The first week of any given month tends to have the highest concentration of economic data with the power to influence the bond market, and thus interest rates. This week was no exception.
In addition to the scheduled economic data, there was unscheduled drama in the banking sector. This involved the orderly failure of First Republic Bank, rumors of other imminent bank failures, and a run on various bank stocks that ultimately required multiple “circuit breakers” (temporary halts to trading due to the size and speed of price changes).
Bank drama coincided with lower job openings on Tuesday morning to send bond yields lower on Tuesday morning. This was easier to see in 2yr Treasury yields compared to the 10yr Treasuries that we typically follow because shorter-term bonds have more in common with the Fed Funds Rate.
A day later, we heard from the Fed itself with the widely anticipated 0.25% hike to the Fed Funds Rate. Despite the hike, interest rates continued broadly lower into mid week (Mortgage Rates in Weeks After Fed Hikes Rates. Here’s How That Works…” data-contentid=”6452c40c9d238671bb2d6f63″ data-linktype=”rateupdate” rel=”noopener”>here’s why) before bouncing after Friday’s stronger jobs report.
All told, 10yr yields traded a range of roughly 0.25% whereas 2yr yields saw a range closer to 0.50%. That’s a volatile week by any standard, but it nonetheless failed to blaze any new trails with respect to the range we’ve been following in the 10yr. One might have argued that yields were pushing the lower boundary of the range had it not been for NFP (“nonfarm payrolls,” the main component of the jobs report) on Friday.
Mortgage rates haven’t necessarily been keeping pace with Treasuries, but they’ve been just as sideways. In fact, rates have been consolidating in a narrower pattern surrounding a conventional 30yr fixed rate of 6.5%.
Whereas this week’s volatility was well-distributed across multiple days and events, next week’s potential volatility is highly concentrated on Wednesday morning. That’s when the latest monthly installment of the Consumer Price Index (CPI) will be released.
CPI is the biggest market mover among the various inflation reports that come out each month. It’s the only report that could legitimately challenge NFP as THE most important monthly data over the past few years. Every new update on inflation is particularly interesting right now because the market is actively trying to determine if inflation in check and declining, or if it is persistent enough as to require more rate hikes from the Fed. This indecision is what the consolidation pattern in mortgage rates is all about.
The most important figure in the CPI data is the monthly “core” reading which excludes more volatile, less elastic food and energy prices. It topped out at 0.8% at the highest levels and although it has come down a bit, it’s still well above the target range.
It will take 12 months of 0.167% core inflation to hit the 2% target. Obviously, there’s a long way to go, but if the market is convinced that we’re headed in that direction, rates would be much lower than they are now. The year-over-year chart is still anything but convincing.
The Public Service Loan Forgiveness (PSLF) program was established in 2007 to provide debt relief to nonprofit and government agency employees. The program’s goal was to forgive the student loans of borrowers after they made 120 qualifying payments (10 years of payments). However, the program’s approval rate was low, with only around 7,000 borrowers approved before 2021. The Biden administration announced temporary changes to the PSLF program last year, which helped borrowers get credit toward loan cancellation regardless of their federal loan type or payment plan. The temporary changes allowed borrowers to consolidate their debt before the end of the waiver in October 2022. As a result, more than 615,000 borrowers have received $42 billion in debt relief since October 2021.
The PSLF program remains available to public workers, and the Biden administration has scheduled improvements to go into effect on July 1, 2023. These changes include helping borrowers earn progress toward relief, simplifying employment criteria, and providing borrowers with a chance to correct account problems.
To qualify for PSLF, borrowers must be employed by a U.S. federal, state, local, or tribal government or not-for-profit organization, work full-time for that agency or organization, have Direct Loans (or consolidate other federal student loans into a Direct Loan), and make 120 qualifying payments. Borrowers can use the PSLF Help Tool to determine if they work for a qualifying employer, have eligible loans, and have already made qualifying payments.
It is important to note that PSLF relief is separate from President Biden’s student debt relief, which is still awaiting a decision from the Supreme Court. The Supreme Court is expected to rule on the President’s debt forgiveness program before the end of June.
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
Today we’ll check out tech-minded lender “GO Mortgage,” which is a dba of GSF Mortgage Corporation.
While GO is only a few short years old, its parent company GSF has been around since 1995. And its founders have been in the mortgage biz since the 1970s.
So clearly there’s a strong pedigree here, and the combination of the latest technology coupled with old-fashioned customer service could be a win for consumers.
Let’s learn more about GO Mortgage to determine if it could be a go-to spot for your home loan needs.
GO Mortgage Fast Facts
Independent direct-to-consumer mortgage lender
A dba of parent company GSF Mortgage Corp.
Founded in 2018, headquartered in Brookfield, Wisconsin
Offers home purchase loans, refinances, and construction loans
Currently licensed in 36 states nationwide
Funded roughly $1.3 billion in home loans last year
GO Mortgage is an independent, direct-to-consumer mortgage lender that offers home purchase financing, refinances, and construction loans.
