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Apache is functioning normally

June 8, 2023 by Brett Tams

Back in the day, if you wanted a loan to pay off your car or credit cards, you’d go to a bank or a credit union, sit down with a loan officer, and wait for them to tell you yes or no as they “crunched the numbers.”

But now peer-to-peer (P2P) lending has come onto the market, offering loans to borrowers directly from individuals — and usually carrying more favorable terms for those without a great credit profile. Borrowers can access up to $50,000 (or more) from lenders, with fixed term repayment scheduled and reasonable interest rates. Investors can also become lenders on P2P platforms, earning interest collected on loans as a passive form of investment income.

Let’s break down some of the best peer-to-peer lending sites for both borrowers and investors, so you can determine which option is best for you.

What’s Ahead:

Overview of the best peer-to-peer lending sites

  • Best for those with high credit scores: Prosper
  • Best for crypto-backed loans: BlockFi
  • Best for young people: Upstart
  • Best for a payday loan alternative: SoLo Funds
  • Best for small businesses: FundingCircle
  • Best for first-time borrowers: Kiva

Prosper: Best for those with high credit scores

Prosper 210

  • APR: 6.99% to 35.99%
  • Term: 2 to 5 years

Prosper is the OG peer-to-peer lender in the market. It was founded in 2005 as the very first peer-to-peer lending marketplace in the U.S. According to their website, they’ve coordinated over $22 billion in loans.

Borrowing with Prosper

If you’re a borrower, you can get personal loans up to $50,000 with a fixed rate and a fixed term from two to five years in length. Your monthly payment is fixed for the duration of the loan. There are no prepayment penalties, either, so if you can pay it off early, you won’t be penalized.

You can get an instant look at what your rate would be and, once approved, the money gets deposited directly into your bank account.

Investing with Prosper

As an investor, you have many options on loans to choose from. There are seven different “risk” categories that you can select from, each with their own estimated return and level of risk. Here’s a look at the risk levels and the estimated potential loss, according to Prosper:

  • AA – 0.00 – 1.99%
  • A – 2.00 – 3.99%
  • B – 4.00 – 5.99%
  • C – 6.00 – 8.99%
  • D – 9.00 – 11.99%
  • E – 12.00 – 14.99%
  • HR (High Risk) – ≥ 15.00%

As you can see, the lower the letter, the greater the risk of default, hence a higher estimated potential loss. With just a $25 minimum investment, you can spread your risk out across all seven categories to provide your portfolio some balance.

The borrowers that you’re lending to are also above U.S. averages regarding their FICO score and average annual income.

Learn more about Prosper or read our full review.

BlockFi: Best for crypto-backed loans

  • APR: 4.5% – 9.75%
  • Term: 12 months

BlockFi is a popular crypto lending platform that offers crypto-backed loans to borrowers and pays out interest to lenders. BlockFi offers instant loans and requires no credit checks for borrowers. All loans are collateralized, meaning borrowers will need to lock in their crypto to borrow against it.

Borrowing with BlockFi

If you’re a borrower, you can get a crypto loan for up to 50% of the value of your crypto, with rates ranging from 4.5% to 9.75% APR, depending on the amount of collateral. Payments are made monthly and are fixed for the duration of the loan.

Interest rates are determined by the amount of collateral deposited and the loan-to-value (LTV) of the overall loan. There is a 2% origination fee on all loans.

  • Loan rate – 9.75% (50% LTV)
  • Loan rate – 7.9% (35% LTV)
  • Loan rate – 4.5% (20% LTV)

Bitcoin (BTC), Ether (ETH), Paxos Gold (PAXG), or Litecoin (LTC) can be used as collateral for the loan, and can be liquidated if the LTV goes above the original LTV of the loan.

Investing with BlockFi

BlockFi offers interest accounts for users who deposit crypto. The funds are used for crypto lending, and interest is paid out in the native crypto deposited. Interest rates vary by cryptocurrency, and range from 0.10% APY up to 7.50% APY. Stablecoins (such as USDC) pay out the highest rates.

Crypto interest accounts are not available to U.S. investors, as BlockFi was sued by the SEC for violating securities laws.

Read our full review.

BlockFi Bankruptcy Notice -On November 10, 2022, BlockFi announced that it had to suspend withdrawals from its platform due to the FTX liquidity crisis. As a result, consumers should not be using the BlockFi platform. As of November 28, 2022, BlockFi officially declared bankruptcy.

Upstart: Best for young people

Upstart 210

  • APR: 5.6% – 35.99%
  • Term: 3 or 5 years

Upstart is an innovative peer-to-peer lending company that was founded by three ex-Google employees. In addition to being a P2P lending platform, they’ve also created intuitive software for banks and financial institutions.

What’s unique about Upstart is the way they determine risk. Where most creditors will look at a lender’s FICO score, Upstart has created a system that uses AI/ML (artificial intelligence/machine learning) to assess the risk of a borrower. This has led to significantly lower loss rates than some of its peer companies. Combine that with an excellent TrustPilot rating, and this company is certainly making waves in the P2P marketplace.

Borrowing with Upstart

Borrowers can get loans from $1,000 up to $50,000 with rates as low as 5.6%. Terms are either three or five years, but there’s no prepayment penalty.

Using their AI/ML technology, Upstart looks at not only your FICO score and years of credit history, but also factors in your education, area of study, and job history before determining your creditworthiness. Their site claims that their borrowers save an estimated 43% compared to other credit card rates.

Investing with Upstart

Investing with Upstart is also pretty intuitive. Unlike other P2P platforms, you can set up a self-directed IRA using the investments from peer-to-peer lending. This is a unique feature that many investors should be attracted to.

Like other platforms, you can set up automated investing by choosing a specific strategy and automatically depositing funds.

Upstart claims to have tripled their growth in the last three years due heavily to their proprietary underwriting model, so it might be worth a shot to consider this option.

Learn more about Upstart or read our Upstart review.

SoLo Funds: Best for a payday loan alternative

  • APR: 0% (tipping optional)
  • Term: Up to 35 days

SoLo Funds is a peer-to-peer platform that functions as a short-term lender, similar to payday loans. With term lengths only lasting for up to 35 days, loans must be paid back in a narrow timeframe. But instead of charging fees, borrowers can leave an optional tip instead.

SoLo Funds is an affordable option for clients who are in a pinch and need an advance on payday, but there are hefty fees if loans are not paid back within 35 days. Users will need to pay a 10% penalty plus a third-party transaction fee if late.

Borrowing with SoLo Funds

Borrowers can take out loans up to $575 for a maximum of 35 days. Loans do not charge fees, but allow borrowers to select an optional tip amount to lenders.

Loan applications only take a few minutes, and while most loans post within a few days, some may be instantly approved, offering same-day funding with money transferred to borrowers within a few hours.

Loans must be paid back in full within 35 days, or there is a 10% penalty plus other transaction fees. There is no option to roll the loan over.

Investing with SoLo Funds

Lending is fairly straightforward, with a simple sign-up process and no pre-qualifications needed. Since the loans are smaller amounts (up to $575), there are no minimums required for lending.

SoLo Funds has a marketplace of loan requests from borrowers, with details specified on each. Each loan request shows the amount needed plus the tip given by the borrower for the loan. Each borrower also has a SoLo Score, on a scale from 40 to 99, with higher scores showing more “worthiness” for paying back a loan. Loans can go into default, and if needed, to collections through a third party. There is a risk of total loss with SoLo Funds investing, though the platform does offer insurance against loss for a fee.

