Embrace Home Loans celebrated the grand opening of its new location at 102 South Main St., Suite 101, on May 16, with a ribbon-cutting ceremony sponsored by the Culpeper County Chamber of Commerce.
Members of the Culpeper community were able see the new office and enjoy food and beverages.
According to Christina Swift, producing sales manager and loan officer for Embrace, when the home loan company first came to Culpeper in the early 2000s, it opened its first office on West Davis Street.
A few years later, the business moved to a space on Madison Road, where it stayed for 15 years before returning to downtown Culpeper.
“We had many, many offices and we were downsizing in a way and we also wanted a downtown location,” Swift said on the decision to move again. “When the downtown location came up, we found that this was the perfect fit for us.”
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Swift added the customer response has been positive, and complimented the newly renovated office. She said he hopes the new location can attract foot traffic from those walking in the downtown shopping area and allow her to show potential clients new to the area the appeal of Culpeper.
Among Embrace’s well wishers was Justin McFarland, senior vice-president for Oak View National Bank’s Culpeper branch. “(Swift) does a lot of the same things I do in the mortgage business and in the commercial business but she’s always been a fair competitor and a great friend,” he said.
Tish Smyth, a member of the board of directors for Culpeper Renaissance Inc., added, “It is wonderful to have a local lender downtown in our small community.”
Embrace Home Loans is a residential mortgage lender helping people buy and refinance homes. The company also advises and guides clients through the home buying process.
The corporate office is in Rhode Island and has offices throughout the East Coast, including Fairfax, Woodbridge, Virginia Beach and Ashburn in Virginia.
To lean more about the business, visit embracehomeloans.com.
AN interior design enthusiast has shared a rule that simplifies home decorating.
A free program helps them organize their home layout without moving furniture around.
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An interior design fan shared a trick that made home decor easy (Stock photo)Credit: Getty
Redditor AdHot6173 shared the interior design tip in a viral post.
A trick that’s saved them time and effort only requires one simple step.
“The ‘rule’ that helped me the most was placing my largest piece of furniture on the longest wall,” they said.
“Then, I work my way down size-wise until all I have left is my accent furniture (end tables, floor lamps).”
A free tool, they added, makes the process even simpler without needing to lift a finger.
“There is an online program (it’s free) that you can type in your room [dimensions] and add your furniture so you get a floor plan (and you can move it around without physically moving it around),” they said.
It’s called Icovia Space Planner. This really helped me in my new home as we have some shared/awkward spaces, and I am getting too old to move furniture [ten times more] if I don’t like where it’s at.”
Another trick also helps them visualize their space.
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“I also found that seeing it from a bird’s eye view really helped, too,” they said.
“It doesn’t really do anything for color, pattern, or anything but just your furniture layout.”
Top 3 interior design trends of 2024
The interior design fan also shared a resource for those looking for decor and layout inspiration.
“Pinterest would be a great visual resource for you as well; it can help you narrow down your style and colors you like,” they said.
Other room decorators seconded their advice on utilizing Pinterest.
“Look at Pinterest, magazines, Instagram, and save the images of rooms you like, then study them to see what it is you like about a room,” said another.
Budget interior design tips
Interior designer Judy Hoang shared her furniture tips with The U.S. Sun.
Thrift furniture and paint it to match your decor.
Test if an item is fit for its purpose before thrifting.
Shop at Target or HomeGoods for rugs, lamps, desks, and pillows.
Invest in classic timeless pieces.
Set up smart home lighting to save money.
“Look for similarities in your room and just move stuff around until you think it looks good.
“Don’t worry about making holes in the walls, buy sliders for your furniture, and always think function first — what goes on in this room, and what’s the traffic pattern?”
Another tip, they added, is to always be mindful of the dimensions of your decor pieces and their place in a room.
“As for specific arrangements, pay attention to spacing. Spacing things too far away makes a room look disconnected,” they explained.
“Think ‘seating arrangement’ when arranging your living room, for example— what’s going to be [the] most conducive to how people use this space?” they asked.
READ MORE SUN STORIES
“If someone in the chairs across from the couch has to yell to be heard, bring your furniture closer together.
“If you have to squeeze between pieces to get a seat, space it out. Not everything needs to be against the wall.”
Have you ever thought about how it would feel to live cheap?
I didn’t think about it before, but now I know.
When you live a cheap life, you have more money for what you actually want to spend it on, and you can put more money towards your future.
You can do so many things in life, but you should make sure you’re doing them on your own terms. If you want to live cheap, but still have a high quality of life, you’ll need to get out of your comfort zone and be willing to try new things.
A cheap life can also help you save money on your biggest expenses.
Plus you can learn how to live cheap but good and no one will know anything different. Except for you because you are watching your accounts grow with your money saving style.
It is way easier to learn how to live cheaply! The hardest part is saying no to all the temptations.
Living cheap does not mean you deprive yourself or never have fun. In fact, it is quite the opposite!
Let’s dig in and you can enjoy the benefits of how to live cheap and save money.
Why Live Cheap?
In the past, living cheaply meant sacrificing a lot of things in life. However, that’s not always true anymore. There are many ways to live cheaply and still have a great quality of life without compromising your happiness or finances.
One main reason to live cheaply is that it will save you money.
Another reason for living cheap is because of the environmental impact of having a large carbon footprint, which can cost a lot more in the long run.
You might be interested in living cheap if:
– You want to save money on expenses
– You’re struggling to make ends meet
– Your family is spending more than they earn
– You want to have a positive impact on the world
Living cheap is oftentimes associated with simple living. While simple living has a better flair and acceptance, both mean you are willing to live on less and spend less money.
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.
How to Live Cheap
It’s possible to live cheaply, but the effort involved is significant especially when you are trying to change spending habits and ways of living.
There are big life changes you can make or tiny money saving habits you can do.
What are some ways to live cheap?
There are many ways to live cheaply! Some tips include not eating out, cooking at home, choosing entertainment wisely, and finding free activities. You just have to decide what works for you.
Learn about the frugal home must haves.
The most important step is, to be honest, and creative about what you can do and what you can’t do.
Here are the big things you can do to live cheap:
#1 – Spend Way Less
Many of us can’t afford how society wants us to live. Or maybe you can, but you have no desire to be materialistic.
You prefer the simplest way to create a new life that still allows us to work and care for our family.
Living cheap is not about living poorly. It is about spending way less than your income. Thus, you are saving the difference.
You have a heightened awareness of what your expenses are and you know where your money is spent. Now, you are mastering how to spend money wisely.
You know that living below your means is the path of how to live cheaply.
Budgeting is a way of life in order to keep your expenses at a minimum.
The thought of splurging every single day is gone and when you spend money, you invest in something that will last.
#2 – Focus Long Term
Focusing long term is the process of thinking about the consequences of your actions for a period of time before you take any action. This can be hard to do, especially when it involves emotionally charged topics.
Everyone knows that money is an emotional topic.
For example, debt is expensive. It is not just the money you borrow and repay, but also the interest fees and penalties that accumulate over time. If you want to live cheap, one of the best ways to do it is by paying off your debt as quickly as possible so that no more monthly payments go out the door.
Instead, start with a savings account where you deposit all of your extra cash each month (and ideally add some every week). This will be used for emergency purposes like car repairs, doctor visits, and so on.
Always stay focused on your current money goal as well as your long term financial vision.
#3 – Housing Expenses
Given that housing accounts for 25-35% of your income, this is the biggest place to start.
This is a great way to huge amounts of money each month.
1. Rent a room
Rent a room is an act of renting an apartment or other living space from another person. Renting rooms for a living can be seen as a service that enables people to live close to their work. Renting a room usually involves sharing living space with one or more other people.
2. Live in an RV or Van
Living in an RV or van is a question that many people have been asking themselves, and the answer to this question varies from person to person.
The most common response would be that it depends on the person. Some people love camping and would love to live in an RV for a few months before going back to their house. Other people enjoy living in a van as they are able to go to work and school without having to worry about commuting.
3. Own a Duplex
In a duplex, there is one unit of living space that shares a wall with another unit.
The concept is house hacking by living in one unit of a duplex and renting out the other units and getting money from one side of the building. Thus, making your mortgage nothing or even making money.
4. Buy a Fixer-Upper
A fixer-upper is a house with major problems, which the buyer fixes up and then sells. You can also live in the property while doing the renovations and lowering your housing expenses.
When it comes to buying a fixer-upper, there are always risks and rewards. There is always the possibility that you could end up with an expensive disaster on your hands or find yourself living in paradise for less than the market rate.
5. Rent an Efficiency Apartment
The monthly rent for an efficient apartment is usually lower than a studio.
Efficiency apartments are like studios in that they have only one room and the bathroom is separate from living quarters, but unlike studios which contain two to three rooms, efficiency apartments do not feature any additional space.
By renting an efficient apartment, it offers limited space and utilities, but at a low price.
What are free housing options?
Free housing options are available to people who are homeless, low-income, or living in shelters. These types of housing options include government-funded apartments that are given to the homeless and single-room occupancy hotels.
Other options for free housing include living in a friend or family member’s home. You are living without paying rent.
Also, you can net yourself a free room by doing a little work as well.
Where can you find the cheapest housing?
Finding the best place to live is a difficult task, but it can be made easier with some knowledge of where to find the cheapest housing.
There are many factors that go into finding affordable housing, such as the cost of living, quality of schools, and commute time.
