Mortgage lenders GO Mortgage and PacRes struck a deal to merge their businesses, allowing them to gain scale and reduce the cost of originating a loan in a higher-for-longer mortgage rate environment. The financials of the transaction were not disclosed.
“By uniting our unique capabilities and resources, we will achieve significant operational improvements,” Michael Isaacs, CEO of GO Mortgage, said in a prepared statement. Matt Stashin, CEO and founder of PacRes Mortgage, added that “in today’s lending environment, a focus on driving down the cost to originate a loan is critically important.”
The parties expect the transaction, announced on Friday, to close in the third quarter of 2024.
Loan volume has the potential to double in the combined company. Mortgage tech platform Modex shows that Columbus, Ohio-based GO Mortgage originated about $690 million in mortgage loans over the last 12 months. Meanwhile, Portland, Oregon-headquartered PacRes produced about $440 million in the same period.
According to the Nationwide Multistate Licensing System (NMLS), GO Mortgage is combining its 91 sponsored loan officers and 26 active branches with PacRes’s 63 sponsored LOs and 16 active branches.
The companies are complementary geographically. GO Mortgage gets most of its business in states such as Ohio, Florida, Pennsylvania, and Wisconsin, while PacRes is focused in Oregon, California, and Utah, per Modex data. Both companies are focused on originating purchase mortgages.
According to the merger agreement, Stashin will join the GO Mortgage board of directors, Isaacs will be the combined company CEO, and Melissa Stashin, the president and cofounder of PacRes, will become president of the merged business.
PacRes cofounder and executive vice president Eric Wiley will be chief experience officer, and GO Mortgage’s Andrew Panagos will become chief operating officer.
Mortgage industry experts anticipated more merger and acquisition transactions in 2024 amid a challenging landscape. In 2023, HousingWire reported on 62 mergers, acquisitions, exits, and bankruptcies.
So far this year, Utah-based Capital Community Bank (CCBank) acquired Security Home Mortgage (SHM), and California-based Mountain West Financial sold its retail assets to competitor ML Mortgage Corp.
Earlier in the year, CrossCountry Mortgage acquired Amcap Home Loans, Guild Mortgage struck an agreement with Academy Mortgage, and New American Funding (NAF) nabbed Draper & Kramer Mortgage Corp. In addition, CMG Financial acquired Norcom Mortgage’s retail assets.
Detroit is a Delta Air Lines hub through and through. As a result most of the lounges in the airport belong to the airline.
If you are not a SkyTeam flyer, there are some other options worth trying, but be sure to see where they are located as the two main terminals are not physically connected. This means it is only convenient to use the lounge in the terminal you are using although there is a shuttle that takes guests between them.
No matter whether you use Priority Pass, the American Express Global Lounge Collection, credit card lounge access or club membership, there are several Detroit airport lounges. As a result, it can be helpful to know what is available before your next flight.
About DTW lounges
McNamara Terminal: Delta Sky Clubs, Priority Pass
Lounges at Detroit Airport’s McNamara Terminal mostly serve SkyTeam passengers. There, you will find a suite of Delta Sky Clubs as well as a Minute Suites, which provides Priority Pass access.
Delta Sky Clubs
Regardless of which Delta Sky Club you access, rules for admittance stay the same.
Must present a boarding pass to enter.
Open to SkyTeam premium cabin and eligible elite status passengers.
Open to annual Sky Club members within three hours of departure (or any time if making a connection).
Open to certain Delta co-branded cardholders and Platinum-branded cardholders. See card options below.
Cards with Delta SkyClub access
Delta SkyMiles® Reserve American Express Card
Delta SkyMiles® Reserve Business American Express Card
The Platinum Card® from American Express
The Business Platinum Card® from American Express
Annual fee
Still not sure?
CONCOURSE A
Gate A18: Located across from Gate A18 on the second level of the Express Tram South Station. An open bar, Starbucks coffee station, hot and cold food buffet, and workstations where travelers can charge devices are all on tap here.
Gate A38: This is the largest Sky Club at the airport and also has the longest operating hours. Aside from the traditional workstations, food and beverage options and Starbucks coffee station, this lounge also has showers. It is the only Delta lounge at the airport to offer them.
Gate A43: This is yet another lounge option for Delta and SkyTeam passengers featuring an open bar, hot and cold food, workstations and a Starbucks coffee area.
Gate A68: Located across from Gate A68 on the second level of the Express Tram North Station. Like other Delta lounges in the airport, there is an open bar, hot and cold food buffet and plenty of workstations where travelers can charge devices. A Starbucks coffee station is also available.
CONCOURSE C
This is the only Delta lounge in Concourse C. It has a full-service bar plus a buffet of hot and cold items. One of its many features is a cozy fireplace, which is popular during the colder months. A Starbucks coffee station is also available.
Priority Pass lounges
Minute Suites
This is not a traditional lounge. Instead, it provides private rooms where guests can lie down on a bed, work or watch TV. It is a great option if you need some alone time and want to escape the busy terminal.
Be Relax Spa 1
Located near Starbucks at Gate A18.
Be Relax Spa 2
Located between Johnston & Murphy and Vino Volo near Gate A46.
Either location is open to anyone for a fee. Priority Pass cardholders receive relaxation services free of charge.
These are not traditional lounges. Anyone with a Priority Pass card can take advantage of several relaxation services. These include a 15-minute massage plus oxygen, a 30-minute massage, nail polish change and hand massage, or a chair massage plus oxygen.
Evans Terminal: Lufthansa, Priority Pass lounges
This terminal is on the other side of the airport and not connected to the McNamara Terminal. Here, visitors have two Priority Pass options, and Star Alliance flyers have access to a Lufthansa lounge.
Lufthansa Business Class and Senator Lounge
Located next to Gate D8.
Open to Priority Pass members during certain hours. It is also available to Lufthansa premium cabin passengers and those with eligible elite status. Star Alliance Gold members traveling on United plus United first class passengers and United Club members can also access this lounge.
This lounge is also part of the American Express Global Lounge Collection, which means you use an eligible credit card to gain access.
This lounge has a hot and cold food buffet (depending on time of day), an open bar, workstations and comfortable seating.
Anita’s Kitchen
Near Gate D23.
Open to anyone, but also to Priority Pass cardholders.
This is another non-traditional lounge. It is a Lebanese restaurant serving fresh salads, burgers and shawarma among other things. Priority Pass cardholders receive a $28 credit to use here.
Best Priority Pass cards
Chase Sapphire Reserve®
on Chase’s website
Capital One Venture X Rewards Credit Card
The Platinum Card® from American Express
Annual fee
Priority Pass benefits
• Full Priority Pass Select membership.
• Includes two guests per visit.
• Full Priority Pass Select membership.
• No limit on the number of guests allowed.
• No restaurants.
• Full Priority Pass Select membership.
• Includes two guests per visit.
• No restaurants.
Enrollment required. Terms apply.
• 10 complimentary Priority Pass lounge visits per year.
• No restaurants.
Terms apply.
Learn more
Plenty of variety from the lounges in Detroit Airport
Whether you want a place to lie down, to shower, to work, to eat or to relax, Detroit airport lounges have you covered. Not everyone has access to all of them, and it is wise to review your access options before arriving too early at the airport.
With a plethora of Delta Sky Clubs as well as several other options for Priority Pass members, and if you have access, the ideal Detroit airport lounge is available on your next trip.
To view rates and fees of the Delta SkyMiles® Reserve American Express Card, see this page.
To view rates and fees of the Delta SkyMiles® Reserve Business American Express Card, see this page.
To view rates and fees of The Platinum Card® from American Express, see this page.
To view rates and fees of The Business Platinum Card® from American Express, see this page.
Fixating too much on the rate, Clark said, means some borrowers are dissuaded by supposedly high borrowing costs and lose sight of the fact that they could feasibly afford the mortgage. “When you take the rate out of the equation, if the monthly payment is where it needs to be and the house is what … [Read more…]
A bank statement loan allows you to qualify for a mortgage using bank statements rather than tax returns. It’s most often used by self-employed borrowers.
