But depending on how a lender interprets the guidelines, the client could have gotten his application rejected for not having consistent employment for a two-year period without interruptions, explained Gastelum.
“It really comes down to interpretation of the guideline. One lender could have said, ‘Oh, he was out a week, so it’s interrupted and therefore, the second employment doesn’t work.’ The problem is, a mortgage credit reject (MCR) is kind of like your scarlet letter, to be completely honest,” Gastelum said.
When a lender rejects an FHA application, it discourages the next lender from even reviewing the application because of the extra work the underwriters have to do to override that MCR, mortgage pros told HousingWire.
All FHA mortgage lenders use a system by the U.S. Department of Housing and Urban Development (HUD) called FHA Connection, a database used to insure and generate FHA case numbers associated with the borrower’s home loan application. When the borrower is denied for an FHA mortgage loan, an MCR report had to be created for that denial. That changed on September 11.
The FHA’s announcement in early September to waive a requirement that FHA-approved lenders flag rejected loans in the FHA Connection system is a step in the right direction since declined borrowers don’t have to overcome a stigma, loan officers said.
In a rate-rising environment where it has become more difficult for first-time buyers to get into the market, borrowers won’t have to deal with a file that has an MCR for six months. Even after the six-month period is over, the borrower’s case number would still be attached to his/her social security number.
Demand for FHA loans have risen over the past year to comprise 23.8% of mortgage applications in August 2023, up from 17% from the same period a year ago, according to the Mortgage Bankers Association.
The FHA/VA share in Q2 2023 stood at 22.9% of the entire mortgage origination volume, up from 18% in Q2 2022, according to data compiled by Inside Mortgage Finance and Urban Institute.
Loan officers said that the FHA’s waiver will give borrowers a fairer shot at obtaining financing. Borrowers won’t be subject to lenders’ different underwriting interpretations that could lead to a rejection of their mortgage applications.
“That (MCR) is a subjective stigma based on credit risk tolerance of the particular lender that you went to initially. “This is an underwriting technicality that is unfair and it is a good move to create more fairness,” Billy Taylor, CEO of Hometown Lenders, said.
“We are really happy about this change because it’s going to provide more opportunity for loan officers and is going to provide more opportunity for buyers to get a second chance,”Michael Borodinsky, VP and branch manager at Caliber Home Loans, said.
Overcoming overlays
The FHA credit requirements are strict, but borrowers can get an FHA loan with no credit score. In fact, HUD forbids lenders from declining a borrower’s FHA loan application simply because they lack a credit history.
In such a case, lenders will ask for documentation, including a letter from the landlord documenting on-time rent payments, payment history of utility companies and cell phone or internet provider.
Lenders, however, have overlays – rules on top of the federal rules that were published as lenders need to sell those loans to investors who do not want to buy high-risk loans.
“Those overlays – it could be higher standards, it could be lower debt-to-income (DTI) ratios – still exist on a subjective basis on a lender-by-lender basis. So a borrower not knowing that they could qualify for a loan where their credit score is below 640 or 620 could be subject to a denial and then not realize that they could be approved somewhere else,” Borodinsky said.
Generally, the FHA requires a minimum 580 credit score with a down payment of 3.5% to qualify for a FHA loan. Under FHA guidelines, borrowers with credit scores between 500 and 579 must make a down payment of at least 10%. But they may also face tighter requirements. Lenders may require a lower loan-to-value (LTV) ratio or ask that the borrower make a larger down payment.
Reasons for a MCR vary, said Ted Tozer, non-resident fellow at the Urban Institute‘s Housing Finance Policy Center (HFPC) and the former head of Ginnie Mae.
“It could be low credit scores, or it could be geographics too – maybe they’re in a market that it’s a soft market where they’re looking at home prices that could be falling. Lenders don’t want to tilt their portfolio to one where these 3.5% down payments could very well become over 100% LTV just because home prices fall,” Tozer noted.
Industry personnel frequently complained that FHA Connection often didn’t provide sufficient information about mortgage credit rejects to determine why the applicant was rejected, said Peter Idziak, senior associate attorney at Polunsky Beitel Green.
“It could be the lender’s own standards could be higher or different, or in addition to just the FHA qualifications,” Idziak said.
For a prospective homebuyer, the new waiver should avoid a possible misrepresentation of their actual creditworthiness, JR Younathan, SVP and California state mortgage production manager at California Bank & Trust, said
“The given waiver doesn’t necessarily open new paths to compete as they could have done that previously. It would only open a new path in the instance that the other lender wasn’t willing to investigate the reasons the denial was registered, and instead rejected the loan file/borrower on the fact it existed at all, thus eliminating that ability to compete,” Younathan noted.
Regardless of whether the applicant is walking in to the lender for the first or second time, the lender should be armed with enough financial information to assess the credit risk.
“The lender should be confident enough to know what questions to ask, how to analyze their income, how to analyze all the other risk profiles, it really shouldn’t make that much difference, because they should be in a situation where they should be asking the right questions to really understand,” Tozer said.
Beggars can’t be choosers
Though loan officers are unanimous that the waiver will make FHA loans more accessible for borrowers, LOs interviewed by HousingWire don’t expect it to increase their production volume.
In a highly competitive environment, lenders had already taken that extra effort to approve loans that would’ve been rejected or already rejected from another lender.
“We’re more likely to underwrite a 500 credit score than a big bank who’s saying ‘I don’t want that risky loan in my portfolio. I don’t want I don’t even want to underwrite it, because I don’t want a 500 or 520 or 560 borrower in my portfolio,’” Taylor, of Hometown Lenders, said.
Hometown Lenders would perform a manual underwriting for an applicant with a lower credit score to try to get an approval rather than simply rejecting a lower credit score borrower, he said.
The FHA loan program requires lenders to seek manual underwriting review when a borrower has a credit score lower than 620 and a DTI greater than 43%. According to HUD, borrowers could qualify with a 580 credit score and a DTI of 50%.
“That (loan origination) is the only way we make income. I don’t think it (the new waiver) would affect us at all, we would have looked at that borrower whether there’s an MCR on there or not,” Taylor noted.
To override an existing MCR would require a level two underwrite – meaning two underwriters would have to underwrite the file as they have the authorization to override the MCR in the FHA Connection system.
Because the mortgage credit reject is going to be eliminated, we’re no longer going to have to deal with a second underwrite, Gastelum said.
“It’s not going to be more business. If anything it’s going to bring some of the borrowers that got declined at other companies back to the marketplace sooner,” Gastelum said.
FHA loan limits rose to a maximum of more than $1 million and mortgage insurance premiums for FHA loans were cut by 30 bps this year in line with home price inflation and to provide relief from the steep rise in mortgage rates.
Some loan officers noted that while the FHA’s decision to cut MIPs was a step in the right direction, the upfront mortgage premium (UFMIP), which amounts to 1.75% of the base loan amount, as well as a monthly premium for the life of the loan, could still be a burden for borrowers compared to those with a conventional loan.
However, affordability will still remain challenging for borrowers as wages would need to rise and home prices would need to fall to tackle that issue, Taylor noted.
“You’re not going to change affordability — which is the real reason people don’t have access to housing — by taking MCR off,” said Taylor.
But any little bit helps, Borodinsky said, citing a tough mortgage origination market that he’s never seen before.
“I welcome anything that moves the needle even fractionally. Because in this market, beggars can’t be choosers. This market is unlike any market we’ve seen in over 30 years in terms of there being no inventory, high interest rates and a real problem compounded with what’s called the lock-in effect,” Borodinsky said.
Are you looking to learn how to find a free car? Cars are expensive. There’s no doubt about that. Is it possible to get free cars? Getting a free car may sound too good to be true, but it’s possible for people who meet certain requirements, which we will talk about below. In this article,…
Are you looking to learn how to find a free car?
Cars are expensive.
There’s no doubt about that.
Is it possible to get free cars?
Getting a free car may sound too good to be true, but it’s possible for people who meet certain requirements, which we will talk about below. In this article, I’ll show you how to get a free car through different ways, from charity donations to assistance programs, and more.
I understand that there are so many people who would benefit from a more affordable transportation option. After all, a car can be essential to landing a job, getting to work, helping you pick up and drop off your children at childcare (so that you can work!), getting groceries, and so much more.
Low-income families, single parents, individuals with disabilities, veterans and their families, and so many others may particularly benefit from getting free vehicles to improve their quality of life.
Whether it’s making it easier to get to work, taking the kids to school and childcare, or simply attending important appointments, acquiring a free car can have a significant impact on your daily life.
Related content:
Why do free cars exist?
Free cars exist to help people who need transportation.
There are many organizations whose sole purpose is to help you get a free car because they know how much it can change a person’s life.
Below are some organizations that may help you find a free car:
Nonprofit Organizations— Some nonprofit organizations give away cars for free to those who need one. They work with local partners and households and accept donations of old cars and used cars, which are then fixed up and given to those who need them. These organizations usually target specific groups of people, such as low-income families, working families, single parents, military families, or disabled individuals, who may find it hard to afford a car on their own.
Churches and Private Charities— Churches and private charities may offer car help in your community as well. They usually work on a smaller scale, providing help to local residents experiencing hardships and may just give out a free car here and there. These organizations often rely on donations from members of the community and local businesses, and they require applicants to demonstrate a genuine need for a vehicle. You may need to contact local churches and charities directly to learn more about how to get a car for free.
People donate their used cars all the time. Their reasons may be either because they have no use for the car, they want to avoid the hassle of selling a car, for tax breaks, or they want to help others.
Who can benefit from free cars?
There are many people who can benefit from a free car, such as:
Low-income families— If your family is struggling with money and you are finding it hard to afford your bills, you might be eligible to receive a free car if you can show your need to an organization.
Single mothers and single parents — Single moms and parents need transportation so that they can get to work and also be able to bring their children to childcare. Not having a car can make this much more difficult.
Domestic violence victims — Having reliable transportation can be important for the safety and well-being of domestic violence victims. Some organizations have experience providing a free car in this situation and understand the need for privacy.
Disabled individuals — If you have a disability, you might be eligible to receive a free car to help you get around and be more independent.
Veterans and military families — Veterans and military families can also benefit from free car programs. There are organizations dedicated to providing assistance to those with a military background, to repay them for their service and sacrifices.
Victims of natural disasters — If you have experienced loss from a natural disaster, then you may benefit from many charitable free car organizations.
Of course, there are many more people who could benefit from finding affordable transportation as well. This is not a full list of those who might need a free vehicle.
Now, you do want to be cautious with getting a free car. If you are receiving government assistance, such as housing assistance, welfare, or food stamps, then accepting a free car may be considered income and it can affect your benefits. This is something that you will definitely want to think about as you do not want to lose these benefits.
