10 Inherited Items Worth More Than You Think

shocked man with money cash
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After 25 years of appraising and reselling antiques, I know how daunting it can be to settle an estate. It usually goes something like this: A family is overwhelmed after inheriting a house stuffed to the rafters with generations’ worth of objects. They choose a few keepsakes for themselves and then rent a roll-off dumpster to dispose of everything else.

And while that approach might feel efficient, it’s a tremendous waste. Sometimes the most mundane-looking items can be worth a surprising amount of cash. So if you’re a recent heir, take a breath — and take stock. These items are worth more than you think.

1. Cookware

Vintage Texas Ware bowl
Kentin Waits / Money Talks News

There may be money in those kitchen cabinets! Buyers love cookware that’s been proven by years of use. Look for Pyrex and Fire-King casserole dishes. Texas Ware mixing bowls (pictured) and Revere Ware pots and pans.

Beyond their practical uses, many of these brands are hot collectibles. This jadeite casserole dish by Fire-King sold for $178.40 on eBay.

2. Midcentury furniture

midcentury modern couch sofa loveseat
TierneyMJ / Shutterstock.com

From architecture to accent tables, midcentury design is having a moment. If you’ve inherited a houseful of MidMod (midcentury modern) furniture, get ready to be pleasantly surprised.

Eager buyers aren’t limiting themselves to high-end designers. Decidedly midmarket when first produced, pieces by Heywood-Wakefield can now sell for several hundred dollars. And this Plycraft chair and ottoman (a knock-off of a famous Charles Eames design) recently sold for $1,350 on eBay.

See also: “8 Tips for Selling Inherited Family Furniture”

3. Vintage tools

Jeff Giniewicz / Shutterstock.com

At estate sales, I’ve noticed shoppers make a beeline for the garage or basement workshop in search of tools. Vintage Craftsman, Skil and Stanley products sell well because they’re better made than their contemporary counterparts.

And don’t worry about emptying the toolshed. If you’re lucky enough to inherit one of these 20 valuable old tools, you can afford to hire a handyman anytime you need one.

4. Old phones

rotary phone
evkaz / Shutterstock.com

Everything old is cool again. Collectors pay top dollar for rotary phones made of an early type of plastic called Bakelite. This Western Electric model from the 1930s sold for $155.99 on eBay.

Princess phones from the 1960s and ’70s are in demand too. Unusual colors like pink, mint green and orange command the highest prices. This aqua blue touchtone phone made by Bell System recently sold for $150 on eBay.

5. Retro clothing

Vintage retro clothes clothing
Marbury / Shutterstock.com

Have you inherited closets packed with vintage clothing, shoes and accessories? Buyers are waiting.

According to thredUP, an online consignment and thrift store, the used clothing market is expected to be worth $84 billion by 2030. That demand is fueled by a new generation of consumers who prioritize sustainability and appreciate the quality and style of vintage clothing.

Not convinced? This vintage pair of Florsheim Imperial shoes recently sold for $295 on eBay. And on Etsy, this three-piece Pendleton set for women is listed for $160.

See also: “11 Secrets to Finding Quality Clothing at Thrift Shops”

6. Stainless steel flatware

Antique silverware
Zadorozhnyi Viktor / Shutterstock.com

Stainless flatware sold in most department stores today should be called “bentware.” The quality and durability just doesn’t compare with pieces from the 1960s and ’70s.

Consumers are noticing and willing to “fork” over more cash for better quality. This 59-piece Oneida flatware set sold for $175 on eBay and this Montgomery Ward set brought $112.50.

7. Old eyeglasses

Hipster man with vintage glasses
MS_studio / Shutterstock.com

Brands like Warby Parker have carved out a niche by selling vintage-inspired eyeglass frames. But there’s a strong market for truly old-school glasses. The following styles are hot sellers right now:

  • “Cat-eye” frames from the 1950s
  • Round wire-frames
  • Horn-rimmed frames (sometimes referred to as “Buddy Holly glasses”)

Vintage examples in good condition can sell for $25-$65 per pair.

8. Vintage Christmas decorations

Sarycheva Olesia / Shutterstock.com

Yes, Virginia, there is a Santa Claus. Vintage glass ornaments made in Germany by Shiny Brite sell well all year long. This lot of 61 ornaments recently sold on eBay for $295, and this Shiny Brite tree-topper brought $75.

And remember those ceramic table-top Christmas trees from the 1970s? They’re selling for hundreds these days. This 23-inch tree made by Atlantic Molds is listed for $500 on Etsy.

9. Original artwork

Nataliia Zhekova / Shutterstock.com

Over the years, many older adults accumulated generations’ worth of family art. Purchased in a gallery or homemade by a budding artist, original creative work can sell for serious money.

And though it may be tempting, don’t cast aside art that looks crudely done. Sometimes referred to as “naïve” or “outsider art,” these pieces may have value. This painting of South Beach, Florida, signed simply “E.S.,” recently sold on eBay for $235.

10. Vintage vinyl

George Carlin records
digitalreflections / Shutterstock.com

Those milk crates full of vinyl records just might be hiding a treasure. Even if you don’t have one of the rarest records of all time, you could still make a handsome sum in the resale market. This Buckingham Nicks album (by the Fleetwood Mac members) recently sold for a rockin’ $149.99 on eBay.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

ABLE Accounts Give Disabled More Financial Freedom

In 2014, federal legislation paved the way for states to offer ABLE accounts—tax-advantaged plans that allow individuals with disabilities to save for ongoing expenses without threatening their eligibility for crucial government support, such as Supplemental Security Income or Social Security Disability Insurance. Previously, people with disabilities had to have less than $2,000 in total assets to maintain their eligibility for such programs, which made it difficult for them to live independently. 

As is the case with 529 college-savings accounts, ABLE accounts (the acronym stands for Achieving a Better Life Experience) grow tax-free, and the earnings aren’t taxed as long as the money goes toward qualified disability expenses. The maximum annual contribution to an ABLE account rose to $16,000 on January 1. The limit, which is tied to the IRS’s gift tax exclusion, had been capped at $15,000 since 2018. 

All but four states—Idaho, North Dakota, South Dakota and Wisconsin—offer ABLE programs, and if you live in a state that doesn’t offer one, you can create an account offered by another state. 

How to Qualify

Anyone with a disability who receives disability-related benefits, such as SSI or SSDI, or who can produce a certification from a doctor that states that their disability is “marked and severe,” can open an ABLE account, with one major caveat: The individual’s disability must have occurred prior to his or her 26th birthday. Congress is considering legislation that would extend the age of onset from 26 to 46. If enacted, the legislation would likely double the number of people who qualify for an ABLE account, says Mary Morris, chief executive of ABLEnow, an ABLE program offered by Virginia. “It would hit a really large group of working people with disabilities and those who we think benefit most from an ABLE account,” Morris says. 

Contributions to an ABLE account can come from anyone—friends, family, even strangers—as long as they don’t total more than $16,000 in one year. And many states allow residents a state tax deduction for a portion of their contributions to their own state’s plan, Morris says. Michigan, for example, allows residents who contribute to its ABLE account to deduct up to $5,000 (or $10,000 for a married couple). Minimum contributions to ABLE accounts vary from state to state, but generally they’re low, ranging from $5 to $50. 