Not all mortgage lenders offer bank statement loans. You might need to work with a mortgage broker to find one.
If you qualify for a conventional or government-backed loan, it’s likely a better option.
If you’re self-employed or a gig worker looking to buy a home, a bank statement loan might help. With this loan, you use bank statements rather than tax returns for mortgage preapproval.
What is a bank statement loan?
A bank statement loan allows you to apply for a mortgage without having to prove your income via pay stubs, W-2s or tax returns. Instead, lenders use recent bank statements to assess your earnings.
This loan type can be helpful if your income is inconsistent, your employer doesn’t issue traditional paychecks or you claim significant tax deductions. This might apply if you’re self-employed or a small business owner, doctor, lawyer, real estate agent or investor.
“One example would be if your tax returns show that you made $100,000 last year when you really made $200,000 because you were able to deduct an expensive printing machine you bought,” says Brad Seibel, president of Sage Home Loans Corp. “Your bank statements, rather than your tax returns, would adequately show your income.” (Editor’s note: Sage Mortgage is owned by Bankrate parent company Red Ventures.)
How non-QM loans relate to bank statement loans
Bank statement loans are considered riskier than typical mortgages, and many banks and mortgage lenders don’t offer them. That’s because they’re non-qualified mortgages (non-QM), meaning they aren’t backed by Fannie Mae and Freddie Mac, so there’s less protection for lenders and borrowers.
Non-QM mortgages include any loan that doesn’t meet the conforming standards set by Fannie and Freddie. These standards cover characteristics like the maximum loan amount and debt-to-income (DTI) ratio.
Non-QM loans allow more borrowers to qualify for a loan. However, they tend to have higher interest rates, meaning they cost more. They also lack some of the consumer protections that conforming loans have. For example, a non-QM loan could negatively amortize or include a balloon payment.
How do bank statement loans work?
When you apply for a bank statement loan, you’ll provide the lender with bank statements as far back as two years. This includes statements for personal and business accounts. You’ll also need to disclose other information about your business and expenses, if applicable.
“The type of business, the number of employees and whether the business has a physical location are some of the questions that bank statement lenders will want to know to decide the expense factor,” says Darrin Seppinni, president of HomeLife Mortgage, a California-based lender specializing in bank statement loans.
The lender then analyzes your income to determine your net income. From there, if you meet the lender’s other requirements, you’ll be preapproved for a certain loan amount.
Bank statement loan example
Let’s assume you’re self-employed, have a credit score of 740 and want to purchase a home. Your income fluctuates month to month, averaging out to $6,875. You also put $800 a month toward other debt payments. If the lender allows a DTI ratio of up to 45 percent, you could potentially qualify for a mortgage with a monthly payment of about $2,295. The exact number will vary widely based on current mortgage interest rates, your down payment and other factors.
Bank statement loan vs. traditional mortgage
Traditional mortgages, such as 30-year fixed-rate conventional or FHA loans, are more common than bank statement loans. They are geared toward borrowers with consistent, verifiable income documented on pay stubs, W-2s and tax returns. You can get approved for a conventional loan with a down payment as low as 3 percent and a minimum 620 credit score.
However, bank statement loans are far less common. They cater to self-employed borrowers or those with inconsistent income. Typically, they come with eligibility guidelines that differ from traditional mortgages.
Bank statement loan requirements
Generally, you can qualify for a bank statement loan with a credit score as low as 620, but 700 or higher gets you a better rate and terms. If your credit score is on the lower end, though, you might also need to make a larger down payment. Doing so lowers the risk posed to the lender.
Overall, expect to meet the following requirements:
Provide two years’ worth of bank statements
Provide a profit and loss statement for your business
Make at least a 10 percent down payment
Have adequate cash reserves
Have a credit score of at least 620
Have a DTI ratio of 45 percent or lower (some lenders allow a higher percentage)
Provide business licenses, organization documents and other related paperwork
Should you get a bank statement mortgage?
A bank statement mortgage loan might be right for you if your tax returns don’t adequately reflect your income. Fact is, many self-employed workers are eligible for other, more traditional types of mortgages, even with inconsistent income. Given that bank statement loans have considerable downsides, it’s crucial to carefully consider all options. Ultimately, you want to try a conventional loan first.
But there are scenarios where it might make more sense to get a bank statement loan, such as if you’re self-employed and heavily use tax write-offs to minimize your adjusted gross income (AGI). Or maybe you’re a small business owner who acquires new businesses, but your personal income taxes are significantly reduced due to large one-time payments.
Borrowers like these will likely face challenges when seeking a conventional or jumbo mortgage loan. But a bank statement loan offers a viable solution, as it assesses income based on bank statements rather than AGI from tax returns or pay stubs.
Good candidates for a bank statement mortgage include:
Self-employed individuals
Freelancers
Small business owners
Entrepreneurs
Gig workers
Full-time real estate investors
You might also consider a bank statement loan if your income can’t be documented in a traditional way. For example, some employers pay workers via prepaid cards instead of direct deposit.
Bank statement loans give non-traditional income earners the chance to buy a home. Still, they aren’t without drawbacks. Weigh the pros and cons when deciding if this mortgage option is right for you.
Pros of bank statement mortgages
Flexibility: If you have non-traditional income streams, you can use your bank statements in lieu of traditional income documents to qualify for a loan.
Accessibility: You don’t need perfect credit to get a bank statement mortgage, as some lenders accept borrowers with credit scores as low as 620.
May have higher loan limits: With a bank statement loan, you might be able to take out a bigger loan than conventional loan limits.
Cons of bank statement mortgages
Higher borrowing costs: Expect higher interest rates due to the risky nature of these loan products.
Larger down payment: Lenders generally require a down payment of at least 10 percent, which is higher than those required for conventional and government-backed loan products.
Prepayment penalties: Some bank statement loans come with prepayment penalties that could make it costly to refinance or pay your balance off early.
How to apply for a bank statement loan
If you aren’t already working with a mortgage lender who offers bank statement loans, a mortgage broker might be able to help you find one. Brokers often have partnerships with several wholesale lenders, which gives them access to various unique mortgages and deals.
Brokers typically don’t charge borrowers for their services. Instead, they charge the lender, who then passes the cost onto you in the form of fees or a higher rate.
When comparing brokers, ensure whoever’s on your shortlist is licensed to work in your state and has experience with bank statement loans. Once you choose the right fit, connect with them to explore lenders that can assist you with securing a bank statement loan.
With a shortlist of lenders in hand, here’s how to move forward:
Step 1: Get preapproved. Connect with loan officers to discuss your situation and get preapproved. Doing so will give you an idea of the loan terms and how much you might be able to borrow.
Step 2: Compare loan offers. When comparing loan options from your top lenders, look carefully at estimated closing costs, APRs and other fees to choose the loan with the best terms that also suit your needs.
Step 3: Formally apply for a loan. Gather all the necessary information and documents needed to apply for a bank statement loan with the lender you select.
Alternatives to bank statement loans
Bank statement loans are one way for people to borrow money, but there are other mortgage loan options. Unlike bank statement loans, these options typically don’t require years of financial records and are typically less expensive to get. These alternatives include:
Conventional loans: Conventional loans are available through virtually every mortgage lender. They tend to offer much better interest rates and terms compared to bank statement loans. Simply put, “if you have pay stubs, it’s a much better deal to submit pay stubs,” says Seibel.
FHA loans: FHA loans are especially popular among first-time homebuyers due to their flexible qualification criteria.
VA loans: Eligible service members, veterans and surviving spouses can obtain a VA-backed mortgage with no money down.
Asset depletion loans: If you have no income but significant assets, a lender might be able to use those assets to qualify you for a mortgage. These types of loans are costly, however — it might make more sense to sell some assets to get the funds to buy a home.
DSCR loans: If you’re a real estate investor, you might qualify for a debt service coverage ratio (DSCR) loan, which is based on your portfolio’s cash flow and how that relates to your ability to repay the mortgage. Keep in mind that when calculating the DSCR, lenders tend to be conservative and account for higher expenses and a vacancy rate.