How To Get A Free Car
There are organizations that help you get a car when you need a free vehicle. And there are other ways to find a free car as well. Below are some of the options that you may want to look into:
1. 1-800-Charity Cars
1-800-Charity Cars (also known as Free Charity Cars) is a nonprofit organization that provides free vehicles to eligible people, including domestic violence victims, the medically needy, victims of natural disasters, veterans and military families, and families transitioning from public assistance to work. It was the first charity of its kind in the nation.
This is the original free charity cars organization and they have given away over $70,000,000 in cars (over 9,000 cars) nationwide since they started the organization in 1996.
To apply, you will need to meet their eligibility criteria and submit an application on their website. Some of their eligibility requirements include being over the age of 18, being a resident of the U.S., having a valid driver’s license, being at or below 200% of the Federal Poverty Level, and having a genuine need for a vehicle.
This is a good place to start if you need a free car and you’re wondering where can I get a donated car for free.
2. Vehicles for Change
Vehicles for Change was started in 1999 and has given out over 7,500 cars to low-income families for little to no cost.
This organization helps residents in the states of Maryland and Northern Virginia. Cars are repaired and restored by people seeking workforce training as auto mechanics.
Donated vehicles are provided to families in need who meet their eligibility requirements. Eligible applicants must have a verifiable job offer or be working at least 30 hours per week, have no DUIs, and have a valid driver’s license to begin the application process.
3. Good News Garage
Good News Garage is a car donation program to look into if you’re trying to find a free car. They provide refurbished free cars for low-income families that meet their eligibility requirements. They give out around 200 cars to families in need each year and have provided around 5,500 cars since starting in 1996.
This organization is available for those in need who live in the New England area of Massachusetts, Vermont, and New Hampshire.
Good News Garage also has a transportation program. If you need to get to a job or get your children to childcare, then their program Ready To Go may be able to help you with this as well.
4. Online Car Donation
OnlineCarDonation.org is another platform that donates refurbished vehicles to needy individuals and families.
Online Car Donation gives free cars to people such as those with physical challenges, families living in homeless shelters, military families, and more.
You can apply by filling out their application form on their website and providing the required documents to prove your eligibility.
After you submit your application for a free car, if you are chosen, you will be contacted within 30 days. If you do not hear back within that time frame, their website says you can apply again as applications are only valid for 30 days.
5. With Causes Charitable Network
The WithCauses.org Network helps individuals and families in need by providing resources and assistance, which includes help getting a free car. The eligibility requirements may vary, so visit their website to find out if you qualify and how to apply.
6. Salvation Army free car program
The Salvation Army offers a free car program for eligible candidates.
They mainly focus on helping domestic violence victims, families in dire financial situations, and the homeless. Visit your local Salvation Army branch to inquire about their car donation program and how to apply.
7. Cars 4 Heroes
Cars4Heroes donates free cars to first responders, military veterans, and their families who are in need of transportation.
Cars 4 Heroes was started in 1996, and the organization currently gives away over 300 cars a year in the Kansas City, Kansas, metro area.
You can fill out their application form on their website and provide the required documentation to be considered for a free car.
8. Local church
Your local churches or other religious institutions may have programs that provide free vehicles to families that need help getting a car.
You may want to contact your nearby churches to find out if they have any car donation programs and how to apply or if they have eligibility requirements. They may know someone that they can connect you with to help you get a free car.
9. Check Facebook Marketplace and Craigslist
Many people often give away their cars or sell them at low prices on platforms like Facebook Marketplace and Craigslist.
If I was wondering about free cars near me, then I’d browse through these websites regularly to find out if anything is available. The search can be customized by entering your budget and location to see if anything suitable turns up.
10. Find a job that gives you a free car
There are jobs that may give you a free car as well, in case none of the above options works for you.
Some job positions that may come with a company car include sales representatives, district managers, or regional directors who spend a lot of time traveling between different offices.
To start your search for jobs that give you a car to take home, you can look for job postings with phrases like “company car provided” or “full-time vehicle provided.” Job websites such as Indeed, LinkedIn, and Glassdoor make it simpler to find such job listings by using specific keywords, so you may try searching for those. I did a quick search and was able to pull up jobs easily by typing those phrases into the keyword search bar.
Some employers might offer a car allowance instead of providing a free car. In this case, you would receive a monthly stipend to use toward your vehicle expenses. This would offset some of your car expenses, such as monthly payments or maintenance.
Also, if you know someone who currently has a company car, you can try asking them for tips and advice. They might even refer you to open positions at their workplace, and this can help you get a job with a free car as well.
11. Look for a free dealer donation
Dealer donations are a little more difficult of an option, as car dealers are in the business of making money, not giving away all of their cars that make them that money.
But, it doesn’t hurt to try if you have the time to write a letter and reach out to a car dealership.
To obtain a car dealer donation of a free used car, you’ll want to start by seeing what local dealerships are in your area. You can research their involvement in charitable activities to see if they even give out free cars (maybe do a simple search of the dealership’s name plus the term “free car” or something like that), as this will show you that they are open to the idea of donating a vehicle to those in need of a free car.
Once you have a list of local dealers to reach out to, there are ways to get a free car from a dealership. You can write a letter talking about your situation and reasons for requesting a donated car. You should talk about your struggles and the positive impact the donation will have on your life (such as, what a donated car will help you do).
When writing your letter for a free dealer donation, here are some things to think about:
Write the letter to the dealership’s owner or general manager, as they will likely have the authority to approve a car donation or be able to talk to someone who does have that authority.
Explain your situation fully and provide the specific reasons why you need a car.
Talk about how a car donation would improve your life and allow you to overcome challenges or achieve goals.
Provide information on any relevant programs or resources, such as a community organization or nonprofit, that may support your request for a free car.
After you have written your letter, submit it to the dealership. You may do this by sending it to the physical mailing address of the person, their email address, or perhaps even handing your letter to them in person.
Here are answers to common questions you may have about finding a free car:
What are other transportation options if I can’t find a free car?
There may be a long waiting period if you are applying for a donated car. If you are not able to find a free vehicle, then you may need to look into other options to get around town. Here are some ideas on how to get around if you don’t have a car of your own:
Public Transportation— If you live in a place with public transportation, then this option is something to look into. One great thing about public transportation is that you won’t have to pay to maintain a vehicle or repair anything. Of course, public transportation sometimes takes longer and may not be widely available to you (unfortunately, there are many towns in the U.S. that do not have great public transportation options), and that is something to think about. Also, more and more cities offer public transportation at no charge. You may have to apply for a special card to get this free service, or it may be available to everyone. It’s worth asking around about because it can save you hundreds of dollars a month.
Carpooling — Carpooling is an option to think about if you are unable to find a free car, especially for people who live in areas with limited public transportation. Car owners may be looking for riders so that the expense of ownership is offset a bit. You’ll need to share the cost of expenses, such as gas, tolls, parking, and wear and tear. You may be able to share rides with coworkers, friends, or neighbors. To save money, you could offer to trade babysitting, gardening, or home repairs for the ride. Also, check out carpooling apps that apply to your local area.
Rideshare Services — Now, rideshare most likely won’t be the most affordable option, but sometimes you don’t have a choice. Rideshare services, such as Uber and Lyft, may be able to get you to where you need to go if you don’t have any other options. To save money, use an app that compares rideshare companies and finds you the cheapest price. And, as far as your work commute, it’s good to know that some companies offer rideshare services as a benefit to their employees and will pay for the full cost or part of it.
How can I find free cars given away near me?
Yes, you can find free cars given away near you. There are many local organizations that may be able to help you out. You can research the various charity programs in your area and see if you meet their eligibility requirements for a free car.
Many charities, such as Charity Cars, provide free vehicles to people in need. These organizations often target specific groups of people, like veterans or victims of domestic violence.
Next, reach out to local branches of organizations like the Salvation Army or Goodwill Industries. These organizations may also auction off donated cars at affordable prices. Reach out to your nearest branch to learn more about available vehicles and to find out if they hold any auctions.
Another option is Online Car Donation, which aims to provide free cars to as many people in need as possible. Fill out their application to see if a reliable used car is available for you. They also offer trucks, vans, and sometimes even modified vehicles for individuals with disabilities.
Remember to be patient but also to keep trying, as it can sometimes take time to find the right opportunity for a free car. And, many times your application is only good for 30 days, so keep in mind that you may have to submit it over and over again.
Is Free Charity Cars legit?
Yes, Free Charity Cars is a legitimate organization that connects eligible people with free vehicles. They have high ratings and many endorsements.
How to get a car if you can’t get a free one?
If you’re not able to get a free car, you do have some other options, such as learning how to get a cheap car and learning the best way to get a car loan with a low interest rate.
Here are my tips for finding a cheap car:
Shop around for cars that are affordable to you: Many organizations offering a free car may also give you the option of purchasing a refurbished vehicle from them at a much lower cost than elsewhere. Otherwise, check out your local dealerships, online car-selling platforms, and even Craigslist to find the best deals on reliable cars in your area. Don’t limit yourself to just one site; shop around and be patient until you find a car that fits your budget.
Buy a used car: Buying a used car rather than a brand new one can save you money. Pre-owned vehicles tend to be more affordable and can still offer reliable transportation.
Negotiate for the best price: Don’t be afraid to negotiate the price of the car with the car seller or dealership. They may be able to lower the price, especially if you can show them that similar cars are around for cheaper prices elsewhere.
Check your credit score: Before applying for a car loan, make sure that you know your credit score. A better credit score increases your chances of getting a lower interest rate on your car loan. If you can, I recommend you take the steps to improve your credit score (even while searching for a free car) in case you need to apply for a car loan.
You can learn more about building up your credit score at Everything You Need To Know About How To Build Credit.
Shop around for car loans: Just as you should shop around for the best car deal, you should do the same for car loans. Different lenders may offer different interest rates and loan terms.
Choose a shorter loan term: While a shorter car loan term means higher monthly payments, you’ll pay less in interest overall, making the car less expensive over the years.
There are plenty of options for finding cars that may not be entirely free but are still affordable to you.
Related content: Save Money With These Top Tips For Buying A Car
How To Get A Free Car — Summary
I hope you enjoyed today’s article on how to get a free car.
If you need a car but cannot afford one, there are several ways to possibly get a free car. Many programs and organizations exist to help people get a free car, especially if you belong to certain categories, such as low-income families, veterans, domestic violence victims, or those transitioning from public assistance.
Remember, you do want to be cautious with getting a free car as well. If you are receiving government assistance, such as housing assistance, welfare, or food stamps, then accepting a free car may be considered income, and it can affect your benefits.