The company was founded in 2018 and is headquartered in Brookfield, Wisconsin, the state where they do the bulk of their business.
In fact, nearly 25% of total loan volume came from the Badger State, though they’re also quite active in Texas, Florida, North Carolina, and Virginia.
Overall, they managed to fund about $1.3 billion in home loans last year, with about half of that coming from refinance transactions, a third from home purchases, and the rest home improvement.
Currently, they work remotely with customers in 36 states nationwide as they don’t appear to have physical branches.
They aren’t available in Alaska, Connecticut, Hawaii, Massachusetts, Montana, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Rhode Island, Vermont, West Virginia, or Wyoming.
How to Apply with GO Mortgage
Their ‘On the GO’ digital app is powered by fintech company SimpleNexus
Allows customers to apply for a mortgage from any device in just minutes
Ability to link financial accounts, securely scan/upload docs, and eSign disclosures
Use the borrower portal to check your progress and receive status updates along the way
To get started, simply navigate to the GO Mortgage website and hit “Get Rates.” Or simply call them up directly to get connected with a loan officer.
If you already know who you’ll be working with, you can search by name once you click “Find an Advisor.”
Those who are ready to go can click “Apply Now” and begin filling out the digital application powered by SimpleNexus.
There’s also a smartphone app called “On the GO” if you prefer to manage your mortgage experience from your mobile device.
Once in the app, it’s possible to link financial accounts, securely scan and upload docs from your phone, and message your loan officer instantly when you have questions.
You’ll also get updates as you go and there’s an online borrower portal where you can check your loan status.
If you’re looking to get pre-approved for a mortgage, they say you can do so in about 24 hours.
They appear to employ the latest tech, but also have dedicated loan officers and processors standing by to help when needed.
Loan Programs Available at GO Mortgage
Home purchase loans
Home renovation loans
Refinance loans: rate and term, cash out, and streamline
Conventional mortgages
Jumbo loans
FHA/VA/USDA loans
Single-close construction loans
Go Mortgage has a fairly extensive product menu, offering anything from a home purchase loan to a mortgage refinance to a renovation or construction loan.
You can also get your hands on any major type of loan, whether it’s a conventional loan backed by Fannie Mae, a jumbo loan, or a USDA loan.
They seem to specialize in single-close construction loans, with options for all major loan types including Fannie Mae, FHA, VA, and USDA.
Both fixed-rate and adjustable-rate mortgages are available in a variety of loan terms, including options like the 15-year fixed and 5/1 ARM.
GO Mortgage Rates
While GO Mortgage says many of its customers choose them for their low rates, they don’t feature on their homepage or elsewhere on their website.
As such, you’ll either need to fill out their mortgage rate quote form online, or simply call them up to get connected with a licensed loan officer.
I was able to find at least one loan advisor that listed sample daily mortgage rates on his personal webpage, but most did not.
From what I did see, the mortgage rates were definitely competitive, but it will depend on the loan scenario.
In terms of lender fees, I couldn’t find any information regarding a possible loan origination fee, processing, underwriting, etc.
So be sure to take the time to speak with someone first to get all those details, then shop around accordingly.
My assumption is they’re competitively priced with other nonbank, direct lenders, which might put them ahead of big banks, but perhaps not the absolute lowest out there.
But again, you’ll need to get in touch with a human to find out.
GO Mortgage Reviews
One thing Go Mortgage isn’t short on is excellent reviews.
On Experience.com, they’ve got a 4.79-star rating out of 5 from more than 7,000 customer reviews.
Be sure to check out individual loan officer reviews as well if you want to fine-tune your search and work with someone truly exceptional.
Over at Zillow, GO Mortgage has a stellar 4.88-star rating out of 5 from about 1,000 customer reviews.
They also have an equally strong 4.9-star rating on Bankrate, and a 4.7-star rating on Google from about 250 reviews. The company is an accredited business with the Better Business Bureau, and currently holds an ‘A+’ rating with the BBB based on complaint history.
To sum things up, GO Mortgage appears to be a popular choice for both home buyers and those looking to refinance.
And as noted, they specialize in one-time construction loans, so they could be a good option if you’re building a home.
GO Mortgage Pros and Cons
The Pros
A paperless, digital mortgage loan process
Can apply online or via smartphone in minutes
Lots of loan programs to choose from
Specialize in one-time close construction loans
Excellent customer reviews across all ratings sites
Fintech software and hardware company Mortgage Automation Technologies, Inc. announced on Monday that it has integrated its next-generation point of sale system, The BIG Point of Sale, on the latest API Platform available through ICE Mortgage Technology, a division of Intercontinental Exchange, Inc.
The goal was to create a configurable and robust Point of Sale to Loan Origination System integration, according to a press release from the company.
“Built by the people that use it every day, The Big Point of Sale was designed with the consumer in mind and the mortgage professional at heart. The Big Point of Sale gives the freedom of mobility to our users; originators can be in touch with every transaction from virtually anywhere,” Matthew VanFossen, CEO of Mortgage Automation Technologies, said.