Interest-only loans: With this type of loan, you’ll only pay interest for the first few years of the loan’s term, then pay principal and interest. This keeps your costs low for a while, but you also won’t build any equity during the intro period, and you might not be able to afford the principal and interest payments once they kick in.
Portfolio loans: When a lender issues a portfolio loan, it retains that loan in its portfolio versus offloading it on the secondary mortgage market. Because of this, these types of loans have more flexible qualifying standards. They aren’t always advertised, however, and are typically reserved for high-value customers or those who already have a relationship with the lender. If you’re an investor, consider maintaining your bank accounts with a portfolio lender. This can give you a leg up when you need a mortgage.
Bank statement loans FAQ
It might be challenging to find a bank statement loan lender, but it’s not impossible. Some even specialize in this type of loan. If you can provide bank statements to prove your income and meet the lender’s other guidelines, getting approved might not be difficult at all.
It depends on the loan amount you’re seeking. You’ll need enough funds to cover the minimum down payment and closing costs, as well as some reserves in your accounts. Learn more about how much of your income should go to a mortgage.
The prospect of hosting a dinner party at my house filled my heart with panic. I had been wanting to update my dining room. Suddenly, I had an incentive — and a deadline.
The dinner party wasn’t my idea. A few months ago, a friend hatched a plan to auction off a dinner for eight at my house for an Orlando Philharmonic Orchestra fundraiser.
“You know how your column is At Home With Marni?” was how she framed it. “Well, this would let people actually be at home with Marni. Get it?”
Oh, I got it. If I’d known when I started writing a home design column what all I’d be getting myself into, I would have become a pet therapist. People assume I live up to my words! Before I agreed — and because no one should pay to eat my cooking — I called a chef I knew to see if he’d help. Chef Angelo Bersani generously agreed to donate his time to prepare and serve dinner, if I paid for the groceries. Done! Chef and I became a package deal on the auction block.
I live in the real world, so redecorating does not mean tossing all my furniture and starting over. It means working with what I have and making small refinements to get, ideally, big results. The trick, however, is knowing what those small moves are. So I called Los Angeles interior designer and long-time friend Christopher Grubb for help, asking if he’d call the shots while I did the legwork, which included shopping for materials, gathering samples and coordinating workers.
With a chef and a designer on board, I could feel my lungs fully expanding, my blood pressure dropping. Over the next eight weeks, we exchanged dozens of texts, photos and a few sobbing emojis, and made the following small refinements, which yielded big results, and just might do the same for a room or two in your home:
Added lampshades: Although I had replaced the dining room’s dated light fixture a few years ago, I had not “finished” the fixture off with chandelier shades, which Grubb advised. I test drove three shade styles, ordering one of each and returning the rejects, before settling on a black tapered shade. Because black shades direct light down, not out, they can make lighting more dramatic.
Filled in the art niche: Art niches in walls can be difficult to work with, as they limit the size of art you can hang in them. The niche in my dining room’s accent wall was 5-feet square and 3-inches deep. Until recently, a large tapestry hung over the niche and covered it. But, as part of my attempt to make the space more contemporary, I sold the tapestry and now had this, uhh, hole in the wall. “Art niches just make you ask why?” said Grubb, who recommended having a drywaller fill it in.
Put up wallpaper: To make the open room feel cozier and more intimate and to distinguish the alcove from the entryway, Grubb suggested covering the now smooth back wall and ceiling with sea-blue grasscloth, which added character and texture to the room.
Replaced mirrors: Although Grubb liked the idea of two mirrors flanking the art on the main wall, he suggested replacing the existing round ones with larger, vertical mirrors to make the room appear taller. Since we were moving toward a more transitional and less traditional look, we kept the frames simple.
Updated end chairs: Although our goal is to replace all the tapestry-covered dining chairs with more contemporary seating but keep the existing table, here we hit an impasse. I couldn’t find any chairs I liked that would also be available in time for my dinner party. Rather than compromise, I bought the chairs I wanted and accepted the fact that they wouldn’t arrive until September. Darn that supply chain. Meanwhile, I recovered the table’s two armchairs in a bold zebra-print fabric and painted the wood lacquer black. These chairs, which I wrote about a few weeks ago, are now fixtures in my living room, but for dinner parties they double as end chairs.
Added ambiance: With the new furnishings in place, all I needed to do was add the finishing touches — a fresh centerpiece of pale roses, patterned table linens, crystal and silver, candles and, of course, illustrious guests — to make the room come together like a symphony.
Marni Jameson is the author of seven books, including the recent “Rightsize Today to Create Your Best Life Tomorrow.” Contact her at [email protected]. Join her on May 23 for a free, virtual event, “Rightsize Your Life and Live Well Now.” Register at https://extras.mercurynews.com/events/.
If you’re trying to perfect your credit score, it’s important first to understand what makes up your credit report and credit score. Your credit score is determined by an advanced algorithm developed by FICO and pulls the data from your credit report to determine your score. When calculating your credit score, the following information is going to affect your credit score in the corresponding percentages:
35 percent: History of on-time or late payments of credit.
30 percent: Available credit on your open credit cards
15 percent: The age of your lines of credit (old = good)
10 percent: How often do you apply for new credit?
10 percent: Variable factors, such as the types of open credit lines you have
Many of this may be common sense or information that you’ve already learned over time, resulting in a good credit score but possibly not a perfect score. If you have a bad credit score, it could take a lot of time and work to increase your score and you may first want to consider repairing your credit. If your credit score is already above 700 but you’re trying to shoot for that perfect score of 850 to ensure the best deals and interest rates, here are 5 ways to perfect your credit score:
5 Ways to Get a Higher Credit Score
1. Maintaining Debt-To-Limit Ratio
To increase your credit score, it’s recommended that you keep your debt-to-credit ratio below 30% and, if possible, as low as 10%. The debt-to-limit ratio is the difference between how much you owe on a credit card versus how much your credit limit is. For example, if one of your credit cards has a credit limit of $5,000, then you should always keep the balance below $1,500 but preferably around $500. As you can see above, 30% of your credit score is determined by the available credit on your open credit cards, so keeping the debt-to-limit ratio will increase your available credit and also show that you’re responsible with your credit.
2. Keep Your Credit Cards Active
Make sure that you use your cards at least once a year to keep them shown as “active” credit and make sure that you never cancel your credit cards. 15% of your credit score is determined by the age of your lines of credit, so you should always keep your credit cards active to lengthen the age of your line of credit. Many people tend to cancel cards that they no longer use – many times because the rates aren’t very good or because they have another card with better benefits – but even if you don’t use the cards very often (just once a year is fine), you should keep them active. Typically, someone with a credit score over 800 has credit lines with at least 10 years of positive activity.
3. Always Pay Bills On Time
Probably the most well-known factor of a credit score and the factor that has the biggest impact on your credit score (35% of your score) is your history of paying your credit payments on-time. If you have a history of always making your credit card, mortgage, and car payments on time, you will greatly improve your credit score. This can also have an adverse effect as well, should you ever make a late payment. Unfortunately, it only takes one late payment to severely reduce your credit score so it’s crucial that you make sure to always make credit payments on time.
4. Dispute Errors On Your Credit Report
If you don’t already, make sure that you request a copy of your credit report once every year and review it for errors. It is actually quite common for credit reports to contain errors which can be disputed and potentially allow you to have negative items removed from your credit report. If, for instance, your credit report shows a late payment on a credit card but contained errors in the record, you can dispute the negative item and request to have it removed from your report. Having a negative item, like a late payment, removed from your report can improve your credit score significantly. While disputing errors on your credit report can be tedious and take a lot of time, it is usually worth it. Another option would be to contact a credit repair agency to help you dispute any negative items on your credit report.
