Rates for a 30-year, fixed-rate mortgage are the highest in over 20 years and may stay elevated for some time.
As borrowers reel from the sticker shock of conventional mortgages, lenders could see a surge of demand for alternative lending products, such as adjustable-rate mortgages (ARMs), for the first time since the financial crisis.
Most potential borrowers should familiarize themselves with how these products work. Without the proper guidance, they could be enticed by attractive introductory rates only to choose the wrong product for their personal or financial situation in the long term.
One way lenders can create value is to upgrade the shopping experience so borrowers can easily understand, compare and contrast the available products. Here are three tips that can help.
1. Ask the right questions upfront
Most lenders ask borrowers a few initial questions to understand their needs better. But many tend to focus on the basics, like whether a borrower is a first-time homebuyer.
With more products on the table, lenders will need more granular data to steer borrowers toward the right one. In many cases, that product may still be a fixed-rate mortgage. But for some borrowers, a less traditional loan type could make the most financial sense.
What is the best way to help borrowers choose? Start by asking enough questions early on to create a holistic borrower profile. We recommend enhancing your POS flow with an initial questionnaire. Ask these questions:
How long do they plan to stay in their home?
How comfortable are they with uncertainty?
How comfortable are they potentially making higher monthly payments after three, five or seven years?
Of course, the more questions you ask upfront, the more overwhelming the shopping process can feel to borrowers. To ease folks in, we suggest these action items:
Break down your questionnaire into manageable chunks.
Add a progress bar that displays what percent of the questionnaire remains.
Add a “Save and Continue Later” button that gives borrowers more flexibility (and allows you to keep folks engaged).
Add context about why you’re asking for specific information at every stage. Tooltips can be a powerful way to do so; they give borrowers the flexibility to toggle explanations. Tooltips are helpful when it comes to educating customers on your products, which we’ll dive into into next.
2. Educate borrowers early and often
Exotic lending products went mainstream in the early 2000s, leading, in part, to the 2008 financial crisis and the subsequent regulatory overhaul.
It’s worth emphasizing just how little borrowers knew about these products. In the run-up to 2008, many lenders emphasized low introductory mortgage rates and weren’t required to disclose the final terms until closing day. Without enough timely information to ask questions and compare options, borrowers had loans they couldn’t afford.
Today’s regulations require more precise disclosures earlier in the process to help people make more informed financial decisions. But they only apply after a borrower has submitted a loan application, which leaves room for ambiguity when shopping.
When lenders educate up front, they can add value when borrowers need it most. Here’s what we recommend:
Tailor your educational content to the borrower’s profile. Your initial questionnaire can help. For instance, if a borrower says they plan to relocate to Chicago in a few years, they might be a better candidate for a five-year ARM than someone who intends to stay in Charlotte indefinitely. At the comparison stage, you can prioritize education about that product and deprioritize products that might be a poor fit.
Help borrowers understand how rates may change over time. For instance, don’t just display a 3% teaser rate for an ARM. Instead, explain whether it adjusts annually or semiannually, along with the maximum annual adjustment factor and lifetime cap, plus what factors will affect the adjustable rate.
Offer information about refinancing. Many borrowers are familiar with the concept but may need to learn how it works. Spelling out the specifics may make some borrowers feel more comfortable taking on a fixed-rate loan at a 7% or higher rate.
Create an intuitive shopping experience. Avoid the dreaded info dump, where lending products display on an endless scroll with intimidating blocks of text. Instead, let borrowers compare a handful of products side by side. And present only the most important details first, with drop downs or tooltips that offer more information.
Even in a digital-first shopping landscape, loan officers are still a valuable resource for borrowers. Alongside on-screen sidebars and tooltips, ensure that borrowers can connect with a human expert for more hands-on guidance.
The goal is to help borrowers understand the risks and rewards of every product available and feel more confident in their decisions.
3. Invest in the right technology
The key to a top-notch shopping experience is a digital platform that allows for everything we’ve discussed so far — all while fitting seamlessly with the rest of your origination software. Creating that platform, though, is often easier said than done.
For instance, if you choose to build your platform, you’ll have plenty of freedom in its design. But you’ll have to integrate it with your point of sale (POS) on the back end. That could make for a longer and more complex project that eats up more of your organization’s resources.
On the other hand, it might be worth talking with your POS vendor about customizing the shopping experience to fit your goals. This route could help you save on development time.
However, most vendors don’t prioritize software features that seem like “nice to haves.” So you’ll have less control over the features that do get added, not to mention the development timeline. And keep in mind that if your vendor adds new capabilities, any lender — including your competitors — will be able to use them.
There’s no single best path here, but consider partnering with an experienced digital specialist to help you weigh the options available. This way, you can make the right decision for your business and your borrowers.
As “exotic” lending products become more attractive, borrowers will value lenders that demystify the shopping process to connect them with the right product for their needs.
But the truth is that helpful lenders win in any market conditions. By upgrading your shopping experience now, you can set yourself — and your borrowers — up for long-term success, no matter how the wind blows.
Steve Wolfe is an SVP of Banking and Fintech and Lloyd Booth is an Enterprise Solutions Executive at CI&T, a global digital specialist.
Snapshot: TheSecured Chime Credit Builder Visa® Credit Card1 doesn’t have interest4 or an annual fee, which makes it a great credit-building2 option. You’ll have to open a Chime checking account and receive a qualifying direct deposit in order to apply.
Pros
Cons
No annual fee.
You can’t apply without a Chime checking account.
No interest4
You have to secure your credit limit with a deposit.
Chime reports to all three credit bureaus.
Chime doesn’t report credit utilization.
You can use your deposit to pay down your charges at the end of the month and move more money from your checking account to the secured account to secure future credit
Secured Chime Credit Builder Visa® Credit Card
Qualifying direct deposit of $200 or more. Chime Checking Account required.
No annual fee. No minimum security deposit*. No credit check to apply
*Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.
Build credit history with your own money on everyday purchases and on-time payments**
**On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Results may vary.
View and track your FICO® Score¹ right in the Chime app. FICO® Scores are used by 90% of top lenders
¹Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn More
***$2.50 Out-of-network ATM withdrawal fees may apply.
Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Credit Builder Visa® Credit Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.
Table of Contents
Full Review of Secured Chime Credit Builder Visa® Credit Card
What You’ll Like About This Card
The Drawbacks
Is the Secured Chime Credit Builder Visa® Credit Card Worth It?
Full Review of Secured Chime Credit Builder Visa Credit Card
The Secured Chime Credit Builder Visa® Credit Card is unique among secured credit cards. Most secured credit cards require an initial qualifying deposit that acts as collateral and determines your credit limit. The Secured Chime Credit Builder Visa® Credit Card works a little differently. By transferring funds from your Chime checking account to your secured account, you determine your own credit limit.
This means that you don’t have to worry about accruing credit card debt faster than you can pay it back. You’re essentially “borrowing” from the deposit that you initially submitted to set up the account, except that it appears on your credit reports as a credit account. This means that all on-time payments you make on this card will show up as positive items on your reports, helping you build up good credit.
Also, a credit check isn’t necessary to apply – which makes it a good option if you have a low or non-existent credit score.
To apply for the Secured Chime Credit Builder Visa® Credit Card, you will need to open a Chime checking account and receive a qualifying direct deposit of at least $200. So although the Secured Chime Credit Builder Visa® Credit Card has no security deposit minimum3, with the requirement for the Chime checking account, it’s essentially a $200 minimum requirement to get the secured card.
At the end of the day though, a $200 minimum deposit is right in line with other secured cards. And the lack of interest rate4, annual fee, and credit limit flexibility available with this card make it a great choice if you’re looking to build your credit.
What You’ll Like About This Card
No Minimum Security Deposit3 and an Adjustable Credit Limit
The money that you use as a security deposit for your Secured Chime Credit Builder Visa® Credit Card is transferred from your Chime Checking Account to your Credit Builder secured account. So even though you need to have a qualifying direct deposit of at least $200 in your Chime checking account in the last year to get the card, you don’t have to transfer the full $200 to your Credit Builder secured account – you can transfer however little you want.
One of the most unique features of the Secured Chime Credit Builder Visa® Credit Card is that there is no minimum security deposit3. You can also change your credit limit later if you decide to add more money into the Credit Builder secured account, which provides a lot of flexibility. You can start working to build your credit history right away. (There is a maximum deposit limit of $10,000 though).
No Interest Rates4 or Annual Fees
With Chime, you essentially get a checking account as well as a secured, credit building card. The benefit is that you get these things for free – no interest rates, no annual fees.
User-Friendly App
You can easily manage your Secured Chime Credit Builder Visa® Credit Card and your Chime checking account from the Chime app, including moving money from your spending account to your Credit Builder secured account.
Great for Building Credit2
There are two aspects of this card that make it a great option for building credit:
Because you’re spending your own money and Chime doesn’t have any interest rates, you don’t have to worry about racking up credit card debt. You can spend to your credit limit without any worries (although you will need to continue to make on-time payments).
Chime doesn’t report your credit utilization ratio to the credit bureaus (the ratio of available credit to used credit). Typically, with credit it’s a good practice to keep your credit utilization ratio below 30%. But with the Secured Chime Credit Builder Visa® Credit Card, you don’t have to worry about that.
The Drawbacks
You Need a Chime Checking Account
While you don’t need great credit to get this card, you do need a Chime checking account. You also have to continue to transfer money over to your secured account to secure future credit if you use your deposit to pay down your charges each month.
