• Home
  • Small-Business Marketing Statistics and Trends
  • What Is Mobile Banking?
  • How Student Loans Affect Credit Score?
  • Refinancing an Inherited House
  • How to Build a Kitchen?

Hanover Mortgages

The Refined Mortgage Lending Company & Home Loan Lenders

payments

Apache is functioning normally

June 2, 2023 by Brett Tams

Top life insurance companies

Company Best for J.D. Power Score in 2022 U.S. Individual Life Insurance Study AM Best Financial Strength Rating
Guardian Life insurance coverage without a medical exam 787/1,000 A++ (Superior)
Mass Mutual Whole life insurance 780/1,000 A++ (Superior)
Mutual of Omaha Digital accessibility 801/1,000 A+ (Superior)
Nationwide Customer satisfaction 791/1,000 A+ (Superior)
Northwestern Mutual Universal life insurance 794/1,000 A++ (Superior)
Prudential Policy personalization 773/1,000 A+ (Superior)
State Farm Term life insurance 839/1,000 A++ (Superior)

How Bankrate picked the best life insurance companies for 2023

To find the best life insurance companies of 2023, Bankrate’s editorial team started by researching the largest life insurance carriers on the market. We also analyzed life insurance company ratings,  including customer satisfaction scores and financial strength ratings from trusted, unbiased sources, including J.D. Power and AM Best. Next, we looked at whether or not each insurer offers a mobile app, online portal, 24/7 customer service and local agents to determine each company’s accessibility. We then factored in each company’s coverage capacity (the maximum dollar amount of each company’s death benefit), the number of riders for optional coverage and the availability of a no-medical exam underwriting option. More information about each carrier is available below to help you learn about their benefits and drawbacks.

You may notice that we don’t include average rates in our analysis. That’s because rates vary widely based on each policyholder’s age and health metrics, as well as the type of policy they choose, their death benefit level and any riders they add on. Life insurance companies don’t reveal average rates, since that information reflects the general health of its policyholders and could put privacy at risk. Life insurance rates are incredibly personal, so average rates aren’t a helpful metric when choosing a company. Additionally, rates don’t vary as much between life insurance companies as they do between auto or home insurance companies. Generally, insurance experts recommend that you choose a life insurance company based on the specific product you need, rather than the rate.

Clock Wait

46

years of industry expertise

122

carriers reviewed

20.7K

ZIP codes examined

Dollar Coin

1.2M

quotes analyzed

  • Choosing the best life insurance policy is not a decision to take lightly. The insurance company’s history, as well as its reputation for customer service, financial stability and death benefit payouts are just a few of the things that can impact both your experience and policy value. We assessed NAIC ratings based on market share, financial stability ratings from sources like AM Best and customer satisfaction scores from J.D. Power. We also examined the number of endorsements and riders available, general accessibility, coverage capacity and whether medical exams were required as part of the underwriting process in order to make our picks.

Compare the best life insurance companies

Shopping for life insurance can be intimidating but Bankrate is here to make the process easier. When studying the largest life insurance carriers, there are some metrics that you can rely on to help effectively compare your options. Does one company offer a wide range of life insurance policy types, as well as riders and endorsements to personalize your policy, compared to another? What does the qualification process look like, and what might your estimated life insurance premium be?

From there, you can also compare companies’ financial strength ratings and customer service scores from trusted third-party agencies, such as AM Best and J.D. Power, for an unbiased view of which providers may excel in these areas and give you the best experience.

Guardian

Best for: Life insurance coverage without a medical exam

The Guardian Life Insurance Company of America ranks well in customer satisfaction and financial strength and offers the most term life insurance riders on our list. According to the National Association of Insurance Commissioners (NAIC), the company also has fewer than baseline policyholder complaints and offers multiple no-medical exam policy options.

Guardian provides easy policy management through its network of more than 3,000 financial representatives across the nation and online account management. Guardian carries an A++ (Superior) financial strength rating from A.M. Best and offers multiple coverage options depending on your life stage, goals, needs and budget.

Learn more: Guardian Life Insurance review

PROS


  • Checkmark

    Dividends available on some policies


  • Checkmark

    Easy online management


  • Checkmark

    Policies available for HIV-positive applicants


  • Checkmark

    Multiple no-medical exam policy options

CONS


  • Close X

    Must purchase coverage through an agent


  • Close X

    Rider details limited online

MassMutual

Best for: Whole life insurance

MassMutual won a Bankrate Award in 2022 and 2023 for best whole life insurance thanks to its A++ (Superior) financial strength rating from AM Best and for offering 13 whole life insurance riders, the most of any company we analyzed.

MassMutual, also known as Massachusetts Mutual Life Insurance Co., is a U.S. life insurance company owned by its policyholders, allowing select policyholders to earn dividends when the company does well. MassMutual offers an online application process for term life policies. Coverage takes effect immediately upon application approval, and applicants must usually complete medical exams for all term and universal life policies.

Learn more: MassMutual Life Insurance review

PROS


  • Checkmark

    Free coverage for qualifying low-income families


  • Checkmark

    Convenient mobile app


  • Checkmark

    Numerous riders


  • Checkmark

    Superior financial strength


  • Checkmark

    High coverage capacity (the maximum dollar amount of a policy’s death benefit)

CONS


  • Close X

    Limited online quotes


  • Close X

    Medical exams required for term and universal life policies


  • Close X

    No final expense policies

Mutual of Omaha

Best for: Digital accessibility

Mutual of Omaha ranked just behind the overall winners of Bankrate’s best life insurance study. The company ranks well above average in J.D. Power’s customer satisfaction survey and earned a financial strength rating of A+ (Superior) from AM Best. Mutual of Omaha offers no-medical exam life insurance options, and its digital features could make managing your life insurance policy easy.

Some people may be looking for the best online life insurance experience. In terms of accessibility, Mutual of Omaha offers a robust digital app, an online portal, local insurance agents and a 24/7 phone line for accepting your payments.

Learn more: Mutual of Omaha Life Insurance review

PROS


  • Checkmark

    Easy online quote process


  • Checkmark

    Offers digital money management app


  • Checkmark

    High J.D. Power customer satisfaction score

CONS


  • Close X

    Does not provide dividends


  • Close X

    Not all life insurance can be quoted online

Nationwide

Best for: Customer satisfaction

Nationwide offers a user-friendly mobile app, streamlined online portal and a network of independent agents across the U.S. Combine those features with an above-average J.D. Power customer satisfaction rating, and Nationwide could be a great choice for customer satisfaction.

The multi-line insurer offers seven riders for universal life, the second-highest number of riders of any company on our list. Nationwide also received an A+ (Superior) financial strength rating from AM Best, making it possibly one of the best life insurance companies in the marketplace in terms of third-party ratings.

Learn more: Nationwide Insurance review

PROS


  • Checkmark

    No-medical exam options available for universal, whole and term life insurance programs, depending on eligibility


  • Checkmark

    Above-average J.D. Power customer service score


  • Checkmark

    Plentiful rider options

CONS


  • Close X

    Limited online quotes


  • Close X

    Policy acceptance not guaranteed


  • Close X

    No 24/7 help line

Northwestern Mutual

Best for: Customer service

Northwestern Mutual won the 2023 Bankrate Award for best universal life insurance company due to its high financial strength rating, highly-rated customer satisfaction and available financial planning services. Northwestern Mutual sells coverage through agents, which could be a good fit for those who prefer face-to-face interactions over a digital purchase process.

Earning an A++ (Superior) financial strength rating from AM Best, Northwestern Mutual shows a strong history of being able to pay claims. As a mutual company, it is owned by its policyholders. Northwestern Mutual offers a variety of term, whole and universal life insurance policies. Because universal life coverage is flexible, you may be contacting your agent more often. Northwestern Mutual ranks highly in Bankrate’s internal study of accessibility for providing a mobile app, online portal, local agents and a 24/7 customer service phone line that accepts premium payments.

Learn more: Northwestern Mutual Insurance review

PROS


  • Checkmark

    Dividends available on whole life insurance policies


  • Checkmark

    Flexible policy options


  • Checkmark

    Wide range of riders


  • Checkmark

    Easy-to-use online portal and mobile app

CONS


  • Close X

    Must buy coverage through an agent


  • Close X

    Limited information available online

Prudential

Best for: Policy personalization

Prudential is the third-largest U.S. life insurer based on market share rankings from the Insurance Information Institute (Triple-I). In our study, Prudential Financial ranked just behind our overall best life insurance company winners in customer satisfaction and accessibility. It offers plentiful rider options, easy-to-use online tools and live agent support.

The company has nine universal life insurance riders — more than any other carrier on our list. It offers a variety of term life and universal life insurance policies, giving customers a greater level of flexibility than some of its competitors. However, keep in mind that Prudential does not offer whole life insurance or no-medical exam policy options.

Learn more: Prudential Life Insurance review

PROS


  • Checkmark

    Live agent support available


  • Checkmark

    Online tools


  • Checkmark

    Plentiful rider options


  • Checkmark

    Variety of term and universal life policies

CONS


  • Close X

    Medical history required for quotes


  • Close X

    Limited online quotes


  • Close X

    Selective policy options


  • Close X

    Below-average J.D. Power customer satisfaction score

State Farm

Best for: Term life insurance

State Farm was another two-time Bankrate Award winner, scoring the prize for best term life insurance in 2022 and 2023, thanks to its top-notch customer service and accessibility tools. As one of the top life insurance companies, State Farm also received the highest customer satisfaction score from J.D. Power.

State Farm offers accessibility tools including a 24/7 customer helpline, easy-to-use mobile app, online portal and more than 19,000 exclusive local agents across the U.S. With an A++ (Superior) rating from AM Best, State Farm has a history of financial stability. The carrier offers a variety of term life insurance options as well as whole, universal and variable universal options.

Learn more: State Farm Insurance review

PROS


  • Checkmark

    Numerous policy and rider options


  • Checkmark

    No medical exams required for some policies


  • Checkmark

    Highest J.D. Power customer satisfaction rating

CONS


  • Close X

    $10,000 maximum for final expenses insurance


  • Close X

    Age-dependent exam plans


  • Close X

    Can only purchase from an agent; no online option

Source: thesimpledollar.com

Posted in: Apartment Decorating, Life Insurance Tagged: 2022, 2023, About, accessibility, Account management, age, agent, agents, All, analysis, app, at risk, Auto, average, Benefits, best, Budget, Buy, choice, codes, companies, company, cons, customer service, death, death benefit, decision, Digital, dividends, earning, expense, expenses, experience, experts, farm, Features, Financial Planning, financial stability, Financial Wize, FinancialWize, Free, friendly, General, Giving, goals, good, great, guardian, health, helpful, history, home, Home Insurance, impact, in, Income, industry, Insurance, insurance coverage, Learn, Life, life insurance, life insurance policy, list, Live, Local, low, low-income, Make, making, market, Massachusetts, Medical, mobile, Mobile App, money, Money Management, More, needs, new, new york, offer, offers, or, Other, party, payments, Personal, Planning, plans, policies, premium, products, programs, pros, Purchase, Quotes, rate, Rates, ratings, reveal, Review, riders, risk, second, shopping, simple, stage, state farm, studying, survey, term life insurance, time, tools, Underwriting, universal life insurance, value, variable, whole life insurance

Apache is functioning normally

June 1, 2023 by Brett Tams

Damage has already occurred While it appears both sides are coalescing toward a compromise, Cohn said damage had already been done. “Fitch last week, at the end of the week, put Fannie and Freddie on warning they could lose their rating if the government were to default,” she noted as an example of the negative … [Read more…]

Posted in: Refinance, Savings Account Tagged: biden, bond, bond yields, bonds, crash, debate, Debt, debt ceiling, debt payments, estate, Financial Wize, FinancialWize, government, house, Housing, Housing market, in, interest, interest rates, Joe Biden, market, Mortgage, Mortgage Rates, payments, president, President Joe Biden, price, Prices, Raise, Rates, Real Estate, real estate market, right, short, simple, washington, will

Apache is functioning normally

June 1, 2023 by Brett Tams

From the Kansas City Chiefs to St. Louis’s Gateway Arch, Missouri has plenty to offer both residents and visitors. As a result, there are plenty of Missouri banks. In fact, it can be tough to narrow down the options.