5. Reduce The Number of Credit Inquiries
While this may only affect 10% of your credit score, keeping the number of credit inquiries down can still help to build that perfect credit score but is often ignored. You should never have more than one credit inquiry per year but many people do not realize how often this is done and often times have their credit checked more than once per year. If you’re applying for a car loan, checking your credit score online, or applying for a new credit card, these type of actions will almost always result in a credit inquiry and should be avoided if you’ve already had a credit inquiry earlier in the year. Make sure you do your research on what will result in a credit inquiry so that you don’t accidentally have more than one a year without realizing it.
Two major government-related mortgage investors, at the direction of their regulator and conservator, are updating a key vehicle that helps seriously delinquent borrowers, who have long-term income reductions and distressed mortgages, to afford monthly payments.
The upcoming changes in the Flex Modification program that government-sponsored enterprises Freddie Mac and Fannie Mae offer to qualified borrowers respond to lessons learned from the pandemic and the market’s high home-equity levels and financing costs.
The updates set for later this year will give struggling borrowers “a meaningful mortgage payment reduction in the current environment of elevated interest rates and home prices,” Federal Housing Finance Agency Director Sandra Thompson said in a press release.
One prominent change of many planned for the mods, which make a series of adjustments to loan terms within certain parameters, is to expand a market-to-market loan-to-value ratio limit that determines access to both lower rates and the ability to add unpaid amounts to a mortgage.
(Higher LTVs were originally emphasized as a parameter for assistance when modifications became more widespread and standardized amid the Great Recession, a period in which, unlike today, there was heavy equity depletion.)
Currently only borrowers with post-modification mark-to-market LTVs of 80% can achieve certain reductions of their contractual rate or capitalization of arrearages, but those above 50% will be able to do so after the latest changes go into effect.
The change partially restores some of the temporary leeway instituted during the transition out of pandemic forbearance, when the COVID-19 version of the Flex Mod applied potential rate reduction regardless of loan-to-value ratio. That was later retired as COVID-19 policies ended.
Overall, foreclosure prevention programs appear to have been effective in containing distress based on Freddie and Fannie’s serious delinquency rates, which have been lower than they were prior to the pandemic.
Just 0.51% single-family loans had payments three months late or were in foreclosure as of April, compared to 0.52% the previous month and 0.61% a year ago.Fannie Mae’s number for April was the same as Freddie’s and compared to 0.53% in March and 0.58% a year earlier.
The latest changes may help some within that small percentage of serious delinquent borrowers return to paying status.
In addition to providing some more leeway around the LTV limit, Freddie, Fannie and their oversight agency also are adjusting term extensions, which have not been subject to limitations based on equity levels.
Currently, term extensions are for a set 40 years. Shorter terms will be possible in the future if the loan can achieve the program’s 20% principal-and-interest payment reduction target without going out 40 years. (There also is a target limit to forbearance.)
This adjustment is anticipated to achieve lower payments more in line with the targeted range. Loans with a 10% reduction or less have had less favorable reperformance rates. Reductions above 20% have made little difference in whether a loan reperforms.
The Flex Mod changes are set to go into effect on Dec. 1.
In addition to the aforementioned criteria that generally pertain to the fixed rate mortgages that dominate the market, Flex Mods have several other parameters that may limit their applicability to borrowers. They also have some nuances where adjustable-rate loans are concerned.
One of the notable limitations is that more recent borrowers and certain lenders don’t have access to Flex Mod assistance, said Taylor Stork, president of the Community Home Lenders of America and chief operating officer of Developer’s Mortgage Company. A loan must be at least a year old to qualify for a Flex Mod.
Independent mortgage bankers who originate and sell loans servicing-released have certain buyback responsibilities for loans that default relatively soon after origination, Stork said.
“This is not going to fit in newer borrowers because of the traditional early-payment default repurchase model in the industry, and it does not add any value to non-servicing IMBs that originate,” said Stork, commenting on the upcoming Flex Mod enhancements.
The issue is part of broader, ongoing discussions the industry and the GSEs are having about whether there might be more that can be done to provide alternatives to loan repurchases that can impose a heavy financial burden on mortgage companies.
Inside: In this guide, I reviewed all of the budget apps and compared features and costs to form the best budgeting apps list. Find the best budgeting apps to fit your needs.
The best way to become smart with your money is to actively manage your money.
Make a plan for your money. Some may call it a budget.
At Money Bliss, we like to call it a Cents Plan. This enables you to find financial freedom. Find that place Where Cents Parallel Vision. Today, there are many budgeting apps on the market.
To kick off the new year, I was determined to find the best budgeting app on the market. Guess what?
My list grew each week!! And still growing! There are so many choices.
There are money management apps. Personal finance apps. Budgeting apps. So many apps to choose from! Seriously.
Some are free budgeting apps. Others have a monthly fee. Some have one-time costs.
The key to any budgeting app (free or paid) is to learn to manage your money.
At the very bottom of the post, we will reveal the best budgeting apps available.
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.
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Start Your Free Trial.
What is a Budgeting App?
A budgeting app is a tool that helps you manage your money and keep track of how much you spend.
There are many different types of apps, and some may be free while others cost money.
However, they all make managing your finances easy by tracking where your money goes each month as well as providing tools for saving cash flow or spending more efficiently on things like groceries or travel expenses.
The end purpose of a budgeting app is to make managing your money easy.
There are many apps out there that can help you with this, including some from big brand names like Mint which just announced it is shutting down, Acorns, and Quicken. This guide will provide a list of the best budgeting apps for 2024 so you can save time and money!
Quick Answer
The preferred budget apps are YNAB, Empower, and Quicken.
What to Look for in Budgeting Apps
In order to find the best budgeting apps, you need to know what features and functions you are looking for.
The best budgeting apps are often the simplest and focus on ways to make saving a breeze.
They can help ease financial uncertainty by providing tools that allow users to save more money over time.
What’s more, how can you tell what to look for in a good budgeting app?
1. Ease of use
The best budgeting apps are easy to use and do not require manual entry. Different ways of creating a budget include handwriting it out, using a spreadsheet, or logging into an app or software program.
You want to find something that is easy for you to use. Even better, if you find the app fun to use!
2. Budgeting Capabilities
There are many types of budgeting apps; thus, each person will have budget apps they prefer over others. At the end of the day, you need something that will work for you over the long term.
Some have basic features that simply allow users to view their own spending, while others provide a number of tools for managing finances and saving money. Users should choose an app based on what they want as well as the capabilities it offers.
Many budget apps let you define your categories to track.
3. Saves Time
When you have an automatic budgeting app, it tracks how money moves in and out of your bank account automatically with ease. In addition to this, the updating process takes place automatically as well which saves more time for individuals who need it most!
Saving time with the least favorite tasks like budgeting is a win-win!
You want your budgeting app that makes managing your money a breeze.
4. Focus on Financial Goals
You need a budget app that helps you work towards your smart financial goals. This is important.
You want your budgeting app to help you with achieving your financial goals.
5. Synchronization
Synchronization is the process of returning data to a master database from one or more secondary databases. You want the budget app to synchronize accounts automatically.
Most offer automatic synchronization but may lack a feature that allows for a reconciliation of accounts such as bank accounts.
Many budgeting apps can synchronize from desktop to mobile. In addition, you can have multiple users on the same platform.
6. Price
Budgeting apps range in price from free to about $150 per year.
The app that has the most features and options is Quicken, especially given its price point.
Spending $5 a month to manage your finances is cheaper than overdraft fees and the lack of saving money.
7. App ratings
Many financial experts and personal finance gurus agree that a budget is necessary to take control of your money.
Look for budgeting apps that have at least 1,000 reviews in both the App Store (for iOS) and on Google Play (for Android), as well as a rating of 4 stars (out of 5) or higher on both platforms.
That will tell you the longevity of the app and user appeal.
8. Security
Specifically, are budgeting apps secure? Are there any security features in place to protect your data? This is a huge feature you need to verify your personal information will be intact.
On my budgeting apps, financial information is safe because they need to go through vigorous testing and pass banking regulations. There are certain vulnerabilities inherent to operating online in the cloud.