Learn more about SoLo Funds.

FundingCircle: Best for small businesses

Best Peer-To-Peer Lending Sites For Borrowers And Investors REWRITE - FundingCircle

  • APR: 11.29% to 30.12%
  • Term: 6 months to 7 years

FundingCircle is a small business peer-to-peer platform. The company was founded with the goal of helping small business owners reach their dreams by providing them the funds necessary to grow.

So far, they’ve helped 130,000 small businesses across the world through investment funds by 71,000 investors across the globe. FundingCircle is different in that it focuses on more substantial dollar amounts for companies that are ready for massive growth. They also have an excellent TrustPilot rating.

Borrowing with FundingCircle

As a borrower, the minimum loan is $25,000 and can go all the way up to $500,000. Rates come as low as 5.99%, and terms can be anywhere from six months to seven years. There are no prepayment penalties, and you can use the funds however you deem necessary — as long as they are for your business.

You will pay an origination fee, but unlike other small business loans, funding is much quicker (you can be fully funded as quickly as 1 business day).

Investing with FundingCircle

As an investor, you’ll need to shell out a minimum of $25,000. If that didn’t knock you out of the race, then read on.

According to FundingCircle, you’ll “Invest in American small businesses (not start-ups) that have established operating history, cash flow, and a strategic plan for growth.” While the risk is still there, you’re funding established businesses looking for extra growth.

You can manage your investments and pick individual loans or set up an automated strategy, similar to Betterment, where you’ll set your investment criteria and get a portfolio designed for you.

Learn more about FundingCircle.

Kiva: Best for first-time borrowers

Best Peer-To-Peer Lending Sites For Borrowers And Investors REWRITE - Kiva

  • APR: 0%
  • Term: Up to 3 years

If you want to do some good in the world, you’ll find an entirely different experience in P2P with Kiva. Kiva is a San Francisco-based non-profit that helps people across the world fund their businesses at no interest. They were founded in 2005 with a “mission to connect people through lending to alleviate poverty.”

Borrowing with Kiva

If you’d like to borrow money to grow your business, you can get up to $15,000 with no interest. That’s right, no interest. After making an application and getting pre-qualified, you’ll have the option to invite friends and family to lend to you.

During that same time, you can take your loan public by making your loan visible to over 1.6 million people across the world. Like Kickstarter, you’ll tell a story about yourself and your business, and why you need the money. People can then contribute to your cause until your loan is 100% funded. After that, you can use the funds for business purposes and work on repaying your loan with terms up to three years.

Investing with Kiva

As a lender, you can choose to lend money to people in a variety of categories, including loans for single parents, people in conflict zones, or businesses that focus on food or health. Kiva has various filters set up so you can narrow down exactly the type of person and business you want to lend your money to. You can lend as little as $25, and remember, you won’t get anything but satisfaction in return — there’s no interest.

You can pick from a variety of loans and add them to your “basket,” then check out with one simple process. You’ll then receive payments over time, based on the repayment schedule chosen by the borrower and their ability to repay. The money will go right back into your Kiva account so you can use it again or withdraw it. There are risks to lending, of course, but Kiva claims to have a 96% repayment rate for their loans. Just remember, you’re not doing this as an investment, you’re doing it to help out another person.

Learn more about Kiva.

What is peer-to-peer lending?

As the name suggests, peer-to-peer lending involves private individuals making loans to other individuals. The system runs contrary to the traditional model of banks and credit unions providing financial services because it cuts out the middleman.

While peer-to-peer lending had a surge in users over the past decade, in the past few years, some P2P lending companies have shuttered their services, including StreetShares, Peerform, and LendingClub.

How does peer-to-peer lending work?

Peer-to-peer lending shares many similarities with traditional lending:

  1. You fill out an application with your financial and personal information, including the loan’s size, tax returns, and government-issued identification.
  2. The lender will review your application before posting it on the site for investors.
  3. Investors get to play the part of a loan officer, reviewing a list of applications and deciding where they might want to contribute.
  4. The platform will indicate how risky the loan is and the potential return on investment.
  5. Funding takes anywhere from one day up to two weeks.

Is peer-to-peer lending safe?

No one would say that peer-to-peer lending is 100% safe. No form of investing is. Many of the best peer-to-peer lending sites vet borrowers and investors to mitigate risk. The review process helps eliminate untrustworthy candidates, so borrowers can receive their loan and investors can earn interest.

Read more: Should you invest in peer-to-peer loans?

Pros & cons of P2P lending for investors

Pros

  • An attractive alternative to more traditional investments — You can round out your portfolio that might exclusively include stocks, bonds, and mutual funds. Some platforms merge private and public equities, so you can make all your investments in one place.
  • Most lending platforms let you select multiple loans at once — The variation enables you to reduce your risk exposure while potentially earning higher yields than a CD or savings account.
  • Feel good about your contribution — With sites like Kiva, you know that your money is going toward a humanitarian purpose.

Cons

  • Risk of default — When you lend money to individuals, you risk them defaulting. Peer-to-peer lending sites don’t come with FDIC insurance like a CD or savings account.
  • P2P loans lack the liquidity of stocks or bonds — Most loans are for three to five years, so you would have to wait until then to withdraw money.
  • Inequality — Some platforms, such as Funding Circle, only give access to accredited investors, so not everyone has equal access to lending opportunities.

Pros & cons of P2P lending for borrowers

Pros

  • You can circumvent the traditional bureaucracy of brick-and-mortar banks — Instead of waiting in line and negotiating with a loan officer, you have access to a fast, online experience. Because online platforms don’t have to worry about physical overhead, many can give borrowers competitive interest rates.
  • P2P loans typically aren’t as strict as banks or credit unions — The lax approach makes it easier to secure a loan if you have fair or poor credit history.
  • Often no prepayment penalties — You don’t have to worry about prepayment penalties in many cases.

Cons

  • Borrowers face more hurdles if they have a low credit score — Interest rates can go as high as 36% for those with lower scores, while some platforms don’t offer financial services to anyone with a credit score below 630.
  • Possibly high fees — Some sites have origination fees of 6%.
  • Impersonal — If you want the old-fashioned face-to-face borrowing experience, peer-to-peer lending isn’t for you. You don’t have a chance to sit down with your lender and hash out terms.
  • Loan caps around $50,000 — If you need more money, you’ll likely have to go to a bank or credit union.

Summary

Peer-to-peer lending is a great option for borrowers with less-than-stellar credit who want access to capital with reasonable terms and rates. P2P lending is ideal for small businesses and individuals who are looking for a personal loan that does not require mountains of paperwork, and that is funded quickly (usually within a few days).

But not all P2P lending platforms operate the same, and some can charge high origination fees and interest rates. Others require high minimum loan amounts to borrow as well, making them less accessible to some borrowers.

Investors can earn decent returns with P2P lending, but there is also the risk of default and the mess of going through collections agencies occasionally. Finding a solid platform with detailed risk mitigation strategies (such as borrower scores), and insurance against default can help alleviate these concerns, but it may eat into your profits.

While peer-to-peer lending is not seeing the massive growth of a few years ago, it is still a solid option for borrowers and investors alike.

