In the Midwest, Ohio provides residents a unique blend of urban excitement, small-town charm, and picturesque landscapes. From the lively city life of Columbus, with its thriving arts scene and diverse culinary offerings, to the quaint charm of Cincinnati, known for its historic neighborhoods and iconic skyline views along the Ohio River, Ohio has a diverse array of experiences. In this ApartmentGuide article, we’ll uncover the pros and cons of living in Ohio, so you can learn what life is like in “The Buckeye State.”
Renting in Ohio snapshot
Population
11,785,935
Avg. studio rent
$724 per month
Avg. one-bedroom rent
$933 per month
Avg. two-bedroom rent
$1,109 per month
Most affordable cities to rent in Ohio
Lorain, Elyria, Lima
Most walkable cities in Ohio
Lakewood, Norwood, Cleveland
1. Pro: Affordable cost of living
Cities like Dayton and Toledo offer residents access to affordable housing options, with median home prices and rental rates below the national average. For instance, Toledo has a median home sale price of $105,500 and an average rental rate of $784 for a one-bedroom apartment. Additionally, everyday expenses such as groceries, utilities, and healthcare are generally more affordable, allowing residents to stretch their dollars further and enjoy a higher standard of living.
2. Con: Unpredictable weather
Ohio’s weather is notoriously unpredictable, with residents experiencing a wide range of climatic conditions throughout the year. From severe thunderstorms and tornadoes in the spring to heavy snowfall and freezing temperatures in the winter, Ohioans must be prepared for rapidly changing weather patterns. Cities like Cincinnati and Cleveland often face weather-related disruptions, such as flooding and power outages, which can impact daily life.
3. Pro: Sports culture
Ohio has a rich sports culture, with passionate fans rallying behind local teams and sporting events. Cities like Cleveland and Cincinnati are home to iconic sports franchises such as the Cleveland Cavaliers, Cleveland Browns, Cincinnati Reds, and the Cincinnati Bengals. Moreover, Ohio hosts major sporting events like the Cincinnati Masters tennis tournament and the Memorial Tournament in Dublin, attracting athletes and spectators from around the world.
4. Con: Limited public transportation
Ohio’s public transportation infrastructure is relatively limited, particularly outside major urban centers like Columbus and Cleveland, which can present challenges for residents who rely on public transit. Lakewood, for example has a transit score of 41, meaning there are only a few public transportation options offered in the city.
5. Pro: Educational opportunities
Ohio offers a wealth of educational opportunities at all levels, from great universities to excellent public school systems. Institutions like The Ohio State University, Case Western Reserve University, and Miami University provide students with exceptional academic programs and research opportunities. Moreover, Ohio’s strong public school system ensures that students receive quality education from an early age.
6. Con: Infrastructure concerns
Ohio faces infrastructure concerns, including aging roads, bridges, and public utilities, which can impact residents’ quality of life. The state received a C- on its Infrastructure Report Card in 2021, which further highlights its lacking infrastructure.
7. Pro: Outdoor recreation
Ohio’s diverse landscapes offer residents ample opportunities for outdoor recreation and exploration. From hiking and biking trails in Cuyahoga Valley National Park to boating and fishing on Lake Erie, the state’s natural beauty provides endless possibilities for adventure. Columbus, one of Ohio’s largest cities, has an extensive park systems and green spaces, providing residents opportunities for picnicking, birdwatching, and outdoor sports year-round.
8. Con: High humidity
Ohio experiences high humidity levels, particularly during the summer months, which can create uncomfortable and sticky conditions for residents. The combination of heat and humidity can lead to discomfort, dehydration, and heat-related illnesses, prompting residents to seek relief indoors or in air-conditioned spaces during the hottest times of the year.
9. Pro: Central location
Ohio’s central location in the Midwest makes it an ideal base for travel and exploration throughout the region. Columbus and Cincinnati are within a day’s drive of major metropolitan areas such as Chicago, Detroit, and Pittsburgh, offering residents easy access to cultural attractions, entertainment, and dining experiences.
10. Con: Environmental concerns
Ohio faces various environmental concerns, including pollution from industrial activities, agricultural runoff, and urban development, which can impact air and water quality. Additionally, Lake Erie and the Ohio River are susceptible to pollution and algae blooms, affecting drinking water sources and aquatic ecosystems.
11. Pro: Historical landmarks
12. Con: “Brain drain”
Ohio experiences “brain drain,” where various people leave the state in search of better job opportunities and quality of life elsewhere. Factors contributing to brain drain include limited job prospects, lack of cultural amenities, and perceptions of Ohio as a less desirable place to live.
Methodology : The population data is from the United States Census Bureau, walkable cities are from Walk Score, and rental data is from ApartmentGuide.
Fort Wayne is a growing Midwestern city with a lot to offer. From one-of-a-kind festivals to innovative breweries, the city has options for anyone looking to find a home in the Fort Wayne area.
As the second-largest city in Indiana, Fort Wayne has developed a distinctive identity through its kind people and unique attractions. Whether you’re exploring its scenic parks, tasting its local flavors, or meeting the people, there’s always something memorable to discover.
Below is a list of ten of the top things that Fort Wayne is known for so you can see a whole new side of this Midwestern gem.
1. Fort Wayne Children’s Zoo
Fort Wayne Children’s Zoo is a family-friendly spot in the heart of the city. Known for its well-maintained animal exhibits and child-friendly activities, the zoo spans over 40 acres and houses hundreds of animals from around the world. It’s particularly famous for its African Safari journey where children can get up close with giraffes and zebras.
2. Johnny Appleseed Festival
Each year, Fort Wayne pays homage to John Chapman, better known as Johnny Appleseed, with a festival that transports visitors back to the 1800s. The Johnny Appleseed Festival features period crafts, food, and music, celebrating the legendary figure who planted apple trees across the United States. This event has historical reenactments that offer a glimpse into the pioneer life.
3. Fort Wayne TinCaps
The Fort Wayne TinCaps, a Minor League Baseball team affiliated with the San Diego Padres, play their games at the modern Parkview Field. This ballpark is a centerpiece of downtown Fort Wayne and has a fantastic family-friendly atmosphere. The name “TinCaps” references the tin pot that Johnny Appleseed famously wore on his head, linking the team to local lore.
4. Fort Wayne’s Famous Coney Island
Since opening its doors in 1914, Fort Wayne’s Famous Coney Island has been a landmark for classic American cuisine. Known for its coney dogs, the nostalgia-inducing diner transports patrons back in time with its vintage décor.
5. Science Central
Science Central is a hands-on science museum located in a former power plant. It has over 200 exhibits ranging from a high-rail bike to a giant slide that teaches physics through play. Science Central is instrumental in providing STEM education in a fun environment, making it a must-visit for families and school groups looking to ignite a passion for science.
