rent payments Archives - Hanover Mortgages

Apache is functioning normally

December 1, 2023 by Brett Tams

Life is expensive and paying for rent can take up a significant chunk of your paycheck. In an ideal world, 30 percent of your income should go towards rent and housing costs. But life happens and you may come up short on rent due to loss of income or other unexpected expenses, leaving you wondering if you should take out a loan to pay rent. Coming up short on your rent payment is an extremely stressful situation and you’ll be looking for ways to make your rental payment and avoid eviction.

If you find yourself in this situation, what do you do? There are several options to weigh and taking out a loan to pay rent is one of them. Let’s walk through the pros and cons of rent loans and discuss several options you can consider if you’re behind on rent payments.

Is it possible to take out a loan to pay for rent?

If you get behind on rent payments, you’re not alone. In fact, more than 7 million renter-occupied households are behind on just last month’s rent alone. So, what are your options and is it possible to take out a loan to pay for rent? The short answer is yes, you can.

Using a loan to pay rent is an option. You can obtain a personal loan to pay rent and for some people, it’s a good idea. However, before you take out rent loans, you need to consider if it’s the right choice for you.

Pros of using a personal loan for rent

If you’re strapped for cash and need to pay for rent, there are some plus sides to taking out a personal loan for rent.

Pro #1: Provides a window of time for re-assessing your finances

By taking out a personal loan to cover your rent, you buy yourself some time to get your budget back on track. With a personal loan, you can pay for rent (either what you owe from missed payments or for future rent payments). Once you pay your rent, you’ll find yourself less stressed and you’ll think more clearly so you can get your budget back in a place where you can pay your loan back and have enough money for future rent payments.

Pro #2: Gives you flexibility

Personal loans allow you to use the loan money for anything you need. So, taking out a personal loan gives you the flexibility to use the money for rent or any other expense you need to cover. This flexibility is enticing for renters who need some financial help as the loan doesn’t specify what you can and cannot use the money for.

Pro #3: You can shop loan ranges and rates

Before taking out a personal loan, you’ll be able to shop around for loan ranges and rates. Make sure to compare your findings before you make a decision. You can take out a loan for as little as $1,000 or as much as $60,000 if needed. You can also compare interest rates.

It is important to try and find a loan with a low interest rate so you don’t accrue more debt than is absolutely necessary.

Pro #4: Can build a credit score

This is both a pro and con of personal loans, depending on how diligent you are with repayment. If you make your loan repayments in full and on time every single time, you’ll pay the loan off within the limits and build your credit score. If your credit score took a hit or is low, this is one way to rebuild your credit history.

However, it’s essential that you meet the terms of the loan for this to benefit you.

Cons of using a personal loan for rent

As with everything, when there are pros there are cons. Before taking out a loan to pay rent, consider the negative impacts of rent loans.

Con #1: You’ll pay interest

With any type of loan, you’ll pay interest on the amount you borrow. So, if you take out a personal loan toward rent, not only will you pay the rent money, you’ll also be paying money toward the interest.

If you have no other options, then taking out a loan for rent allows you to make your payment, stay in your apartment and come up with a new financial plan. Keep in mind that you’ll pay more with this option because of interest.

Con #2: Adds to debt

When you take out a personal loan to pay rent, you’re adding to the overall amount of debt you have. This may compound your stress and overall debt, causing more problems down the road. Also, when you rent, you aren’t putting money toward eventually owning an asset as with a mortgage toward a house. So, you’re compiling debt without working toward an eventual purchase.

Con #3: Could harm your credit score

If you fail to make your monthly loan payment, you could seriously damage your credit score putting you at risk for further financial hardship.

How to find a personal loan to pay back your rent?

If you’ve come to the conclusion that a personal loan is right for you, then you’ll need to know where to look and find one. Most financial institutions will offer loans and you can shop around for the loan that is right for you. Here are some places you can go to find a personal loan to pay back your rent:

Bank
Credit union
Online banks
Loan comparison websites

Because different places offer different rates on your loan, it’s smart to get several recommendations before taking out a loan.

Other options to pay back your rent

Unsure that a personal loan is right for you? We also have provided several other options to consider when you need money to pay back your rent. Before taking out a loan, you could consider:

1. Talking to your landlord

When you first realize that you may not have the money to pay your rent or if you’ve missed the due date, you’ll want to talk to your landlord immediately. Getting in front of the issue and addressing it openly is always a wise move.

Ask your landlord if he/she is willing to defer rent, offer a payment plan or waive late fees. You never know unless you ask!

2. Borrowing from a friend or family member

Do you have a trusted friend or family member that could loan you money for rent payback? If so, this is a less expensive option compared to getting a personal loan. Sometimes, close family or friends will loan you the money, interest-free, which is always a better option.

3. Call 211

You can the 211 community phone line to get referrals for services, like financial resources. If you’re in a bind, try calling this number and get in touch with local resources that can help with rent relief.

4. Consider a roommate

Imagine your rent payment being cut in half. Would that free up some of your budget? The answer is most likely yes. If you have space, you may consider getting a roommate who can share the cost of rental expenses and save you money, too.

5. Get a side gig

Nowadays, there are several side hustles that you can do from home, after work or at your convenience that pays well and would help your income. If you can get a side hustle that’ll cover the additional money you need for rent, this is a great option because it puts you in control of your money and you don’t need a loan to cover the extra expense of rent paybacks.

6. Reallocate your budget

Sometimes, we spend money on things like coffee, eating out or shopping and don’t realize how much of our budget it’s taking up.

Before you take out a personal loan, take a hard look at your expenses and budget to see where you can trim the fat. If there are areas to cut back on and reallocate expenses to rent payback, do this before taking out a personal loan.

Know your financial options

Now that you understand the pros and cons of loans to pay rent, you can make an informed decision if this is right for you. As always, you may want to consult a financial advisor before making a big decision like this to get professional guidance on what is best for you and your situation.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

Sage Singleton is a freelance writer with a passion for literature and words. She enjoys writing articles that will inspire, educate and influence readers. She loves that words have the power to create change and make a positive impact in the world. Some of her work has been featured on LendingTree, Venture Beat, Architectural Digest, Porch.com and Homes.com. In her free time, she loves traveling, reading and learning French.

Source: rent.com

Apache is functioning normally

November 30, 2023 by Brett Tams

Inside: Fixed expenses are a vital part of any budget, and understanding how to account for them is essential to staying on track. This guide will teach you about fixed expenses and how to use them in your monthly budget to keep expenses under control.

Budgeting is the cornerstone of financial stability.

Whether you want to or not, it will take away the stress of money.

A budget is a practical tool that enables you to plan your spending and savings, ensuring a fair share of your income goes towards critical expenses. It also gives you more control over your money, reducing stress and enabling you to meet your financial objectives.

This is something you want, right?

In this post, we will uncover information specifically related to fixed budget expenses.

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

Decoding Your Expenses – Fixed and Variable

Understanding expenses forms the bedrock of effective budgeting practices. There are two key types of expenses to consider: fixed and variable.

Fixed expenses are those that remain constant every month, such as rent or car payments.
Variable expenses, on the other hand, fluctuate monthly based on usage or consumption, like groceries, utilities, or gas.

Balancing these two types of expenses forms a significant part of personal budgeting.

What is A Fixed Expense?

A fixed expense is a cost that remains typically constant and is paid at regular intervals. These intervals may be weekly, monthly, quarterly, or annually.

Given their consistency, they contribute to financial predictability and ease of budgeting.

What is an Example of a Fixed Expense?

Here are common fixed expense examples that cover a wide spectrum but predominantly include costs required to maintain a basic standard of living. Here are some examples:

Rent or mortgage payments: This encompasses the regular cost of housing.
Insurance premiums: This could be for your car, health, life, renters, or homeowners insurance.
Loan payments: Regular installments for obligations like student loans and car loans belong to this category.
Utilities: Though they may fluctuate occasionally, regular payments like water, gas, and electricity are often treated as fixed costs.
Subscriptions: Recurring payments for services such as gym memberships or streaming platforms.
Savings: For disciplined budgeters, fixed contributions to saving accounts can be considered a monthly fixed expense. This is how Money Bliss readers save so much money!

The list can extend to include other less common fixed expenses, such as alimony, child support, or back tax payments, depending on personal circumstances.

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Comprehensive approach to budgeting, helping you plan monthly budgets based on your income.
Offers expert advice, making it suitable for those who require an in-depth, forward-thinking budgeting strategy.
Superior synchronization skills make it the winner in this area.
YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
Option to manually add and upload transactions from accounts each month.
YNAB prioritizes user privacy.

What is a periodic fixed expense?

A periodic fixed expense is a cost that is regular and predictable but does not occur monthly. These expenses still retain the characteristics of fixed expenses.

They may be caused by quarterly, semi-annual, or annual payment terms and require careful budgeting and planning. Examples include annual subscriptions, car insurance paid semi-annually, or yearly property taxes.