The best place to find the cheapest housing is by looking for listings in your area. There are many websites that offer up-to-date listings of homes for sale or apartments.
70 Ways to Live Cheap
In today’s economy, it is hard to live on a budget. However, there are ways to make your life easier by living cheaply.
Whether we’re saving money or just living debt free, we all struggle with these life decisions. Most of the time it’s better to be frugal than indulge all of our wants and needs.
Frugal living can be difficult, but it’s better for you in the long run.
Here are many tips to live cheaper yet fuller lives.
Money Spending Habits:
Budget your money: Budgeting your money is a process of making decisions on how you will spend your income so that you can have enough for necessities and not exceed your budget. This is a great way to reach a goal.
Cancel bills you can’t pay: The best way to cancel bills you can’t pay is to contact your creditors and ask for a cancellation. If that doesn’t work, you’ll have to explain why the bill was not paid. If you have a lot of bills, consider filing for bankruptcy.
Switch Banks: You should not pay for banking. Period. If you do, it is time to switch. Credit unions are great options.
Insurance bundles: Insurance bundles are a type of insurance that is usually offered by an insurer and includes a number of different types of coverage. Bundles typically include home, auto, life and disability insurance as well as rider policies for loss of income and medical expenses.
Switch banks to one with high APY: If you do not invest in an account with high interest, then you are losing money by not investing. A bank’s APY is the annual percentage yield it pays on deposits. Here is a great online banking option.
Increase income: Increasing one’s income is a way to increase the amount of money one can earn. This can be done in a variety of ways, such as by finding a new job or starting their own business.
Cut your bills: The average person spends around $150 a month on various bills, such as electricity and gas. By cutting your bills where you can, you’ll be able to save a lot of money each month.
Earn cash back on purchases: Earn cash back on purchases is the opportunity to earn money for items you already buy. It can be done through a credit card, debit card, or other means.
Make money on things you own: Sell items you no longer need on eBay, craigslist, and other classified sites instead of throwing them away
Avoid unnecessary spending: When you’re out and about, do your best to avoid places that sell items you don’t need.
Don’t buy things on credit: If you don’t have the money, don’t buy it! That way you won’t be stuck paying more than what an item is worth.
Save your spare change: If you take your spare change and divide it into jars, you’ll be surprised how much money can accumulate.
Automate your budget: Knowing what you have to spend will help keep your shopping in check and prevent impulse buying.
Avoid fees from simple transactions: Credit cards, debit cards, and electronic check transactions have fees associated with them that users need to be aware of in order to avoid being charged for a transaction that they did not intend to pay.
Shopping Habits
Stay out of stores: Don’t go the mall. Changing this simple habit can be a huge savings on a budget and improve quality of life. Find thrifty alternatives to cramming your whole life into a big container, from food to avoiding the mall.
Have a no-spend weekend: A no-spend weekend is a time when people often give up spending and try to save money. Many people use this as a way to get back on track financially by trying to cut back on their spending. Get your no spend printables.
Write down what you want to buy: When you’re tempted by a purchase, take five minutes and write down what you want from the item. Do this for at least three days until your desire is gone.
Buy only used items: Buying used items is a great way to lower the cost of your purchase. The downside, however, is that you might not be able to find exactly what you are looking for.
Skip paying the full price: Many people do not want to pay the full price for a product or service. However, as most companies now provide discounts and promotions, consumers are finding themselves paying less for their services.
Be wary of subscriptions: There are a lot of different types of subscriptions that can be found online. Many people today subscribe to the idea that they need some type of subscription in order to access content on any given website. There are many subscription services that make it seem like you’re not actually paying for content, but rather making a one-time payment to receive all the benefits. Review your subscriptions to make sure you benefit from them.
Trim unused subscriptions: Unused subscriptions are subscriptions that have been set to expire in the next 30 days. They can be canceled by clicking on “cancel subscription” and then deleting the unwanted subscriptions from your account.
Get cashback on everyday products: Online shopping is a great way to get cashback on everyday products. You can search for the best deals by using comparison websites, which will help you find the cheapest price. Personally, I use this one.
Free Stuff: Take advantage of free events and activities in your area. Here is a list of 101+ things to do with no money.
Use the Library: For things like magazines or books, look at the library instead of buying them new.
Buy clothes during the off season: Buying clothes during the off season is a time when deals can be found everywhere. If you want to know what’s inside the trend, now is not the time to buy those clothes. Department stores also offer discounts on winter clothing. Shop at stores with racks, not shelves.
Shop thrift stores: Visit thrift stores and garage sales to find items you want or maybe even flip for a profit. Want to learn more about flea market flipping?
Try to reduce waste: Consider what can be done to reduce waste when purchasing items you need in your house.
Around the House
Adjust the temperature: Turning down the temperature is a key part of many different energy saving strategies. Reducing air conditioning or heating can help people save money, but it also has health benefits. Turn down the heat or air conditioning in your home at night and turn it back up during the day.
Cut back cell phone plan: The best wireless provider for you may be to cut back your cell phone plan. Cutting down on the number of minutes or texts could save you money, but this decision should be made with careful consideration.
Make clothes last longer: The best way to make clothes last longer is to not wear them too often. Washing garments made from natural fibers will help preserve them, while colors can be faded or bleached out with the addition of vinegar. This is a great powder detergent to have your clothes last.
Shop for clothing on clearance: Shopping for a style that best fits within a budget is possible. You can save lots of money by shopping off season.
Eliminate cable or satellite television: People can find shows on the internet instead of overpriced services, so the only monthly payment is something to get broadband internet.
Switch cell phones: It’s important to keep in mind that switching cell phone providers are a big decision. While there are many cheaper alternatives, they may not have the cell service where you need it.
Look into your energy usage: By adjusting your thermostat a few degrees, you could save hundreds and then invest in a comfy sweatshirt.
Limit trips to the Salon: Cut your own hair at home, or get it trimmed. You can also grow out your natural hair color.
Turn off unused lights: Of course, turning off lighting when leaving a room always happens.
Buy in Bulk: Buy things like toilet paper, toothpaste, cleaning supplies for yourself rather than in bulk.
Save money on laundry: All you have to do is wash your clothes at night and hang them up, so it’s ready in the morning when you go to school or work for a whole week! Find more tips on how to save money on laundry.
Transportation
Sell any cars you own: Benefits of selling your own car include not having to worry about finding parking, saving on gas or maintenance, and not having to worry about getting a ride to work.
Use a bike: Biking is a great way to get in shape, exercise, and save money. The best bike for you depends on how much time you have to practice and what kind of riding experience you want.
Carpool: Car pooling is a way for people to share the responsibility of driving each day, or from one destination to another. This can be done by carpooling with others who live near you, or by finding drivers for ridesharing. Plus you save money on gas and maintenance.
Public transportation: Public transport modes include buses, trolleys, trains (rail), metro (subway), trams, ferries, and others. This is cost-effective option.
Food / Grocery Ideas
Grocery Shop Less Often: In order to save on spending, grocery shop less often. Most people rely on big grocery stores with extended selections for their meals, but it’s easy to find out what you need or make what you need.
Meal plan based on cheap ingredients: Being on a budget is never easy, but it can be manageable. In order to make the best use of your time and money, create a meal plan based on cheap ingredients that you have in your pantry and fridge.
Always use a shopping list: To create a shopping list, start by making a list of the items you need. Online grocery shopping has made this process simpler.
Avoid convenience foods: Convenience foods are typically less expensive and easier to make, but they lack nutrients and often have a high amount of sugar. They can cause weight gain, cravings for more food, and even mood swings. Save your money and your health.
Eat at home: Eating at home is cheaper than eating out. Period.
Make your own coffee: Make your own coffee, saving money on your morning fix. Set yourself up with a nifty electric French press or better yet use a reusable cone to brew grounds that won’t ever taste gross.
Make as many of your dinners as possible at home: Eating at home also eliminates the need for two trips out, one to buy food and one to clean up. On average, most people who cook for themselves do so twenty minutes each day.
Maybe use a meal delivery service: Most of the time, the factor that makes eating healthy impossible for some people is the overwhelm in the kitchen. Fortunately, there are many online food delivery services to get fed with fresh produce on your plate. Studies show that people are eating fresh, organic items more often now with the help of these wonderful services. Check out the best meal delivery services.
Buy produce from large supermarkets, not from stand-alone farmers markets.
Eat Out Smart: Find more affordable locally owned restaurants, but be aware of the cost. Look for weekly specials or happy hours.
Use your own coffee mug: Then, you can get a discount on hot drinks at places like Starbucks or Peet’s Coffee & Tea.
Pack lunch for work or school: Instead of buying lunch on-the-go, pack a lunch and save lots of money.
Shop Grocery Ads: Plan ahead for what you need to buy by checking the weekly ads before shopping. Look for the loss leaders to bring you into the stores.
Slashing grocery bills: Slashing grocery bills is a term used to describe the process of reducing food costs by shopping at discount stores. The most common ways to slash grocery bills are buying in bulk, switching from expensive “brand-name” items to generic brands, and buying food on sale.
Figure out Food Habits: You must first determine where you are spending the most money on food. Many people spend a majority of their money on unhealthy processed foods, such as boxed cereal or frozen pizzas. To slash your grocery bill, you must cut back on these items and buy more healthy food.