No Upgrade Path
Many secured credit cards offer an upgrade path after a period of “good behavior” where you’ve shown that you can make payments on-time and can be trusted with a line of credit. Typically, this is a great option if you’ve been struggling with a low credit score for a long time and are looking to work your way up to a larger line of credit.
Is the Secured Chime Credit Builder Visa® Credit Card Worth It?
Our opinion? Absolutely. Why? No interest4, no annual fees and total flexibility.
If you’ve never had a credit card before (maybe you’re a young adult or a college student) and you’re looking to build credit and avoid high interest rates while learning about how to manage a credit card, this is a great option. It can also be a tool to help those who’ve had significant negative credit items in their past, like bankruptcies, rebuild their credit.
It all depends on what you’re looking for. If you’re looking to rebuild and protect your credit, this card is a great option. If you have a low credit score and are looking for an access point to a larger line of credit, you may want to consider other secured credit cards.
What are the credit limits for Secured Chime Credit Builder Visa® Credit Card?
The Chime credit card doesn’t come with “traditional” credit limits. You can spend as much as you secure with a deposit of funds from your Chime checking account to the secured account. You need to receive a qualifying direct deposit of at least $200 in your Chime checking account in the last year before you can qualify and apply for a Secured Chime Credit Builder Visa® Credit Card.
How soon can I increase my credit limit after being approved for a Secured Chime Credit Builder Visa® Credit Card?
You can increase your own credit limit at any time, depending on how much money you transfer from your Chime checking account to your Chime Builder secured account. The maximum limit you can have on the card is $10,000. There is no upgrade path to a typical “unsecured” line of credit though.
Is a Secured Chime Credit Builder Visa Credit Card good for building credit?
Yes! The Secured Chime Credit Builder Visa Credit Card offers two main benefits for building credit. First, Chime does report your positive payment history to all three of the credit bureaus. Second, it doesn’t report credit utilization. That means you can use your credit amount as you want without worrying about what percentage of the credit limit you’ve used.
To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.
On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.
Out of network ATM withdrawal fees may apply. See here for details.
Inside: Are you thinking about moving out? This guide will help you identify the costs of moving, calculate how much you need to save, and advice on expenses. You need to learn and plan for the practicalities of living on your own.
Taking the leap to move out and start living independently is a significant milestone.
However, it’s important to ensure you’re financially prepared for this exciting new chapter in your life.
One vital step you need to take is to start saving money, essential for covering your future expenses, emergency fund, and even fun activities. Through careful budgeting, consistent saving, and efficient spending, you can make the transition smoother and stress-free.
Around here at Money Bliss, we focus on the need to save money before making a purchase or taking the next step, so you will be better equipped and stay debt free.
This way, you can fully enjoy the freedom and responsibilities that come with having your own place.
This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.
Why is Moving Out on Your Own Important?
There comes a time in one’s life when one feels the need to spread their wings and live independently. We all wanted to move out at 18 – I remember!
This crucial step, however, requires substantial planning. Yet, most just jump right to moving out.
The key thing you must do? Save. But, why so important?
Here’s why: independence means bearing your own expenses. Rent, groceries, utilities, they’re all on you.
Plus, unforeseen emergencies are less shocking when you have a well-stocked safety net.
What’s a good amount of money to have before moving out?
The amount you need to move out depends on many factors.
However, on average, you should aim to have between $6,000 and $12,000 stashed away before you pack your bags.
This sum would cover initial moving costs, deposits, furniture, essentials, and a few months of rent.
Remember, it’s not just about surviving your first month. You’ll need enough to keep you comfortable while you’re settling into your new life.
How much should I save before moving out?
Remember, there isn’t a “magic number.”
Yet, many wonder is $5000 enough to move out?
Your savings should cater to your housing costs, which ideally should not exceed 1/3 of your monthly income. Besides, factor in regional cost of living, moving expenses, and an emergency fund.
What determines the amount needed?
The amount to save before moving out varies greatly. It hinges on factors like your targeted living area because there is a wide fluctuation of HCOL vs LCOL areas, your projected expenses, and your income level. The rent in one city might be higher than in another.
As well as your personal lifestyle choices and spending habits will greatly affect monthly expenses.
Evaluation: Your Financial Status
Your financial status, including current income and expenditures, plays a crucial role in determining the proportion of your earnings you should save before moving out.
If you have a higher income with lower outlays, you can save more, whereas having roommates can significantly cut down your living expenses, enabling better savings.
A careful review of these factors allows you to create a realistic saving plan tailored to your unique financial circumstances.
You need to make sure you are on track to how much money should you have saved by 25.
Assessing your current income
Take a deep look at your income. How much do you earn each month? How regular is this income? These are vital questions.
Your net income (what you earn after taxes) sets the tone for what you can afford. This is the amount listed on your paycheck.
Learn more about gross pay vs net pay.
Understanding your debt load
Debt can be a significant hindrance when contemplating moving out. How much do you owe monthly?
You need to consider your debt-to-income ratio. This is what mortgage lenders do to figure out if I make 70000 a year, how much house can I afford.
If your debt is taking up more than 30% of your income, you need to be careful on how much you spend on rent and other mandatory expenses.
Learn how to pay off your debt faster using Undebt.it.
Know Your Expenses: Breaking Down the Costs
I’ll be honest. This is what most people overlook when they move out or even purchase a new home.
For instance, the couch I loved couldn’t fit into our new house. Sigh.
Now, is the time to learn how to save 5000 in 6 months.
Identifying the cost of moving
Moving costs can bite! They depend on relocation distance, packing supplies, and the complexity of the move.
Movers can range from hundreds to thousands. According to Moving.com, the average costs for a studio or one bedroom range from $501 – $985. 1
Thankfully, you are young and you can pay friends for help with pizza. But, you still need to account for a moving truck if needed.
Hidden costs you need to consider
When moving out, some costs aren’t glaring. These include fees for installing new services, delivery fees for new furniture, or penalties if foregoing a current lease. Yes, these hidden costs can pile up!
Even, the costs to put blinds up at your new place! A room darkening shade can easily set you back $50; I know, I like my sleep.
So, be sure to consider them when saving for your move.
Setting Up a Personal Budget
A budget plays a crucial role in being financially stable. Period.
Call it adulting if you want to, but you cannot spend more money than you make. That is a recipe for a disaster and way too much debt.
By adhering to a well-planned budget, one can prevent financial stress to ensure financial security and start your journey to financial independence.
How to start a personal budget
Starting a personal budget is simple.
List your income and expenditures. Include rent, groceries, utilities, subscriptions, and yes, even luxuries.
The goal is to spend less than you earn.
Then, you can save and plan for your future.
That means you may not be able to afford everything you want. And using credit cards to fill the gap isn’t smart.
The 50/30/20 budget rule explained
For many, the 50/30/20 rule serves as a rough guide for managing your finances.
It suggests allocating 50% of your income to necessities, 30% to wants, and 20% to savings.
This is a beginner-friendly method to manage spending without feeling overwhelmed.
Starting to use a budget app is extremely helpful.
YNAB
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Pros:
Comprehensive approach to budgeting, helping you plan monthly budgets based on your income.
Offers expert advice, making it suitable for those who require an in-depth, forward-thinking budgeting strategy.
Superior synchronization skills make it the winner in this area.
YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
Option to manually add and upload transactions from accounts each month.
YNAB prioritizes user privacy.
Avoid These Budget Downfall
The most common expenses that are forgotten are irregular expenses such as vacations, weddings, or holiday spending. These variable expenses do not occur on a consistent schedule.
To manage these, note these big-ticket events on a calendar, estimate their cost, divide by 12, and contribute that amount to a high-yield savings account each month, offering you a guilt-free way to cover these costs without stressing over money.
Make sure you remember all of your expenses by checking out this full list of personal budget categories.
Creating and Managing an Emergency Fund
Why an emergency fund? It provides you with a safety cushion.
This fund prevents unexpected expenses from ruining your plans or sending you spiraling into debt. It acts as your financial parachute when you need it the most.
Around here at Money Bliss, we consider it a staple in financial wisdom.
Ideal size of an emergency fund
As a rule of thumb, your emergency fund should cover at least $1000-2000 in savings. This will provide money to cover a car breakdown or new car tires. Honestly, the goal is never to use your emergency fund.
However, you may look at a bigger rainy day fund that will cover 3-6 months of living expenses. This will provide you with a comfortable safety net against unexpected events like job loss or medical emergencies.
But remember: start small. Even $1,000 can buffer you from financial shocks. Check out these mini savings challenges.
Enough Money for One Year
A year’s worth of savings may sound excessive.
However, it provides unmatched stress relief and financial stability that can be life-changing, especially for young adults.
This tip will change your financial landscape immensely and provide you with more opportunities than you can imagine.
You can handle life’s ups and downs more easily when you have an entire year’s expenses sitting in your bank account.
Raisin
Simply select one of the high-yield savings products offered by their network of federally insured banks and credit unions to begin your savings journey.
You can open a free Raisin account in just a few minutes!
Compare Rates
Better Planning for Potential Bills and Fees
When preparing to live independently, don’t forget to plan for unanticipated costs.
Rental fees and deposits explained
When you rent, you’re likely to encounter a range of fees.
First off, you’ll have to foot a security deposit – typically equal to one and a half month’s rent. This upfront cost acts as insurance for landlords against damages. If you leave the place in top shape, you’ll get your full deposit back!