9. Additional Features
Most budgeting apps go beyond basic budgeting. Some offer advice on debt and investments, while others identify unnecessary expenses.
Most apps can track your spending and organize your expenses into categories.
The savings apps will automate savings, suggestions to save money, bill alerts, access to credit scores, and investing features.
All of the apps have a different feature set, so it’s important to find what you’re looking for.
Good Budgeting Apps will Help, But First – You Must
Before we dig into the list of good budgeting apps, we must discuss key points first.
In order to be successful, with any type of budget app, you must understand three key areas.
1. Uncover your Money Situation
You can’t hide under the sheets or with your head in the sand and expect changes.
To be successful with money, you must be active with your personal finance situation.
Take time to understand your vision. Figure out where you stand in building a foundation to the Money Bliss Steps to Financial Freedom. Understand where the pits of money are spent every month.
Not sure, where to start? Stick around here at Money Bliss; we have many resources to help you!
Must Read Help:
2. Budgeting Apps Won’t Change Habits
While personal finance or money management apps keep you on track, they are incapable of changing habits.
You have to make changes.
Just because the budget app tracks your usage on the credit card doesn’t mean that you should have spent that money. So, be willing to make changes in your spending habits and those emotional purchases to achieve financial freedom.
You must learn to manage your money.
Related Readings:
3. Still Need Paper & Pen
The first thought is “Wait, I wanted to get away from paper and pen.” Yes, that is the goal for most individuals.
However, it is key to know your net worth over time.
Also, you never know when your favorite budget app will go away. (Ugh!) Personally, I don’t like to be pessimistic, but technology is rapidly changing, and being able to adapt is key.
Keep tracking your personal finance numbers toward financial freedom in a separate place.
Okay without further ado, the full list of budgeting apps on the market.
YNAB
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Pros:
Comprehensive approach to budgeting, helping you plan monthly budgets based on your income.
Offers expert advice, making it suitable for those who require an in-depth, forward-thinking budgeting strategy.
Superior synchronization skills make it the winner in this area.
YNAB has extra features like goal setting for budgeting, shared budgeting tools for partners.
Option to manually add and upload transactions from accounts each month.
YNAB prioritizes user privacy.
Start 34 Day Free Trial
Full List of Budgeting Apps with Free Trial
The budget apps we selected for this section offer a free trial for users to test out before signing up.
Budget apps are typically inexpensive and start with a free trial.
1. YNAB (You Need a Budget) – A proven method that has helped hundreds of thousands of people break the paycheck to paycheck cycle, get out of debt, and live the life they want to live. YNAB is best for serious budgeters.
2. Simplifi – Manage your money less in 5 minutes each week. Reach your money goals with confidence! Introducing Simplifi by Quicken, the personal finance app that gives you something to look forward to.
3. Tiller Money – Your financial life is in a spreadsheet, automatically updated each day. Track all your accounts in one place, always know where your money goes, and confidently plan your financial future.
4. Rocket Money – Rocket Money is your automated financial assistant and budget tracker designed to put you back in control of your money. Truebill lets you easily track bills, cancel unwanted subscriptions, and proactively request refunds on your behalf, putting real money back in your pocket!
5. Qube Money – The cash envelope system made easy. They invented digital cash envelopes. Real-time financial awareness without the hassle of tracking expenses, updating spreadsheets, and carrying cash.
6. HoneyMoney– HoneyMoney increases your awareness about your money habits. Being fully aware of your money naturally changes how you spend it. Great way to use cash flow budgeting. Plus uses “envelopes” to budget.
7. Qapital – Free, easy way to save money. Get $5 for your first Goal if you sign up here.
8.Money Patrol – MoneyPatrol actively monitors and analyzes financial transactions, and then alerts insights about the trends, patterns, and anomalies observed.
9. Wallet– Wallet is designed to help you get your finances under control from day one, giving you ongoing insight into your financial situation, and helping you stay in control for the long term.
10. Every Dollar– EveryDollar follows the zero-based budget approach recommended by Dave Ramsey, a top personal money-management expert. Create daily and monthly budgets and track your expenses to manage and save money.
11. Expensify – Expensify is the perfect tool for anyone who needs to keep track of receipts and automate expense management.
12. Cost Track – Expense Tracker – Cost Track allows you to: use your money wisely, keep track of your personal and family budget, and quickly enter your income and expenses.
13. Easy Spending – It is a simple and convenient finance tracker that provides the most powerful and convenient daily money management for iPhone and iPad, that neatly tracks all your cash flow between different accounts that you can budget.
Making Your Budget Work for You:
Full List of Free Budgeting Apps
The budget apps we selected for this ranking are completely free! Free budget apps are good options for users who don’t want to pay monthly or a yearly fee. Just to note, the list of free apps is dwindling with each update.
Finding the best budgeting app the best ones do simple things well.
Free apps are not always better than paid ones.
Typically, the free versions of budget apps provide basic features. Plus there are many free budget apps available on the market.
1. Empower– Empower is the best app for investors. This is one of my favorite ways to analyze investment accounts. See all of your accounts in one place, which helps to see spending. Free budgeting app to use. Read myEmpower Review.
Empower Personal Wealth, LLC (“EPW”) compensates Money Bliss for new leads. Money Bliss is not an investment client of Personal Capital Advisors Corporation or Empower Advisory Group, LLC.
2. PocketSmith – Manage your budget and forecast your finances. There are paid levels of access but you can still get basic options for the casual budgeter.
3. Zeta – AskZeta is a financial planning platform designed to help couples manage their finances collaboratively. It provides tools and guidance for setting joint financial goals, budgeting, and navigating major life events to build a secure financial future together.
4. Honeydue – A financial app designed for couples, facilitating shared money management. It allows partners to track and manage their finances collaboratively, providing insights into spending, budgeting and shared financial goals.
5. GoodBudget – Envelope budgeting for the modern world.
6.Fudget – The budget planner you can actually use.
7. Wally – Personal Finance – It helps you compare your income to your expenses, understand where your money goes and set and achieve goals.
9. CountAbout – CountAbout is an online personal finance solution that surpasses the security and ease of use of the other popular commercial solutions on the market while offering complete privacy, zero advertising, and no selling of your personal data.
10. Daily Budget Original – Daily Budget calculation, planning & saving for big spending, basic categories for expenses, backup.
11. Spending Tracker – The simple fact is, by tracking your spending you will be able to stick to a budget and therefore SAVE MONEY.
12. Money Monitor – You can track and organize all your transactions, accounts, budgets, bills, cash flow, and payees in Money Monitor by easy operation but with powerful functions.
13. Money Box – Set your money goals and track your personal savings with this app. Take control of your saving goals and spend cash wisely.
14. Dollarbird– Track and forecast your money as easily as adding events to a calendar! Dollarbird helps you make sense of your financial situation, plan ahead and manage your money together with those who matter.
15. NerdWallet – Whether you want to maximize credit card rewards, earn extra cashback, track your credit score or make budgeting easier, it’s all here.
Budgeting Resources:
16. Buddy – Designed for simplicity and efficiency, helping users easily manage their finances. With intuitive features, it enables users to track expenses, set budget goals, and gain insights into their spending habits for better financial management.
17. Banktivity – Banktivity puts you in the driver’s seat of your finances so you can do both.
18. PocketGuard – With all of your financial accounts in one place, PocketGuard helps you stay on top of your finance and make better financial decisions.
19. Budget Saved – Personal Finance – Budget Saved helps you save money by grouping expenses based on need or want. You input an expense, save it as a need or want, and then you can look back to see which purchases were really necessary. With this information, you can see exactly how much you can save.
20. Albert – Money Management – Combining human guidance with cutting-edge technology, Albert is an intuitive app that automates your financial life — so you can be free to enjoy it. Build savings, meet bills, end the overspending cycle and develop your financial IQ, right from the palm of your hand.
21. Expense IQ – Expense IQ (formerly EasyMoney) is your ultimate money manager app that combines an expense tracker, a budget planner, a checkbook register, integrated bills reminder, and more rolled into one powerful personal finance app!