Cutting coupons: Coupons are an important tool for saving money. Cutting coupons can be tough, but it is possible to save the most money by cutting out ads and extra fees that come with regular purchases.
Buy Store Brands: A store brand is a product that is produced and sold under the same name as a popular brand, but by a different company. Stores that offer their own brands of products include Costco, Wal-Mart, and Kroger.
Don’t Shop Hungry: Shopping while hungry can be a recipe for disaster. That’s why it’s important to remember that you should never shop hungry. Remember not to buy anything that is going to last more than a few hours.
In-Store Grocery Apps: In-store grocery apps are digital tools that help people to find the best prices, buy groceries at their local store, and discover new recipes. In-store grocery apps can be used on smartphones, tablets, and computers.
Eat Meatless Meals: If you want to take a break from meat, try eating more vegetarian meals. Meatless meals are often higher in fiber and protein than their meat-containing counterparts. You’ll also save money and help the environment.
Don’t eat out: It’s hardly surprising to hear that eating out is going to cost a ton more than if you simply made your meals at home.
Use cash back apps: Cash back apps are an easy way to earn cash for purchases. They often offer coupons, discounts, and other promotional codes that can be redeemed on selected products or services. Check out these five best cash back apps.
Use Ibotta every time you shop: Ibotta is a mobile app that rewards users with cash for shopping. Users earn money by scanning barcodes and completing tasks such as taking surveys, watching videos, or answering trivia questions.
Stop buying K-Cups: In recent years, K-Cups have been a popular way to brew coffee for many people. However, the problem with these pods is that they are actually quite expensive and environmentally unfriendly. The cost of a K-Cup is roughly three to five cents, whereas the average coffee shop brews a cup for two or three dollars. Additionally, many people are concerned about the waste that comes with K-Cups. Coffee pods are typically made of plastic, which cannot be recycled and is often littered on the ground for people to pick up. As a result, here is a reusable alternative that is cost effective and environmentally friendly way to drink coffee.
How to Live Simply and Cheaply
A budget can help you live a simple and cheap life. It allows for the spending of money on what is necessary to keep your quality of life up at all times.
It’s important not to spend too much time thinking about how you’re going to pay for things because that will only lead to stress, which leads to bad financial habits like overspending or taking out loans when they don’t need them.
The best way to live cheaply is by not spending on luxuries or buying too many things.
Instead, focus on big purchases. For example, buying a car can be expensive but it will make your life easier as you won’t have to rely on public transportation or worry about traffic jams.
Most people, do not want to go to the extreme of how to live super cheap.
But, that is completely up to you and what you want to do with your life.
You can choose your lifestyle.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
NEW YORK (AP) — Mortgage rates, credit card rates, auto loan rates, and business loans with variable rates will all likely maintain their highs, with consequences for consumer spending, after the Federal Reserve indicated Wednesday that it doesn’t plan to cut interest rates until it has “greater confidence” that price increases at the consumer level are slowing to its 2% target.
The central bank kept its key rate at a two-decade high of roughly 5.3%, where it has been since last August.
Here’s what to know:
WHAT DOES THIS MEAN FOR BORROWERS?
Credit card rates are at or near all-time peaks, and mortgage rates have more than doubled in recent years.
According to LendingTree, the average credit card interest rate in America today is 24.66%, unchanged from last month, though that rate has risen for 24 of the last 26 months.
“That isn’t likely to fall anytime soon, despite the Fed taking its foot off the gas,” said LendingTree Credit Analyst Matt Schultz. “That’s likely the unfortunate reality for the next several months.”
In the battle against credit card debt, 0% balance transfer cards “are still your best weapon,” according to Schultz, but “they’re getting harder to get and their fees are rising.”
With delinquencies and debt totals also increasing for consumers, some banks are becoming more hesitant about taking on transferred balances, he said, meaning consumers will need good credit to get approval.
WHAT’S IN STORE FOR SAVERS?
Yields on savings accounts and certificates of deposit (CDs) have been hovering at high levels, thanks to the Fed’s increased interest rates, according to Ken Tumin, banking expert and founder of DepositAccounts.com. That said, “several banks have been lowering deposit rates (with the) expectation that the Fed will start cutting rates at some point this year.”
Certificate of deposit rates have been the first to fall, and a few online banks have also started lowering online savings account rates. Ally Bank dropped its rate to 4.25% from 4.35% and Discover to 4.25% from 4.30%.
Even so, most online banks held their online savings account rates steady in 2024, and several online banks still offer yields of 5.25%. The highest online yield is currently 5.55%, with the average online 1-year CD yield 4.94% as of April 1st, according to DepositAccounts.com.
Tumin notes that “brick-and-mortar bank deposit rates continue to be slow in their movement higher,” saying that while their average rates have gone up sharply in the last year, “they are still very low compared to online rates.”
The average savings account yield for all banks and credit unions, of which the vast majority are brick-and-mortar, is 0.52% as of April 24th.
WHAT ABOUT MORTGAGES?
The Fed doesn’t directly set mortgage rates, but it does influence them. The bond market, inflation, and other factors all contribute to the high mortgage rates currently facing consumers.
The average rate on a 30-year, fixed-rate mortgage recently rose to above 7% for the first time since November. LendingTree Senior Economist Jacob Channel notes that mortgage rates can shift even as the Fed holds its benchmark rate steady, and that consumers should consider many economic data points before deciding to take on a mortgage.
“Even in the face of relatively steep mortgage rates and high prices, now could still be a good time to buy a home,” he said. “Timing the market is virtually impossible… In that same vein, there are a lot of people who won’t be able to buy until the market becomes cheaper.”
High shelter and rent costs have contributed to steep inflation in recent months.
A Bankrate study found that renting is cheaper than buying a typical home in all 50 of the largest U.S. metro areas. As of February, the typical monthly mortgage payment on a median-priced home in the U.S. was $2,703, while the typical national monthly rent was $1,979. That’s a nearly 37% gap between the costs of renting and buying a home.
“While it would be nice if the Fed could fix everything on its own, it probably can’t, at least not without causing a great deal of weeping and gnashing of teeth,” said Channel.
I NEED TO BUY A CAR. WHAT’S THE OUTLOOK FOR AUTO LOANS?
While vehicle prices have steadied through late 2023 and early 2024, Bankrate Chief Financial Analyst Greg McBride predicts that high interest rates on auto loans will linger for those with weak credit profiles. Borrowers with stronger credit may see more competitive rates, but the Fed’s decision will continue to make auto loans expensive, even if vehicle prices decline. The average car loan hasn’t been this pricey since 2008.
McBride predicts five-year new car loan rates will reach an average of 7.0% and four-year used car loans, 7.5% by the end of 2024.
In the past year, borrowers have f aced especially expensive monthly payments due to high interest rates, and auto loan delinquency reached its highest rate in nearly thirty years. The average monthly car loan payment was $738 for new vehicles and $532 for used ones in the fourth quarter of 2023, according to credit reporting agency Experian.
New vehicles cost an average of $47,218 in March 2024, according to Kelley Blue Book, a price that, combined with high interest rates, pushes many buyers out of the market for new cars.
IS THE FED MAKING PROGRESS ON SLOWING INFLATION?
Not as quickly as it would like.
Several recent reports on prices and economic growth have undercut the Fed’s belief that inflation was steadily easing.
“Inflation has shown a lack of further progress toward our 2% objective,” said Chair Jerome Powell.
While inflation has cooled from a peak of 7.1% to 2.7%, average prices remain well above pre-pandemic levels, and the costs of services continue to grow — including for rents, health care, restaurant meals, and auto insurance.
___
“The Associated Press receives support from Charles Schwab Foundation for educational and explanatory reporting to improve financial literacy. The independent foundation is separate from Charles Schwab and Co. Inc. The AP is solely responsible for its journalism.”
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 do you think of when I say, “smart with money”?
Do you remember any significant life events such as landing your first job after college or signing up for a lucrative opportunity to invest in the stock market?
Most likely not.
Because those didn’t happen until later on in life and we were already smart with our money by then. But there was no rocket science behind it: we just learned about saving and investing early on and took action that eventually yielded positive results.
And if you didn’t, there is no need to fret. You are in the right place and everyone has to start somewhere.
It’s not long before you start to wonder how much richer your life and bank account would be if you had started earlier.
So, let’s do a reality check: what is the difference between investing 10 minutes per day and putting $10 into an investment each month?
A sensible answer would be that investing 10 minutes per day is worth $1,000 in a year.
Your time has value and you are getting richer by the minute!
So, what are you waiting for?
Let’s learn how to be smart with money.
How to Be Smart with Money
Money touches nearly everything we do in our modern society.
It’s what keeps the wheels of commerce turning and enables people to get by without physical labor, so it is important that you know how to manage your finances well.
To be smart with money means understanding its power and spending on what matters most for your life goals.
You need to make sure you are paying for your day-to-day expenses while saving for emergencies, retirement plans, and long-term investments like a home or college education.
Money helps us to achieve our goals and dreams, increase our quality of life, and buy everything we need or want.
If you’re just starting out with your finances then this article is for you! I will give some basic steps on how to be smart with money.
In other words, this article is a crash course on how to make your money work for you! You’ll learn what financial independence means and why it’s important to have a large enough nest egg. Read more now!
Why You Need to be Smart with Money
This is exactly how can I be wise with money.
