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Today’s mortgage rates
Average mortgage rates edged higher yesterday. It was a modest increase by any standards but tiny by comparison with Wednesday’s big jump.
First thing, it was looking as if mortgage rates today could fall. But that could change later in the day.
Current mortgage and refinance rates
Find your lowest rate. Start here
Our table is having technical problems. But we’re working hard to fix them.
Program | Mortgage Rate | APR* | Change |
---|---|---|---|
30-year fixed VA | 7.222% | 7.262% | +0.05 |
Conventional 20-year fixed | 7.007% | 7.058% | +0.07 |
Conventional 10-year fixed | 6.51% | 6.584% | +0.09 |
Conventional 30-year fixed | 7.127% | 7.173% | +0.07 |
30-year fixed FHA | 7.056% | 7.1% | +0.09 |
Conventional 15-year fixed | 6.64% | 6.713% | +0.1 |
5/1 ARM Conventional | 6.785% | 7.888% | +0.08 |
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions See our rate assumptions here. |
Should you lock your mortgage rate today?
Markets have turned gloomy over the prospects of the Federal Reserve cutting general interest rates over the next few months. And that’s been pushing mortgage rates higher.
So, for now, my personal rate lock recommendations remain:
- LOCK if closing in 7 days
- LOCK if closing in 15 days
- LOCK if closing in 30 days
- LOCK if closing in 45 days
- LOCK if closing in 60 days
However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So, let your gut and your own tolerance for risk help guide you.
>Related: 7 Tips to get the best refinance rate
Market data affecting today’s mortgage rates
Here’s a snapshot of the state of play this morning at about 9:50 a.m. (ET). The data are mostly compared with roughly the same time the business day before, so much of the movement will often have happened in the previous session. The numbers are:
- The yield on 10-year Treasury notes fell to 4.50% from 4.55%. (Good for mortgage rates.) More than any other market, mortgage rates typically tend to follow these particular Treasury bond yields
- Major stock indexes were falling this morning. (Good for mortgage rates.) When investors buy shares, they’re often selling bonds, which pushes those prices down and increases yields and mortgage rates. The opposite may happen when indexes are lower. But this is an imperfect relationship
- Oil prices increased to $87.42 from $85.57 a barrel. (Bad for mortgage rates*.) Energy prices play a prominent role in creating inflation and also point to future economic activity
- Gold prices climbed to $2,414 from $2,361 an ounce. (Good for mortgage rates*.) It is generally better for rates when gold prices rise and worse when they fall. Because gold tends to rise when investors worry about the economy.
- CNN Business Fear & Greed index — fell to 51 from 54 out of 100. (Good for mortgage rates.) “Greedy” investors push bond prices down (and interest rates up) as they leave the bond market and move into stocks, while “fearful” investors do the opposite. So, lower readings are often better than higher ones
*A movement of less than $20 on gold prices or 40 cents on oil ones is a change of 1% or less. So we only count meaningful differences as good or bad for mortgage rates.
Caveats about markets and rates
Before the pandemic, post-pandemic upheavals, and war in Ukraine, you could look at the above figures and make a pretty good guess about what would happen to mortgage rates that day. But that’s no longer the case. We still make daily calls. And are usually right. But our record for accuracy won’t achieve its former high levels until things settle down.
So, use markets only as a rough guide. Because they have to be exceptionally strong or weak to rely on them. But, with that caveat, mortgage rates today look likely to decrease. However, be aware that “intraday swings” (when rates change speed or direction during the day) are a common feature right now.
Find your lowest rate. Start here
What’s driving mortgage rates today?
Today
Two economic reports are scheduled for this morning.
The March import price index (IPI) landed at 8:30 a.m. Eastern. And that would normally be bad for mortgage rates. Markets had been expecting it to hold steady at 0.3% and it came in at 0.4%.
So, how come mortgage rates were falling first thing? Well, it’s too early to be sure. But those rates often move in the opposite direction after a sharp movement one way or the other. That’s simply markets reflecting on the change and deciding they over-reacted.
This morning’s other report isn’t due until 10 a.m. Eastern. And that means I won’t have time before my deadline to assess its likely impact on markets. They were expecting the preliminary consumer sentiment index for April to improve slightly to 79.9% from 79.4%.
A lower figure may help mortgage rates to fall while a higher one could push them upward. But this is one of those reports that rarely move those rates far unless they contain shockingly good or bad data.
Mortgage rates might also be affected by earnings reports later from three of the biggest U.S. banks, JPMorgan Chase, Wells Fargo and Citigroup. If they all tell a really positive story, stock market reactions could spill over into the bond market that largely determines mortgage rates.
Next week
We’ve had April’s two most important reports over the last six days. And, taken together, they were pretty bad for mortgage rates.
Next week’s reports aren’t typically as influential by a long way. But a couple of them (retail sales and industrial production) could move mortgage rates higher if they feed markets’ current pessimism over Fed rate cuts — or push them downward if they contradict it.
Don’t forget you can always learn more about what’s driving mortgage rates in the most recent weekend edition of this daily report. These provide a more detailed analysis of what’s happening. They are published each Saturday morning soon after 10 a.m. (ET) and include a preview of the following week.
Recent trends
According to Freddie Mac’s archives, the weekly all-time lowest rate for 30-year, fixed-rate mortgages was set on Jan. 7, 2021, when it stood at 2.65%. The weekly all-time high was 18.63% on Sep. 10, 1981.
Freddie’s Apr. 11 report put that same weekly average at 6.88%, up from the previous week’s 6.82%. But note that Freddie’s data are almost always out of date by the time it announces its weekly figures.
Expert forecasts for mortgage rates
Looking further ahead, Fannie Mae and the Mortgage Bankers Association (MBA) each has a team of economists dedicated to monitoring and forecasting what will happen to the economy, the housing sector and mortgage rates.
And here are their rate forecasts for the four quarters of 2024 (Q1/24, Q2/24 Q3/24 and Q4/24).
The numbers in the table below are for 30-year, fixed-rate mortgages. Fannie’s were updated on Mar. 19 and the MBA’s on Mar. 22.
Forecaster | Q1/24 | Q2/24 | Q3/24 | Q4/24 |
Fannie Mae | 6.7% | 6.7% | 6.6% | 6.4% |
MBA | 6.8% | 6.6% | 6.3% | 6.1% |
Of course, given so many unknowables, both these forecasts might be even more speculative than usual. And their past record for accuracy hasn’t been wildly impressive.
Important notes on today’s mortgage rates
Here are some things you need to know:
- Typically, mortgage rates go up when the economy’s doing well and down when it’s in trouble. But there are exceptions. Read ‘How mortgage rates are determined and why you should care’
- Only “top-tier” borrowers (with stellar credit scores, big down payments, and very healthy finances) get the ultralow mortgage rates you’ll see advertised
- Lenders vary. Yours may or may not follow the crowd when it comes to daily rate movements — though they all usually follow the broader trend over time
- When daily rate changes are small, some lenders will adjust closing costs and leave their rate cards the same
- Refinance rates are typically close to those for purchases.
A lot is going on at the moment. And nobody can claim to know with certainty what will happen to mortgage rates in the coming hours, days, weeks or months.