Missouri Welcomes You

17 Best Banks in Missouri

From online banking apps to small community banks and large financial institutions, Missouri has a little of everything. Here are some of the best Missouri banks to kick off your search.

1. First Midwest Bank

Founded in Poplar Bluff, First Midwest Bank has branches and ATMs in Poplar Bluff, Columbia, Greenville, Piedmont, Puxico, Van Buren, and Williamsville. Currently, First Midwest is offering $.10 cash back per swipe of your First Midwest Dime-a-Time debit card.

Recently, First Midwest merged with Old National Bank to expand its service area and offerings to Indiana, Illinois, and Kentucky.

Pros:

  • Cash back with each debit card purchase
  • No monthly maintenance fees with most checking accounts
  • Wide variety of account options

Cons:

2. U.S. Bank

Missouri residents looking for a national bank with branches in Missouri might like U.S. Bank. You’ll find branches and ATMs in 25 different states, along with a mobile app that allows you to transfer funds, pay bills with bill pay, and split a check with Zelle.

U.S. Bank’s current special on CDs means you can earn up to 4.75% APY. Small business owners should consider U.S. Bank’s current checking bonus, which offers $500 if you open a new account and deposit $5,000. Deposit $15,000 and earn a $750 bonus.

Pros:

  • Robust mobile banking features
  • Up to $750 bonus for business checking account
  • Wide range of banking services

Cons:

3. Chime

Chime is a mobile banking solution with competitive interest rates on savings accounts. You’ll get fee-free1 ATM access nationwide at any MoneyPass, Allpoint, and VisaPlus Alliance ATM, as well as access to your direct deposit up to two days early2. Electronic deposit customers also qualify for up to $200 in overdraft protection through SpotMe5, although Chime charges no fees for overdrafts.

Pros:

  • No fees on checking account
  • Up to 2.00% APY3 on savings accounts
  • No overdraft fees

Cons:

  • No physical branches
  • No cash deposit options

4. GO2bank

GO2bank is an online banking solution with a full-featured mobile app and access to free ATM withdrawals and deposits through partners. Your account with GO2bank will include a checking account with no maintenance fees and a high-yield savings account.

If you’re interested in building credit, you can qualify for a GO2bank Secured Visa Credit Card, which reports your on-time payments to credit bureaus and requires no credit check.

Pros:

  • Fee-free checking account with direct deposit
  • Up to 4.50% APY on savings accounts
  • Cash deposits at 90,000+ retail locations nationwide

Cons:

  • No physical branches
  • Direct deposit necessary for free checking

5. Commerce Bank

Kansas City residents should consider Commerce Bank, a community bank with locations throughout the area. You’ll also find ATMs and branches throughout Missouri, as well as in 10 other states. You’ll find a wide variety of checking account and loan options, as well as savings accounts and CDs.

Not only will you get in-person customer service at a branch, but you can chat with a live banker at any time in the Commerce Bank CONNECT app. You’ll choose the banker and connect with the same representative every time.

Pros:

  • Branches and ATMs in 11 states
  • Free account includes full mobile banking services
  • Competitive rates on loans

Cons:

  • No fee-free ATMs outside the service area
  • Low interest rates on savings accounts and CDs

6. Regions Bank

With branches in Missouri, Alabama, Arkansas, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, and Texas, Regions Bank is a great option if you travel within the Midwest and Southeast.

Regions Bank offers a variety of banking services, including wealth management services and support for small business owners. With DepositSmart ATMs, you can skip the branch and deposit your funds at an ATM.

Pros:

  • DepositSmart ATMs let you deposit cash and checks without visiting a branch
  • Flexible requirements to waive checking account fees
  • Checking accounts for students and seniors

Cons:

  • Low rates on savings accounts
  • No branches or ATMs outside the Midwest and South

7. Axos Bank

If you don’t need a local branch, online banking might be an option. Axos Bank offers online services through its website and mobile banking app. There are multiple checking account options, including accounts with no monthly maintenance fees and rewards.

Axos offers unlimited ATM fee reimbursements, so you can use your debit card anywhere in the U.S. Currently, Axos has a $100 bonus for new checking account holders who open an account and have at least $1,500 in electronic deposits within the first 30 days.

Pros:

  • $100 bonus for new rewards checking account
  • Up to 3.30% APY on checking accounts
  • Unlimited reimbursements for out-of-network ATM fees

Cons:

  • No physical branches
  • Low interest rates on savings accounts

8. Central Bank

Central Bank is a regional bank with more than 130 locations in Missouri, Kansas, Illinois, and Oklahoma. You’ll find multiple checking account options, including a fee-free account with all the basic features.

You’ll enjoy free ATM transactions at any Central Bank ATM, as well as more than 37,000 ATMs nationwide. Central Bank also has robust business banking options, including loans and multiple checking options.

Pros:

  • Fee-free ATM withdrawals at 37,000+ MoneyPass locations nationwide
  • Personalized customer service at branches
  • Wide range of loan options available

Cons:

  • $50 minimum deposit to open
  • Branches in Missouri are mainly in the southwest and central part of the state

9. Bank of America

There are benefits to going with a national bank, including access to banking services while traveling and a broad range of features. As one of the largest national banks, Bank of America has competitive offerings, including a variety of checking account options and wealth management services.

Business customers can earn a $200 bonus for opening a new account and depositing $5,000 in the first 30 days. Individual banking customers should check out the $200 rewards bonuses on new credit cards.

Pros:

  • 3,900 branches and 15,000 ATMs nationwide
  • Robust free mobile banking features
  • Wide range of personal and business credit cards

Cons:

  • Low interest rates on savings accounts
  • Long waits for customer service

10. Great Southern Bank

Great Southern is headquartered in Springfield, with branches in Missouri, Arkansas, Iowa, Kansas, Minnesota, and Nebraska. You’ll find multiple checking account options, with a free basic checking account.

Although Great Southern’s checking accounts require minimum deposits, there are three options with only a $25 minimum opening deposit required. That includes a second chance account designed to help those who struggle to establish an account due to their banking history.

Pros:

  • Fee-free ATM transactions at Allpoint ATMs nationwide
  • Branches across six states
  • Competitive rates on personal loans

Cons:

  • Checking accounts require a minimum deposit to open
  • Limited customer service hours

11. Belgrade State Bank

Belgrade State Bank is a local bank with checking and savings accounts. While there are limited ATMs and branches, Belgrade’s out-of-network ATM fee is only $1. This is in addition to the fees that will be charged by the third-party bank.

Belgrade has robust business banking options, including a fee-free checking account that includes 1,000 items per month, with a $0.25 charge per transaction after.

Pros:

  • Free checking with enrollment in e-statements
  • No minimum balance requirement for checking accounts
  • Competitive rates of personal loans

Cons:

  • Limited branch and ATM footprint
  • $50 minimum deposit to open

12. PNC

PNC is one of the biggest national banks with 26 branches in Missouri. Although PNC only has branches in 29 states, you’ll enjoy fee-free access to your cash at more than 60,000 ATMs nationwide, thanks to PNC’s partner network.

Pros:

  • Access to more than 60,000 ATMs nationwide
  • Branches in 29 states
  • Competitive mobile banking features

Cons:

  • Low interest rates on savings account
  • Accessible banking services, including support for non-English-speaking customers

13. Mid-Missouri Bank

Mid-Missouri Bank is one of the best banks for both the small business owner and the consumer. You’ll find 14 branches across Missouri, as well as ATMs within the coverage area. There are two checking accounts.

One issues an annual percentage yield on your balance, while the other offers cash back on debit card purchases. Mid-Missouri offers competitive rates on personal loans, including auto, home, and home equity lines of credit.

Pros:

  • 14 branches across Missouri
  • Basic account earns cash back or APY
  • Up to $25 in ATM fees refunded each month

Cons:

  • Lower APY on savings account than competitors
  • Limited number of branches and ATMs

14. Bank of Missouri

Bank of Missouri is one of the best banks in Missouri for its checking account perks. You’ll have three options: a bank account that earns 3.05% APY, an account that earns cash back on debit transactions, and an account that offers iTunes, Amazon, or Google Play refunds each month.

This bank’s checking accounts come with no monthly maintenance fees and refunds on up to $25 monthly in out-of-network ATM withdrawals.

Pros:

  • Rewards and interest-bearing checking accounts
  • No monthly fee on checking and savings accounts
  • Competitive rates on CDs

Cons:

  • Low rates on savings account
  • Limited number of branches and ATMs

15. UMB Bank

UMB Bank is one of the longest-running Missouri banks, having been in existence for more than a century. You’ll find branches throughout Missouri, as well as in Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona, and Texas.

UMB also offers online banking options that make it easy to transfer funds and deposit checks. One downside to UMB is its ATM footprint. You’ll pay $2 if you can’t find a UMB ATM, and those are limited to its service area.

Pros:

  • Robust mobile banking options
  • Fee-free checking account available
  • Competitive rates on CDs

Cons:

  • Minimum deposits required for all checking accounts
  • Low interest rates on savings account

16. Simmons Bank

If you’re looking for the best checking account among banks in Missouri, consider Simmons Bank, which offers impressive checking and savings accounts with plenty of branches throughout Missouri.

You’ll get fee-free cash withdrawals nationwide at MoneyPass ATMs, along with fee-free checking that requires no minimum balance or opening deposit.

Pros:

  • Fee-free checking options
  • Multiple checking and savings accounts
  • Fee-free cash access at MoneyPass ATMs nationwide

Cons:

  • Competitive rates on CDs
  • Minimum deposit on savings account

17. First State Community Bank

First State Community Bank has more than 50 branches throughout Missouri for that in-person customer service. You’ll also get free access to ATMs in the MoneyPass network for cash withdrawals while you’re traveling.

The basic account, Free eChecking, offers all the features you’ll likely need with no monthly fee as long as you sign up for electronic statements.

Pros:

  • Fee-free cash access at MoneyPass ATMs nationwide
  • Fee-free checking option when you sign up for electronic statements
  • Round up debit transactions to boost your savings

Cons:

  • Opening deposit required for checking
  • Limited branch locations

Frequently Asked Questions

What is the most popular bank in Missouri?