The BIG Point of Sale features an Encompass integration with an interface module that enables a loan to deep link from The BIG Point of Sale web portal directly into the Encompass loan file from a mobile device.
The Encompass Product & Pricing Service integration focuses on the originator’s mobility by building a web interface module that allows the loan officer to access rates on current loans or new scenarios from their mobile device.
The POS system technology includes a mixture of consumer and origination portals in multiple formats, such as web landing page, mobile application, and kiosk, and uses the ICE Mortgage Technology API Platform to provide a unique single point of truth database architecture. This eliminates the need for a secondary loan repository outside of Encompass by ICE Mortgage Technology.
Originators can use the BIG Point of Sale system to monitor and adjust loan files from their mobile devices, including generating pre-approvals, and the web interface module allows the loan officer and consumer to electronically sign loan disclosures and closing documents from their mobile devices.
The onboarding and contract process are designed to minimize upfront costs by using a customer self-service implementation process, according to a press release about the integration.
In addition, the BIG Point of Sale offers a mixture of software and hardware solutions with its kiosk product line.
“Our industry is going through some interesting times. During these times, making sure you partner with the right companies will be the secret to success. Companies that enable cost control and increased functionality will thrive. Mortgage Automation Technologies, Inc., who has delivered The Big POS, has been that partner for First Option Mortgage (FOM),” Alvin Shah, managing partner of First Option Mortgage, said.
The solution will be delivered through loan originator and consumer web portals and mobile applications, as well as hardware kiosk devices.
Mortgage Automation Technologies, Inc. is a fintech software and hardware company that designs, develops, and integrates web-based solutions.
ICE Mortgage Technology combines technology, data, and expertise to automate the whole mortgage process, from consumer engagement through loan registration.
This content was generated using AI, and was edited and fact-checked by HousingWire’s editors.
The deal to get a $40 Target coupon which could be used twice and on both the debit and reloadable version is now dead.
Target periodically offers a $40-off-$40 coupon for those who get approved for a new REDcard debit or credit card. Previously they gave the $40 coupon for the reloadable card as well; that stopped with the latest offer that came out on April 30, 2023.
They also revamped the system whereby the $40 coupon comes as bar code which you scan into the Target Circle app. Previously, the coupon was (unofficially) able to be used twice, once online and once in store. With the new system that does not appear possible any longer and we are limited to one use.
We wrote about how the reloadable version was dead when the latest deal came out, and I suspected that the double-dip with online and in-store was dead as well. I held off posting until we got confirmation, which has now come.
Going forward, you’ll only get $40 for signing up and it only works on the debit version. As before, after closing a card you become eligible again for the $40 coupon after 90 days from when you last opened the card.
Kim and I first connected on a wine tour 18 months ago. Perhaps it’s not surprising, then, that we’ve continued to build our relationship over glasses of chardonnay and (especially) Champagne. We enjoy wine, and we’ve had a lot of fun creating a shared wine library.
At the same time, we’re frugal people. We’re not willing to spend $50 on a bottle of wine. Heck, it hurts to spend $20 on a bottle of wine! No, we’d prefer to spend less than $10 per bottle, if possible — but we still want to drink the good stuff.
A highlight from our European vacation: Tasting wine and cheese in Paris!
It’s been three years since I shared strategies for wine-buying. With the holidays approaching, I thought now would be a good time to review my techniques, and to share the things I’ve learned since I last wrote about the subject.
Here are my top tips for buying wine:
Drink what you like. This is the most important rule of wine-drinking. There’s so much ink (and so many pixels) devoted to wine reviews and tasting notes that it’s easy to believe that certain folks are experts and you’re not. But here’s the deal: It doesn’t matter that Robert Parker loves a wine. Robert Parker is Robert Parker. What matters is what you like. If merlot tickles your pickle, drink merlot. Me? I never met a sauvignon blanc I didn’t like. While everyone else is drinking red, I’m drinking white because I like the tart taste and the crisp finish.
Visit your local wine shop. Most metropolitan areas will have a store devoted to wine. Some places — like Portland — have dozens. If you like wine, spend a little time there. Get to know the staff. Let them know what you like. They can be a valuable resource for discovering new wines — and for getting unexpected discounts. (Note: Some places sell wine and spirits and beer all under the same roof. That’s not allowed in Oregon (except for a couple of test stores in a recent pilot project. Wine shops only sell wine.)
Try a lot of wine. Whenever we’re at a party, we’ll try the wine. When we go out for dinner, we sample new wine. (Kim has taught me the art of asking for a taste before ordering a glass. In the past, I would have thought this was tacky; but she’s convinced me it’s not just acceptable, but smart.) By drinking a lot of wine, we’re able to expand our palates and discover new favorites.
Watch for cheap tasting opportunities. We’re fortunate to live in the Willamette Valley, where there are dozens of wineries, some of which offer free (or cheap) tastings from time to time. (Plus, when we visit Kim’s hometown in northern California, we taste wines in nearby towns.) And sometimes on a Friday or Saturday, we’ll check to see if local wine shops are offering tastings. Remember: Even if you have to pay, the tasting fee will usually be deducted from any purchase you might make.