Additional fees could include application fees or non-refundable move-in fees like background checks. Know what you’re paying for before you sign the lease.
Utilities and recurring expenses
Electricity, gas, water, and internet – these utilities fall on your shoulders when you’re living solo.
These costs can eat a hole in your wallet if unchecked!
To avoid surprises, ask for estimates before signing a lease or find a place that includes utilities.
Other recurring expenses? Consider subscriptions. Gym, Netflix, Spotify – they all add up!
Trim
Perfect for the person who hates to hassle with canceling subscriptions and checking spending.
Trim adds value in such ways as canceling old subscriptions, setting spending alerts, checking how much users spent on ride-sharing apps the previous month, and automatically fighting fees.
Learn More
Go for a Trial Run Before Moving Out
Adopt the practice of “paying rent” beforehand by setting aside a third of your income into a dedicated savings account which can test your financial readiness for the move. See if you can move out and afford it before you actually move.
Remember, being savvy with money while planning to move out involves carefully auditing your spending over the last 3-6 months and developing a budget that accounts for future expenses, savings, and essential purchases.
This may save you headaches in the future.
Smart Moves: Making Rent Like a Boss
You need to understand how you are starting to make financial decisions.
In fact, reading this financial advice for young adults would be helpful.
Understanding rent payments.
Rent payments can be daunting as prices for a single bedroom apartment are $1700/month. 2
Many landlords may tenants to earn at least three times their rent.
Payments are usually due on the first day of the month. Late payments can lead to hefty fees!
Stay organized by setting reminders or setting up auto-pay.
Considering a roommate.
On the fence about getting a roommate? It’s worth considering!
A roommate can drastically cut your living expenses. Half the rent, half the utility costs… that sounds like a sweet deal.
On the flip side, you may have less privacy and there can be disputes.
However, with clear communication and shared responsibilities, it can be a great experience. It’s a great option if your income is tight. Choose wisely!
Opting for second-hand furniture
Furniture expenses can add up quickly, but there’s a savvy solution: opt for second-hand furniture! Yes, it’s cool to be frugal.
In fact, vintage pieces can add character to your home. Perhaps snag a few items from your parent’s home, Buy Nothing Group, or thrift stores. It’s not about being cheap, but about being smart!
You can always upgrade later.
Key Takeaways Before Taking That Leap
Moving out with roommates not only gave me a firsthand experience of independent living but also exposed me to the nuances of financial management. These initial steps helped me understand budgeting and the importance of balancing expenditures with earnings.
Then transitioning into renting my own place, I was armed with the knowledge I gained and was better prepared to face the challenges, creating a smooth transition to living completely on my own.
Checklist before getting your own place
Before making the big move, have you:
Saved enough to cover deposit, rent, moving, and utility hook-up fees?
Started a personal budget, tracking income and expenses?
Drafted a rough spending plan using the 50/30/20 budget rule.
Built an emergency fund?
Discussed potential apartment rental fees and deposits?
Considered recurring expenses and variable expenses?
Weighed the pros and cons of having a roommate.
Looked into second-hand furniture?
Can you comfortably cover living expenses with your income?
Have you accounted for all possible costs? Think of moving costs, utilities, groceries, health insurance, and more.
Have you considered the cost of living in your preferred location?
How stable is your income? Can it sustain your independence long-term?
Check out this first apartment checklist.
Frequently Asked Questions (FAQs)
Before moving out of your parents’ house, aim to save at least $5,000. But, you want to start off financially sound, so aim higher like $10,000. This amount would ideally cover your moving costs, early rent payments, and the setting up of utilities.
Remember, the real magic figure depends on your cost of living and your current income.
Put simply, saving $1,000 a month is excellent!
As an expert, Money Bliss often recommends saving at least 20% of your income each month. If you can stash away $1,000, you’re well above this bar.
Remember, every little helps when working towards financial independence. Check out our 52 week money saving challenge to get started.
Start Saving for How Much Money I Need to Move Out
Taking the leap into independent living can feel daunting. But with careful planning, budgeting, and saving, it’s an exhilarating journey.
The best advice I can give someone who is looking to move out is to plan ahead for the journey in front of you.
Remember, having anything between $6000 and $10,000 saved up is an excellent starting point.
As you navigate your financial freedom, adopt the 50/30/20 rule for managing expenses. Around here we call it the Cents Plan Formula.
Most importantly, stay prepared for life’s unexpected twists with an emergency fund. And don’t be shy to make some smart moves like considering a roommate or opting for second-hand furniture.
The journey towards independence is rewarding and fun – as long as you’re financially prepared. So pop that calculator, get budgeting, and start saving for your own place!
Source
Moving.com. “Moving Cost Calculator for Moving Estimates.” https://www.moving.com/movers/moving-cost-calculator.asp. Accessed October 25, 2023.
Rent Cafe. “Average Rent in the U.S.” https://www.rentcafe.com/average-rent-market-trends/us/. Accessed October 25, 2023.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Wouldn’t it be great if we all had a crystal ball that told us what the interest rate environment would do? We could figure out the best time to get a mortgage or the best time to buy a car. And of course, we would know exactly when to put all of our money into certificates of deposit (CDs) to maximize our yield.Unfortunately, that isn’t the case. Nobody knows what interest rates are going to do in the future — not even the people in charge of setting benchmark interest rates. However, we can use the latest economic projections to consider the most likely scenario and what else could happen instead. So here’s what we know (and don’t know) about what CD yields will do in 2024.Where do CD yields come from?The short explanation is that CD rates are a combination of three main factors:The current interest rate environmentThe bank or financial institution that offers themThe maturity termIn other words, when benchmark interest rates rise, CD rates generally tend to rise along with them. However, the rates paid by CDs can vary dramatically between banks.For example, as I write this, our top 12-month CDs have APYs ranging from 4.25% to 5.65%. The same is true for CDs of other maturity lengths as well. But because the Federal Reserve has raised benchmark interest rates so aggressively in the past couple of years, this range is significantly higher than it was.When it comes to different maturity lengths, it’s a little tricky to explain, but the general idea is that shorter-term CDs tend to track benchmark interest rates rather closely. The current federal funds rate (the most important interest rate the Fed controls) is set to a range of 5.25% to 5.5%, and this is certainly aligned with most of the top 1-year CDs we track.With longer maturities, there are a lot of economic factors at work, but the simple explanation is that CD yields are a combination of the current interest rate environment and expectations for future interest rate movements. In most environments, longer-maturity CDs tend to have higher yields, since banks typically pay a premium if customers agree to leave their money on deposit for a longer time. But as of Oct. 2023, the range of 5-year CD yields on our top CD list is 3% to 4.85%, with the average yield significantly lower than the average 1-year CD.This makes sense. According to the latest projections from the policymakers at the Federal Reserve, the benchmark federal funds rate is expected to fall to 4.6% by the end of 2024 and to 3.4% by the end of 2025.What will CD rates do in 2024?There’s no way to predict with accuracy what CD rates will do next year. Even the Federal Reserve’s own projections can be very wrong. In fact, the Fed’s projections in Sept. 2021 called for a federal funds rate of just 1% at the end of 2023.Having said that, the latest projections call for one further quarter-point rate hike by the end of 2023, which would likely push CD yields slightly higher to start 2024. And if the Fed’s projection of a 4.6% federal funds rate proves to be accurate, we could expect 1-year CD rates to gravitate towards that level, with other maturity terms drifting generally lower as well.However, it’s tough to overemphasize that we don’t know what is going to happen. If inflation proves far more difficult to control than the Fed expects, it’s entirely possible that several more interest rate hikes will be needed and CD yields will be much higher at the end of 2024. On the other hand, there’s the possibility of a recession coming and the need for the Fed to aggressively cut rates if the economy takes a worse downward turn than expected.The bottom line is that CD rates are higher right now than they’ve been in a long time, and the best course of action is to put your money in CDs that make sense for you now — not to leave your cash on the sidelines in anticipation of rates rising even further.However, one smart strategy could be to create a CD ladder, which gives you the best of both worlds. If rates end up rising in 2024, you’ll end up with some money to take advantage. And if rates fall, most of your money will be locked in at today’s rates.