Like most states, Missouri has plenty of large corporate banks with branches in the area. Some consumers will always prefer that option due to the wealth of banking services and access to ATMs nationwide. Bank of America has a strong presence in Missouri, as does U.S. Bank.

But when it comes to popularity, locals tend to cite smaller banks. Central Bank is often mentioned as a favorite, in part due to its heavy presence throughout Missouri. Commerce Bank also often tops lists of the best banks in Missouri.

If you go with a local bank, look for one that’s covered by the Federal Deposit Insurance Corporation and pay close attention to whether you’ll have access to cash withdrawals at ATMs while traveling.

What is the best bank for small businesses in Missouri?

Those looking for business accounts typically have different criteria than those searching for personal accounts. You might be more interested in being able to invoice customers, for instance, or track spending for tax purposes.

If you’re a freelancer in Missouri, take a look at Axos for your small business banking. U.S. Bank has great money management features, so if that’s a priority, take a look at its small business banking services.

Which Missouri bank has the best customer service?

As valuable as it can be to have a bank account with no monthly maintenance fees or plenty of ATMs, sometimes it’s all about getting help when you need it. If you like in-person service, go with a small brick-and-mortar option with branches that are convenient to you. First State and Bank of Missouri are both great traditional banking options.

For some people, though, the best banks are those that offer easy-to-use remote customer service. Whether that means getting help via a chatbot or connecting with a representative by phone, narrow the options to something that works for you. Ally Bank has been recognized for its 24/7 customer support, primarily because you’ll get an estimate of how long you’ll have to wait on hold before you launch the call.

Which Missouri bank is the most reliable?

As long as you go with an FDIC-insured bank, your funds will be protected up to $250,000. Still, nobody wants to stress over a bank eventually going under. Large corporate banks like Bank of America and U.S. Bank have a long history and an impressive asset value that protects them from default.

But there are plenty of reliable local banks in Missouri as well. First State has been in business for 150 years, and Central Bank was founded in 1902. Both are unlikely to go anywhere and if they did, it would be to merge with another bank or join a parent company.

The best banks are the ones that fill your needs while also keeping fees at a minimum. It’s important to compare at least a few options to make sure you’re getting the best deal for your Missouri banking needs.

1. Out-of-network ATM withdrawal fees may apply with Chime except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

2. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. Chime generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

3. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is accurate as of May, 22, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

5. Chime SpotMe is an optional, no fee service that requires a single deposit of $200 or more in qualifying direct deposits to the Chime Checking Account each at least once every 34 days. All qualifying members will be allowed to overdraw their account up to $20 on debit card purchases and cash withdrawals initially, but may be later eligible for a higher limit of up to $200 or more based on member’s Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. Your limit will be displayed to you within the Chime mobile app. You will receive notice of any changes to your limit. Your limit may change at any time, at Chime’s discretion. Although there are no overdraft fees, there may be out-of-network or third party fees associated with ATM transactions. SpotMe won’t cover non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. See Terms and Conditions.

Source: crediful.com

Posted in: Credit 101 Tagged: 2, 2023, About, ACH, Alabama, All, AllY, Amazon, analysis, app, Apps, Arizona, Arkansas, asset, ATM, Auto, balance, Bank, bank account, bank of america, Banking, banks, basic, before, Benefits, best, Bill Pay, bills, bonus, bonuses, brick, building, Building Credit, business, Business Credit, business credit cards, cash back, CDs, chance, Checking Account, Checking Accounts, Chime, city, Colorado, columbia, Community Bank, Community banks, company, cons, Consumers, Credit, Credit Bureaus, credit card, credit cards, credit check, customer service, Debit Card, deposit, deposit insurance, Deposits, Direct Deposit, earn interest, equity, FDIC, Featured, Features, Federal Deposit Insurance Corporation, Fees, Financial Wize, FinancialWize, Florida, Free, free checking, funds, Georgia, Google, great, history, hold, home, home equity, hours, Illinois, in, indiana, Insurance, interest, interest rates, items, Kansas City, Kansas City Chiefs, launch, lists, Live, loan, Loans, Local, louisiana, low, low rates, LOWER, maintenance, Make, member, Midwest, mississippi, missouri, mobile, Mobile App, Mobile Banking, money, Money Management, More, most popular, nebraska, needs, new, new credit cards, no fee, north carolina, offer, offers, Online Banking, or, Other, overdraft, overdraft fees, overdraft protection, party, pay bills, payments, Personal, Personal Loans, play, PNC, Popular, pros, protection, Purchase, questions, Rates, rewards, rewards checking, Rewards Checking Account, risk, running, savings, Savings Account, Savings Accounts, search, searching, second, Seniors, single, Small Business, South, South Carolina, southwest, Spending, St. Louis, states, stress, students, tax, Tennessee, texas, time, timing, track spending, traditional, Transaction, Travel, u.s. bank, under, value, variable, visa, visitors, wants, wealth, wealth management, will, withdrawal

Apache is functioning normally

June 1, 2023 by Brett Tams

Our rights as women have come a long way since we earned the power to vote on August 26, 1920.

But the financial playing field between men and women still isn’t level. Not even close. 

To help you make waves in your own financial life, I interviewed several Millennial and Gen Z women to find out what financial advice they’d give to other women today

Here’s what they had to say.

What’s Ahead:

  • 1. “Don’t be afraid to negotiate your salary.”
  • 2. “Take advantage of any employer match ASAP.”
  • 3. “Avoid high-interest debt.”
  • 4. “It is SO cliché, so hear me out… please start saving early for retirement!”
  • 5. “Start using a spending plan or budget. Zero it out each month, and save the rest.”
  • 6. “As a Millennial myself, the best money advice I would give women in their 20s and 30s is to diversify how you save and spend money.”
  • 7. “Protect yourself and your people financially.”
  • 8. “Educate yourself so you understand how money, interest, and debt works.”
  • 9. “Sign up for Experian Boost. It’s free and will report monthly bills that generally don’t boost your credit like a phone bill, gas, and power!”
  • 10. “When you buy your first home, pay biweekly (most working people get paid on these terms anyway). You’ll make one extra payment a year, shaving off seven years of your loan life on a 30-year mortgage!”
  • 11. “When it comes to money, you can have your cake and eat it too.”
  • 12. “Do not share bank accounts with anyone you’re dating but not married to, even if you live together.”
  • 13. “Do not lease your car. Take out a loan instead.”
  • 14. “Be a minimalist, especially if you rent.”
  • 15. “The greatest gift you can give yourself is to save and invest early.”
  • 16. “Becoming a financially grown-up woman means unlearning a lot of money lessons society taught us as girls: that men are better at money and math (they’re not), that investing is scary (it’s not), and that the best route to financial stability is to marry a high earner (absolutely not!).”
  • 17. “Surround yourself with people with similar money values.”
  • 18. “Make saving a habit as soon as you start making income.”
  • 19. “Budget, but give yourself room to indulge.”
  • 20. “Cash back offers are everywhere, from brands like Rakuten, to credit card perks, to apps like Coupons.com. Use them!”
  • 21. “Learn to use credit cards wisely.”
  • 22. “Get a side gig by turning a passion into a money-making opportunity.”
  • 23. “Know your worth and advocate for yourself when negotiating.”
  • 24. “Set goals and actively work toward them.”
  • 25. “Forget FOMO. Don’t be afraid to say no.”
  • Summary

1. “Don’t be afraid to negotiate your salary.”

Women’s Equality Day: 25 Money Tips From Women For Women - Negotiate your salary

Anna Barker, Founder of LogicalDollar, offered me this advice. 

There’s no question that it can be scary to ask for more money. Especially as women, we often internalize the feeling that we’re going to be seen as pushy or demanding if we ask for a raise. 

However, various studies show this is actually one of the reasons women end up earning less over their lifetimes than men, who tend to be more likely to ask for more money.

2. “Take advantage of any employer match ASAP.”

Barker also talked with me about retirement. One of the best things that you can do for your future financial security is to start investing as early as possible.

If your employer offers any matching of your 401(k) contributions, this is basically free money and you should do everything you can to invest up to the limit of the match.

3. “Avoid high-interest debt.”

According to Barker, a big money mistake that a lot of women in their 20s and 30s make is signing up for high-interest credit cards. To be clear, credit cards can actually be a great tool if used correctly — which primarily involves paying the balance off in full by the end of each billing cycle.

The problems start to arise once those interest-free periods run out and you realize you’re not able to immediately pay off the debt you’ve accrued.

4. “It is SO cliché, so hear me out… please start saving early for retirement!”

Heather Albrecht, Financial Coach and Founder of Balance Financial Coaching, discussed this with me. 

It’s hard because when you’re young, you seem to have SUCH a long time until that money is needed. But the math doesn’t lie.

Starting young makes it easier because you can save less. Gosh, I wish I had made the space in our spending plan to save earlier even though it seemed impossible. The $25 here or there would have been huge by now.

5. “Start using a spending plan or budget. Zero it out each month, and save the rest.”

Women’s Equality Day: 25 Money Tips From Women For Women - Use a budget

Albrecht also spoke with me here. And I have to say if I had been able to get myself into the mindset of “saving money is spending money on my future freedom” at a younger age, there would have been a lot less stress at times.

Budgeting doesn’t have to be difficult, either. Just pick the right method and it’ll become just another habit.

6. “As a Millennial myself, the best money advice I would give women in their 20s and 30s is to diversify how you save and spend money.”

Siobhan Alvarez, Founder of Budget Baby Budget, shared this wisdom with me.

I am a big believer in not being dependent on one checking and savings account! I have a long-term high-yield savings account for an emergency fund, a savings account at my local bank for big purchases, a checking account for everyday expenses; and a checking account for fun purchases throughout the month.

This has helped me not only pay off a huge amount of debt over the past few years but do it in a way so I didn’t feel like I was missing out on life and fun!

7. “Protect yourself and your people financially.”

Brittney Burgett, Head of Communications at Bestow, gave this little nugget of advice. Emergency savings, disability insurance, and life insurance matter, especially if you have financial dependents.

Insurance, in particular, is more affordable to buy the younger and healthier you are. I, for example, have life insurance because I own a home.

My mom is my beneficiary, so if anything were to happen to me, the payout from a policy would enable her to continue the mortgage payments and decide later on what to do with my house — keep it, rent it or sell it. Life insurance would give her flexibility when it’s needed most.

8. “Educate yourself so you understand how money, interest, and debt works.”

Women’s Equality Day: 25 Money Tips From Women For Women - Educate yourself

Lindsay Feldman, Publicist and Founder of BrandBomb Marketing, broke down this for me.

It wasn’t until I really started reading financial books and listening to podcasts that I really began to take control over my financial situation. Understanding how money, interest, and debt works are key to being able to make your money work for you. I look at everything differently now which has empowered me to make smarter decisions.

9. “Sign up for Experian Boost. It’s free and will report monthly bills that generally don’t boost your credit like a phone bill, gas, and power!”

Feldman offered up a way for folks to finally help their credit the easy way. Experian Boost™ is free and it takes just a few minutes to sign-up.

