year.
Presented by: LERETA
The adjustable-rate mortgages (ARM) share of applications jumped to over 10.6%, demonstrating continued popularity among borrowers. The average interest rate for a 5/1 ARM rose to 4.78% from 4.57% a week prior, according to the MBA
The FHA share of total applications increased to 12% from 11.8% the week prior. Meanwhile, the VA share went from 11.7% to 10.7%. The USDA share of total applications declined to 0.5% from 0.6% the week prior.
The trade group estimates the average contract 30-year fixed-rate mortgage for conforming loans ($647,200 or less) increased to 5.98%, from 5.65% the previous week. For jumbo mortgage loans (greater than $647,200), it went to 5.49% from 5.25%.