Costco Is Selling a Full Thanksgiving Meal Kit So You Don’t Have to Do a Thing
By: Maurie Backman |
Updated
Oct. 23, 2023 – First published on Oct. 23, 2023
Some people absolutely love hosting Thanksgiving and getting creative in the kitchen. But if you’re someone who dreads Thanksgiving and the hours upon hours of preparation that tend to come with it, then you may be in luck. Costco is selling a Thanksgiving meal kit for $199.99 that’s designed to feed a party of eight. You’ll need to pre-order yours by Nov. 5, but it could be worth it for the time-related savings involved. And you may even find that Costco’s Thanksgiving dinner kit saves you money, too.When you’re looking to outsource your Thanksgiving mealEven if you’re someone who likes to cook, being in charge of Thanksgiving isn’t easy. There’s a lot of pressure to throw together a massive feast, and you may not have the time or desire to spend an entire day preparing food. If you’re not at all looking forward to a day of cooking, let Costco come to your rescue. For $199.99, you’ll get the following:Five pounds of skin-on turkey breastA two-pound tray of stuffingA 1.5-pound trap for mashed potatoes with a side of gravyA 1.6-pound tray of macaroni and cheese A two-pound pack of sweet cornA two-pound pack of green beansCranberry relish12 dinner rollsOne pumpkin pieOne apple pieAll of this food will ship frozen, and you can expect delivery to your home between Nov. 8 and 17. Will Costco’s Thanksgiving meal kit save you money?You probably won’t save money by purchasing Costco’s meal kit compared to buying ingredients for the above dishes at Costco, or even elsewhere. At your local grocery store, turkey might cost about $3.50 per pound. So a five-pound turkey might cost you just $17.50. A Costco pumpkin pie, meanwhile, is generally only $5.99 (though prices can vary). So right there, you’re looking at $23.50 for 20% of your meal. The cost of the other items included in Costco’s Thanksgiving dinner kit can vary based on how you prepare your sides. But macaroni and cheese, for example, can be an extremely inexpensive dish to prepare. A single box of Kraft might cost under $1.50, so even if you need five boxes, you’re looking at $7.50 or less in total. (Of course, if you insist on making yours from scratch with high-end cheese, that’s a different story.)All told, you can probably throw together a Thanksgiving meal for eight for under $200 — but not so much under. So the question you’ll want to ask yourself is how much time you want to save.Also, if you’re so not looking forward to cooking to the point where you think you’ll pay to cater your Thanksgiving dinner, then you’re likely to put more than $200 on your credit card by going that route through a local restaurant or caterer. In that regard, Costco’s offering could save you some money.All told, Costco’s Thanksgiving dinner kit may be worth considering if you’re not excited to cook for the holiday this year. But chances are, this meal kit is going to be a popular item, which means it may sell out soon. If you are interested in ordering it, do so quickly so you don’t miss out.
3 Costco Perks You Aren’t Taking Advantage of — but You Should
By: Brittney Myers |
Updated
Oct. 23, 2023 – First published on Oct. 23, 2023
Just $250 a month at Costco would earn enough back to pay for the upgrade. In other words, if you spend more than $250 a month at Costco, upgrading makes financial sense.If that sounds like a ton of money to you, then definitely stay with your regular membership. But if your family goes through Kirkland Signature toilet paper like they flush it down the toilet, and you’re one of the people who actually finishes that 3-liter bottle of olive oil, then a membership upgrade could be a smart idea.Double up with rewards cardsWhether an Executive membership is right for you or not, there’s another way to earn rewards that everyone should be taking advantage of: rewards credit cards.Unfortunately, you can only use Visa credit cards in a Costco warehouse. If you’re shopping at Costco.com, you can use Visa or Mastercard credit cards. While these restrictions certainly stymie some of my favorite rewards cards, you’re not completely out of luck. There are still some great options from either issuer. Costco even offers its own cobranded Visa card, which can be especially rewarding when it comes to gas purchases. I prefer to use my Chase Freedom Unlimited®, however, for 1.5x points per $1.
I Bought a $278.99 Walmart Mattress. Here’s How It Compares to My Expensive Tempur-Pedic
By: Christy Bieber |
Updated
Oct. 27, 2023 – First published on Oct. 27, 2023
Recently, we bought a mattress that we plan to use temporarily for a few months as most of our furniture is in storage while we complete a remodeling project. We didn’t want to spend a lot of money since this mattress will be relegated to a guest room, if it is used at all, once we get our furniture back in place.We opted to buy a memory foam mattress from Walmart and paid $278.99 for a king size. This was a fraction of the cost of our regular mattress, which is a Tempur-Pedic that cost several thousand dollars.After sleeping on the cheap mattress for a while, here’s how they compare.Both are equally comfortableFirst and most importantly, my husband and I have found that both of the mattresses are equally comfortable to sleep on. Both provide a similar level of firmness and support. And, we don’t feel the other person moving around in either bed. In fact, if forced to pick which of the two we like better, we would not be able to based on the comfort factor alone.Both have the same warrantyOur Tempur-Pedic mattress came with a 10-year warranty. We didn’t expect our new bed to offer this same guarantee since it cost so much less. But, we were wrong. The new, inexpensive mattress also has a 10-year warranty and a 30-day refund policy to make sure we’re comfortable with it.Both have multiple layersOur Tempur-Pedic came with multiple different layers of material including a comfort layer on the top, a support layer in the middle, and a base layer. Each of these layers is supposed to serve a purpose, like distributing body weight evenly along the mattress or dispersing heat.Our inexpensive mattress actually comes with more layers, referred to as the “five floors of comfort.” There’s a top breathable fabric, a second layer to avoid heat, two separate support layers, and a non-slip layer at the bottom.I’m not exactly sure if all of these layers are serving their exact purpose, but I have noticed that neither bed sleeps warm and both feel like they provide adequate support. The non-slip layer on the cheaper mattress also seems to help it stay in place on my box springs.The Tempur-Pedic feels heavier and more substantialThe Tempur-Pedic stands out by feeling more substantial. The cheaper mattress came vacuum packed in a tiny little package and it took a while to fluff up. And it just doesn’t have the same heft as the Tempur-Pedic mattress.However, while this is a point in the Tempur-Pedic’s favor because the substance has me feeling like it may last longer, it also means the Tempur-Pedic is more of a pain to move around.Ultimately, I feel like the cheaper mattress was a better buy. It left more money in my bank account than the Tempur-Pedic, and it provides a similar level of comfort as well as the same warranty.The experience has shown that buying a more expensive bed isn’t always the best option, so before breaking out your credit cards, be sure to explore and fully compare different mattresses to find one that feels the best at a fair price. Visit some stores and try them out. Don’t immediately dismiss one just due to a lower price point, as you might miss out on a comfortable mattress at a great discount. And don’t forget to consider the return policy and warranty so you end up happy with your purchase in the long run.
Mark Cuban Thinks You Should Buy a 2-Year Supply of Toothpaste. Here’s Why
By: Christy Bieber |
Updated
Oct. 27, 2023 – First published on Oct. 27, 2023
Mark Cuban is the owner of the Dallas Mavericks and is well-known for his business skills and investing prowess. Over the years, he has provided some tips to others who want to get rich, and one of them was a pretty surprising one.His advice: Buy a two-year supply of toothpaste. Here’s why the billionaire suggested making this unconventional move.Cuban has a simple reason for buying so much toothpasteMark Cuban doesn’t just want your teeth to be really clean. He had a good reason for suggesting purchasing such a large stockpile. Specifically, he advised doing this if you use the same brand of toothpaste regularly and can find it at a deep discount.”If we, hopefully we’re all using toothpaste every day, right, couple times a day, and we’re gonna go through toothpaste every month, whatever it may be, you’re better off buying two years’ worth of toothpaste when it’s on 50% discount,” he said. “That’s an immediate return on your money.”Cuban’s point was that the prices of items go up over time, so you’re better off purchasing them at the lowest possible price as this puts guaranteed money in your pocket. You also immediately benefit from the savings since you get to spend less now and in the coming years, keeping more cash in your bank account.Toothpaste isn’t the only item Cuban believes you should stock up on. “Any of your reusables, consumables that you have to have, when they’re on a huge sale on Amazon, buy them, because chances are, their prices are gonna go up, but that’s a real savings that you get to put in your pocket.”Cuban said that while it can feel difficult to make a profit by investing in a brokerage account, this is a simple step that anyone can take that will have an immediate positive impact on their personal finances.Should you follow Cuban’s advice?Listening to Cuban just makes good sense — especially as the recent few years of rising prices and surging inflation have demonstrated that routine products and services that we use every day can and do see big price increases.If you’re able to get many of your consumer products at discounted prices, this can make a noticeable difference in your personal finances. It’s not difficult to do either. Most stores put items on sale on a predictable schedule, such as marking down a product once every six or eight weeks. If you can stock up when there’s a good price — and especially if there’s a deep discount, then you’ll be able to slash what you spend on groceries and personal care.Use this extra money wisely to do things like repay debt or invest for your future, and you will end up being able to build wealth without changing your lifestyle at all. But, no matter what you do with the money, you probably have better stuff to spend it on than paying full price for toothpaste.
Looking to turn your home into a cozy and stylish haven? We’ve got a delightful surprise for you! Prepare to be amazed as we unveil a curated collection of 30 home decor treasures that will elevate your space. From incredibly lifelike artificial plants that bring nature indoors with zero maintenance, to luxurious blankets that add a touch of elegance to your living room, and oh-so-comfortable chairs that beckon you to relax after a long day—this incredible assortment is like investing in a beautiful and comfortable future. With these unique finds from Amazon, you can create an inviting atmosphere that will make your guests wonder how you managed to find such amazing pieces.