22. Prism– Never miss a bill or pay late fees again! We automatically track your bills & send due date reminders, for free. See your income, account balances, & monthly expenses at a glance.
23. Coin Keeper– Download CoinKeeper — the handiest way to plan and manage your finances, created especially for smartphones and tablets.
24. Mobills– Mobills is a budget planning app that allows you to create a custom monthly budget that will help you take control of your money. You are able to manage your money, track your spending, and achieve your financial goals all in one place.
25. iSpending – iSpending helps you to track your income and spending. You can add transactions under different categories, such as income, food, and entertainment.
26. Receipt Box – The Receipt Box is a quick app that is conducive to developing a good habit of tracking spending. It indeed performs well on this one.
27. BUDGT – BUDGT will help you keep track of your Expenses in a very simple way and tell you how much money you can spend each day, taking in account what you have already spent during the current month.
Full List of Paid Budgeting Apps
A budgeting app is a type of software that helps you track your money to manage your finances. There are several different ways you can use them, including getting paid upfront or by monthly fee.
Some apps offer discounts for people who pay monthly, but this is not always the case. If an app doesn’t have the capabilities you need to better manage your budget, it’s not worth it.
App users want budget capabilities and prefer to handle bill paying on their own schedules.
1. Quicken– Quicken personal finance and money management software allows you to manage spending, create monthly budgets, track investments, retirement and more. Read my Quicken Review.
2. Moneyspire – The budget feature is very user friendly and can rollover amounts. All of the reports you need at your fingertips. Also, you can move your data from many of the top budgeting apps and Quicken.
3. PocketSmith – Manage your budget and forecast your finances.
4. MoneyDance – Moneydance is easy to use personal finance software that is loaded with all the features you need: online banking and bill payment, account management, budgeting and investment tracking.
5. CheckBook Pro – An easy & quick way to manage your daily finances, Checkbook Pro keeps track of your credit card charges, cash expenditures…etc.
6. HomeBudget – HomeBudget is an integrated expense tracker designed to help you track your expenses, income, bills due and account balances. It offers support for budgeting and allows analysis of your expenses and income, including charts and graphs.
7. Pennies – Keep track of your spending and save money with Pennies, the award-winning budgeting app for iPhone, iPad and Watch.
Enjoy guilt-free spending and effortless saving with a friendly, flexible method for managing your finances.
Start Your Free Trial.
Budgeting Apps Off the Cloud:
Due to security concerns, many budgeters prefer to keep their financial information off the cloud.
Here are the best budgeting software that are off the cloud. And if you want, they can be synced.
1. Quicken– Personally, I have used Quicken – pretty much since it was developed. Way before budgeting apps were even a thing and the cloud didn’t exist. Quicken is great for tracking how your money is being spent. Their internal budget feature is not user-friendly and has quirks. However, the cash flow reports are awesome to compare spending. The #1 reason I still recommend Quicken is because of its long history.
Read my Quicken Review.
2. Moneyspire – For those frustrated with Quicken, Moneyspire is your choice. The budget feature is very user-friendly and can rollover amounts. All of the reports you need are at your fingertips. Also, you can move your data from many of the top budgeting apps and Quicken. Start a free trial here.
3. Tiller Money – Tiller is the only tool that automatically updates Google Sheets and Microsoft Excel with your spending, transactions, and balances each day.
4. Banktivity – Get full control of your personal finance situation with Banktivity. Has all the bells and whistles you would come to expect for personal finance budgeting software. There is the ability to connect to the cloud if you prefer. Only for Mac Users.
5. MoneyDance – Moneydance is easy-to-use personal finance software that is loaded with all the features you need: online banking and bill payment, account management, budgeting, and investment tracking.
6. QuickBooks – QuickBooks is most like Quicken. It is the preferred software for most bookkeepers. The features are very helpful, but the price is significantly higher.
Expense-tracking budgeting apps
Expense-tracking budgeting apps are becoming more popular as they allow users to connect to financial accounts. They track transactions and group them into categories, making the best ones based on expense tracking systems.
Some of the top expense tracking budgeting apps include:
Simplifi: Quicken has introduced a new personal finance management solution. It is simple, smart, and intuitive money tracker tool that ensures users can keep track of their income and expenses in real-time.
YNAB (You Need A Budget): YNAB helps to reverse this pattern by living off last month’s income during current month.
Pocket Expense: This app is easy to use and has a clear interface for users who are not tech savvy. With Pocket Expense, you can input your income and expenses, set a budget, and track your progress.
Spendee – Understand your finances better with Spendee, the FREE budgeting app that tracks your spending, optimizes your budget, and helps you save money. This user-friendly app with good features for recording income and expenses as well as the ability to plan future budgets. It also lets you set goals and track progress.
Quicken: Quicken is a personal finance software application that can be installed on Windows, Mac or Linux computers and allows users to organize financial information in order for them to make financial decisions.
Learn where to load your Cash App card.
Investment/retirement planning budgeting apps
Investment/retirement planning budgeting apps are becoming more popular with consumers as the retirement age is being pushed back.
These types of apps allow users to keep track of their investments and review performance, ensuring that they’re on track to retire at the desired time.
There are numbeous different investment portfolio management tools, but most are designed for average investors looking to make changes or work towards long-term goals. Many double as budgeting apps also enable tracking expenses alongside investments in order to ensure that you’re on track to reach your goal.
Empower – read my Empower Review
Quicken
Betterment
Wealthfront
Stash
Apps to Help Save Extra Money:
Looking for easy ways to save extra money?? These budgeting apps will do just that.
1. Acorns: Invest Spare Change: This app rounds up any purchase made with a credit card to the nearest dollar and invests it in an exchange traded fund. They have four different investment portfolios from conservative, balanced, growth, and aggressive.
2. Tiller: This app automatically transfers money from any account you connect to it (like your checking or savings) into a fund of your choice every time you make a transaction.
3. Trim – Trim negotiates your cable, internet, phone and medical bills, finds and cancels unwanted subscriptions, can help you lower APRs and bank fees and more.
4. BillShark – Billshark is the easiest way to lower your bills, cancel unwanted subscriptions, and lock in the best rates for insurance.
Which Budgeting App is right for You?
Budgeting apps are becoming more popular as consumers try to make better financial planning decisions.
Budgeting apps help people with the ability to track spending, create budgets, and save money for retirement or other goals.
Budgeting apps must be paid for because they can be used across all devices and have a variety of features that can really help users save time and money.
As you can tell in this post, there are plenty of options to find your favorite budget apps.
Each of these apps can improve money management.
However, you must be able to make the changes necessary to stay within your means. That is up to you. Don’t try it and give up after a month. Stick with it. Show perseverance.
In the end, you will be happy you are stuck with using a good budgeting app.
Apps That Have Shut Down or Changed
These are budgeting app that have been on our list previously. But, when we recently updated the post, realized they are no longer offering the same services.
Mint: Personal Finance & Money – Mint is a free money management and financial tracker app that helps you get ahead and stay ahead. – Mint app shut down in 2024.
Firstly (formerly Honeyfi: Couples Finances) – The first app to help couples team up on everyday and long-term finances.
Opurtun (formerly Digit) – Digit analyzes your spending and automatically saves the perfect amount every day, so you don’t have to think about it.
mvelopes (merged with EveryDollar) – Everyone knows that cash will keep you on budget. Here is a digital option for your cash envelopes. Your first month free is to check out the budgeting system.
Olivia– Whether you identify as someone who is living paycheck to paycheck, or you’d just like to get smarter with your money in general, you’ve come to the right place! I am here to help YOU become the MASTER of your money.
Your Money Wallet – YourMoneyWallet lets you see all your accounts in one place, understand your spending, monitor your everyday spending, and see all your money transactions in a beautiful well crafted design.free
Joy – Money App– Joy is the brand new money app that will change the way you spend and save money to help you find more happiness in your life.
Advent – Budgeting Made Simple – Advent makes budgeting and tracking expenses super easy! With a very minimalistic design, you can easily maneuver around quickly.