Find your lowest mortgage rate today
You should comparison shop widely, no matter what sort of mortgage you want. Federal regulator the Consumer Financial Protection Bureau found in May 2023:
“Mortgage borrowers are paying around $100 a month more depending on which lender they choose, for the same type of loan and the same consumer characteristics (such as credit score and down payment).”
In other words, over the lifetime of a 30-year loan, homebuyers who don’t bother to get quotes from multiple lenders risk losing an average of $36,000. What could you do with that sort of money?
Verify your new rate
Mortgage rate methodology
The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.
How your mortgage interest rate is determined
Mortgage and refinance rates vary a lot depending on each borrower’s unique situation.
Factors that determine your mortgage interest rate include:
- Overall strength of the economy — A strong economy usually means higher rates, while a weaker one can push current mortgage rates down to promote borrowing
- Lender capacity — When a lender is very busy, it will increase rates to deter new business and give its loan officers some breathing room
- Property type (condo, single-family, town house, etc.) — A primary residence, meaning a home you plan to live in full time, will have a lower interest rate. Investment properties, second homes, and vacation homes have higher mortgage rates
- Loan-to-value ratio (determined by your down payment) — Your loan-to-value ratio (LTV) compares your loan amount to the value of the home. A lower LTV, meaning a bigger down payment, gets you a lower mortgage rate
- Debt-To-Income ratio — This number compares your total monthly debts to your pretax income. The more debt you currently have, the less room you’ll have in your budget for a mortgage payment
- Loan term — Loans with a shorter term (like a 15-year mortgage) typically have lower rates than a 30-year loan term
- Borrower’s credit score — Typically the higher your credit score is, the lower your mortgage rate, and vice versa
- Mortgage discount points — Borrowers have the option to buy discount points or ‘mortgage points’ at closing. These let you pay money upfront to lower your interest rate
Remember, every mortgage lender weighs these factors a little differently.
To find the best rate for your situation, you’ll want to get personalized estimates from a few different lenders.
Verify your new rate. Start here
Are refinance rates the same as mortgage rates?
Rates for a home purchase and mortgage refinance are often similar.
However, some lenders will charge more for a refinance under certain circumstances.
Typically when rates fall, homeowners rush to refinance. They see an opportunity to lock in a lower rate and payment for the rest of their loan.
This creates a tidal wave of new work for mortgage lenders.
Unfortunately, some lenders don’t have the capacity or crew to process a large number of refinance loan applications.
In this case, a lender might raise its rates to deter new business and give loan officers time to process loans currently in the pipeline.
Also, cashing out equity can result in a higher rate when refinancing.
Cash-out refinances pose a greater risk for mortgage lenders, so they’re often priced higher than new home purchases and rate-term refinances.
Check your refinance rates today. Start here
How to get the lowest mortgage or refinance rate
Since rates can vary, always shop around when buying a house or refinancing a mortgage.
Comparison shopping can potentially save thousands, even tens of thousands of dollars over the life of your loan.
Here are a few tips to keep in mind:
1. Get multiple quotes
Many borrowers make the mistake of accepting the first mortgage or refinance offer they receive.
Some simply go with the bank they use for checking and savings since that can seem easiest.
However, your bank might not offer the best mortgage deal for you. And if you’re refinancing, your financial situation may have changed enough that your current lender is no longer your best bet.
So get multiple quotes from at least three different lenders to find the right one for you.
2. Compare Loan Estimates
When shopping for a mortgage or refinance, lenders will provide a Loan Estimate that breaks down important costs associated with the loan.
You’ll want to read these Loan Estimates carefully and compare costs and fees line-by-line, including:
- Interest rate
- Annual percentage rate (APR)
- Monthly mortgage payment
- Loan origination fees
- Rate lock fees
- Closing costs
Remember, the lowest interest rate isn’t always the best deal.
Annual percentage rate (APR) can help you compare the ‘real’ cost of two loans. It estimates your total yearly cost including interest and fees.
Also, pay close attention to your closing costs.
Some lenders may bring their rates down by charging more upfront via discount points. These can add thousands to your out-of-pocket costs.
3. Negotiate your mortgage rate
You can also negotiate your mortgage rate to get a better deal.
Let’s say you get loan estimates from two lenders. Lender A offers the better rate, but you prefer your loan terms from Lender B. Talk to Lender B and see if they can beat the former’s pricing.
You might be surprised to find that a lender is willing to give you a lower interest rate in order to keep your business.
And if they’re not, keep shopping — there’s a good chance someone will.
Fixed-rate mortgage vs. adjustable-rate mortgage: Which is right for you?
Mortgage borrowers can choose between a fixed-rate mortgage and an adjustable-rate mortgage (ARM).
Fixed-rate mortgages (FRMs) have interest rates that never change unless you decide to refinance. This results in predictable monthly payments and stability over the life of your loan.
Adjustable-rate loans have a low interest rate that’s fixed for a set number of years (typically five or seven). After the initial fixed-rate period, the interest rate adjusts every year based on market conditions.
With each rate adjustment, a borrower’s mortgage rate can either increase, decrease, or stay the same. These loans are unpredictable since monthly payments can change each year.
Adjustable-rate mortgages are fitting for borrowers who expect to move before their first rate adjustment, or who can afford a higher future payment.
In most other cases, a fixed-rate mortgage is typically the safer and better choice.
Remember, if rates drop sharply, you are free to refinance and lock in a lower rate and payment later on.
How your credit score affects your mortgage rate
You don’t need a high credit score to qualify for a home purchase or refinance, but your credit score will affect your rate.
This is because credit history determines risk level.
Historically speaking, borrowers with higher credit scores are less likely to default on their mortgages, so they qualify for lower rates.
So, for the best rate, aim for a credit score of 720 or higher.
Mortgage programs that don’t require a high score include:
- Conventional home loans — minimum 620 credit score
- FHA loans — minimum 500 credit score (with a 10% down
payment) or 580 (with a 3.5% down payment) - VA loans — no minimum credit score, but 620 is common
- USDA loans — minimum 640 credit score
Ideally, you want to check your credit report and score at least 6 months before applying for a mortgage. This gives you time to sort out any errors and make sure your score is as high as possible.
If you’re ready to apply now, it’s still worth checking so you have a good idea of what loan programs you might qualify for and how your score will affect your rate.
You can get your credit report from AnnualCreditReport.com and your score from MyFico.com.
How big of a down payment do I need?
Nowadays, mortgage programs don’t require the conventional 20 percent down.
Indeed, first-time home buyers put only 6 percent down on average.
Down payment minimums vary depending on the loan program. For example:
- Conventional home loans require a down payment between 3%
and 5% - FHA loans require 3.5% down
- VA and USDA loans allow zero down payment
- Jumbo loans typically require at least 5% to 10% down
Keep in mind, a higher down payment reduces your risk as a borrower and helps you negotiate a better mortgage rate.
If you are able to make a 20 percent down payment, you can avoid paying for mortgage insurance.
This is an added cost paid by the borrower, which protects their lender in case of default or foreclosure.
But a big down payment is not required.
For many people, it makes sense to make a smaller down payment in order to buy a house sooner and start building home equity.
Verify your new rate. Start here
Choosing the right type of home loan
No two mortgage loans are alike, so it’s important to know your options and choose the right type of mortgage.