It’s essential to account for these expenses in your budget, dividing the total cost by the number of months until payment to ensure you’re adequately prepared when they’re due.

How to Budget for Fixed Expenses

Budgeting is a crucial financial activity as it helps manage income effectively and ensures all necessities are covered.

Most people use the zero based budget or the biweekly budget as a starting point.

1. Start With Fixed Expenses in Budgeting

Starting with fixed expenses in the budgeting process is essential, as they make up the majority of one’s budget and are typically consistent for longer periods.

When writing out your budget, prioritize fixed expenses such as housing costs, insurance, and childcare. You can use our personal budget categories to find out which expenses you shouldn’t forget.

Upon allocating your income for the month, ensure these bills take precedence over discretionary spending to avoid budgeting errors.

Quicken

Personal finance and money management software allows you to manage spending, create monthly budgets, track investments, retirement and more.

I have used this platform for over 20 years now.

Pros:

Birds-eye view of your complete financial picture.
Conveniently download your spending activities, and automatically categorize them (Quicken connects to over 14,000 financial institutions).
Track investments with it’s features like portfolio analytics, retirement goals, and market comparison.

Cons:

Little complex to use at first, the learning curve is moderate.
Yearly subscription-based model to use the platform.

2. Prioritizing Between Fixed and Variable Expenses

Prioritizing between fixed and variable expenses can often feel like walking a tightrope.

The first step is budgeting for your fixed expenses. Since they make up the majority of your budget and are for longer periods of time, it’s crucial to ensure these costs are taken care of first.
Next, plan for your variable expenses. These costs fluctuate every month and can be adjusted easily.
Finally, you will account for flexible expenses.

As always, don’t forget to save and invest, as this will help with financial sustainability and wealth development.

3. Tools and Techniques for Efficient Budgeting

Today’s digital landscape offers myriad tools and techniques for efficient budgeting, which is great news for you!

Apps and digital tools can facilitate the tracking of expenses in real-time, thus making it easier to discern patterns and identify savings opportunities. Using a line-item budget can help you dig into where your money is going and plan every dollar you earn.

Here are our favorite budget apps.

Regularly reviewing and updating your budget can help you stay on top of changes and future uncertainties.

Tiller Money

Your financial life in a spreadsheet, automatically updated each day.

Tiller is the fastest, easiest way to manage your money with the unlimited flexibility of a spreadsheet.

Update your finances in one place, so you can take control of spending, optimize cash flow, and confidently plan your financial future.

Pros:

Tiller automatically updates Google Sheets and Microsoft Excel with your latest spending, balances, and transactions each day.
No more tedious data entry, CSV files, or logging into multiple accounts.
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How do I determine whether a cost is fixed or variable?

Determining whether a cost is fixed or variable often comes down to its consistency and its correlation with a factor such as output, usage, or time.

Fixed costs remain constant over time or within certain activity levels; examples include rent and insurance premiums. They do not fluctuate with changes in production or the number of goods sold.
Variable costs, on the other hand, fluctuate in direct proportion to levels of spending, such as groceries or gas.

Understanding this difference can help with accurate cash flow forecasting and effective financial management.

Strategies to Save on Fixed Costs

Now, the key is to try to lower your fixed expenses as much as possible. This will make the biggest difference in your budget.

For example, if your rent for a one bedroom apartment is $1850, maybe you move in with a roommate, and your rent is lowered to $800 per month. That is a savings of $1050, which you can save for a down payment on a house.

Ways to Curb Fixed Expenses

Optimizing your budget often entails finding ways to reduce your fixed expenses. Several strategies can help achieve this:

Renegotiate Your Bills: Reach out to service providers to negotiate lower rates for services such as insurance premiums, Internet, phone service, and more.
Refinance Your Loans: If interest rates have decreased, consider refinancing your mortgage or student loans to lower the monthly payments.
Downsize Your Living Situation: One major way to cut costs is to find a smaller or cheaper place to live.
Cancel Unused Subscriptions: Regular payments for services you don’t use, like gym memberships or streaming platforms, can silently drain finances.
Automate Savings: Regular, automated transfers to a savings account can enforce discipline and consistency in managing money.

Remember, while these strategies can help you cut costs, each individual’s circumstances are different, so personalized considerations should be made.

Which fixed expense would be most difficult to change if money is needed for car payments?

Car payments are a real struggle for most people. Right now, the average car loan is between $516-725 per month depending on a used or new vehicle. ¹

As such, your largest fixed expenses are usually the most challenging to change.

If you require more money for car payments, the most difficult expenses to alter would likely be your mortgage or rent payments. Reducing these costs often necessitates significant lifestyle changes, such as moving to a cheaper home or obtaining a roommate.
Other difficult-to-change fixed expenses could include insurance or student loan payments, depending on the terms of your loans or policies.

It’s important to have an emergency fund set up for unforeseen repairs like these to avoid having to drastically change your lifestyle.

Practical Tips for Achieving Financial Stability

Achieving financial stability often boils down to effective management and strategic planning. Here are some practical tips:

Pay Your Bills on Time: This reduces unnecessary fees and interest costs. If this is a challenge, setting up automated payments may help.
Save Regularly: Aim to set aside a certain percentage of income on a regular basis. Automated savings plans are a useful tool for this.
Prioritize Spending: Distinguish between your wants and needs to help prioritize your spending.
Get Insured: Protect yourself from large, unexpected expenses by ensuring appropriate coverage on insurance.
Stay Informed: Regular budget reviews and financial check-ups can help you stay on track and adjust your plans as necessary.

Remember, financial stability is a journey, not a one-time achievement. It requires consistency and patience. So, celebrate your small financial victories along the way!

YNAB

Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.

Pros:

Comprehensive approach to budgeting, helping you plan monthly budgets based on your income.
Offers expert advice, making it suitable for those who require an in-depth, forward-thinking budgeting strategy.
Superior synchronization skills make it the winner in this area.
YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
Option to manually add and upload transactions from accounts each month.
YNAB prioritizes user privacy.

Start 34 Day Free Trial

YNAB vs Mint

Frequently Asked Questions

Yes, rent is considered a fixed expense. It is a recurring cost that typically stays constant, regardless of changes in your income, spending, or other factors.

The rental or lease agreement specifies the monthly rent expense, which does not change until the lease period ends or is renegotiated.

If fixed costs become variable costs in a personal budget, it can add some unpredictability to your expenses. For instance, if you have a variable-rate mortgage, your payments may change due to the mortgage agreement.

To restore control, consider opening separate savings accounts for each variable expense category, turning these unpredictable expenses into ones that can be anticipated and budgeted for each month.

Fixed costs refer to expenses that do not change with fluctuations in your budget. They are incurred regularly and remain relatively constant, independent of your spending.

These costs are critical expenses necessary to live your life and cannot be quickly modified or eliminated.

Does This List of Fixed Expense Examples Help You?

In conclusion, examining and reducing your fixed expenses can be a transformative step toward achieving financial stability.

Contrary to popular belief, fixed costs are not immutable. With diligence and thoughtful consideration, you can explore cheaper alternatives for health insurance premiums, cell phone plans, and other consistent expenses.

Lowering your fixed costs enables automatic, consistent savings which can then be directed towards settling debt or securing your future. The beauty of this approach lies in its subtlety as this won’t feel like an imposition on your lifestyle.

Therefore, understanding and managing your fixed expenses can indeed play a crucial role in your journey to financial soundness.

It’s not just about making frugal decisions, rather it’s about making smart ones that can reap substantial benefits in the long run.

Now, do you have the traits needed to be financially stable?

Source

LendingTree. “Average Car Payment and Auto Loan Statistics 2023.” https://www.lendingtree.com/auto/debt-statistics/. Accessed November 27, 2023.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

November 28, 2023 by Brett Tams

The Bilt World Elite Mastercard® Credit Card is best known for its unique standout feature: the ability to earn rewards with no transaction fee when paying rent. Indeed, the Bilt credit card is a game-changer for renters. Beyond rent, though, how does Bilt compare with a more traditional general-purpose credit card like the Wells Fargo Autograph℠ Card?

Both cards carry no annual fee. They both earn 3 points per $1 spent on dining, offer cell phone protection and certain travel protections, plus charge no foreign transaction fees. But in most other respects, the benefits of these two cards couldn’t be more different.

The Wells Fargo Autograph℠ Card offers a compelling sign-up bonus and introductory APR, while the Bilt World Elite Mastercard® Credit Card offers neither. But the Bilt credit card, along with its most obvious benefit for renters, earns points that can be transferred to various hotel and airline travel partners, giving the potential for outsize value. Currently, the Autograph offers no such transfers.

Let’s dig into the specifics of each card so you can make the right pick for your lifestyle.

Who doesn’t want to be rewarded?

Create a NerdWallet account for personalized recommendations, and find the card that rewards you the most for your spending.

How the cards compare

Bilt World Elite Mastercard® Credit Card

Wells Fargo Autograph℠ Card

Annual fee

Sign-up bonus

Limited Time Offer: Earn 30,000 bonus points when you spend $1,500 in purchases in the first 3 months – that’s a $300 cash redemption value.