If you have unused funds in a 529 college-savings account, you can roll over that money to an ABLE account. If you go this route, you can still use the money for college, but you can also use it for qualified ABLE account expenses.

The list of qualified expenses is broad and includes basic living expenses, health and wellness programs, housing, transportation and vehicle expenses, education and training, assistive technology, and even financial management.

People are now saving for homes and small business start-up costs—as well as disability-related expenses, such as an electric-powered wheelchair or scooter—“anything that someone wants to, as the name suggests, achieve a better life experience,” says Tom Foley, a financial planner and executive director of the National Disability Institute. Individuals can also use these accounts to build up an emergency savings fund.

Source: kiplinger.com

9 Easy Ways to Make Extra Money Working Wedding Gigs

Nearly 2 million couples tied the knot in 2021 — but 2022 is projected to be even bigger, with the most weddings since 1984.

That means lots of opportunity to work a side gig helping couples throw their grand affairs.

9 Easy Ways to Make Extra Money Working Wedding Gigs

Here are nine side hustles and weekend gigs to earn some extra cash while love is in the air.

1. Take Engagement Photos

If you’re a shutterbug, this is a great way to build your portfolio and earn extra cash.

Your friends may want to hire a professional photographer for the wedding itself, but they might like to save a little money on their engagement photos.

Be sure to look at professional engagement photos beforehand to get ideas for poses, and then upload the edited shots to a photo-sharing platform so the couple can easily download them and order prints.

If you’re an experienced photographer, you probably already have what it takes to start your own wedding photography business.

2. Address Envelopes

Many couples want the address on their save-the-dates, invitations and thank you cards to be perfect. And many are willing to pay top dollar for perfection: professional calligraphers charge $3 to $4 per envelope!

If you have good penmanship, offer to address envelopes for a fraction of the price.

Even at $1 per envelope, you’ll still earn $100 for a 100-person wedding.

Two people create cupcakes.
Getty Images

3. Bake Desserts

Wedding cakes cost an arm and a leg. If you’re talented in the kitchen, here’s an area where you can definitely profit.

Choose a dessert you excel at making, or one that’s meaningful for the couple.

Cupcakes are an obvious choice — they’re cheaper than a cake, easier to transport and trendy. Bake a few different flavors to please the varying tastes of the guests, and decorate them to wow the crowd.

4. Provide Musical Entertainment

Help make the day special with your musical talent.

If you’re a guitarist, play and sing while the bride walks down the aisle, or during the cocktail hour. If you have a band, get the crowd going at the reception.

Love to sing? Consider working weekends as a wedding singer to earn $400 and up per gig.

Or if you have the gear, spin up a wedding DJ side hustle.

Nick Smith from Southwest Indiana bought his first set of DJ sound equipment when he was 20 years old from a local bar that was closing down.

Sixteen years later, Smith runs his own successful wedding DJ business where he pulls in upwards of $1,000 a gig.

DJing involves some initial upfront costs, like music licensing fees and reliable transportation to move your gear.

But finding work is easy, Smith said. He’s performed at over 200 weddings, most of which came from friend referrals and word of mouth.

5. Create Decorations

Crafty people, rejoice! Weddings provide an abundance of opportunities for you to get your glue gun on.

Everything from centerpieces to place cards to favors is cheaper to make than to buy, so offer to design and execute all decorative needs for the wedding.

Shop at discount stores and buy in bulk to save money on your supplies.

6. Pick Up Catering Gigs

With wedding season in full bloom, now is a great time to find catering side gigs.

From bartenders and cooks, to servers and general kitchen staff, catering gigs run the gamut. Most shifts take place on the weekends and last seven to 10 hours per shift.

Catering staff tend to get paid better than restaurant staff. Expect to earn around $13 to $17 an hour, with some high-end events netting upwards of $25 an hour.

A woman looks happy as she looks in the mirror while getting her hair and makeup done on her wedding day.
Getty Images

7. Do Wedding Makeup and Hair

Every bride wants to look beautiful on her wedding day. That’s why people who do wedding makeup and hair earn big bucks.

If all your friends come to you for beauty advice, this might be the perfect job for you.

Be sure to do a test run a few weeks before the wedding. This gives you and the bride a chance to agree on a style, and helps avoid unwanted surprises on the big day.

If you want to take your bridal makeup business to the next level, get licensed and obtain limited liability insurance.

Make sure to Google the cosmetology laws in your state as well.

8. Love to Sew? Do Alterations

Sewing is a rare skill these days, but if you know your way around a needle and thread, you could earn major money altering clothes — specifically, wedding dresses.

Brides want their dress to fit like a glove — but don’t want to pay the high alteration fees charged at bridal shops.

Market yourself as an independent seamstress who can offer the same quality at a lower price, and you’ll have brides knocking at your door in no time.

9. Be an Officiant

If you aren’t shy around large groups and don’t mind delving into a few state and local laws, becoming a wedding officiant could land you a few hundred dollars per gig.

Becoming ordained is simple. It takes about five minutes and is usually free.

But according to FindLaw.com, Alabama, Connecticut, Virginia, Tennessee — and certain parts of Pennsylvania, New York and Las Vegas — don’t recognize online ordinations.

To be certain, you should ask a clerk at your county courthouse. You can also use this interactive map of state licensing requirements from the American Marriage Ministries.

If you want to start performing ceremonies on a regular basis, you will need to set a rate: $75 to $100 is a good starting point for officiants on average.

Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.

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Source: thepennyhoarder.com

A Guide to the VA Home Loan for 2022

When looking for a way to fund the dream of home ownership, many men and women who served or are serving in the United States military look into VA loans.

The Department of Veterans Affairs — formerly the Veterans Administration — loan program is for service members, veterans and eligible surviving spouses to help them become homeowners.

“We’re looking for the VA home loan to be the program of choice for veterans,” said Terry Rouch, assistant director for loan policy and valuation with the Department of Veterans Affairs. “This is what we consider one of the major benefits for their military service.”

While many of the terms are favorable, in some cases, a VA loan might not always be the best option for those who are eligible, so it is important to understand how a VA loan compares to a conventional loan and how and when they can be used.

What Is a VA Loan?

A VA loan is a mortgage loan for qualifying military personnel, veterans and surviving spouses administered through the Department of Veteran Affairs. The loans are made through private lenders but backed by the federal government. Among the benefits are lower interest rates and often no down payment.

The main benefits of a VA loan are:

  • No down payment in many cases.
  • Often lower interest rates than conventional mortgages.
  • Limited closing costs.
  • No need for PMI (private mortgage insurance).
  • No penalty for prepayments or paying off the loan early.

“In the past year, we guaranteed more loans than we’ve ever done in the entire history of the program,” Rouch said. “We had 1.44 million loans in the fiscal year of 2021.”

Rouch said the fact PMI is never required with a VA loan is a huge benefit. Conventional lenders often require PMI if the buyer is making less than a 20% down payment.

Michael Anderson, a mortgage loan officer with Charter West Bank in the Omaha, Nebraska, area, said using the VA home loan program increases buying power.

“Say you wanted to keep your payment at $1,500. If you have PMI, you’re going to be able to buy less of a home because you need to add in that PMI portion,” Anderson said.