The five main types of mortgages include:
Fixed-rate mortgage (FRM)
Your interest rate remains the same over the life of the loan. This is a good option for borrowers who expect to live in their homes long-term.
The most popular loan option is the 30-year mortgage, but 15- and 20-year terms are also commonly available.
Adjustable-rate mortgage (ARM)
Adjustable-rate loans have a fixed interest rate for the first few years. Then, your mortgage rate resets every year.
Your rate and payment can rise or fall annually depending on how the broader interest rate trends.
ARMs are ideal for borrowers who expect to move prior to their first rate adjustment (usually in 5 or 7 years).
For those who plan to stay in their home long-term, a fixed-rate mortgage is typically recommended.
Jumbo mortgage
A jumbo loan is a mortgage that exceeds the conforming loan limit set by Fannie Mae and Freddie Mac.
In 2023, the conforming loan limit is $726,200 in most areas.
Jumbo loans are perfect for borrowers who need a larger loan to purchase a high-priced property, especially in big cities with high real estate values.
FHA mortgage
A government loan backed by the Federal Housing Administration for low- to moderate-income borrowers. FHA loans feature low credit score and down payment requirements.
VA mortgage
A government loan backed by the Department of Veterans Affairs. To be eligible, you must be active-duty military, a veteran, a Reservist or National Guard service member, or an eligible spouse.
VA loans allow no down payment and have exceptionally low mortgage rates.
USDA mortgage
USDA loans are a government program backed by the U.S. Department of Agriculture. They offer a no-down-payment solution for borrowers who purchase real estate in an eligible rural area. To qualify, your income must be at or below the local median.
Bank statement loan
Borrowers can qualify for a mortgage without tax returns, using their personal or business bank account as evidence of their financial circumstances. This is an option for self-employed or seasonally-employed borrowers.
Portfolio/Non-QM loan
These are mortgages that lenders don’t sell on the secondary mortgage market. And this gives lenders the flexibility to set their own guidelines.
Non-QM loans may have lower credit score requirements or offer low-down-payment options without mortgage insurance.
Choosing the right mortgage lender
The lender or loan program that’s right for one person might not be right for another.
Explore your options and then pick a loan based on your credit score, down payment, and financial goals, as well as local home prices.
Whether you’re getting a mortgage for a home purchase or a refinance, always shop around and compare rates and terms.
Typically, it only takes a few hours to get quotes from multiple lenders. And it could save you thousands in the long run.
Time to make a move? Let us find the right mortgage for you
Current mortgage rates methodology
We receive current mortgage rates each day from a network of mortgage lenders that offer home purchase and refinance loans. Those mortgage rates shown here are based on sample borrower profiles that vary by loan type. See our full loan assumptions here.
Source: themortgagereports.com
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Welcome to Pennsylvania, a state steeped in history, brimming with diverse landscapes, and home to lively cities that offer unique living experiences. From the bustling metropolis of Philadelphia, known for its iconic landmarks, to the picturesque streets of Pittsburgh, a hub of innovation and creativity, there’s a lot to explore in this state. This ApartmentGuide article will take you through the pros and cons of living in Pennsylvania, so you can decide if this state is right for you.
Renting in Pennsylvania snapshot
1. Pro: Iconic historical sites
Pennsylvania is steeped in American history, home to well-known landmarks such as the Liberty Bell and Independence Hall in Philadelphia to the Gettysburg National Military Park in Gettysburg. These sites offer residents and visitors alike a unique opportunity to walk through the corridors of American history, experiencing the birthplace of the nation’s independence firsthand.
2. Con: Humid summers
Pennsylvania experiences high humidity levels during the summer months, creating discomfort for residents and impacting outdoor activities. The combination of the summer heat ranging from 70-90 degrees Fahrenheit, and high humidity levels can make outdoor excursions feel stifling and exhausting, requiring extra precautions to stay cool and hydrated.
3. Pro: Diverse landscapes
From the urban landscapes of Philadelphia and Pittsburgh to the scenic beauty of the Pocono Mountains and the shores of Lake Erie, Pennsylvania offers a diverse range of environments. This diversity allows for a multitude of outdoor activities, including hiking, skiing, and beach outings, catering to all sorts of preferences and lifestyles.
4. Con: Infrastructure challenges
Pennsylvania grapples with aging infrastructure, evident in its roads, bridges, and public transportation systems, which often suffer from disrepair and congestion. The state’s infrastructure report card is a C-, highlighting the urgent need for upgrades to address deficiencies and ensure public safety. These infrastructure challenges not only inconvenience residents with frequent road closures and delays but also pose risks to motorists and commuters.
5. Pro: Educational opportunities
Pennsylvania is home to some of the nation’s top universities, including the University of Pennsylvania, Carnegie Mellon University, and Penn State. These institutions not only provide excellent educational opportunities but also contribute to vibrant local economies and cultural scenes throughout the state.
6. Con: Property taxes
Pennsylvania imposes a relatively high property tax rate of 1.36%, surpassing the national average of 0.99%, which can significantly impact homeowners’ financial burden. This disparity is worth noting for those considering transitioning from renting to homeownership, as it adds to the overall cost of owning property in the state. This can affect affordability and the cost of living for residents, making it challenging for some to maintain homeownership.
7. Pro: Culinary diversity
The state’s culinary scene is a reflection of its cultural diversity, offering everything from traditional Pennsylvania Dutch dishes to modern American cuisine. Cities like Philadelphia are renowned for their food, including the iconic Philly cheesesteak, attracting food lovers from all over.
8. Con: Air quality issues
Industrial activities and traffic congestion contribute to air quality issues in certain areas of Pennsylvania, particularly in its larger cities like Philadelphia and Pittsburgh. These cities are known for their industrial history, which has left a legacy of pollution and environmental challenges. Poor air quality can have significant impacts on residents’ health, especially those with respiratory conditions.
9. Pro: Proximity to other cities
Source: apartmentguide.com
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If you caused a major car accident and the other driver sued you to cover their medical costs, would you have enough liability insurance to pay the damages? In a financially disastrous situation like this one, an umbrella insurance policy could help.
Umbrella insurance offers extra liability coverage beyond what’s on the policies you already have, such as auto or homeowners insurance. But there can be big differences from one umbrella policy to the next, including coverage details and maximum limits. Here’s how to find the best umbrella insurance for you.
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How to find the best umbrella insurance
When comparing umbrella insurance options, consider the following questions.
What’s covered?
A standard umbrella insurance policy will cover injuries or property damage you cause to others, as well as your legal defense for such claims. But the nitty-gritty details may vary between policies.
For example, if your idea of a fun vacation is renting a Jet Ski and hitting the water, know that some umbrella insurers won’t cover these kinds of personal watercraft. The best umbrella insurance coverage for you will include your hobbies and other activities.
Many umbrella policies offer coverage anywhere in the world, which could be useful if you often travel overseas. But some policies may pay only for lawsuits brought in the U.S. or Canada.
You might also see some insurers offering excess liability policies, which tend to be similar but not identical to umbrella policies. Excess liability policies essentially boost the limits on the coverage you already have, while umbrella policies may also offer extra types of coverage that aren’t available on your existing policies.