Rolling Budget– Rolling Budget is a personal finance tracker that keeps track of your day-to-day expenses, travel, and fuel costs. Track where your money goes, plan your expenses, and create a budget that works for you!
Best Budgeting Apps
There are many apps available to help people manage their budgets.
The best app for you will depend on the type of budget you want to create and how often you want to make changes. All of these apps are mobile-friendly and work across multiple devices. They also offer additional features like budgeting tasks, reminders, and spending plans.
You can find all of these for iPhone or Android.
You can save time and money by using a good budgeting app.
This is your personal finance journey.
The ultimate goal with any budget app is to learn to manage your money. Not have your money manage you.
Now, make sure you are doing these habits to be successful with budgeting.
Which are your favorite budgeting apps?
Keep on Budgeting:
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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.
Investing in art can be a good idea, but there are a number of options and factors to take into account, such as: the type of art investment you might choose (i.e. art funds vs. individual works of art), the art market climate, your familiarity with artists and trends in the art world, and more.
Generally speaking, art is considered an alternative investment. The art market does not move in sync with traditional stock and bond markets, and therefore owning art in some capacity can provide portfolio diversification. But like any alternative asset, investing in art also comes with risks.
The art market is highly illiquid, art itself is not well regulated, collectors’ tastes are fickle — and thus what determines the value of certain works of art can be harder to predict than, say, shares of stock. So while investing in art could be a smart move, it requires careful research and a deep understanding of this asset class.
How Big Is the Art Market?
Most people are familiar with the high-priced sales of some pieces of art. Works by well-known and historically revered artists can sell for millions — as can contemporary works by artists who are increasingly popular. But despite a few big headliners, the art market is fairly small.
According to a 2023 industry report, global art sales increased by a modest 3%, to $67.8 billion in 2022. Sales were more robust in the United States in 2022, with 8% growth to $30.2 billion year over year. The U.S. is the world’s largest art market, with the U.K. and China being second and third largest.
💡 Quick Tip: Because alternative investments tend to perform differently than conventional ones, even under the same market conditions, alts may help diversity your portfolio, mitigate volatility, and provide a hedge against inflation.
Is Art a Good Investment?
Whether art is a good investment to a large degree depends partly on the work of art. For example, just as there are blue-chip stocks, there are blue-chip artworks that typically command higher prices and offer the potential for steady appreciation (although given the volatility of the art market, there are no guarantees).
But investing wisely in art also depends on the investor, and the vehicles they choose. For example, investing in individual art — similar to investing in individual stocks — requires a deep familiarity with that product and its market, as well as understanding the risks involved.
While you can invest in individual works of art, the value of any piece of art depends on its rarity, whether the artist is in demand, the historical and cultural significance of the work, as well as trends and market conditions.
However, these days investors can also choose to invest in art through art-related funds (similar to mutual funds), and fractional shares of art, which is analogous to investing in fractional shares of stock.
It’s also important for would-be investors to understand the role of collectors.
Art Collectors vs. Art Investors
The difference between art collectors and art investors is important to grasp. Most types of asset classes attract investors alone (with some exceptions, e.g. collectibles). Typically you don’t hear about people collecting stocks or mutual funds, for example.
In the case of the art market, however, collectors can play a role in art market trends as well as valuations. While investors, particularly high net-worth investors, may also influence sales, many collectors are long-time participants in the art market with years of familiarity with the ins and outs of many sectors, artists, dealers, galleries, domestic and international art fairs, and more.
Collectors may be steeped in a certain era or style (e.g. medieval religious statuary or Impressionist paintings), and committed to owning works long-term — for decades, or even generations.
By contrast, art investors may aim to acquire works that will gain value in a relatively short period (i.e. within a few years). This is where different types of art investment vehicles can come into play.
Alternative investments, now for the rest of us.
Start trading funds that include commodities, private credit, real estate, venture capital, and more.
What Makes a Good Art Investment?
Investing in art requires a certain mindset, and doing your due diligence to size up what constitutes the best opportunities for you, depending on your goals. It’s also important to understand some of the newer investment vehicles.
Individual Works
Investing in individual works requires knowledge of the artist, their current status (e.g. are they in demand or have they fallen out of favor?), the relevance or importance of a given work, and a sense of whether it’s overvalued or undervalued.
The risks of choosing individual works include the possibility of buying a fraudulent piece, the cost of owning and maintaining the work (including storage and insurance), and the uncertainty of knowing whether any given work will hold its value.
Buying individual works can also come with added charges, similar to investment fees (e.g. commissions and other costs). And given the fragility of most art, there is also the risk of physical damage or total loss.
Fractional Shares of Art
Owing to the high cost of purchasing and owning blue-chip works of art, it’s possible to buy fractional shares of art. This option is relatively new, but fractional shares of art are available on a growing number of platforms.
There are various systems for buying fractional art shares. One common way it can work: Investors purchase fractional shares of a work by a specific artist. The platform handles the maintenance and storage of the art, which is held for a period of time and then sold, ideally for a profit. If the sale is profitable, investors get a percentage of the gain, net of fees, commensurate with the percentage of the work they own.
The risk of buying fractional shares of art is that, as with any investment, there are no guarantees of a return. In addition, this is a financial strategy — fractional owners never have the pleasure of actually possessing the work.
Art Funds
Similar to traditional mutual funds and ETFs, an art fund is a type of pooled investment fund. But unlike conventional funds, art funds tend to be a long-term proposition. Art funds are structured typically as closed-end funds, but with a twist: investors typically contribute their capital over a period of three to five years, often with no returns for another specified time period (terms vary).
These funds are highly illiquid, and (in addition to the unpredictability of the art market itself) there are substantial risks to locking up your capital for what could be years, for an unspecified return upon redemption.
💡 Quick Tip: Did you know that opening a brokerage account typically doesn’t come with any setup costs? Often, the only requirement to open a brokerage account — aside from providing personal details — is making an initial deposit.
Risk Tolerance
Individual investors interested in exploring this type of alternative investment need to consider many factors, especially their stomach for risk. While all investments come with some degree of risk, the spectrum is wide when it comes to art, and there are many unknowns.
Perhaps the biggest factor is the capriciousness of the art world as a whole. For a couple of years, digital art, especially non-fungible tokens (NFTs), spiked in popularity and many people sold digital art at a profit — only to see demand plunge, taking prices along with it.
It’s a cautionary tale. Yet there is always the potential for a rebound, if digital art regains its appeal, or “antique” NFTs become a thing.
Investing in art also includes risk factors specific to owning fragile physical items, as well as the risk of total loss of capital if the investment you choose falls out of favor, or turns out to be a fake — or if a given fund manager makes a bad call.
Recommended: What Every Investor Should Know About Risk
Pros and Cons of Investing in Art
Taking all of the above into consideration, it’s important to weigh the advantages and disadvantages of investing in art.
Advantages
Art offers the potential for substantial returns.
There are many new opportunities for investing in art; would-be investors can consider art funds, fractional shares of art, and more.
Investing in art may offer portfolio diversification.
Some countries may offer tax breaks on art sales.
If you enjoy art and the art world, this type of investing can offer the potential for fun, travel, and aesthetic gratification.
Disadvantages
The art world is volatile and there is no way to know for sure what a given artist or work may be worth now or in years to come.
It’s difficult to authenticate works of art, and the risk of forgery is high.
Investing in art-related funds, stocks, or fractional shares are still relatively new types of instruments, and terms (fees, redemptions, illiquidity) may not be favorable.
Many types of physical artworks can be damaged or destroyed.
The current tax treatment of art gains in the United States is higher than long-term capital gains rates.