About 40% of Anderson’s clients are currently serving or have served since the area is home to Offutt Air Force Base. Anderson said he has worked at other banks where more than 90% of his clients were using VA loans.

Realities of a VA Loan in a Hot Housing Market

It’s no secret the real estate market is hot across the country. Prices are increasing and the time that homes are on the market is decreasing. In many cases, there are multiple offers. More and more, cash offers rule and those seeking loans are aced out.

There are misunderstandings about the VA loan process which make both buyers and sellers uneasy. One of those misconceptions is that the process takes much longer than a conventional loan.

“It’s really about advocacy at that point,” said Debbie Childs, a real estate agent with the Real Estate Group in Virginia Beach, Virginia.

She often has the loan officer who is working with her clients call the listing agent to vouch for their mutual client.

Childs said to sweeten the deal, she will add a clause saying if the VA appraisal finds anything that needs to be fixed, the buyer will incur the cost.

Sometimes, the seller will pick an offer based on the fastest closing. In this case, cash offers are more attractive because the deal can close quickly.

Childs said most of her VA loans have come through in about 30 to 45 days. According to Fannie Mae, the average closing time for a conventional loan is 47 days.

Sometimes it takes a conversation between the loan officer and listing agent to get a deal done, providing proof the buyer is serious and has the funding in place.

Meeting VA Loan Requirements

Even with a VA loan, the borrower must still meet the lender’s credit and income requirements so borrowing money to buy a home is not a guarantee, but having a VA loan can help make things easier on the borrower.

“It’s difficult in many instances for a veteran or an active duty service member to actually save money simply because they’re limited on the amount of income that they’re earning and they’re constantly being transferred to different duty stations, which makes it hard for families to set up a budget to set aside a down payment,” Rouch, himself a Navy veteran, explained.

A VA loan is only for primary residences and that residence must meet building codes and safety standards, so it’s not possible to use a VA loan for a vacation or investment home or a real fixer upper.

There are also funding fees for VA loans based on a percentage of the loan with rates set by the federal government.

All VA loans have funding fees except if the borrower:

  •  Receives or is eligible to receive compensation for a service-related disability.
  • Received a Purple Heart.
  • Is the surviving spouse of a veteran who died during service or of a service-related disability.

The funding fee is similar to the points conventional lenders charge for a loan.

Who Are VA Loans For?

Contrary to what some might think, VA loans aren’t just for first-time home buyers.

“Many people utilize the VA program one time when they are young and they purchase their first home (using a) VA loan, but they don’t ever go back and use it again,” Rouch said. “We do want people to know this is a lifetime benefit so once they become eligible, they can use that for their entire lives.”

According to the VA website, as of 2020, there is no limit to the amount of a loan if you meet the conditions of having full entitlement, which means you have:

  • Never used the home loan benefit, or
  •  Paid a previous VA loan in full and sold the property, or
  • Used the home loan benefit, but had a foreclosure or short sale and repaid it in full.

If you do not meet the conditions for having a full entitlement, there may be a loan limit, based on where you live.

The limit is based on the county where you live and the Federal Housing Finance Agency has a site to figure it out. Typically, in 2022 it is $647,200 but higher in some areas where it is $970,800.

Rouch said service after the loan is another advantage of using a VA home loan.

“If someone becomes delinquent or has a situation that would create a scenario where they need to do a modification, the VA is very workable with veterans. We want to ensure that they not only get a loan but to maintain that home as well.”

He said they work with loan servicers to make sure veterans are taken care of.

“On that odd chance or that situation that may occur where they become delinquent, they can feel comfortable knowing that the VA has got their back there too and that we’re there to try to help.”

Types of VA Loans

Under the heading of VA loans, there are several different types including purchase loans and cash out refinance loans.

  • Purchase loans: This loan helps veterans purchase a primary residence at a competitive interest rate without PMI and often without a down payment.
  • Cash out refinance loans. With this loan, owners can take cash out of a home’s equity to pay for things like home improvements or school, or to pay off debt.

The other types of VA loans are:

  •  Native American Direct Loan:  For Native Americans or people married to Native American veterans who can help finance the purchase, construction, or improvement of homes on Federal Trust Land.
  •  Interest Rate Reduction Refinance Loan: These are for borrowers who have an existing VA backed loan who want to reduce monthly payments or make their payments more stable. These are also known VA streamline refinance loans.
  • Adaptive Housing Grants: These loans are for veterans with permanent and total service-connected disability to help them purchase or build an adaptive home or to modify an existing home.
A female veteran picks up her child as she enters her home.
Getty Images

Who Is Eligible for a VA Loan?

In general, to be eligible for a VA loan, you must have served in the military for a specified length of time or be the surviving spouse of someone who died on active duty or from a service-related disability or the spouse of someone being held as a prisoner of war.

General length of service requirements are:

  • 181 days of active duty during peacetime.
  • 90 consecutive days during wartime.
  • More than six years of service with the National Guard or Reserves or 90 days under Title 32 active duty status with at least 30 days being consecutive.

The VA website section on eligibility requirements has more specifics depending on when you served, if you are an officer or a retired officer, and the times that constitute wartime or peacetime.

Character of service matters, so no other than honorable discharge is allowed so no dishonorable discharge or bad conduct.

To get a VA loan, you must have a valid Certificate of Eligibility (COE) to show you have satisfied the service requirements and duty status.

The application process is online as part of a benefits information site from the VA and the Department of Defense. Make sure to have any documents handy that you may need to prove your eligibility.

Even if you meet the service and duty status requirements, it is not a guarantee that you will receive a VA loan. You must still meet credit, income, and other requirements your lender might have.

How to Buy a House With a VA Loan

In many ways, buying a home with a VA loan is the same as buying a house with any other type of loan.

As you would with any loan, you need to find out how much of a mortgage you qualify for, but there’s one additional first step.

“I like to go out and get [a client’s] certificate of eligibility first from the VA portal just to make sure they’re eligible and then from that point, it’s just an application just like everyone else,” Anderson explained. “I’m going to document their credit, get their assets and other information.”

Not all lenders handle VA loans. According to the VA, there are more than 1,500 lenders that offer VA loans.

To find a VA loan lender in your area, Anderson recommended asking your real estate agent or talking to other veterans in your area or the area where you’re moving. In fact, you might want to look for a Realtor who has experience working with the military community and understand the specific needs and challenges.

Once you know how much you prequalify for, you can start looking at homes in your price range.

“It’s a challenging market and each pricing point is different and each neighborhood is different, so you really need a realtor guiding you,” said Childs, the Virginia Beach real estate agent. “When I’m representing a VA client, I first remind the listing agent that the VA buyer’s skin in the game is their service to our country because sometimes (they ask) where is their skin in the game? Where is their money down?”

The prequalification can also help agents and home sellers know you are serious about buying their home.

Appraisal and Underwriting

Once you find the home you want and put in an offer, there are a few more steps you must take with a VA loan including appraisal and underwriting.

“When I’m working with buyers, I try to get them through initial underwriting before they look at houses. That does really help a buyer to get all their paperwork in and processed so when I have my loan officer call the listing agent, I can say they are through initial underwriting already,” Childs said.