Always be on the lookout for ways to improve your credit – it’ll only help you in the long run.

Feldman shares a great tip that can help homeowners own their home sooner (and pay wayyy less in interest). If it’s possible, work those extra payments into your budget.

11. “When it comes to money, you can have your cake and eat it too.”

Youmna Rab, Founder of Brilliantly Budgeting offered me this quote.

Women’s Equality Day: 25 Money Tips From Women For Women - Enjoy your money

You don’t need to save every penny you earn and give up your favorite indulgences like spa days or dinners out.

If you make a plan for your money, you can enjoy what you like while also saving money for the future.

12. “Do not share bank accounts with anyone you’re dating but not married to, even if you live together.”

Shannon Vissers, the Financial and Retail Analyst of Merchant Maverick, shared some tough love here.

If you break up or your partner spends on things you don’t agree with, you’ll have no legal recourse to get your money back apart from suing them in small claims or court (which is expensive and stressful and may not go in your favor).

13. “Do not lease your car. Take out a loan instead.”

Vissers makes a good point here as well. A lease is essentially a very expensive car rental, and it’s a bad choice unless you’re wealthy enough to comfortably afford this luxury.

This doesn’t mean you can’t get a new car when you’re young. Rather than leasing a car out of your price range, opt to finance a cute, reliable car that you’ll own in three or five years (ideally three). You’ll build credit history this way and, in a few years, you won’t even have a monthly car payment.

14. “Be a minimalist, especially if you rent.”

Women’s Equality Day: 25 Money Tips From Women For Women - Be a minimalist

While this tip may not be for everyone, there’s a good reason Visser’s offers this pearl of wisdom as well.

A good case can be made for spending on experiences when you’re young – trips, concerts, etc. — but overspending on retail goods is another story. Ever heard of the saying, what you own, owns you?

It’s true.

Remember, you’ll have to deal with all your clothes, shoes, furniture, kitchen items, knick-knacks, etc. the next time you move — and your headaches will be compounded if you have to move to a smaller place.

15. “The greatest gift you can give yourself is to save and invest early.”

Sarah Jane Paulson, CFP® at Valkyrie Financial, gave me this bit of guidance.

The classic pay yourself first mentality is the easiest way to a financially strong future. Build that emergency fund (or F*** You fund, if you prefer) of three to six months worth of expenses in a separate account other than your everyday checking.

Then go out and open an IRA or Roth for yourself. Put your money into cheap, diverse index funds and keep adding to it. The greatest money strength you have on your side is that you have years for the market to create an avalanche out of the first few snowflakes of money you invest.

16. “Becoming a financially grown-up woman means unlearning a lot of money lessons society taught us as girls: that men are better at money and math (they’re not), that investing is scary (it’s not), and that the best route to financial stability is to marry a high earner (absolutely not!).”

Sara Rathner, credit cards expert at NerdWallet, wanted to share this with other women.

Women’s Equality Day: 25 Money Tips From Women For Women - Throw sexist financial "advice" in the garbage

So throw all those old lessons in the garbage, because that’s where it belongs. Now, today, learn everything you can about managing your finances on your own.

There is nothing more empowering than being the boss of your own life, and of being an equal partner in your relationships. No one will ever care as much about your money as you will.

17. “Surround yourself with people with similar money values.”

Sue Hirst, Co-Founder and CFO of CFO On-Call shared her experience when we talked.

When I was in my 20s, I used to hang out with many people who didn’t share my money values. As a result, almost every time I went out with my friends, I splurged money recklessly due to peer pressure.

This was one of the top reasons I was unable to save as much money as I would have liked each month. Looking back, I wish I had either told my friends directly that I wasn’t comfortable spending huge amounts of money routinely, or made new friends whose financial values aligned with my own.

18. “Make saving a habit as soon as you start making income.”

Imani Francies, Finance Expert at US Insurance Agents, shared this little mind shift.

Saving becomes easier when you look at yourself with the same significance that you look at your power bill or any other bill. No matter what, you are going to do your best to pay your power bill. You should feel the same way about putting money into your savings.

Paying yourself first every month is investing in your future. Even if you can only put $5 into a savings account once a month, start early.

19. “Budget, but give yourself room to indulge.”

Women’s Equality Day: 25 Money Tips From Women For Women - 19. “Budget, but give yourself room to indulge.”

Lisa Thompson, Savings Expert at Coupons.com, offered up ALLLL the good tips when I spoke with her.

What’s your weakness: designer handbags, weekend getaways, fine dining with a great bottle of champagne? Make room for things you love by controlling what you spend in other areas.

20. “Cash back offers are everywhere, from brands like Rakuten, to credit card perks, to apps like Coupons.com. Use them!”

Thompson also offers this bit of advice. Refuse to pay full price for anything until you’ve looked for an offer. If you can pair a coupon or cash back offer with a store discount or sale, bam! That’s a savvy way to shop.

21. “Learn to use credit cards wisely.”

To tack on, Thompson also had this to say.

She makes a good point, too. Today, there are so many options for credit cards that offer perks from cash back to miles to points, as well as incentives, like a free Dash Pass for DoorDash or money toward a Peloton membership. The key, of course, is to not carry a balance and pay so much interest that it cancels out the perks. But if you can learn to use credit cards wisely by paying them off each month, the perks and incentives can help make everything from dining out to travel more affordable.

22. “Get a side gig by turning a passion into a money-making opportunity.”

Finally, Thompson ended our conversation with the quote above.

Do you love essential oils? Make balms, rollerballs, and pillow sprays, and sell them on Etsy or at pop-up shops.

Do you love thrifting, going to estate sales, and visiting antique shops? Find items worth more than what you’re paying and resell them! Facebook Marketplace is the perfect spot for that, and it’s free.

If you can turn a hobby into a source of income, that’s extra money for you to invest, save, or use as your slush/entertainment fund.

23. “Know your worth and advocate for yourself when negotiating.”

Women’s Equality Day: 25 Money Tips From Women For Women - Know your worth

Amy Maliga, Personal Finance Consultant at Take Charge America, tells it like it is with her wise advice above.

Since the gender pay gap is still a real thing (ugh), it’s important to do your research on salaries for your position and advocate for yourself when negotiating a new job or discussing your annual performance review.

24. “Set goals and actively work toward them.”

Maliga offered me a simple but strong piece of advice above.

Whether it’s buying a home, starting a business, or embarking on world travel, setting financial goals gives a structure and framework to how you plan your finances.

25. “Forget FOMO. Don’t be afraid to say no.”

Maliga also makes a good point here.

TikTok made me buy it – or did it?

It’s way too easy to shop these days, and social media knows exactly what it takes to get you to press “add to cart.” When you’re tempted to buy something you hadn’t planned on, or friends are trying to talk you into activities you can’t afford, keep those long-term financial goals in mind, and don’t be afraid to say no.

Summary

We celebrate Women’s Equality Day every August 26th to commemorate the day the 19th Amendment finally recognized that women have the right to vote. But that same equality hasn’t trickled to the financial space yet, where the gender pay gap, wealth gap, and investing gap still exist today.

We’ve made a lot of progress over the decades, but a lot still needs to happen at the company, state, and national levels to achieve equal pay and equal opportunities for equal work. Until then, I hope these financial tips from awesome Millennial and Gen Z women serve as inspiration for how you can up the ante in your own financial life.

Are there any tips you’d add to the list? Let me know in the comments below!

Read more:

Source: moneyunder30.com

Posted in: Investing, Personal Finance, Saving And Spending Tagged: 2, 30-year, 30-year mortgage, About, Activities, advice, affordable, age, agents, All, Apps, ask, avalanche, baby, baby budget, balance, Bank, bank accounts, before, beneficiary, best, Bestow, big, bills, Books, Budget, Budgeting, build, build credit, business, Buy, Buying, Buying a Home, car, cash back, Checking Account, choice, clear, Clothes, company, consultant, contributions, coupons, court, Credit, credit card, credit cards, credit history, dating, Debt, decades, decisions, dining, dining out, Disability, diversify, doordash, earning, Emergency, Emergency Fund, emergency savings, employer, employer match, Entertainment, estate, expenses, expensive, experian, Experian Boost, experience, Extra Money, facebook, Finance, finances, Financial advice, financial coach, Financial Goals, financial stability, financial tips, Financial Wize, FinancialWize, first home, fomo, Free, freedom, fun, fund, funds, furniture, future, gap, gas, Gen Z, gender, gift, gig, goals, good, great, habit, history, home, homeowners, house, in, Income, index, index funds, Inspiration, Insurance, interest, Invest, Investing, IRA, items, job, kitchen, Learn, lease, leasing, Legal, lessons, Life, life insurance, lindsay, list, Live, loan, Local, Luxury, Make, making, market, Marketing, marriage, married, math, Media, men, miles, millennial, mindset, Minimalist, mistake, money, money advice, money tips, More, more money, Mortgage, mortgage payments, Move, needs, negotiate, negotiating, nerdwallet, new, new job, offer, offers, opportunity, or, Other, pay gap, payments, peloton, penny, Personal, personal finance, pillow, place, plan, points, pressure, price, protect, Raise, Relationships, Rent, rental, Research, retirement, Review, right, room, roth, salaries, Salary, sale, sales, save, Saving, saving money, savings, Savings Account, security, Sell, shares, Side, side gig, simple, social, Social Media, society, spa, space, Spending, Start Saving, starting a business, story, stress, the balance, TikTok, time, tips, Travel, under, waves, wealth, wealth gap, weekend getaways, will, woman, women, work, working, young

Apache is functioning normally

June 1, 2023 by Brett Tams

As unemployment numbers continue to rise, many employees are stressed about whether they’ll have a job next week or not.  Some have already, some have already lost their jobs and are scrambling to find new employment.   In this time financial planning is crucial.  This is a time when people are feeling and are desperately in need of guidance.  If you think that you are about to encounter a layoff,  you need to be focusing your attention on what can be controlled:  cutting expenditures, figuring out emergency funds, evaluating how to replace lost benefits, and making a game plan for the job search.

1. Save Emergency Cash

For those that are still employed but the future of their job is uncertain, I would encourage them to have at least 12 months of savings in cash.  Unfortunately many will not have enough.  But if they’re still employed and the emergency funds are not there, tapping into their 401(k) might be a viable option.  I know what you’re thinking.  Tapping into your 401k usually goes against all that I stand for.  And with this dismal market,  it might be a dangerous move, but;  if they become unemployed that option might now be available to them.

Typically if you’re still employed you’re allowed borrow up to half of your 401(k) balance, up to a maximum of $50,000.  Running these numbers you can guesstimate the period of how long you think it will take you to find a new job and then how much you would need to borrow to get you by until the new job is made.  If you borrow from your 401k while you are still employed then you avoid the 10% withdrawal penalty.  Sure there is some speculation in this move, but if you’re in a high demand field you may be able to use this move to your advantage.

Warning: If you do this, be sure to double check with your employer when you are due to pay it back.  It tends to vary from employer, but it could be due back immediately, within 60 days or some period greater.