6. Mad Anthony Brewing Company
Named after the fiery General “Mad” Anthony Wayne, whom the city is also named after, Mad Anthony Brewing Company is a cornerstone of Fort Wayne’s craft beer scene. This brewery is famed for its unique selection of beers and a vibrant atmosphere. Whether you’re trying the seasonal specialties or the year-round favorites, Mad Anthony’s embodies the spirit of innovation and community in every pint.
7. The Embassy Theatre
The historic Embassy Theatre is a beautifully restored vaudeville house that is now one of Fort Wayne’s prime venues for performing arts. Hosting a range of events from Broadway shows to concerts and films, the Embassy Theatre remains a true hub for the arts in Indiana.
8. Allen County Public Library
The Allen County Public Library houses one of the largest genealogy collections in the nation. Its expansive archives attract researchers from all over the country, making it a center for historical study. The library’s commitment to community enrichment through educational programs and resources makes it a pillar of Fort Wayne society.
9. Lakeside Park & Rose Garden
Lakeside Park & Rose Garden is one of Fort Wayne’s most picturesque places. With beautifully landscaped gardens, a reflective pond, and a massive display of over 2,000 roses, it’s a real hotspot for photographers.
10. DeBrand Fine Chocolates
DeBrand Fine Chocolates is a luxurious chocolate company based in Fort Wayne, known for its high-quality confections and beautiful presentation. A tour of DeBrand offers insights into the chocolate-making process and ends with a tasting of their exquisite creations. This chocolatier is a favorite for locals and visitors looking for a sweet treat or a gourmet gift.
The idea of a four-day workweek is so popular with some workers that they’d be willing to take a pay cut to make it happen, according to a new survey.
The survey, which included 1,250 people who work full time, was conducted in April by Resume Builder, a career services company. It found that 8 in 10 workers would be excited to work 32 hours a week instead of 40 because they believe it would help them achieve better work-life balance, improve their health, mitigate burnout, be more productive and reduce commuting costs.
The survey results suggest some workers feel pretty desperate for that better work experience. Even though nearly all the survey participants (94%) said they could do the same amount of work in fewer hours, about 21% said they would take a pay cut if it meant they could work the equivalent of one less day per week.
In addition, 83% of respondents said they would prefer a four-day, 40-hour workweek to the current standard of 40 hours in five days.
“I think people value time now more than they ever have — especially younger generations,” says Julia Toothacre, resume and career strategist with Resume Builder.
Idea of a four-day workweek is catching on
The four-day workweek is still a long way from becoming the norm in the U.S., Toothacre says. But the idea has picked up steam in recent years because it’s seen as a way to address the impact of work stress and long hours.
Roughly 3 out of 4 workers said they experienced work-related stress in the last month, according to the 2023 Work in America Survey by the American Psychological Association. More than half said that stress resulted in an array of negative effects, including emotional exhaustion, lack of motivation, a desire to quit, lower productivity and irritability.
There’s some interest in making the four-day workweek a national policy. In March, Sen. Bernie Sanders, I-Vt., introduced a bill that would standardize a 32-hour workweek without cutting workers’ pay or benefits. But it’s not expected to go anywhere.
Pilot programs show promising results
Instead, the four-day workweek has gained the most traction through companies’ participation in pilot programs. Organizations around the world have tested it out, and the results are pretty positive. In 2022, a pilot program that included 33 U.S. companies found that most of them wanted to continue with the 32-hour schedule after the trial period ended.
The companies involved in this pilot didn’t make any changes to workers’ pay. And it turns out that’s for good reason: The companies reported that productivity was positively affected by the new schedule. Workers at the participating companies said their job performance improved during the course of the trial.
In the trial, companies got rid of meetings and other unnecessary activities to free up workers’ time, according to Boston College researchers who evaluated the results. Wen Fan, a sociology professor, said in a December 2022 news release that the program worked as expected. “Hours reduced, well-being improved, and key organizational bottom-lines sustained — all of these happened without the need for workers to intensify their work demands.”
I’m currently in the process of buying a house. Even though I’ve done so in the past (spoiler alert: it didn’t end well), I still qualify as a “first-time home buyer” on this go-round, at least for mortgage purposes. Since it’s been more than three years since I had an ownership stake in a house, I qualified to buy with an FHA loan — and actually, that’s how I bought last time, too.
FHA loans are backed by the federal government (specifically, the Federal Housing Administration, hence their name), and administered by standard mortgage lenders. The requirements to use one are less stringent than for conventional home loans.
While a conventional mortgage often requires a credit score of 620 or better, many FHA lenders only require a score of 500. If your credit score is at least 580, you can get away with putting down just 3.5% on a home purchase. But if you can swing a 10% down payment, your credit score could be as low as 500.
Despite these perks, I opted against an FHA loan this time — I’m buying with a conventional loan instead. Here’s why.
I’m already paying more than I want to
Mortgage loans are far from cheap these days. As of this writing, the average rate on the classic 30-year fixed home loan sits at 6.88%, according to Freddie Mac. Compare that to rates at 3% in 2021! In real numbers, if you buy a $250,000 home with 10% down at a rate of 3%, your monthly payments for the loan and the interest will be just $1,094. Swap that 3% rate for one at the current average, and you’re signing on for monthly loan and interest payments of $1,624. Ouch. And even with a credit score over 800, I’m still not saving much on a mortgage rate.
Since I’m already paying more per month (and overall) to buy a house, I decided against going with an FHA loan, because it would cost me even more. I’m putting just 10% down on my home purchase, so I will have to pay for private mortgage insurance (PMI). This protects my lender in the event I stop making payments and it must repossess and resell my house. If you buy a home with a conventional loan and less than 20% down, you’ll pay for PMI.
More: Check out our picks for the best mortgage lenders
FHA loans come with mortgage insurance, too — it’s called MIP, or a mortgage insurance premium. Like PMI, payments are collected monthly — but there’s also an upfront payment to cover at closing. But unlike PMI, if you make a 10% down payment on a home with an FHA loan, you’ll pay MIP for 11 years. If you make the standard 3.5% FHA loan down payment, however, you’re stuck with MIP unless you refinance to a conventional loan.
With my conventional loan, once I reach 20% equity in my house, I can have my PMI payments canceled by my mortgage lender. With an FHA loan, I’d be paying more for longer — or paying to refinance the loan as soon as I got to 20% equity.
I wanted to be a more competitive buyer
I’m very aware of how competitive the current market is for buyers. The supply of homes for sale (just 2.9 months’ worth in February, according to the National Association of Realtors) is too low to equalize the market between buyers and sellers, so I knew I’d have to beat out other buyers to get an offer accepted.
On the lead up to finding the right house, making an offer, and getting it accepted, I looked at several that specified “cash or conventional” in their listings. This means that sellers were only willing to consider buyers paying cash or using a conventional loan, rather than a government-backed mortgage. Unfortunately, some sellers are wary of FHA loans because of the stricter appraisal requirements.