The VA appraisal for a loan is not the same as a home inspection or a traditional home appraisal. It must be done by a VA-certified appraiser, which can take up to two weeks depending on the market.

The VA appraisal is more stringent than appraisals for traditional loans and is done to make sure the property meets the minimum property requirements like working plumbing and functioning electrical systems and that it meets fair market value.

“The VA does do almost a secondary home inspection,” Childs explained, but said the reports often come back with just a few minor repairs.

Closing Costs

The closing costs are the fees the borrower pays to the lender, and with VA loans, they are different than with traditional mortgage loans.

With VA loans, lenders cannot charge the borrower prepayment penalties, attorney fees or settlement charges.

Lender can charge:

  • Origination fee: The lender can charge this fee, but there are limits about how much they can charge.
  • VA funding fee: This is a charge that is only for VA loans. It is a one-time fee that goes to the VA as a way to help pay for the program to continue. The fee varies based on the price of the home and if the borrower has a down payment.
  • VA appraisal fee. This fee varies from state to state and they were raised in 2021 to meet high demand. The fee can be $450 to more than $1,000 (parts of California and Alaska). The appraisal determines the market value of the home and ensures that it meets Department of Veteran Affairs requirements. 

If you don’t want to pay the closing costs up front, you can roll some of them into the mortgage amount, including the VA funding fee.

Frequently Asked Questions (FAQs) About VA Loans

We found the answers to some of the mostly commonly asked questions about VA loans.

Is There a Minimum Credit Score to Qualify for a VA Loan?

The VA does not set a minimum credit score, however lenders may require a credit score above a certain threshold to have a loan with their company. Your real estate agent should be able to steer you to a lender that can work with whatever credit score you have. Or help you understand ways to bring it up if necessary.

What is the Minimum Income for a VA Loan?

The VA does not set a minimum income for a loan, however borrowers still need to meet income and other standards from the lending institutions.

How Does a Home Qualify for a VA Loan?

The home must pass a VA appraisal in order for the buyer to use a VA loan. The VA appraisal makes sure the property meets the minimum property requirements like working plumbing and functioning electrical systems and that it meets fair market value.

Is There a Limit to the Amount you can borrow With a VA Loan?

There is no loan limit if the borrower meets basic eligibility criteria of service time and character of discharge. That assumes the borrower has a full loan benefit entitlement. The lender might set an amount the borrower qualifies for based on income, credit, and other criteria.

Who Qualifies for a VA Loan?

There are basic eligibility criteria of service time and character of discharge. General length of service requirements are: 181 days if served active duty during peacetime; 90 consecutive days during wartime; more than six years of service with National Guard or Reserves or 90 days under Title 32 active duty status with at least 30 days being consecutive. Surviving spouses can also be eligible in certain situations.

What can Disqualify You From a VA Loan?

Service members and veterans must meet discharge and military service obligations. A less than honorable discharge may disqualify someone from obtaining a VA loan as they could not meet time of service requirements.

Is it Easy to Get Approved for a VA home Loan?

Approval for a VA loan is not necessarily any easier or more difficult than approval for a conventional loan. The main differences are neither a down payment nor PMI (Private mortgage insurance) are required parts of VA loans.

Can I be Denied a VA Loan?

Eligibility for a VA loan does not always mean loan approval. Lenders might have other risk criteria they apply to loans that are in addition to VA requirements and guidelines.

Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.

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Source: thepennyhoarder.com

Are Home Prices Falling? The Devil Is in the Details

How’s this for a dramatic headline: “Home prices are falling!”

But before you get too excited, assuming you’re a prospective home buyer, there are some strings.

What was almost unthinkable a month or two ago is now apparently becoming reality.

A new analysis from Realtor.com found that asking prices are actually down year-over-year in several large metropolitan areas nationwide.

Does this mean the seller’s market is finally coming to an end, driven by markedly higher mortgage rates? Let’s find out.

Where Home Prices Are Down the Most

The Realtor.com data team analyzed year-over-year median list prices in the 100 largest metros nationwide in the month of March.

They then limited their list to just one metro per state as a means to ensuring “geographic diversity.”

The result is a top-10 list of metros “where home prices are falling the most.”

The list is as follows:

1. Toledo, Ohio (-18.7%)
2. Rochester, New York (-17%)
3. Detroit, Michigan (-15.4%)
4. Pittsburgh, Pennsylvania (-13.7%)
5. Springfield, Massachusetts (-5.8%)
6. Tulsa, Oklahoma (-5%)
7. Los Angeles, California (-5%)
8. Memphis, Tennessee (-4.6%)
9. Chicago, Illinois (-3.7%)
10. Richmond, Virginia (-3.4%)

As you can see, there is quite a range in listing price drops among the top ten, with a high of -18.7% in hard-hit Toledo, to a mere 3.4% drop in Richmond, VA.

So what exactly is going on here? Weren’t home prices expected to keep rising, despite significantly higher mortgage rates?

Well, in Toledo specifically, the issue has been an elevated unemployment rate, coupled with an overheated housing market.

This has put a big strain on affordability as mortgage rates jumped from sub-3% levels in late 2021 to their current mid-5% range.

The same is largely true of the other four metros in the top five, which all happen to be located in the Rust Belt as well.

In these communities, home prices may have simply gotten way too ahead of themselves, and are simply falling back down to earth.

Of course, earth is relative because they’re likely still up tremendously from their lows seen a decade ago.

Is the Housing Market Simply Evolving?

home price forecast

They say real estate is local, in that you shouldn’t worry about the national trend as much as the neighborhood in which you’re looking to buy a home.

In other words, who cares if home prices are down in Toledo if you’re attempting to purchase a property in Phoenix?

That being said, there appears to be an emerging trend in the remaining five metros on the list that is more indicative of an evolving housing market.

In places like Chicago, Los Angeles, and Tulsa, it appears smaller properties are making their way to market.

As such, the median listing price is “down” from a year ago, but often times the price per square foot is up.

This is somewhat similar to your bag of Doritos still costing 99 cents but containing a few less chips.

For example, a prospective home buyer in Los Angeles may now be settling for a 1,500-square-foot cottage instead of say a 2,500-square foot home.

And in Chicago, there are apparently 6,000 condominium units on the market, which also drags the median list price lower.

Condos are always cheaper than single-family homes, so the -3.7% reduction in median listing price might be a bit deceiving.

Often times, condos begin to creep higher in price during the latter stages of a seller’s market as buyers look for more affordable options.

That could explain some of what we’re seeing in this early, seemingly negative data.

The other reason listing prices might be down is simply a marketing tactic. Real estate agents are listing lower to garner interest, instead of taking the risk of having to make a price cut.

This means the homes may sell for more than what they sold for a year ago when all is said and done.

On a national basis, home prices are still expected to rise a whopping 14.9% through March 2023, per Zillow.

That’s down slightly from the 16.5% year-over-year forecast made in February, as seen in the image above.

What’s incredible is this would be the highest home price growth ever recorded by Zillow prior to June 2021.

And the 6.09 million in expected existing home sales would be the second best calendar year since 2006.

So while there might be some signs of a slowdown in certain markets, don’t get your hopes up.

Home prices likely aren’t falling just yet, despite some cracks starting to show.