Read more:

Source: moneyunder30.com

Posted in: Investing, Money Basics Tagged: 2, 2022, About, affordable, AI, All, Applications, apr, artificial intelligence, average, balance, Bank, bank account, bankruptcy, banks, before, best, betterment, bitcoin, bonds, Borrow, borrowers, borrowing, brick, business, business loans, car, categories, CD, chance, Collections, companies, company, cons, Consumers, Credit, credit card, credit cards, credit history, credit score, credit scores, credit union, Credit unions, creditors, Crisis, crypto, cryptocurrency, deposit, earn interest, earning, education, equities, experience, Family, FDIC, FDIC insurance, Fees, fico, fico score, Financial Services, Financial Wize, FinancialWize, fixed, fixed rate, food, ftx, fund, funds, goal, gold, good, Google, government, great, Grow, growth, health, history, hours, HR, in, Income, inequality, Insurance, interest, interest rates, Invest, Investing, investment, Investment Funds, investments, Investor, investors, IRA, job, kickstarter, knock, Learn, lend money, lenders, lending, liquidity, list, loan, Loan officer, Loans, low, LOWER, Make, making, manage, market, mess, model, money, More, more money, mountains, mutual funds, negotiating, november, offer, offers, one day, or, Original, Origination, origination fee, Other, P2P Lending, P2P loans, paperwork, parents, party, passive, Payday Loans, payments, peer-to-peer lending, Personal, personal information, personal loan, Personal Loans, place, plan, play, poor, Popular, portfolio, poverty, pretty, pros, race, rate, Rates, reach, ready, repayment, return, return on investment, returns, Review, right, risk, safe, san francisco, save, savings, Savings Account, SEC, securities, self-directed IRA, shares, short, simple, single, single parents, Sites, Small Business, small business loans, Software, stocks, story, Strategies, tax, tax returns, Technology, time, tipping, traditional, Transaction, transaction fees, under, Underwriting, unique, value, waves, will, work, young, young people

Apache is functioning normally

June 6, 2023 by Brett Tams

Hello, GRSers. Today, let’s revisit something I tacked on to the end of my nine lessons from The Millionaire Next Door:

[T]here are actually two benefits of learning to live on much less than your paycheck.

  • The first, of course, is that you can save more.
  • But secondly, it also means that you ultimately need to save less.

Permit me to demonstrate.

Someone who makes $50,000 but lives on just $40,000 can contribute $10,000 a year to her nest egg, and can retire when that nest egg is big enough to generate — along with Social Security and other benefits — $40,000 a year. However, someone who makes $50,000 but spends, say, $48,000 is contributing just $2,000 to a portfolio that must eventually help provide $48,000 a year in retirement. In other words, she’s saving less yet needs to accumulate more.

I thought I’d add some heft to this argument by drawing out the illustrations with some calculations (yay, math!), as well as add a third hypothetical person with a savings rate in between the aforementioned folks.

Save Now, Profit Later

Let’s assume we have three 40-year-olds who each earn $50,000. Here’s how they look in 2011:

  Investor A Investor B Investor C
Annual living expenses $40,000 $45,000 $48,000
Annual savings $10,000 $5,000 $2,000
Savings rate 20% 10% 4%
Savings rate is the percentage of income contributed toward retirement accounts.

Besides their ages and salaries, let’s assume they’ll also experience the same rate of inflation and wage growth (both 3% annually) and investment returns (8% annually). Finally, they each would like to retire at age 67, when they will be able to claim full Social Security benefits.

Note: Yes, I know we can argue about the assumed inflation rate and investment returns. Let’s not, though. They’re incidental to my main point here, which is comparing investors with different savings rates. Whatever inflation and investment returns the future holds, they will affect these investors identically.

Now, let’s fast-forward 27 years. Thanks to raises, each of our three guinea pigs earns an annual salary of $111,064. But they’ve maintained their savings rates, and thus their annual expenses (since they’re just different sides of the same 11,106,400 coins, assuming those coins are pennies). Here’s how things will look at the end of 2037.

  Investor A Investor B Investor C
Annual expenses $88,852 $99,958 $106,622
Portfolio value $1,245,623 $622,811 $249,125
Income coverage ratio 14.0 6.2 2.3
Income-coverage ratio is the portfolio value divided by annual expenses.

As you can see, the super-saver has more than a million dollars, quite a bit more than the other two investors. Furthermore, that portfolio is 14.0 times Investor A’s annual expenses; in other words, not factoring in investment growth, inflation, or any other retirement income (such as Social Security), Investor A’s portfolio could cover living expenses for fourteen years.

The other two portfolios would only last 6.2 and 2.3 years. This is mostly due to Investor A having a bigger portfolio, but it’s also due to Investor A needing less each year because she’s learned to live on a lower level of annual expenses. This is why living below your means is like saving for retirement twice: It allows you to contribute more to retirement accounts, and you can retire sooner because you need to accumulate less to cover your expenses in retirement.

Still Not Enough?

Thus ends the lesson about the whole “saving for retirement twice” concept. I hope you enjoyed the show.

For those who wish to continue, we’ll address another question: Does Investor A have enough to retire, even after saving 20% of income for 27 years? The answer: It depends. If Investor A were a real-life person on the verge of retirement, I’d recommend 1) a thorough retirement-plan analysis, and 2) a psychoanalysis of her parents for naming her Investor A. But since this is a blog post and there are plenty of funny YouTube videos to vye for your viewing (such as this one), we’ll do some simple calculations (yay, more math!). It involves two numbers:

  • Four percent of $1,245,623 or $49,825: Financial-planning geeks (and the people who love them) know the “4% rule,” which is a guideline for how much of a portfolio a retiree can spend in the first year of retirement. It’s just a rule of thumb, with plenty of quibbles. (For an explanation and some of the criticisms, read this from Vanguard’s John Ameriks.) But it serves as a good baseline for our purposes.
  • The future, inflated, annualized value of Social Security benefits, or $55,668: That’s the number I got from using the Quick Calculator from Social Security Online.

Add them together, and you get $105,493 — a good bit more than the $88,852 Investor A needs to cover living expenses. Perhaps she, being the great saver that she is, could retire before age 67.

But wait! That assumes she’ll receive her full Social Security benefit as currently estimated, and everyone knows that the program is bankrupt and all she’ll receive is “10% off” coupons from Denny’s. That leaves her with just that $49,825 — only half of what she needs.

Well, not quite. As I’ve written before in these cyber-pages, you will receive something from Social Security — but it’s prudent to assume it’ll be less than currently projected. The Social Security Administration estimates that future payroll taxes will cover approximately 75% of scheduled benefits in 2037. Let’s play it safer and assume Investor A will get just half of her benefit, or $27,834, for a total retirement income of $77,659. That’s still less than $88,852.

This is where that “thorough retirement-plan analysis” would come in. Could Investor A get by on less than $88,852? Can she downsize to a smaller home? Could she work just a few years more (by delaying Social Security to age 70, her benefit will be more than a third higher than if she takes it at age 67) or work part-time (and thus retire part-time)? She likely has a few options, which are more numerous and will entail less sacrifice than those available to Investor B and Investor C.

But even they have more options than Investor D, whose situation looks like this:

  Investor D
Savings Rate 0%
Portfolio value $0
Chance of retiring 0%

If you can’t save 20% or even 10% of your income, save what you can, as soon as you can. You’ll always be better off than someone who doesn’t save anything.

Source: getrichslowly.org

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Apache is functioning normally

June 6, 2023 by Brett Tams

A Coverdell savings account, or a Coverdell Education Savings Account (ESA), is an investment account that is tax-free when used for qualified higher-education expenses.

Assets in Coverdell accounts can be transferred to other family members if the beneficiary doesn’t need the money (whether because of scholarships or other circumstances) and many find the main benefit is that these funds can also be used for K-12 school-related expenses. The biggest drawback is that you cannot contribute more than $2,000 per year, even across multiple accounts.