The most important thing is to cultivate the habit of saving money. The fact that you are reading this article likely means that you understand how important it is, but if not then it’s time for some serious change! If your goal in life is security and doing something meaningful with your life, then building wealth will be a significant step towards achieving those goals.
When we have enough money saved up, we can start investing our funds into different assets such as stocks or real estate so that they grow and compound. The more money we have, the more freedom and control we will gain over our lives.
There are many ways to be smart with money. Here are some suggestions that can help you save, invest, or earn more money.
7 Steps to Be Smart with money
It’s not easy to be smart with money, but it is possible.
Start by building a budget and identifying your spending habits. It takes time and hard work, but once you’re on track for saving money consistently over the long-term, you will find yourself in a much better position financially than those who are constantly struggling or living paycheck to paycheck.
Here are the exact steps to follow:
Step #1: Set Goals
Set goals for yourself. It’s important to have clear, measurable, attainable goals that you will be able to achieve in order to keep your motivation up when you are working towards them.
In order to have a better future, it is necessary to start saving for the future now and not wait any longer.
Set goals and save money every month so that when your goal is achieved, you can spend more time enjoying what life has in store for you.
In order to set goals, it is best to reflect on what you want in your life.
What do you want to know?
Who do you want to be?
What do you want to experience?
What is your purpose in life and how will this help you get what you want?
It’s also important to make a plan for achieving these goals.
For instance, if you want to be a millionaire, what are some steps that you can take today? Maybe it means getting more education or saving up for retirement.
You have the power to set goals and make plans to achieve them.
Action Step: Dig deeper into making smart financial goals.
Step #2: Managing your Budget
A budget can be a valuable tool for managing your money and preventing financial stress.
More importantly, to become smart with money is to create a budget that you can follow. You should also save your money, especially if you want to build wealth.
Managing your budget is a step-by-step process that requires you to have a budget.
You should start by setting up a spreadsheet to track your income and expenses. The next step is to create a budget that reflects your financial situation. You can use an online Google Sheet, Microsoft Excel spreadsheet, or personal finance software like Quicken.
Action Step: Dig deeper into how to make a budget.
Step #3: Paying Off Debts (non-mortgage debts)
Dealing with debt is difficult enough, but it can be made easier by paying off your monthly payments.
Paying off debts is the process of getting rid of outstanding debt and freeing up cash flow. This can be done by creating a plan to get out of debt, avoid taking on smaller manageable debts or simply by not spending as much.
Pay off your high interest debt first, such as credit cards and loans. This will help reduce the amount of interest you pay each month.
When you are able to pay off your debts on a regular basis, the interest rates will go down and this will save money in the long run.
Paying off debt faster and building wealth is easier than ever by following this action step below.
Action Step: Dig deeper into how to get out of debt.
Step #4: Save More Money
Save more money is a step in the process of achieving financial independence.
Saving money and building wealth is something that anyone can do. Once you get into the habit of saving money, it becomes easier to increase your savings rate or build up an emergency fund.
This step involves taking on additional work and increasing your income so that you can save more. By saving more money, you will be able to reach financial independence faster.
It is important to create an emergency fund and invest in a money market account. This allows you to save for future goals and emergencies with less risk, as well as build wealth faster.
Action Step: Pick a money saving challenge for you!
Step #5: Track Expenses
Track expenses is a phrase that means to collect or record the money that you spend on various things over a given period of time. This includes bills, groceries, and anything else expenditure-related.
Track your spending or review debit/credit card transactions and receipts to begin to understand where your money is going.
This will help you stay on top of what you are spending so that you can be more efficient with your finances.
Track your spending habits to find the big leaks in your wallet. You should know what you are spending money on, where it is going and how much you spend.
For at least a month, track your expenses in order to get a better understanding of where you can save. This will help you set goals and make conscious decisions about money management.
Action Step: Try a no spend month to prioritize your spending.
Pick a money saving challenge for you!
Step #6 – Increase Income
There are numerous ways to increase your income. You can increase your income by working more hours, starting a side business, or taking on additional responsibilities at work.
The fastest way is to think of businesses, products, or services that people want – use Google to find the products and advertise your niche. The benefit of working for yourself is there are no income limits on what you can make.
Many people want to make money online, but most of them need help figuring out how to do it.
To start, you need to figure out what your skills are and then find a niche that is in demand. For example, if you have good writing skills, it might be best for you to try blogging or find freelance work.
Don’t give up. If you want to make a lot of money, you have to put in the time and effort!
Action Step: Find ways to make money fast.
Step # 7: Invest Wisely
Investing wisely is the act of making investments that will provide positive returns.
Investing in stocks, bonds, or other types of securities can be risky, but it can also make you rich. Investing wisely means understanding the risks and rewards of your investment.
If someone asked you, “What is the smartest thing to do with your money?” The loud answer is to invest money consistently.
Investing early on and taking action eventually yielded positive results.
Investing is a marathon and not a sprint, so we need to start small and take it one day at a time.
Investing in a variety of assets is the best way to maximize your returns. Invest only in what you know and understand, invest for the long term, and diversify investments.
Action Step: Learn how much you can make in stocks.
10 Simple Smart Money Tips
On Reddit personal finance, you can find hundreds of answers to what is a money smart person, which is great but can be overwhelming.
Smart money tips are a great way to build wealth and get rich faster. These smart money tips will help you learn more about personal finance, save time on your monthly expenses, and grow savings for the future.
Here are specific ways you can become money smart today:
1. Build an Emergency Fund
An emergency fund is a savings account that’s been set aside for the unexpected.
It is used to cover emergencies, such as car repairs or medical emergencies, and can also be used when you have a job that doesn’t offer health insurance.
It’s important to set up an emergency fund because unexpected situations can happen at any time, and you won’t be able to use your credit cards or other debt to pay for them.
2. Save for Larger Purchases and Expenses
Save for larger purchases and expenses is a financial planning strategy that entails saving a certain amount of money each month to put towards future, much bigger purchases or expenses.
It’s important not to spend all of the money you save, as it’s possible that the future expense will not come to fruition.
This is exactly how you stay out of debt.
3. Steer Clear of Debt
Keep your debt low, and pay it off when you can.
Good debt is debt that will help you reach your goals in the future or help build a business. Bad debt is debt that you will not be able to pay back, and if you default on this type of debt, it can have a huge impact on your credit score.
To get out of debt, figure out how much you owe on various debts and decide what to do with the money.
4. Start Investing for Retirement
Many people have a hard time saving for retirement. This is unfortunate because of the power of compound interest, which means that you will earn more money on your investment over time.
Start saving 15% of your income as soon as you can for retirement. This will allow for passive income later in life.
The best way to start investing for retirement is by setting up a Roth IRA.
You can then invest your money with low or no fees and earn tax-free returns until you retire.
This means every time you get a raise, put that extra cash into an account that will be used for your retirement.
5. How to Save for Kids’ College
There are a few different ways to save for kids’ college. One way is to pay for their education through a 529 plan, which is a tax-advantaged savings account that allows you to save for college expenses. Another way is to use a mix of tax-advantaged and taxable investments like an IRA or 401(k), which will take some time to build up your savings but will allow you to invest in stocks, bonds, mutual funds, and other investments that are safe for retirement.
The best way to save for your kids’ college is to start saving early.
Also, you need to check out this scholarship program to lower the cost of college.
6. Find a Good Credit Card
Credit cards offer the best interest rates on purchases, and they’re easy to find with little risk. Apply for one that charges no annual fees and offers a balance transfer promotion.
Even better, you want a credit card that offers you cash back on your purchases.
7. Talk about Money
In order to be smart with money, it’s important that you talk about finances and learn from them. You can normalize talking and learning about finance by using a planner or financial statements.
It also helps to meet up with other people who have similar values in the community so they can help support your journey towards wealth building.
By talking openly about finances and learning how to be smart with money, it helps people get wealthy.
8. Learn about Money
Money is a topic that most people know little to nothing about, and it can be hard to get started.
However, Money Bliss provides some helpful tips on how you can begin building your wealth in the simplest way possible.
Wealthy people are getting richer by staying up to date with money matters.
Building wealth starts with thinking about your finances the right way. It’s not about losing weight or running a marathon; it’s about how we use the resources we’re given and the smart money management skills we need to get what we want out of life.
9. Know the Purpose of Money
Most people believe that it is “the key to happiness” to have enough money, but studies show this is not true.
We know money does not buy happiness, but it doesn’t mean you should live without it.
In fact, you need to know how money helps you find time freedom.
Time freedom is a relativity new concept; yet, it is the driver behind finding happiness with money.
10. Be Aware
Awareness of spending habits, saving, and donations are all examples of smart money skills.
By understanding how your current income is allocated to different expenses–including the ones you can’t control like mortgage rates or gas prices–you’ll learn what really drives your monthly budget.
When it comes to money, you should be smart about your spending habits. By doing this, you will have a better understanding of how much money is coming in and going out so that you can save more or donate more.
You should also know the difference between saving for the future vs living day-to-day expenses because these are two different things.
There are many perspectives on how to manage money. And honestly, there isn’t one opinion that dominates from another.
That is why investing in yourself to read some of the best books on how to manage money is key to long-term financial success!
While many of the concepts may be similar, there is ALWAYS something unique I learn after reading each book.
Happy reading!
Photo Credit:
amazon.com
Hands down this is one of my favorite books on how to manage money of all time.
The reason is simple.
It is easier to follow regardless of your background, knowledge of personal finance, or love/hate relationship with numbers, and money savviness.