Rewards

3 points per $1 spent on dining.
2 points per $1 spent on travel.
1 point per $1 spent on rent (up to 100,000 points annually).
1 point per $1 spent on all other purchases.

3 points per $1 spent on restaurants.
3 points per $1 spent on travel, transit, gas stations and EV charging stations.
3 points per $1 spent on popular streaming services and select phone plans.
1 point per $1 spent on all other purchases.

APR

See Terms.

0% intro APR on Purchases for 12 months from account opening, and then the ongoing APR of 20.24%, 25.24%, or 29.99% Variable APR .

Foreign transaction fee

Still not sure?

Why the Bilt World Elite Mastercard® Credit Card is better for renters and travelers

Pay rent with a credit card

The Bilt World Elite Mastercard® Credit Card‘s standout feature is its ability to earn rewards on rent payments without any transaction fees. That’s a unicorn in the credit card world, as most cards can’t be used directly toward rent payments without such fees. Previously, renters looking to pile up credit card rewards relied on intermediary services like Plastiq, whose high fees cut into any rewards earned.

Though the benefit caps out at 100,000 points per year, this still makes the Bilt World Elite Mastercard® Credit Card the obvious choice for renters looking to get more out of their biggest monthly expense. Even if you don’t live in a property that’s part of the Bilt network, you can still charge rent on the card (with no transaction fees) and they’ll mail a check to your landlord.

Transfer to travel partners

Both cards earn points, but only points earned from the Bilt World Elite Mastercard® Credit Card have the potential for higher value toward travel. Points earned from the Wells Fargo Autograph℠ Card are worth 1 cent each and can be redeemed for travel, gift cards or statement credits — or when checking out online with PayPal.

Bilt Points are also versatile and can be used toward rent, fitness classes, home decor and even a home downpayment, for varying value. But as a card with no annual fee, the Bilt World Elite Mastercard® Credit Card stands out for its ability to transfer points at a 1:1 ratio to a wide range of travel partners. Travelers often find greater value than 1 cent each for their points when they transfer this way.

This is a rare perk among no-fee cards, most of which require pairing with a higher-fee card to transfer points. For example, Chase Freedom Flex℠ cardholders can transfer points to travel partners only if they also carry a higher fee card like the $95-annual-fee Chase Sapphire Preferred® Card.

Plus, Bilt’s list of travel partners is excellent, including American Airlines, United, Hyatt and IHG. In fact, despite American Airlines issuing co-branded credit cards with both Citibank and Barclays, neither issuer allows transfers of its points to the airline. Here’s a look at the full list of available transfers:

Full list of Bilt transfer partners

Aer Lingus (1:1 ratio).
Air Canada (1:1 ratio).
Air France (1:1 ratio).
American Airlines (1:1 ratio).
British Airways (1:1 ratio).
Cathay Pacific (1:1 ratio).
Emirates (1:1 ratio).
Hawaiian Airlines (1:1 ratio).
Hyatt (1:1 ratio).
Iberia Airlines (1:1 ratio).
IHG (1:1 ratio).
Marriott (1:1 ratio).
Turkish Airlines (1:1 ratio).
United (1:1 ratio).
Virgin Atlantic (1:1 ratio).

Bonus points in several categories, with an extra boost on “Rent Day”

Beyond rent payments, the Bilt World Elite Mastercard® Credit Card earns solid rewards on a variety of everyday expenses. That includes 5x points on Lyft rides, 3x points on dining, 2x points on travel and 1x on all other purchases.

But Bilt’s biggest benefit to cardholders comes on the first day of each month, when point values double for all nonrent categories, up to a cap of 10,000 bonus points per month. On that day, Bilt World Elite Mastercard® Credit Card holders earn 6x points on dining, 4x on travel purchases and 2x on everything else.

Why you may prefer the Wells Fargo Autograph℠ Card

Snag a sign-up bonus

Like many more traditional rewards credit cards, the Wells Fargo Autograph℠ Card greets new users with an attractive new cardholder bonus: Limited Time Offer: Earn 30,000 bonus points when you spend $1,500 in purchases in the first 3 months – that’s a $300 cash redemption value.

The Bilt World Elite Mastercard® Credit Card, on the other hand, offers no bonus for new cardholders, meaning it will take longer to rack up the same level of rewards.

Pay over time with 0% introductory APR

The Wells Fargo Autograph℠ Card is also the better pick for cardholders who need to finance purchases over time. Currently, new cardholders will get 0% intro APR on Purchases for 12 months from account opening, and then the ongoing APR of 20.24%, 25.24%, or 29.99% Variable APR .

Since the Bilt World Elite Mastercard® Credit Card doesn’t offer an introductory interest rate, it’s a less attractive choice for cardholders who need some breathing room on interest.

Earn higher rewards on travel, gas stations and streaming services

Both cards earn 3x points at restaurants, but the Wells Fargo Autograph℠ Card wins by a nose on travel purchases, earning 3x points per $1 spent compared with 2x with Bilt.

The Autograph also earns 3x points on certain popular streaming services and phone plans. Bilt’s baseline earnings rate for these categories is just 1 point per $1 spent — but you can bump that up to 2x points per dollar by setting these recurring bills to be charged on the first of every month.

When it comes to fueling your vehicle, though, the Autograph really races ahead on rewards, earning 3x points at gas stations and EV charging stations. For comparison, the Bilt World Elite Mastercard® Credit Card earns a modest 1 point per dollar spent in these categories.

Potential tie-breakers

Still can’t decide which card is right for you? Here are a few minor points of distinction to consider.

Simplicity of earning rewards

A major downside of the Bilt World Elite Mastercard® Credit Card is its transaction requirement. According to the card’s terms, you must complete five transactions per billing period to earn any rewards. That means if you only make four transactions on the card one month, you won’t earn rewards on any of those purchases. There’s no minimum spend per transaction, but this does present an extra hoop to make sure you maximize your rewards.

The Wells Fargo Autograph℠ Card won’t earn you rewards on rent, but it also doesn’t include any such complicated requirements.

Metal vs. plastic

If you have strong preferences about the feel of the card, it’s worth noting that the Bilt World Elite Mastercard® Credit Card comes in a sleek metal design, adding some sophistication to your wallet. The Wells Fargo Autograph℠ Card is plastic, making it a lighter weight to carry.

Which card should you get?

The distinction here is pretty clear. If you’re a renter, the Bilt World Elite Mastercard® Credit Card is the obvious choice. No other card offers comparable rewards on rent payments, and the card’s additional rewards plus travel partners make it a good value on everyday spending as well.

Not a renter? The Wells Fargo Autograph℠ Card will provide more overall value on everyday spending.

Then again, given that both cards carry no annual fee, renters with good credit may choose to pick up one of each. Use the Bilt World Elite Mastercard® Credit Card for rent, Lyft rides and to pick up extra rewards on the first day of each month. For the rest of the month, the Wells Fargo Autograph℠ Card will earn you higher rewards in most categories, along with a strong intro APR and sign-up bonus.

Source: nerdwallet.com

Apache is functioning normally

November 22, 2023 by Brett Tams

Here’s how to go about breaking your lease.

Breaking a lease can be a daunting task, but circumstances may arise that necessitate early termination of a lease agreement. Whether it’s due to a job relocation, changes in personal circumstances or dissatisfaction with the rental property, understanding the process and your rights is crucial. This guide aims to provide a comprehensive overview of everything you need to know about how to legally break a lease, ensuring you navigate the complexities with confidence.

Understanding lease agreements

A lease agreement is a legally binding contract between a tenant and a landlord, outlining the terms and conditions of the rental arrangement. It typically includes details like rent amount, lease term and responsibilities of all parties. Breaking a lease involves terminating this contract before its specified end date, which can have legal and financial implications.

Lease termination options

Early termination clause: Some leases include an early termination clause that allows tenants to end the lease before its expiration date, usually for a fee. Review your lease agreement to understand the terms and conditions of this clause.
Negotiating with the landlord: Communication is key. Discuss your situation with your landlord openly and negotiate the terms of breaking the lease. Some landlords may be willing to work with you, especially if they can find a new tenant quickly.
Subleasing: In certain situations, subleasing might be an option. Ensure that your lease agreement permits subleasing and follow the necessary procedures outlined by your landlord.

Sublease agreements

Subleasing can be a viable option for tenants looking to break a lease early. In a sublease arrangement, the original tenant finds a replacement tenant to take over the lease for the remaining duration. However, it’s crucial to check the lease agreement to determine if subleasing is allowed, as some leases may explicitly prohibit this practice.

If permitted, the tenant must follow the specified procedures, which may include obtaining the landlord’s approval and ensuring the new tenant meets certain criteria. Subleasing can provide a way for tenants to fulfill their lease obligations while offering flexibility in changing life circumstances.

New lease agreements

In some cases, tenants may negotiate with their landlords to break the existing lease and enter into a new lease agreement. This approach requires open communication between the tenant and landlord to discuss the reasons for the lease termination and the terms of the new lease.