All homes bought with a mortgage go through appraisal, but in the case of a conventional loan, that appraisal is to assess value, not condition (that’s what a home inspection is for). But FHA appraisals also serve as a safety inspection for the home, which must meet certain livability standards for the loan to be approved. I didn’t want a seller to be leery of me as a buyer because of this extra layer of scrutiny.
If you’re an aspiring homeowner, it’s a great idea to assess all your mortgage options. Depending on your credentials, income, or background, you might have access to programs that can save you money on the home-buying process. I might not be using an FHA loan this time, but I’m sure glad the option exists — anyone who wants (and has the means) to buy a house should be able to.
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A 1099-c cancellation of debt form is issued when a lender forgives or cancels a debt. The 1099 c form helps the IRS account for canceled debts from the previous tax year.
The 1099-C cancellation of debt form deals with canceled or forgiven debt from the previous tax year. This form exists to ensure accuracy when reporting taxes and to help filers determine if they owe debt forgiveness taxes.
Cancellation of debt happens when a creditor discharges or forgives a debt you haven’t paid off. The IRS notes that cancellation can occur when the creditor gives up on collecting because it’s exhausted its resources and is unable to collect. In some cases, cancellation can come about as an agreement between you and the creditor.
Here, we’ll answer several common questions about this form and explain how canceled debt relates to taxes.
Key Takeaways:
The IRS requires 1099-C forms because forgiven debt contributes to your gross income.
Receiving and filing a 1099-C form won’t affect your credit score positively or negatively.
Certain forgiven debts, such as mortgage forgiveness, are exempt from 1099-C requirements.
What Is a 1099-C Form?
Form 1099-C is a tax form required by the IRS in certain situations where your debts have been forgiven or canceled. Forgiven debt contributes to your gross income for the given tax year. The IRS requests 1099-C forms to account for those funds and debt forgiveness tax if need be.
If you received a 1099-C form in the mail, it’s because of a debt cancellation that occurred at some point during the previous tax year. Box 6 on the document contains a code to help you determine why you received the form.
Reasons why a cancellation might occur include:
A creditor stops trying to claim a debt.
Your mortgage is modified.
A property is foreclosed or repossessed.
You can also learn more about the 1099-C cancellation of debt processes and why you might receive such a form if you’re unsure whether yours is accurate.
Is a 1099-C Form Good or Bad for Your Credit?
The 1099-C form shouldn’t have any impact on your credit. However, the activity that led to the 1099-C probably does impact your credit. Typically, by the time a creditor forgives a debt, you’ve engaged in at least one of the following activities:
Failed to make payments for an extended period of time
Negotiated a settlement on the debt
Entered into a program with the creditor because you can’t pay the debt, such as a home short sale or voluntary repossession
Been sent to collections
Had a foreclosure or repossession
Gone through bankruptcy
All those are negative items that can impact your credit report and score for years. So, while getting a 1099-C itself doesn’t change your credit at all, you’ve probably already experienced a negative hit to your score.
What Should You Do with a 1099-C Form?
First, find out whether the type of debt cancellation on the 1099-C form is excluded from taxable income. The IRS provides a list of exclusions; if your debt is included on this list, you won’t have to worry about the 1099-C form.
Some of the items on this list include:
Canceled amounts that were gifts or inheritances
Certain student loans and student loan discharges
Qualifying purchase price reductions
If you ultimately need to claim the income, you must incorporate the 1099-C into your federal tax filing and report the canceled debt as “other income”. Forgiven debt can increase your gross income for that tax year, which might reduce your refund or increase the taxes you owe.
In cases where the 1099-C canceled debt falls under an IRS exclusion—which means you don’t have to pay taxes on all or some of the income—you still may need to file a form. The creditor that sent you the 1099-C also sent a copy to the IRS.
Some types of debt cancellation on the 1099-C form are excluded from taxable income. The IRS provides a list of exclusions, which include debts that were forgiven because you were insolvent or involved in certain types of bankruptcies. You may want to double-check with your bankruptcy lawyer about whether you need to claim 1099-C income relevant to your bankruptcy discharge.
Call out box “Pro Tip:” link
If you don’t acknowledge the form and income on your tax filing, it could result in a tax audit. Luckily, the IRS provides a form for this purpose. It’s Form 982, the Reduction of Tax Attributes Due to Discharge of Indebtedness.
Who Can File a 1099-C Form?
According to the IRS, you can file a 1099-C form if you’ve forgiven or canceled at least $600 in debt for an individual or entity in the previous tax year. You must also be an applicable financial entity, such as a bank or credit union.
For example, you don’t need to file a 1099-C form if you loaned your brother $1,000 and then told him on his birthday you’ve decided he doesn’t have to pay you back.
How to File a 1099-C Form
How you include your 1099-C depends on how you already file your taxes. Online tax filing programs include options for adding the 1099-C form when you file. Typically, you do this when entering various types of income.
You may need to file form 982 if you have exclusions to ensure you don’t pay more than you need to. You can work with a tax professional or use software to file taxes yourself. Both options can help you minimize mistakes and maximize your refund.
How to Read a 1099-C Form
Knowing how to read your 1099-C may help you understand why you got one and what you have to do with it. Here’s a breakdown of what each box means:
Codepen Link for 1099-C instructions
Codes that might be included in Box 6 on the 1099-C:
A. Bankruptcy Title 11
B. Other judicial debt relief
C. Statute of limitations or expiration of deficiency period
D. Foreclosure election
E, Debt relief from probate or similar proceeding
F. By agreement
G. Decision or policy to discontinue collection
H. Other actual discharge before identifiable event
What Is the Mortgage Forgiveness Debt Relief Act?
The Mortgage Forgiveness Debt Relief Act of 2007 generally excludes all forgiven debt on the mortgage of your primary residence. That means you may not have to include canceled debt on your mortgage as part of your income on your taxes.
For example, if your debt is reduced through a restructuring of your mortgage or in connection with a foreclosure, it may be excluded. This is one of the most common exclusions, but there are a few other situations where you don’t have to include canceled debt.
1099-C Cancellation of Debt FAQ
Receiving a 1099-C form is a rare occurrence, which is why people often have so many questions about it. Here are several frequently asked questions we’ve encountered about this rare tax document.
What If You Receive a 1099-C Form on an Old Debt?
There aren’t statutes of limitations on the cancellation of debt, though the IRS does have rules about when these forms should be filed. The creditor must file a 1099-C the year following the calendar year when a qualifying event occurs. That just means the creditor must file the next year if they discharge or forgive a debt.
If the creditor files a 1099-C with the IRS, it typically must provide you with a copy by January 31 so you have it for tax filing purposes that year. This is similar to the rule for W-2s from employers and other tax forms.
However, there’s no rule for how long a creditor can carry debt on its books before it decides it’s uncollectible. So, if your debt isn’t canceled via repossession, bankruptcy or other such processes, cancellation could happen at any time. The creditor doesn’t have to tell you about it other than sending the 1099-C.
What If You Don’t Get Your 1099-C?