An independent insurance agent can help talk you through exactly what’s covered and what isn’t by each policy you’re considering.
How much underlying coverage is required?
Insurers often require a minimum amount of liability insurance on your underlying policies before you can buy umbrella insurance.
For instance, to add umbrella coverage to your car insurance, your policy may need to have $250,000 of bodily injury liability coverage and $100,000 of property damage liability coverage. To add umbrella coverage to a homeowners policy, you often need $300,000 of liability insurance.
If your existing policies fall short of these limits, increasing your coverage amounts will likely raise your premiums.
Can you buy your policies from different companies?
Before they sell you an umbrella policy, many insurers require that you carry your auto, homeowners, condo or renters insurance with them, too. RLI and Auto-Owners Insurance are two companies that offer stand-alone umbrella insurance policies, meaning you could carry your auto or homeowners coverage with someone else.
How much coverage should you buy?
Another factor to look at when shopping is the maximum limit a company offers. Most umbrella policies stop at $5 million, but some go higher. Farmers, for instance, offers umbrella insurance up to $10 million in most states, while Chubb‘s umbrella limits go up to $100 million.
When choosing your coverage limit, add up the value of your assets, such as savings, investments and real estate. These are things you could lose if someone files a lawsuit against you. Consider choosing an umbrella liability limit at least high enough to cover all your assets.
Where to buy umbrella insurance
Many major carriers offer umbrella insurance. A good first step is to call your current auto and home insurer and request an umbrella insurance quote. Remember that you may have to increase the coverage limits on your underlying policies, which could raise your total cost.
If you have coverage with multiple companies, ask how much it would cost to move all your policies to that company, including the new umbrella. See if a bundling discount could reduce the total cost of your premiums.
🤓Nerdy Tip
Take this opportunity to shop around. Since you’re adding a new type of insurance and potentially raising the coverage limits on your existing policies, you may find that your current insurer no longer offers the best value.
We recommend getting quotes from at least three companies before making a decision. An independent agent or broker can shop around on your behalf and explain the coverage differences between policies.
Umbrella insurance companies to consider
Below are some of the major umbrella insurance companies in the U.S., along with details about their coverage limits and eligibility requirements. Keep in mind that smaller regional insurers may also offer solid coverage at an affordable price. A local insurance agent can help you find them.
Allstate
Coverage limits: $1 million to $5 million.
States available: Washington, D.C., and all states except Alaska, Massachusetts, Nevada and New York.
Eligibility requirements: You must have underlying policies with at least the following limits:
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Amica
Coverage limits: $1 million to $5 million.
States available: Washington, D.C., and all states except Hawaii.
Eligibility requirements: Requirements vary by state. Generally, your underlying policies must meet the following minimums:
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Auto-Owners
Coverage limits: $1 million to $5 million, with additional limits potentially available.
States available: Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia and Wisconsin.
Eligibility requirements: Eligibility requirements differ depending on underlying policy, underlying carrier and where you live.
Chubb
Coverage limits: $1 million to $100 million.
States available: All 50 states and Washington, D.C.
Eligibility requirements: Minimum limits for underlying policies vary by state.
Note: Chubb’s policy is technically an excess liability policy, not an umbrella policy.
Farmers
Coverage limits: $1 million to $10 million, except in Florida and California, where the maximum limit is $5 million.
States available: All states except Alaska, Delaware, Hawaii, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, North Carolina, Rhode Island, Vermont, Washington, D.C., and West Virginia.
Eligibility requirements: Farmers must insure at least one car with bodily injury liability limits of at least $250,000 per person and $500,000 per accident. You can insure your home with any company as long as it has at least $300,000 of liability coverage.
Geico
Insurance type |
NerdWallet star rating |
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Auto insurance |
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Homeowners insurance |
Coverage limits: $500,000 to $10 million. (Limits above $2 million require additional eligibility requirements.)
States available: Washington, D.C., and all states except Alabama, California, Georgia, Montana, Nevada, New York, Texas and Washington. In the states where Geico doesn’t currently sell umbrella insurance, it can offer a policy through a partner carrier.
Eligibility requirements: You generally must have all vehicles insured with Geico and have the following minimum coverage limits on any relevant underlying policies:
Auto, RV, motorcycle or golf cart |
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Property (homeowners, renters, etc.) |
$300,000 of liability coverage. |
Boat (26 feet or longer, or over 50 horsepower) |
$300,000 of liability coverage. |
Boat (under 26 feet with motor of 50 horsepower or less) |
$100,000 of liability coverage. |
Liberty Mutual
Coverage limits: $1 million to $5 million.
States available: All states except California, Georgia, Louisiana and New Jersey. Coverage limits and requirements vary by state.
Eligibility requirements: You generally must have a Liberty Mutual auto policy with at least the limits below, but requirements may vary by state. The other policy types are optional, but if you have any of them, the liability limit must be at least $100,000.
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Homeowners, dwelling, watercraft, farmer’s personal liability or general personal liability |
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Nationwide
Coverage limits: $1 million to $5 million.
States available: Washington, D.C., and all states except Alaska, Hawaii, Louisiana and Oklahoma.
Eligibility requirements: It depends on where you live. In most cases, all vehicles and your primary home must have Nationwide policies with at least the following limits:
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USAA
Coverage limits: $1 million to $5 million, with higher limits available through the USAA Insurance Agency.
States available: All 50 states and Washington, D.C.
Eligibility requirements: USAA policies are available only to veterans, active military and their families. The following limits apply to underlying policies:
Homeowners, renters or rental property |
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Watercraft (if applicable) |
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Source: nerdwallet.com
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New Mexico’s desert landscapes and cultural heritage create a compelling backdrop for renters seeking a extraordinary living experience. From the sun-soaked streets of Albuquerque to the historic ambiance of Las Cruces, the state offers a diverse range of cities worth exploring. This ApartmentGuide article takes you through the pros and cons of living in New Mexico so you can learn more about the “Land of Enchantment” and help you make an informed decision about your next home.
Renting in New Mexico snapshot
1. Pro: Rich cultural heritage
New Mexico’s cultural heritage is a blend of Native American, Hispanic, and Anglo influences, present in everyday life. The state is home to numerous cultural festivals, such as the Albuquerque International Balloon Fiesta and the Gathering of Nations Pow Wow, which showcase its diverse traditions and history.
2. Con: Water scarcity
Water scarcity is a significant issue in New Mexico, affecting both urban and rural areas. The state’s reliance on the Rio Grande and its aquifers means that drought conditions can severely impact water availability, leading to restrictions and conservation measures for residents especially in the summer.
3. Pro: Outdoor recreation
New Mexico offers unparalleled opportunities for outdoor activities, with landscapes ranging from the Chihuahuan Desert to the peaks of the Sangre de Cristo Mountains. Residents can enjoy hiking, skiing, and exploring national parks like White Sands and Carlsbad Caverns.
4. Con: Hot summers
During the summer months, New Mexico often experiences extreme weather conditions characterized by scorching temperatures and intense sunlight. Heatwaves are common, with temperatures frequently soaring above 100°F, especially in the desert regions. These extreme weather patterns can pose health risks, strain energy resources, and exacerbate water scarcity concerns.