Landlords may be willing to accommodate tenants’ needs, especially if there is a valid reason for the lease break. However, both parties need to formalize any changes in writing to avoid misunderstandings and ensure that the new lease agreement clearly outlines the terms, conditions and responsibilities of all parties involved.

Fixed terms

Leases are often structured with fixed terms, specifying the duration for which the lease is valid. Breaking a lease with a fixed term typically incurs additional challenges, as the agreed-upon timeframe binds tenants. Early termination may be allowed by most landlords under certain conditions, like the inclusion of an early termination clause in the lease.

Tenants must carefully review the lease agreement to understand the implications of breaking a lease with a fixed term and work within the parameters outlined in the contract. Communication with the landlord and, if necessary, legal advice can help tenants navigate the complexities of breaking a lease with fixed terms.

Giving written notice

Most leases require tenants to provide written notice when intending to break a lease. This written notice typically includes the reason for the lease termination, the intended move-out date, and any other relevant details.

It’s crucial to follow the specific notice requirements outlined in the lease agreement, which may specify the notice period and the method of delivery. Providing written notice establishes a clear record of the legal reason for the tenant’s intent to break the lease and helps both parties navigate the process in accordance with legal and contractual obligations.

Rental history

A tenant’s rental history can significantly impact the process of breaking a lease. If a tenant has a positive rental history—consistently paying rent on time, maintaining the property, and adhering to lease terms—it may positively influence the landlord’s willingness to negotiate or provide flexibility.

On the other hand, a history of late payments or lease violations may make the process more challenging. Communicating openly about the reasons for the lease break and demonstrating a commitment to fulfilling any outstanding obligations can help mitigate potential issues related to rental history.

Landlord responsibilities

Understanding the landlord’s responsibilities is crucial when contemplating breaking a lease. Landlords are generally obligated to properly maintain the property in a habitable condition, address repairs promptly, and adhere to health and safety codes. If the landlord fails to fulfill these responsibilities, tenants may have legal grounds for breaking the lease.

Documenting instances of neglect or code violations and communicating these concerns to the landlord in writing is essential. If the issues persist, tenants may need to seek legal advice to navigate the process of breaking the lease based on the landlord’s failure to meet responsibilities.

Landlord harassment

Harassment by a landlord can be a challenging situation for tenants. If a landlord engages in harassment tactics to force a tenant out, it may constitute a breach of the lease agreement. Examples of harassment include unwarranted and repeated entry into the rental unit, threats, or creating an environment that interferes with the tenant’s right to peaceful enjoyment of the property.

In such cases, tenants should document instances of harassment, keep written records, and seek legal advice. Breaking a lease due to landlord harassment may require demonstrating that the harassment has created an uninhabitable living situation for new tenants.

New owners

If the rental property changes ownership while a tenant is still under lease, it may impact the lease-breaking process. In many cases, the new owner is obligated to honor the existing lease agreement.

However, tenants should carefully review the lease to understand any provisions related to changes in ownership. Communication with property management and the new owner is essential to ensure a smooth transition and clarify any concerns or questions regarding the lease terms and conditions.

Legal considerations

Landlord-tenant laws: Familiarize yourself with the landlord-tenant laws in your state. These laws govern the rights and responsibilities of both parties and may affect the process of breaking a lease.
Written notice: Most leases require tenants to provide written notice before breaking a lease. This notice period varies by state and is often 30 days, but it’s essential to check your lease agreement for specific requirements.
Early termination fees: Be aware of any early termination fees specified in your lease agreement. These fees are intended to compensate the landlord for the financial loss resulting from the early termination.
Security deposit: Understand the conditions under which you may be entitled to a full or partial return of your security deposit. Failure to adhere to the terms of the lease could result in the forfeiture of this deposit.

Legal protections

Servicemembers Civil Relief Act (SCRA): Military personnel may be protected under the SCRA, allowing for lease termination under certain circumstances, such as deployment.
Domestic violence and family violence: Some states have provisions allowing victims of domestic or family violence to break a lease without penalty. Check your local laws to determine eligibility.
Constructive eviction: If the rental unit becomes uninhabitable due to the landlord’s negligence, you may have grounds for constructive eviction, justifying the termination of the lease.

Seeking legal advice

If you are unsure about your rights or encounter challenges during the lease-breaking process, seeking legal advice is crucial. Consult with an attorney who specializes in landlord-tenant law to ensure you make informed decisions and protect your interests.

Handling the lease breaking process

Lease breaking steps: Follow the specific steps outlined in your lease agreement for breaking the lease. This may include providing written notice, paying any applicable fees, and adhering to the agreed-upon timeline.
Replacement tenant: If your lease allows for subleasing, actively search for a replacement tenant. Ensure that the new tenant meets the landlord’s criteria and follows the necessary application procedures.
Rent payments: Continue paying rent until the lease termination process is complete. Failure to do so may result in additional fees or legal consequences.
Document everything: Keep detailed records of all communication with the landlord, including written notice, emails, and any agreements reached during negotiations. This documentation can be crucial if legal issues arise.

Understanding the fine print

Lease terms and conditions: Read the fine print of your lease agreement thoroughly. Understand the consequences of breaking the lease, including any financial penalties or legal actions that may be taken by the landlord.
Credit report impact: Breaking a lease can impact your credit report. Be aware of this potential consequence and take steps to mitigate any negative effects by fulfilling your obligations as outlined in the lease.

State and local laws

Local laws and regulations: In addition to state laws, be aware of local laws and regulations that may impact the lease-breaking process. Some cities or counties may have specific requirements or protections for tenants.
Health and safety codes: Familiarize yourself with health and safety codes that may affect the habitability of the rental unit. If the property violates these codes, it may provide legal grounds for lease termination without penalty to the tenant.

Special circumstances

Job relocation: If you’re breaking the lease due to a job relocation, check if your employer offers any assistance or resources to help with the relocation process.
Health issues: In cases of severe health issues, consult with your landlord and provide any necessary documentation to support your need for early lease termination.

Knowledge is power

Breaking a lease is a significant decision that requires careful consideration and adherence to legal obligations. Understanding your lease agreement, state and local laws and exploring all available options for legal action are essential steps in the process.

By approaching the situation with transparency, communication and knowledge, you can navigate the complexities of breaking a lease while minimizing potential legal and financial consequences. Remember to seek legal advice when needed and always act per the terms outlined in your lease agreement to protect your rights as a tenant.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

A native of the northern suburbs of Chicago, Carson made his way to the South to attend Wofford College where he received his BA in English. After working as a copywriter for a couple of boutique marketing agencies in South Carolina, he made the move to Atlanta and quickly joined the Rent. team as a content marketing coordinator. When he’s off the clock, you can find Carson reading in a park, hunting down a great cup of coffee or hanging out with his dogs.

Source: rent.com

Apache is functioning normally

November 18, 2023 by Brett Tams

Drazen Zigic / Getty Images/iStockphoto

Purchasing a home is a significant milestone, but not everyone has the means to pay in cash or qualify for a traditional mortgage. Fortunately, there are alternative methods to buy a house that can work for various financial situations. Exploring these options can open doors to homeownership that you might not have considered.

Exploring Alternatives To Cash for Home Buying

While cash and traditional mortgages are common paths to homeownership, they aren’t the only options available. For many prospective buyers, alternative methods of financing a home can be both practical and attainable. These alternatives offer flexibility and solutions for those facing financial constraints or credit challenges. Here are three alternatives that can help you buy a house, even without traditional means.

1. Rent-To-Own Agreements

Rent-to-own agreements are a unique blend of renting and buying. In this arrangement, you agree to rent the home for a set period, with the option to buy it before the lease expires. Part of your rent payments can go towards the down payment.

This method is ideal for those who need time to build credit or save for a down payment while locking in a purchase option.

2. Seller Financing

Seller financing, also known as owner financing, occurs when the seller of the home acts as the lender. Instead of getting a loan from a bank, you enter into an agreement with the seller to pay back the purchase price over time.

This option can be beneficial if you have trouble securing a traditional mortgage, as the terms can be more flexible and negotiable.

3. Government-Backed Loans

While not entirely different from traditional mortgages, government-backed loans offer more lenient qualifying criteria. Programs like FHA loans, VA loans and USDA loans require lower down payments and have more flexible credit requirements.

These loans are especially helpful for first-time homebuyers or those with lower credit scores.

Final Take

Owning a home doesn’t always require cash upfront or a conventional mortgage. Alternative options like rent-to-own agreements, seller financing and government-backed loans provide different pathways to homeownership. Understanding and considering these alternatives can be your first step towards holding the keys to your new home.

FAQ

Here are the answers to some of the most frequently asked questions about buying a house.