You cannot learn how to manage money successfully without reading this book. This is one of the best gifts that you can give.
Key Takeaways – Creating your F-you fund will dramatically change your financial independence and your future.
Photo Credit:
amazon.com
This book by David Bach is the inspirational story you need when motivation is low to stay on budget.
You learn the secret to automatically secure your future – all through automatically saving money. This is a real system that any person can follow.
If you are struggling to stay on course and motivated, then you need to pick up this book. Once you read it, then pass it along to a friend to keep the motivational and accountability train going.
Key Takeaway – Automatically saving 10% early on will guarantee your millionaire status.
Photo Credit:
amazon.com
This book covers every aspect of money from debt, saving accounts, automating finances, set-it-and-forget it investment strategy, how to handle big purchases (car, house, wedding, kids) plus how to negotiate a raise at work.
These are the basic principles on how to manage money that needs to be taught in school. Call this book your beginner’s guide on managing your finances and setting yourself up for long term success!
Take control of your financial situation. By becoming active, you don’t have to continue to hold for a magically change.
Make sure you get the 2nd edition that was revised in 2019.
Key Takeaways – Ramit Sethi, the author, provides you word-for-word scripts that will save you thousands of dollars on loan interest and lowering all of your expenses. That alone is worth the $9.
Photo Credit:
amazon.com
The goal is to become financially independent as quickly as possible.
This is something the author Grant Sabatier has achieved and retired at the age of 30.
He offers counter-intuitive advice about money so that you can actually live the life you want. This FI movement is picking up speed and something that you shouldn’t ignore regardless of your age.
Key Takeaways – You will not walk away from reading this book the same person.
Photo Credit:
amazon.com
This is what we all dream of… be set for life. Not to have to worry about the next paycheck coming in. Running out of money each month. You want money in the bank and the freedom to do what you want to do.
Become set on escaping the 9-to-5 grind and lay a solid foundation with money. According to the author, Scott Trench, you must be willing to work harder and smarter than the average person.
Find the motivation to conquer your financial goals early on.
Key Takeaway – Be prepared to start saving 50% of your income while still enjoying life’s luxuries at a younger age.
Photo Credit:
amazon.com
This recent release is about how you behave with money. The decisions that are made on the go and not when looking at a spreadsheet.
The book is filled with 19 short stories on how emotions play such a big part with how we handle money. Everyone handles money and investing differently and that is okay, but learning how to know what works for you.
Key Takeaway – This book is meant to be thought provoking on why we do silly things with money.
Photo Credit:
amazon.com
This is the perfect book for beginners written by a (retired) millennial.
You will walk away with a solid understanding of budgeting and why tracking your net worth will boost your money management efforts.
She puts everything into simple terms and provides uncomplicated and realistic solutions to handing your finances.
Key Takeaway – This book is loaded with sass and humor, so you will find the lessons upbeat and honest to a normal dreary topic of personal finance.
Photo Credit:
amazon.com
The long term reason to save money today is to not work for years. If you want a drag on your portfolio by using a financial investor, then don’t read this book.
If you want a classic guide on getting smart about the stock market and becoming financially independent, then this book is for you.
The author teaches how to make index fund investing work for you and help you to achieve your financial goals. Plus with having little risk.
Key Takeaway – The investment scene doesn’t have to be scary and confusing after learning the basics of investing and creating a simple portfolio.
Photo Credit:
amazon.com
One of the best ways to build income is to become your own boss whether, through a side hustle, real estate investing, or building a business. However, too many times expenses swallow business before they ever churn a profit back to the owner.
Mike Michalowicz will lays out the Profit First Formula, which will transform any business on the way they manage money.
This is a must-read for anyone owning their own business, a board member for a corporation, or looking to start their own business. This is how you build a sustainable, no-ceiling income.
Key Takeaway – You will finally know how much you have to invest in your business and always take home a profit.
Photo Credit:
amazon.com
The last book on the top 10 best books to manage money isn’t even focused on money!
It is how we handle and deal with our stuff. Unfortunately, buying all that stuff comes at a cost and normally a big price tag. Plus the cost to maintain the stuff we already own.
The book by Joshua Becker helps you to open your eyes to a slightly different lifestyle that may change your life forever.
Key Takeaways – By learning to live with less stuff, there is more money in our budget to spend on other things or experiences.
Ready to Be Smart with Money?
Being smart with your money is about making good choices.
It’s important to know what you need and what you don’t because if you spend too much on things that aren’t necessary, you’ll never save enough to buy the things that are important to you.
Becoming rich and building wealth is all about making smart choices!
You need a goal, sometimes called an objective or an endpoint, and you need to set up a plan.
There are many steps that can help you be smart with your money. For example, never save for “a rainy day”; instead save for all the days.
The steps to be smart with money are not difficult, but the effects of being smart with your finances will last throughout your life.
Know someone else that needs this, too? Then, please share!!
Did the post resonate with you?
More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!
Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.
Most Americans still view homeownership as a key to building wealth, but for many, that piece of the American dream is on hold or out of reach thanks to the heavy burden of student debt.
In fact, according to a recent study, millennials currently struggle with so much debt that 25% worry they won’t qualify for a mortgage. Nearly 1 in 5 millennials (19%) think their credit card debt will be a stumbling block when applying for a mortgage, while 1 in 7 (14%) think the same about their student loans.
If you’re considering buying a home but worry that student debt will prevent you from securing a mortgage, you’ll need to be strategic about your approach to increase the probability of your application getting approved.
How student loans impact your ability to buy a home
Adding a mortgage on top of monthly student loan payments can create a significant financial strain. The more debt you carry, the fewer resources you have to allocate toward a down payment or for monthly mortgage payments, making some lenders less likely to approve your application. Student loan debt may affect your home-buying goals in a few key ways.
Debt-to-income ratio (DTI)
Lenders calculate your DTI ratio by dividing your total monthly debt payments (including student loans) by your gross monthly income to assess your ability to handle additional debt, like a mortgage. Having a high debt-to-income ratio can limit the loan amount you qualify for, or even disqualify you from certain mortgages. DTI standards vary among lenders, but most look for a DTI below 35%, while others accept up to 45%, and still others, like an FHA-backed loan, will allow 50%.
Credit score
Your credit score reflects your approach to handling credit and gives lenders insight into how likely you are to make timely payments. A higher credit score is generally associated with high reliability, improving your chances of a mortgage approval. A lower credit score due to late payments or defaults may pose more challenges to getting approved.
Ability to save for a down payment
Having a larger down payment will reduce the amount you need to borrow and can strengthen your mortgage application. Student loans, however, can make it harder to reach that down payment goal. Showing lenders you have a stable income large enough to handle both mortgage and student loan payments is a plus.
Strategies for securing a mortgage with student loan debt
Student loan debt is just one factor lenders use to determine if you qualify for a loan. To improve your chances of getting approved, consider the following strategies.
Pay down your debt
Work to reduce your overall debt and improve your debt-to-income ratio by paying down high-interest debts first (like credit cards), and explore options for refinancing or consolidating student loans and other debt to make monthly payments more manageable. In addition, you might also explore strategies like using a “debt avalanche” to pay off high-interest loans quickly.
Improve your credit score
Boost your overall credit score to improve your chances of getting more favorable mortgage terms. It’s important to make consistent, on-time payments on all your debts, including student loans and credit cards, as even one late payment may be reflected in your credit report.
Review your credit report at least annually to check for discrepancies and address any errors promptly. If you’re struggling to bring your credit score up, consider credit counseling as an option for in-depth advice.
Switch to an income-driven repayment plan
You might qualify for one of the federal government’s four income-driven repayment plans (IDRs) based on your current circumstances. IDRs are intended to make student loan debt more manageable by calculating a monthly payment based on your current income and family size, rather than the amount of your debt.
While an IDR can significantly reduce your monthly student loan payment, thereby freeing up more money for a mortgage payment, there are some potential downsides, including the fact that you’ll pay more interest on your student loan over the long haul. Weigh your options carefully, and seek professional advice if necessary before applying for an IDR.
Shop around
Do your homework and compare the competition. Choose a reputable lender who has experience working with clients who carry student loan debt, as they’ll be able to help structure the best financing options to suit your specific needs. Consider getting pre-approved if possible, as this not only gives you a realistic idea of how much you’ll be able to borrow, but it also signals to home sellers that you’re serious rather than casually looking.
Add a co-signer
If you have a responsible family member, or trusted friend, on solid financial footing with little debt and a high credit score willing to co-sign your mortgage application, you could improve your chances of getting approved. For this kind of agreement to work, it’s advisable to work with an attorney so terms and conditions are clear within a written contract that includes repayment schedules and title agreements.
Consider home loan programs
There are a number of home loan programs you may qualify for, even if you carry student loan debt.
Fannie Mae and Freddie Mac both have a number of loans that cater to lower-income borrowers or first-time home buyers and may accommodate low down payments and cancellable mortgage insurance, among other features.
Other government-backed loan programs include FHA loans which typically require only a 3.5% down payment, as well as VA loans for active-duty service members, surviving spouses, and veterans, which do not require a down payment or mortgage insurance. USDA loans may be available if you live in a designated rural area.
Work with a lender who is knowledgeable about your particular situation and can recommend a loan program to meet your needs.