Pros
Cons
Potential for gains
Risk of losing money owing to art market volatility
New ways to invest in art; i.e. art funds, fractional shares
Like some alternative investments, art is not heavily regulated by the SEC
May provide portfolio diversification
Highly illiquid and opaque
Some countries offer tax breaks on art sales
Art gains subject to higher taxes than long-term capital gains
Owning art is aesthetically gratifying
Risk of damage and loss
Returns on Art Investments Over Time
Just as the art world is expanding to offer new options to investors, it’s also adopting certain investment world conventions, such as art indices. Now investors can consider the data provided by an index such as the Sotheby Mei Moses Index, which was modeled on the Case-Shiller Index for home prices.
That said, individual artworks are not securities — they are non-fungible and highly illiquid — and as such evaluating the “performance” of specific works or even certain sectors over time is difficult. Even taking into account the evolution of fractional art shares and art funds as investment vehicles, the lack of transparency around pricing (as well as regulation) can make it difficult for investors to make a satisfactory risk-reward assessment.
Unfortunately, this lack of transparency is part of the risk when investing in alternative assets.
The Takeaway
Investing in art offers some advantages, not least of which is the enjoyment of researching and purchasing individual works that fulfill a personal taste or passion. In addition, art is an alternative investment, meaning that it doesn’t move in tandem with traditional markets. As such, it can offer portfolio diversification.
But like many alternative assets, art can be highly volatile and illiquid. As a whole, although art investment opportunities have expanded into art funds and owning fractional shares of artworks, art as an investment is not transparent or well regulated. That said, for the right investor, this asset class may provide unique opportunities.
Ready to expand your portfolio’s growth potential? Alternative investments, traditionally available to high-net-worth individuals, are accessible to everyday investors on SoFi’s easy-to-use platform. Investments in commodities, real estate, venture capital, and more are now within reach. Alternative investments can be high risk, so it’s important to consider your portfolio goals and risk tolerance to determine if they’re right for you.
Invest in alts to take your portfolio beyond stocks and bonds.
FAQ
What is the best art to invest in?
The best art to invest in is art you know well and has a value you feel confident in. That might be an individual piece by a certain artist, or it might be fractional shares in well-known or even famous works. Whatever route you choose, treat it like any other investment: do the necessary research, and understand the potential risks and rewards.
Will the art you choose increase in value?
As with any type of investment there are no guarantees. Some works of art appreciate steadily over time, some enjoy a sudden rise in value if market trends are favorable, while other art you might invest in could rapidly lose value. This is why it’s essential for any investor interested in art to fully understand how these alternative assets might fit into your portfolio, or not.
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SoFi Invest® INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below:
Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
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An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. This and other important information are contained in the Fund’s prospectus. For a current prospectus, please click the Prospectus link on the Fund’s respective page. The prospectus should be read carefully prior to investing. Alternative investments, including funds that invest in alternative investments, are risky and may not be suitable for all investors. Alternative investments often employ leveraging and other speculative practices that increase an investor’s risk of loss to include complete loss of investment, often charge high fees, and can be highly illiquid and volatile. Alternative investments may lack diversification, involve complex tax structures and have delays in reporting important tax information. Registered and unregistered alternative investments are not subject to the same regulatory requirements as mutual funds. Please note that Interval Funds are illiquid instruments, hence the ability to trade on your timeline may be restricted. Investors should review the fee schedule for Interval Funds via the prospectus.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at [email protected]. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Disclaimer: The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Fund Fees If you invest in Exchange Traded Funds (ETFs) through SoFi Invest (either by buying them yourself or via investing in SoFi Invest’s automated investments, formerly SoFi Wealth), these funds will have their own management fees. These fees are not paid directly by you, but rather by the fund itself. these fees do reduce the fund’s returns. Check out each fund’s prospectus for details. SoFi Invest does not receive sales commissions, 12b-1 fees, or other fees from ETFs for investing such funds on behalf of advisory clients, though if SoFi Invest creates its own funds, it could earn management fees there.
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Known for its contributions to aviation history and its robust industrial past, Dayton offers residents a blend of cultural heritage, economic opportunity, and a tight-knit community feel. However, as with any location, living in Dayton comes with both benefits and challenges. From its affordable cost of living and rich educational resources to its variable weather, it’s important to consider all aspects before deciding to call Dayton home. In this article, we explore the pros and cons of living in Dayton, providing you with a detailed perspective to help you determine if this city aligns with your lifestyle. Let’s get started.
Dayton at a Glance
Walk Score: 45 | Bike Score: 47
Median Sale Price: $130,000 | Average Rent for 1-Bedroom Apartment: $830
Dayton neighborhoods | Houses for rent in Dayton | Apartments for rent in Dayton | Homes for sale in Dayton
Pro: Affordable cost of living
The cost of living in Dayton is 5% lower than the national average. Additionally, average housing prices are particularly affordable, with a variety of options ranging from historic homes to modern apartments. This affordability extends to other living expenses such as groceries, utilities, and healthcare, making it an attractive option for individuals looking to stretch their dollars further.
Con: Limited public transportation
One of the cons of living in Dayton is the limited public transportation options. The Greater Dayton RTA provides bus services, but the routes and schedules may not be as extensive or convenient as those in larger metropolitan areas. This can make commuting without a personal vehicle challenging, especially for those who rely on public transit for daily activities. Locals often find themselves needing to drive, which can be inconvenient and costly.
Pro: Rich aviation history
Dayton has deep-rooted aviation history, being the birthplace of the Wright brothers. The city is home to the National Museum of the United States Air Force, which is the oldest and largest military aviation museum in the world. Visitors can explore a vast collection of aircraft and artifacts, including the Wright Flyer III. This rich heritage offers a unique cultural experience that aviation enthusiasts and history buffs will find fascinating.
Con: Air quality concerns
Dayton occasionally faces air quality issues, particularly during the summer months. Industrial activities and vehicle emissions contribute to higher levels of pollutants, which can affect residents’ health and outdoor activities. Those with respiratory conditions may find the air quality challenging, and it can detract from the overall quality of life in the city.
Pro: Strong educational institutions
Dayton is home to several reputable educational institutions, including the University of Dayton and Wright State University. These universities offer a wide range of undergraduate and graduate programs, as well as continuing education courses for lifelong learners. Additionally, the presence of these institutions fosters a strong academic environment, with numerous cultural and intellectual events open to the public.
Con: Harsh winters
Residents of Dayton experience harsh winters, with cold temperatures and significant snowfall. The winter weather can be challenging, particularly for those unaccustomed to dealing with icy roads and shoveling snow. The cold season can also lead to higher heating costs and potential disruptions in daily activities, making it a less appealing aspect of living in the city.
Pro: Thriving arts scene
Another pro of living in Dayton is its thriving arts scene, with numerous galleries, theaters, and performance spaces. The Dayton Art Institute and the Schuster Performing Arts Center are prominent cultural landmarks that host a variety of exhibitions, concerts, and theatrical productions. This lively arts community provides residents with rich cultural experiences and opportunities to engage with the arts.
Con: Limited nightlife options
While Dayton has a variety of dining and entertainment options, its nightlife scene is relatively limited compared to larger cities. The city has a few bars, clubs, and live music venues, but the options may not be as diverse or plentiful. This can be a drawback for those who enjoy a bustling nightlife and seek a wide range of evening entertainment activities.
Pro: Abundant green spaces
Dayton offers an abundance of green spaces and parks, providing residents with ample opportunities for outdoor recreation. The Five Rivers MetroParks system includes over 16,000 acres of parks, rivers, and trails. Popular spots like the RiverScape MetroPark and the Wegerzyn Gardens MetroPark offer scenic views and activities such as kayaking, hiking, and picnicking, making it easy for locals to enjoy nature.
While Dayton has several shopping centers and local boutiques, the shopping options may be limited compared to larger cities. Locals may find themselves traveling to nearby cities like Cincinnati or Columbus for a wider variety of retail stores and specialty shops. This can be inconvenient for those who enjoy frequent shopping or seek specific brands and products.
Dayton is known for its strong sense of community and friendly residents. The city hosts numerous community events and festivals throughout the year, such as the Dayton Celtic Festival and the Dayton Air Show. These events foster a sense of belonging and provide opportunities for residents to connect with one another, creating a welcoming and tight-knit community atmosphere.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.