Lastly, if mortgage rates peak and begin to recover, we could see a new surge in buyer interest…

Source: thetruthaboutmortgage.com

NetCredit Personal Loans 2022 Review

There are places to get loans even if your credit score has fallen off the cliff. You may need that extra money for a medical or housing emergency despite the fact you have other financial obligations or are not making a top salary.

NetCredit is a lender that caters to clients with low credit ratings. That low credit score will cause you to pay a higher interest rate, though, because the lender feels you are at higher risk of not meeting your payments.

Take out a loan or open a line of credit from NetCredit, make your payments on time and you will likely see your credit rating climb. We review NetCredit here so you can decide if this lender is right for you.

What Is NetCredit?

NetCredit is an online lender, offering unsecured personal loans (and lines of credit) through their partnership with Republic Bank & Trust Company. Available in 36 states, NetCredit believes that borrowers are more than just their credit score and claims to use a broader financial summary of borrowers’ finances to create a loan plan that works for borrowers — even those with a poor credit history.

While a NetCredit personal loan is better than a payday loan, NetCredit’s personal loans have high APRs. Those APRs range from 19% to 155% depending on your state and that can make paying back the loan difficult.

We like that NetCredit’s loan term is decently flexible with repayment terms ranging from 6 to 60 months and that they have a fast deposit time. But with such high interest rates, NetCredit won’t be a good choice for most.

Personal Loans vs. Lines of Credit

Before we dive into NetCredit’s loans, here’s a quick review of NetCredit’s two services: personal loans and lines of credit.

Unlike a personal loan that is received as a lump sum, NetCredit’s open-end line of credit works as a flexible, revolving account. Basically, you can access the money up to the borrowing limit and then once repaid, you can access it up to that limit again.

NetCredit offers lines of credit with varying maximums and minimums depending on your state, but mostly an average of $500 to $4,500. To find your state’s limitations, check out NetCredit’s Rates and Terms.

Lines of credit are most often used to supplement income if borrowers run into a cash shortage. While helpful, most people use NetCredit for large upfront expenses like to consolidate debt or cover a large home expense, so a personal loan is more helpful.

Accordingly, this review focuses on NetCredit personal loans, but if you’re interested in understanding lines of credit better, check out our full review of what a line of credit is and how it works.

Things to Know About NetCredit Personal Loans

NetCredit can seem like a lifesaver for people with poor or nonexistent credit looking for a loan, but it’s important to understand what you’re really paying for with a NetCredit loan and how much it’s going to actually cost you.

Below, we outline key points to consider before you sign up for a NetCredit personal loan.

NetCredit Personal Loans

Best for Bad Credit Loans

2.5 out of 5 Overall

Key Features

  • High interest rates
  • Flexible loan terms
  • Quick approval time

NetCredit personal loans are high interest options for people who have poor credit. They offer flexible loan terms and upfront fees to help you find a loan that works for your financial situation. Interest rates, loan terms and line of credit ranges vary by state.

NetCredit Personal Loans

Interest rate ranges

19%-155%

Minimum credit score

Not disclosed

Loan amounts

$1,000 – $10,000 ($10,500 if in California)

Loan terms

6 to 60 months

Line of credit amount range

$500 – $4,500

Features Covered in NetCredit Review

There are a number of features of a NetCredit loan or line of credit that you’ll want to understand before (electronically) signing on the dotted line. We go into detail about them here so you can decide if NetCredit is right for you.

Keep in mind that one of its top selling points is that it works with clients with bad credit and there is no penalty for paying off a loan early.

Lending Terms

NetCredit mostly offers personal loans from $1,000 to $10,000, but in some states actually offers loans as little as $500 and as much as $20,000. You can look up your personal offerings by state on NetCredit’s Rates and Terms.

Unlike some online lenders that have specific, unbendable loan timelines, NetCredit’s loan terms range from six to 60 months. If you qualify for a NetCredit loan, it’ll allow you to pick your loan term amount. Just remember that while a long loan term does reduce monthly payments, it ultimately costs you more interest over time.

Interest Rates

NetCredit follows state lending laws that limit interest rates, so their rates vary depending on location and can range from 19% to 155% APR.  Where you fall in this range depends on your state of residence, your credit history, your monthly payment expectation, and the amount you plan to borrow.

These high APRs situate NetCredit somewhere in between other online lenders that often have lower APRs and payday loans that have even higher APRs.  While we’re grateful NetCredit’s APR is a more affordable option than payday loans, NetCredit’s high rates can really tank your finances.

For example, say you borrow $1,000 at 87% APR with a three-year repayment period. Here are  the totals you’ll end up actually paying for that $1,000 loan:

  • Monthly payment: $78.85
  • Total Interest paid: $1,838.44
  • Loan Cost: $2,838.44

The low monthly payment can initially seem pretty enticing, but you’ll end up paying almost three times the original loan thanks to the high interest rate. Basically, this interest can make getting yourself out of debt pretty difficult.

Fees and Penalties

NetCredit charges several fees and penalties depending on where you live. For example, in most states, NetCredit charges a late payment fee of $25 and an origination fee of 5% of the loan amount.

Thanks to NetCredit’s ClearCostForMe program, your specific fees should be explained up front before you sign up so that the extra costs for the personal loan will be clear — just make sure to read all the loan details.

One thing we do like about NetCredit’s fees is that they do not have a prepayment penalty. They don’t penalize you for paying off your loan early which we suggest you do as soon as possible to avoid the effects of NetCredit’s astronomical interest rates.

Availability

NetCredit serves 36 states: Alabama, Alaska, Arizona, Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming.

How to Get Started With NetCredit

If you’re moving forward with a NetCredit personal loan, the requirements to apply for a NetCredit loan are minimal. To apply, borrowers must:

  • Be 18 years or older (19 in Alabama and Delaware and 21 in Mississippi)
  • Have a valid personal checking account
  • Have an active email address
  • Have a verifiable source of income

Once you’ve applied, you can be approved for a loan in as little as one business day. NetCredit claims to determine your approval based on a broader financial picture, not just your credit score which often means people with less-than-perfect-credit scores still stand a chance at approval.

If approved, you’ll then fill out a form explaining the loan’s purpose and providing employment and income details, desired loan amount, repayment terms, and your social security number, and NetCredit will create the final loan terms for you to look over and sign.

Should I Get a Loan With NetCredit?

The short answer is, not if you can avoid it. While NetCredit is a good service as a last resort, it should always be treated as such. A personal loan from NetCredit comes with a high APR, which makes the cost of borrowing substantial. If you can afford to, we suggest you look elsewhere.

If you do decide to go with NetCredit, we recommend you read the loan details carefully so that you understand exactly what you’re paying and then try to pay it off as early as possible!

Alternatives to NetCredit

If you’re wary of NetCredit’s high APRs like we are, check out a few other options to consider to meet your financial needs.

Other Personal Loan Lenders

These days there are a lot of other lenders that offer much lower APRs than NetCredit. Some even advertise similar promises for fair credit scores. For example, Upstart claims to take a look at more than just your credit score and has more reasonable APRs of 9.57% to 29.99%. While it does require a credit score of 580 in most states, the lower APRs are well worth it if you can qualify. If you’re interested, check out our UpStart review.