Here’s more:

Coverdell ESA Basics

How to open: The Coverdell ESA is opened with a brokerage or mutual fund company and its assets are owned by either the parents or the student.

Limits: Contributions are phased out at incomes between $95,000 and $110,000 for single tax filers, $190,000 to $220,000 for married filers (though there are some ways around these limits). Contributions can be made until the student turns 18 and must be withdrawn by age 30. The deadline to open a Coverdell ESA: April 15.

Related: What the IRS says about Coverdell accounts

Investment choices: Whatever is offered by the company with which you’ve opened the account.

Impact on financial aid: Depends on the account owner. Assets owned by a student have a greater negative impact on aid eligibility than assets owned by the parents, though this impact is lessened if the student is still a dependent of the parents.

Related: the savings calculator at Savingforcollege.com. It estimates the total cost of college based on your child’s age and tells you how much you need to save each month to reach that goal. The calculator has plenty of flexibility that allows users to fiddle with the assumptions, and it can even help look up the costs of specific colleges.

Why choose the Coverdell: If you want maximum control over your investments in terms of what you can buy and how often you transact, this is the education savings account for you. Also, unlike with 529 plans, Coverdell assets can be used for elementary- and high-school expenses. However, given the low contribution limits, saving only in a Coverdell will likely not be enough.

Now what?
The good news is you don’t have to choose just one of these accounts. You can contribute to each, if you have the resources and it makes sense for your situation. For example, you might participate in a prepaid plan to manage the future costs of tuition, then max out the Coverdell (because you enjoy picking individual stocks, an investment choice not available in 529 plans) to help cover room and board, and contribute to a 529 savings plan for additional savings. Of course, such a strategy would require a lot of cash; for those seeking a place to contribute a few hundred dollars a month, the 529 savings plan is the most popular choice.

Finally, attempt to persuade your kids to choose a degree that has greater chances of paying off (unlike these degrees). Yes, choosing a career you enjoy is important, nearly crucial. But college is an investment, and like every investment, there should be a cost-benefit analysis. Going into a huge amount of debt for a low-paying career makes paying for a car, paying for a home, raising a family, and taking vacations — also important factors in life satisfaction — much more difficult.

Source: getrichslowly.org

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Apache is functioning normally

June 6, 2023 by Brett Tams

With rates around 6.9% and home prices still near record highs, homebuyers are demanding that their loan officers provide options to lower monthly mortgage payments as much as possible.

Michael J. Barnes, a branch manager at Mann Mortgage, recently had a client who planned to live in a new home for five years before selling it. The client requested a cost analysis to compare monthly payments on a mortgage at 7.5% versus a 6.5% mortgage rate with a permanent rate buydown.

His client would pay $4,000 to buy down the rate by one full percentage point (100 bps) and save $7,880 over the five-year period he planned to keep the home. 

“In that client’s case, it made sense to pay to do a permanent buy down,” Barnes said. “There were too many things going against the client to do a temporary buydown, knowing that he’s going to keep it for a maximum of five years.”

To get the best product for the borrower, Barnes, like many LOs these days, has had to run different scenarios based on the client’s preferences, including the mortgage term, down payment and whether the purchase would be a primary residence versus investment, as that would affect the pricing of LLPA fees. 

LOs across America are challenging clients to think about their financial situation several years down the line, asking about plans for kids, how much is being saved in IRAs/401Ks, and more. These days, there’s much more to the job than, “Here’s much you qualify for,” LOs said.

“What I’ve seen is that the really good mortgage advisors today are taking time to understand each borrower’s circumstance, short term goals, long term goals and put together a plan with them of how long are they going to be in the house, how much do we need to put down on that house, and understand not every loan is created equal for every person, depending on what their goals are,” said Brian Covey, executive vice president of Revolution Mortgage. 

Understanding the borrower

Randy Kaufman, a senior loan originator at Notre Dame Federal Credit Union, offered his client the option to float his rate for a transaction that is set to close at the end of June. 

When Kaufman’s client’s offer was accepted at the end of May, the client anticipated that the debt ceiling legislation would pass and that the Federal Reserve would pause hiking rates in the upcoming June FOMC meeting, which in turn would bring mortgage rates down. 

“They didn’t want to lock it yet, they wanted to let it flow. So they’re saving themselves some money by letting it flow,” Kaufman said.

Being conservative never hurts and being strategic about the market is important, Jared Sawyer, a sales manager at loanDepot, said.

loanDepot offers borrowers the option to float rates but Sawyer sees the majority of his clients want predictability when it comes to rates – opting to go with a permanent rate buydown.

“I would say about 95% of first-time homebuyers want to know what their payment is going to be out of the gate. They don’t have to worry about that changing on them,” Sawyer said.

Especially when the seller is willing to give concessions, the buyer is able to get a credit for closing and contribute to buying down points. 

Seller concessions are abundant in some of the markets that have cooled – including Oregon and Arizona – and his clients are able to take advantage of that, Sawyer noted. 

“I let them know their options. These are the options you can do and here are the pros and cons of this (…) About 90% of the conversation we’re having, [I’m hearing] we don’t want to look at something temporary. We want to make sure we know what our payments are going to be,” Sawyer said.

Every scenario is different and he finds some of his experienced buyers – those who bought their first homes already are open to the option of a temporary buydown, according to Sawyer, 

Temporary buydowns often make more sense for buyers planning to live in the home long term as they are more likely to have a refi opportunity during that time period, Barnes noted. Also, seller-funded temporary buydowns may not be available depending on how hot market conditions are.

A game of conversion for loan officers

“The knowledge of what the market is doing and knowing why it is happening is critical right now more than ever,” Jose Valenzuela, a loan officer at Motto Mortgage, said. “If you can paint a picture for the borrowers explaining potential scenarios both good and bad, it’s also critical.”

Valenzuela has been able to create a high pull-through closing after retaining pre-approved clients thanks in part due to weekly check-ins with his clients. Being a “trusted advisor” is important in an environment where buyers are trying to find their homes. It’s important to focus on what the buyer might be looking for, Valenzuela said.

For instance, having a nice yard for a borrower’s son could mean they can pass on to their child like their parents did for them, he noted. Some borrowers are focused on legacy to leave for their child’s future.

“Have a meaningful conversation about ways to focus on legacy like a living trust, a financial planner (…) This will keep you in the driver’s seat against almost any other loan officer,” he said. 

Many loan officers are hoping for the market to turn, which in turn would bring back some refi business among homebuyers who locked in rates at close to 7% levels at the latter half of 2022. 

“I would not hold my breath on that I would plan on this environment being consistent. You have to work three times as hard to make the same paycheck you did last year in this environment,” Sawyer said. 

Ultimately, it’s a game of conversion. Loan officers need to take more time with borrowers and ask better questions to secure loans, Covey said. 

“Even if you’re talking to fewer people, if you can convert at a higher percentage, you’re still getting the volume and velocity of applications and closings that you desire.” 

Source: housingwire.com

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Apache is functioning normally

June 6, 2023 by Brett Tams

Growing up, my parents taught me very little about financial responsibility. It wasn’t until college, when my parents expected me to pay my own car insurance, that I was forced to learn the basics of budgeting. It was just one bill, but it was traumatic to me since I’d never paid for anything myself until that point. Looking back, the lesson was introduced too late. It didn’t “take”.