2. Don’t Pay Off Debt

Another common misconception of after being laid-off is that most people want to take their savings or take their retirement savings and pay off debt, such as credit cards or even the 401(k) debt.  But in this type of market, paying off debt should not be the priority especially if you are unemployed.  The priority is to keep get your savings intact and making sure that you have plenty of cash on hand.  Sure credit card debt is bad, but just focus on making the minimum payment until you get your job situation in check.

3. Focus On Crisis Budgeting

If you’re used to going to shopping every weekend or eating out every other night at fancy restaurants, then most likely those changes are just around the corner. You need to sit down and seriously hammer out a budget of things that you need and things that you don’t need.

You may even consider working out two budgets, one for while you’re working and one for when you’re not working, so that way you can truly see how much you’re spending per month. And then, you can contemplate whether you can go on a cheaper cell phone plan, or cut your cable bill services. Sometimes adding that extra payment per month might not seem like a big deal, but $50 here and $50 there will surely add up, especially on a limited budget. Also, too, knowing which expenses you absolutely must be covered will help you realistically search for your future job.

4. Replace Lost Benefits

In the aftermath of a job loss, people should take stock of what benefits have been lost, which ones you are entitled to by law, and which ones may be portable.  how to continue health care coverage, especially if there are dependents.

Typically, employees are eligible to keep the same coverage through COBRA for at least 18 months. But, they may have to pay 102% of the cost of their insurance premium. If there premium have been subsidized by their employer, then that cost will be a rude shock.  COBRA can often be a good bridge choice, but it ends up being a health benefit. Families paying $200 a month for insurance under COBRA, it could be $1,000.  Luckily, the government just passed new law concerning COBRA benefits that qualifying period will be only responsible to pay for 35% of the benefit.  This comes at a time that should be very helpful to many that are facing layoffs ahead.

Many employers offer life insurance, long-term care insurance, disability policies and they may be portable as well. For another person or one who is not in good health, ability to take over the payments on existing $100,000 life insurance policy may save the worry of having to find another carrier. It’s better to keep it for a few months, although make sure they don’t need it, and drop it later.

5. Consider a Career Transition

Many people will be forced by an unforeseen job layoff to reassess what they want in their lives and what is meaningful to them. They may have to craft resumes, cover letters for the first time in years, and feel at a loss especially if they are switching to a new career path, which is an unfamiliar field.

If you haven’t jumped on the social media bandwagon, it’s time.  Consider Facebook, LinkedIn, Twitter and other social media sites to reconnect with old networks and also create new ones.  The more people that know your situation the better.   Also, consider starting a blog to showcase your talents. Need a good blog for inspiration?  Guess what, you’re already here.

by Steve Rhodes

Source: goodfinancialcents.com

Posted in: Retirement, Starting A Family Tagged: 2, 401k, About, All, balance, Benefits, big, Blog, Borrow, bridge, Budget, budgets, Cable, Career, cents, choice, cost, Credit, credit card, Credit Card Debt, credit cards, Crisis, Debt, Disability, double, Eating, eating out, Emergency, employer, Employment, existing, expenses, facebook, Financial Planning, Financial Wize, FinancialWize, funds, future, good, government, health, Health care, helpful, How To, in, Inspiration, Insurance, job, Job Search, jobs, Law, Layoffs, Life, life insurance, life insurance policy, long-term care, long-term care insurance, Make, making, market, Media, More, Move, new, new job, offer, or, Other, Pay Off Debt, Paying Off Debt, payments, plan, Planning, policies, premium, restaurants, retirement, retirement savings, rise, running, save, savings, search, shopping, Sites, social, Social Media, speculation, Spending, stock, time, Twitter, under, Unemployment, Unemployment numbers, will, withdrawal, working

Apache is functioning normally

June 1, 2023 by Brett Tams
A senior couple walking together on a sunny day. The man is pushing a bicycle with a basket on it.

Nitat Termmee/Getty Images

There are a few different types of life insurance policies to choose from when you’re shopping for coverage. That includes whole life insurance, which is a permanent type of life insurance policy that remains in place for your entire life and guarantees a death benefit, as long as premiums are paid. But while whole life insurance can offer a number of unique perks, it may not be the best option for everyone. Before you make a decision on your life insurance coverage, it may benefit you to learn more about the pros and cons of whole life insurance, as well as how it works, in order to make the best choice possible for your unique circumstances.

Key takeaways

  • Whole life insurance is a permanent policy that remains in force for your entire life, as long as premiums are paid, and guarantees a death benefit.
  • Whole life insurance policies may cost two to three times more than term life insurance policies because of the expected payout.
  • Whole life insurance policies usually have a cash value component that you may be able to put towards premiums when enough funds accumulate.

What is whole life insurance?

Whole life insurance offers coverage for your entire life as long (in most circumstances) as you’re paying your premiums. In return, the death benefit is essentially guaranteed to be paid out to the beneficiaries in the event that the policyholder passes.

In addition, whole life policies include other benefits, like a cash value component, which is an account that accumulates funds over time. This account is funded by the policy’s premiums, which are what you pay to keep your policy active. As the policyholder, you can choose to borrow against the cash value component during your lifetime under certain circumstances.

How does cash value work?

The cash value component of a whole life insurance policy can be used in a variety of ways and has a few tax considerations to keep in mind. You may borrow against it, use it to pay premiums or make tax-free withdrawals, within policy limits. Withdrawals over the amount of the cash value may be considered taxable income and will reduce the death benefit amount that goes to your beneficiaries. Your beneficiaries will also not be able to access this cash value when you pass away, as it can only be used while you are alive.

Knowing how to leverage the cash value can be a useful tool. When you borrow against the cash value amount, you will not have to undergo a lengthy approval process from a bank or lender, and you will likely enjoy a lower interest rate. Borrowing against the cash value account may be the right fit for individuals in a pinch who want a loan with an easy approval process. Additionally, a loan against the cash value is not reported to credit bureaus, meaning it does not impact your credit score. Just remember that any amount that remains unpaid when you pass will likely be deducted from the death benefit total.

Best whole life insurance

Many regional and national life insurance companies offer whole life policies, so choosing the right one will require some research. Bankrate’s list of the best whole life insurance companies may be a great place to start your search. To determine this list, our insurance experts chose these providers based on the following considerations: customer satisfaction rankings from J.D. Power’s 2021 U.S. Individual Life Insurance Study, financial strength scores from AM Best, reported complaints from the National Association of Insurance Commissioners (NAIC), available coverage options and digital policy management tools.

The cost of whole life insurance

Generally, whole life insurance is more expensive than the same amount of term life insurance coverage. This is because whole life insurance policies are guaranteed to be paid out, as long as the policy remains in force and premiums are paid. As such, whole life policies might also come with a lower potential death benefit compared to a term policy.

However, whole life premiums remain stable and the policy comes with a cash value account, which policyholders can leverage for other financial needs. Your specific whole life insurance policy cost is determined by multiple factors, including the amount of coverage you choose, your age and your relative health.

Learn more: Affordable life insurance companies

Is whole life insurance worth it?

Some people may prefer whole life insurance because it remains in effect for the insured’s entire life and because the cash value component adds additional financial flexibility. However, these financial components also contribute to a higher rate compared to premiums associated with a term life insurance policy. Whether or not whole life insurance is worth it to you depends on your financial situation, budget and long-term goals.

On the other end of the spectrum, many people prefer the shorter-term coverage that comes with a term life policy. For instance, if you only want coverage for a limited amount of time — such as when your children are in school or while you still owe on a mortgage — you may want to apply for a term life insurance policy just for the period of time when the financial protection is most critical. Term policies are typically much more affordable, as a payout is significantly less likely to occur. If deciding between term life vs. permanent life insurance, knowing what your immediate and long-term needs are, budget and purpose for life insurance can help you make a choice.

Frequently asked questions

    • A whole life insurance policy comes with a cash value account that can be invested, but since it is considered low-risk the cash value is usually minimal. Whole life insurance policies are designed to provide loved ones with a death benefit after your passing, rather than to act as an investment vehicle. While the investment component of insurance can be a nice added perk to a whole life insurance policy, other forms of investment may generate higher returns. A financial advisor can help you determine whether or not a whole life policy is right for your situation, taking into account its investment component.

    • How much life insurance you need typically depends on your situation and the goals you have for your policy. You may also want to keep in mind your individual financial obligations when determining the amount of life insurance you need. For instance, if you have personal debt, a mortgage, or upcoming college tuition payments for your children, you may want to factor in those expenses. If you financially support someone into adulthood, such as a special needs family member, you may want to factor their living expenses into your life insurance coverage, as well. Typically, a licensed agent or certified financial professional can guide you in estimating how much life insurance you need, or you can use Bankrate’s life insurance calculator as a starting point.
    • You may have less need for life insurance coverage if you’re single and have no dependents, since this likely means that you have less people who would be financially at-risk if you were to pass away. However, some policyholders choose to purchase life insurance to pay for their funeral expenses, or to leave money to a favorite organization or charity.

      This is one reason single people may choose to obtain a term policy, which can typically be converted to a whole life policy ahead of the policy’s expiration when you may marry or have dependents in the picture. Obtaining a policy when you are young and in relatively good health may help you secure good rates for such a time when insurance becomes more critical.

Source: thesimpledollar.com

Posted in: Apartment Decorating Tagged: 2021, About, active, advisor, affordable, age, agent, Bank, before, beneficiaries, Benefits, best, Borrow, borrowing, Budget, calculator, cash value, charity, Children, choice, College, companies, cons, cost, Credit, Credit Bureaus, credit score, death, death benefit, Debt, decision, Digital, do i need life insurance, event, expenses, expensive, experts, Family, Financial Advisor, Financial Wize, FinancialWize, Free, funds, goals, good, great, guide, health, How To, impact, in, Income, Insurance, insurance coverage, interest, interest rate, investment, Learn, leverage, Life, life insurance, life insurance policy, list, Living, living expenses, loan, low, LOWER, Make, member, minimal, money, More, Mortgage, needs, offer, offers, or, organization, Other, payments, permanent life insurance, Personal, place, policies, pros, Pros and Cons, protection, Purchase, questions, rate, Rates, Research, return, returns, right, risk, School, search, shopping, simple, single, stable, tax, taxable, taxable income, term life insurance, time, tools, tuition, types of life insurance, under, unique, value, whole life insurance, will, work, young

Apache is functioning normally

June 1, 2023 by Brett Tams

Interested in a 40-Year Fixed Mortgage?

  • If you need even more time to pay off your mortgage
  • Or need to get the monthly payment down to boost affordability
  • A 40-year fixed mortgage could be one alternative to consider
  • But they’re harder to come by these days and aren’t well-suited for everyone

Every now and then, I take a look at a specific mortgage product to determine if it could be a good fit for a prospective (or existing) homeowner.

Today, we’ll discuss a formerly popular home loan option, the “40-year mortgage.” It was all the rage during the prior housing boom in the early 2000s.

But also partially to blame for the housing crisis that took place shortly after.

Still, with mortgage rates now double what they were to start the year, they could make a resurgence.

What Is a 40-Year Mortgage?

40 year mortgage

A 40-year mortgage is a home loan with a loan term that lasts for 40 years. This is 10 years longer than the typical 30-year loan term attached to most mortgages.