What is the most effective way to purchase a home?
- The most effective way to purchase a home depends on individual financial circumstances. For many, obtaining a traditional mortgage with a good interest rate is effective, especially if they have a strong credit score and steady income. Exploring different mortgage options and shopping around for the best rates can lead to an effective home buying process.
What is the cheapest option for buying a house?
- The cheapest option can vary, but government-backed loans, like FHA or VA loans, often offer lower down payments and are more accessible to first-time buyers or those with lower credit scores. Additionally, programs offering down payment assistance or first-time homebuyer grants can also reduce upfront costs.
What are creative ways to buy a house?
- Creative ways to buy a house include:
  - Rent-to-own agreements — where you rent a home with an option to buy
  - Seller financing — where the home seller provides the loan
  - House hacking — where you buy a property with multiple units and rent out the others to cover your mortgage
How do people finance houses?
- Most people finance houses through mortgages obtained from banks, credit unions or mortgage lenders. There are various types of mortgages, including fixed-rate, adjustable-rate and government-backed loans. Others may use alternative financing methods such as seller financing or personal loans for smaller or less expensive properties.

Editor’s note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates’ editorial team.

Source: gobankingrates.com

Apache is functioning normally

November 16, 2023 by Brett Tams

Inside: Ever wondered how much rent you can afford on a particular hourly wage? Use the rent calculator to see what you can afford on $20 an hour. Find out from the experts in this guide.

Honestly, this is something most people don’t think about until after they get themselves in a troubling situation.

Determining rent affordability is paramount in your financial planning. It’s important to strike a balance between comfortable accommodation and fiscal responsibility to avoid financial strains down the road.

There exists a direct correlation between your income and the rent you can afford to pay. Higher income opens doors to pricier accommodations while lower wages might enforce budget constraints. Understanding this relationship is crucial.

It guides your housing decisions and helps maintain a stable financial footing.

By calculating your rent affordability, you can set a clear budget, establish your housing needs, and navigate the real estate market with ease.

How much rent can I afford making $20 an hour?

If you make $20 an hour, based on a standard 40-hour work week, your gross income would come up to approximately $3,467 per month.

If you follow the 30% rule, this means you should allocate a maximum of $1,040 each month for rent.

$3467 x 30% = $1040

However, remember this is a rough estimate and your specific expenses and financial obligations should also be taken into consideration before deciding on a rent budget.

What Percentage of My Income Should Go to Rent?

This is a good question to consider.

Even better when you are trying to figure out how much to save before moving out.

The 30% Rule Explained

The 30% rule is a simple guideline suggesting that one should allocate no more than 30% of their gross (before taxes) monthly income toward rent.¹

This rule of thumb has been widely adopted as a measure of rent affordability. The beauty of the 30% rule lies in its simplicity and ease of use, allowing for quick budgeting while maintaining room for other essential expenses.

Be Conservative and Stick with 20%

According to Money Bliss budgeting percentages, adopting a more conservative approach to budgeting by allocating only 20% of your income towards housing costs can be more beneficial.

If you follow the 20% rule, this means you should allocate a maximum of $693 each month for rent.

$3467 x 20% = $693

This strategy helps to account for additional expenses such as utilities, unexpected repairs, and other costs that often accompany home ownership or renting.

This reduced allocation promotes being smart with your money to avoid unnecessary financial stress.

When to Consider Stretching the 30% Rule

At times, it might be necessary to stretch the 30% rule particularly in high-cost areas or during short-term situations. It’s crucial, however, to understand the potential ramifications and adjust other spending habits to compensate.

A temporary overshoot could be justifiable if it leads to significant future benefits, like proximity to a well-paying job. Always remember, that this should be an exception rather than the norm.

How Does the Rent Calculator Work?

A rent calculator is a practical tool that aids in estimating the rent you can afford.

This simple calculator is based on your hourly income and spending either 20-30% of your gross income on rent.

Fine-tuning your budget is possible by adjusting the percentage you wish to spend on housing. Remember, the final number serves as a guide and may require adjustments based on your financial situation.

Breaking Down Your Monthly Budget

For savvy budgeters, adhering to the 50/30/20 rule can provide a clear framework for managing your expenses and growing your savings. While at Money Bliss, we went a step further to define it as the 20-50-10-20-0 budget rule. (save-basic expenses-give-fun spending-debt).

This approach gives a precise breakdown of your monthly budget, ensuring that you are living within your means while also setting funds aside for future financial security.

Housing Costs

The basic 50/30/20 rule suggests dividing your monthly net income into 50% for necessities such as rent and groceries, 30% for personal wants like clothing or travel, and designating the remaining 20% for savings goals or debt repayment.

By adding these to your housing budget, you get a realistic picture of your monthly accommodation costs.

When budgeting for rent, one must account for other housing costs. These may include utilities like gas, electricity, and water, as well as internet, cable TV, and trash collection. You might also need to factor in the renter’s insurance and potential parking fees.

Essential Living Expenses

In addition to housing, remember to consider essential living expenses in your budget. These include food, transportation, health insurance, and childcare.

In addition, we advise our readers to put aside about 15-25% of their net income for savings. Accounting for these factors ensures you don’t stretch your budget to the limit solely on rent.

Discretionary spending

While you need to cover essential living expenses, it’s also important to allocate funds for discretionary spending – we call it FUN spending.

This category involves non-essential purchases like eating out, entertainment, vacations, and shopping. Using the 50/30/20 rule as a guideline, 30% of your net income can be put towards these wants, allowing you to enjoy your income while staying financially sound.

Factors Influencing Rent Affordability

There are many factors that impact how much you can spend on rent. As such, this will vary from person to person as situations vary. While these numbers are gross income, you need to realize the amount of money coming out for taxes. Many people don’t understand gross income vs net income.

Furthermore, the cost of living and rental prices in your chosen location can greatly impact how much you can afford. So, use the rent affordability calculator!

Location and Rent Prices

The location of a home greatly influences its rent prices. HCOL vs LCOL is a real thing!

Proximity to the city center, schools, parks, and shopping centers typically equate to higher costs. For example, renting trends in 2023 indicated an increase in prices the closer you get to these amenities.²By choosing to live a bit further out, you may be able to find more affordable rent payments.

Areas with higher crime rates will have lower rents but these tend to come with more issues.

Size and Type of Housing

The size and type of your dwelling can also significantly affect your rent. Large houses with multiple rooms naturally cost more, whereas smaller apartments or studios are less expensive.

The type of housing also plays a role; for instance, a modern, furnished apartment might cost more than an unfurnished one. Tailoring your choice to your needs and budget allows for comfortable living without overspending.

If you have a pet, don’t forget it may cost more plus you have a pet deposit.

Lease Length Considerations

Lease length can directly impact your rent. Longer leases often equate to lower monthly rents, offering landlords a sense of security. On the contrary, short-term or month-to-month leases typically come with a higher price tag due to their inherent flexibility.

Assess your personal situation and potential need for flexibility before deciding on the lease term.

Also, the amount you need to put down as a security deposit can be negotiated.

Tips to Maximize Your Rent Budget

Plan your budget carefully taking into account factors like income, potential expenses, and the cost of living in your chosen location. So, if you are thinking $5000 is enough to move out, you may be surprised.

Use the 30% rule as a guide but be aware that in high cost of living areas, you may need to adjust this percentage. When searching for a rental, compare the cost and amenities of different apartments in your preferred areas and see if there are nearby neighborhoods with cheaper rental costs.

Also, you may need to embrace cost-saving measures such as cooking at home and shopping frugally to free up more income for rent.

You can learn more about those areas on our site.

Tip #1 – Reducing Costs and Saving

There are several ways to reduce housing costs and save more in this tough rental market.

Consider downgrading to a smaller place or moving to a less expensive area.
Negotiate a longer lease term for a reduced monthly rent.
Maybe even consider becoming a permanent housesitter to free up your budget.

Small changes can lead to substantial savings over time.

Tip #2 -Planning for Future Rent Increases

Each year when your lease is about to renew, always factor in the possibility of future rent increases, which could be influenced by trends in the real estate market and inflation.

Ensuring your income can keep up with these increases is necessary for maintaining affordability. Continually reassess your rent affordability, especially during annual lease renewals or job changes.

Tip #3 – Get Roommates

Sharing your space with a roommate is a practical way to cut down on your living expenses substantially. By having one or more people to share the rental costs, utilities, and even groceries in some instances, you are likely to free up a considerable portion of your budget.

However, it’s important to clearly set boundaries and expectations to maintain a smooth living arrangement.

FAQ on Rent Affordability

Spending more than 30% of your income on rent is generally not advisable. It risks leaving you cash-poor, having insufficient resources for other important expenses like groceries, utility bills, health expenses, retirement savings, or emergency funds.

However, in certain scenarios like living in high-cost areas or prioritizing proximity to work (thus lowering your need for a car), bending the rule temporarily might be justifiable. Always reassess your budget to account for flexibility.

Yes, an increase in your hourly wage can slightly affect the amount of rent you can afford. The raise translates to an increased monthly income, which may enable you to comfortably afford higher rent.

However, it’s important to ensure this does not erode financial stability because lifestyle creep is real. Aim to maintain the key balance between comfortable living and responsible saving.