Buying a home with student debt can be challenging, but it’s not impossible. Work closely with both a real estate professional and a reputable lender to create a strategy that will meet you where you are, and open the door to your new home sooner.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners.
To contact the editor responsible for this piece: [email protected]
Our writers and editors used an in-house natural language generation platform to assist with portions of this article, allowing them to focus on adding information that is uniquely helpful. The article was reviewed, fact-checked and edited by our editorial staff prior to publication.
Key takeaways
Non-QM loans provide an option for those who don’t meet the requirements for standard mortgages, such as business owners, self-employed borrowers and gig workers.
These loans offer flexibility in terms of income and credit requirements, but they carry higher down payment requirements and interest rates.
To find a non-QM loan, borrowers should determine their eligibility and shop around for a lender that focuses on this type of mortgage.
Some homebuyers don’t fall into the standard mortgage lending box. Usually, it’s for factors related to their creditworthiness and income level or income predictability. That’s where a non-qualified mortgage — non-QM for short — can fill the gap. While non-QM loans offer more lenient credit and income requirements, they also come with higher down payments and interest rates — and sometimes without important consumer protections.
What is a non-qualified mortgage?
A non-qualified mortgage is a type of mortgage that doesn’t conform to certain standards set by the Consumer Financial Protection Bureau (CFPB). These standards mandate certain features loans may (or may not) have, and delineate certain practices lenders must follow in evaluating applicants’ finances and ability to repay. Asset-based loans and no-income loans are common examples of non-QM loans.
In the case of mortgages, non-QM lenders have more flexibility in underwriting guidelines. They will work with borrowers whom conventional lenders might deem too risky because of their non-salaried income, their low credit score or their blotted credit history — or who just don’t fit the qualified-mortgage criteria.
What are the features of a non-qualified mortgage?
Non-QM loans feature looser income and credit requirements. For example, instead of W-2 forms and paystubs, borrowers may be able to use alternative methods of income documentation, such as tax returns, bank/investment account statements (or other proof of assets), rental income or 1099s, to demonstrate their ability to repay the loan.
Borrowers’ debts may consume a greater percentage of their income than the standard amount conventional lenders like to see — as much as 50 percent.
In some cases, there is no waiting period after bankruptcy or foreclosure, enabling individuals to secure a mortgage soon after these events.
How does a non-qualified mortgage differ from a qualified mortgage?
A qualified mortgage (QM) is a type of loan that adheres to specific guidelines set by the CFPB. These guidelines are designed to ensure that the borrower can afford the loan and include restrictions on negative amortization, interest-only payments and balloon payments, among others. QMs also have loan terms that do not exceed 30 years and require verification of your income and assets.
The QM rule has four key directives lenders must follow:
The “ability-to-repay” rule
Lenders must ascertain whether a borrower can truly afford a loan before giving them any financing — by verifying and documenting certain aspects of the individual’s personal finances (the “underwriting” process). The ability-to-repay rule requires a lender, at a minimum, to evaluate loan applications on these eight components:
Current income/assets
Current employment status
Monthly payment for this mortgage loan
Monthly payment on any simultaneous loan that’s secured by the home such as a piggyback mortgage (usually taken out when a borrower doesn’t have enough cash for a down payment)
Monthly payment for mortgage-related obligations
Current debt obligations, alimony and child support
Monthly debt-to-income ratio or residual income
Credit history
Restrictions on risky features
These include:
Loan terms longer than 30 years
Interest-only payments without paying down the principal
Balloon payment (a big lump-sum payment at the end of a loan term)
Negative amortization, which allows your loan balance to increase over time
Caps on fees and points
Lender fees and points can dramatically increase your borrowing costs. For loan amounts that exceed $100,000, lender fees and mortgage points cannot exceed 3 percent of the loan amount.
Limits on debt-to-income ratio
Expressed as a percentage, the debt-to-income (DTI) ratio is derived by dividing all of your monthly obligations by your pre-tax monthly income. In most cases, a qualified mortgage borrower is limited to a 43 percent DTI ratio.
In contrast, non-QM loans are not subject to these same rules and regulations. They typically have less stringent requirements for credit scores, debt-to-income ratios and repayment schedules. However, they can also feature longer-than-30-year terms, balloon payments and higher fees.
The Consumer Financial Protection Bureau established its Qualified Mortgage standards in 2014. They were largely in response to certain irresponsible lending practices of the early 2000s: lack of due diligence into applicant finances, people receiving loans they really couldn’t afford and terms that made delinquency or default more likely. All of this contributed to the 2007 subprime mortgage crisis, with its wave of defaults and foreclosures.
Is a non-qualified loan the same as a non-conforming loan?
Non-qualified loans and non-conforming loans are not the same thing. Both refer to mortgages that are outside the typical sort of loans most homebuyers get. But they are outside two different sets of rules; in other words, they differ in the standards that they are not adhering to.
A non-QM loan doesn’t conform to the standards set by the CFPB to protect consumers from predatory lending practices — and to ensure they don’t take out loans they won’t be able to repay.
A non-conforming loan doesn’t meet (or conform) to the criteria set by the Federal Housing Finance Agency (FHFA). As a result, it is not eligible for purchase on the secondary mortgage market by Fannie Mae and Freddie Mac, the two government-sponsored enterprises that buy most of the home loans originated in the U.S. Chief among the FHFA’s criteria: The loan can’t exceed a certain amount — $766,550 in most parts of the U.S. in 2024.
There is overlap in the FHFA’s and the CFPB’s standards, especially in the borrower’s finances and creditworthiness. Conforming loans often require applicants to have a DTI of no more than 43 percent, proof of salaried income and a certain credit score, for example. If a loan has other non-traditional features, such as having a term other than 15 or 30 years, or requiring no down payment, it is usually non-conforming, too.
Basically, non-conforming loans are a category of non-QM loans that don’t fit into the typical mortgage framework.
Who can benefit from non-qualified mortgages?
While CFPB’s Qualifying Loan standards are intended to safeguard consumers, they can sometimes seem exclusionary to those whose financial profiles don’t fit the norm. Borrowers who’ve tried getting a conventional or government-insured loan and were turned down may find what they’re looking for working with a non-QM lender.
Here’s who may benefit most from a non-QM loan:
Self-employed borrowers: These borrowers generally have sporadic pay and multiple income streams, making it hard to get a qualified mortgage. Many self-employed, non-QM borrowers get bank statement loans, which are based on their cash flow and liquid assets (rather than relying on W-2s).
Real estate investors: These are the folks who fix-and-flip homes, or who rent out and generate an income from the homes they buy, and need funding quickly. Investors are exempt from the ability-to-repay rule, usually because they sell the homes they buy quickly, or they rely on rental income to repay the mortgage. DSCR loans (short for debt service coverage ratio) and asset depletion home loans (in which you tap the equity in your primary residence to fund the purchase of another property) often accommodate this sort of borrower.
Foreign nationals: Non-resident borrowers who want to purchase property in the U.S. might not qualify for a traditional loan because of a low or non-existent U.S. credit score. Non-QM lenders use international credit reports and letters from creditors to qualify this group for a foreign national home loan. Mitigating factors, such as a high income, robust liquid assets and a large down payment, also help foreign borrowers qualify for non-QM loans.
Prime borrowers: Borrowers who have pristine credit but are in search of a loan with certain features, such as interest-only payments or a debt-to-income ratio limit above the standard 43 percent, are considered “prime non-QM borrowers.”
Near or non-prime borrowers: In many cases, these are borrowers who have insufficient credit, or a prior bankruptcy or recent distressed property sale within the last two years. Lenders tend to require more money down and may have tighter standards elsewhere to lessen the credit risk.
Borrowers with significant assets: A type of non-QM loan, called an asset qualifier loan, is ideal for borrowers with prime credit and substantial assets. Although the assets are enough to buy the home outright, a borrower may decide to finance the purchase to maintain positive cash flow. Credit invisibles — people who have considerable assets but who lack a long credit history or credit score (because they don’t use credit cards) — are good candidates too.
How do lenders verify income for non-qualified loans?
While the process for verifying income for a qualified loan typically involves reviewing tax returns, W-2s and pay stubs, the process for non-QM loans is slightly different. Using manual underwriting, lenders may allow borrowers to demonstrate their ability to repay the loan using alternative forms of income documentation, such as bank/investment account statements, 1099s, receipts from rents or leases or other business receivables.
What are the drawbacks of a non-QM loan?
Non-QM loans can be a viable alternative to conventional financing — but these benefits come at a cost. Non-QM loans typically have higher down payment requirements (as much as 25 percent of the home price) and interest rates.
As for rates, spreads above qualifying mortgages can be as little as 0.25 percent and as much as 5 percent, depending on the terms of the transaction and the creditworthiness of the borrower. Non-QM 30-year fixed rate loan rates are typically a percent or two higher than the prime 30-year fixed mortgage rate, according to Fitch Ratings.
The stiffer terms exist to compensate the lender for the additional risk they’re taking on — since Fannie Mae and Freddie Mac cannot purchase non-QM loans.
Pros
Easier to obtain
Open to non-traditional borrowers
More flexible terms
Cons
Harder to find (reputable lender)
Higher interest rate, down payment
Potentially tougher to repay
Also, the lender still has to do some due diligence on the borrower. It faces the risk of a CFPB enforcement action if the borrower’s ability to repay is not accurately verified.