J.D., Kim, and Gwen tasting wine in Murphys, California last autumn.
If you find a bottle you love, buy a case. (And if you really love it, consider buying several!) Most wines are meh. They’re not great, but they’re not bad. But every so often, you’ll discover a wine that makes your taste buds tingle. And rarer still, there’ll be a wine that both you and your partner enjoy equally. When this happens, take notes. Snap a photo of the bottle. Take this info to your local wine shop and find out what it costs to buy a case. Kim and I have done this with great success. In our 18 months together, we’ve found three bottles that we both enjoy, and one that we truly loved.
Host a wine party. One fun way to discover new wines is to host your own tasting. Gather a group of friends, each of whom brings one or two bottles and something to snack on. Devote a long afternoon/evening to sampling the different varieties. You can make this more fun by doing a blind tasting, and having everybody jot down notes about each wine. We’ve done this with wine and with whiskey, and we’ve had fun both times. (Please note that this gets very sloppy by the end of the process. That’s part of the fun.)
Be patient. Learning about wine and building a small wine library takes time. There’s no rush, especially if you don’t drink many bottles. It’s better to slowly build a quality collection than to have a bunch of wine you’ll never drink. If our stock dwindles, it dwindles. We have some old standbys we know we like, and we can always pick them up, if needed.
Use an app. There are a variety of web- and phone-based apps for exploring wines. We’ve been beta-testing Wine4.me, which allows us to track bottles we enjoy, while also recommending new wines to try.
Once you’ve discovered a wine you love, one of the challenges is finding a cheap place to buy it. Prices can vary drastically from one store to the next. (Kim likes a particular sparkling wine; she uses its prices as a kind of barometer for how expensive any given store is. You probably won’t be surprised to learn that Whole Foods isn’t a cheap place to buy your wine…)
Trader Joe’s is a fantastic source of decent low-priced wine. TJ’s is famous for Charles Shaw, better known as “three-buck Chuck” (“two-buck Chuck”, if you live in California). These wines aren’t great, but they’re passable. Best of all, they cost less than a buck a glass. But did you know Trader Joe’s has many other wines that cost less than five dollars per bottle? At that price, there’s little risk in trying a bottle to see if you like it.
Costco is another surprise source of wine. This warehouse store doesn’t have a huge selection, but its buyers carefully curate the limited number of bottles available. You can generally be sure that anything you buy will taste good, even at the lower price points. And some of the more expensive bottles ($15 or $20) are excellent.
Consumer Reports provides periodic recommendations for “best buys” of mass-market wine. Last week at her dental office, Kim found an article in Sunset magazine that ranked the best wines out of 3,000 their expert panel tasted. She brought home the section that listed the best bottles under $12. (Every year around Thanksgiving, I take the list of wines recommended by CR to Costco and Cost Plus. I’m usually able to find a few bottles of cheap, good wine.)
Finally, here’s a very important tip: Like any food product, wine is only a value if you drink it. We waste a ton of food in the U.S., and that includes wine. Don’t buy so much that you won’t use it. I visited a frugal friend’s house recently and spent some time in the basement. She had a couple dozen bottles of wine, all of which were covered with dust. Some of the bottles were very old — and not because it was wine that needed to age. I’m guessing a lot of that will go to waste. A bargain isn’t a bargain if it doesn’t get used.
The nation’s largest mortgage lender, Wells Fargo, is now offering mortgages to home buyers with just 3% down via their new “yourFirst Mortgage.”
I’m assuming the new loan program is based on Fannie and Freddie’s 97% LTV program announced back in late 2014. And it appears to be geared toward first-time home buyers seeing that the name is yourFirst Mortgage.
That reads as your first mortgage, meaning your first home purchase as well.
The program is available for qualified first-time buyers, including low-to-moderate income applicants as well as the “diverse Millennial population,” which Wells points out is over two-thirds of first-timers these days.
I believe anyone who can demonstrate their ability to repay the loan can qualify for a yourFirst Mortgage if they haven’t owned a home in the past three years, or if at least one borrower on the loan hasn’t.
yourFirst Mortgage Only Requires 3% Down
Wells Fargo’s new 3% down home loan program
No median area income limits
Down payment assistance and gift funds permitted
Only loan option is a fixed-rate mortgage
The main selling point to this new mortgage is the 3% down payment requirement, which rivals the 3.5% down required from the FHA.
To make the deal even sweeter, and perhaps riskier if you like, your down payment and closing costs can come in the form of a gift or from a down payment assistance program.
In other words, you don’t need any cash to qualify, other than maybe some reserves to show you can make monthly payments going forward.
To offset this perceived risk, Wells Fargo is offering a 0.125% interest rate reduction if home buyers complete a homebuyer education course conducted by a certified HUD-approved housing counselor. So instead of a rate of 4.5%, you might get a rate of 4.375%.
Your down payment must be less than 10% to qualify for the rate discount.
You might also learn something about mortgages and homeownership, which could prevent default and/or foreclosure in the future.