It’s recommended to reassess your rent affordability annually or when there’s a significant change in your financial situation.

Such changes could be a raise or decrease in income, new financial obligations, or plans to save for major future expenses. Regular evaluations ensure your housing budget aligns with your current financial realities.

Is $20 an hour a livable wage?

Given the average rent in the United States is $1702, $20 an hour is not a livable wage, especially in San Francisco or New York. As such, the maximum you should be spending on rent is $1040.

If workers are unable to afford to live in the communities they work in, it puts the whole system under stress. While there have been movements to create low-income housing, it is slow to happen and for many, difficult to apply.

Ultimately, whether this wage allows for a comfortable lifestyle depends largely on your financial habits, commitments, and where you live.

With good financial planning, including a solidly crafted budget that factors in rent, savings, and living expenses, a $20 hourly wage can indeed cater to a decent lifestyle.

Remember to reassess your budget regularly and adjust as necessary to meet changing financial landscapes.

Making wise financial decisions now can lead to a financially secure future. Now, do you have the habits needed to be financially stable?

Source

FiftyThirtyTwenty. “About.” http://fiftythirtytwenty.com/about.html. Accessed November 13, 2023.
Rent. “Rent Growth in Half of Suburbs Outpacing Metro’s Core City.” https://www.rent.com/research/suburban-growth-outpacing-core-city/. Accessed November 13, 2023.
Rent Cafe. “Average Rent in the U.S.” https://www.rentcafe.com/average-rent-market-trends/us/. Accessed November 13, 2023.

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

November 16, 2023 by Brett Tams

Screening tenants, especially their financial situation, is the most critical part of operating a rental property. To make sure tenants can pay their rent on time each month, you should run an employment and credit check. Then, you might have to decide whether you’re open to renting to tenants with bad credit.

As a rental property owner, you expect tenants to pay their rent on time each month. Even if a tenant doesn’t have a stellar credit score, that doesn’t necessarily mean you shouldn’t rent to them, particularly if other aspects of their application are a good fit. Here are a few things to remember when renting to tenants with bad credit.

Do I have to rent to someone with bad credit?

It’s up to property owners to pick their tenants. So, you may want to require tenants have a minimum credit score. In many ways, a good credit score signals that an individual is creditworthy and financially responsible, which likely means they can afford to pay rent. However, you might not want to completely avoid renting to a tenant with bad credit.

People have bad credit for many reasons. It doesn’t always mean they haven’t paid their bills in the past or that they’re irresponsible with money. If the renter applicant otherwise looks perfectly suited for your home, you can require a higher deposit or a co-signer to compensate for the poor credit score.

Do most landlords do credit checks?

As part of the tenant screening process, it’s essential to run a credit check. The reports offer a glimpse into the individual’s financial history, including their bill-paying past and whether there are any financial judgments against them.

If someone has a good credit history, they’ll likely consistently pay their rent on time. If someone has a history of late or missed payments, this behavior may continue. In these cases, property owners should dig a little deeper before renting to tenants with bad credit.

What is the lowest credit score to rent a house?

Credit scores range from 300 to 850, according to the credit bureau Experian. Here’s what’s considered a good and bad credit score:

Exceptional: 800-850
Very good: 740-799
Good: 670-739
Fair: 580-669
Poor: 300-579

It’s up to you to decide the minimum credit score that’s acceptable to you. But many landlords set 600 as the lowest score to rent a house.

Things to remember when renting to tenants with bad credit

Even if an applicant has a negative credit score, that doesn’t always mean you shouldn’t rent to them. Here are some things to remember when renting to tenants with bad credit:

1. Understand the reason for the bad credit score

Credit scores come from various factors, including payment history, account balances, length of credit, types of credit accounts and recent activity on these accounts. But, many different things affect these elements.

For example, if someone is a recent graduate or just moving out on their own, they likely haven’t built up a solid credit history, which could show up on their credit report as a low score. Financial changes from getting a divorce, incurring large medical bills or being a victim of identity theft can also ding someone’s credit.

Communicating with the applicant about why their credit score is low is crucial. It will help you understand their situation and build a trusting relationship. The more information you have, the more informed decision you can make.

2. Get proof of income

The screening process should include verifying the applicant’s income. If someone has a steady job with a decent salary, it could overshadow their poor credit score and set your mind at ease about their ability to pay rent.

Ask for pay stubs and contact information for their employer to find out how long the person has worked there and to verify their salary. Make sure their income is at least three times the monthly rent to ensure they can afford it.

3. Check rental history

An applicant’s behavior with previous landlords are a telling sign of how they’ll be with you. If the individual is renting somewhere else, ask for rent receipts showing that they’ve paid on time each month.

Contact previous landlords, as well, to learn more about their rental history. Find out what type of tenant they were, whether they followed the lease, paid rent on time and if they got evicted. If past landlords don’t have good things to say, it’s a good idea to move on to another renter.

4. Charge a higher deposit

Banks often charge people with lower credit scores a higher interest rate to protect themselves against the risk. So, you might want to consider doing something similar.

Increasing the deposit amount could lower your risk of tenants defaulting on their rent payments. If your typical deposit is one month’s rent and a security deposit, increase it to two months’ rent and a security deposit. Make sure whatever you charge aligns with local landlord-tenant laws, which may set caps on security deposits or other fees.

5. Require a co-signer or guarantor

Another option for renting to tenants with bad credit is to ask them to have someone with good credit to co-sign or act as a guarantor on their lease. If you’re not sure of the difference between a co-signer and guarantor, here’s an overview:

A guarantor is usually a family member or friend who agrees to take on the responsibility of paying rent or covering property damage if the tenant can’t. Guarantors sign the lease but usually don’t live in the home.
A co-signer is often a roommate and signs the lease with the right to occupy the home. The co-signer agrees to share the responsibility for the rent, fees and damage. They may contribute to the monthly rent and are responsible for paying when the tenant can’t.

If you allow a co-signer or guarantor, you’ll need to check that person’s credit history and proof of income, as well.

6. Use a shorter lease

The term for most rental lease agreements is one year. Offering a shorter lease term, such as three or six months, is an option for renting to tenants with bad credit. A shorter lease gives the tenant the opportunity to prove they can pay rent on time and protects you in case they can’t by ending the tenancy within a short timeframe.

If everything works out after the shortened lease ends, you can ask the renter to sign a year-long lease.

Renting to tenants with bad credit

Renting to tenants with bad credit is risky. You’re not sure of their financial situation and whether they’ll pay rent. But automatically discounting these tenants because of their poor credit might be a mistake.

If the individual meets all your other requirements and seems like a good fit, consider charging a higher deposit or relying more on proof of income. The tenant will appreciate your willingness to work with them since renting a home with bad credit is challenging.

Categories: Landlords

Source: rent.com

Apache is functioning normally

November 10, 2023 by Brett Tams

Bilt Rewards is a unique credit card rewards program that allows members to earn points on rent payments without paying transaction fees. Members with the Bilt World Elite Mastercard® Credit Card can also earn Bilt Points on non-rent spending, including bonuses on dining and travel purchases.

One way to redeem these points for travel expenses is to transfer Bilt Rewards points to airline and hotel loyalty programs. Prominent Bilt transfer partners include American Airlines AAdvantage, United MileagePlus, Emirates Skywards, World of Hyatt and the company’s newest transfer partner: Marriott Bonvoy.

Bilt airline transfer partners

Bilt Rewards members can transfer their points to 12 airline frequent flyer programs. Notably, that includes the American Airlines AAdvantage program — which is exclusive to Bilt.

Bilt members can transfer points to the following airline loyalty programs at a rate of 1:1 (1 Bilt point will become 1 airline mile).

Bilt Rewards hotel transfer partners

Bilt Rewards members can transfer to three hotel partners at a rate of 1:1.

Marriott Bonvoy is the newest transfer partner for Bilt Rewards. Members can transfer points to Marriott Bonvoy at a rate of 1:1. Plus, for every 20,000 points transferred to Marriott in a single transaction, Bilt Rewards members will receive an additional 5,000 Marriott Bonvoy points.

How to earn Bilt Rewards points

With a $0 annual fee, cardholders earn 1 Bilt Rewards point per dollar spent on rent (up to 100,000 points in a calendar year) without paying any extra transaction fees. If necessary, Bilt will charge you for your rent and then send a check to your landlord on your behalf.

Bilt cardholders also earn:

3 points per dollar on dining.
2 points per dollar on travel booked directly through a hotel, airline, or car rental agency.
1 point per dollar on all other purchases.

Members must use the card on five transactions within each statement period to earn points.

On the first of the month — which the company calls “Rent Day” — Bilt cardmembers earn double points on non-rent categories, including 6 points per dollar on restaurants, 4 points per dollar on travel and 2 points per dollar on other purchases. There are usually other promotions as well on Rent Day.

How to transfer Bilt Rewards

The easiest way to transfer Bilt Rewards points to partner loyalty programs is in the Bilt Rewards app.