Had I understood budgeting earlier in life, some of my financial choices might have been different. Obviously, this isn’t the only reason I accumulated a mountain of debt, but it’s an example of the lack of financial education I received as a kid. (Fortunately, now thousands of dollars in debt are gone after a lot of planning and sacrifice — and of course, using coupons.) My husband and I want to teach our boys smart financial habits at a much younger age than we learned them.

An 11-Year-Old’s View of Money

For Christmas, our 11-year old son, T, wanted wanted a cell phone. Actually, when the new iPhone 4G hit the market, he suggested that he could take my 3G to use so I could get the new 4G. (His generosity knows no bounds!) While his suggestion gave his parents quite a laugh, we seized the opportunity to teach him a financial lesson. Here’s a bit of that conversation:

Me: “T, even if you did get an iPhone, the monthly plan is expensive. Who would pay for that?”
T: “You can just add me onto your plan, Mom.”
Me: “You didn’t answer my question, who would pay for that?”
T: “Well, you would. It’s only a few extra dollars a month. You and Dad work, so that’s nothing.”

The last statement set me off a bit! My husband and I do not want our kids to think that just because money is earned means it has to be spent. We also don’t want them to think that just because their friends have the newest fill in the blank that they need it too. After this conversation with my son, we decided to teach him a financial lesson.

An 11-Year-Old’s First Budget

s Christmas rolled around, T kept mentioning the cell phone. He really wanted it. So, we sat down and had a more detailed discussion about budgeting.

Since the cell phone would be T’s first and and only bill, we talked about his cash flow. He makes $44 a month for doing his chores (with potential to make more money each month for doing other things). We broke down his current expenses. I know he’s only 11 years old, but we really wanted this lesson to impress the importance of budgeting and giving.

I suggested that if he could find a phone plan that cost 50% or less of his monthly income, we’d consider the phone. The only limit to his search was that we needed a monthly payment plan without a contract. If he didn’t pay, we didn’t want to be bound to a contract we were paying for and not using. No payment means he simply wouldn’t have a phone to use (after all, a cell phone is a want and not a necessity).

An 11-year-old's budgetBeing eleven years old and not knowing how to find the information, I came up with a list of websites for him to review (with my guidance for some online safety measures). He browsed the sites, wrote down options, and noted which carriers offered a monthly service plan option.

After his review, he gave me his analysis and recommendation. I wasn’t surprised at the suggestion since I’d done some preliminary research myself. The lowest monthly payment plan was $25, and it did offer the monthly payment option that we required. Even though this was $3 over his $22 budget, we decided it was the best financial option meeting the requirements.

As we were going over the numbers again with the $25 cost, we discussed all of T’s expenses that his $44 monthly income was expected to cover. During this talk, we reminded him about tithing, and ensuring that 10% of his income is set aside for our church.

T’s response to this didn’t surprise me: “That’s easy. I make $44 and will spend $25 on my phone bill. That leaves me with $19. So 10% of $19 is $2.” While I appreciated his stellar math skills, we also took the time to remind him that the 10% giving was before he paid any bills. For us, that lesson was equally important in his understanding of financial generosity.

Family Financial Responsibility

Going through this budgeting process was eye-opening for all of us. While some parents are worried about having “the talk,” I was equally concerned with having this budgeting talk. This was a great lesson to teach T, but we hope that dad’s jacked up car and his first-hand look at poverty also show him reasons why we make the choice to manage our money wise in the first place.

Maybe 2011 is the year you take control of your finances and say good-bye to debt. For our family, 2011 is the year that we, as a family unit, focus on financial responsibility. And it started by teaching an 11-year-old how to budget for a cell phone.

Source: getrichslowly.org

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Apache is functioning normally

June 6, 2023 by Brett Tams

Nothing says summer quite like the first day at the pool. The sun is beaming down, the air is hot and the water is sparkling and blue. You can almost feel yourself taking the plunge and emerging from the crisp water feeling refreshed and energized.

You don’t need to be a member of a fancy club to enjoy the perks of swimming pools. In fact, you can have access to the pool every day (or as weather permits) if your apartment complex has a pool on-site.

If this piques your interest, here are some additional benefits to consider when hunting for apartments with pools. Soon, you could be sitting poolside in the comfort of your own home. You’re just a lease away. With that, let’s dive into the perks of apartments with pools.

11 reasons to consider apartments with pools

If having a pool on-site isn’t an immediate dealbreaker, then it’s our job to convince you that apartments with pools are the best. Here’s why.

1. Opportunities to socialize

When you live in an apartment, the apartment itself might be too small to host larger parties or social gatherings. However, when you have a community pool, you instantly have access to more space to throw a party poolside. Apartments with pools provide you with built-in opportunities to throw a summer barbecue, a birthday party or an apartment neighborhood social.

Alternatively, if you don’t want to host, you can mix and mingle with fellow swimmers at the pool and meet new friends within your own community.

2. Low-impact exercise close by

Swimming is a great exercise for people to consider. It’s low-impact, which means it isn’t strenuous on your joints but you are sure to burn calories and stay fit. Swim a few laps and call this your form of exercise for the day!

3. Save money on gym memberships

If you don’t have a pool at your apartment, you may need to purchase a gym membership to have access to a lap pool. However, when you look for apartments with pools, you immediately have access to the pool so you can start exercising in this low-impact, high-result manner. Think of it this way — apartments with pools are like automatic gym memberships.

4. It’s a reprieve from the heat

Summer is hot. And there is nothing like cannonballing into the pool to cool off. When your apartment comes with a pool, you can take a dip every day to cool down and enjoy the heat in a more comfortable fashion.

5. An inexpensive way to entertain friends

Life is expensive, even for many high earners. Sometimes, going out for dinner and drinks or catching a movie is just too expensive on a regular basis.

That’s when apartments with pools come in handy. When your apartment is equipped with a pool, you can invite your friends over for free, or at a relatively low cost. Keep in mind that some apartment complexes charge for a day pass, but that will vary by apartment.

Either way, it’s an inexpensive way to entertain friends on a budget. Plus, it’s always a crowd-pleaser so you won’t have to argue about where to eat or which movie to see.

6. Great place to take a break

Are you feeling cramped in your apartment and need out? Well, take 30 minutes to swim laps or read a book by the pool to get out of your space. And, if you work from home, spend your lunch break swimming or catching up with emails in the shade of an umbrella.

7. Indoor pools can be used all year long

If you’re lucky enough to find a place with an indoor pool, you can enjoy it year-round. Likewise, if you live in a city with 365 days of sun, you have access to entertainment all year long.

8. Enjoy the outside

We don’t go outside enough and apartments with pools provide the perfect excuse to get outside and enjoy the sun. When you have a pool as an apartment amenity, it’s a great way to ensure you stay active and get outside.

9. Keep your kids entertained

Summer break can be long for parents. Why not take the kids to the pool several days a week this summer? Apartments with pools are a great way to keep kids (and parents!) entertained during the dog days of summer.

10. You don’t need to travel to stay entertained

Summer vacations can be expensive and if you have kids, you mostly want to be by water anyway. So, when have an apartment with a pool, it’s like you’re on vacation all summer long but at a fraction of the cost!

11. Meet new friends

Community gathering centers, like an on-site pool, are a great way to meet your neighbors and make new friends. If you’re new to an apartment or city, you can socialize with fellow swimmers, start conversations and make new friends. Soon enough you’ll be scheduling regular pool dates with your new bestie.

Things to consider when looking for apartments with pools

Are you convinced you need to find apartments with pools for your next home? Well, we do need to outline some other things to consider before you sign the lease.