Secured Loans

Secured loans–like a HELOC–are another option to help with your cash flow problem. These types of loans have collateral behind them so they’re less risky for lenders which normally means lower interest rates for the borrowers. You are of course risking whatever you use as collateral, but the lower interest rates can make paying off the loan much easier.

Balance Transfer Card

If you’re thinking about taking out a personal loan for debt consolidation, you might think about a balance transfer card. A balance transfer card is like any  other normal credit card except it also allows you to move a balance from one card to another. Most often what this does is buy you time, allowing you to move your balance to a card that might have a lower APR or a low introductory rate. It’s not a permanent solution to debt, but can be a big help.

Renegotiate Credit Card Debt

You can also try to negotiate with your creditors. Some things you might think about is asking for a forbearance or hardship plan, asking the lender to erase your late fees, or seeking out a debt management program.We suggest you check out the Negotiating Credit Card Debt page to help flush out your options.

Pros and Cons of NetCredit

Now that you’ve got the basics, here are the pros and cons of how we see NetCredit stack up as a whole.


Pros

  • Approval possible on the same business day
  • Loan options for people with bad credit
  • Soft credit check available
  • Opportunity to build credit


Cons

  • High APRs
  • Origination fees and late fees
  • Not available in all states

Know What You’re Getting Into With a NetCredit Loan

First, we admire NetCredit’s quick turnaround on approvals and deposits. NetCredit claims they can have you approved and money in hand the same day. While that’s possible with other online lenders, some banks will take as long as five business days to disburse your money, so if you’re in a bind, NetCredit can help you quickly.

We also like that NetCredit offers a soft credit check called MyScoreSaver that allows you to understand your personalized loan terms without a hard credit pull.

Finally, we like that NetCredit reports to the major credit bureaus. So as you pay off your loan on time, you can build your credit. There are other less expensive ways to build your credit, but if you’re going to be using NetCredit anyway, this is a nice perk.

Despite all these positives, we have to emphasize NetCredit’s high APRs and fees. NetCredit’s interest rates range from 19% to 155% — and can make it difficult to get out of a cycle of debt.

Plus, NetCredit has a $25 late fee and 1% to 5% origination fee depending on your location. While these fees aren’t exorbitant, there are some online lenders that waive these fees completely.

Frequently Asked Questions (FAQs) About NetCredit

If you’re still wondering about NetCredit, check out some of the most frequently asked questions to help you figure out if NetCredit is right for you.

Is NetCredit Legit?

NetCredit is a legitimate online lender working in partnership with the Republic Bank & Trust Company as an option for people with bad credit scores seeking a quick money source.

NetCredit’s history has not been without its problems however. In 2018, the Commonwealth of Virginia sued NetCredit for misleading borrowers and working in Virginia illegally. In addition to that lawsuit, NetCredit currently has 125 complaints at the Consumer Financial Protection Bureau in the last year. 

So the straight-forward answer is that NetCredit is legitimate, but we suggest you understand the terms of your loan before you sign.

How Long Does NetCredit Take to Deposit?

NetCredit advertises same-day approval. The approval process can sometimes take up to three business days with the money depositing one business day after the loan is approved. This deposit time is quick and one of the reasons NetCredit can help if you’re in a bind.

How Much Interest Does NetCredit Charge?

NetCredit’s APRs range depending on where you live and your financial history, but can be anywhere from 19% to 155%. You can look up your state’s specific range on NetCredit’s Rates and Terms.

Is NetCredit a Predatory Lender?

NetCredit isn’t a straight-forward predatory lender, but they do have some predatory lender-like practices, namely high interest rates. 

Enova International, NetCredit’s parent company, has been put on the NCLC’s High-Cost Rent-a-Bank Loan Watch List for suspicious activities regarding possibly skirting state laws that are meant to protect borrowers. 

Even the NetCredit website itself references that fact that there may be lower APRs available on the mark. So no, NetCredit is not on some official predatory lender list, but it is worth watching and being careful what you sign up for.

​​Contributor Whitney Hansen writes for The Penny Hoarder on personal finance topics including banking and investing.

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Source: thepennyhoarder.com

The Cheapest Neighborhoods in Miami for Renters in 2022

The Magic City has been beckoning people to move to its sun-drenched environs for decades now.

Miami is one of the most popular destinations for people moving in the U.S. and is even considered one of the best places to live in Florida. And who can blame people for flocking to Miami? Sun, ocean, perfect weather — Miami has it all.

If you’re thinking about packing your bags for South Florida, this roundup of the cheapest neighborhoods in Miami will help you find the perfect apartment to call home.

What is the average rent in Miami?

The average rent for a two-bedroom apartment in Miami is $3,249. That’s an increase of 9.23 percent in just one year. This is an average, however, and you will find apartment prices will vary by neighborhood.

The 10 most affordable neighborhoods in Miami

Fortunately, many of the cheapest neighborhoods in Miami are more affordable than the citywide average. “Cheap” doesn’t mean bad, however. All of these neighborhoods still have access to all the amenities Miami is known for. Most of these are on the south or east side of the city, within easy commuting distance of downtown and Miami’s world-class universities. A few of them are even on the waterfront.

You’re sure to find a great apartment to call home in one of these neighborhoods.

10. Upper Eastside

upper east side, one of the cheapest neighborhoods in miami

upper east side, one of the cheapest neighborhoods in miami

Source: Rent.com/631 NE 69th St.
  • Average 2-BR rent: $3,415
  • Rent change since 2021: +3.92%

This neighborhood sits right on Biscayne Bay and is next door to Little Haiti. Two designated historic districts sit within its boundaries. The age of the neighborhood means it contains a mixture of architecture from Frame Vernacular to Art Deco to Midcentury Modern. It’s a great place to live for architecture fans! You can walk down the street and see historic buildings from multiple time periods sitting side by side.

Upper Eastside contains an impressive number of parks for such a small neighborhood. You’ll never run out of restaurants and bars to try. Sidewalk cafés are especially popular in this neighborhood. It’s also home to the striking retail complex Miami Ironside. Want to head to the beach? No problem — Upper Eastside is right across the bay from Miami Beach. Just hop on the bridge at NE 79th Street and you’ll be there in minutes.

9. Golden Pines

golden pines

golden pines

Source: Rent.com/Gables Columbus Center
  • Average 2-BR rent: $3,034
  • Rent change since 2021: +19.89%

Golden Pines is a small neighborhood on the southeast side of Miami, not too far from Downtown. It buts up against Coconut Grove and Coral Gables. It’s just a few blocks from the waters of Biscayne Bay. Several of Miami’s best museums, including Vizcaya Museum and Gardens and the Coral Gables Museum, are within easy reach, as are two of the city’s botanical gardens.

Douglas Park is located within the neighborhood and two of the parks on Biscayne Bay are nearby. The Coral Gables Hospital is on the western edge of the neighborhood. You’ll also be an easy commute from the University of Miami. This makes the neighborhood popular with college students, of course.