Including renters and non-borrowing family members
And non-traditional credit that might not show up on a credit report
Requires PMI but might be able to get lender-paid in exchange for higher interest rate
Playing on the risky theme, the yourFirst Mortgage allows both household income and non-traditional credit.
So if you eschewed credit for much of your life, like some Millennials appear to do, you can still get approved for a mortgage via this program because everyday bills like tuition, rent, and utilities may be used in place of traditional credit tradelines.
Additionally, you’re able to use income from other occupants in the home (that aren’t co-borrowers), including family members and renters, to qualify for the loan.
But rest assured the loans will be “fully documented and underwritten,” so no new housing crisis here…
It appears that Wells Fargo is working with Self-Help, the company that helped launch Bank of America’s 3% down mortgage back in February of this year, known as the Affordable Loan Solution.
The yourFirst Mortgage does require private mortgage insurance because you’re putting less than 20% down. However, it might be built into the rate or lender paid.
I took a look at Wells Fargo’s rates today and they were advertising 3.75% on a 30-year fixed with borrower-paid mortgage insurance, and 4.375% with LPMI.
yourFirst Mortgage Features
3% down payment requirement
Down payment and closing costs can be gifted
Down payment assistance permitted
Property must be owner-occupied (I believe only single unit qualifies)
Loan is fully documented and underwritten
No income limits
Income from others in the household may be used to qualify
Loan type is 30-year fixed
Mortgage insurance required (can be lender-paid)
Minimum FICO most likely 620
Non-traditional credit may be used (utility bills, tuition payments, etc.)
0.125% interest rate discount for completing homebuyer education course
Inside: Are you thinking about moving out? This guide will help you figure out how much money you need to save and where to find affordable housing. Will $5k be enough to move out?
Moving out for the first time is a huge milestone. It’s a chance to start fresh, create your own space, and live on your own terms.
But it can also be a daunting prospect, especially when you’re trying to figure out how much it will cost.
You want to know if $5,000 is enough to move out?
But there are a lot of factors to consider before making the decision to move out, and we’ve laid them all out for you in this ultimate guide.
So whether you’re just starting to think about moving out, or you’re ready to start packing your boxes, read on for everything you need to know about making the big move.
How much money do I need to move out?
Experts recommend having at least $6,000 to $12,000 saved up before moving out.
However, it’s possible to move out with as little as $5,000 if you focus on knowing how to live cheap and have a stable source of income.
However, if you don’t have a job before moving out, the need for a huge savings account is huge.
How much money should I have if I want to move out?
The minimum amount of money required to move out will depend on where you plan to live and your living expenses.
Shortly you will learn factors to include initial moving costs, rental deposit, and ongoing costs like rent, utilities, and food.
If you are looking to move out in an HCOL area, then you will need more than an LCOL city. At this point in your life, it is important to understand HCOL vs LCOL and how it affects your finances.
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.
What are the expenses you should consider when moving out?
Moving out on your own can be a daunting and expensive task.
There are many expenses to consider when budgeting for your new place especially when you are learning how to move out at 18.
This guide will help you estimate the cost of moving out and provide tips on how to save money.
1. Rent/Utilities
The cost of rent varies depending on the location and size of the apartment or home, with the median rental cost in the US being around $1700 per month.
Along with rent, utilities like electricity, gas, water, and internet can cost around $400 per month.
To save money on rent and utilities, consider finding roommates to split costs or negotiating with landlords for a lower rent.
Rent is your biggest expense when figuring out the ideal household budget percentages.
2. Rent Deposit
When renting an apartment, you will typically need to provide a rent deposit. This deposit is a sum of money paid upfront to the landlord to cover any damages or unpaid rent at the end of the lease.
The cost of a rent deposit can vary depending on the location and the landlord’s requirements, but it can range from $1,000 to $5,000 or one to three months of rent.
To save money on a rent deposit, consider looking for apartments with lower deposit requirements or negotiating with your landlord for a lower amount. A clean rental history will help you with this.
3. Moving Expenses
Moving out can be an expensive process, but with some planning and budgeting, you can keep costs under control.
When considering moving expenses, be sure to factor in the costs of moving truck, packing supplies, such as boxes and tape, as well as the cost of hiring movers
To save money on these expenses, try finding free packing materials on Buy Nothing groups or ask friends and family to help you move. You can also minimize your possessions and have less to move.
4. Renter’s Insurance
When moving out and renting a home or apartment, it’s important to consider getting a renter’s insurance policy to protect you from unforeseen events.
Home insurance, also known as renter’s insurance, is a special type of insurance policy that protects your property against losses or damage stemming from covered perils, including fires, storms, or theft. It can give you peace of mind and help you repair or replace your possessions in the event of unforeseen situations.
Insurance premiums are based on various factors, including where you live, how much you choose to insure, and your deductible. Your credit score and history may also affect your insurance rates.
5. Furniture and Appliances
When moving into a new home, it’s important to consider all the necessary expenses for furnishing the space. This includes appliances like a refrigerator, stove, oven, and microwave, as well as daily living items such as a mattress, table, and couches.