After logging in, navigate to the “Travel” tab.

From there, select “Flights” or “Hotels.” Then scroll down and select a specific loyalty program. At that point, you’ll be able to enter your partner loyalty number to link your loyalty account with your Bilt Rewards account. You’ll get 100 Bilt points for each loyalty program you link.

Then you can enter however many points you’d like to transfer.

🤓Nerdy Tip

In some cases, the app cautions that transfers may not happen instantaneously. For instance, the app specifics that American Airlines AAdvantage transfers may take up to 72 hours to complete.

Which Bilt transfer partners are best?

NerdWallet values Bilt Rewards points at 2 cents per point. Here is how NerdWallet values some of the top transfer partners when you redeem these programs’ points or miles for flights or hotel stays:

Transfer partner	Estimated value
American Airlines AAdvantage	1.7 cents.
Air France/KLM Flying Blue	1.2 cents.
Air Canada Aeroplan	1.4 cents.
British Airways Avios
Emirates Skywards
Hawaiian Airlines HawaiianMiles	1.2 cents.
IHG One Rewards
Marriott Bonvoy
United MIleagePlus	1.2 cents.
World of Hyatt	2.3 cents.

The best Bilt transfer partners are generally the highest valued ones: World of Hyatt and American Airlines. But that doesn’t mean you shouldn’t ever transfer to other partners, especially if you need to top off your account to be able to book a trip or if you find a surprisingly good redemption rate with one of the other loyalty programs.

Is transferring your Bilt Rewards worth it?

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:

Source: nerdwallet.com

Apache is functioning normally

November 8, 2023 by Brett Tams

Can you negotiate rent? The short answer is yes. After all, you never get anything unless you ask for it.

So, how do you go about negotiating rent? Rental negotiations can be tricky, so it’s always in your best interest to be strategic when talking to landlords. Here are different ways to negotiate rent, gain bargaining power, take action and (hopefully) get a lower rent from your property manager.

1. Understand the rental market

The first step in negotiating rent is to do your research ahead of time. Look around and understand what surrounding apartment rates are. Compare apples to apples. If you’re interested in a new development, then look at other new developments.

Make sure you have a clear understanding of the amenities that are available and how they compare to the unit you’re considering. For example, if one neighboring apartment complex offers covered parking, a gym and a pool, you’ll want to compare that to an apartment complex with similar offerings. After all, those amenities increase the price of rent. Make this info known to your property manager.

Rental rates are not a secret, but they can change from day to day. Get a competing rate in writing if you can, and if it’s lower than the one being offered, have it with you when you go to negotiate. A lower rate in a similar apartment is a great tool for negotiating a lower price on your own apartment.

2. Consider the time of year

For property managers, timing is everything and there are seasonal trends in the moving and rental industry. In other words, think about the broader supply and demand trends during any given season.

If it’s the end of the month, vacancies are high and you’d be willing to leave if you don’t get what you want, that could be a time when a manager is more likely to be amenable to your offer. However, if you don’t have an alternate place to move ahead of time, you may not want to start negotiating rent until something else is lined up.

As a rule of thumb, winter is usually a good moment to broach the topic of cheaper rent, as it’s harder to find tenants during that time of year. Summer is peak rental season, so you’ll need to be a little more persuasive if you’re trying to negotiate rent during the peak moving season.

3. Sell yourself as a good tenant

Looking for another lesson on how to negotiate rent? If you’ve never rented in that particular complex a few letters of recommendation from personal references will go a long way toward convincing a manager you’d be a tenant worth having, even at a lower rate.

Think of it as a resume for your living situation. Get a letter from previous landlords or apartment managers that says you make on-time rent payments and cause them no problems. Get letters that speak to your character from a former boss, neighbor, or someone in a non-profit organization or church. Just like in a job interview, these professional references can help you negotiate rent and sell yourself as a good tenant for your potential new landlord.

If you’re trying to renew your existing lease at a better rate, remind the manager that you’ve always paid your rent on time and anything else that’s positive. Have you kindly alerted them to maintenance concerns? Have you helped in an emergency? Have you assisted during holiday parties? These situations can go a long way and help you lower the cost of rent on your upcoming lease.

4. Exchange value for price

What’s a lower rent price worth to you? Would you consider doing something above and beyond paying rent that offers tangible value to your property manager?

Think of jobs or tasks around the property — maintenance, cleaning, administrative, marketing — that would increase the underlying value of the owner or manager’s investment. Helping with some of these activities could cut down on expenses and thus, justify the price reduction you’re looking for.

Another “how to” negotiate your rent tip is to bargain with amenities and other things of value. Are you willing to give up your parking space to reduce rent each month? Or, can you pay six months of rent upfront or in cash? Would you be willing to sign a longer lease at a lower rate?

Think like a manager. Everything has a value and most everything is fair game to negotiate or trade with. Don’t be afraid to ask what your manager needs. If he or she has flexibility in pricing (and they usually do), then you might be able to help each other.

5. Experiment with the lease terms

Offering a different move-out date, extending your lease term or reworking the end of your lease term to fall during high season (spring or summer) are some of the ways you may be able to play with lease dates and terms that might be attractive to a leasing manager.

Get your negotiation in writing

As with many things in life, you can ask for and negotiate anything — including rent. If you’re a good tenant, can be persuasive and ask for what you want and need, you can negotiate the terms of your lease and rent prices and walk away with a lower rental rate.

After you’ve worked out a reduced rate with your landlord, make sure you get the new deal in writing so you have a paper trail and proof of your newly negotiated rate.

FAQs around rent negotiations

Rent negotiations are tricky and require a wealth of knowledge and understanding.

How can I negotiate rent for a rent-controlled apartment?

Negotiating rent for a rent-controlled apartment is different. In these cases, research local rent control laws and regulations to understand your rights and limitations. While you may not have as much room for negotiation on the base rent, you can explore negotiations on other aspects, like utilities or improvements.

How can I negotiate rent if I have a low credit score or a poor rental history?

If you have a low credit score or a poor rental history, you can still negotiate rent. Tips to overcome this include offering to pay a larger security deposit, providing a co-signer or demonstrating your commitment to improving your credit and rental history. This can help build trust with the landlord and potentially secure a lower rate.

What if my landlord refuses to negotiate the rent?

If your landlord is unwilling to negotiate the rent, consider proposing alternative terms, such as a longer lease or prepayment of rent. If negotiations remain unsuccessful, you may need to decide whether you’re willing to accept the current rent or look for another rental property.

Can you negotiate rent? It’s worth a shot!

Negotiating rent is not only possible but also a valuable skill for renters. By following these steps, you can strategically and effectively negotiate your rent with confidence. Understanding the rental market, considering the timing of your negotiation and presenting yourself as a desirable tenant are essential elements in the process. Remember, communication is key in this process, and being prepared, courteous and persistent can lead to a mutually beneficial agreement with your landlord.

The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.

Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.

Source: rent.com

Apache is functioning normally

November 5, 2023 by Brett Tams

As Prepared for Delivery

Remarks of Mr. DeVito

Introduction

Good morning and thank you for joining today’s call to review Freddie Mac’s business and financial results.

As many of you know, September marked 15 years since Freddie Mac entered government conservatorship. And the company has made significant progress.

While much remains to be done, and this company is committed to the work, today I will cover three topics that illustrate how far Freddie Mac has come since 2008:

First, how the company has intensified its focus on mission, particularly related to affordable housing.
Second, how risk has been reduced.
And finally, how Freddie Mac has made progress in its work to build financial stability.

Then I will turn it over to our CFO, Chris Lown, for an update on the company’s third quarter financial performance.

Ongoing Improvement

Mission

Let’s start with mission.

Over the past few years, Freddie Mac has strengthened its focus on its mission and embraced an expansive view of support for affordable housing.

Freddie Mac strives to meet or exceed a number of affordable housing-related commitments, such as:

Affordable Housing Goals in both Single Family and Multifamily,
The Duty to Serve Plan, which targets high-needs rural regions, manufactured housing, and affordable housing preservation.
And that includes the company’s payments into the Capital Magnet Fund and Affordable Housing Trust Fund, which now top $2.2 billion.
And finally, Freddie Mac’s Equitable Housing Finance Plan, which expands the company’s efforts to promote equity in the Single-Family and Multifamily markets.

Regulatory commitments are the baseline expectation. Today, the company approaches mission more broadly, with a range of initiatives to help renters, lenders, diverse developers and other market participants. For example:

Single-Family improved its technology to help borrowers with thin credit files by allowing lenders to access bank data, tax transcripts and direct deposit data to verify critical information such as income, assets, and on-time rent payments.
Multifamily is helping renters prepare for homeownership though an on-time rent reporting initiative, which helps them establish or raise credit scores. To date, more than 375,000 renters can participate.
Freddie Mac has also provided tools to help borrowers receive down payment assistance, including through Special Purpose Credit Programs and the newly launched DPA One tool, both of which I have discussed previously.

This company’s commitment to housing affordability is more ingrained in its DNA than ever before.