To find free cars near you, it’s important to explore local nonprofit organizations, as well as community centers, churches, or social services agencies that may have information about free car programs or resources in your area. Some jobs come with a company car that you can take home.
Here are some potential resources to assist you in getting a free car:
Local nonprofit organizations
Online car donation websites
Community centers and churches
Social services agencies
Remember that just because you meet the eligibility requirements for a free car and apply for one, it does not mean that you will succeed. There are many people who would like to receive a free vehicle as well. However, you can increase your chances of getting a free car if you can show that you have a need and you have a story to share (since people personally review the applications to see who needs the car the most).
Settling credit card debt is a potential option when you have many missed payments over several months. If a credit card issuer or collection agency suspects they won’t get paid at all, they might be willing to accept less money than you owe. It’s typically a last resort to be explored after you’ve considered other debt-payoff options.
“Whether or not you can settle depends on each creditor; no two banks have the same collection process or settling parameters,” says Leslie Tayne, founder and managing director at Tayne Law Group. “The outcome can depend on many factors, including the creditor’s policies, the debt amount, the individual’s credit history, and the ability to negotiate effectively.”
Here’s what you need to know about how to settle credit card debt.
🤓Nerdy Tip
Note that settling credit card debt is different from — and riskier than — simply negotiating the cost of existing debt, such as attempting to get fees waived or APRs lowered.
Pathways for credit card debt settlement
There are different options for settling the debt on your credit cards. You can try the do-it-yourself method or have an attorney or company settle debt on your behalf. Regardless, there is no guarantee that the company that owns the debt will be willing to settle. Be wary of anyone offering debt settlement services who promises these results. Many people in their desperation to settle debt are left vulnerable to scams by debt relief companies or other sources. Before hiring anyone to settle debt on your behalf, research their background, history and track record.
Do it yourself
When deciding whether to settle debt on your own or hire someone to negotiate on your behalf, it’s worth considering the pros and cons for both. Hiring someone can cost more, but settling debt on your own can be a risk. The law can come into play, and if you don’t know what to look for, you could dig yourself deeper into debt and spend more money down the line to fix those mistakes. Consider your options and what is best for your situation.
Hire an attorney experienced with debt settlements
An attorney who specializes in debt settlement can help you consider factors like federal and state laws, statutes of limitations for debt, time-barred debts, whether you’re judgment-proof or have a lien due to other debts, credit reporting, and tax outcomes, among other things. They may also understand how certain creditors or collections agencies work and the kind of offers they are willing to accept.
It can be difficult to wrap your head around attorney costs when you’re already struggling to meet payments. It might be possible to find an attorney who offers reduced costs through a legal aid office, but they can be in high demand. Costs for a private attorney may vary based on the type of work involved. They may charge a flat fee per creditor, a percentage of the debt eliminated, or an hourly rate. Attorneys are in theory held to ethical standards, but some have been known to not charge fairly. When hiring an attorney, it’s in your best interest to do an online search for consumer reviews, consumer complaints, actions taken by the Consumer Financial Protection Bureau (CFPB), and the attorney’s standing with the state bar.
Hire a debt relief company
A debt settlement or relief company is an option, but it can come with risks and steep costs. These companies generally charge excessive fees and rarely deliver on the promised results, leaving you worse off financially, according to the CFPB’s website. You’re typically required to stop paying your balances and instead put that money into a savings account. As a result, you’ll incur late fees, penalty interest rates and potentially other charges. Pricey service fees may also apply for the debt and the savings account, which can be counterproductive if those costs cancel out the value of any balances settled. Some creditors may also refuse to work with certain debt relief companies.
🤓Nerdy Tip
If you choose to work with a debt settlement company, the CFPB’s website suggests contacting your state attorney general or a local consumer protection agency to see whether the company has any consumer complaints on file. Some states also require debt settlement companies to be licensed. You can verify if a company is licensed through your state’s regulator or attorney general.
How to determine if settlement is right for you
If your credit has already taken a hit because of missed payments for six months or longer, debt settlement is an option to consider, according to Tayne, but it’s not without drawbacks. Beyond the credit repercussions of missed payments, this option can leave a lasting mark.
“On a credit report, a settled account is identified as being ‘settled for less than the full balance,’” said Margaret Poe, head of consumer credit education at TransUnion credit bureau, in an email. “The settled account will remain on a credit report for seven years from the date of first delinquency, as with other derogatory remarks on a credit report.”
Even if you are able to settle debt, the journey toward that agreement may be packed with pitfalls. You should prepare to receive calls from your creditor or a debt collector as payments become past due. The costs will also keep spiraling as interest and fees continue to accrue. And, as you’re missing payments, it’s possible to get sued by the creditor or collection agency.
It’s a big risk to take when there’s no guarantee that you can settle debt.
How to negotiate a credit card debt settlement yourself
Negotiating a credit card debt settlement isn’t a one-size-fits-all approach, so the following steps may not work for everyone, and they don’t factor in other possible debts. You’ll need certain financial resources to settle debt. If you’re having trouble covering essentials like housing and food, consider bankruptcy as a potential option.
1. Consult an expert
Before trying to negotiate yourself, it may be in your best interest to consult an expert early in the process. An expert may alert you to blind spots. You don’t have to hire an expert or a company for the long term if the costs are overwhelming, but at the very least you can understand if you should go at it alone or consider other options like a debt management program.
You can get an initial consultation with an attorney or a certified credit counselor. The latter will be more affordable, but credit counselors aren’t very involved in the settlement process. What they can help with is exploring your options and helping you gain an understanding of whether a do-it-yourself approach is a good idea.
“We can obviously help with the budgeting process and thinking about, you know, other possible ramifications,” says Thomas Nitzsche, senior director of media and brand at Money Management International, a nonprofit credit counseling agency. “If a debt management program is not viable, the counselor is going to tell you that you really need to seek legal advice.”
An attorney will be more familiar with the settlement process. Unless you hire an attorney to represent you, though, that person can only offer general advice that may not be specific to your situation. Regardless, both experts are skilled at negotiating credit card debt, so it’s wise to at least consult one.
2. Figure out whom and how much you owe
Understanding who owns your debt is crucial. You can get some of that information in your free credit report from annualcreditreport.com, according to Tayne. But the report may not account for all of your debt in some cases. Judgments or liens don’t always show up on a credit report. You can go to your county recorder’s office to get information about potential judgments or liens and use online directories to find statutes of limitations by state, she says.
These are the kinds of steps an expert can potentially help you plan or consider before starting the settlement process on your own, hence why we recommend the consultation step above first.
3. Know your budget
By giving your finances an in-depth look, you can see how much money is truly available to negotiate a settlement. Review your budget and statements to explore the possibility of eliminating unnecessary purchases like lapsed free trials or others. Also look for opportunities to swap products or services for less costly alternatives.
In your review, you’ll also need to assess the highest and lowest amount you can afford to pay in a settlement. Consider whether it’s best to negotiate several payments or a lump sum.
The range should allow you to still prioritize essentials like rent, utilities, transportation, gas, food and anything else you may need. Ideally, you can negotiate for an amount that gives your budget room to breathe. Leave a buffer for potential emergencies and tax-related costs that may apply on debts forgiven over $600. Depending on your circumstances, it may be possible to get the tax costs waived, Tayne says.
4. Get organized
Once you know who owns your debt, look up contact numbers for those companies and write them down. You should also make a list of the debts, the amounts outstanding, and the range you can afford to pay back.
Here are some of the documents you may need:
Your budget and range for settlement.
Your credit report.
Documents concerning judgments or liens.
A script of what you’re planning to say.
A list of questions if a settlement agreement is proposed.
Practicing what you’re going to say will also help you be more confident in the actual negotiation process. Don’t step outside the parameters of what you can afford, and don’t negotiate out of fear — even if the person on the other end of the call seems intimidating.
In case you are able to get a settlement agreement, it helps to have a list of follow-up questions. For instance, you may want clarity on the following:
When, if at all, can you get the agreement in writing?
How will the settled debt appear on your credit report?
What happens if you don’t honor the terms of the agreement?
Will you be taxed on the amount settled?
Will you get a 1099-C for the settlement, and if so, when?
5. Make the call
Once you’ve done your prep work, you’re ready to make the call to the creditor or debt collection company. Before dialing, here are some best practices to consider:
To prevent unwanted surprises, don’t provide your bank account information upfront to the company that owns the debt. Wait until you have a signed agreement.
Write down the names of people you speak to and the time you spoke to them.
Write down the numbers of departments before accepting a transferred call.
Make as many calls as it takes to get through to the right person.
Start negotiations at the lowest offer possible (i.e., even if you can afford to pay 60%, start at 20%).
Once you’re ready to dial, ask to speak with an employee who can negotiate your debt. Start by asking, “I would like to settle my outstanding credit card debt. Can we discuss any options that you offer?” If you’re asked why you can’t pay it off, avoid revealing too much information, to prevent it from potentially being used against you in the settlement process.
“What consumers tend to do is just dump on the creditor tons of information that impacts and impedes the settlement process,” Tayne says. “Somebody who is an attorney understands how to filter certain information in order to appropriately negotiate in the client’s best interest.”
Once you share that you’re struggling to meet payments, the account may be closed if it’s still with the original creditor.
🤓Nerdy Tip
Don’t be afraid to ask for more time to think about a settlement offer. Ask for the direct number so that you can pick up where you left off. Don’t agree to any terms or offers that are unclear or out of budget. Ask for clarification or a breakdown of costs, if needed.
6. Get the agreement in writing
Request the agreement in writing and carefully review it before signing to ensure it includes the terms you agreed to. You might be under the impression that you’ve settled debt, but it may not be the case until you get all of the necessary details in writing.
The agreement should include the name and number of the account settled, the name of the creditor, the date, and the terms depending on whether you’ll have different payment deadlines or make a lump-sum payment, according to Tayne. You can also feel free to request that credit reporting details be included and anything else that might be relevant or useful to document.
Don’t make any payments or share any bank account details until the agreement is finalized.
7. Honor the settlement agreement
It’s important to meet the terms of the new agreement. Failure to do so can result in a lawsuit and fewer opportunities to negotiate in the future, Tayne says. To avoid further complications, be sure to pay off any tax-related costs that result from the debt settled.
Looking to build wealth with the best income-generating assets? As you set out on the path to financial freedom, understanding the different types of income-generating assets can truly change your life. This is because you can invest in assets that will generate you income, earning you more passive income. Today’s article will introduce you to…
Looking to build wealth with the best income-generating assets?
As you set out on the path to financial freedom, understanding the different types of income-generating assets can truly change your life.
This is because you can invest in assets that will generate you income, earning you more passive income.
Today’s article will introduce you to a range of assets that reliably bring in cash, giving you peace of mind and the freedom to live life on your own terms.