You may not receive a 1099-C or might receive it after you already filed your taxes. If you receive the form after you file, you should file an amended return. That’s true even if the 1099-C doesn’t change your tax obligation, as you want to get a Form 982 detailing the reasons for exclusion on record for documentation purposes. If you don’t receive a form at all, it may mean the creditor didn’t send one and you don’t have to file.
What If You Have a Canceled Debt That Is Less Than $600?
Canceled debt less than $600 still needs to be reported as income on your taxes, though you may not receive a 1099-C for it. Working with tax professionals may be a good idea if it’s unclear which form you should use and what income you need to claim.
What If You Misplaced Your 1099-C?
You should be able to contact the associated creditor for a copy of your 1099-C form if you lose it. If you can’t reach them or retrieve a copy, you may have to call the IRS to resolve the issue.
What If Your 1099-C Form Is Incorrect?
If your form is incorrect, you should contact the creditor to send a corrected version. If the creditor doesn’t send it before the tax deadline so you can file with the correct information, you’ll need to file an amended return when you receive it.
Though receiving a 1099-C doesn’t hurt your credit, the canceled debt that led to it probably will. It’s best to find other solutions to debt than delinquency or cancellation. You may be able to negotiate, refinance, or restructure your debt to make it more manageable.
Can a Creditor Still Collect After Issuing a 1099-C?
Yes, a creditor can still try to collect the debt a person owes even after a 1099-C has been issued. Even if a lender issues a 1099-C form, they can still choose to pursue delinquent funds if they simply want to collect the money you owe.
If you find yourself in this situation, reach out to your creditor as soon as possible and try to negotiate a new agreement.
What to Do If You Received a 1099-C Form after Filing Your Taxes
If you don’t know a 1099-C form is coming, you could make a mistake on your tax return by filing too early. If you receive the form after you file, you should file an amended return. That’s true even if the 1099-C doesn’t change your tax obligation, as you’ll want to get the Form 982 on record for documentation purposes.
The IRS also allows amended tax returns to be e-filed, making it even easier to quickly file an amendment. However, you can only amend 2020, 2021, and 2022 returns in this manner.
Enrich Your Personal Finance Knowledge with Credit.com
Learning more about taxes and financial matters is easier than ever. You can always consult Credit.com’s expansive personal finance guide to learn more about topics like unpaid taxes, credit reports, and debt-to-income ratios.
Receiving and filing a form 1099-C shouldn’t affect your credit, so you check your credit report if you notice any strange fluctuations in your score. Use Credit.com’s ExtraCredit® subscription for a full view of your credit profile—you can even get started with a free seven-day trial.
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In a low-volume mortgage origination market, some sellers “don’t have the balance sheet or their owners are not interested in legacy and continuity,” which is a different model than Lower’s, Snyder said.
The company is looking for geographic expansion and companies that are “technically sound,” he added.
In November 2023, Lower announced the acquisition of Colorado-based Universal Lending Home Loans, which became a separate division. Universal president and industry veteran TJ Kennedy leads its retail and wholesale channels. Founded in Denver in 1981, Universal added 60 loan officers to Lower.
That deal was followed by the acquisition of Texas-based Thrive Mortgage in December. As is usually the case with Lower’s deals, Thrive maintained its brand. Thrive CEO Selene Kellam, and Randell Gillespie, its national sales director, joined the executive team at Lower.
Financials of the Universal and Thrive deals were not disclosed.
To support its business strategy, Lower announced in June 2021 that it had raised $100 million in a Series A funding round led by venture capital firm Accel. It also expects to raise more capital, “probably a Series B, ideally this year,” according to Snyder.
He added that becoming a publicly traded company isn’t out of the question, although it “really depends on the capital” needed in the future.
“Lower is still majority owned by myself and my co-founders,” said Snyder, who started his career in corporate banking at Wells Fargo and American Bank. “But we have raised money from Silicon Valley. They have seen the bottom [of the mortgage origination market] and can now start seeing the growth.”
Another minority stakeholder at Lower is Veritex Holdings, the parent company of Veritex Community Bank. In 2021, Veritex acquired a 49% stake in Thrive for $53.9 million, valuing the lender at roughly $110 million. Veritex kept a stake in Lower following the acquisitions of Universal and Thrive.
Acquisitions are only one part of Lower’s battle plan, as the lender is also looking to attract talent. In November, the company announced the addition of Amir Syed, co-founder of Growth Only Coaching, as its chief growth officer.
A multichannel lender, Lower operates an online consumer-direct channel that expects to launch a full-service refinance product by the end of the year. It also has an offline retail channel that is “picking up steam” through M&A opportunities, such as Thrive and Universal, and it maintains a local presence, Snyder said.
Meanwhile, Snyder said that Lower’s third-party origination platform that services brokers and other fintechs has been competitive with niche products such as down payment assistance programs.
“We get our customers from multiple places where they want to transact and then fulfill as efficiently as possible with technology,” Snyder said.
Lower claims that the Thrive acquisition made it the country’s 25th largest mortgage lender. According to the Nationwide Multistate Licensing System (NMLS), it had 620 sponsored loan officers and 108 active branches as of Tuesday.
If you’re tired of renting, it may be time to purchase your first home. Being a first-time homebuyer is nerve-wracking, but many of the myths about buying a home just aren’t true.
You don’t need a perfect credit score, and you don’t need 20% for a down payment. Many first-time homebuyer programs, grants, and down payment assistance programs are available to help you secure the financing you need to purchase your first home.
Key Takeaways
First-time homebuyer programs and grants offer various forms of financial assistance, such as low down payment options and closing cost aid, making homeownership more accessible without needing perfect credit or large down payments.
FHA, USDA, and VA loans provide significant benefits, including lower credit score requirements and minimal or no down payment requirements, tailored to help first-time buyers with limited resources.
Additional unique programs like the HUD Good Neighbor Next Door and HUD 203(k) Rehab Loans offer further advantages, like substantial discounts on home prices and funding for renovations, specifically designed to encourage public service employees and those interested in revitalizing homes.
Federal Housing Administration (FHA) Loans
FHA loans are a suitable option for first-time buyers with poor credit, or anyone who doesn’t have 20% to put toward a down payment. These loans are backed by the U.S. Department of Housing and Urban Development (HUD).
FHA Loan Requirements
If your credit score is at least 580, you qualify for minimum down payment of 3.5%. If your credit scores are between 500 and 579, you qualify with a 10% down payment. However, you should expect to receive a higher interest rate.
Here are some of the other requirements:
Have a steady employment history of at least two years
You plan to occupy this home as your primary residence
You’re prepared to get an FHA property appraisal
You can qualify for the FHA loan program even if you filed for bankruptcy, as long as it’s been at least two years. However, you should expect to pay for private mortgage insurance (PMI). However, you should expect to pay private mortgage insurance for the duration of the FHA loan if your LTV ratio is less than 90% at the time of closing.