I remember when I moved into my first apartment by myself and there wasn’t a washer or dryer in the apartment. Just hookups. I had one of two choices: 1) rent from the management company for $35 a month or 2) buy new appliances with 0% interest for $35 a month. I choose option #2 and it saved me money in the long term.
To save money, consider buying used furniture from thrift stores or online marketplaces like Facebook Marketplace. You can also find plenty of free furniture if you are not picky.
By being thrifty and smart with your purchases, you can furnish your new home without breaking the bank.
6. Housewares
When moving out on a budget, it’s important to consider the essential housewares you’ll need to make your new place feel like home. Here’s a list of must-haves and their estimated costs:
By prioritizing these essential housewares, you can make your new place feel like home without breaking the bank.
Don’t forget to check out thrift stores and Facebook Marketplace for gently used furniture and household items. With a little creativity and resourcefulness, you can furnish your new home on a budget.
7. Internet and Phone Bills
The average cost of internet and phone plans varies depending on the provider and the plan you choose. However, you can expect to pay around $50 to $100 per month for internet and $40 to $80 per month for a mobile phone plan. In addition, there may be additional fees, such as equipment costs or activation fees, which can add up quickly.
To minimize these expenses, consider bundling services with one provider. Many companies offer discounts for bundling internet, phone, and cable services.
8. Credit Card Payments
If you thinking about moving out and are currently swaddled in debt, then you probably don’t have enough money to move out. If you have high-interest credit card debt, prioritize paying it off before moving out.
Automating savings on essential bills using Truebill can also help you manage your credit card payments while covering the costs of moving out.
Additionally, ensure that you have an emergency fund and enough money to stay a year to handle unexpected expenses.
Things may get harder if you have to pay for college without help from parents.
How to calculate your moving out budget
Moving out on your own requires careful planning and budgeting.
To calculate your moving-out budget, start by determining your monthly expenses once you move out. Make sure to include the factors discussed above.
Then, decide on your target move out date.
Now, figure out how many months you have to save.
For example, if your target move out date is in 6 months and you need to save $5,000 to cover your expenses, you’ll need to save about $833 per month.
Additionally, create an emergency fund to cover unexpected expenses such as medical bills or car repairs. Aim to save at least 3-6 months’ worth of expenses in your emergency fund.
By creating a detailed monthly budget and sticking to it, you can ensure that you can afford to live on your own and achieve your goal of moving out.
Tips and tricks on how to move out
So, you’re finally ready to move out and start your life as an independent adult.
But before you can start your new life, there are a few things you need to take care of first – like, you know, finding a place to live and figuring out how to pay for it.
Learn the lessons from those who did not move out with enough cash – like me.
Tip #1: Create a Budget and Stay Within Limits
Moving out with only $5000 can be challenging, but creating a budget and sticking to it can make the process much easier.
To start, subtract your monthly bills from your monthly income to determine your basic budget.
For instance, if you make $2500 per month and pay $1500 for rent and bills, you have $1000 left for living expenses.
Allocate $400 for groceries and other necessities, $200 for transportation, and $100 for utilities.
This leaves you with $300 for entertainment and other non-essential expenses.
To stay within your budget, consider using a budget binder to track your income and expenses.
Be mindful of living within your means and avoid overspending by resisting the temptation to spend your first paycheck on new household items or entertainment. Instead, opt for more affordable options such as walking around your new neighborhood or having a picnic in the park.
Tip #2: Reduce Expenses Where Possible
One of the hottest topics is becoming frugal green. To save money and the environment at the same time.
When it comes to furniture, try buying used or refurbished items or borrowing from friends and family. Additionally, cutting back on unnecessary expenses such as dining out and entertainment can free up more money.
By being resourceful and creative, it is possible to move out on a budget without sacrificing quality or comfort.
Remember to allocate 50% of your monthly pay towards necessary expenses, 30% towards things you want, and 20% for debt repayment and long-term savings.
Tip #3: Look for Low-Cost Rentals
Finding low-cost rentals can be a challenge, but there are several options available to those who are willing to be flexible and creative.
Renting a basement suite or studio apartment can be a more affordable option.
Consider couch surfing, subletting, or home-sharing arrangements.
Home-sharing can be particularly attractive as it allows you to pair up with an elderly homeowner who needs a little extra help in exchange for low rent.
Find a tiny home rental.
If you don’t mind sharing the space, you can also consider getting a roommate or looking into pod shares. Pod shares are co-living spaces where individuals rent a bed in a shared room, with access to other community spaces like a bathroom and kitchen.
Become a housesitter and be paid to move out. Learn more with Trusted Housesitters.
With a little bit of research and creativity, it is possible to find low-cost rentals that fit your budget and lifestyle. Remember to determine exactly how much you can spend on rent and be open to alternative housing solutions to help keep your costs at a minimum.
Tip #4: Look Into Getting Renters Insurance
When renting you are more than likely going to live closer to others, which means more things can go wrong. Don’t skip out on renter’s insurance, as it can provide the peace of mind and protection you need as a first-time renter.