From traditional investments like stocks and bonds to more creative options like peer-to-peer lending or real estate, income-generating assets give you the power to diversify your portfolio and build wealth over time.
Related content:
What are income generating assets?
Before we begin, I want to talk about the basics on income-generating assets, in case you are new to the subject or if you want a background first.
Income-generating assets are investments that, as the name suggests, generate income for you. These are assets that provide you with a steady cash flow, allowing you to earn passive income and build your wealth over time.
Examples include rental real estate and dividend-paying stocks (we will go over 17 different types of income-generating assets below in more detail).
There are several benefits of the best income-generating assets such as:
Passive income: You earn money without actively working, and this can provide financial freedom and the ability to focus on other things in life. You can earn money in your sleep, while on vacation, making dinner, and more.
Diversification: You can diversify your investments so that all of your income is not coming from just one source.
Wealth building: Earning income and generating a steady cash flow can help you build your wealth over time.
Note: Please keep in mind that there is no one-size-fits-all approach when investing in any of these income-producing assets. Everyone is different and while one asset may work great for someone, it may not be the right asset for you. I recommend doing as much research as you can if you are interested in one of the asset investments I talk about below.
Types Of Income Generating Assets
There are many types of income-generating assets. Some may be more traditional such as dividend-paying stocks, and others may be more alternative income-generating assets, such as selling stock photos, and even renting out your driveway.
Today, I will talk about 17 different types of income-generating assets, but this is not a full list of the best income-producing assets. There are many, many more!
The different types of income-generating assets that I will talk about today include:
1. Dividend-paying stocks
One of the best assets to invest in are dividend-paying stocks.
Dividends are simply a payment in cash or stock that public companies distribute to their shareholders.
The amount of a dividend is determined by a company’s board of directors, and they are given as a way to reward those who have stock in their company. Both private and public companies pay dividends, but not all companies pay dividends.
How do dividends work? If you own shares of a dividend-paying stock, then a dividend is paid per share of that stock. So, if you have 10 shares in Company ABC, and they pay $5 in cash dividends each year, then you will get $50 in dividends that year. While dividends can be paid on a monthly, quarterly, or yearly basis, they are most commonly paid out quarterly — so, four times a year. In this example, the $5 in cash dividends the company pays each year will most likely be distributed as $1.25 per quarter for each share of stock.
The most common type of dividends are cash dividends. Shareholders may choose to get this deposited right into their brokerage account. Stock dividends are another common type of dividend. In this case, shareholders get extra shares of stock instead of cash.
Both cash dividends and stock dividends are great income-generating assets that will earn more money for you.
As a shareholder, you can earn income when companies distribute profits to their shareholders. Look for stocks with a history of consistent dividend payouts and a high dividend yield. Keep in mind that dividend stocks are still subject to market fluctuations, and just because a company has paid a dividend in the past does not mean that they always will in the future.
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2. High-yield savings accounts and CDs
High-yield savings accounts and CDs are a great way to grow your savings, but most people have their money in accounts with low rates. Unfortunately, that means many of you are losing out on some easy money.
Savings accounts at brick-and-mortar banks are known for having really low interest rates. That’s because they have a much higher overhead — paying for the building, paying the tellers to help you in person at the bank, etc.
High-yield savings accounts offer an easy option for earning interest on your cash. Online banks often offer higher interest rates than traditional banks. As of the writing of this blog post, you can easily find high-yield savings accounts that can earn you above 4.00%.
Certificates of Deposit (CDs), another form of income-generating assets, are FDIC insured and provide a guaranteed interest rate over a specific term. Remember that access to your money is limited during the term of the CD. You will agree upon the term before putting your money in the CD. The terms typically vary in length from around 3 months to 5 years.
Money market accounts are also offered by banks and often with a higher yield than other types of savings accounts.
3. Real estate
Real estate is one of the most common income-generating assets that people think of.
Investing in rental properties is a popular way to generate steady cash flow. You can earn rental income from tenants, and properties typically appreciate in value over time.
Location and property management are important factors that can impact your return on investment.
By investing in real estate, you may be investing in residential properties, commercial real estate, short-term rentals, REITs, and more.
Recommended reading: How This Woman In Her 30s Owns 7 Rental Homes
4. Real estate investment trusts (REITs)
An REIT is a company that owns and manages income-producing real estate. They then sell shares to investors like stock.
By investing in REITs, you can make money in the real estate market without actually owning real estate.
So, if you don’t want to be a landlord, then this may be something for you to look into. This makes it much more passive than actually owning real estate and having to manage it.
You can even diversify your income stream with REITs by investing in different property types, such as residential homes, commercial office space, industrial, and retail store properties.
5. Bonds
Bonds are fixed-income investments that are issued by governments and companies. If you own a bond, you receive interest payments from borrowers on a regular basis.
An easy way to explain this is: When you buy a bond, you are giving someone a loan and they are agreeing to pay you back with interest.
Bonds with higher credit ratings are generally a safer investment but may offer lower interest rates.
6. Mutual funds
Mutual funds gather funds from investors to invest in stocks, bonds, or other securities. Basically, the funds are pooled together and there’s a fund manager who chooses the best investments.
Income-generating assets like this have multiple types of mutual funds available for multiple types of investors. Some of these fund types include bond funds, stock funds, balanced funds, and index funds.
Mutual funds typically have higher fees because they have fund managers who are actively trying to beat the market.
With a mutual fund, you get diversification because the fund manager mixes the assets in it.
7. Index funds and exchange-traded funds (ETFs)
ETFs and index funds are popular options for those who are looking to diversify their portfolio of income-generating assets.
This is because index funds and ETFs track a specific market index and invest in a wide range of stocks or other assets, instead of picking and choosing stocks in an attempt to beat the market. This is what makes them different from mutual funds.
They often have lower fees and higher diversification compared to actively managed funds.
8. Annuities
Annuities are long-term investments offered by insurance companies that give you a guaranteed income stream to build wealth. In exchange for a lump-sum payment or periodic contributions (such as monthly or annually), you’ll receive steady payments in the future.
The way it works is you pay premiums into the annuity for a set amount of time. Later, you stop paying premiums, and the annuity starts sending regular payments to you. Some are even set up to pay you back with a lump sum.
Annuities can be fixed or variable. A fixed annuity offers a guaranteed payment amount — which means a predictable income for you. As for a variable annuity, the payment amount does vary, depending on how the market is doing.
9. Websites and blogs
Starting a website can generate income through the money-making assets of advertising, affiliate marketing, or the sale of products and services.
Since I started Making Sense of Cents, I have earned over $5,000,000 from my blog through affiliate marketing, sponsored partnerships, display advertising, and online courses. These income-generating assets make sense for building wealth.
Blogging allows me to travel as much as I want, have a flexible schedule — and I earn a great income doing it.
Now, it’s not entirely passive, but I do earn semi-passive income from my blog.
You can learn how to start a blog in my How To Start a Blog FREE Course.
Here’s a quick outline of what you will learn:
Day 1: Why you should start a blog
Day 2: How to decide what to write about (your blog niche!)
Day 3: How to create your blog (in this lesson, you will learn how to start a blog on WordPress)
Day 4: The different ways to make money with your blog
Day 5: My advice for making passive income with your blog
Day 6: How to get pageviews
Day 7: Other blogging tips to help you see success
Recommended reading: The 25 Most-Asked Blogging Questions To Get You Started Today
10. Royalties and intellectual property
Intellectual property, such as patents, copyrights, and trademarks, can generate income through licensing fees or royalties. This particular option is good for creative professionals, such as authors, musicians, and inventors, who are looking for income-generating assets.
Royalties are a way to earn income from your creative work or intellectual property. By granting others permission to use or distribute your intellectual property, you can receive ongoing payments known as royalties.
Whether you’re a musician, author, inventor, or artist, royalties offer a passive income stream as your creations continue to generate revenue over time.
Royalties can be paid out periodically or as a lump sum on these passive income assets, depending on your agreement with the licensee.
11. Stock photos
If you have a talent for photography, you can monetize your skills by selling stock photos on platforms such as Shutterstock or Adobe Stock. The more high-quality images you upload, the more potential passive income you can generate.
With stock photography, you simply upload photos that you have taken to a platform such as DepositPhotos, turning your pictures into income-generating assets. Then, you will receive a commission whenever someone buys one of your stock photos.
Stock photos are used for all sorts of reasons by websites, companies, blogs, and more. Businesses need stock photos because they are not usually in the business of taking photos of everything that they need. Instead, they can use stock photos to make their content, website, or business more visually appealing.
Some examples of stock photography include pictures of:
Travel, vacations, landmarks, outdoor adventures
Family members, such as parents, children, family gatherings
Food and drink
Cars, boats, RVs
Businesses, pictures of people in meetings, in an office.
Sports, professional events
Animals, such as household pets or wildlife
The photo possibilities are almost endless for this type of income-generating asset.
Recommended reading: 18 Ways You Can Get Paid To Take Pictures
12. Crowdfunding and peer-to-peer lending
Crowdfunding platforms enable you to invest in real estate deals with a smaller amount of money than buying real estate up front, giving you a passive income through rental income or even a property increasing in value.
Peer-to-peer lending platforms allow you to lend money directly to borrowers. Typically you can earn higher returns than traditional savings accounts, though there’s always the risk of a borrower not paying you back.
Both of these types of assets — crowdfunding and peer-to-peer lending — use technology to connect investors with those looking for funding.
13. Renting out storage space
If you own unused land or unused space in your home, renting it out for storage can be a simple way to generate passive income.
You can offer storage solutions for vehicles or boats. If you have a smaller space, then offer it to store personal belongings. You can rent out your driveway, closet, basement, attic, and more. You can even rent out a shelf.
A website where you can list your storage space is Neighbor. You can earn $100 to $400+ each month on this platform. This depends on the demand in your area and the type of income-generating assets you are renting out. And, you can choose who, what, and when — who to rent to, what things are stored, and when it will happen.
You can learn more at Neighbor Review: Make Money Renting Your Storage Space.
14. Short-term rentals
Short-term rentals can be a lucrative income-generating asset if you own properties in popular tourist destinations or business hubs.
Websites like Airbnb provide a platform to rent out your property to travelers for short periods, potentially generating higher returns than traditional long-term leases.
Furnished Finder is another website for short-term rentals. This is a way to connect with travel nurses in need of short-term housing.
Keep in mind that rental income can be affected by local regulations, potential vacancies, or seasonal fluctuations.
15. Car rentals
Car rental platforms like Turo allow you to rent out your car when you’re not using it. Assets that generate cash flow include your own wheels, and that means no significant initial investment besides the cost of the car you already own.
Be mindful of risks such as wear and tear, insurance, and potential damage caused by renters.