If it’s lower, you’ll have to pay for 11 years (unless the home loan is paid off earlier). These proceeds are used to cover the lender if the borrower defaults on the loan.
FHA loan limits vary by area. You can view the loan limits for your area here.
Energy Efficient Mortgage Program
With this program, you can roll the cost of any energy-efficient improvements into your FHA mortgage. This won’t change your minimum down payment requirements, and the money financed for the EEM package won’t affect your loan limit. You’ll need to work with your mortgage lender to determine how much of an EEM benefit you qualify for.
Fannie Mae
With Fannie Mae, you can roll the cost of any energy-efficient improvements into your FHA mortgage. This won’t change your minimum down payment requirements, and the money financed for the EEM package won’t affect your loan limit. You’ll need to work with your lender to determine how much of an EEM benefit you qualify for.
HomeReady Mortgage Program
The HomeReady Mortgage program is ideal for first-time homebuyers who have a minimum credit score of 620. The minimum down payment is 3%, and PMI is required. If your credit score is 680 or higher, you may qualify for more competitive rates.
HomePath Ready Buyer Program
With this program, you can get up to 3% of the purchase price in closing cost assistance toward the purchase of a HomePath property. To qualify, you’ll need to complete a homebuyer education course.
You’re also limited in what you can buy. This program is only for HomePath properties, which are foreclosed homes owned by Fannie Mae.
97% LTV Mortgages
This mortgage loan could be the right option for first-time buyers that don’t have 20% for a down payment. 97% LTV mortgages from Fannie Mae allow you to make a down payment of only 3%.
You can only take out a fixed-rate mortgage for this type of loan. And the home you purchase must be your primary residence and not an investment property.
Freddie Mac
Freddie Mac is another entity that offers competitive mortgage products to consumers. Their most popular program for first-time homebuyers is the Home Possible mortgage. This mortgage is ideal for low to moderate-income borrowers in underserved communities.
Home Possible Mortgages
Buyers can choose from the 95% LTV (Home Possible) or 97% LTV (Home Possible Advantage) options. This conventional loan is not backed by the federal government, but it comes with flexible terms and low down payment minimums.
Plus, you can cancel your PMI once the loan balance reaches 79% of the home’s appraised value. And even if with no credit or bad credit, you may be eligible for a mortgage with as little as 5% down.
United States Department of Agriculture (USDA) Loans
Considering a home in a rural area? You may qualify for 100% financing through the USDA loan program.
There is no required down payment with this program, and the credit requirements are much lower than what other lenders look for. You can use this tool from the USDA’s website to see if your area qualifies. There’s a 2% guarantee fee with a USDA loan, but it can be rolled into your mortgage loan and spread across your monthly mortgage payments.
Veterans Administration (VA) Loans
If you’re an active service member, veteran, or surviving spouse, you may be eligible for a mortgage through the VA Home Loan Program.
VA loans are perfect for first-time homebuyers because the upfront costs are so low. There’s no down payment required, and you don’t have to pay for PMI. There is no minimum credit score requirement for a VA loan. However, most mortgage lenders want to see a FICO credit score of at least 580.
Native American Direct Loan
If you’re a Native American veteran looking to purchase your first home, this program may help you get the financing you need. Loans come with no down payment, minimal closing costs, and no PMI.
They are also much easier to qualify for than traditional mortgages. Your home must be located on Federal Trust Land, and the mortgage is for a 30-year term at a fixed rate.
HUD’s Good Neighbor Next Door (GNND) Sales Program
Do you work in a public service role such as law enforcement, teaching, or the fire department? Then you can receive 50% off the HUD appraised value of select homes through HUD’s GNND Sales program.
The only catch is that the home must be located in a revitalization area, and you must commit to living there for 36 months. You also need to act fast because homes are only listed for sale during a seven-day window.
HUD Dollar Homes Program
First-time homebuyers should also check out Dollar Homes offered by HUD. These are foreclosed FHA properties that have been on HUD’s website for over six months. The options may be limited, but you never know when a good deal may appear.
HUD 203(k) Rehab Loans
Do you have your eyes set on a fixer-upper? Check out HUD 203(k) loans, which are backed by the FHA and give additional funding to homebuyers who want to complete renovations. Instead of taking out a second loan, you can roll the renovation costs into the mortgage.
See also: How to Buy a HUD Home (And When You Should)
Other Homebuyer Grants and Programs
You can visit HUD’s website to learn more about programs that are available for first-time homebuyers in your area. Once you’ve selected your state, you’ll be redirected to a list of programs that you may qualify for.
National Homebuyers Fund
The National Homebuyers Fund (NHF) is available for low-income homebuyers that need down payment assistance. Once you find a participating lender, the NHF will provide a grant for up to 5% of the loan amount.
You don’t have to repay the grant, but there are income requirements based on the current housing market and your location. Your lender can provide you more information and help you determine if you qualify.
Employer-Sponsored First-Time Home Buyer Programs
Some employers are now offering housing incentives to help employees with down payments and closing costs. Your employer or labor union may give you a grant that’s forgivable over time. Check with your manager to see if they offer any kind of down payment or closing cost assistance.
Local Grants to First-Time Home Buyers
There are many state or local government grants available for first-time homebuyers. And many of these don’t require any repayment if you live in your home for a certain time frame. Contact a real estate agent and check with both your state and county to learn more about what options are available to you.
Learn More
What Is a NACA Mortgage? – For over two decades, NACA has been assisting borrowers in securing affordable housing through its renowned loan program. Here is an overview of how the program operates.
Home Loans for Single Moms – Single mothers often face challenges when trying to secure a mortgage due to having just one income and no down payment. Here are several mortgage programs available for single mothers.
Known for its academic and medical prestige, Durham is also a growing powerhouse in sports, science, and entrepreneurship. With so much going on within the city limits, those lucky enough to find a home in Durham are reaping the benefits.
From the Durham Bulls to Eno River State Park, let’s take a closer look at ten of the top things Durham is known for and learn a bit more about why so many people are clamoring to lock down an apartment in Bull City.
1. Duke University
Duke University is pivotal to Durham’s identity and a beacon of academia. This prestigious university attracts students and scholars from all corners of the world, contributing to its reputation as a center for academic excellence. The Gothic architecture of its West Campus and the university’s significant contributions to fields like medical research, public policy, and environmental science mark it as a cornerstone of Durham.
2. City of Medicine
Durham is often referred to as the “City of Medicine” due to its many medical and health-related institutions. Home to over 300 medical companies and renowned healthcare systems, this designation highlights the city’s role as a leader in health innovation and services. The presence of the Duke University Medical Center helps spearhead research and advances in medical science and keeps highly skilled folks cycling through Durham.
3. Startup Capital of the South
Dubbed the “Startup Capital of the South,” Durham is a great spot for entrepreneurs. This startup-friendly environment is supported by a network of academic institutions, incubators, and venture capital firms. The city has become a magnet for tech startups and biotech research.