Review: “This set was pretty quick to throw together with an extra pair of hands. Everything came securely wrapped and well protected. Perfect budget friendly set!” – jrenken88
amazon.com , jrenken88 Report
Review: “I did not expect the sturdiness that this stand has. It is absolutely beautiful once it’s finished. The wood is thick, there’s nothing flimsy on this thing. The actual fireplace has kept my living room toasty. And this weekend our heat just isn’t keeping up, so I’m so glad it came when it did. We’ve kept the heat on for the whole day and all night before heading to bed and it seems like this thing is quality. The shelves are so deep, I can fit multiple game units and our surround sound w out it looking cluttered. And of course my 4 year old enjoys the different color light show lol. Honestly it upgraded our living room. The tv shown is a 65”, and there’s a lot more space around it and in front of it. Our old stand was half the size holding this tv so really this is an amazing upgrade for us. I’m really in love w the quality and how modern this is. Probably the best thing I’ve bought on amazon. Now my only con. Took me forever to put it together… I had a 4 year old distracting me tho. But there’s ALOT of boxes within boxes and ALOT of styrofoam. I mean a lot lol. So be ready to have a major clean up. Otherwise I would totally recommend this stand. Absolutely gorgeous” – Jujubean
amazon.com , Jujubean Report
Review: “This is a beautiful bust. I have been buying a lot of things to decorate my Latin classroom with and, normally, when the items are this intricate, they are also small, but this busy is both intricately detailed and large. It was actually quite a bit bigger than I expected, but fits beautifully with the rest of my classroom decor. This is, perhaps, the center piece of my classroom.” – Tad
amazon.com , Tad Report
Review: “Ordered it after looking at many more expensive options in the furniture stores, ready to return it if we felt it was lower quality and cheap looking. Arrived today and after a simple assembly we feel it is perfect…very elegant and very sturdy. Replaced the supplied bulb with a smart led and we can now control brightness and color with voice commands. A+” – Flamethrower
amazon.com , Flamethrower Report
Review: “These shelves were perfect for my accent wall in my dining room. They are super easy to hang. I was able to hit the studs for both hooks because they placed them in the right location on the shelf. They are truly authentic with nail holes and even a nail. So cool. 7” is plenty of depth to put accessories on. Worth the money.” – K.Ryan
amazon.com , K.Ryan Report
Review: “This lamp was a great complementary piece for our boho style living room. The natural shade added the perfect touch. It fit well next to our sofa . Great looking lamp for an affordable price . Totally on trend . Good vibe . ” – Amazon Customer
amazon.com , Amazon Customer Report
Review: “This was a great buy. Just what I had been looking for, it’s very sturdy with a slight bit of weight but, not heavy by no means to handle. I’m glad I got it. You won’t be disappointed. The seller definitely did an awesome job on this one and it was packaged very very well and delivered with care. Now to decide where to put put because I want to hang it up on my wall.” – BB
amazon.com , BB Report
Review: “I have bought so many things on Amazon and I do get let down often. This tree exceeded anything I thought I would be getting. The details are perfection. The material is perfection. It came in perfect condition. I simply took it out of the box and placed it in the planter I bought for it then fluffed out the leaves. It was so easy to do by myself. The leaves look so green and real like trees I’m used to in Florida but they don’t grow where I live now. Plus it smelled good. Not like a perfume or anything just clean. – Ciscojrmpswife
amazon.com , Ciscojrmpswife Report
Review: “I am shocked by the value and quality! The Amethyst has a rich purple color and is more than a value, more than! I highly reccomend it!” – Odalisque
amazon.com/ , Odalisque Report
Review: “This rug is perfect for my closet. Stylish, cozy and soft on bare feet yet thin enough for my chair to roll over. Does not slide or shed (as stated in other reviews) and vacuums up well. Have not washed it yet but definitely a great buy!” – Tina
amazon.com , Tina Report
Review: “I wanted something to accompany the 50th Wedding Anniversary Card that I got for my wife. There would be plenty of real flowers, a family celebration and many gifts. I wanted something simple yet permanent that would stand out in our already filled China Cabinet. This is perfect. It doesn’t take much space. It is very well done, solid yet delicate. Attractive well made box for storage if need be. It will soon be added to our life-long precious collectibles and will hold its own.” – WallyH
amazon.com , WallyH Report
See Also on Bored Panda
Review: “I ordered this rug in the Grey/Brown color option. It is perfect for tying my brown wood furniture and dark grey floors together. It is also a great color/pattern combo for hiding any little spills my toddler or dog might have. The thickness is enough that it is comfortable and padded underfoot, but not thick enough for a lot of crumbs, dirt, hair, etc. to get stuck in the fibers. It definitely can be vacuumed easily. Overall I am very happy with this purchase and buy this rug again for other rooms! The picture shows the rug right out of the bag, so the side is still a little curled. After an hour or so it is already flattening out.” – Scott Hammock
amazon.com , Scott Hammock Report
Review: “Loved that they came in a set, so you know they’re going to be identical. Wonderful size. Tall. Perfect. Note. In order to get the leaves to look like the ad picture: when installing, the leaves are in various sizes and you can put them wherever you’d like. Smaller on the bottom, larger on top, works best. Alternating colors. Initially, they stick straight up. To get the curved look, roll the “leaves” by hand. Do not try to bend the wire between the leaf and the stem. They really do look quite real” – Good
amazon.com , Good Report
Review: “I love this screen. We placed it on our deck for a privacy screen and love it. It is a very versatile screen and I have used it in several places in the house as well. It looks great on the deck as you can see. I ordered 30″ zip ties when I ordered the screen and have used the zip ties to gently secure the screen to the deck posts for windy days. I want to order another!” – Buckleysangel
amazon.com , Buckleysangel Report
Review: “I had a great TV stand that I really liked because it was open. I decided to order this one because the top was going to raise the height of the tv. At the last minute I decided NOT to add the back & the doors so that it would be exactly like the previous one, so I wanted a buyer to know you can leave off the back & doors if you choose & it looks great. When I get bored I change things often, so if I decide to add the back & doors it will be like a different piece of furniture. I am so pleased with this purchase.” – Robinette Fields
amazon.com , Robinette Fields Report
Review: “I was very apprehensive because it was only a two ounce candle pretty small but wow it’s mighty. I understand the price now. I’m going to say buying the 8oz version is going to be totally worth it because this candle lasts a while and you don’t need to leave it on for long and the smell will Permeate the entire area and it’s very strong. I would also say this is a great gift for anyone and especially for a masculine man.” – That One Girl
amazon.com , That One Girl Report
Review: “The quality of these shelves is awesome. And, they are so easy to put together! I chose to get the adjustable option so I could customize my shelves. I chose to leave one shelf out to have a bit more room. And, the price point is right in line with the quality in my opinion.” – Heather Lowery
amazon.com , Heather Lowery Report
Review: “Very realistic. Soft. Very lux looking. True to color. Great size for the sofa. I have yet to clean this but my hunch would be to avoid tumble drying. I purchased primarily for the look. Not to actually use as a blanket. So far no shedding. I’m in love with this throw. Excellent accessory to mark the cold season. BUY IT! – Markita
amazon.com , Markita Report
Review: “These three coffee tables are so beautiful and came in much larger than I expected. It really fits in a large living room. The install was straightforward but due to the arch we had to spend sometime lining the holes up. I love these coffee tables in the living room!” – Janice
amazon.com , Janice Report
See Also on Bored Panda
Review: “Got two of these for dorm room and was pleasantly surprised by the weightiness of the mirrors. It is a solid, sturdy piece and I feel confident it will still be standing at the end of this school year. They look great in the room!!” – Kat
amazon.com , Kat Report
Review: “I bought the 30” and 40” bottle to fill in space next to my entertainment center in the living room. I was pleasantly surprised when they arrived. They were very well packed and when I unpacked them , they were very sturdy and heavy. I loved the look of the recycled glass. – Terry A Stiles
Here’s everything you’ll need to know about how to rent a house, including how it’s different from apartment renting.
Maybe you have a growing family or elderly parents moving in. Perhaps you need a dedicated office or you’re craving outdoor space and more privacy than most apartment complexes offer.
If you can’t afford to buy your own home, you can upgrade your living arrangements by renting one. Still wondering how to accomplish this milestone, though? We’ll walk you through it step by step.
How renting a home is different than renting an apartment
While the renting process may be similar, there are large differences that any prospective tenants should be aware of, so their renting process runs smoothly. Navigating the local market is tricky enough, turn to this guide to delve into the must-knows for your home renting experience.
1. Your rent price will look drastically different
Before beginning your hunt for the perfect rental home, you’ll need to figure out what you can afford. Factoring in your income and recurring expenses including any loan payments, check out our helpful tool that will calculate average rents and the cost of living in major cities. You’ll notice upfront, that renting a house may be pricier, due to numerous reasons.
In addition to the monthly rent you’ll be forking over, there are other costs to consider that you may not have had to deal with as an apartment dweller. For example, things like heat, hot water, electricity, internet and satellite TV that are sometimes covered with an apartment rental will likely come straight out of your pocket when you rent a house.
Also, you might be responsible for lawn care, snow removal and other general maintenance, so if you don’t want to take care of those yourself, plan to budget for hiring out those tasks.
You’ll also need to know your credit score to see if you have to get a co-signer or guarantor — someone with good credit who would be liable for your rent if you can’t pay it. This will be added to your lease agreement should this be the case.
2. Your wants and needs will be more extensive
Once you’re clear on your budget, the fun part of researching houses for rent begins. It’s best to start by narrowing down your search to a few choice neighborhoods that offer the amenities you’re looking for, including proximity to work or your children’s schools. Due to the nature of a home (which lacks the built-in amenities an apartment has) your wants and needs for your ideal rental property will be longer.
It’s helpful to make a list of wants vs. needs to help you sort through your thoughts on your dream rental properties:
If you or your family are active or love nature, is the area close to parks and recreation centers?
Do you want a bustling neighborhood packed with restaurants, cafés and boutiques, or would you prefer a quiet, suburban environment?
Is a backyard important to you?
Do you need a garage or dedicated parking space?
Are you looking for a detached home to rent or are you okay with a townhouse?
Does the neighborhood have easy access to public transportation?
3. You’re sure to attend more tours and have more questions
Reading rental listings and taking a good look at the photos is typically not enough to determine whether a rental house might work for you.