Apartments with pools cost more

Pools are an added luxury and so you’ll pay more to have that amenity. The cost can vary. Sometimes, it’s included in your rent and other times it’s an additional fee or annual purchase you can add on. While the benefits of a pool are vast, you do pay more to have access. Keep this in mind when budgeting and when you’re searching for apartments with pools.

Apartments with pools may be in higher demand

If you live in a city that is notoriously hot — think Phoenix or Orlando— pools are in higher demand. So, it may be more difficult to even find an available apartment with a pool. Likewise, families who are looking for apartments may be more inclined to find a place with a pool, so this can impact the market.

Pools can be dangerous

While swimming is a blast, it also can be dangerous. When you rent an apartment with a pool, you need to understand that there is inherent risk when you live near water, especially if you have young children. Be sure to understand these risks and take proper precautions before finding apartments with pools.

How to stay safe when poolside

Staying safe when swimming is the number one priority. When you live near a pool, you must be vigilant about practicing pool safety, especially if you have children. Here are some of the most critical things to think about to stay safe when living near a pool.

  • Always keep an eye on your children, even if they know how to swim
  • Never let children go unsupervised by the pool
  • Wear flotation devices if you don’t know how to swim
  • Don’t swim if you’re drowsy or under the influence
  • Wear sunscreen
  • Don’t dive into shallow water
  • Sign your kids up for swimming lessons

Pools are fun but can be dangerous so stay on your guard if your apartment complex has a pool.

Find your perfect next apartment with a pool

Now that you know some of the pros and cons of renting an apartment with a pool, you can begin your apartment search in any state and filter by amenity to ensure this feature is included. Happy swimming and house hunting!

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Apache is functioning normally

June 6, 2023 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.


The question of whether a car is an asset or a liability has been debated for decades.

The reason for the debate is that there are many types of cars in the world and each car serves different purposes.

In the past, many people bought cars that were used and old to save money, because they believed it was cheaper in the long run than purchasing new ones every few years. This mindset shifted after some studies showed that replacing your car more often actually costs you less over time in terms of maintenance cost and depreciation on your vehicle value when compared to keeping a newer model longer.

Nowadays, most consumers are aware that the car is an asset and are more willing to pay for a new one.

However, there is a huge caveat on how you purchase the car, the age of the car, and the purposes of the vehicle.

All in all, depreciation can eat into your car’s worth.

What’s your take on this debate?

Is a car an asset or liability? Answer this question by looking at the purpose of the vehicle, its value and how much it will cost to repair if damaged.

What is Considered an Asset?

The definition of an asset is broad and includes most things that have value. Assets are tangible or intangible property such as land, buildings, equipment, intellectual property such as patents and trademarks, or stocks.

This can be anything from a physical asset such as a house or equipment, to a more intangible asset such as a strong brand name or a loyal customer base.

Is a car an asset or liability?

Picture of a couple looking at a car discussing is a car an asset or liability.

A car is an asset to its owner because it took money to buy the vehicle. It is also a liability in that the cost of maintaining the car can be high, and depreciation on a new vehicle can eat into a person’s savings.

There is no definitive answer as to whether a car is an asset or a liability. It depends on the specific situation and the person’s circumstances.

For example, if someone needs a car to get to work, then the car would be considered an asset. However, if someone only uses their car for recreational activities, then the car would be viewed as a liability.

On the whole, cars are considered liabilities. They require regular maintenance, insurance, and other associated costs. However, there are a few exceptions. For instance, in some cases, a car can be used as collateral for a loan or as an investment vehicle.

Is a Car a Depreciating Asset?

Picture of a key with cash for is a car a depreciating asset.

A car is a depreciating asset because its value decreases over time. The depreciation of a car is based on a number of factors such as the age of the car, the make and model of the car, the condition of the car, and the miles on the car.

Cars are assets, but not smart investments as they will depreciate over time.

Reason # 1 – Wear and tear

Cars require a great deal of care and maintenance in order to keep them running smoothly. This includes everything from regular oil changes and tune-ups, to replacing worn-out parts and fixing dents and scratches.

In addition, cars depreciate in value over time due to normal wear and tear.

Reason # 2- Higher Mileage

The value of a mile decreases the more it is used. This is because the value of something depends on its rarity and when something becomes common, its value decreases.

The average car is only good for 200,000 miles. This is because of both the increased mileage and the cost of repairs as a car gets older.

Reason # 3- Cars become obsolete

Cars are becoming obsolete because new models and makes are constantly being released. This means that people want the newest and latest model, so they trade in their old car for a newer one.

Plus many of the parts for older cars become harder and harder to find. Thus, causing the cost to repair to escalate.

Reason # 4- Cars are not investments

Some people may argue if a house is an investment as well.

When you think of an investment, you want a certain rate of return on your money.

Most people use the stock market as a benchmark of earning 8% of the initial outlay of money. Thus, a car is an investment that depreciates over time. It will lose value as it gets older and the parts wear out.

If you want a return on your money, you should be asking is now a good time to buy stocks?

Can a Car Appreciate?

Yes, vintage cars and luxury sports cars have always been the exception. There are select vehicles that are in pristine condition with little to no mileage. These collector cars have a special fan base willing to spend money on these appreciating collections.

However, for the average car, the answer has always been a resounding NO!

Well, that was up until 2020, when used vehicles started to increase in value due to lack of microchips availability has been scarce causing the production of new cars to be halted. Thus, the supply and demand for new cars have been skewed causing an increase in car worth.

As the supply chain gets back to normal production, this appreciation in our sedans, trucks, and SUVs will be short-lived.

How To Calculate Car Value

Picture of a car driving on a highway to figure how to calculate car value.

Car value is the estimated worth of a car. There are two main methods for calculating this:

  1. The trade-in method, which takes your vehicle’s current market value and divides it by its estimated remaining life span.
  2. The resale method takes your vehicle’s current market price and then subtracts the depreciation rate from that value to get a car’s market value.

To calculate the value of a car, you need to know its make, model, year, and condition.

Personally, I like finding the worth of a car based on its Kelley Blue Book (KBB) value. This is the resource my dad used when he worked in the car industry, so I can trust the information.

The KBB value is updated monthly and takes into account recent sales and modifications.

When it comes time to buy, sell, or trade-in your car, you’ll need to know a fair price.

You can use a variety of methods to calculate your car’s worth, including using online tools, checking with dealerships and other buyers in your area, and looking at recent sales data. Remember to factor in your car’s condition and mileage when calculating its worth–prices will vary depending on the location and condition of your car.

Car Value Deprecation Curve

Picture of a car driving on a path for the car value depreciate curve.

Before you head out and purchase your car, car value depreciation is a real consideration in your decision.

As KBB states, the first year of owning a brand new car will depreciate the most. While it feels great to drive off the lot in a brand new SUV, you can watch hundred dollar bills float behind you with how quickly the car depreciates.

To calculate the depreciation of a car, it varies depending on the make and model.

However, here is a car value depreciation chart to estimate based on.

  • In year one, most models will depreciate at least 20% or more.
  • From years 2-4, the car depreciates about 10% each year.
  • After five years, a car will depreciate about 60% of the original purchase price.

Car Value Deprecation Curve Example

For example, let’s take the average price of a new car of $47,077 according to Car and Driver.