4. Durham Bulls
The Durham Bulls are a symbol of Durham’s commitment to community. This iconic minor league team, made famous by the movie Bull Durham, brings together families and fans from all over to enjoy America’s pastime. Their games are held at the Durham Bulls Athletic Park, a staple for entertainment in the city.
5. American Tobacco Historic District
Once the home of one of the largest cigarette manufacturers in the world, the American Tobacco Historic District has been transformed into a center for entertainment and business. This revitalized area is full of charming old factories converted into offices, restaurants, and shops. Plus, you can’t beat the views of the old water tower and the Lucky Strike smokestack.
6. The Museum of Life and Science
The Museum of Life and Science is a family favorite. With interactive exhibits and programs that ignite curiosity in the natural and physical sciences, this is a place that fosters scientific interest through interaction. Highlights include a butterfly conservatory, wildlife habitats, and aerospace exhibits.
7. Research Triangle Park
Located near Durham, Research Triangle Park (RTP) is one of the largest research parks in the world. It hosts over 200 companies specializing in pharmaceuticals, biotechnology, information technology, and environmental sciences.
8. Durham Performing Arts Center
The Durham Performing Arts Center (DPAC) is a premier venue for entertainment in the city, hosting Broadway shows, concerts, comedy, and more. With state-of-the-art facilities, DPAC attracts major national tours and acts.
9. Eno River State Park
Eno River State Park offers a retreat into nature with its lush forests and rolling river. Visitors can enjoy hiking, picnicking, canoeing, and fishing within its extensive trails and scenic spots. The park is a testament to Durham’s commitment to preserving natural landscapes.
10. Brightleaf Square
Brightleaf Square houses a collection of shops, restaurants, and boutiques. This shopping complex perfectly combines the historical with the contemporary. The area is known for its lively atmosphere during the evening, with frequent events and live music drawing a regular crowd.
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The term “six figures” refers to any annual six-digit salary that falls within the $100,000 to $999,999 range. Securing a post-graduate degree or attaining a highly in-demand position can help you earn six figures over time.
How Much Money Is Six Figures?
A six-figure salary can range anywhere from $100,000 to $999,999 annually. If a person had an annual income of$500,000, here’s what their payments would look like before taxes and deductions:
Salary Breakdown
$500,000 per year
$240
per hour
$9,615
per week
$19,231
every 2 weeks
$41,667
per month
$125,001
per quarter
$250,002
every six months
Please note that this breakdown doesn’t include taxes, which can vary depending on your state and filing status. This breakdown will also vary depending on a person’s exact salary and not what they’re expected to receive.
What Percent of America Makes Six Figures?
When you remove demographics such as infants, students, and stay-at-home spouses and focus only on full-time workers,around 18% of all earners in the US make at least six figures.
Conversely, the median American household income in 2023 was approximately $44,225. This number will fluctuate when one examines factors like the location, education, and health of certain populations.
How Does Education Affect Earning Six Figures?
Having a higher education can create more opportunities to earn a six-figure salary after college. Postgraduate degrees in Science, Technology, Engineering, and Mathematics (STEM) fields are often requirements for high-paying occupations.
Below are their median salaries, according to the Bureau of Labor Statistics. Keep in mind that median salaries don’t reflect the highest or the lowest paying positions:
Higher education is synonymous with increased student debt, but at least five college degrees are worth the money in the long run. Medical degrees, engineering programs, industrial management studies, and computer science degrees fall under this umbrella.
Can You Make Six Figures Without a Degree?
It’s possible to earn $100,000 or more each year without a college degree by pursuing certain occupations. Roles in this category often require preliminary and on-the-job training, as well as multiple certifications.
Choosing this route can also help you avoid some of the most frequent student loan mistakes, such as borrowing more money than you need and slowing down your financial growth.
Commercial Airline Pilot
The median salary for airline and commercial pilots was $148,900 in 2023. Securing a pilot’s license is the first barrier to entry for this role, though it will take years to gain the necessary experience for the most lucrative positions.
Air Traffic Controllers
The high level of responsibility and focus required of air traffic controllers results in a high compensation of about $132,250 annually. An individual’s performance and personal experience can pave the way for higher wages over time.
Air traffic controllers only need an associate degree to get started, though this role requires extensive on-the-job training.
Police Officer or Firefighter
Police officers and detectives, along with firefighters, can earn larger salaries based on their experience and location. For instance, the salary and benefits for police officers in California total around $117,822 annually and include health and dental insurance.
Hard Labor Jobs
Hard labor jobs often pay very well to compensate for the physical risks and immense technical knowledge that these roles demand. In 2022, power plant operators earned a median salary of $97,570. As technology and energy continue to become more important to society, the demand and compensation for these roles will almost certainly rise.
Athletes and Sports Competitors
World-famous athletes and sports competitors like LeBron James, Lionel Messi, and Naomi Osaka earn millions of dollars each year, but many of their contemporaries also earn fantastic salaries without ever needing a degree. Talented athletes with the proper opportunities earned a median salary of $94,270 in 2022.
Real Estate Agent
Real estate brokers and sales agents can earn six-figure salaries without a college degree. Instead, they will need to invest time and money into securing a real estate salesperson license—which, in California, for example, can cost upwards of $500 once all fees are accounted for.
Real estate agents largely earn income from commissions, so they’ll have to gain experience and build up their network of clients to hit that six-figure mark.
Making Six Figures From Your Investment Strategy
A certified financial advisor is best qualified to help you understand how your investments can grow in the future. A strong investment strategy combined with the proper resources and economic conditions can also help someone earn six figures annually.
Potential investment options include:
Pretax retirement savings plans
Stocks, bonds, treasuries, and cryptocurrencies
Real estate and REITs (real estate investment trusts)
Compound interest helps funds grow exponentially based on the amount you’ve deposited and any additional contributions you add. To see this concept in action, you can use our 401(k) calculator and try out multiple scenarios.
Normally, compound interest accounts can generate 5% to 8% interest each year based on your retirement investments. Jobs that provide employees with 401(k) matching contributions can generate hundreds of thousands of dollars by the time you reach retirement age (around 65 years old).
What Are the Best Ways to Start Earning Six Figures?
Keep these strategies in mind if you strive to make at least $100,000 annually:
Consider earning a postgraduate degree. Postgraduate STEM degrees may pave the way for higher-paying roles after graduation.
Avoid student loans to the best of your ability.
Research vocations that don’t require post-graduate degrees.
Consider attending a trade school or a technical college.
How to Increase Your Income in Your Current Role
You have several options to increase your revenue in your current career.
Consider switching companies every few years. Competitors may pay more for experienced workers from other companies.
Pursue promotions within your current organization whenever possible.
Explore entrepreneurship once you’ve gained enough practical experience and saved up a set amount of capital.