Finally, the loan could be riskier for the borrower. There’s a reason the CFPB frowns on features like balloon payments and interest-only repayments — they can blow up in a borrower’s face, increasing the likelihood of delinquency and default. At the very least, the non-QM loan is likely to be more expensive than a traditional mortgage of comparable size and term.
Where can you get a non-QM loan?
If you’re interested in a non-QM loan, there are several places you can turn to. Start by determining your eligibility — typically, you’ll need a minimum credit score of 620, stable income and a consistent employment history.
Once you’ve confirmed your eligibility, you can then search for a lender that offers non-QM loans Many mortgage brokers work with non-QM wholesale lenders, so they might be a good resource.
When you find a lender, ask if they’ll first run you through an automatic underwriting, just to make sure you couldn’t get a qualifying loan after all. Also ask lenders whether they originate their own non-QM loans, or if the loan is backed by another company that will service your loan. Take the time to understand what fees you’ll pay, as well as any special loan terms or features that might add to your overall borrowing costs.
You should always fully understand the terms of your mortgage. But it’s especially important to read the fine print and be aware of the worst-case scenario of any non-qualifying loan you consider.
Inside: Learn how much your 55k salary is hourly. Plus find tips to make more money and live the lifestyle you want.
You want to know to look into this… Is 55k salary a solid hourly wage in today’s society?
When you get your first job and you are making just above minimum wage making over $55,000 a year seems like it would provide amazing opportunities for you. Right?
The median household income was $70,084 in 2021 not much different from the previous year (source). Think of it as a bell curve with $70 at the top; the median means half of the population makes less than that and half makes more money.
The average income in the U.S. is $55,350 for a 40-hour workweek; that is an increase of 1.1% from the previous year (source). That means if you take everyone’s income and divide the money out evenly between all of the people.
But, the question remains… Can you truly live off 55,000 per year in today’s society since it is barely above the average income and yet still below household incomes? The question you want to ask all of your friends is $55000 per year a good salary.
In this post, we are going to dive into everything that you need to know about a $55000 salary including hourly pay and a sample budget on how to spend and save your money.
These key facts will help you with money management and learn how much per hour $55k is as well as what you make per month, weekly, and biweekly.
Just like with any paycheck, it seems like money quickly goes out of your account to cover all of your bills and expenses, and you are left with a very small amount remaining. You may be disappointed that you were not able to reach your financial goals and you are left wondering…
Can I make a living on this salary?
$55000 a year is How Much an Hour?
When jumping from an hourly job to a salary for the first time, it is helpful to know how much is 55k a year hourly. That way you can decide whether or not the job is worthwhile for you.
55000 salary / 2080 hours = $26.44 per hour
$55000 a year is $26.44 per hour
Let’s breakdown how that 55000 salary to hourly number is calculated.
For our calculations to figure out how much is 55K salary hourly, we used the average five working days of 40 hours a week.
Typically, the average workweek is 40 hours and you can work 52 weeks a year. Take 40 hours times 52 weeks and that equals 2,080 working hours. Then, divide the yearly salary of $55000 by 2,080 working hours and the result is $26.44 per hour.
Right above $26 an hour.
That number is the gross hourly income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.
You must check with your employer on how they plan to pay you. For those on salary, typically companies pay on a monthly, semi-monthly, biweekly, or weekly basis.
What If I Increased My Salary?
Just an interesting note… if you were to increase your annual salary by $7,500, it would increase your hourly wage to over $30 an hour – a difference of $3.61 per hour.
To break it down – 62500 a year is how much an hour = $30.05
That difference will help you fund your savings account; just remember every dollar adds up.
How Much is $55K salary Per Month?
On average, the monthly amount would be $4,583.
Annual Salary of $55,000 ÷ 12 months = $4,583.33 per month
This is how much you make a month if you get paid 55000 a year.
$55k a year is how much a week?
This is a great number to know! How much do I make each week? When I roll out of bed and do my job of $55k salary a year, how much can I expect to make at the end of the week for my effort?
Once again, the assumption is 40 hours worked.
Annual Salary of$55000/52 weeks = $1,057.69 per week.
$55000 a year is how much biweekly?
For this calculation, take the average weekly pay of $1057.69 and double it.
This depends on how many hours you work in a day. For this example, we are going to use an eight-hour workday.
8 hours x 52 weeks = 260 working days
Annual Salary of$55000 / 260 working days = $211.54 per day
If you work a 10 hour day on 208 days throughout the year, you make $264 per day.
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$55000 Salary is…
$55000 Salary – Full Time
Total Income
Yearly Salary (52 weeks)
$55,000
Monthly Salary
$4,583
Weekly Wage (40 Hours)
$1,058
Bi-Weekly Wage (80 Hours)
$2,115
Daily Wage (8 Hours)
$211
Daily Wage (10 Hours)
$264
Hourly Wage
$26.44
Net Estimated Monthly Income
$3,499
Net Estimated Hourly Income
$20.19
**These are assumptions based on simple scenarios.
Do you know how many work days in a year you work? This answer may surprise you.
55k a year is how much an hour after taxes
Income taxes is one of the biggest culprits of reducing your take-home pay as well as FICA and Social Security. This is a true fact across the board with a salary range of up to $160,200.
When you make below the average household income, the amount of taxes taken out hurts your hourly wage.
Every single tax situation is different.
On the basic level, let’s assume a 12% federal tax rate and 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.
So, how much an hour is 55000 a year after taxes?
Gross Annual Salary: $55,000
Federal Taxes of 12%: $6,600
State Taxes of 4%: $2,200
Social Security and Medicare of 7.65%: $4,207.50
$55k Per Year After Taxes is $41,992.50.
This would be your net annual salary after taxes.
Hourly Wage After Taxes
To turn that back into an hourly wage, the assumption is working 2,080 hours.
$41,992.50 ÷ 2,080 hours = $20.19 per hour
After estimated taxes and FICA, you are netting $41,992.50 per year, which is $13,007.50 per year less than what you expected.
***This is a very high-level example and can vary greatly depending on your personal situation and potential deductions. Therefore, here is a great tool to help you figure out how much your net paycheck would be.***
Taxes Based on Your State
In addition, if you live in a heavily taxed state like California or New York, then you have to pay way more money than somebody who lives in a no-tax state like Texas or Florida. This is the debate of HCOL vs LCOL.
Thus, your yearly gross $55000 income can range from $37,592 to $44,192 depending on your state income taxes.
That is why it is important to realize the impact income taxes can have on your take home pay. It is one of those things that you should acknowledge and obviously, you need to pay taxes. But, it can also put a huge dent in your ability to live the lifestyle you want on a $55,000 income.
My 55000 Salary To Hourly Calculator
More than likely, your salary is not a flat 55k, here is a tool to convert your salary to hourly calculator.
Many teachers are hovering in this range, which may make you wonder do teachers get paid in the summer.
If you are looking to change industries, you need to check out the freight broker salary.
55k salary lifestyle
Every person reading this post has a different upbringing and a different belief system about money. Therefore, what would be a lavish lifestyle to one person, maybe a frugal lifestyle to another person? And there’s no wrong or right, it is what works best for you.
One of the biggest factors to consider is your cost of living.
In another post, we detailed the differences between living in an HCOL vs LCOL vs MCOL area. When you live in big cities, trying to maintain your lifestyle of $55,000 a year is going to be much more difficult because your basic expenses, housing, transportation, food, and clothing are going to be much more expensive than you would find in a lower cost area.
To stretch your dollar further in the high cost of living area, you would have to probably live a very frugal lifestyle and prioritize where you want to spend money and where you do not. Whereas, if you live in a low cost of living area, you can live a much more lavish lifestyle because the cost of living is less. Thus, you have more fun spending left in your account each month.
As we noted earlier in the post, $55,000 a year is slightly above the average income that you would find in the United States. Thus, you still have to be wise with how you spend your money.
What a $55,000 lifestyle will buy you:
If you are debt free and utilize smart money management skills, then you are able to enjoy the lifestyle you want.
You are able to rent in a decent neighborhood in LCOL and even a MCOL city.
Looking for ways to invest 100 to make 1000 a day.
Focus on becoming financially sound.
You should be able to meet your expenses each and every month.
Ability to make sure that saving money is a priority, and very possibly save $5000 in one year.
When A $55,000 Salary Will Hold you Back:
However, if you are riddled with debt or unable to break the paycheck to paycheck cycle, then living off of 55k a year is going to be pretty darn difficult.
There are two factors that will keep holding you back:
You must pay off debt and cut all fun spending and extra expenses.
Break the paycheck to paycheck cycle.
It is possible to get ahead with money!
It just comes with proper money management skills and a desire to have less stress around money. That is a winning combination regardless of your income level.
$55K a year Budget – Example
As always, here at Money Bliss, we focus on covering our basic expenses plus saving and giving first, and then our goal is to eliminate debt. The rest of the money is left for fun spending.
If you want to know how to manage a 55k salary the best, then this is a prime example for you to compare your spending.
You can compare your budget to the ideal household budget percentages.
recommended budget percentages based on $55000 a year salary:
Category
Ideal Percentages
Sample Monthly Budget
Giving
10%
$275
Savings
15-25%
$825
Housing
20-30%
$1,100
Utilities
4-7%
$183
Groceries
5-12%
$346
Clothing
1-4%
$34
Transportation
4-10%
$229
Medical
5-12%
$252
Life Insurance
1%
$14
Education
1-4%
$34
Personal
2-7%
$69
Recreation / Entertainment
3-8%
$138
Debts
0% – Goal
$0
Government Tax (including Income Taxes, Social Security & Medicare)
15-25%
$1,084
Total Gross Monthly Income
$4,583
**In this budget, prioritization was given to basic expenses and no debt.
Is $55,000 a year a Good Salary?