It’s an affordable alternative to traditional rental car companies for customers, and it’s a good way to make money if you’re already working from home and don’t need your car, or are a two-car household.
Turo is one of a few different places to rent out your car, turning your vehicle into one of your income-generating assets. Your car is covered by Turo with up to a $1 million insurance policy. You can also pick the dates for when your car is available and set your rates.
Turo says you can earn an average of $706 per month by listing your car on their site.
16. RV rentals
Similarly to car rentals, RV rentals can provide additional income by renting out your recreational vehicle when you’re not using it. Your RV could easily become one of your income-generating assets.
You may be able to earn $100 to $300 a day, or even more, by renting out your RV on RVShare.
If you have an RV that is just sitting there and not being used, then you may be able to earn an income with it by renting it out to others who are interested in RVing. Cash flow-generating assets like RVs are a win-win for both you and the renter who wants to experience life in a recreational vehicle.
You can learn more at How To Make Extra Money By Renting Out Your RV.
17. Vending machines
With a vending machine business, you can generate income by selling a variety of products, from food to fishing supplies, beauty products to baby items, and more.
You may be able to earn $1,000+ a month by running a vending machine business. That’s enough reason to take a closer look at income-producing assets like this.
You can learn more at How To Start A Vending Machine Business – How I Make $7,000 Monthly.
Questions about income generating assets
Here are common questions that you may have about income-generating assets:
How do I start passive income from nothing?
Starting passive income from nothing requires creativity and resourcefulness. You can begin by identifying skills you possess or interests that can be turned into income-generating opportunities.
What are the assets that generate income?
The assets I talked about above include:
Dividend-paying stocks and stock market investing
High-yield savings accounts and CDs
Real estate
Bonds
Mutual funds
Index funds and exchange-traded funds
Annuities
Websites and online businesses
Royalties and intellectual property
Stock photos
Crowdfunding and peer-to-peer lending
Renting out your storage space
Car rentals
RV rentals
Vending machines
How do I start buying income generating assets?
There are traditional investments or more creative options. Do as much research as you can before deciding which option fits you best.
What are good assets to buy?
After deciding if you want to purchase traditional investments or more creative options, choose an asset that you can afford and best fits your lifestyle.
What are the best assets to buy for beginners?
For beginners seeking income-generating assets, you may want to look into:
Dividend-paying stocks for your investment portfolio
Crowdfunded real estate investing: Platforms like Fundrise allow smaller investments with lower risk exposure.
ETFs and index funds: They provide diversification and passive income through dividends.
What is income generating real estate?
Income-generating real estate refers to properties that produce regular rental income, such as apartments, commercial properties, or short-term vacation rentals.
How do I start passive income in real estate?
There are a few ways that you can earn passive income from real estate, including:
Buying a property, such as an apartment building or duplex, and renting it out to tenants
Using real estate crowdfunding platforms
Investing in REITs
How to make passive income with real estate without owning property?
You don’t need to actually own property in order to make money with real estate. Instead, you can earn passive income from real estate by investing in REITs and using real estate crowdfunding platforms.
This is an option for those who want to be diversified with their income-generating assets but don’t want to spend all of their money or time on a single piece of real estate.
How to make $1,000 a day in passive income?
Making $1,000 a day in passive income with assets that produce income will not be easy. If it were easy, then everyone would be doing it, after all.
Making $1,000 a day in passive income may require a large amount of money up front, diversifying into different assets mentioned above, and lots of patience from you because it will take time to make that kind of money.
You may want to start off by focusing on building multiple income streams and reinvesting your profits as you earn them.
What to think about before investing in income producing assets?
There are many different things to think about when it comes to income-generating assets. You want to find the best assets to invest your money in that will also be the best fit for you.
Remember, as I said at the beginning of this article, not everything will be applicable to everyone. Everyone is different! You may prefer to create a stock photo portfolio and hate real estate, whereas someone else may really enjoy being a real estate investor — or it may even be the other way around.
Here are some of my tips if you are interested in income-generating assets:
Do your research and talk to experts —I recommend researching as much as you can on the asset you are interested in. And, if you still have questions, don’t be afraid to talk to an expert.
Diversify — One of the important parts of building a successful income-generating portfolio is finding ways to be diversified.
Think about the risks —When making money, there’s usually some sort of risk. I recommend evaluating the risks and seeing what you are comfortable with.
What are the best books on income generating assets?
Some highly recommended books on income-generating assets include:
The Simple Path to Wealth by JL Collins
The Millionaire Real Estate Investor by Gary Keller
The Little Book of Common Sense Investing by John C. Bogle
Income Generating Assets — Summary
I hope you enjoyed this article on the best income-generating assets. As you learned, there are many different types of assets that you can invest in so that you can earn an income.
The best income-producing assets, if they’re right for you, can truly change your life.
With these assets, you can build wealth through a reliable passive income, giving you peace of mind and freedom to live life on your own terms.
Are you looking to build income-generating assets? What are your favorite ways?
Building your dream home in Texas is an exciting journey, but it comes with its unique set of considerations, shaped by the state’s diverse landscapes and dynamic climate. In this Redfin article, seasoned Texas builders offer invaluable tips for both native Texans and newcomers. These insights will help you navigate the Lone Star State’s home construction landscape.
Essential pre-build tips for your Texas home
1. Figure out your budget and financing before getting started
Managing your finances is a critical aspect of building a house in Texas. Before starting construction, establish a realistic budget that includes all aspects of the project, from land acquisition to finishing touches.
Building a spacious, energy-efficient home in the Dallas area may cost between $200 to $300 per square foot, depending on various factors. Research the current costs of materials and labor specific to that region to create an accurate budget. Consult with local banks or financial institutions to explore financing options, such as construction loans, which can provide you with the necessary funds to complete your project without draining your savings.
Keep in mind that unexpected expenses can arise during construction, so having a financial buffer of at least 10% of your budget is advisable to ensure your project stays on track.
2. Create a realistic construction timeline
Texas’ weather can be unpredictable, which may impact your construction timeline. Work closely with your builder to create a realistic project schedule that takes into account potential weather delays.
For instance, if you’re building a home in San Antonio, where hot summers and occasional heavy rainstorms are common, your construction timeline should factor in weather-related disruptions. Effective project management is essential to keep the construction process on track.
3. Make sure you understand Texas building codes and regulations
Before embarking on your home construction project, it’s essential to familiarize yourself with Texas’ building codes and regulations. These codes can vary from one municipality to another, so it’s crucial to research the specific requirements in your area.
For example, if you’re planning to build a home in Austin, you should be aware of the city’s unique land codes and permitting processes. Multiple layers of review and inspections from various city departments are common in Austin. You can typically find information about local building codes on your local government’s website or by contacting the relevant permitting authorities.
4. Thoroughly research contractors and builders before selecting one
“Texas is known for its flexible contractor laws”, shares contractor review site Bad Texas Contractors. “Unlike many states, it does not require general contractors to be licensed. To safeguard your project, thoroughly research your contractor. Seek references and word-of-mouth recommendations from local homeowners. Visit ongoing construction sites to identify reputable builders. Ensure that the contractor’s claims are verified and that they have a solid track record.”
5. Make sure your builder has local experience
Local home builder Carty Custom Builders, LLC shares, “Building in Austin, TX, requires expertise due to the city’s complex land codes and permitting processes. Engage a builder experienced in Austin’s unique requirements, such as multiple layers of review and inspections from various city departments. Navigating these hurdles is crucial for a positive home-building experience in the city.”
6. Verify builder’s associations and certifications
According to local realtors DFWMoves, “Texas may not require general contractors to be licensed, but reputable builders often belong to the Texas Association of Home Builders or local affiliates. Look for builders with certifications like Graduate Master Builder from recognized industry associations. Request a list of all homebuyer clients from the past three years for a comprehensive view of the builder’s track record.”
7. Choose your location carefully
“Picking the right location and homesite is paramount when building in Texas,” says Republic Grand Ranch, a land company today offering newly developed acreage for sale near Houston. “Opt for larger lots, ideal for single-story ranch-style homes that are popular in the region. Ensure the site is elevated and not prone to flooding or other weather-related issues. Maintain natural tree coverage for shade and privacy.”
8. Consider offsite construction for your Texas home
“Offsite construction is an ideal solution for building homes in Texas,” states home builders Champion Homes. “Constructing houses in a controlled factory environment shields materials and labor from extreme weather conditions. Select materials suitable for the region, such as engineered wood siding, to withstand Texas’ harsh heat and sunlight.”
Tips for the construction and design phase of your Texas home
9. Use finger-jointed studs for strength and stability
“Texas experiences significant humidity variations between seasons,” informs local family owned business Brookson Builders. “Finger-jointed studs, engineered for strength and stability, combat twisting and bowing caused by humidity changes. Using these studs minimizes common issues like bowed walls or drywall blemishes in Texas homes.”
10. Blend functionality with local charm
“In Texas, it’s crucial to merge functionality with the region’s distinct charm when constructing a custom luxury home,” recommends custom home builder CRV Homes. “Tailor your design to the site’s specific topography and climate. Use locally sourced materials like Texas limestone and native plants for landscaping. Incorporate features like wide eaves, verandas, and energy-efficient windows to combat the intense Texan sunshine and reduce energy consumption.”
11. Don’t overlook landscaping
Texas’ outdoor spaces are an integral part of the lifestyle, so don’t overlook the importance of landscaping and outdoor design. Work with a landscape architect to create outdoor living areas that complement your home and the local environment. Native plants, irrigation systems, and outdoor lighting can enhance the beauty and functionality of your property. Additionally, consider factors like outdoor kitchens, patios, and pool installations if they align with your lifestyle and budget.
12.Incorporate energy-efficient features
Texas’ climate can be harsh, with scorching summers and high-energy demands. Consider incorporating energy-efficient and sustainable features into your home’s design. This includes options like solar panels, high-efficiency HVAC systems, and smart home technologies. Investing in energy-efficient solutions not only reduces your environmental footprint but also saves you money on long-term utility bills.
13. Secure homeowners insurance home insurance
Texas is prone to extreme weather events, including hurricanes, floods, and tornadoes. It’s crucial to consider the insurance aspects of your new home. Research and consult with insurance providers in Texas to understand the types of coverage you may need, such as windstorm insurance, flood insurance, and homeowners’ insurance. Ensuring that you have appropriate coverage can provide peace of mind and financial security in the face of unforeseen natural disasters.
Ready to build a home in Texas?
Building a house in Texas is a rewarding venture, but it requires careful planning and collaboration with experienced professionals who understand the intricacies of the state’s construction landscape. By following these insights from Texas builders, you’ll be better prepared to embark on your home construction journey and turn your dream home into a reality.