2024 Tax Brackets for Single and Joint Filers
As your salary increases, so will your tax obligations for each year. The Internal Revenue Service disclosed the following income tax bracket structure for 2024:
Percentages
Single Filers
Joint Filers
35%
$243,725
$487,450
32%
$191,950
$383,900
24%
$100,525
$201,050
22%
$47,150
$94,300
12%
$11,600
$23,200
Maintain Strong Credit With Credit.com
No matter how you plan to increase your revenue, maintaining strong credit is pivotal. Good or even excellent credit can help you secure lucrative loans and could even open the door to higher-paying positions. With Credit.com’s ExtraCredit® subscription, you can get reliable updates about your credit score and insight into your credit information with resources, tools and strategies to help you know where to work and progress for credit security.
Inside: Uncover the realities of financial aid repayment for students. Learn about FAFSA, loan forgiveness, credit impacts, and strategies for managing your student debt. Find out which types of debt you must pay back.
Financial aid is a beacon of hope for many aspiring students, granting them the financial support they need to access higher education.
Yet, understanding the basics of FAFSA makes applying for financial aid confusing for most students. When considering aid options, it’s crucial to differentiate between the various available types.
Navigating your repayment obligations can seem daunting, but with proactive management, they needn’t be overwhelming.
Take stock of your financial aid package and parse out which portions require repayment.
Understanding these details is the first step towards fulfilling your obligations without compromising your financial well-being.
Remember to read the fine print and don’t hesitate to reach out to your loan servicer for clarification. They are there to help guide you through the repayment process.
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Do you have to pay back FAFSA money?
Technically, FAFSA indicates how much financial aid you can qualify for. Whether you need to repay depends on the type of financial aid you received:
Grants and scholarships: These forms of aid do not require repayment.
Work-Study: These funds are earned through part-time work and do not require repayment.
Loans (subsidized, unsubsidized, and Direct Plus Loans): These must be repaid with interest.
It’s important to note that while grants typically don’t have to be paid back, certain circumstances, such as withdrawal from a program or changes in enrollment status, may require you to repay federal grant money.
Start filling out your FASFA properly with these tips.
Do you have to pay scholarships back?
When it comes to scholarships, the name of the game is financial support without the strings of repayment. Generally, scholarships are like gifts—they do not have to be paid back. Perfect for the undergraduate!
Scholarships are awarded for various reasons such as academic excellence, artistic or athletic talent, or involvement in community service, among others. That said, it’s imperative to understand the terms set by the scholarship provider.
Most scholarships are commitment-free, but some may carry conditions such as maintaining a certain GPA, completing a degree in a specified field, or requiring the recipient to follow through with certain obligations. If these conditions are not met, there could be repercussions, including the requirement to repay the funds.
Learn how to pay for college without loans.
Types of Financial Aid That Require Repayment
I’m not going to lie when I was looking at borrowing for financial aid for college I was confused with the names and types of aid offered. Now, I know the best course of action is to get paid to go to school.
Thankfully, there is more information readily available for this type of information rather than relying on your guidance counselor.
So, here is the info you need.
Unraveling Federal Student Loan Repayment
First, you must understand the different types of Federal Student loans to know their repayment requirements.
Each loan type has its own set of rules and repayment schedule, typically beginning after you graduate, leave school, or drop below half-time enrollment.
Federal loans boast flexible repayment options.1
The Standard Repayment Plan for federal loans entails a fixed monthly payment amount, ensuring that the loans are fully repaid within a standard period of 10 years, and extends to 30 years for direct consolidation loans. This plan is often the quickest way to pay off loans, providing a consistent monthly payment over the repayment term.
The Graduated Repayment Plan starts with lower monthly payments that increase every two years, designed to pay off all student loans within 10 years, or 30 years if it’s a direct consolidation loan.
The Extended Repayment Plan offers borrowers with over $30,000 in federal student loans the flexibility of fixed or graduated payments over a 25-year period.
If affordability is a concern, you might settle on an income-driven repayment (IDR) plan, which keys your monthly payments to your earnings and family size. Should your finances take a downward turn, relief is available through programs like deferment or forbearance, allowing you to temporarily suspend payments.
After 20 to 25 years on an IDR plan, you might even be eligible for loan forgiveness for any remaining balance. This doesn’t nullify your entire debt but can relieve a significant financial burden. Teacher Loan Forgiveness and Public Service Loan Forgiveness (PSLF) are two such avenues, provided eligibility requirements are met.
Deciphering Private Student Loan Responsibility
These private loans are offered by non-government entities such as banks, credit unions, and online lenders, and repayment rules can be more stringent. As such, it is best to start with traditional federal loans.
While you typically aren’t required to repay private student loans while you’re in school, interest accrues during this time, increasing your eventual debt. After leaving school, some lenders allow a grace period similar to federal loans, but this isn’t guaranteed. Check with your lender for specifics on repayment commencement and grace periods.
Repayment plans with private loans are usually less flexible and often lack income-driven options. Monthly payments are fixed, and lender offerings on deferment and forbearance can be less generous, with some providing no options for such measures.
This is why it is best to learn how to pay for college without parents’ help.
Scholarship System
The Scholarship System is changing how parents and students look at paying for college.
Learn how real people found real scholarships. Their students have been awarded $12,060,000 in scholarship money (as of October 2023).
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When You Need to Start Paying Back Financial Aid
Federal Loans: Grace Periods and Repayment Plans
Federal student loans, notably, offer a six-month grace period following graduation, leaving school, or dropping below half-time enrollment status. During this period, no payments are due, offering you time to get financially settled and choose a repayment plan.
Repayment plans span the Standard, where you’ll pay a fixed amount each month for a term of usually ten years, to Graduated, where payments start lower and increase over time. Income-Driven Repayment Plans adapt to your income level, ensuring that your student loan payments are manageable relative to your earnings.
Each plan has unique advantages depending on your financial situation and long-term goals. The key is to select one that corresponds with your ability to pay, aligns with your career trajectory, and manages your debt effectively over time.
Always be proactive in contacting your loan servicer to discuss plan options or changes in your financial status.
Private Loans: Lender-Specific Timelines and Terms
Private loans come with lender-specific timelines and terms that can vary widely from one lender to another. Unlike federal loans, private loans don’t come with a standardized grace period, although some lenders may offer a similar post-graduation moratorium on payments.
Borrowers must check their loan agreements to determine when repayment should begin.
The terms of repayment for private loans are also set by the lender and typically don’t offer the same flexibility found in federal programs. Fixed and variable interest rates are based on credit scores, and while some lenders might offer loan modification options in cases of financial hardship, such policies are not universal.
Remember, with private loans, leniency for late or missed payments is not a given.
Consequences of Defaulting on Financial Aid
The Effects on Credit Scores and Future Borrowing
Missing payments, or worse, defaulting on your student loans, are red flags to future creditors that appear on credit reports and can significantly lower your credit score. A lower score can make securing further credit from lenders—whether it’s for a mortgage, a car loan, or a credit card—an uphill battle.
Moreover, the repercussions ripple outward: Not only might you face higher interest rates due to perceived risk, but landlords and employers can reference credit scores during their tenant or employment screening processes.