You may already be thinking, “40 years? I thought mortgages had terms of 30 years?” Is this a mistake?

Well, you’d be mostly right. The majority of mortgages issued today do have terms of 30 years. It’s certainly the most common loan term out there.

In fact, aside from 30-year fixed mortgages, which clearly last for 30 years, as the name implies, most adjustable-rate mortgages also have terms of 30 years, despite lacking any reference to 30 years in their title.

So that 5/1 ARM or 7/1 ARM you’ve got your eye on still has a 30-year term, meaning it’s fixed for the first five or seven years.

It then becomes adjustable for the remaining 25 or 23 years, respectively. This is one reason why consumers have a great amount of difficulty understanding mortgages.

Only the 15-year mortgage and 10-year fixed come with different loan terms, 15 and 10 years respectively.

Why Go With a 40-Year Mortgage Term?

  • It’s an extra 10 years over the typical 30-year loan term
  • Offered as a means to lower monthly mortgage payments
  • This can make the home loan more affordable or allow money to allocated elsewhere
  • But it will also lead to a lot more interest paid over the longer term (and a slower payoff)

Okay, so we know the 40-year mortgage bucks the trend, and adds 10 years on to the standard mortgage term. But why?

What’s the point of paying a mortgage for an extra decade? That sounds like a literal lifetime commitment. Especially since 30 years is already way too long.

Well, the longer a mortgage amortizes (is paid off), the lower the monthly mortgage payment.

Essentially, payments are stretched out over a longer period of time. Instead of 360 months, you’re looking at 480 months.

Let’s look at an example of a 40-year fixed mortgage:

Loan amount: $300,000
30-year fixed: $1,703.37 @5.5%
40-year fixed: $1,598.66 @5.75%

As you can see, the monthly mortgage payment on the 40-year mortgage is roughly $105 less each month thanks to that longer period of time to pay it off.

That extra cash could be used to pay off student loans, credit cards, personal loans, and other higher-APR debt you may have.

Or it could be allocated toward a different investment or retirement account. It could also make a real estate purchase slightly more affordable.

The bad news is you’ll pay much more interest over the life of the loan, and it’ll take a very long time to build a meaningful amount of home equity.

If you use a mortgage calculator, make sure it’s set at 480 months. And pay close attention to how much interest is paid versus a loan with a term of 360 months. It’ll be an eye-opener.

In the example above, it’s about $150,000 more in interest for the 40-year mortgage, assuming it’s held until maturity.

40-Year Mortgage Rates Are Slightly Higher

  • Expect 40-year mortgage rates to be slightly higher than interest rates on 30-year fixed mortgages
  • How much higher will depend on the lender in question and your unique loan scenario
  • You essentially pay a premium to lock in an interest rate for an additional 10 years
  • And the slower payoff means you must pay a higher rate of interest to the bank/lender

You may have also noticed that the mortgage rate on the 40-year mortgage in my example is 0.25% higher than the interest rate on the 30-year fixed. There’s a reason for that.

Simply put, you pay a premium for a longer amortization period. This is the opposite of a 15-year fixed, where you receive a discount for paying your mortgage off faster.

After all, a bank or lender is willing to give you a fixed rate for four decades, so they’re going to want a slight premium in exchange for all that uncertainty.

In other words, expect 40-year mortgage rates to be slightly more expensive. It might only be .125% higher than the 30-year, but could definitely range from bank to bank. The bigger problem is finding a lender that offers the product to begin with.

That being said, the short-term savings can increase how much house a buyer can afford, and also make qualifying easier (or even feasible) if a borrower’s debt-to-income ratio is too high for a 30-year mortgage. That’s assuming the lender qualifies the borrower at the 40-year loan payment…

This is essentially why a borrower would go with the 40-year fixed – to buy more house or make their home loan more “affordable.”

More aggressive borrowers could even invest that $105 each month in a high-yielding retirement account and essentially try to beat the relatively low interest rate on their mortgage.

Nowadays, a 40-year mortgage term may even be part of a loan modification program to make payments more affordable for a struggling borrower.

When combined with an interest rate cut on their current mortgage, the combo can help a borrower stay put in their home for the long haul.

The Downsides of a 40-Year Mortgage

  • Loan is paid much back slower (harder to build equity)
  • Most of the mortgage payment consists of interest
  • May not be much cheaper than a 30-year fixed when all is said and done
  • And they’re not easy to find these days but that could change if rates remain elevated

While the benefits of a 40-year mortgage sound good, a borrower who chooses to go with a such a loan is paying a premium to do so.

As mentioned, they are higher-rate home loans, so that cuts into the payment “discount” afforded by a 40-year mortgage.

And while the monthly mortgage payment might be lower, the total interest paid over the full loan term will be much higher, which makes one question whether $100 or so in monthly savings is worth it.

On smaller mortgages, the payment different will be even more negligible. It may also be difficult to find a 40-year mortgage, since not all lenders offer them.

In fact, the Qualified Mortgage rule outlawed loan terms longer than 30 years, so 40-year mortgages aren’t even QM-compliant.

That means you’ll probably need to go with a specialty mortgage lender or portfolio lender if you want one.

Additionally, a longer amortization period means you’ll build home equity a lot slower, which could prove to be an issue if you need to sell your home or refinance in the future and your loan-to-value ratio is still sky-high. This could be the case if you come in with a low down payment.

Some Benefits to a 40-Year Mortgage

  • Could be a good short-term solution if you need monthly payment relief
  • Or if you don’t plan on staying in the property for very long
  • Those who wish to use their money elsewhere might be attracted to the program
  • But keep in mind that you pay for the privilege of a longer term via a higher interest rate

One could argue that most homeowners don’t stick with their mortgage full term anyway, let alone for 10 years, so why pay more each month? Or worry that it’ll take forever to pay it off?

A 40-year mortgage could also serve as a good alternative to an interest-only home loan, the latter of which won’t build any equity, and could eventually land a homeowner in an underwater position.

These mortgage types are also safer than an ARM (assuming it’s a 40-year fixed rate), which can adjust higher once the fixed period comes to an end.

So you won’t have to contend with any interest rate adjustments, which could make it easier to sleep at night, especially if you’re a first-time home buyer.

As always, do plenty of homework (and math using a mortgage calculator) and consult with a loan officer or mortgage broker to determine what’s best for you and your unique situation.

Tip: You may come across a “40 due in 30” as well, which is essentially a 30-year balloon mortgage that amortizes like it has a 40-year term.

That keeps monthly payments low, but the balance due at 30-year mark. Again, most of these probably aren’t kept full term, so it might be moot.

Is a 40-Year Mortgage a Good Idea?

Some say you should only buy a house if you can afford a 15-year mortgage. So if we’re talking a 40-year mortgage, which is 10 years beyond the standard 30-year fixed, it might be a red flag.

It may reveal that you aren’t qualified for the mortgage in question, at least from a traditional, more conservative standpoint.

Of course, there are exceptions to every rule, and it depends why a homeowner would seek out this type of financing.

They might want to deploy their cash in other places where its yield is higher than the rate on a 40-year mortgage.

At the same time, for the typical home buyer, a 40-year loan probably isn’t the best idea because so much more interest is paid throughout the loan term.

And it takes a significant amount of time to pay off the loan. But every situation is unique.

Are 40-Year Mortgages Available?

One last thing. As noted above, you might have difficulty finding a 40-year mortgage because not many lenders offer them.

So they might not even be available to begin with, which stops the debate in its tracks. Before you spend too much time thinking about getting one, maybe see if anyone offers them.

The reason they’re scarce is mostly because the Consumer Financial Protection Bureau (CFPB) outlawed loan terms beyond 30 years on most residential home loans.

You can still get one, but it won’t be considered a Qualified Mortgage (QM). And only big banks and niche non-QM lenders offer such products, typically at a premium.

So even if you find one, the pricing might not be great given the lack of competition. At the end of the day, you might be better off with a more traditional loan program instead.

(photo: Derek Swanson)

Source: thetruthaboutmortgage.com

Posted in: Mortgage Tips, Renting Tagged: 15-year, 15-year mortgage, 30-year, 30-year mortgage, About, affordability, affordable, All, amortization, apr, ARM, balance, Bank, banks, before, Benefits, best, big, borrowers, Broker, build, Buy, buy a house, buyer, calculator, CFPB, Competition, Consumer Financial Protection Bureau, Consumers, Credit, credit cards, Crisis, debate, Debt, debt-to-income, decades, double, down payment, equity, estate, existing, expensive, Financial Wize, FinancialWize, financing, first-time home buyer, fixed, fixed rate, future, good, great, home, home buyer, home equity, home loan, home loans, Homeowner, homeowners, house, Housing, housing boom, housing crisis, in, Income, interest, interest rate, interest rates, Invest, investment, Land, lenders, Life, loan, loan modification, Loan officer, Loans, low, LOWER, Make, math, mistake, money, More, Mortgage, Mortgage Broker, mortgage calculator, mortgage lender, mortgage payment, MORTGAGE RATE, Mortgage Rates, Mortgage Rates Now, Mortgage Tips, Mortgages, News, non-QM, offer, offers, or, Other, pay off student loans, payments, Personal, Personal Loans, place, plan, Popular, Popular Home, portfolio, premium, PRIOR, products, property, protection, Purchase, rate, Rates, Real Estate, real estate purchase, Refinance, Residential, retirement, retirement account, reveal, right, savings, Sell, short, sleep, specialty, stretched, student, Student Loans, the balance, time, title, traditional, trend, unique, value, versus, will

Apache is functioning normally

June 1, 2023 by Brett Tams

Austin-based rent reporting fintech Boom announced on Wednesday that it has raised $4.5 million in a seed round to improve user experience, expand its product offerings and market its app to customers. 

The seed round was led by Chicago-based venture capital fund Starting Line, followed by Clocktower Technology Ventures, Company Ventures, Gilgamesh Ventures, and Plaid co-founders William Hockey and Zachary Perret. This latest round of funding follows a $800,000 pre-seed round. 

“We’re gonna do three things with the resources: improve the core product of rent reporting; launch a couple of new products in the pipeline; and go to market, as we haven’t done any consumer and landlord marketing,” Rob Whiting, CEO and co-founder, said in an interview.  

Boom’s app was launched in late 2021 to allow users to build credit using rent payments, which are typically their largest monthly expense. Boom reports the information to the three credit bureaus: Experian, Equifax and TransUnion. 

Subscribers pay $24 a year for the app services, and customers link the app to their bank accounts so that the rent payments will be verified every month. While Boom does not work with users that have “handshake” rent agreements, it can verify whether customers pay rent to a relative, friend or roommate by checking wire transfers and the lease agreement, for example.   

According to the company, users see an average increase of 28 points to their credit scores within two weeks of using the app when making their rent payments accordingly. The company says it’s offering its core product at a price 70% lower than its competitors. 

Boom says it has between 15,000 and 20,000 subscribers and has attracted partnerships with major industry players such as Progressive, Apartment List, and national property management companies.

On-time rent payments have become another piece of the mortgage underwriting process in the U.S. over the last two years. 