5. Pro: Affordable cost of living
Housing, utilities, and daily expenses are generally lower in New Mexico, making it easier for residents to enjoy a higher quality of life. These affordable housing costs are evident in cities like Las Cruces which has a median sale price of $279,000 and an average rent price for a one-bedroom of $942.
6. Con: Limited public transportation
New Mexico faces challenges in providing comprehensive public transportation options, particularly in rural areas where services may be limited or non-existent. However even Albuquerque, New Mexico’s largest city has a transit score of 29 which makes it a car-dependent location.
7. Pro: Historic landmarks
New Mexico boasts numerous historic landmarks that contribute to its rich cultural heritage. Iconic sites such as Taos Pueblo, a UNESCO World Heritage Site dating back over a thousand years, and the historic adobe structures of Old Town Albuquerque provide glimpses into the state’s storied past.
8. Con: Limited cultural amenities in rural areas
In rural areas of New Mexico, access to cultural amenities such as theaters, museums, and galleries may be limited compared to urban centers. Residents in these regions often have fewer opportunities to engage in cultural events and activities due to the sparse population and distance from major cultural hubs
9. Pro: Culinary diversity
New Mexico boasts culinary diversity influenced by Native American, Hispanic, and Anglo traditions, offering a unique and flavorful dining experience. Dishes such as green chile stew, Navajo tacos, and carne adovada showcase the fusion of these cultural influences in New Mexican cuisine.
10. Con: Infrastructure needs
New Mexico faces infrastructure needs, particularly in transportation and utilities, which can pose challenges for residents. Issues such as road maintenance, broadband access, and water distribution systems may be inadequately developed in certain areas, leading to inconvenience and potential safety concerns.
11. Pro: Stargazing
New Mexico offers exceptional stargazing opportunities thanks to its clear skies and minimal light pollution, making it an ideal location for astronomers and stargazers. Notable sites like the International Dark-Sky Association-designated communities of Silver City and Clayton, as well as observatories such as the Very Large Array and the Apache Point Observatory, provide unparalleled views of the cosmos.
12. Con: Limited job opportunities
New Mexico faces limited job opportunities, particularly in certain industries and regions, which can be a drawback for residents seeking employment. For instance, the state’s reliance on the government sector, including national laboratories and military installations, may result in fewer private sector job prospects.
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from Redfin.
Source: apartmentguide.com
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Many businesses show their appreciation for U.S. military service members, whether that’s via special parking privileges or exclusive discounts on goods and services. The same is true for many airlines, particularly when it comes to those who are active duty military.
Let’s take a closer look at flights with military discounts, including which airlines offer them and who’s eligible.
U.S. airlines with military discounts
Alaska Airlines
Alaska Airlines offers military fares to eligible service members. This includes those who are:
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On official leave.
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Reservists on active orders.
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Within seven days of discharging from active duty.
Alaska also offers military discounts to spouses and dependents of active duty service members. Those who are older than 10 years old need to show a dependent ID.
Alaska doesn’t publish a specific discount amount. Instead, you’ll have to call 800-252-7522 to get a quote and purchase the ticket.
Those who are enrolled in VetRewards can get a 5% discount. This discount is valid for up to six people booked together.
Allegiant Air
Allegiant Air doesn’t offer discounts on airfare to military members, but it does provide a host of other benefits to both active duty members and veterans. This includes two free checked bags up to 99 pounds each, early boarding and the ability to print your boarding pass at the airport for free. Service members also receive waived fees for in-cabin pets, oversized bags, ticket changes and flight cancellations.
Family members of the service member or veteran can also take advantage of these benefits if they’re flying together and hold a dependent ID card.
American Airlines
American Airlines’ military discount is for both active duty military and those who are members of the government. You’ll need to call to get this deal. The phone number is 800-433-7300.
Active duty military members also receive free checked bags (up to three for leisure travel and five for those traveling on orders) and can board in the first boarding group.
Additionally, American Airlines offers 10% off vacation packages to those with a VetRewards membership.
Delta Air Lines
You’ll get discount military flights with Delta Air Lines if you’re an active duty service member. This benefit extends to Delta Vacations packages as well. To score these deals, you’ll need to call 800-221-1212.
Active duty military members also receive between three and five checked bags, with varying weight limits, depending on your class of service and if you’re flying on military orders or for leisure.
JetBlue Airways
JetBlue Airways provides a 5% discount on airfare to those who are active duty in the military, and only applies when you’re not traveling on orders.
The discount applies to all fare classes and destinations, even when traveling abroad, and includes two free checked bags.
You’ll need a VetRewards member ID to take advantage of the discount. To book your tickets, call 800-538-2583. The typical $25 service fee for booking over the phone is also waived.
Hawaiian Airlines
Hawaiian Airlines partners exclusively with Veteran’s Advantage to offer discounts to the armed forces. Members of VetRewards can get 5% off economy fares for all flight destinations. Business class flights are not eligible for the promotion.
Southwest Airlines
Southwest Airlines offers military pricing to those who are active duty as well as eligible government employees. The exact discount is unpublished, and you’ll need to call 800-435-9792 to book with the discount.
Military members on active duty may also bring more than two checked bags for free when flying the airline, weighing up to 100 pounds each. The baggage limit for all passengers — military members included — is 20 bags per flight.
United Airlines
Like Hawaiian Airlines, you’ll need to be enrolled with VetRewards from Veteran’s Advantage if you’re a military member seeking discounts on United flights. The total discount amount is 5% and is valid on all fare classes except basic economy. This special pricing has several limitations:
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Flight must originate in the United States or Canada.
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Flights must be going to the United States, Canada, Mexico, Europe, Central America or the Caribbean.
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Valid only on United-operated flights.
United provides some benefits to active duty service members and those who have been discharged in the last seven days, including free extra checked bags. For those traveling in uniform or are on leave, complimentary United Club lounge access is also provided.
About Veteran’s Advantage, VetRewards
Many airlines have teamed up with Veteran’s Advantage and its associated VetRewards program to offer cheap flights for military veterans — in some cases, it’s the only way to receive a discount. So what is Veteran’s Advantage?
Veteran’s Advantage is a third-party membership website available to both active duty and veteran service members. A month-to-month plan will cost you $9.99. Otherwise, it’s possible to purchase several years of access for less.
For example, a five-year membership costs around $200, which constitutes a large savings versus a monthly plan. If you’re a frequent traveler, signing up for a VetRewards account can save you money overall.
Baggage discounts for military members
Nearly all airlines offer special perks for those traveling with luggage —even low-cost carriers such as Frontier Airlines and Spirit Airlines are willing to give you free checked bags if you’re in the military.
🤓Nerdy Tip
Some airlines, such as United, also provide complimentary airport lounge access to active duty military members, though requirements — such as traveling on official orders — can vary.
These waived bag fee benefits vary depending on whether you’re changing your duty station or simply traveling for leisure. Make sure you verify how it works with your airline of choice before showing up at the airport.
About American Forces Travel
Another way to receive travel discounts is through American Forces Travel, a specialty website available only to those who are serving or who have served. It’s an official Morale, Welfare and Recreation site and uses your personal information to verify eligibility.
American Forces Travel isn’t just limited to military flight discounts. The website also has hotels, rental cars, cruises, event tickets and travel packages available at a discount.