Reducing Risk

That’s equally true for the company’s commitment to strong risk management. Today, it is both a requirement and a vital part of Freddie Mac’s identity.

Here are just a few of the many examples:

Since 2008, Freddie Mac has reduced its mortgage-related investments portfolio down to approximately $85 billion. This is less than one-tenth of its $867-billion peak.
In 2020, the company adopted bank-like capital requirements designed to backstop its risks and has been steadily building total equity to meet those requirements.
And finally, Freddie Mac pioneered credit risk transfer. CRT brings billions of dollars of private capital into the U.S. housing finance system, dramatically reducing taxpayer exposure and lowering the company’s own risk.
- In fact, the third quarter marked 10-years since the first Single-Family CRT transaction.
- To date, Freddie Mac’s Single-Family CRT program has transferred more than $108 billion of credit risk on approximately $3.3 trillion of mortgages.
- Multifamily has also protected a half-trillion dollars of loans via its K-Deal program, which started in 2009.

Ensuring Stability

Finally, let me turn to the growing stability of Freddie Mac’s financial position after 15 years of change and improvement.

In the third quarter the company earned $2.7 billion and grew its net worth to $44.7 billion.

Furthermore, credit quality today is strong in both the Single-Family and Multifamily mortgage businesses. Chris will say more about that in a moment, but it is clear that the changes the company made since 2008 have set Freddie Mac on a new course.

Keeping What Works

While the company made significant strides to improve its focus and performance over the past 15 years, it still preserved the core elements of Freddie Mac that have worked for decades.

That includes support for the 30-year mortgage—the cornerstone of the American housing finance system and Freddie Mac’s business. Thirty-year fixed-rate mortgages accounted for more than 90 percent of the home loans we purchased this year.

Freddie Mac is also helping provide access to housing for low- and moderate-income renters and borrowers.

Support for first-time homebuyers is near all-time highs at 50 percent of purchase loans.
And more than 90 percent of the eligible rental units financed were affordable to low-income and working families.

The company also has preserved small lenders’ access to the secondary mortgage market via the cash window.

And it enhanced liquidity in the to-be-announced market as one of the leaders in the creation of the uniform mortgage-backed security, one of the most significant changes to the market in a generation.

Since inception more than $284 trillion of UMBS have been traded.

Finally, Freddie Mac has maintained its counter-cyclical role. The company’s market presence in the early days of the pandemic and current support for the housing market are solid examples.

Playing an Important Role

Before I turn it over to Chris Lown, allow me to put the work of thousands of talented people over 15 years into context.

Since 2008, Freddie Mac has:

Provided more than $8 trillion in liquidity to the mortgage market,
Helped nearly 11 million homebuyers, including more than 4.1 million first-time homebuyers, and
Funded more than 8.3 million rental units, 87 percent of which were affordable.

Further the company has returned nearly $120 billion to taxpayers, approximately 67 percent more than it borrowed from the U.S. Treasury.

And most importantly, Freddie Mac is a strong, stable organization that is unwavering in its focus on Making Home Possible for renters and borrowers well into the future.

Now, let me turn it over to Chris.

Financial Results (Remarks of Chris Lown)

Thank you, Michael, and good morning.

As Michael noted, this morning we reported net income of $2.7 billion for the quarter, an increase of $1.4 billion, or 104 percent, year-over-year. This increase was primarily driven by a credit reserve release in our Single-Family business versus a credit reserve build in the prior year quarter.

Third quarter net revenues were $5.7 billion, an increase of $509 million, or 10 percent, year-over-year. This increase was driven by both higher net interest income and higher non-interest income. Net interest income increased 4 percent year-over-year to $4.7 billion, driven by higher investments net interest income benefiting from higher short-term interest rates. Non-interest income of $941 million was up 50 percent year-over-year driven by higher Multifamily guarantee income and higher investment gains.

An increase in observed and forecasted house price appreciation drove a $263 million benefit for credit losses this past quarter versus an expense of $1.8 billion in the prior year quarter.

In the third quarter of 2022, the provision for credit losses was driven by deterioration in housing market conditions coupled with lower observed and forecasted house price appreciation.

These increases were partially offset by a $751 million, or 41 percent, increase in our non-interest expense, which was primarily driven by an allocation of $313 million for the accrual for the judgement in the Fairholme Funds litigation and a $314 million decrease in Single-Family credit enhancement recoveries due to a decline in expected credit losses on covered loans.

Our total mortgage portfolio at the end of the third quarter was $3.5 trillion, a 2 percent increase year-over-year.

Single-Family Business Segment

Turning to our individual business segments, the Single-Family segment reported net income of $2.3 billion for the quarter, up $1.5 billion, or 176 percent, from the prior year quarter.

Single-Family net interest income of $4.5 billion was up 4 percent year-over-year, primarily driven by higher income on our investment portfolio, which benefited from higher short-term interest rates, partially offset by lower deferred fee income recognition as prepayments slowed due to higher mortgage interest rates. Mortgage interest rates at the end of this quarter were 7.31 percent, up 61 basis points from the prior year quarter. Non-interest income for Single-Family was $393 million this quarter, up $335 million from the prior year quarter. This increase was primarily driven by higher net investment gains which benefited from higher interest rate-related gains.

Our benefit for Single-Family credit losses this quarter was $304 million, primarily driven by increases in observed and forecasted house price appreciation. In the prior year quarter, we had a provision expense of $1.8 billion, which was primarily driven by deterioration in forecasted housing conditions and lower observed and forecasted house price appreciation.

House prices increased by 2.5 percent this quarter and our forecast assumes an increase of 2.9 percent over the next 12 months and 1.7 percent over the subsequent 12 months.

The Single-Family allowance for credit losses coverage ratio at the end of the quarter was 22 basis points, down from 23 basis points a year earlier.

The Single-Family serious delinquency rate declined to 55 basis points at the end of the third quarter, down 12 basis points from the end of the prior year quarter. The Single-Family serious delinquency rate remains historically low and is down 8 basis points from the pre-COVID rate of 63 basis points at the end of 2019.

In the third quarter, we helped approximately 18,000 families remain in their homes through loan workouts. Our loan workouts have continued to decline as the seriously delinquent loan population has declined.

Our Single-Family mortgage portfolio increased 2 percent year-over-year to $3 trillion at the end of the third quarter.

Credit characteristics of our Single-Family portfolio remained strong, with the weighted average current loan-to-value ratio at 53 percent and the weighted average current credit score at 756. At the end of the quarter, 62 percent of our Single-Family portfolio had some form of credit enhancement.

New business activity was $85 billion, up $2 billion from the second quarter. However, year-over-year new business activity declined $36 billion, or 30 percent, as both refinance and purchase activity declined due to higher mortgage interest rates. Home purchase volume of $76 billion made up 89 percent of our total new business activity this quarter. First-time homebuyers represented 50 percent of new Single-Family home purchase loans. The average guarantee fee rate charged on new business was 55 basis points this quarter.

Multifamily Business Segment

Moving on to Multifamily, the segment reported net income of $362 million, down 23 percent, or $108 million, from the prior year quarter. This decrease was primarily driven by higher provision for credit losses and higher non-interest expense in this period.

The provision for credit losses in Multifamily this quarter was $41 million, an increase of $29 million from the prior year quarter primarily driven by deterioration in overall loan performance. The Multifamily allowance for credit losses coverage ratio at the end of this quarter was 54 basis points, up from 14 basis points a year earlier.

Non-interest expense was $266 million, up $94 million, or 55 percent, year-over-year, primarily driven by an allocation for the accrual for the judgment in the Fairholme Funds litigation.

The Multifamily delinquency rate was 24 basis points at the end of the quarter, up from 21 basis points last quarter and 13 basis points at the end of September 2022. This increase was primarily driven by an increase in delinquent loans in our senior housing and small balance loans portfolios. Ninety four percent of these delinquent loans have credit enhancement coverage.

We have seen a continued decline in demand for Multifamily mortgage financing due to higher mortgage interest rates and a slowdown in the Multifamily origination market.

Our Multifamily new business activity was $13 billion for the third quarter, bringing the year-to-date volume to $32 billion versus $44 billion for the same time last year.

Our Multifamily mortgage portfolio increased 4 percent year-over-year to $432 billion, of which 95 percent was covered by credit enhancements.

Capital

On the capital front, our net worth increased to $44.7 billion at the end of the quarter, representing a 27 percent increase year-over-year.

With that I will turn it back over to Michael.

Conclusion (Remarks of Mr. DeVito)

Thanks, Chris.

Before we close, let me say a few words about the recent announcement that I will be departing Freddie Mac in early 2024.

It is a privilege to lead this company. And Freddie Mac is fortunate to have a strong leadership team, ready to meet the challenge of guiding this company into the future, and an outstanding group of employees who are intensely dedicated to its mission and making home possible.

Thank you for joining us today.

MEDIA CONTACT: Frederick Solomon
703-903-3861
[email protected]

Additional Resources

Source: freddiemac.com