In September 2021, Fannie Mae incorporated customers’ rent payments into its underwriting system, known as Desktop Underwriter. Freddie Mac adopted the same initiative in June 2022. 

A study by the Urban Institute found that Black households have the most to gain by including rent payments in mortgage underwriting.

Source: housingwire.com

Posted in: Mortgage, Refinance Tagged: 2021, 2022, agreements, apartment, app, Austin, average, Bank, bank accounts, black, build, build credit, CEO, chicago, companies, company, couple, Credit, Credit Bureaus, credit score, credit scores, Desktop Underwriter, Equifax, expense, experian, experience, Fannie Mae, Financial Wize, FinancialWize, Fintech, Freddie Mac, fund, in, industry, interview, landlord, launch, lease, list, LOWER, making, market, Marketing, Mortgage, new, or, Origination, Partnerships, payments, points, price, products, property, property management, Proptech, Rent, rent payments, roommate, september, Single-Family Rentals, Technology, time, TransUnion, Underwriting, Urban Institute, Venture Capital, will, wire transfers, work

Apache is functioning normally

June 1, 2023 by Brett Tams

Imagine a situation where you could transform your mortgage into a more favorable and empowering financial tool. Picture the possibilities of accessing the equity in your property or securing lower interest rates. Welcome to the world of mortgage refinancing. Refinancing your mortgage is like hitting the reset button on your home loan, allowing you to replace your current mortgage with one that better aligns with your financial goals. The general rule of thumb is that you’ll pay between 2% and 6% of the refinance value. Here’s how it breaks down.

For help figuring out how to refinance your mortgage in a way that works for you, consider working with a financial advisor.

Mortgage Refinances Basics

A mortgage refinance refers to the process of replacing an existing mortgage with a new one, typically to take advantage of more favorable terms or to access equity in a property. Refinancing means receiving a new loan to pay off your current loan and obtaining a lower interest rate, longer loan duration, or a different type of mortgage. For instance, you might refinance your fixed-rate mortgage to a 5/1 adjustable-rate mortgage (ARM) for a lower interest rate.

Remember, although mortgage refinancing can provide a more favorable loan, it involves closing costs and fees. As a result, it’s essential to calculate whether the potential savings or benefits outweigh the expenses over the long term.

Average Cost to Refinance a Mortgage

Refinancing a mortgage means paying for the loan servicing required for your original mortgage. While the average refinance costs 2% to 6% of your loan amount, costs vary depending on your circumstances. In addition, interest rates have risen in the last two years, making borrowing more expensive.

Here’s a breakdown of refinancing costs:

  • Application fee: $0-$500
  • Attorney fees: $500-$1,000
  • Credit report fee: $10-$100
  • Discount points: 0%-3%
  • Document preparation fee: $50-$600
  • Flood certification: $15-$25
  • Home appraisal: $300-$700
  • Home inspection: $300-$500
  • Origination fees: 0.5%-2%
  • Recording fees: $25-$250
  • Reconveyance fee: $50-$65
  • Tax service: Varies
  • Title insurance and search: $400-$900

Factors Affecting Refinance Costs

Refinancing your mortgage can save you a significant amount of money. However, it’s critical to note that, similar to acquiring a new home loan, a refinance entails closing costs that can impact your immediate and long-term financial situation. Compared to closing on a comparable purchase loan, the closing costs for a refinance are generally lower. The precise amount you’ll be required to pay depends on various factors, such as:

Your Loan Size

As mentioned above, lenders base mortgage insurance and other costs on your total loan amount. Therefore, the larger your loan, the higher the refinance cost.

Your Lender

Each lender has its own fee structure. For example, some lenders may waive your credit report or application fee. As a result, it’s wise to shop around for lenders and ask for a summary of fees before committing to a specific lender. This way, you can compare the offers available.

Your Location

Costs of home inspections, recording fees, taxes and more depend on your location. Therefore, where you live can change your refinance costs by hundreds or thousands of dollars.

Your Credit Score

Your credit score and history demonstrate your consistency and reliability as a borrower. As a result, your lender charges lower interest rates to customers with higher credit scores because they present less risk. On the other hand, a low credit score means you’ll pay more interest, increasing your refinancing costs.

Your Home Equity

Similarly, home equity can also impact the interest rates available when refinancing. Generally, lenders offer better rates to borrowers with higher levels of equity. With more equity in your home, you represent less risk to the lender, which can result in more favorable interest rate options.

In addition, the loan-to-value ratio (LTV) is a crucial factor lenders consider when evaluating a refinance application. You can calculate it by dividing the loan amount by the property’s appraised value. Lenders typically have maximum LTV ratios they are willing to accept. For example, if a lender has a maximum LTV of 80%, they will only refinance up to 80% of the home’s appraised value. So, if your original mortgage required private mortgage insurance (PMI) because you had a low down payment or a higher LTV ratio, refinancing can help you eliminate PMI. Building equity to achieve an LTV ratio of 80% or less can eliminate PMI, reducing your monthly payment.

Your Loan Duration

Refinancing means receiving new terms for your loan. For example, you might extend your loan by five years or more through a refinance. Although doing so can lower your monthly payment, it usually increases the amount of interest you pay over time. On the other hand, shortening your loan duration means paying it off more quickly, reducing paid interest.

Your Type of Mortgage (Fixed-Rate or Adjustable-Rate)

With a fixed-rate mortgage, the interest rate remains constant throughout the entire loan term. The rate you agree upon at the beginning of the loan remains unchanged over the life of the mortgage, whether over 15, 20, or 30 years. This stability allows you to have predictable monthly mortgage payments, making budgeting easier. The downside is your interest rate is permanent, even if market trends in the future produce lower interest rates.

In contrast to fixed-rate mortgages, adjustable-rate mortgages (ARMs) have an interest rate that can change periodically. Typically, an ARM has an initial fixed-rate period, such as 5, 7, or 10 years, during which the interest rate remains stable. This rate is usually lower than fixed-rate mortgages. Then, after the initial period, the interest rate can adjust periodically based on an index, such as the U.S. Treasury rate. Therefore, the interest rate can fluctuate over time, potentially resulting in higher or lower monthly payments. If interest rates rise, your payments may increase, but if rates fall, your payments could decrease.

Your Specific Mortgage Program

In addition, you’ll pay different amounts for mortgage insurance depending on the loan type. For instance, mortgage insurance for conventional loans costs 0.15% to 1.95% of the loan amount every year. For FHA loans, you’ll pay a 1.75% premium upon closing and 0.15% to 0.75% of the loan amount every year. VA loans have a funding fee at closing of 0.5% to 3.6%. Lastly, USDA loans have a 1% upfront fee and a 0.35% annual fee.

Your Type of Property

The type of property you own can impact the refinancing process. Lenders may consider different factors and have specific guidelines based on the property type. Here are a few ways the property type can affect a refinance:

  1. Primary Residence: Refinancing a primary residence typically offers the most favorable terms and options. Lenders may provide lower interest rates and more flexible terms for primary residences because borrowers prioritize them over other real estate and assets.
  2. Investment Property: Refinancing an investment property, such as a rental property or vacation home, often comes with slightly higher interest rates and stricter eligibility requirements. Lenders may impose stricter debt-to-income ratios, require larger down payments and assess the property’s rental income potential to determine the feasibility of the refinance.
  3. Condominiums: Refinancing a condominium may have specific requirements. Lenders may assess the financial health of the condominium association, including factors such as the percentage of owner-occupied units, insurance coverage and reserve funds. Additionally, lenders may have stricter appraisal requirements for condos to ensure the property’s value and marketability.
  4. Multi-Unit Properties: Refinancing a multi-unit property, such as a duplex, triplex, or apartment building, may involve different considerations. Lenders typically evaluate the property’s rental income potential, occupancy rates and the borrower’s experience as a landlord. The appraisal process may focus on the property’s income-generating capabilities.
  5. Manufactured or Mobile Homes: Refinancing a manufactured or mobile home may have specific requirements and considerations. Lenders may have stricter criteria for these types of properties due to their unique characteristics. They may require specific certifications, consider the property’s foundation and location and have limitations on the loan-to-value ratio.

Typical Cost Breakdown

Here’s an example of how these numbers work. According to a recent report by Freddie Mac, the average rate refinance is about $273,500. So, here’s how the costs look at percentages of the loan balance on average using the dollar figures introduced earlier:

  • Application fee: 0%-0.18%
  • Attorney fees: 0.18%-0.36%
  • Credit report: 0.003%-0.03%
  • Discount points: 0%-3%
  • Document preparation fee: 0.018%-0.2%
  • Home appraisal: 0.11%-0.25%
  • Home inspection: 0.11%-0.18%
  • Origination fees: 0.5%-2%
  • Recording fees: 0.009%-0.09%
  • Reconveyance fee: 0.018%-0.023%
  • Title insurance and search: 0.14%-0.33%

Additional Considerations

Here are several other aspects of refinancing a mortgage to contemplate before taking action:

Interest Rates Variations 

Interest is the foundation for how lenders make money on loans. As a result, it’s one of the primary expenses for refinanced mortgages. The rate is a percentage of your principal balance, and your monthly payment goes toward interest first, then the principal. As a result, a higher interest rate means you’re paying more for the cost of the loan and less on the loan itself, increasing the cost and requiring more time for repayment.

Choosing Between Fixed-Rate and Adjustable-Rate Mortgages

Remember, a fixed-rate mortgage offers an interest rate that doesn’t change throughout the loan. This feature offers predictability for monthly payments until you repay the loan. On the other hand, adjustable-rate mortgages (ARMs) have interest rates that shift according to market trends after the initial fixed period. The advantage of ARMs is that your initial rate is usually lower than fixed-rate mortgages, and the adjustable rate afterward could also remain lower, increasing your savings.

Potential Savings Over the Long Term

How long you plan to live in your home is another crucial factor regarding refinancing. The refinancing process entails paying closing costs, which can outweigh the savings the interest rate reduction provides. Therefore, it’s best to estimate how long you plan to stay in your home to determine if you can break even or save money through refinancing. One method is to calculate the break-even point by dividing the total cost of the refinance by your monthly savings.

For example, say you save $100 per month, and the closing costs amount to $5,000. In this case, it would take approximately 50 months (or over four years) before you experience savings on your refinance. If you intend to stay in your home for longer than that, refinancing is worthwhile.

Loan-To-Value Ratio (LTV)

The eligibility of your mortgage for refinancing is influenced by the current value of your home compared to the loan amount. During the refinancing process, an independent party appraises your home to determine its market value. The appraised value is critical since the LTV usually can’t exceed 80%. If your home’s value has declined since you purchased it, you might lack sufficient equity to refinance, or you may need to bring additional funds to cover the difference between the home’s value and the loan amount.

Income Stability and Debt-To-Income Ratio

Other debts besides your mortgage, such as car loans or credit card debt, can impact your ability to refinance or the interest rate you receive. Lenders evaluate your debt-to-income ratio when you apply for a refinance. To calculate this ratio, divide your monthly debt payments by your gross monthly income. Generally, a debt-to-income ratio below 43% is desirable for mortgage or refinance qualification.