While apartment complexes might post floor plans and room sizes online, you might not have advanced information like that with homes for rent. This means you’ll need to ask the landlord, property manager or rental property owner about many things that may not be explicitly listed:
Is the home pet-friendly?
Are appliances included, or would you need to purchase your own?
Is the house furnished? If it is, can you decide what stays or goes?
Are laundry hook-ups in place?
If utilities are not included in the monthly rent, how much can you expect to pay for heat, electricity and hot water?
Can you make decorative changes, such as painting the walls or changing light fixtures?
If there’s a backyard, can you plant a garden?
Is there a home owners association to which you will owe monthly fees?
4. Your neighborhood will be more important than ever
If you like the looks of a house for rent, and the landlord has answered questions to your satisfaction, make sure you also tour the area to get a sense of whether it would be a good fit for you and your family.
Try to speak to some potential neighbors, too: Ask them if it’s safe to walk the streets at night, whether it’s noisy and whether there are other children on the block.
It’s a good idea to visit the street both during the day and in the evening if possible. If the rental home does not have a garage or dedicated parking spot, check out whether street parking is readily available. It’s important to confirm that the right rent price takes into account the neighborhood and what it has to offer potential tenants.
5. There’s additional paperwork, like a home rental application
Paperwork for renting an apartment is a given, however, there tends to be a bit more when it comes to renting a home. Keep in mind, if the property is in a popular neighborhood in a hot real estate market, you won’t want to waste any before time letting the landlord know you’re ready to begin the application process.
Some property managers will charge you a fee between $25 to $100 before opening a file. Supply the following information to help the landlord determine if you are a good candidate to rent the house:
Your personal contact information
Proof of income. If you work full-time, pay stubs are sufficient. If you are self-employed, you can present bank statements or tax returns from the past three years. Retirees can provide proof of pension, 401(k) or bank statements.
Your guarantor’s name and contact information, if applicable
References who can vouch for your reliability and trustworthiness, such as a supervisor or former landlord
6. More rules you’ll have to adhere to
If your rental home has an HOA, you’ll need to check in with them to see if there are any regulations to follow on moving day, such as not leaving empty boxes at the curb when moving. There will likely also be regulations ranging from decorating to construction restrictions that the homeowner, in this case the landlord, will have to adhere to.
The similarities between renting an apartment and a house
There are some steps and parts of the renting process that don’t change even though the type of rental property does. There are similarities beyond the obvious of needing to pay rent and adhering to rental laws.
1. The background check
Landlords want tenants who have a steady income, a good loan repayment track record and a history of paying rent on time. Often, they will conduct a background check to assess whether they want to rent you their house.
During this part of the process, a property manager will likely want to confirm your employment, speak to the references you provided and check your credit report to see how you managed past payments.
2. The required fees such as a security deposit and first month’s rent
Some landlords will require a security deposit equivalent to a month’s rent, which would cover any damage to the property you might cause during the term of the lease. In some cases, you can either be refunded this fee when the lease is up or it goes to the last month’s rent.
You might also have to pay the first month’s rent once you sign a lease, even if you’re not moving in for a while. Sometimes, you’ll be charged a deposit for keys if you require more than one.
3. The moving process
While you won’t have to reserve an elevator to move into your rental home the way you did when you lived in an apartment, there are some things you need to organize before the big move.
For example, before you book a professional moving company, find out from the landlord if you can reserve a parking spot in front of the house where the truck can park, or whether it can back onto part of the property for easier unloading.
Once that’s done, you can concentrate on packing up and getting ready to move into your new home. Don’t forget to advise utility companies, internet and television providers and anyone else who needs to know you’re moving elsewhere.
Make sure to stay on top of details
Taking the time to research rental homes and neighborhoods and asking the right questions will make the transition from apartment living to a home rental go more smoothly.
Being organized with your paperwork and task list for moving day will provide peace of mind and fewer last-minute glitches so that you can celebrate once you’re settled into your new rental home.
And if you’re thinking about renting out your home for some passive income-generating opportunities, take a look at our rent estimator to see how much you could be earning.
Wesley is a Charlotte-based writer with a degree in Mass Communication from the University of South Carolina. Her background includes 6 years in non-profit communication and 4 years in editorial writing. She’s passionate about traveling, volunteering, cooking and drinking her morning iced coffee. When she’s not writing, you can find her relaxing with family or exploring Charlotte with her friends.
Our experts answer readers’ home-buying questions and write unbiased product reviews (here’s how we assess mortgages). In some cases, we receive a commission from our partners; however, our opinions are our own.
Buying a home is an exciting time that can fill you with a sense of accomplishment.
But you don’t want to get swept up in the excitement and jeopardize everything you worked for.
Take practical steps that can save you time, money, and effort down the road.
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mortgage down payment, closing costs, and moving expenses. Money will definitely be tight — and might be that way for a while — because your savings are depleted, and monthly expenses may also be higher, thanks to the new costs that come with homeownership, such as water, higher electric bills, and extra homeowner’s insurance.
Of course, I was ready to personalize my new home and upgrade temporary apartment furniture to something nicer, but my dad advised that I shouldn’t go on a massive spending spree to improve everything all at once. Just as important as getting my first home was staying in it, and as much as I wanted to immediately renovate the kitchen — I had already reached out to a contractor — it wasn’t worth jeopardizing my financial stability.
Give yourself time to adjust to homeownership’s expenses and rebuild your savings account — the kitchen will still be waiting for you when you can do more.
2. Don’t put off necessary maintenance
One of the new expenses that accompany homeownership is making repairs — there’s no landlord to call if your roof is leaking or your toilet is clogged. When I moved into my home, the windows needed replacing to the point that downstairs was ice-cold during the winter and the electric bill was over $500 a month. But since that wouldn’t be as aesthetically pleasing as renovating the kitchen or getting a glossy new bathroom, I wasn’t in a rush to do it. My dad let me know that I was costing myself money.
By not taking care of a necessary window replacement, I was paying a higher electric bill and inconveniencing myself every time I went downstairs wrapped in a blanket.
While you should exercise restraint in purchasing the nonessentials, you shouldn’t neglect any problem that could worsen over time. Delays can turn relatively small problems into much larger and costlier ones, and in a home, everything works together for better or for worse. Have a water leak? Now you have a higher water bill — and maybe water damage. Need new energy-efficient windows? You will pay a higher electric bill until you get them replaced.
3. Invest now so you only pay once
I will admit that I was in love with the bones of my home: the high ceilings, the staircase, the fireplace, the yard, and the location. But there were several serious elements of the house that needed replacing, and that was going to be expensive. The water heater, the furnace, the washer, and the dryer all needed replacing, not to mention smaller items such as ceiling fans and window treatments.
So of course, when getting estimates, in the beginning, I would gravitate toward the cheapest option. My dad said, “There is no reason to buy the cheapest version and be right back here in two years. Invest now so you only have to pay once.” After that I always asked for three options and landed on the middle number.
You may not need the most expensive option with the name brand and all the extra bells and whistles, but the cheapest option is typically cheap for a reason and could cost you more money down the road.
Jennifer Streaks
Senior Personal Finance Reporter and Spokesperson
Jennifer is a Senior Personal Finance Reporter and Spokesperson for the Personal Finance vertical at Business Insider. She started her career covering personal finance at Black Enterprise Magazine, went on to CNBC where she covered personal finance, women and money and tech and then Forbes, where she reported on personal finance, business, tech and money matters related to the economy, investing, credit and entrepreneurship. Jennifer is also the author of Thrive!…Affordably: Your Month to Month Guide to living your Best Life without breaking the bank. The book offers advice, tips and financial management lessons geared towards helping the reader highlight strengths, identify missteps and take control of their finances. In addition, she has extensive experience as an on-air financial commentator and has been a featured expert discussing credit and savings, investing and retirement, mortgages and all things money and personal finance. She has an ability to discuss and simplify complex financial issues and make them easier to understand.
Internal Audit, Verification, Broker, Marketing Products; Training and Webinars Next Week
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Internal Audit, Verification, Broker, Marketing Products; Training and Webinars Next Week
By: Rob Chrisman
1 Hour, 17 Min ago
The unofficial Chrisman LLC sarcastic slogan is, “We do this not because it is easy, but because we thought it would be easy.” Hopefully, there are no lenders out there with that slogan, as residential lending, done the right way, is not easy. Sometimes residential lending seems discombobulated. Sometimes things settle down and become more orderly: recombobulated! (Workflow and improved lender efficiency are the topics of today’s Mortgage Collaborative Rundown featuring Donielle Geiser with Thrive Mortgage.) Not only is our biz not easy but it is also unpredictable. 2024 is shaping up to be another tough year for mortgage originations due to the market environment, and every basis point will matter. Capacity still needs to be right sized across the industry, and the market and your competitors will force that to happen. Would you rather have profitability or market share? If you’re losing money what difference does market share make? If you don’t have a HELOC or 2nd program, find one. Even companies like Rithm Capital (parent of New Rez, doing about $4 billion a month and who have done better than expected) are forecasting a dismal Q4 and a challenging 2024. (Today’s podcast can be found here, sponsored by Visio Lending and its top notch broker program. Visio is the nation’s premier lender for buy and hold investors with over 2.5 billion closed loans for single-family rental properties, including vacation rentals. Listen to an interview between Robbie and me on the Commentary’s editorial process and its evolution over the years.)