Maintaining on-time payments is an investment not only in your education but also in your broader financial stability and opportunities.
Legal Repercussions and Wage Garnishment Risks
Wading into the murky waters of default on student loans can unleash legal repercussions that ripple through your financial landscape. The government has tough mechanisms to recoup defaulted federal student loans, ranging from wage garnishment — where a portion of your paycheck is allocated to your debt without your consent — to seizing tax refunds and other federal benefits you may be entitled to receive.
The prospect of wage garnishment adds a level of complication to an already tense situation. In such cases, the government can legally claim up to 15% of your disposable income. This can strain your finances even more, potentially forcing you to make hard choices about your monthly budget.
These same consequences do not typically apply to private student loans, which are subject to state laws. However, private lenders can bring lawsuits against borrowers in default, leading to potential wage garnishment or asset liquidation as decided by a court.
The message is stern yet simple: Stay vigilant with student loan repayments to forestall these severe outcomes.
Options for Managing Repayment Challenges
Loan Forgiveness, Cancellation, and Discharge Opportunities
Navigating the sea of student loan debt isn’t without its lifelines. Loan forgiveness, cancellation, and discharge programs can serve as financial floatation devices, providing necessary relief in an ocean of repayment.
Loan forgiveness is typically occupation-specific. For instance, Public Service Loan Forgiveness (PSLF) absolves remaining federal loan debt after 120 qualifying payments for professionals in government or non-profit sectors.
Cancellation might occur under circumstances like your school closing prematurely or if you’ve been defrauded by the institution.2
Additionally, if you become totally and permanently disabled, you may qualify for a discharge, relieving you from the obligation to repay your federal student loans.
Exploring these opportunities requires patience and diligence, as each comes with strict eligibility criteria. Nonetheless, they can significantly lighten the burden of student debt.
Strategies for Keeping Student Loan Payments Affordable
Crafting a strategy to keep student loan payments within the realm of affordability hinges on exploring all available options and making informed choices. Consider the following ways to ensure your loans remain manageable:
Income-Driven Repayment Plans: Federal loans offer several plans that base your monthly payment on your income, notably capping payments at a fixed percentage of your discretionary income. These plans can significantly decrease your monthly obligations if you’re starting with a lower salary.
Refinancing or Consolidation: You might find a lower interest rate through refinancing, which can reduce your monthly payments and the total cost over the life of the loan. Consolidating multiple federal loans can streamline payment processes, though it may average out to a higher overall interest rate. This is what I did.
Applying for Deferment or Forbearance: In times of financial hardship, job loss, or returning to school, you can apply for a temporary suspension of payments. While interest may still accrue, it can provide short-term relief.
Making Extra Payments: By paying more than the minimum or making bi-weekly payments, you can reduce the principal balance faster and save on interest in the long run.
Setting a Budget and Cutting Expenses: Sometimes, the most effective strategy is tightening your budget. By trimming unnecessary expenses, you may free up funds for your loan payments.
Every borrower’s situation is unique, so consider your financial circumstances and long-term goals when choosing the best strategy for you. Always maintain open communication with your loan servicer to stay abreast of changes or additional assistance programs that may become available.
Should I refinance my Student Loans?
Refinancing your student loans can be a strategic move to manage debt, potentially offering lower interest rates and different repayment terms to suit your financial situation. It involves replacing your current loan with a new one, typically through a private lender, and may provide relief if you’re struggling with high payments.
However, borrowers should carefully consider the loss of federal loan benefits, like loan forgiveness, before proceeding with refinancing their student loans.
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We refinanced our student loans to lower the payments and ultimately are debt free.
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Making Informed Financial Aid Decisions – How to Review and Understand Your Aid Offer
When the much-anticipated financial aid offer lands in your hands, taking the time to thoroughly review and understand it ensures you’re making an informed decision. Here’s how you can break down your aid package:
Identify Free Money: Distinguish between grants and scholarships that don’t require repayment from loans that do. These are the parts of your offer that you’ll want to maximize.
Assess Work-Study Opportunities: If your offer includes federal work-study, understand that these funds must be earned and are not guaranteed. They depend on your finding an eligible job and fulfilling work hours.
Analyze Loan Details: Look closely at the type of loans offered, their interest rates, and repayment terms. Remember, federal loans generally offer more favorable terms than private loans.
Calculate Net Cost: Subtract the total aid package, excluding work-study, from the overall cost of attendance to determine what you’ll need to cover through savings, income, or additional loans.
Consider Cost of Living: Ensure that you take into account living expenses and indirect costs like books and supplies when reviewing your aid offer.
If anything is unclear, don’t hesitate to contact the school’s financial aid office for clarification. The goal is to fully understand your commitments before accepting any part of the aid offer.
Remember Not All Financial Aid Offers Must Be Accepted
Not every portion of the financial aid offered to a student needs to be accepted.
It’s crucial to carefully evaluate the components of the financial aid package, as some elements, such as loans, will need to be repaid with interest. Ultimately, it’s important to make informed decisions about which types of aid to accept based on one’s financial circumstances and long-term educational costs.
Frequently Asked Questions (FAQ)
FAFSA, the Free Application for Federal Student Aid, is a form that determines your eligibility for different types of financial aid, not money in itself.
Some aid offered via FAFSA does not need to be repaid, like grants and scholarships, while other types, such as federal student loans, do require repayment with interest.
If you withdraw from college, your student loans remain in place and need repayment.
Following withdrawal, usually a six-month grace period for federal loans before repayments start. However, interest may accrue during this time, except for subsidized federal loans, which don’t accumulate interest until after the grace period.
Yes, FAFSA loan debt, which generally refers to federal student loans obtained through the FAFSA application process, can be forgiven, canceled, or discharged under certain conditions, such as public service work, teaching in low-income areas, or permanent disability.
However, these options have specific eligibility requirements. So, be careful and read the fine print.
If you don’t pay back financial aid that is in the form of a loan, you risk defaulting, which can lead to wage garnishment, withheld tax refunds, lowered credit score, and other financial consequences.
It can make future borrowing more difficult and become a legal issue. Always seek help before defaulting.
What Happens If You Don’t Pay Back the Financial Aid?
If you don’t pay back financial aid that is in the form of a loan, you risk defaulting, which can lead to wage garnishment, withheld tax refunds, lowered credit score, and other financial consequences.
It can make future borrowing more difficult and become a legal issue. Always seek help before defaulting.
Source
Federal Student Aid. “Federal Student Loan Repayment Plans.” https://studentaid.gov/manage-loans/repayment/plans. April 28, 2024.
Student Loan Borrower Assistance. “Borrower Defense to Repayment.” https://studentloanborrowerassistance.org/for-borrowers/dealing-with-student-loan-debt/loan-cancellation-forgiveness-bankruptcy/cancellation-forgiveness-options/borrower-defense-to-repayment/. April 28, 2024.
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