In addition, your current income and employment status, will influence the refinancing application. Specifically, changes in your income or employment can affect your refinancing eligibility. For instance, you may qualify for a better rate or more favorable terms if your income recently increased.

Conversely, suppose your income has decreased or you recently changed jobs. In that case, the refinancing process may be more challenging, depending on the duration of your current job or the extent of the income reduction. If you’ve recently started a new job, giving your situation several months to stabilize before attempting to refinance can help you qualify for a loan.

Cash-Out Refinance

Freddie Mac’s most recent report shows that 41.9% of refinances in 2021 were cash-out refinances. A cash-out refinance means liquidating a portion of your equity, putting thousands of dollars in your pocket. Homeowners cash out their equity for numerous purposes, such as improving the home, paying off debt, or starting a business. As a result, this refinance enlarges your mortgage, and you get a lump sum in return.

Strategies to Minimize Refinance Costs

Because refinancing can be expensive, it’s recommended to reduce costs as much as possible. This way, excessive fees won’t ruin the benefits of the refinance. These strategies can help you do so:

Shopping Around for Lenders

The whole lending market is open to you when refinancing. Although refinancing with your current lender might be convenient, you could find better rates and terms by getting quotes from several lenders and comparing the offers. This way, you’ll get the best deal available and save money on fees and interest.

Negotiating Fees and Closing Costs

Negotiating fees and closing costs with the lender is also an option. Many fees have wiggle room on the price, so asking lenders about discounts and waivers can be fruitful. In addition, a preexisting relationship with a lender, such as having a bank account or loan beforehand, allows you to access special deals.

Utilizing Mortgage Points

Lastly, you can purchase mortgage points to reduce your interest rate. Typically, they cost 1% of the loan amount per point. As a result, you can cut your interest rate down by paying several thousand dollars up front, reducing interest payments over time. It’s crucial to calculate when you break even if you do so. For example, say you spend $1,500 to lower your interest rate by 1%, lowering your monthly payment by $50. In this scenario, it will take 30 months to break even.

Hidden Costs to Be Aware Of

In addition, some refinancing costs are less apparent when shopping lenders. Here’s what to keep an eye out for:

  • Loan duration and its impact on costs: Generally, the longer the repayment schedule, the more expensive the loan. Your loan duration affects how long the interest rate builds upon the principal. So, repaying the loan faster means fewer compounding periods, which equates to less interest accrual.
  • Tax implications: Both original and refinanced mortgages provide a tax deduction for paid interest. In addition, purchasing points for a refinance loan creates another tax deduction. Specifically, you’ll divide what you paid over the number of years for the loan. So, paying $1,000 for a mortgage point for a 10-year loan results in a $100 deduction every year.
  • Costs associated with mortgage insurance: Refinancing with a conventional loan can incur mortgage insurance costs if you have less than 20% equity in your home. Specifically, private mortgage insurance (PMI) charges a percentage of your loan amount. These charges can occur at closing and each month as part of your loan payment.

The Bottom Line

Mortgage refinancing can benefit homeowners by allowing them to take advantage of more favorable terms and access equity in their property. However, it’s vital to carefully consider the costs involved in the refinancing process and determine whether the potential savings or benefits outweigh these expenses in the long term. As a result, it’s necessary to understand how numerous factors, including the loan amount, origination fees and discount points, can impact the overall cost of refinancing and evaluate the potential savings. Other considerations include the option of a cash-out refinance, which allows homeowners to access their equity, and using strategies to minimize refinance costs.

Tips for Refinancing a Mortgage

  • It’s a good idea for homeowners to analyze their financial situation and goals before refinancing their mortgage. Fortunately, you can consult with a financial advisor to evaluate your circumstances and make informed decisions that align with your long-term plan. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • The real estate market fluctuates daily, making it challenging to understand when refinancing is beneficial. You can get an interest rate estimation using SmartAsset’s rate comparison tool to see if the market conditions suit you.

Photo credit: ©iStock/cnythzl, ©iStock/Daenin Arnee, ©iStock/dusanpetkovic

Source: smartasset.com

Posted in: Mortgage, Refinance Tagged: 2, 2021, About, action, advisor, Amount Of Money, apartment, Appraisal, ARM, ARMs, ask, assets, average, balance, Bank, bank account, basics, before, Benefits, best, Blog, borrowers, borrowing, Budgeting, building, business, car, car loans, Cash-Out Refinance, closing, closing costs, compounding, Condominiums, condos, conventional loan, Conventional Loans, cost, Credit, credit card, Credit Card Debt, Credit Report, credit score, credit scores, Deals, Debt, debt payments, debt-to-income, Debts, decisions, discount points, Discounts, down payment, Down payments, duplex, Employment, equity, estate, evergreen_simplefeed_delay, existing, expenses, expensive, experience, Fall, Fees, FHA, FHA loans, Financial Advisor, financial advisors, Financial Goals, financial health, Financial Wize, FinancialWize, fixed, Fixed rate mortgage, flood, foundation, Freddie Mac, Free, front, funds, future, General, get started, Giving, goals, good, health, history, home, Home appraisal, home equity, home inspection, home inspections, home loan, homeowners, homes, how much does it cost to refinance a mortgage, How To, impact, in, Income, index, inspection, inspections, Insurance, insurance costs, insurance coverage, interest, interest rate, interest rates, investment, investment property, job, jobs, landlord, lenders, lending, Life, Live, loan, Loans, low, LOWER, Make, Make Money, making, market, Market Trends, market value, mobile, money, More, Mortgage, Mortgage Insurance, mortgage payments, mortgage points, mortgage refinance, mortgage refinancing, Mortgages, negotiating, new, new home, new job, offer, offers, or, Original, Origination, Other, party, Paying Off Debt, payments, plan, PMI, points, premium, present, price, principal, private mortgage insurance, property, Purchase, Quotes, rate, Rates, ready, Real Estate, real estate market, Refinance, refinance your mortgage, refinancing, refinancing a mortgage, rental, rental property, repayment, return, right, rise, risk, room, save, Save Money, savings, search, Servicing, shopping, stable, starting a business, Strategies, tax, tax deduction, taxes, time, tips, title, Title Insurance, Treasury, trends, U.S. Treasury, unique, USDA, usda loans, VA, VA loans, vacation, vacation home, value, will, work, working

Apache is functioning normally

June 1, 2023 by Brett Tams

What is a bank holiday?

A bank holiday is when banks are closed on a business day in observance of a federal or local holiday. There are typically 11 federal bank holidays per year in the United States.

How do bank holidays work?

When a bank is closed for a holiday, branches and remote customer service options — such as customer service by phone or live online chat — are unavailable until the next business day. If the holiday falls on a Sunday, the bank will usually be closed on Monday. Online banking will typically still be available during the bank holiday, but it will be self-service.

List of bank holidays in the U.S. in 2023 and 2024

You may want to check your bank’s holiday closure schedule — especially if your bank operates internationally — but here are the typical bank holidays observed in the United States according to the Federal Reserve.

2023 Dates

2024 Dates

New Year’s Day

Jan. 1 (observed Jan. 2).

Martin Luther King Jr. Day

Washington’s Birthday

Memorial Day

Juneteenth

Independence Day

Columbus Day

Veterans Day

Nov. 11 (observed Nov. 10).

Thanksgiving

Does money go out on a bank holiday?

If you have an electronic payment that might be delayed by a bank holiday — such as a direct deposit, online payment or money transfer — you may need to plan to pay for something early. For example, if your rent is due on a particular day of the month, look ahead to any bank holidays that might disrupt your payment and try to schedule your payment accordingly. Sometimes your employer or bank might also send your paycheck before a bank holiday.

How to access your money during a bank holiday

Even if your bank’s branches and customer service phone lines are closed during a bank holiday, you can still typically access your money online and through your bank’s ATM network. Most banks allow their customers to manage their money with a mobile app or by logging in to their accounts on a computer. You can send money through Zelle if your bank offers that service, transfer money to other accounts and make bill payments online, and you can use ATMs to withdraw and deposit cash.

Source: nerdwallet.com

Posted in: Banking, Moving Guide Tagged: 2, 2023, About, app, ATM, Bank, Banking, Banking Basics, banks, before, business, customer service, deposit, Direct Deposit, employer, Federal Reserve, Financial Wize, FinancialWize, holiday, Holidays, How To, in, Learn, list, Live, Local, Make, manage, mobile, Mobile App, money, Money Transfer, nerdwallet, offers, Online Banking, or, Other, paycheck, payments, plan, Rent, states, transfer money, united, united states, will, work
1 2 … 295 Next »

Archives

  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • October 2020

Categories

  • Account Management
  • Airlines
  • Apartment Communities
  • Apartment Decorating
  • Apartment Hunting
  • Apartment Life
  • Apartment Safety
  • Auto
  • Auto Insurance
  • Auto Loans
  • Bank Accounts
  • Banking
  • Borrowing Money
  • Breaking News
  • Budgeting
  • Building Credit
  • Building Wealth
  • Business
  • Car Insurance
  • Car Loans
  • Careers
  • Cash Back
  • Celebrity Homes
  • Checking Account
  • Cleaning And Maintenance
  • College
  • Commercial Real Estate
  • Credit 101
  • Credit Card Guide
  • Credit Card News
  • Credit Cards
  • Credit Repair
  • Debt
  • DIY
  • Early Career
  • Education
  • Estate Planning
  • Extra Income
  • Family Finance
  • FHA Loans
  • Financial Advisor
  • Financial Clarity
  • Financial Freedom
  • Financial Planning
  • Financing A Home
  • Find An Apartment
  • Finishing Your Degree
  • First Time Home Buyers
  • Fix And Flip
  • Flood Insurance
  • Food Budgets
  • Frugal Living
  • Growing Wealth
  • Health Insurance
  • Home
  • Home Buying
  • Home Buying Tips
  • Home Decor
  • Home Design
  • Home Improvement
  • Home Loans
  • Home Loans Guide
  • Home Ownership
  • Home Repair
  • House Architecture
  • Identity Theft
  • Insurance
  • Investing
  • Investment Properties
  • Liefstyle
  • Life Hacks
  • Life Insurance
  • Loans
  • Luxury Homes
  • Making Money
  • Managing Debts
  • Market News
  • Minimalist LIfestyle
  • Money
  • Money Basics
  • Money Etiquette
  • Money Management
  • Money Tips
  • Mortgage
  • Mortgage News
  • Mortgage Rates
  • Mortgage Refinance
  • Mortgage Tips
  • Moving Guide
  • Paying Off Debts
  • Personal Finance
  • Personal Loans
  • Pets
  • Podcasts
  • Quick Cash
  • Real Estate
  • Real Estate News
  • Refinance
  • Renting
  • Retirement
  • Roommate Tips
  • Saving And Spending
  • Saving Energy
  • Savings Account
  • Side Gigs
  • Small Business
  • Spending Money Wisely
  • Starting A Business
  • Starting A Family
  • Student Finances
  • Student Loans
  • Taxes
  • Travel
  • Uncategorized
  • Unemployment
  • Unique Homes
  • VA Loans
  • Work From Home
hanovermortgages.com
Home | Contact | Site Map

Copyright © 2023 Hanover Mortgages.

Omega WordPress Theme by ThemeHall