8. Coral Way

Coral Way, one of the cheapest neighborhoods in Miami

Coral Way, one of the cheapest neighborhoods in Miami

Source: Rent.com/2745 SW 17th St.
  • Average 2-BR rent: $3,020
  • Rent change since 2021: +18.28%

If you want to be close to Downtown but live somewhere with a suburban feel, Coral Way is made for you. It’s bounded on the west by Coral Gables and the east by Biscayne Bay. Downtown is just a short drive away. You can easily get to Hobie Island Beach Park and Virginia Key. Just hop on Highway 913.

Do you want a variety of restaurants? Nightlife? Plenty of parks and outdoor activities? This neighborhood has them. It’s also home to several museums and isn’t far from Wynwood, the arts and culture center of the city. Finally, it’s within an easy commute of Miami International Airport to the northwest and the University of Miami to the south.

7. Boca del Mar

Boca del Mar

Boca del Mar

Source: Rent.com/Gables Boca Place
  • Average 2-BR rent: $2,674
  • Rent change since 2021: +19.36%

This community sits on the west side of I-95 and has a distinctly suburban feel. Boca del Mar is a master-planned community with many residential enclaves, schools, churches, golf courses and outdoor activities such as parks and bicycle trails. It’s much quieter than the city center and most of the commercial plazas contain typical chain stores and restaurants.

This neighborhood is popular with families and professionals who want the advantages of an urban lifestyle while having the amenities of the suburbs. The average rent is increasing rapidly in this up-and-coming neighborhood, but it still ranks No. 7 on the list of most affordable neighborhoods in Miami.

6. Miami Urban Acres

Miami Urban Acres, one of the cheapest neighborhoods in Miami

Miami Urban Acres, one of the cheapest neighborhoods in Miami

Source: Rent.com/3640 SW 22nd St.
  • Average 2-BR rent: $2,555
  • Rent change since 2021: +3.28%

Miami Urban Acres is just west of Coral Gables near the Coral Gables Museum and Coral Gables Hospital. It’s an almost completely urbanized neighborhood in the midst of the hustle and bustle that makes Miami so attractive. This neighborhood is convenient to just about everything — the beach, the airport and Downtown — all without the expensive prices that go along with living in those neighborhoods.

This neighborhood has many restaurants to try and is notable for its wide variety of Latin and South American food choices. Shopping options within the neighborhood are limited and are mostly national chains, but it’s within easy reach of some of the best shopping districts in Miami. There’s not much nightlife here, so you’ll need to drive to find the best clubs. The location makes getting anywhere in Miami a breeze, however.

5. Edgewater

Edgewater Miami

Edgewater Miami

Source: Rent.com/455 NE 25th St.
  • Average 2-BR rent: $2,394
  • Rent change since 2021: -13.01%

Just northeast of Downtown, you’ll find Edgewater tucked along the edge of Biscayne Bay, with gorgeous views of the sunset and easy access to Miami Beach. It’s right next door to the arts and culture district in Wynwood, too.

It might surprise you to find this neighborhood on the list of cheapest places to live in Miami, but it’s true. Rents have actually fallen in the last year. It’s mostly a residential neighborhood, but more retail spaces have been opening up as the neighborhood increases in popularity. Margaret Place Park and Biscayne Park provide outdoor activities for nature lovers. The schools have good ratings, as well.

4. Fountainebleau

Fountainbleau, Miami

Fountainbleau, Miami

Source: Rent.com/990 NW 99th Ct.
  • Average 2-BR rent: $1,819
  • Rent change since 2021: -8.45%

If you’re looking for the most affordable neighborhoods in Miami near Florida International University, consider Fountainebleau. It’s one of the few on this list on the west side of the city and is near enough to the university to bike or catch the bus. Some of the apartment complexes are even within walking distance of the FIU College of Engineering and Computing.

Like most college neighborhoods, this one skews towards the younger end of the demographic curve, with the vast majority of residents being under 44. The retail scene is thriving here. This neighborhood is home to some of the biggest shopping centers in the city, including the Mall of the Americas. You can also find more common options, such as Walmart and Target.

Nature lovers will love the numerous parks and lakes that dot the neighborhood. And of course, the mall and the university mean there’s an endless variety of eateries and nightlife.

3. Fontainbleau Park East

Fountainbleau Park East, cheap neighborhood in miami

Fountainbleau Park East, cheap neighborhood in miami

Source: Rent.com/9350 Foutnainbleau Blvd.
  • Average 2-BR rent: $1,797
  • Rent change since 2021: -9.68%

This neighborhood is on the western side of the city near Florida International University. Fountainbleau Park East is a popular neighborhood for students and university employees. The north side of the neighborhood is bordered by the Dolphin Expressway and the south side by W Flagler Street.

It’s not too far from the airport, either and is also close to the Mall of the Americas. It’s a typical college neighborhood, with plenty of cheap restaurants and sports bars. There are many lakes in the neighborhood and Everglades National Park is only a short drive away.

2. Riverside

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Source: Rent.com/855 7th St.
  • Average 2-BR rent: $1,628
  • Rent change since 2021: +14.91%

You’ll find the neighborhood of Riverside situated between Downtown on the east and East Little Havana on the west. It was the first Miami suburb created west of the Miami River, which borders the neighborhood and gives it its name.

This neighborhood has a dense urban feel and is home to many restaurants, bars and coffee shops in addition to residential housing. You can also find several parks within its borders. The public schools are above average. Many families choose to live in this affordable neighborhood. Commuting Downtown or to the rest of the city is easy given its central location.

1. Riverview

Riverview, cheapest neighborhood in Miami

Riverview, cheapest neighborhood in Miami

Source: Rent.com 900 SW 8th St.
  • Average 2-BR rent: $1,356
  • Rent change since 2021: -4.26%

If you’re looking for the cheapest neighborhoods in Miami, you can’t get cheaper than Riverview. It’s the most affordable neighborhood in the entire city. This older neighborhood is part of East Little Havana and is home to the Riverview Historic District. It’s not far from Downtown and is bordered by the Miami River on the North. Riverside Park abuts the eastern boundary.

This is a highly diverse neighborhood with plenty of cafés and nightclubs. Naturally, it has a lot of Latin culture, and you can find some of the best Cuban food in the city here. The Manuel Artime Theater is on the western edge of Riverview. There’s enough variety in the available activities to please anyone except the most ardent outdoor enthusiasts, who will have to drive to find places to canoe, hike, etc. Riverview’s location makes commuting to Downtown or Brickell easy.

The most expensive neighborhood in Miami

On the other end of the scale from the cheapest neighborhoods in Miami, the most expensive neighborhood in Miami is trendy Brickell, not too far from Downtown. A two-bedroom apartment in this neighborhood will set you back an average of $4,639 per month. Rents in Brickell have gone down over the past year, however, dropping by just more than 2 percent.

Brickell abuts Downtown Miami and is a walkable, mixed-use neighborhood with many luxury apartments and a wide variety of retail shops and restaurants. It’s also home to many financial institutions. This neighborhood is walkable, easy to get around and is trendy.

Find an affordable neighborhood for your next apartment

Are you looking to move to the Sunshine State? There are plenty of apartments for rent in the cheapest neighborhoods in Miami. The city would love to have you. You’re sure to find your perfect fit. Pack your bags and come on down. Don’t forget the sunscreen!