  • 1st year = car lost $9415.40 in value and is now worth $37,661.
  • 2nd year = car lost another $3,766 in value and is now worth $33,895.
  • 3rd year = car lost another $3,389 in value and is now worth $30,505.
  • 4th year = car lost another $3,050 in value and is now worth $27,464.
  • After 5th year, the car has lost an estimated $28,246 in value and is now worth about $18,830

That is the reason most people do not believe a car is an asset.

That is a depreciating asset. Would you consider an investment if you knew 60% would be wiped away in less than five years? Probably not.

This is why most thrifty people look for cars that are at least 5 years old and lost most of the depreciation. Personally, I have never purchased a new car; everything I owned was new-to-me used vehicle. Even growing up as a daughter of a car salesman and manager, my parents never purchased a brand new car due to deprecation.

Another reason beater cars are super popular!

How Your Car Is An Asset

Picture of someone driving to show how your car is an asset.

There are a variety of ways to define what an asset is, and whether or not a car falls into that category depends on the definition used.

In general, most people would say that a car is an asset because it has value and can be sold for money.

However, there are other definitions of assets that may not include cars. For example, some people might say that an asset is something that generates income or increases in price.

A car can be an asset for someone who is making money off of it. For instance, an Uber driver uses his or her car as a business asset. The car is providing them with income, and thus it can be considered an asset.

On the other hand, most people use their vehicles for personal use as a mode of transportation and do not make money off of it. If your car was purchased with cash or paid off, then you can consider it an asset.

Is a paid off car an asset? Yes.

Why is a car not an asset?

Picture of an older car as to why is a car not an asset.

A car is not an asset because it depreciates in value the moment you drive it off the dealership lot. While it may be a necessary expense, it is not an asset that increases in worth over time.

Is a leased car an asset?

No, a leased car is not an asset because the asset (car in this case) is the asset of the leasing company. This is 100% liability for you and a monthly payment which you must make.

Leasing a vehicle allows you to drive it for the length of your lease term without the risk of buying and then selling or trading in at the end of your lease. Once the lease expires and if you decide to purchase the car, then it would be considered an asset on your net worth.

How Your Car Is Considered A Liability

Picture of someone handing over cash with a car in the background for how your car is considered a liability.

The car is considered a liability if the debt exceeds the car’s value.

Simply put… If you have an auto loan, your car would be considered a liability.

Given that most people believe car loans are a part of being an adult, many view cars as a liability and monthly payments normal.

In addition, a car is a liability because, like any other depreciating asset, it will lose its value over time.

The longer you own it, the more money you will likely have to spend on repairs and general upkeep. This means that your car is not only costing you money every month in terms of payments and insurance, but also in terms of the decreasing worth of the asset itself.

Is a car loan an asset?

A car loan is a type of debt that is incurred when borrowing money to buy a new or used car. Thus, the car loans are considered liabilities and the car itself would be considered collateral.

Should I Include My Car in My Net Worth Calculation?

The answer to this question depends on how much your car is worth.

Personally, at Money Bliss, we recommend counting the vehicle as an asset and any auto loan as a liability. That means you would include both in your net worth calculations.

The reason why to include in net worth is if you had to sell your car immediately, you would be in one of two situations:

  1. You have instant access to cash if needed.
  2. You owe more in your car loan and thus, have negative equity. Meaning you would have to pay additional money to get out of your car loan and sell your car.

To keep your net worth accurate, you should adjust the price of your vehicles as they decrease over time.

Is Having a Car the worst investment of your Money?

There are a lot of factors to consider when answering this question.

Owning a car can be a major expense, and there are a lot of costs that come with owning a car, such as insurance, registration, and maintenance. However, a car can also provide a lot of benefits, such as convenience, freedom, and security.

Ultimately, it depends on your individual circumstances.

Know someone else that needs this, too? Then, please share!!

Source: moneybliss.org

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Apache is functioning normally

June 6, 2023 by Brett Tams

School’s almost out for the summer, but for some parents, the homework might be just beginning. For those hoping to move before school starts next year but aren’t sure where to go, a new survey can point you in some smart directions—that is, if you can afford it.

WalletHub has just released its 2023 Best & Worst Places to Raise a Family report, ranking how America’s 180 biggest cities stack up by analyzing 45 key metrics that matter to parents. They include local school quality, crime rates, economic factors such as income and unemployment, as well as access to child care, health care, and recreation.

The most family-friendly city of all this year is Fremont, CA, which ranks No. 1 in terms of education and child care, and No. 2 for health and safety. And despite being located in the pricey San Francisco Bay Area, Fremont comes in 18th on the list for affordability, which means it’s a relative bargain for the area.

In fact, five of the top 10 kid-friendly metros are in California. However, decent options are scattered far and wide, and some surprising locales made the list, with Overland Park, KS, coming in at No. 2.

At the bottom—that is, the worst for families—is Cleveland, OH, which ranks dead last for socioeconomics and very low for education, health, and affordability. Right behind Cleveland is Memphis, TN, flagged as the worst in the data set for violent crime.

The family-friendly premium: How much parents pay

Quality schooling and affordable housing are key factors families should consider when setting down roots.

(Getty Images)

What these rankings make abundantly clear is that parents who want the best for their kids might find they’ll have to make some trade-offs. For instance, Overland Park was tops for affordability, but only 115th for “family fun”—a category that includes access to playgrounds, parks, ice rinks, and other amenities.

Meanwhile, Los Angeles ranks No. 1 for family fun but No. 174 for affordability. The high cost of housing is a large part of the problem, with Realtor.com® data showing that the median listing price here hovers at $1.2 million.

Aside from housing, taxes—particularly for public schools—is another big piece of the financial burden families must shoulder if they want the best education and opportunities for their kids.

“Quality schooling and affordable housing are key factors families should consider when setting down roots,” says Susan J. Paik, a professor at the School of Educational Studies of Claremont Graduate University and one of WalletHub’s experts for the report. “The cost of living, especially housing options, matters for growing families.”

For a closer look at what “family-friendly” will cost in terms of housing, here are the WalletHub rankings along with Realtor.com data on the median home prices for each area.

10 most family-friendly cities

  1. Fremont, CA: $1.25 million
  2. Overland Park, KS: $638,950
  3. Irvine, CA: $1.4 million
  4. Plano, TX: $550,000
  5. South Burlington, VT: $564,000
  6. San Diego, CA: $999,000
  7. San Jose, CA: $1.25 million
  8. Scottsdale, AZ: $939,000
  9. Gilbert, AZ: $600,000
  10. San Francisco, CA: $1.46 million

Does a family-friendly city make a difference?

Parents have good reason to weigh all pertinent factors when they decide where to raise their families, due to a growing body of research that finds just how malleable kids’ minds are to their surroundings.

“There is a growing body of research suggesting that a child’s development and a family’s quality of life are influenced greatly by the city in which they live,” says Cristina Santamaría Graff, an associate professor of education at Indiana University Purdue University and one of the experts consulted for this report. “More than ever, local officials need to consider the well-being of families inclusive of economic, physical, social, emotional, and environmental factors.”

So what should parents be thinking about as they peruse the WalletHub report?

“Families should strongly reflect on how places connect with and support their values as a family,” says Sherrill W. Hayes, director of the School of Data Science and Analytics at Kennesaw State University in Georgia. “This is sometimes a difficult question for young parents since they may just be figuring themselves out as adults, but location determines access to jobs, activities, educational opportunities, social networks, and other intangibles.”

Source: realtor.com

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Apache is functioning normally

June 5, 2023 by Brett Tams

Save more, spend smarter, and make your money go further

Entering the real world is exciting. For young professionals this often means getting your first career-track job, moving into your own place and taking full control of your finances.