Lender and Broker Software, Products, and Services
Are you looking for a cost-effective way to build your personal brand and capture demand in this challenging market? Do you want to be top of mind for the prospective home buyers in your market? If so, and you want a simple, easy-to-use suite of marketing tools to position you above your competition, then you need to subscribe to Tabrasa One! Tabrasa One is a brand new, all-in-one marketing platform with first-class marketing capabilities, from email marketing campaigns to impactful social media to leading-edge video to insightful market intelligence from our legendary Mortgage Market Guide, all rooted in a mortgage-specific CRM foundation. Tabrasa One can deliver unparalleled marketing impact for you at an unprecedented low cost. Sign up now: www.tabrasa.io.
In this market, hustle is everything. You can’t afford to waste a single deal… Or a single minute. That’s why ReadyPrice has launched Shop, Lock, Deliver. It’s an innovative platform designed to help independent mortgage brokers and their lenders save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in the toughest market. Multiple lenders. One platform. Zero b.s. Come check us out today.
Get ready to energize your teams and learn new insights to win more business! Join Rocket Pro TPO with a live audience of 500 brokers Tuesday (11/7) at 1:30pm ET for their next IGNITE Live meeting, hosted by Executive Vice President, Mike Fawaz! Streaming from its All Access event in Detroit, find out how Rocket Pro TPO offers its partners more certainty, speed and expertise with Crews, the Credit Upgrade Team and the SOS Scenario Team, all dedicated to serve you. Talk to them to optimize your strategies around recent product changes including a Home Equity Loan CLTV/FICO expansion, more available census tracts for Purchase Plus and more LTV flexibility on VA, and up to 100% LTV on loan amounts over $1.5 million! Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.
Save $100 on every application with Truv! Orion Lending slashed their annual expenses by $300,000 and boosted their conversion rate by 32% using Truv’s income and employment verification solution. “Truv transformed our verification process, expanding our reach and cutting costs,” asserts Richard Plummer, EVP of Operations at Orion Lending. Stop the financial bleed. ContactTRUV today to discuss how we can help you with your income, employment, insurance, and asset verifications.
What’s an internal audit anyway and do you need one? An internal audit acts as a third line of defense for your mortgage operation. It provides comprehensive assurance based on the highest level of independence and objectivity to evaluate the effectiveness of management’s internal controls. This function should advise your mortgage operation on plans to achieve the company’s strategic, operational, financial and compliance goals. An effective internal audit should go far beyond just checking a compliance box; it should be an integral part of protecting your company. If you want to ensure you’re adhering to regulatory requirements and demonstrating good faith business practices, a Richey May internal audit is a good fit. If you’re looking to be Fannie Mae approved in the future or want to maintain your approved status, it’s required. If you’re unsure whether you need an internal audit, ask one of Richey May’s experts today or learn more here.
Training and Webinars Next Week
A good place for longer term conference planning is to start is here, and click on “events” for conferences in the future.
Today, Friday the 27th is The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT, 3PM ET in “The Rundown”. Today’s features Thrive Mortgage’s COO Donielle Geiser.
Tuesday, Halloween, is the next Mortgages with Millennials with Kristin Messerli and Robbie Chrisman. Tune in every Tuesday at 10AM PT to the weekly video show designed to empower mortgage professionals to tap into the millennial market. This show demystifies the psychology of first-time homebuyers and offers strategies to win more market share with a key segment of the market. Sign up for a weekly reminder with the link to join and a sneak peek into the next episode.
A shout out to Lender Toolkit and its 2024 Supercar event in Las Vegas to kick off ICE Experience 2024 on March 18! The company is offering early bird discounts on sponsorships, but only until October 31. Imagine your logo on an exotic car with your clients and prospects behind the wheel. And yours truly will be doing a live podcast! To get the deal on sponsorships reach out to Brent Emler or grab the sponsorship form.
Join the AEI Housing Center for the 12th Annual AEI Housing Conference, Tuesday, Oct. 31st and Wednesday, Nov. 1st, both in-person and online.
Looking for more in-depth commentary on weekly mortgage news? Register here for “Mortgage Matters: The Weekly Roundup” presented by Lenders One. Every Wednesday at 2:00 PM EST/11:00 AM PT is a dive into a range of mortgage-related topics, including market trends, interest rate fluctuations, innovative mortgage products, and industry advancements. Listen to a unique mix of age perspective, expertise, and charisma to the screen, ensuring that the information is not only educational but also entertaining. This Wednesday’s features National MI!
The Knowledge Coop’s new membership platform offers all state and federal Continuing Education courses in an engaging and exciting video format that you’re sure to actually enjoy. Want to give yourself a sharper competitive edge? They also offer in-depth training on specific topics like VA Loans and FHA within their Coop Academy. Get access to industry experts and connect with other mortgage professionals all in one space. Use Code Chrisman10 for 10 percent off your first year of membership here.
Join the Appraisal Subcommittee (ASC) on Wednesday, November 1, from 10 a.m. – 1 p.m. ET for its third public hearing focused on appraisal bias, the residential appraisal process, and associated regulations. ASC provides federal oversight of state appraiser and appraisal management company (AMC) regulatory programs and monitors and reviews the Appraisal Foundation. The ASC is a subcommittee of the Federal Financial Institutions Examination Council (FFIEC).
Join MBA of Florida on November 2nd, 1:00 – 5:30 PM for a Loan Officer Summit at Orlando Museum of Art. Attendees will enjoy an interactive panel of top producing loan officers. This will be a moderated panel with opportunities for Q&A.
On November 2, the Montana Association for Mortgage Professionals is having a dinner at Stockman Bank in Missoula (321 W. Broadway).
Spend Time with the Best… Register for the MBAF LO Summit on November 2, beginning at 1:00pm at the Orlando Museum of Art. Enjoy interactive panel of top producing loan officers, conversation with realtors as they discuss best practices and relationship building in the real estate industry, Speaker Amir Syed of Growth Only Coaching plus networking and happy hour.
Become a Certified Veterans Lending Specialist, CoAMP is partnering with NAMB to bring their exceptional CVLS course to Denver on Friday, November 3rd, 8:30 AM – 5:00 p.m. Mountain Time. The certification training will cover VA lending basics in addition to advanced topics to set yourself apart. You will take the certification exam immediately following the course, upon passing you will be presented with your CVLS certification and marketing materials.
Friday the 3rd is The Mortgage Collaborative’s Rundown covering current events in the mortgage market for 30-45 minutes starting at noon PT in “The Rundown”.
Capital Markets
Higher rates. But rates are already high, and the bond market is doing the Federal Reserve’s rate-setting work for it. U.S. economic growth accelerated in the third quarter to a 4.9 percent seasonally adjusted annualized pace, signaling the economy remains resilient in the face of higher rates and still-elevated prices. That’s not necessarily good news for the Fed, as the central bank pumps the brakes on interest rate hikes in the wake of rising long-term bond yields and geopolitical turmoil. While persistent strength in demand could put the inflation descent in jeopardy, the report doesn’t change much for policymakers and the FOMC is still expected to leave rates unchanged at next week’s meeting while reinforcing the case for restrictive monetary policy near-term.
The overall Gross Domestic Product (GDP) figure was powered by strong consumer spending, which rose 4 percent, strong government spending, and a sizable build in inventories which bumped up the investment portion. It should also be acknowledged that the core Personal Consumption Expenditure Price Index was up 2.4 percent in the third quarter, slowing significantly from 3.7 percent in Q2 and 4.9 percent in Q1. Across “the pond,” the European Central Bank refrained from raising rates for the first time in ten meetings, noting that underlying inflation has eased and is expected to continue decelerating but ECB President Lagarde refused to say that the peak rate has been reached, adding that it would be premature to discuss rate cuts.
Fed favorite PCE for September kicked off today’s calendar (+.4 percent). The core Personal Consumption Expenditure price index increased .3 versus 0.3 percent month-over-month expected and 3.7 percent year-over-year expectations and 0.1 percent month-over-month and 3.9 year-over-year previously. Personal Income was +.3 percent and Personal Spending was Later this +.7. morning brings final October Michigan sentiment, remarks from Fed Vice Chair of Supervision Barr, and more earnings from Wall Street. We begin the day with Agency MBS prices unchanged from Thursday’s close and the 10-year yielding 4.86 after closing yesterday at 4.85 percent.
Jobs
Mortgage Equity Partners (MEP), a growing IMB headquartered in Massachusetts, continues to build upon its growth strategy. In addition to several recent high-caliber new hires on the sales and management team, MEP has done it again. Rick Dionne has joined the team as Vice President, Sales Business Development. Rick will use his extensive experience to help recruit best-in-class loan officers and branch managers and help them unlock their potential through branch partnerships. Rick has a wide range of industry knowledge obtained over many years in various management and leadership roles, most recently with Supreme Lending. MEP has also scored a big win in the Southeast by bolstering its presence in South Carolina under the leadership of Area Manager Jimmy Atkins. Jimmy is very well respected in the Southeast mortgage market and has held leadership positions at Gateway, Finance of America, and, most recently, Go Mortgage. Rick Dionne and Jimmy Atkins are top-level players in the mortgage space and will be instrumental in the continued growth of MEP. We are honored to have them on the team,” said John Cabral, Executive Vice President of Sales. To learn more about MEP, visit here.