If you’re looking for flights with military discounts
Joining the military and serving your country is no small feat. Many companies, including airlines, recognize your service, which is why they’ve made special accommodations for those in the armed forces.
Many major U.S. airlines offer some form of discount for those in the military, while others have partnered with Veteran’s Advantage to provide savings to active duty and veterans alike.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2024, including those best for:
Source: nerdwallet.com
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Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as “Credible” below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.
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Paw Protect
Annual max coverage
Reimbursement rates
Deductibles
Policy highlight
Free access to PawSupport, a 24/7 vet helpline available even on holidays.
Pros and cons
- Offers reimbursement for sick vet exam fees.
- Multipet and military discounts available.
- Wellness plan includes prescription diet food coverage.
- No mobile app.
- 6-month waiting period for orthopedic conditions in dogs.
- Claims process could be quicker.
Bottom line
Paw Protect insurance offers an unlimited annual coverage option and access to a 24/7 vet helpline. But it has a slower claims process than some other insurers and no mobile app.
About Paw Protect pet insurance
Paw Protect earned 4.5 stars out of 5 for overall performance. It stands out for having comprehensive accident and illness coverage that includes congenital and hereditary conditions, dental illnesses, behavioral issues and alternative therapies.
Strengths: Paw Protect’s vet telehealth service is free for all policyholders. Available by phone, live chat or video call, it offers round-the-clock support if you have any health concerns about your pet.
Weaknesses: Paw Protect doesn’t have a mobile app to manage your policy, and it’s slower than some other pet insurers in handling claims.
Paw Protect pet insurance plans and coverage
Paw Protect has a few plans to choose from.
Note: Coverage options and availability may vary depending on where you live and the age and breed of your pet.
Accident and illness
Paw Protect’s accident and illness plan is a comprehensive plan that covers:
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Sick vet exam fees and medical waste disposal.
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Emergency and specialist care.
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Prescription medication.
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X-rays, ultrasounds and other diagnostic tests.
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Hospitalization and overnight stays.
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Dental injuries.
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Dental illnesses, up to $1,000 per policy term.
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Congenital and genetic conditions, including hip dysplasia, ACL injuries, allergies and intervertebral disc disease (IVDD).
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Cancer and chronic conditions.
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Acupuncture, chiropractic treatment and laser therapy.
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Behavioral therapy.
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Euthanasia.
Accident only
Paw Protect’s accident-only plan is generally for older pets. It covers treatment for accidents like broken bones, bite wounds, ingested objects and car accidents. It doesn’t cover any claims related to illnesses.
Wellness Rewards
Paw Protect’s Wellness Rewards is an extra package you can add to your insurance plan. It’s offered through Embrace pet insurance and pays for routine care up to $250, $450 or $650 per year. You can get reimbursed for:
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Wellness exam fees.
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Flea, tick and heartworm prevention.
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Microchipping.
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Nutritional supplements and prescription food.
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Fecal and blood tests.
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Pet activity monitors.
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Hip dysplasia exams.
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Routine chiropractic, acupuncture, massage therapy and reiki care.
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Routine anal gland expression.
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Cremation and burial expenses.
What’s not covered
Paw Protect pet insurance doesn’t cover:
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Breeding, pregnancy or giving birth.
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DNA testing or cloning.
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Intentional injuries by you or someone in your household.
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Injuries or illnesses from racing, fighting, cruelty or neglect.
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Cosmetic procedures like tail docking or ear-cropping.
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Routine veterinary care, unless you have a wellness plan.
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Avian flu or nuclear war.
If you have an accident-only plan, Paw Protect also won’t cover any illness-related claims.
Paw Protect coverage options
Deductibles: A pet insurance deductible is the amount you have to pay before your plan reimburses you for vet expenses. Paw Protect’s annual deductible options are typically $100, $250 and $500.
Reimbursement amounts: Pet owners have the option to get reimbursed for 70%, 80% or 90% of vet expenses.
Paw Protect applies your reimbursement percentage to the vet bill first, before subtracting your deductible. Say you have a $2,000 vet bill, an 80% reimbursement rate and a $500 deductible. To determine your eligible expenses, Paw Protect calculates 80% of $2,000, which is $1,600. Then, it subtracts your $500 deductible, so your reimbursement amount is $1,100.
Some pet insurers subtract your deductible from the vet bill before applying the reimbursement rate. Using the same figures, that method would result in a slightly higher $1,200 payout ($2,000 bill – $500 deductible = $1,500. 80% of $1,500 is $1,200).
Coverage limits: You can choose an annual coverage limit of $5,000, $10,000 or unlimited.
Restrictions and waiting periods
Age restrictions: At Paw Protect, pets must be at least 2 months old to get a policy. The company’s website states that the maximum age of enrollment is 5 years for an accident and illness plan, with accident-only coverage available for older pets. However, in certain states, we were able to get online quotes for accident and illness plans for pets older than 5. We’ve reached out to Paw Protect for clarification.
Waiting periods: A waiting period is the time between when you buy your policy and when your coverage starts. Paw Protect has a two-day waiting period for accidents and a 14-day waiting period for illnesses. Dogs also have a 12-month waiting period for orthopedic conditions like hip dysplasia. Paw Protect may waive the orthopedic waiting period if your vet performs an examination after enrollment and verifies that your dog has no orthopedic issues.
Paw Protect pet insurance rates
The cost of Paw Protect pet insurance will depend on where you live and your pet’s age and breed. Below are sample monthly rates from Paw Protect for six common dog breeds at ages 2 and 8. Our sample dogs lived in Katy, Texas, and had accident and illness coverage with a $250 deductible, $5,000 of annual coverage and an 80% reimbursement rate. Your own price will vary.
French bulldog |
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German shepherd |
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Golden retriever |
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Labrador retriever |
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Medium mixed-breed dog |
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We also gathered rates for a variety of cat breeds with the same coverage limits as above. Rates below are sample monthly premiums for cats living in Katy, Texas.
Domestic shorthair |
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Exotic longhair |
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Maine coon |
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Discounts
Paw Protect offers a 10% multipet discount and a 5% military discount.
State availability
Paw Protect is licensed to sell policies in all 50 states and Washington, D.C. Wellness plans aren’t available in Rhode Island.
Availability may change at any time. Coverage may not be available to all pets in a given state.
Consumer experience
Website: Paw Protect’s website is easy to navigate and has an education center with information about pet insurance. You can also get a quote, view sample policies and see how Paw Protect compares with other insurance companies.
App: Paw Protect doesn’t have a mobile app.
Claims: The fastest way to submit a claim is by logging into your account on Paw Protect’s website. But you can also email, fax or mail your claim forms. It takes about 10 to 15 business days to process an accident or illness claim and about five business days to process a wellness claim. You have your entire policy term to file a claim, plus an extra 60 days after renewal.
Customer service: You can call Paw Protect customer service at 888-812-6704 Monday through Friday from 9 a.m. to 8 p.m. ET and Saturdays from 10 a.m. to 2 p.m. ET. You can also email customer support.