Rent prices are based on a rolling weighted average from Rent.com’s multifamily rental property inventory as of January 2022. Our team uses a weighted average formula that more accurately represents price availability for each unit type and reduces the influence of seasonality on rent prices in specific markets. The rent information included in this article is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.

Source: rent.com

How to Avoid Taxes on Social Security

Uncle Sam cutting Social Security benefits
Jim Barber / Shutterstock.com

Editor’s Note: This story originally appeared on NewRetirement.

As you prepare for retirement, it’s essential to understand what your taxes will be.

You may think your Social Security benefits are tax-free. After all, why would the government pay you money with one hand and take it back with the other?

But the truth is, you may pay taxes on your Social Security benefits if you have other sources of income in retirement.

At a certain level of overall income – that includes your Social Security benefits, paid work, withdrawals from investments, passive income or other sources – your Social Security benefits are taxed. And, if you work while taking Social Security before your full retirement age, your benefits are reduced.

Following are the ways your Social Security benefits could be reduced and how to handle them.

Social Security and Federal Income Tax

Social Security taxation
designer491 / Shutterstock.com

Once you hit a certain age, the rules for Social Security taxes are similar to other federal income taxes in that the more money you make overall, the more you are taxed.

But even at the highest tax rate, at least 15% of your Social Security benefits are shielded from tax.

IRS Rule of Thumb for Social Security Taxes

The IRS has a rule of thumb for savers who want to see if their Social Security benefits are taxable: add one-half of your Social Security benefits to all your other income, including tax-exempt interest.

Lowest Bracket: If the number is greater than $25,000 for single filers or $32,000 for married couples, you will owe tax on your benefits.

Middle Bracket: If you exceed the threshold for tax-exempt benefits, but your combined income for single filers is below $34,000, you pay tax on half of your benefits. Fifty percent of your benefits are taxable If you are married and filing jointly, and you make between the minimum amount but less than $44,000 in combined income.

Highest Bracket: Single people making more than $34,000 and married couples making more than $44,000 combined income have 85% of their benefits taxed. But remember, that doesn’t mean the government takes 85% of your benefit!

Fifteen percent of the benefit for high earners is tax-free, and the part that is taxable is only taxed at your income tax bracket, for example, 24% for married couples making between $168,401 and $321,450.

State Taxes on Social Security Benefits

A padlock on Social Security cards
larry1235 / Shutterstock.com

The rules given above for taxing Social Security benefits only apply to federal taxes.

Thirteen states also tax Social Security benefits.

  • Four states tax them the same way the federal government taxes them.
  • Nine states make exemptions for age or income, reducing the tax burden somewhat.

Thirty-seven states do not tax Social Security benefits.

States That Tax Social Security Like the Federal Government

Minnesota, North Dakota, Vermont, and West Virginia apply state taxes to Social Security benefits using the same brackets as the federal government.

States That Tax Social Security Benefits but Have Different Rules Than the Federal Government

These states each have their own taxation rules for Social Security benefits: Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, New Mexico, Rhode Island, and Utah.

States That Do Not Tax Social Security Benefits

These 37 states (and the District of Columbia) do not tax Social Security retirement income: Alabama, Alaska, Arizona, Arkansas, California, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, and Wyoming.

Additional Social Security Deductions If You Work and Collect Benefits Before Full Retirement Age

Image Point Fr / Shutterstock.com

State and federal taxes are not all you need to worry about with Social Security benefits. There can also be a temporary reduction in benefits if you have not yet reached full retirement age and you are receiving work income above a certain level.

So while you are allowed to start benefits as soon as you turn 62 , the sooner you start collecting your benefits, the less your monthly benefit will be. Conversely, the longer you wait (up to 70 years old), the more your monthly income will be.

And the other downside to starting benefits early is that if you elect to start collecting benefits before your full retirement age and you are also still receiving work income, you will get less money than if you wait to collect, and the combined income you get will be subject to tax.

The full retirement age from 2022 onward is 67 for anyone born after 1960.

Temporary Reduction in Benefits if You Are Working

For work before full retirement age, Social Security will deduct money from your benefits according to the following guidelines:

  • If you are under full retirement age for the entire year, Social Security deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2022, that limit is $19,560.
  • In the year you reach full retirement age, Social Security deducts $1 in benefits for every $3 you earn above $51,960 for 2022.

However, you will get those lost benefits back because your Social Security payments will be increased when you reach your full retirement age. (This is to take into account those months in which benefits were withheld.)

And, after you reach full retirement age, you will no longer pay a work penalty. The month you reach full retirement age, you receive your full benefit whether you work or not. (However, as stated above, up to 85% of your benefits may be taxed by the Federal government and state governments if you earn more than the limits.)

Summary

To put it simply, if you work before your full retirement age, your monthly benefit is cut by a dollar for every two dollars you make above the $19,560 limit. For example, if your monthly benefit is $800 ($9,600 per year), and you earn $29,560 ($10,000 over the $19,560 limit) from work, your benefit will be cut by $5,000 to $4,600 for the year.

But that also means that your potential tax burden will be less.

If you work after full retirement age, you will receive your full monthly benefit no matter what, but depending on how much money you make, up to 85% of your Social Security benefits will be taxable at whatever your marginal tax rate is.

How to Reduce Your Social Security (and All Retirement) Taxes

Senior man working on a laptop
Monkey Business Images / Shutterstock.com

Taxes are a significant cost and can eat away at your retirement savings and income potential. Tax planning should be a critical component of creating a reliable retirement plan.

One of the easiest ways to reduce tax expenditures is to (legally) reduce your annual income levels to stay in the lowest possible tax bracket. Remember, the less you earn, the less you are likely to pay in taxes.

The NewRetirement Planner makes it easy to create a tax forecast for the rest of your life. The system automatically calculates your:

  • Federal tax based on the latest IRS publications
  • State taxes — using the specific rules for all 50 states
  • Work penalties

To create these forecasts, the NewRetirement Planner gives you robust inputs to create the most reliable projections possible. You can:

  • Set different levels of income throughout retirement to approximate your tax bracket for each year. Additionally, it allows you to specify if annuity and/or pension income should be taxed (at both the federal and state levels).
  • Get automatic estimates for how much of your Social Security income will be considered taxable based on the state you live in and your gross taxable income by year.
  • Specify how much of your savings are in different types of taxable and nontaxable accounts and it automatically calculates the tax liability (or lack thereof) for each account, as well as tax deduction handling of contributions. (And, if you live in a state that doesn’t tax retirement savings withdrawals, the NewRetirement Planner supports that, as well.)
  • Get estimates for your required minimum distributions (RMDs) from retirement accounts starting at age 72 — a significant lever when it comes to tax liability in retirement.
  • Choose whether investment returns on after-tax savings should be treated as long-term capital gains or ordinary income.
  • Model a Roth conversion and get an estimate on the tax hit in the year of the conversion as well as the benefit down the road when you draw from the Roth account.
  • Model relocating to a new state, and the system factors that in and uses your new state’s tax rates for the years following your planned move.
  • See estimated taxes, gross taxable income by source, and your federal tax deductions for every year until your goal age — again enabling you to see opportunities for reducing your tax expense.

Want more retirement planning tax tips? Check out “Retirement Planning and Your Taxes: Tips for Keeping More of Your Own Money.”

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Source: moneytalksnews.com