UMortgage is proud to welcome Patton Gade, the nation’s #1 originator of VA loans, per the 2023 Scotsman Guide rankings, as its National Director of Military Lending. In his role, Gade will lead UMortgage’s Division of Military Lending and a team of experienced VA Loan Originators. This team is dedicated to offering the strongest loan products to VA borrowers and education to dispel the common myths surrounding the VA homebuying process. UMortgage is a proud homeownership advocate for our country’s veterans, active service members, and military families. In 2023, nearly 20% of the loans originated by UMortgage LOs were VA loans, well above the national average of 12% per the Congressional Budget Office. Joining an already prestigious team of VA-focused LOs which includes Jay Bunte, Jimmy Hobson, and Tyler Carlston, Gade plans to further increase the service UMortgage offers to our country’s service members. If you want to know why top producers continue to join the UMortgage platform to grow their business and create life-changing opportunities through homeownership, follow this link to connect with some of our standout LOs.
“Stronghill Capital, LLC, a fast-growing Austin, TX-based Wholesale and Correspondent lender, is hiring! We’re looking for experienced Account Executives with an existing book of business who are interested in growing in the Non-QM space. Stronghill specializes in investor residential/DSCR loans, offering unique programs specifically for investor clients. For our 5-10 Unit properties and our 2-8 Unit Mixed Use investment loans, we offer a DSCR ratio of 1.00. For 1-4 Unit properties, your investor clients can qualify using rental cash flow only with a DSCR ratio of 0.75. If you’re interested in being a part of a dynamic company with responsive leadership, sharp price execution, and a commitment to being competitive in the Non-QM space, contact Matt Brammer. As we continue to expand, we are open to discussions in all regions across the country.
Citizens has recently launched a nationwide Private Bank to help facilitate growth in wealth management, improve capabilities in the high-net-worth segment and expand in key markets. Citizens Private Bank will provide holistic, high-touch client service to high-net-worth individuals, families, and businesses, including private family foundations, nonprofit, multifamily and commercial real estate, life sciences, private equity, and venture capital firms. In an effort to better serve Private Bank clients, who often have unique mortgage needs, Citizens has enhanced its relationship lending capabilities to better reward customers for their business and are further evolving our already best-in-class products and services. We’re looking for talented mortgage loan officers who want to join a team who is playing offense and growing our capabilities each and every day. If you are looking to help customers achieve the dream of home ownership and want to learn more about Citizens, contact Sean Reilly or visit us here.
Logan Finance continues to set new Non-QM growth records in Q3! “We continue to see tremendous growth as the industry turns to us as the trusted, reliable partner in Non-QM lending,” says Don Pace, Logan CEO. “In addition to our high-touch service, we continue to expand our Non-QM product suite to encompass a broader set of niche lending needs.” To help support Logan’s tremendous growth, Logan has acquired industry veteran Aaron Samples as Chief Revenue Officer and continues actively hiring superstar account executives. Recent Logan family members include Jesus Gomez, Kelly Stovall, Will Clark, Chris Murphree, and Greg McDonell. If you’re a Non-QM Superstar and want to learn more about Logan’s growth, visit Loganwholesale.com and Logancorrespondent.com or contact Aaron Samples.
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Here are some alternatives to no-credit-check loans that are ideal for individuals with little to no credit history.
Search for Lenders Who Take Alternative Credit Backgrounds Into Account
While credit history is typically used to assess a borrower’s risk, some banks will accept alternative data to determine your eligibility such as salary, rent, or utility payment history and bank statements. Remember that most lenders will only accept alternative data for smaller loans like credit cards, personal loans, and auto loans as opposed to larger loans like mortgages.
To find a lender that accepts alternative credit backgrounds, contact financial institutions in your area or apply for loans online. Make sure to have important documents such as bank statements, W-2s, tax returns, and rent payments readily available.
You can also opt to have alternative data reflected in your credit history. For example, you can sign up for a service that reports your rent and utility payments to the three credit bureaus. This is an excellent way to start building your credit.
Credit tip: You may have better luck if you consult with a lender face-to-face rather than over the phone.
Request a Payday Alternative Loan (PAL) Through Your Credit Union
Some credit unions offer payday alternative loans that are typically lower-cost substitutes to pricey payday loans. PALs are small loans granted in amounts ranging from $200 to $1,000, and they have a maximum APR of 28%. To qualify, you must have been a member of a credit union for at least one month.
Credit tip: You can research credit unions to join by visiting MyCreditUnion.gov.
Apply for a Secured Loan
Secured loans involve putting down a valuable asset as collateral. Assets typically used as collateral include cars, houses, or savings accounts. While these types of loans are beneficial because they have less strict credit history requirements, they are risky in the sense that you could potentially lose the asset you put down as collateral if you’re unable to pay the loan back.
Credit tip: Assess whether you can avoid losing the asset before putting it down as collateral.
Borrow Money From Your Retirement Account
If you have a 401(k) plan, you can take out a loan against your account. Most plans allow you to borrow up to 50% of your savings up to $50,000. Since you are essentially borrowing money from yourself, you won’t need to show credit history to take out a 401(k) loan.
While taking this route could cost you in investment earnings, it is generally a better option than other no-credit-check loans that charge high interest rates. Just make sure to repay the loan within five years to avoid paying taxes and penalties.
Credit tip: Avoid taking out a 401(k) loan if you plan on leaving the company, as you may have to pay it off right away.
Find a Trustworthy Cosigner
If you lack credit history, including a trustworthy family member or friend as a cosigner might help you secure a loan. For a cosigner to improve your chances of being approved, they need to have a good credit score and preferably a long credit history.
However, getting someone to agree to cosign may prove to be difficult, because if you miss payments or default, the cosigner’s own credit will be hurt. Note that this could strain your relationship with the cosigner if you get behind on payments.
Credit tip: If someone in your life agrees to cosign, consider scheduling a reminder to make payments on time.
Turn to a Family Member
If you’re in a position where you need money to cover an expense, consider asking a family member or close friend for a loan. While it might be tough to bring it up, this route can help you avoid getting stuck in a situation with a predatory lender.
Credit tip: When borrowing money from family, consider drafting up a contract to ensure everyone is on the same page about the loan amount, repayment timelines, and any interest that may be charged.
How to Get a Loan With No Credit FAQ
Below, we’ve answered some common questions regarding getting a loan with no credit.
Can I Get a Loan With No Credit?
Yes, it’s possible to get a loan with no credit, although it will be more difficult to get approved, and you may incur a higher interest rate.
What Loans Can I Get With No Credit?
Types of loans you can get with no credit include no-credit-check loans, secured loans, online loans, credit union loans, and family loans.
How Much Can I Borrow With No Credit?
The exact amount you can borrow with no credit will depend on the type of credit account you’re approved for. Remember that the higher your credit score, the more money you’ll be able to borrow.
What Is a Good Credit Score to Get a Loan?
While the exact credit score to get a loan varies, borrowers need a FICO® score of at least 670 to fall within the good credit score range.
How to Build Credit
Establishing credit from the ground up can seem daunting. Here are some ways to start building credit so you can get approved for loans more easily in the future:
Become an authorized user: Ask a trusted person in your life to add you as an authorized user to their credit card account so that you can establish credit history.
Apply for a secured credit card: A secured credit card is a type of beginner-friendly card that requires you to put down a refundable deposit. Since these cards pose less risk to the lender, they’re easier to get approved for when first establishing credit.
Report rent or utilities: While most companies don’t report to the credit bureaus, you can sign up for a rent and utility reporting service that reports these payments to build credit faster.
Apply for a credit-builder loan: A credit-builder loan is an installment loan specifically geared to individuals looking to build credit history. When you take out a credit builder loan, the borrowed funds are placed in a secure savings account or certificate of deposit (CD) and held as collateral until you repay the loan.
Ready to start building your credit? ExtraCredit® is a tool that provides complete credit coverage, including rent and utility reporting and other credit profile-building offers. Try it for free today.
Home equity lending in the United States is on the rise. While reverse mortgage volume has yet to benefit from that spiked interest, consumer curiosity about Home Equity Lines of Credit (HELOCs) appears to be translating into significant volume gains for that product, according to Bankrate.
“Online searches for ‘HELOC’ rose 305 percent this year, reaching an all-time high in July 2023, according to a Google traffic analysis by real estate platform RubyHome,” the Bankrate article said.
But that curiosity is also translating into volume. Based on data released by both ATTOM Data Solutions and the Mortgage Bankers Association (MBA) this past summer, “lenders originated more than 284,000 HELOCs in the second quarter of the year,” up from just under 252,000 in the first three months of 2023, while debt from home equity loans is projected to increase by more than 11% by the end of this year.
Part of this is likely due to a spike in home prices, which has been observed in the market since the beginning of the COVID-19 pandemic.
“The median home sales price stood at $394,300 in September 2023, according to the National Association of Realtors,” the article said. “While down from the record high of $413,800 in June 2022, it still represents a 2.8% increase year-over-year.”
Home equity-related debt also appears to be a growing segment of personal debt carried by homeowners. A survey for Creditcards.com showed that 7% of Americans hold debt in the form of home equity loans and/or lines of credit, but homeowners are also using equity as a source of extra cash to be able to further invest in their homes.
“Many people are tapping into their home equity to spruce up their homes, and better equip them to meet their family’s needs,” the article explained. “Borrowing money to upgrade their current home makes a lot more sense than trying to buy into a new one nowadays.”
That rise in home price appreciation, in addition to increasing levels of tappable equity for homeowners, also translates into a challenging housing market for prospective buyers, which may give some insight into the motives related to additional equity-based debt.