While everyone wants to get started on the right foot, there are some common mistakes young professionals make that can have long-lasting impact.

Figuring It Out Later

This is a time in your life when you may find yourself making many big decisions in a small amount of time.

Don’t say yes and figure it out later. Before you sign a lease or mortgage, determine whether you can afford it.

The easiest way to do this is to create a budget.

You may think you need to wait a while until your expenses “normalize” since when you first move into a place, there can be one-time costs like furniture and security deposits.

But if you wait a few months, you may find yourself already in some serious debt.

[Read: Can You Get Your Student Loans Forgiven?]

Do some research and make a budget immediately.

Then adjust your budget when you see how much money you are bringing home and how much you are really spending.

It’s best to start out tracking your spending right away, instead of playing catch-up later.

Assuming You Will Make More

You may be disappointed by your first salary. You may work in an industry where big bonuses are normal.

Regardless, plan your finances around the salary you are guaranteed right now. This gives you the freedom to make choices in the future.

If you are living beyond your means now, that raise or bonus will only go to paying off debts.

[Read: Can Your Job Hurt Your Credit?]

If you budget for your current salary, you can use that raise or bonus to boost your emergency fund, increase your retirement savings, or treat yourself.

Don’t spend your future self into a corner.

Not Asking Questions

Young professionals are covering a lot of new territory — making decisions we haven’t made before.

Don’t be afraid to do some research or ask for help. Read the fine print before you sign documents and if you don’t understand something, stop.

[Read: Your First Credit Card: What You Need to Know]

Before you accept a job, sign a lease or accept a credit card, ask a few questions.

Being financially independent doesn’t mean you have to be totally alone in the decision-making process.

There are others who have done these things before, so seek out a mentor to help guide you through the process.

There’s nothing more grown up than knowing when you need help.

“Top 3 Financial Mistakes Young People Make” was provided by Credit.com.

Save more, spend smarter, and make your money go further

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Apache is functioning normally

June 5, 2023 by Brett Tams
  • 68 per cent feel buying a home is more out of reach compared to their parents

  • BMO’s new Pre-Qualification tool helps empower customers to make confident decisions at the start of their homebuying journey.

TORONTO, June 5, 2023 /CNW/ – BMO’s Real Financial Progress Index reveals that while homeownership is considered an important financial milestone for many Canadians, concerns about interest rates, inflation and a possible economic recession have affected their approaches to homebuying.

The survey found that over two thirds (68 per cent) of Canadians are planning on waiting until mortgage rates drop to purchase a home. The majority (68 per cent) of Canadians feel buying a home is more out of reach compared to their parents. Gen Z (ages 18 to 24) (71 per cent) are the most likely to have this outlook, followed by younger Millennials (ages 25 to 34) at 69 per cent and older Millennials (ages 35 to 44) at 65 per cent.

According to BMO Economics, Canadian housing activity has rebounded from the slow start in 2023, with home prices firming and existing home sales increasing by 11.3 per cent in April – the largest monthly rise since 2009. However even after last year’s price correction, the combination of past price gains and higher mortgage rates leaves housing affordability near the most challenging level in more than 30 years. The survey found Canadians’ perceptions of the economy have affected their homebuying plans:

  • The Waiting Game: Over two thirds (68 per cent) of Canadians are planning on waiting until mortgage rates drop to purchase a home. Among the quarter (26 per cent) of Canadians that have said current mortgage rates have affected their decision to move homes, 18 per cent are holding off as a result of market uncertainty and volatility.

  • Deferred Decisions: Half (51 per cent) are deferring their home purchases because of their concerns about the economy and 18 per cent plan on waiting until 2024 or later. 20 per cent of Canadians are no longer sure if or when they will buy a home.

  • Revisiting Refinancing: 69 per cent are planning on waiting to refinance their home until mortgage rates drop.

  • Financial Anxiety: Housing costs (71 per cent) are among the top three sources of financial anxiety for Canadians, after fears of unknown expenses (83 per cent) and concerns about their overall financial situation (81 per cent).

“Homeownership continues to symbolize real financial progress, success and security for many Canadians and their families,” said Gayle Ramsay, Head, Everyday Banking, Segment & Customer Growth, BMO. “While the challenging market and economic conditions may pose hurdles and uncertainty, we encourage Canadians to work with a professional advisor or planner to explore the many paths to homeownership and develop a personalized financial plan to help them get into the home they want within a realistic timeline.”

Paths to Homeownership

The survey also explored the different financing strategies Canadians intend on using for their home purchase:

  • Personal Savings: Half (52 per cent) of Canadians plan on using personal savings to pay for their home purchase.

  • Help with Loans: 41 per cent of Canadians plan on using loans from their financial institution and/or lines of credit to help finance their home purchase.

  • Family Support: A fifth (19 per cent) of Canadians are expecting help including financial gifts and loans from family, friends and/or others.

  • Home Buyer Programs: Among the 46 per cent planning on using Canada’s assistance programs, nearly a third (32 per cent) plan on using the First-Time Home Buyers Incentive and 16 per cent plan on using the Home Buyers’ Plan (HBP).

BMO Helps Canadians Make Real Financial Progress with Pre-Qualification Tool

To help Canadians get started with their homebuying journey, BMO has launched Pre-Qualification, an online tool that enables prospective homebuyers to get a mortgage estimate in one minute with a 130-day rate hold. Using a soft credit check that will not affect their credit scores, customers will be able to know how much they can potentially afford for a home based on information including income, assets and debt.

“Amid this challenging and changing market, homebuyers are keeping a keen eye on interest rates,” said Hassan Pirnia, Head, Personal Lending and Home Financing Products, BMO. “Regardless of when buyers are planning their purchase, it’s essential they have a clear understanding of budget and affordability at the start of their homebuying journey. BMO’s new pre-qualification tool is an important first step in that journey and provides a mortgage estimate to give buyers more clarity as to what they can afford and what carrying costs they should be considering.”

BMO offers tools and resources to help customers throughout their homebuying journey including:

  • BMO SmartProgress: Customers can learn more about homeownership, budgeting and other personal finance topics from BMO SmartProgress. The online education platform organizes personal finance topics into playlists, enabling Canadians to learn more about how to manage their finances in a widely accessible and innovative platform.

  • Pre-approval: For homebuyers, getting pre-approved provides a cushion for due diligence when purchasing a home. In addition to visiting a local branch to speak with an advisor, BMO offers the ability for homebuyers to apply for mortgage pre-approval online. And, to give extra time for house hunting BMO offers the longest rate guarantee period at 130 days of any major Canadian bank (as of March 1, 2022).

For more information about BMO’s Pre-Qualification tool, visit www.bmo.com/main/personal/mortgages/pre-qualification.

For more information about first-time home buyers programs and affordability tools, visit: www.bmo.com/main/personal/mortgages/first-time-home-buyer/.

To learn more about how BMO can help customers make financial progress, visit www.bmo.com/main/personal.

About the BMO Real Financial Progress Index

Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money.

The research detailed in this document was conducted by Ipsos in Canada from March 28th to April 28th, 2023. A sample of n=2,350 adults ages 18+ in Canada were collected. Quotas and weighting were used to ensure the sample’s composition reflects that of the Canadian population according to census parameters.

About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.25 trillion as of April 30, 2023. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to over 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future and inclusive society.

SOURCE BMO Financial Group

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View original content: http://www.newswire.ca/en/releases/archive/June2023/05/c7261.html

Source: finance.yahoo.com

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