Looking for a simple way to get started with SMS marketing? On this podcast with SimpleTexting’s Jennifer Hay, we discuss how real estate professionals can quickly leverage one of today’s most powerful marketing tools: texting. In addition to covering how to stay compliant, Jennifer shares the types of texts that work best for buyers and sellers and the best texting tools for busy Realtors. Listen and learn how to start selling more homes with a simple system for text-message marketing.
Listen to today’s show and learn:
The problem with email marketing [1:33]
About SimpleTexting and how it helps real estate professionals [2:23]
Ways a Realtor can use texting in their real estate business [4:22]
Features that SimpleTexting offers over the typical real estate CRM [6:39]
Why cold texting prospects is a bad idea [10:03]
Getting your number registered for text marketing [11:54]
Advice for getting started with text marketing [13:37]
The compliant way to collect numbers for text marketing [14:11]
Keys to getting the right responses when marketing via text [15:34]
Why you should send short, personalized text messages [16:46]
When to switch from texting to a phone call [17:59]
What makes SimpleTexting turnkey [19:55]
Options for communicating via text and calls with SimpleTexting [23:22]
A feature for protecting your work-life balance [25:25]
How to convert email leads into texting prospects [27:03]
The easy way to start text marketing [29:05]
How to get a free trial with SimpleTexting [31:26]
Jennifer Hay
Jennifer has been at SimpleTexting since 2019, started on the Support/Onboard team, worked as an Account Executive and now leads the Sales Team at SimpleTexting. Works with many businesses in real estate, ecomm/retail, and SMBs of all kinds. Prior to that, she practiced law for 7 years, specializing in litigation. She’s a Texan at heart and now lives in North Palm Beach, FL with her fiance and mini dachshund puppy.
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Most tech CEOs emphasize how their technology empowers, not replaces, humans. But Pavan Agarwal, CEO of Sun West Mortgage Company and the creator of the Angel Ai technology, has a different perspective, which he shares in this interview with HousingWire Editor in Chief Sarah Wheeler. This interview has been edited for length and clarity.
Sarah Wheeler:What do people in the mortgage industry not understand about AI?
Pavan Agarwal: I think the mortgage industry is captivated by ChatGPT. That’s a good thing: I love ChatGPT because it raised awareness. Before, when you said AI, people thought you were talking about futuristic stuff, pie in the sky. Then ChatGPT came out and people realized AI is real and it’s here today.
But the mortgage industry and the real estate industry have kind of equated AI with ChatGPT. So there’s this assumption that ChatGPT is cute, it’s nice — it’s helpful for a marketing team. But high value? No.
High value is what we’re doing with Angel Ai: really calculating income, really reviewing documents, really running through tens of thousands of pages of federal and agency regulations and finding the best path. The creation of ChatGPT is revolutionary from a tech standpoint, but its application has been incremental.
However, on our side, what we’ve developed is fundamentally disruptive. Because 99% of what is done by humans in the mortgage industry, it does automatically.
SW: At which points are humans involved in the mortgage process at Sun West?
PA: We have humans helping in three steps of the process. The first is our Angelistas — the humans who get on the phone and call consumers. The second is when documents are scanned and the data is scrubbed off the documents, we have humans double check it, to make sure there’s no mistakes. And then a third human layer is when the AI is analyzing the rule or analyzing the request, and its confidence level isn’t high enough to issue a final answer, then it automatically loops in a human to make the decision.
And that’s really important, because remember, I put my money behind Angel Ai, so if we let loans go through with a low confidence level, then I’ve got a big problem on my hands — I’m going to have lots of loans on my balance sheet and that’s not good for business.
Increasing the confidence level speaks to the speed that we’ve been solving this and getting better at it. And as you get more and more answers, less and less human review is needed. There’s a lot of intermediate steps for any request I put in AI — it doesn’t just say one answer, it makes a series of decisions along the way to finally get to that answer.
If any one of those decisions has a low confidence score, then a human has to be involved. But just looking at the process we have in place today, we’ve really reduced the amount of human touchpoints.
SW: Most other companies talk about leveraging automation or AI to enhance the work of humans, but it sounds like you have a different goal.
PA: The goal is complete robotic manufacturing. That’s how every other product that you use is manufactured, from your cell phone to your automobile. It’s like the new Tesla with the Giga Press: it’s just press one button and the car squeezes out. And AI can deliver that.
We have hardly any people, and the people we do have are massively scalable. We have people reviewing documents to make sure that the OCR is correct. How much training did that take versus the training to have an experienced underwriter? So when I say this is disruptive, this is why. Because, let’s say, even if my headcount is the same as the headcount of another mortgage company — it isn’t just about headcount, it’s the skill level of the people.
As an example, these are not real numbers, but if a company had 10 DE underwriters, and I have one DE underwriter and nine administrative people double-checking data, which one do you think is more scalable, more resilient and more profitable?
When mortgage rates finally drop and the mortgage business turns around, what happens when you need 10 underwriters again? Remember, back in COVID companies were paying huge signing bonuses to underwriters and mortgage loan processors? With our AI, when the next mortgage wave comes, we’ve got the solution. We basically have a Giga Press for mortgages: You can stamp out as many loans as you want.
SW: How do people in the mortgage industry react when you talk about manufacturing loans like this?
AP: People do get upset. But the median age of homebuyers is like 30 and the median age of loan officers is like 55. And loan officers are getting older every year while homebuyers are staying the same or getting younger, so the gap is expanding. And these young whippersnappers, they want everything fast and reliable. They just don’t understand why everything else in life works one way but not real estate. And this is the real market I’m after: the loan officers and industry professionals who understand that.
SW: So do you think there’s going to be a day when there will be no more loan officers?
PA: No, I think there will be a day when there will be no more loan officers the way they are today, and that is already here. Our loan officers spend very little time, if at all, in the manufacturing process and they spend all their time sourcing business.
SW: How does that change who you hire for your loan officers?
PA: Well the challenge here is that the last 10 years in this business were amazing and you didn’t really have to source. And most loan officers that are here today came into this over the last 10 years, so they’re not used to sourcing. Sourcing used to be normal! Loan officers didn’t want to get involved in the manufacturing — they wanted to source because that’s how they made money. We were a sourcing industry. Back then the manufacturing was done by hand by a team who supported the loan officers, but now we can do it with AI.
SW: You have this mortgage company, Sun West Mortgage Company, and you also have this tech component, Angel Ai. Which way is the future for you: mortgage or tech?
PA: Fundamentally, I’m a tech guy. In life, you have things that you need to do and then things that you want to do. And I’ve been able to thread this needle so beautifully that I can do both. I need to run a mortgage company and I want to build amazing technology that can help everyone. And I’ve been able to leverage the mortgage company to do that. Because it’s the best testing ground and development R&D ground.
SW: You developed Angel Ai for Sun West but now you’ve made it available to your competitors. How does that work?
PA: I don’t have to win by someone else losing — there is plenty of business out there, even in a market like this.
There’s definitely an advantage that we [Sun West] have, because we understand the tech at a level that no one else does. But there’s also a disadvantage relative to other lenders because we have a tech culture, so this is not the place for everyone.
For example, there are some brokers we just can’t work with because they refuse to chat with the AI, they want to talk to a person all the time. Of course, we have senior VPs who have decision authority that are happy to talk to you, but we’re not going to be there to visit you at your office at a moment’s notice. We’re not staffed to wine and dine you, romancing you like other account executives are doing.
SW: 10 years from now when we look back at this moment, do you think this will be the inflection point for AI?
PA: Yes, I think the combination of market conditions and AI tech, and then this generation gap in the originators versus customers — those three are a perfect storm. They are a forest fire and today’s redwoods are gonna get slashed and burned and new seedlings are going to be the next forest. And you can already see it — I’m talking to lenders, brokers, originators who right now have this new generation mindset. They understand what 20-somethings want, and they don’t want to talk to their bankers on the phone, and yet we see brokers who don’t want to talk to AI, they can’t do business unless they talk to someone. Yet their customers, that they want to win over, don’t want to talk to them that way.
Congratulations! You’re officially an adult. Turning 18 opens a world of possibilities and freedom, but it also comes with additional responsibilities. One important responsibility to start thinking about is building your credit profile.
Credit can be a critical resource. A good credit score helps you get approved for loans and credit cards. It also helps reduce the expense associated with your debts, as you’re more likely to get approved for lower interest rates if your credit is better.
Your credit score and history can also help—or hinder—you when you’re applying for certain types of employment, a new apartment, utilities, or auto insurance. Find out more about credit and how to build credit at 18 in the guide below.
How to Start Building Credit at 18
1. Learn How Credit Works 2. Monitor Your Credit Score and Reports 3. Sign Up for ExtraCredit 4. Become an Authorized User 5. Get a Secured Credit Card 6. Apply for a Credit Builder Loan 7. Understand How Student Loans Can Help Your Credit 8. Don’t Try to Overdo It 9. Make a Budget and Stick to It
1. Learn How Credit Works
You know that knowledge is power, and understanding how to get credit and how it all works can make a big difference. Here are a few basics.
Your Credit Score
There are multiple scoring models, but they all work to provide a numerical score that tells lenders how likely you are to pay back your debts. Higher credit scores are more attractive to lenders and creditors. Five main factors influence your score:
Your Credit Report
Your credit reports are maintained by three major credit bureaus—Experian, TransUnion, and Equifax. They contain data on your current and past debts, payment history, residential history, and other information about your credit history. This data is supplied by lenders, creditors, and businesses where you have accounts. The information on these reports is fed into the credit scoring models to determine your credit score.
Here’s where it starts getting complex. The information on those reports isn’t always the same. Some businesses and lenders only report to one or two of the credit bureaus. Some don’t report to any.
So, your credit report can be a little different with each of the bureaus. That means your credit score can also vary depending on which report and scoring model is being used.
2. Monitor Your Credit Score and Reports
Once you understand some basics about credit, you should take a look at your own credit reports. Monitoring your credit is one of the best ways to learn what will positively or negatively impact your scores. It also helps you catch inaccuracies or signs of identity theft sooner. Is there an account on your report that’s not yours? It could be bringing your score down even before you learn how to start building credit! If you find inaccurate negative information on your credit report, you can challenge it.
There are a few ways to check your credit reports.
AnnualCreditReport: You can request one report per year from each of the three bureaus at AnnualCreditReport.com. The bureaus are allowing you to request your reports weekly due to the effects of coronavirus through April 2022.
Credit Report Card: You can also get information about your credit reports via the free Credit Report Card at Credit.com. This is a breakdown of how you’re doing with each of the five major factors that impact your credit score. Your personal Credit Report Card can help you understand where you might need to work to positively impact your credit.