Without renter’s insurance, unexpected disasters such as fires, storms, or theft can leave you with thousands of dollars in damages that you would have to pay out of pocket.
Renter’s insurance typically costs around $20 per month and can save you a lot of money in the long run. Some affordable options for renter’s insurance include Lemonade, State Farm, and Allstate.
It’s important to shop around and compare policies to find the best one for your needs and budget.
Tip #5: Plan for Emergencies and Unexpected Expenses
It is crucial to plan for emergencies and unexpected expenses.
Start by setting aside a minimum of $1000 for an emergency fund.
Ideally, you should aim to save at least three to six months of living expenses in a rainy day fund. Remember, having a contingency plan and emergency fund can provide peace of mind and protect you from financial hardship.
Tip #6: Start Saving for a Security Deposit
Remember to prioritize saving for a security deposit by setting a specific savings goal and putting aside a portion of your income each month before you move out!
With dedication and discipline, you can reach your goal and move out with confidence.
More than likely, if you are a good tenant, you should get your full security deposit back after your lease is over.
Tip #7: Start a Side Hustle
Starting a side hustle can be a great way to earn extra money while still maintaining your full-time job. You can earn extra income through various side hustles depending on your skills and interests.
The most common side hustles are online jobs, such as transcription, virtual assistance, proofreading, blogging, freelance writing, data entry, graphic design, and web design. These jobs are flexible and eliminate the need for driving anywhere, requiring only a laptop or computer and a good internet connection.
In fact, learning how to make money online for beginners is a trending topic.
As you start your side hustle, put in as much time as you have available to maximize your earnings. Remember that a side hustle is unlikely to replace the need for a real job, but it can provide a great way to earn extra money and pursue your passions.
Tip #8: Plan Ahead and Create a Timeline
When planning to move out on a budget, it’s important to create a realistic timeline.
Start by mapping out all the expenses you’ll need to cover, such as rent, utilities, food, and transportation. Along with how much money you have already saved for unknown expenses.
Stay organized by keeping a checklist of everything you need to do and when it needs to be done. Don’t rush the process – take your time and make sure you have everything in order before making the big move.
Remember the millionaire quote, failing to plan is planning to fail, so take the time to plan ahead and create a realistic timeline.
Is 10000 a good amount to move out with?
According to various sources, $10,000 is generally considered enough to cover moving out expenses and leave room for emergencies.
However, the actual cost of moving out can vary depending on location, rent prices, and cost of living.
Learn how to save 10000 in a year!
FAQ
There are a couple of different ways to save more money including:
Cut back on frivolous expenses like eating out and buying new clothes.
Sell anything you have that you don’t want or need on websites like Craigslist, Facebook Marketplace, Depop, or eBay.
Consider getting an extra part-time job or side hustle to increase your income.
When it comes to furnishings, be thrifty by asking friends and family if they have anything extra they’re getting rid of or checking out second-hand or discount stores.
Set saving goals and track your expenses using a spreadsheet. That will give you a clear picture of what is and is not possible.
Renter’s insurance is highly recommended, and in some cases, required by leases. It provides protection against unforeseen disasters such as fires, storms, or theft that can damage or destroy your possessions.
While it may seem like an unnecessary expense, it is usually affordable and can save you a lot of money compared to paying out of pocket for damages.
Not having renters insurance can leave you vulnerable to unexpected expenses and potential financial ruin.
You should not spend more on your rent payments than you are comfortable.
Just like with getting a mortgage, you should spend no more than 30% of your take-home pay on rent payments.
You don’t want to be stressed about finances, so you should set a realistic budget for rent that allows you to comfortably cover all of your expenses while still having some money left over for savings.
So, is 5000 enough to move out?
It really depends on your situation.
If you’re moving to a cheaper area and don’t have many expenses, you might be able to make it work.
However, if you’re moving to a more expensive city or have a lot of bills, you might need to save up more money.
When determining how much money is needed to move out, there are several factors to consider, which we covered above. These include where you plan to live, your living expenses, initial moving costs, ongoing costs, and emergency funds.
It’s essential to have a budget and do the math to determine the minimum amount required for a smooth transition to independent living on a tight budget.
Ultimately, it’s important to do your research and figure out what’s best for you.
Know someone else that needs this, too? Then, please share!!
Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his 2 children. He loves reading and writing about personal finance, and also enjoys a good board game every now and again. You can find out more about him on the about page. Don’t forget to say hi on Pinterest, Twitter or Facebook!
Mortgage rates aren’t so low these days. In fact, they’ve basically doubled since early 2022.
While this clearly isn’t great news for aspiring home buyers or those looking to refinance, it has opened the doors to some creative solutions.
Lately, the temporary buydown has taken center stage after being a very niche product.
And many home buyers are opting to pay discount points at closing to lower their rate.
The question is do you want to permanently buy down your rate, or only do so temporarily?
Temporary vs. Permanent Mortgage Buydowns
First, you need to know the difference between a temporary buydown and a permanent buydown.