Other pet insurance companies to consider
Not ready to make a decision? You may be interested in these other pet insurance companies:
How we review pet insurance
Our writers and editors follow strict editorial guidelines that ensure fairness and accuracy to help you choose the financial products that work best for you. In our pet insurance reviews, we consider coverage, discounts, financial strength ratings from AM Best and more to determine our star ratings.
Our rating system rewards companies that cover a wide range of potential expenses, offer many ways to customize your plan and have a strong financial rating. Within the consumer experience category, we looked at features such as mobile app ratings and whether the company offers direct vet payments. To calculate each insurer’s rating, we adjusted the scores to a curved 5-point scale.
Does Paw Protect cover vaccinations?
Paw Protect covers vaccinations under its wellness plan. With this add-on, you can get reimbursed for routine care, up to $250, $450 or $650 per year. For all plans, you save about $25 per year if using the total benefit amount. In addition to vaccines, this plan covers things like wellness exam fees, spaying and neutering, microchipping, dental cleaning, and routine blood work.
How does Paw Protect insurance work?
Paw Protect insurance helps cover the costs if your pet gets sick or inured. You pay a monthly or annual fee, and if your pet needs to go to the vet, you pay the bill, then submit a claim for reimbursement. The amount you get back depends on the coverage options you’ve selected.
How do I cancel Paw Protect pet insurance?
You can cancel your Paw Protect policy at any time by calling customer service.
Source: nerdwallet.com
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This ApartmentGuide article takes you through the pros and cons of living in Virginia, where renters enjoy access to some of the state’s most walkable neighborhoods, alongside charming living options. Whether you’re drawn to the charm of the cobblestone streets of Lynchburg or the ease of urban living in Alexandria, Virginia offers something for everyone. However, every state has its drawbacks, so get ready to explore what “Old Dominion” is all about.
Renting in Virginia snapshot
1. Pro: Rich historical sites
Virginia’s landscape is dotted with pivotal historical sites that offer a deep dive into America’s past. From the Jamestown Settlement, the first permanent English settlement in the Americas, to the historic battlefields of the Civil War, residents and visitors alike have the unique opportunity to walk through history.
2. Con: High pollen allergies
Virginia’s diverse climate contributes to a high pollen count, especially during the spring and fall. This can be particularly challenging for residents with allergies, as cities like Richmond and Virginia Beach often rank high in the lists of worst cities for allergy sufferers with top allergens being maple, juniper and birch trees.
3. Pro: Diverse climate
The state enjoys a diverse climate, offering residents a taste of all four seasons. From the warm, sandy beaches of Virginia Beach in the summer to the snow-covered mountains of the Shenandoah Valley in winter, Virginia provides a variety of environments to enjoy year-round.
4. Con: Traffic congestion
Northern Virginia, particularly the areas surrounding Washington D.C., is notorious for its traffic congestion, with major highways such as Interstate 495 and Interstate 66 experiencing heavy traffic during rush hours. Commuters can expect long delays on these routes, making it one of the more challenging aspects of living in this otherwise picturesque state.
5. Pro: Culinary scene
Virginia’s culinary scene boasts a mix of flavors, drawing inspiration from its diverse cultural heritage and bountiful agricultural resources. From the iconic Chesapeake Bay blue crabs to the savory Southern barbecue of Richmond’s renowned joints, Virginia offers a delectable array of regional specialties.
6. Con: High cost of living in some regions
While Virginia offers many benefits, the cost of living in certain areas, especially Northern Virginia, can be quite high. This includes housing, healthcare, and transportation, making it a significant consideration for anyone planning to move to the state. Take Alexandria for example, where the median home sale price is $653,750 and the average rent for a one-bedroom is $2,065. These high costs can be challenging for those on a budget.
7. Pro: Outdoor activities
With its vast natural landscapes, Virginia is a haven for outdoor enthusiasts. The Appalachian Trail offers hiking opportunities, while the Chesapeake Bay is perfect for boating and fishing. The state’s parks and recreation areas provide countless ways to enjoy the great outdoors.
8. Con: High humidity
Virginia experiences high humidity levels, especially during the summer months, due to its coastal location and proximity to the Chesapeake Bay and Atlantic Ocean. The humid conditions can often lead to discomfort, with residents facing sticky and muggy weather that exacerbates the feeling of heat.
9. Pro: Proximity to Washington D.C
The proximity to Washington D.C. provides residents of Virginia with access to a plethora of career opportunities, cultural attractions, and political institutions. Moreover, residents can enjoy the diverse array of museums, theaters, restaurants, and entertainment options that Washington D.C. has to offer, enriching their overall quality of life.
10. Con: Hurricane risk
Being on the Atlantic coast, Virginia is susceptible to hurricanes and tropical storms, particularly in the late summer and fall. Coastal areas are most at risk, requiring residents to have emergency plans in place and sometimes leading to evacuations.
11. Pro: Strong job market
Virginia boasts a strong job market, particularly in sectors like technology, defense, and government contracting. The presence of the Pentagon and numerous military bases provides stability and opportunities for those in the defense sector and beyond. Additionally, the state’s proximity to Washington D.C. offers access to a wide range of government agencies, consulting firms, and non-profit organizations.
12. Con: Environmental degradation:
Rapid urbanization and industrial development in certain areas of Virginia contribute to environmental degradation, including air and water pollution, habitat loss, and deforestation, which can harm ecosystems and wildlife. For example, the expansion of industrial facilities along the James River in Richmond has led to increased water pollution and habitat destruction.
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from ApartmentGuide.
Source: apartmentguide.com
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Key takeaways
- Jumbo loans are large-amount mortgages, generally used to buy more expensive properties.
- The size of a jumbo varies by geographic location, but it generally means a loan of more than $766,550 in most parts of the U.S. (as of 2024).
- The interest rates on jumbo loans are different (usually higher) than those on regular, conforming mortgages.
- Jumbo loans have stricter criteria for borrowers: a higher credit score, larger income/assets, and bigger down payments.
A jumbo loan is a mortgage for an amount that exceeds the standard loan size, as set by the federal government. If you’re buying a mansion — or just a regular home in a highly pricey neighborhood — you’ll need an extra amount of financing to get it.
It’s not just the principal amount, though: Everything on these mortgages can be super-sized. Let’s look at what jumbo loans are, and when you need one.
What is a jumbo loan?
As the name implies, a jumbo loan covers a larger-than-normal loan amount. More specifically, a jumbo loan is any mortgage that exceeds an area’s conforming loan limits, which are set yearly by the Federal Housing and Finance Agency (FHFA).
Many mortgage lenders offer jumbo loans up to $3 million or $5 million. You might be able to find jumbo loans in even higher amounts, especially if you work with a mortgage broker who specializes in them.
Jumbo loans can be used for primary residences, investment properties and vacation homes.
How do jumbo loans work?
Despite their “nonconforming” status, jumbo loans aren’t much different from traditional mortgages when it comes to the way they work. The payment schedules and other details are generally the same. Borrowers can get fixed- or adjustable-rate jumbo mortgages with various term options.
However, the interest rates on jumbo loans often differ from their conforming loan counterparts. Historically, they’ve been higher; however, the gap has closed of late. As of April 1, 2024, the 30-year jumbo rate was 7.06 percent, according to Bankrate’s survey of national lenders, vs. 6.93 percent for the traditional 30-year fixed loan. Part of the reason for this is an increase in guaranteed fees charged on conforming loans to lenders by Fannie Mae and Freddie Mac.