ExtraCredit: If you’re really serious about understanding your credit reports and scores, sign up for ExtraCredit. The Track It feature lets you see 28 of your FICO® scores and credit reports from all three credit bureaus. These scores are ones that lenders look at when making approval decisions.
ExtraCredit does more than just show you your credit scores. Have you recently started paying rent or utilities? The Build It feature lets you add them as tradelines with the TransUnion and Equifax credit bureaus. That means you’ll get credit for bills you’re already paying—building your credit profile each month that you pay those bills.
This is important, because rent and utility payments don’t usually show up on credit reports. That’s simply because utility companies and landlords don’t tend to bother to report them. ExtraCredit helps you ensure you’re getting credit for those on-time payments anyway.
4. Become an Authorized User
If a friend or family member has a credit card and is an account holder in good standing—meaning they pay their bills on time—ask if they’ll add you as an authorized user. Make sure that their credit card company reports to the credit bureaus for authorized users first or this is a pointless exercise.
You don’t even need a card or to use their account. If the credit card company reports on authorized users, you’ll get their on-time payments posted to your credit reports if your friend or family member makes them.
If you’re looking for how to start building credit at 18, this can be a quick method. However, it does come with some potential risk. If that person doesn’t pay on time or runs up their credit card balance, your credit score could suffer from the negative reports too.
5. Get a Starter Credit Card
For those who want to know how to start credit building without someone else, a secured credit card might be a good place to start. Some credit card companies also offer unsecured credit cards for those with no credit. These tend to have low credit limits and may have high interest rates.
If you can’t find an unsecured credit card, though, a secured card is much easier to get in general. You have to secure it with a deposit—typically in the amount of the credit limit. For example, if you put down a $250 security deposit, your initial credit limit is $250.
You build credit by using the card and paying the bill on time each month. Make sure you opt for a credit card that reports to all three of the bureaus to maximize the benefits to your credit history. Usually after a certain number of timely payments, you get your security deposit back and may even be eligible for an increase in credit limit.
Two options you might consider are the OpenSky Secured Visa and UNITY Visa Secured card.
OpenSky® Secured Visa® Credit Card
No credit check to apply and find out instantly if you are approved
OpenSky gives everyone an opportunity to improve their credit with an 85% average approval rate for the past 5 years
Get considered for a credit line increase after 6 months, with no additional deposit required
You could be eligible for the OpenSky Gold Unsecured Card after as few as 6 months
Reports to all 3 major credit bureaus monthly, unlike a prepaid or debit card. Easy application, apply in less than 5 minutes right from your mobile device
View your FICO® Score through your OpenSky account, an easy way to stay on top of your credit
Nearly half of OpenSky cardholders who make on-time payments improve their FICO score 30+ points in the first 3 months
Your refundable* deposit, as low as $200, becomes your OpenSky Visa credit limit
Offer flexible payment due dates which allow you to choose any available due date that fits your payment schedule
*View the cardholder agreement
UNITY® Visa Secured Credit Card – The Comeback Card™
Unlike your Prepaid Card, UNITY Visa secured card can help you build your credit. Apply online in less than 5 minutes, and you could be approved today!
No Minimum Credit Score required; low fixed interest rate of 17.99%; Fully refundable FDIC security deposit* required at time of application; if you have a min of $250 to deposit immediately, you can start now!
No application fee or penalty rate
Monthly reporting to all 3 major credit bureaus
24/7 online access to your account
*See the Cardholder Agreement for more details.
6. Apply for a Credit Builder Loan
Remember that credit mix is important to your credit score. That means you can’t just have one type of credit—such as a credit card—for maximum impact. You may also want an installment loan on your account.
A credit builder loan is one way to get an installment account on your credit history. These work like a traditional loan in reverse: if you’re approved, your funds get placed in a secured certificate of deposit and are given to you after you’ve paid off the loan.
>> Read our Review of Self Credit Builder Accounts
As you pay the loan as agreed, you’ll enjoy the benefit of positive payment history building on your credit report. Once you pay off the loan, the savings account is unlocked and you gain access to the money.
7. Understand How Student Loans Can Help Your Credit
If you have a student loan in your name, you may already have an installment loan on your credit history. This is true whether your parents acted as guarantors or cosigners or not, but it’s not true if your parent simply took the loan out for you. In that case, the lender would only report on your parent’s credit history.
As with any type of debt, student loans can help you start building credit if you pay them on time. So make sure you keep up with your loan status. If you use options such as deferment—especially during COVID-19—keep an eye on your credit report. Make sure your lender doesn’t report you as paying late when you’re within an agreed-upon deferment period.
8. Don’t Try to Overdo It
Building credit is a marathon, not a 100-yard dash. While some actions can positively impact your credit quickly, as a young person you’re unlikely to have a super robust credit history in just a few months.
Take your time and don’t try to engage in every credit-building tactic at once. You certainly don’t want to max out your debt in an effort to build credit. That could leave you unable to make your payments, which tanks your credit score before you have time to really build it.
9. Make a Budget and Stick to It
Finally, make a budget and stick to it. Spend what you can afford, and don’t take on debts you can’t pay fairly easily. You have years to continue building your credit, and a history of smart decisions and timely payments is one of the best things for your score long-term.
Start Building Credit Now
Building your credit at 18 is possible. It just takes time, commitment to making smart money decisions and an understanding of how credit works.
You want to become a homeowner but aren’t sure how you’re going to save up for your down payment. Typically, you’re going to need at least 3% to 5% for a down payment for a conventional mortgage, or 20% on a loan that doesn’t require private mortgage insurance.
Fortunately, there are a number of methods you can use to stash away money for your future home. Here are some of the best ways to save for a house and get one step closer to your dream.
1. Creating a Budget
Living on a budget may not be easy, but in the long run it can help you save money to put toward a home purchase. Creating a budget to track where your money is going is a good first step in a house savings plan.
Some effective ways to do this are recording expenses in a spreadsheet or using a budgeting app to determine your spending practices and identify where changes can be made to meet your savings goal. 💡 Quick Tip: Want to save more, spend smarter? Let your bank manage the basics. It’s surprisingly easy, and secure, when you open an online bank account.
2. Using Cash Envelopes
The theory behind this method is that it may be harder to part with cash than it is to swipe a debit or credit card. The cash envelope budgeting method involves distributing cash each month (or pay period) into envelopes based on categories you establish. When you’re out of cash for each category, you stop spending.
3. Deleting Your Stored Cards
Do you store your payment information on Amazon or other e-commerce stores? If so, it’s time to consider deleting them from each store or from your browser settings. If you have to manually input your card each time you want to make a purchase, you may just stop spending so much money online.
4. Downsizing Your Life
Another one of the tips for saving for a house involves downsizing your life. This could mean moving to a smaller rental or to a more affordable area of town. Just keep in mind that there is always a flip side to downsizing. For instance, your smaller apartment may not include parking, so you might be taking on an expense you didn’t have before. Moving to a different part of town might mean spending more on transportation costs getting to work each day. It’s a good idea to weigh the pros and cons before making any big decisions.
5. Setting Up Automatic Transfers
Reaching your savings goals might happen faster by setting up automatic transfers from checking account to savings account each time you’re paid. If your paycheck is direct-deposited, you may also be able to split the deposit into more than one account, on a percentage or dollar-amount basis.
6. Postponing Vacation
This method can reap plenty of savings if your usual vacation is a costly one. Instead of taking a big trip, a staycation may be entertaining and less expensive. Check out your local newspaper’s website to find free activities and events in your area. Art museums sometimes offer free admission days, and area nature trails are generally free and can be a good way to have fun and get exercise in one fell swoop. Now is the time to be creative since you’re working on your house savings plan.
7. Tackling Your Debt
If you get 4.50% APY in your high-yield savings account, but you carry a credit card balance with an interest rate of 23.99%, it may make more sense to put your money towards your debt right now rather than savings.
8. Eating at Home
Dining out is expensive. The average American household spends more than $3,000 per year on eating out. By skipping the takeout and restaurants and cooking your meals at home, you can add that money to your house savings plan.
9. Making Your Own Coffee
It’s a cliche, but it’s true: If you skip the lattes, you could boost your savings. The average American spends $92 per month on coffee, which adds up to about $1,100 per year. Purchasing a coffee maker and brewing your own cup of joe as opposed to hitting up a coffee shop every day will likely improve your home savings plan.
10. Using Coupons at the Grocery Store
Looking for coupons for items you normally buy anyway can trim your grocery bill. Coupons can be found on coupon websites and on brands’ websites.
Recommended: Tips for Grocery Shopping on a Budget
11. Buying Things on Sale
Just because you want something doesn’t mean you need to have it right away. Waiting to buy things when they go on sale is another one of the best tips for saving for a house. Along with looking at stores’ advertised sales, you could always create a Google alert to find out when things go on sale by typing in your favorite stores’ names + sales on Google Alerts. 💡 Quick Tip: If you’re saving for a short-term goal — whether it’s a vacation, a wedding, or the down payment on a house — consider opening a high-yield savings account. The higher APY that you’ll earn will help your money grow faster, but the funds stay liquid, so they are easy to access when you reach your goal.
12. Using Promo Codes
Promo codes are like coupons for online purchases. Browser extensions that search the web for deals can bring those promo codes to you and save you precious search time and effort.
13. Cutting Out Cable
Cable television can be a major monthly expense for some households, sometimes hundreds of dollars every month. One of the best ways to save is to cut the cord, switch to streaming services, and potentially pay much less per month on your favorite entertainment by saving on streaming services.
14. Canceling Your Subscriptions
You may be spending money on monthly subscriptions without realizing how much. Canceling subscriptions to things like lifestyle boxes you aren’t using anymore or magazines you don’t read can add up to significant savings.
15. Making the Most of the Library
The local library is a fantastic resource. You can borrow books, magazines, and movies instead of buying them, and some libraries even offer access to free audiobooks. Libraries are funded by taxes, so you’re probably already contributing to this resource—there’s little reason to pay twice for items it provides as a public service.
16. Canceling Your Gym Membership
Gym memberships can be pricey, but exercise is not. Using free, online workout videos and things in your home as exercise equipment (e.g., stepping on your stairs, doing wall or table pushups, or using a chair for barre exercises), or walking around your neighborhood can save money over a gym membership.
17. Shopping Around for Insurance
You may be overpaying for insurance. Comparing rates and getting different quotes for your car, renter’s, pet, health, and other types of insurance can ensure you’re getting the best deal possible.
18. Steering Clear of Checking Account Fees
Is your bank charging you a monthly maintenance fee just to keep your account open? If so, it might be worth looking into switching banks or asking your bank how you can avoid these fees. For example, if you have a direct deposit into the account or maintain a minimum daily account balance, you may be eligible for a fee-free account.