Permanent Buydown (Paying Points at Closing for a Reduced Rate for the Life of the Loan)
The permanent buydown involves paying discount points at closing to lower your mortgage rate for the life of the loan.
For example, say you’ve got a $500,000 loan amount and are offered a rate of 6.5% on a 30-year fixed mortgage with no points.
That would result in a monthly principal and interest payment of $3,160.34.
You’re not too impressed because you’ve seen advertised rates in the 5% range and so you inquire about that.
The loan officer or broker explains that you can get a rate of 5.75% if you’re willing to pay two discount points at closing.
You’d owe $10,000 at closing to buy down the mortgage rate but you’d have that rate locked in for all 30 years.
The payment would drop to $2,917.86, representing savings of nearly $250 per month. Not bad. But you still need to recoup your $10,000!
Temporary Buydown (Receiving a Reduced Mortgage Rate in Years 1-2 Only)
Then there’s the temporary buydown, which as the name implies, is temporary. That means your mortgage rate will only be lower for a short period of time.
In most cases, we’re talking the first one or two years of your loan, which will likely be a 30-year loan term.
So for years 28 through 30, the temporary buydown will do you no good. And perhaps worse, the mortgage rate will return to what it was supposed to be, sans buydown.
For example, if you elected to use a 2-1 buydown, it would temporarily reduce your interest rate by 2% in year one and 1% in year two.
If the note rate were 6.5%, you’d enjoy a rate of 4.5% the first year and 5.5% the second year. But after that the savings would end.
You’d then be on the hook for the full 6.5% mortgage rate, which could create some payment shock.
By shock, I mean making a higher payment than what you were used to. After all, it’s easy to get used to a lower monthly payment, then feel blindsided when it increases.
As a real-world example, imagine if the loan amount were $500,000. The payment would rise from $2,533.43 to $2,838.95 and finally to $3,160.34.
The saving grace is that it’s somewhat gradual because the rate is reduced 2% in year one, but just 1% in year two.
That way the jump in payment isn’t as drastic. Still, it’s a very temporary solution to lower payments.
The Decision Might Depend on Where Rates Go Next (And Where You Might Go!)
$500,000 Loan Amount
Temporary Buydown
Permanent Buydown
Mortgage Rate
4.5% in year one, 5.5% in year two, 6.5% thereafter
5.75% for the life of the loan
Cost of Buydown
$10,000
$10,000
Monthly P&I in Years 1-2
$2,533.43 in year one, $2,838.95 in year two
$2,917.86
Monthly P&I in Years 3-30
$3,160.34
$2,917.86
Now that we know how each type of buydown works, we can discuss which might be better suited for certain situations.
Most proponents of the temporary buydown point to the elevated mortgage rates currently on offer.
To that end, they see it as a bridge to a lower mortgage rate in the near-future once interest rates come back down.
They argue you’ll only need it for a year or two before rates come down and you get the opportunity to apply for a rate and term refinance.
Additionally, you only pay for what you’ll actually use (the temporary buydown funds are put in a buydown account and are typically refunded if you sell/refi before they’re exhausted).
On the other hand, the permanent buydown could result in paying for something you don’t actually use.
For example, imagine if you pay two points at closing ($10,000 in our example), and then rates unexpectedly plummet.
All of a sudden you’re in the money to refinance, but you’re hesitant because you paid those non-refundable points upfront.
If rates fall enough, say to 5%, you’d likely need to eat that cost and go for the refinance to save even more.
If mortgage rates don’t fall dramatically, you could still lose out if you turn around and sell your property before breaking even on the upfront cost.
At that point, the bought-down rate will do you no good either. So you really need to think about your expected tenure in the home (and the loan) before paying points for a permanent buydown.
Can You Finance Mortgage Points?
For the record, there’s also the financed permanent buydown mortgage, which allows you to roll the points into the loan amount.
Instead of a $500,000 loan amount, you’d wind up with a $510,000 loan amount in our example. But the lower interest rate would still equate to a cheaper payment.
It could even increase your purchasing power at the same time, allowing you to buy more home.
While the financing aspect can reduce your cash burden at closing, it still leaves you in a pickle if you refinance or sell shortly after.
You’re stuck with a larger loan amount if you refinance or less proceeds if you sell. So not totally ideal either if you don’t keep the home/loan for a long period of time.
Which Is the Better Option?
To sum things up, be sure you understand the difference between a temporary and permanent buydown to ensure you aren’t paying extra for what you may not use.
Or perhaps buying a home you might not be able to afford at the actual interest rate!
For those who plan to stay in their home awhile, the permanent buydown could make more sense.
But this assumes mortgage rates don’t fall dramatically. Because if they do, a refinance would likely be in the cards.
Conversely, if you expect to sell or refinance sooner rather than later, the temporary buydown could be more favorable.
It reduces the chances of leaving money on the table if you don’t think you’ll hit the break-even period.
Of course, if rates don’t fall, or even rise (and you don’t sell), you might have wished for the permanent buydown.