The maximum size of a jumbo loan varies by your mortgage lender and location, as does the exact qualifying guidelines. Because the market for jumbo loans is smaller, you might need to shop around a bit more to find one. It’s usually beneficial to work with a mortgage lender who specializes in them.
Jumbo loans vs. conforming loans
Most loans are conforming loans, meaning they conform to, or follow, specific criteria followed by Fannie Mae and Freddie Mac, the government-sponsored enterprises that buy most U.S. home loans. Jumbo loans do not adhere to these criteria; hence, they fall into the financing category of nonconforming loans.
You’ll have more buying power with a jumbo loan than with a conforming loan, but you’ll pay more in interest since your balance is bigger. To qualify for a jumbo loan, you’ll need a higher credit score — and possibly a higher income, down payment or more assets — than you would for a conforming loan. For example, U.S. Bank calls for a minimum 740 credit score to be considered for a jumbo loan versus 620 for a conforming loan.
Jumbo loan limits
You need a jumbo loan if you want to finance a property that costs more than a certain amount the FHFA sets for your state each year. If a mortgage exceeds the FHFA’s conforming loan limit, market-makers Fannie Mae and Freddie Mac won’t back or purchase it, thus making it a riskier proposition for a lender.
For 2024, the limit for conforming loans for most of the continental U.S. is $766,550. In Hawaii, Alaska and certain counties where median home prices are significantly higher than average, the conforming loan limit goes up, too — as high as $1,149,825.
Because homes that cost above these sums require a jumbo loan, these ceilings are often referred to as “jumbo loan limits” — though technically, they’re the starting points for jumbos.
Loan limits by state
The table below provides state-by-state conforming loan limits for 2024. In many states, the limits vary by county, depending on how high-cost the real estate market is there.
How to qualify for a jumbo loan
Jumbo lenders typically impose stricter underwriting guidelines than conforming mortgage lenders do. Because the loans aren’t backed by Fannie or Freddie, jumbo mortgages pose more risk to the lender. Overall, if you want to take out one of these hefty loans, you will need to make sure your financial profile is very good or excellent.
There are three common hurdles borrowers must clear to get approved for a jumbo loan: income, credit score and cash reserves (for making a down payment).
Jumbo loan income requirements
Yes, it’ll help if you have a large income — and, just as importantly, if you have a low-debt-to-income (DTI) ratio, the percentage of your monthly income that goes to debt payments. If your outgo is a significant part of your incoming — like more than one-third — you might not qualify for a jumbo loan unless your credit score is excellent or you have a sizable amount of reserves or liquid assets.
Jumbo loan credit score
Higher credit scores are needed to qualify for a jumbo versus a conforming loan. You will need, at the very least, a minimum score of 700 (most likely) to qualify for one. “The average is around 740, although I have seen some as low as 660,” says Robert Cohan, president of Carlyle Financial based in San Francisco. “[But] if you’re high-leveraged and you have a low credit score, it’s going to be hard to get a jumbo loan.”
Keep in mind:
Most jumbo loans are conventional loans (offered by private lenders, vs. a government agency). One exception is the VA jumbo loan. Active military or veterans can qualify with a significantly lower credit score, like in the mid-to-low 600s.
Jumbo loan down payment
You may have to make a significant down payment to qualify for the jumbo loan. The down payment on a jumbo loan is typically 10 percent to 20 percent (and sometimes more). “Anything lower than a 10 percent down payment and you’re probably going to pay for it in higher rates,” says Cohan (assuming you can get the loan at all). Be prepared to show enough reserves, or liquid assets, to cover between six and 12 months’ mortgage payments.
Is a jumbo loan right for me?
Jumbos are meant for buyers with a substantial stable income and ample resources. You’ll need strong credit, a low debt-to-income ratio and at least six months of cash reserves to qualify.
Research the conforming loan limits in your region. If the homes you’re interested in buying do not fall within conforming loan guidelines, a jumbo loan might be an appropriate alternative — in fact, your only alternative, if you want to live in a high-cost county.
That said, a jumbo loan is not for you if it means you must stretch your finances to the brink to get one. Or if it means you’ll end up being house broke or house poor, meaning your homeownership costs squeeze out everything else in your budget.
Pros and cons of a jumbo loan
Jumbo loans can help you finance a large home purchase, however, you’ll pay more in interest over time than with a conforming loan. Here are some additional pros and cons:
Pros
- Allows you to borrow more than a traditional mortgage
- Competitive interest rates
- Opportunity to buy a more expensive home/live in a high-cost region
Cons
- A higher credit score is required to qualify, plus a larger annual income
- Must have cash reserves to cover 6 to 12 months of payments
- Higher interest rates
There may also be situations in which a jumbo loan loan makes sense. For instance:
- If you have to live in a more expensive part of the country
- If you see a good deal on a luxury piece of property
- If the jumbo loan rates are close to conforming loan rates (why not get more bang for your financing buck)
- If you have gotten, or expect to soon get, a windfall or big rise in income, so the cash reserve requirement is no problem (real estate isn’t the worst investment in the world)
Jumbo loan FAQ
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If you would like to take out a jumbo mortgage, you’ll need to make sure your credit is very good to excellent, as a strong credit score is crucial for getting the best rates. Like any home loan, it is worth shopping around with lenders to see who might offer you the best rate. If you can put down a larger down payment — above and beyond the standard 20 percent — it may help you qualify for a lower rate as well.
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The closing costs for a jumbo loan are similar to its conforming loan counterpart — 2 to 5 percent of the home’s purchase price. But while the percentage is the same, the property’s higher price means you’ll end up paying more in fees. For example, with 2 to 5 percent in closing costs, a loan on a $1 million dollar property could cost $20,000 to $50,000 in closing costs alone. For a $500,000 property, your costs would be half that range.
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There are reduced tax benefits with a jumbo loan compared to a standard mortgage. For mortgages taken out after Dec. 16, 2017, the IRS allows for deducting home mortgage interest on the first $750,000 of mortgage debt, or $375,000 if you are married and file separate tax returns. So, taking out a jumbo loan could mean you will not be able to write off the entirety of your mortgage interest on federal tax returns each year. There are higher mortgage interest deductions, however, for homeowners whose mortgage was established before December 16, 2017. In that case, mortgage interest up to $1 million or $500,000 for those who are married filing separately, can be deducted on tax returns.
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Yes, the Department of Veterans Affairs (VA) guarantees (it technically doesn’t offer) jumbo loans. The minimum financial requirements the VA sets are more lax than a conventional jumbo loan: you’ll need a 620 credit score and no cash reserves are required (though lenders may set higher requirements). If you’re a qualified buyer with your full VA entitlement, you may also not need a down payment. Bear in mind, though, that lenders may set their own stricter requirements.
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You can refinance your jumbo loan, but it may be more difficult than refinancing a conforming loan. That’s largely because lenders have different financial requirements when it comes to jumbo mortgages, potentially limiting the pool of lenders you can work with. On top of that, jumbo loans come with higher closing costs, which makes your break-even period longer than it would with a conforming loan.
Additional reporting by Mia Taylor
Source: bankrate.com