19. Selling Your Stuff
Do you have things you never use anymore? Could they fetch some cash? Holding a garage sale or selling your stuff online might net a few dollars to add to your house savings plan. You’ll probably want to buy new things for your new home anyway, and selling your old things will allow you to save up.
20. Asking Your Boss for a Raise
During your annual performance review, consider asking for a raise, highlighting your accomplishments and why you deserve more money. Be specific about improvements you’ve made to the company by backing up your accomplishments with data.
21. Switching to a Better Job
If you aren’t making enough money in your current position, then consider switching to a higher-paying job. It’s a good idea to keep your current job until you find a new one, though.
22. Taking on a Side Hustle
If you have the time and energy, earning extra money on nights and weekends with a side hustle might be an option. For instance, you could start a dropshipping business, take up freelancing, or do affiliate marketing.
23. Signing Up for a Travel Rewards Credit Card
If you need to travel or you are still planning a vacation, using a travel rewards credit card may be a good idea. These cards offer certain rewards for different categories such as travel, gas, and dining out, and allow you to put your rewards towards flights, hotels, rental cars, and more. Plus, many of them offer other ways to save, such as providing you with rental car and baggage delay insurance or no foreign transaction fees.
Recommended: Credit Card Rewards 101: Getting the Most Out of Your Credit Card
24. Getting a Cash Back Credit Card
With a cash-back credit card, you can earn cash rewards every time you spend. Putting that cash back toward a statement credit or bank transfer will help accelerate your savings.
25. Renting Your Spare Room
If you have an extra room in your apartment that you aren’t using, you could get a roommate or list it on a rental site to reduce your overall living expenses. Just make sure that you get permission from your landlord before inviting anyone else to move in.
26. Renting Out Your Storage Space
Another one of the best ways to save for a house is to rent out your unused storage space on a peer-to-peer site. You could generate income without having to do much work at all, and you won’t have to live with someone else—just their stuff.
27. Making Your House Savings Plan Known
Your Aunt Mildred may always get you boxes of chocolates for your birthday, and your dad might give you gift cards for Amazon. But letting your family and friends know you’re trying to save for a home might plant the seed for them to give you cash instead. If you’re getting married, this is a time to tell people about your plans so that instead of registry gifts, they might give you cash for your future home.
28. Opening a High-Yield Savings Account
Putting your money into a regular savings account may not result in much of a return. However, putting money in a high yield savings account may net more interest and get you closer to reaching your savings goals. A high-yield savings account typically offers 20 to 25 times the national average of a typical savings account.
29. Hiring an Accountant at Tax Time
If you’ve been doing your taxes on your own every year, you may have missed potential tax savings you might be eligible for. A tax professional may be able to maximize your savings, possibly resulting in a larger refund, or minimize taxes you owe.
30. Saving Your Tax Refund
If you get a tax refund, consider saving it instead of spending it. The money can be a nice addition to your down payment, possibly even earning interest in high-yield savings account until you need it.
31. Changing Your Tax Withholding
Among the best ways to save for a house is by keeping more money from your paycheck. If your withholding is too high, the IRS is essentially holding your money for you all year round. Instead of getting a large tax refund, keeping your money now and investing it in an interest-bearing account will help you save up for your home.
The Takeaway
Saving for a house takes some time and effort, but there are many different ways to do it. For instance, by eating out less, you could potentially save thousands of dollars a year. Launching a side hustle could increase your income. And opening a high-yield savings account, which typically offers considerably higher interest rates than a traditional savings account, could also help your money grow — and help you achieve your dream of home ownership.
Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.
Better banking is here with up to 4.50% APY on SoFi Checking and Savings.
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4.50% APY SoFi members with direct deposit activity can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a deposit to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.
SoFi members with Qualifying Deposits can earn 4.50% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.
SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.50% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.
SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.
Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.
Interest rates are variable and subject to change at any time. These rates are current as of 8/9/2023. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet..
Whether you’re moving out of your parent’s house or leaving the dorm life behind, becoming a first-time apartment renter is a big and exciting step. However, if you don’t know the ins and outs of the rental process, the task can seem overwhelming. Luckily, we at Redfin put together a list of 8 key tips to help first-time renters find their perfect first apartment and make the transition as smooth as possible. Whether you’re renting an apartment in Los Angeles, CA, or in Brooklyn, NY, these tips will be invaluable in your journey to securing the ideal rental space.
1. Your budget needs to cover more than just rent
If you’re a first-time apartment renter, knowing how to budget for your first apartment is crucial. Your monthly rent will, of course, be the most considerable expense you need to account for, but there are other one-time and ongoing fees that you should be able to pay. Let’s take a look at these costs more closely.
Initial, one-time costs
Before moving into your new apartment, you should save enough money to pay for the following upfront costs:
Recurring costs
Once you’ve moved into your first apartment, there are several ongoing expenses you’ll need to cover every month:
Rent
Utilities, such as electricity, garbage, water, sewage, etc.
Internet and phone
Parking
Laundry
As a first-time apartment renter, this might be the first time you’re responsible for these types of expenses. The last thing you want to do is misjudge what you can afford because you forgot to factor in these essential components of your cost of living.
2. Make a list of needs, then prioritize them
Start with your dream apartment – what is your ultimate living situation? While you may not end up with everything on your list, it’s essential to understand what you value in your home. Some common needs for first-time apartment renters are:
Functional kitchen
Balcony, patio, or other private outdoor space
Closet and storage space
Proximity to work, nightlife, dog parks, or other amenities
Natural light and direction of exposure
Air conditioning
Building amenities, such as a gym, rooftop, or business center
Once you have your list, prioritize the items from most to least important. This will help you narrow down your choices and choose between similar properties.
3. Ask a lot of questions during apartment tours
There are some things you just need to know when you’re shopping for apartments. You may direct these questions to your prospective landlord, or you might have to do some research on your own. Here is a list of must-ask questions, but you may choose to add others depending on your needs.
How much is the rent?
Are utilities included? If not, how much do they usually cost?
How much is the security deposit?
How do I pay rent and utilities?
Is there a parking fee?
Is the apartment pet-friendly, and if so, what are the associated fees?
Are any deposits or fees refunded at the end of the lease?
Do I need proof of renters insurance?
What’s the application process, and is there a fee?
How long is the lease term?
How often does rent increase and by how much?
What alterations can I make to my apartment?
How is apartment maintenance dealt with?
Is there a property manager?
Am I responsible for any maintenance?
What amenities are available nearby?
Are there any particular policies I should know about?
These questions are just the beginning. You likely have special needs or preferences that should inspire additional questions. Keep a list of these questions with you when touring, along with a way of recording the answers.
4. Know the rental application requirements
Each apartment will have a different rental process. Generally, your process will include some or all of the following:
Fill out an apartment application
Show proof of income
Complete a credit check
Complete a background check
Provide rental history with the landlord’s contact information or a personal reference
Add a co-signer if you have a low credit score or no credit history
Include an optional cover letter
To show proof of income, you’ll likely need to provide your most recent pay stubs. You can also use an offer letter or letter from your employer if you’re moving for work. Many landlords or property management companies want to see that you have a reliable monthly income appropriate for the rent payment. While it depends on the apartment, there is often an income requirement that the renter needs to make 2 to 3 times the monthly rent amount.
5. Clarify the parking situation
Some rentals come with a designated parking area or parking spot(s). If you plan to live with a roommate and you both have cars, are there enough parking spaces to easily accommodate both of you? When there are not enough parking spaces or tandem parking, roommates will often switch off week to week or find another acceptable compromise. If the apartment complex does have parking spaces, be sure to ask if this comes at an additional cost. Parking fees are becoming increasingly common at rental properties.
On the other hand, many apartments don’t come with parking, especially in bigger cities like New York City or San Francisco. In this case, pay close attention to the street parking. The street parking signs will tell you which days or times of day parking is limited or prohibited (usually for street-sweeping or snow plowing). But you should also note how many parking spaces are free on your street— is there plenty of room or are cars packed bumper to bumper? Streets with cars parked close together usually mean that parking is difficult to find.
6. Know the best time of year to rent an apartment
You can’t always control when you need to move, but if you do have flexibility, choosing the right time of year to rent an apartment could have a large impact. If your main concern is price, you’ll want to look for an apartment during the winter months. Typically, most people move in the summer months (college students moving away from home, etc.), so demand and prices are typically highest during this time and lowest in the winter. Keep in mind that while rent prices may be lower, there might not be a large selection of apartment complexes with availability.
On the other hand, if your ideal apartment is your top priority, then moving during the summer may be a better option. Most renters sign 12-month leases in the summer. Therefore, most leases usually also end around that time. This means the highest number of new apartments are coming on the market, so you’ll have plenty of options to choose from. The main downside here is that rent prices will typically be higher, and you’ll need to act fast before the best apartments are off the market.
7. Thoroughly read and understand the lease agreement
As a first-time apartment renter, reviewing your lease agreement is one of the most important steps to getting your apartment. Though the lease may contain complex language, it will outline the most important agreements you’re making by signing it. Here are a few things you should make a note of:
The length of your lease
The pet policy and any special terms (like additional fees)
Deposit requirements and how your deposit is returned
Sub-letting rules
Utility responsibilities
Maintenance procedures
Liens or claims to your property if you don’t pay rent
When in doubt, having your lease reviewed by a landlord-tenant attorney is a great idea. The attorney will be able to catch any illegal provisions, explain how provisions work, point out unfavorable provisions and their consequences, and suggest changes that provide you with a more favorable lease.
8. Get renters insurance
In many cases, carrying renters insurance may be required by your landlord, especially if you’re a first-time apartment renter. Even if it isn’t, it’s still a good idea to have it – regardless of if you’re a long-time tenant or a first-time apartment renter. A renters insurance policy protects you in three significant ways:
Personal property protection: If someone steals, damages, or destroys your personal belongings, you will receive a payout (minus the deductible).
Personal liability: If someone gets hurt in your home, renters insurance will pay for medical bills and lost wages, depending on the terms of your policy. You may also be covered if you end up in a lawsuit.
Loss of use: If your apartment becomes uninhabitable, loss of use coverage pays for your expenses, up to coverage limits, while you live outside your home.
Always be sure to review your policy carefully. It’s a good idea to create an inventory of your personal belongings so that you both have a record of what you own and ensure your coverage limits are high enough to protect you in the event of a total loss. If you are unsure about any part of your insurance policy, speak with your agent.
A final note on renting your first apartment
Searching and finding a perfect apartment rental requires some diligence, patience, and preparation. By following these tips, you can avoid possible pitfalls and make your apartment hunting process as seamless as possible, especially if you’re a first-time apartment renter.