As we stated earlier if you are able to make $55,000 a year, that is a decent salary. You are making more money than the minimum wage and almost double in many cities.
While 55000 is a good salary starting out in your working years. It is a salary that you want to increase before your expenses go up or the people you provide for increase.
However, too many times people get stuck in the lifestyle trap of trying to keep up with the Joneses, and their lifestyle desires get out of hand compared to their salary. And what they thought used to be a great salary actually is not making ends meet at this time.
This $55k salary would be considered a lower middle class salary. This salary is something that you can live on if you are wise with money.
Check: Are you in the middle class?
In fact, this income level in the United States has enough buying power to put you in the top 95 percentile globally for per person income (source).
The question you need to ask yourself with your 55k salary is:
Am I maxed at the top of my career?
Is there more income potential?
What obstacles do I face if I want to try to increase my income?
In the future years and with possible inflation, in many modest cities, 55,000 a year will not be a good salary because the cost of living is so high, whereas these are some of the cities where you can make a comfortable living at 55,000 per year.
If you are looking for a career change, you want to find jobs paying at least $75000 a year.
Is 55k a good salary for a Single Person?
Simply put, yes.
You can stretch your salary much further because you are only worried about your own expenses. A single person will spend much less than if you need to provide for someone else.
Your living expenses and ideal budget are much less. Thus, you can live extremely comfortably on $55000 per year.
And… most of us probably regret that we didn’t learn how to spend money wisely. Oh well, lesson learned.
Is 55k a good salary for a family?
Many of the same principles apply above on whether $55000 is a good salary. The main difference with a family, you have more people to provide for than when you are single or have just one other person in your household.
The costs of raising children are high and will steeply cut into your income. As you can tell this is a huge dent in your income, specifically $12,980 annually per child. Plus this does not include college.
That means that amount of money is coming out of the income that you earned.
So, the question really remains can you provide a good life for your family making $55,000 a year? This is the hardest part because each family has different choices, priorities, and values.
More or less, it comes down to two things:
The location where you live in.
Your lifestyle choices.
You can live comfortably as a family on this salary, but you will not be able to afford everything.
Many times when raising a family, it is helpful to have a dual-income household. That way you are able to provide the necessary expenses if both parties were making 55,000 per year, then the combined income for the household would be $110,000. Thus making your combined salary a very good income.
Learn how much money a family of 4 needs in each state.
Can you Live on $55000 Per Year?
As we outlined earlier in the post, $55,000 a year:
$26.44 Per Hour
$211-264 Per Day (depending on length of day worked)
$1,057 Per Week
$2,115 Per Biweekly
$4,583 Per Month
Next up is making $60000 a year.
Like anything else in life, you get to decide how to spend, save and give your money.
That is the difference for each person on whether or not you can live a middle-class lifestyle depends on many potential factors. If you live in California or New Jersey you are gonna have a tougher time than Oklahoma or even Texas.
In addition, if you are early in your career, starting out around 45,000 a year, that is a great place to be getting your career. However, if you have been in your career for over 15 years and still making under $55K, then you probably need to look at asking for pay increases, picking up a second job, or finding a different career path.
Regardless of the wage that you make, if you are not able to live the lifestyle that you want, then you have to find ways to make it work for you. Everybody has choices to make.
But one of the things that can help you the most is to stick to our ideal household budget percentages to make sure you stay on track.
Learn exactly how much do I make per year…
One of the best ways to improve your personal finance situation is to increase your income. Here are a variety of side hustles that are very lucrative. With time and effort, you can start enjoying the lifestyle you want.
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Home equity loan
Home equity line of credit (HELOC)
Interest rate
Fixed
Variable
Monthly payment amount
Fixed
Variable
Closing costs and fees
Yes
Yes, might be lower than other loan types
Repayment period
Typically 5-30 years
Typically 10-20 years
FAQ
What is a rate lock?
Interest rates on mortgages fluctuate all the time, but a rate lock allows you to lock in your current rate for a set amount of time. This ensures you get the rate you want as you complete the homebuying process.
What are mortgage points?
Mortgage points are a type of prepaid interest that you can pay upfront — often as part of your closing costs — for a lower overall interest rate. This can lower your APR and monthly payments.
What are closing costs?
Closing costs are the fees you, as the buyer, need to pay before getting a loan. Common fees include attorney fees, home appraisal fees, origination fees, and application fees.
If you’re trying to find the right mortgage rate, consider using Credible. You can use Credible’s free online tool to easily compare multiple lenders and see prequalified rates in just a few minutes.
Mortgage rates fell across all terms from a week ago, according to rate data compiled by Bankrate. Rates for 30-year fixed, 15-year fixed, 5/1 ARMs and jumbo loans all receded.
The multiple rate cut predictions from the start of the year may be no more, as many experts expect rates to stay higher for longer. The movement of fixed mortgage rates parallels the 10-year Treasury yield, which moves as investor appetite fluctuates with the state of the economy, inflation and Federal Reserve decisions. At the close of the latest Fed meeting on May 1, policymakers held firm and opted not to cut rates. The recent April Consumer Price Index (CPI) data shows inflation slowing, but still not to the 2 percent rate the Fed wants.
“The market was enamored with a slightly lower CPI. We are in a ‘buy on any positive news no matter how modest’ state,” says Dick Lepre of RealFinity.
Often, the decision to buy a home isn’t based on market shifts. It comes down to what you need. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than hoping for a future of more favorable rates and home prices that might not materialize.
Rates last updated May 22, 2024.
These rates are averages based on the assumptions shown here. Actual rates displayed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Wednesday, May 22nd, 2024 at 7:30 a.m. ET.
30-year fixed-rate mortgage retreats, -0.15%
The average rate you’ll pay for a 30-year fixed mortgage today is 7.02 percent, down 15 basis points since the same time last week. A month ago, the average rate on a 30-year fixed mortgage was higher, at 7.30 percent.
At the current average rate, you’ll pay principal and interest of $666.65 for every $100,000 you borrow. That’s $10.11 lower, compared with last week.
Learn more about 30-year mortgage rates, and compare to a variety of other loan types.
15-year fixed mortgage rate trends down, -0.19%
The average rate for a 15-year fixed mortgage is 6.48 percent, down 19 basis points from a week ago.
Monthly payments on a 15-year fixed mortgage at that rate will cost $870 per $100,000 borrowed. The bigger payment may be a little harder to find room for in your monthly budget than a 30-year mortgage payment, but it comes with some big advantages: You’ll come out several thousand dollars ahead over the life of the loan in total interest paid and build equity much more quickly.
5/1 ARM trends down, -0.05%
The average rate on a 5/1 ARM is 6.80 percent, ticking down 5 basis points over the last week.
Adjustable-rate mortgages, or ARMs, are home loans that come with a floating interest rate. In other words, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These types of loans are best for those who expect to sell or refinance before the first or second adjustment. Rates could be considerably higher when the loan first adjusts, and thereafter.
While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.
Monthly payments on a 5/1 ARM at 6.80 percent would cost about $652 for each $100,000 borrowed over the initial five years, but could increase by hundreds of dollars afterward, depending on the loan’s terms.
Jumbo mortgage rate declines, -0.07%
The average rate for a jumbo mortgage is 7.15 percent, a decrease of 7 basis points over the last seven days. A month ago, the average rate was higher at 7.35 percent.
At today’s average rate, you’ll pay principal and interest of $675.41 for every $100,000 you borrow. That’s lower by $4.73 than it would have been last week.
Mortgage refinance rates
30-year mortgage refinance moves lower, -0.18%
The average 30-year fixed-refinance rate is 7.04 percent, down 18 basis points since the same time last week. A month ago, the average rate on a 30-year fixed refinance was higher at 7.32 percent.
At the current average rate, you’ll pay $667.99 per month in principal and interest for every $100,000 you borrow. That’s lower by $12.15 than it would have been last week.
Where are mortgage rates going?
The rates on 30-year mortgages mostly mirror the 10-year Treasury yield, which changes with the market, while the cost of variable-rate home loans more directly mirrors the Fed’s moves.
If and when the Fed cuts interest rates depends on economic reports of new data, such as the inflation rate and the jobs market. April’s CPI data — which measures inflation — showed inflation at 3.4 percent. While inflation has fallen since its peak in 2022, it’s still above the Fed’s target rate of 2 percent.
“The April CPI report revealed that the rate of inflation has cooled for the first time in 6 months,” says Melissa Cohn of William Raveis Mortgage. “While this one report is not enough evidence of cooling inflation to get the Fed to implement a rate cut, it is the first step.”
Broader economic factors, such as inflation and employment, affect the Fed’s decisions on rate changes, but your rate is also affected by your personal finances. Depending on your credit score, down payment, debts and income, you could be quoted a rate that’s higher or lower than the trend.
What today’s rates mean for you and your mortgage
Mortgage rates change daily, but it appears that, for now, they will remain above the historical lows of recent years. If you’re shopping for a mortgage, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.
You could save serious money on interest by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.
“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”
More on current mortgage rates
Methodology
Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).
The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.
Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.