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Apache is functioning normally

June 8, 2023 by Brett Tams

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We are going to under the cover and discover $12 an hour is how much per year.

For most Americans, this is hovering near minimum wage.

Let’s get this straight… This is not a livable wage.

If you are in high school or college and have support from your parents, then this is great spending money for you.

However, if you are making it on your own, $12 per hour will not make ends meet each month.

For most people, being at minimum wage is common and the goal is to make your way up the payscale and quickly!

In this post, we’re going to detail exactly what $12 an hour is how much a year. Also, we are going to break it down to know how much is made per month, bi-weekly, per week, and daily.

That will help you immensely with how you spend your money. Because too many times the hard-earned cash is brought home, but there is no actual plan for how to spend that money.

When living close to minimum wage, you must know how to manage money wisely.

More than likely, you are living paycheck to paycheck and struggling to survive to the next paycheck. Take a deep breath and make this minimum wage just a season.

The ultimate goal is to make the most of your hourly wage with inspirations to make more money.

If that is something you want too, then keep reading. You are in the right place.

$12 an Hour is How Much a Year?

When we ran all of our numbers to figure out how much is $12 per hour is as an annual salary, we used the average working day of 40 hours a week.

40 hours x 52 weeks x $12 = $24960

$24960 is the gross annual salary with a $12 per hour wage.

Breakdown Of 12 Dollars An Hour Is How Much A Year

Typically, the average work week 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, multiple the hourly salary of $12 times 2,080 working hours, and the result is $24,960.

That number is the gross income before taxes, insurance, 401K, or anything else is taken out. Net income is how much you deposit into your bank account.

Work Part Time?

But you may think, oh wait, I’m only working part time. So if you’re working part time, the assumption is working 20 hours a week at $12 an hour.

Only 20 hours per week. Then, take 20 hours times 52 weeks and that equals 1,040 working hours. Then, multiple the hourly salary of $12 times 1,040 working hours, and the result is $12480.

How Much is $12 Per Month?

On average, the monthly amount would average $2,080.

Annual Amount of $24000 ÷ 12 months = $2080 per month

Since some months have more days and fewer days like February, you can expect months with more days to have a bigger paycheck. Also, this can be heavily influenced by how often you are paid and on which days you get paid.

Work Part Time?

Only 20 hours per week. Then, the monthly amount would average $1040.

How Much is $12 per Hour Per 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, what can I expect to make at the end of the week?

Once again, the assumption is 40 hours worked.

40 hours x $12 = $480 per week.

Work Part Time?

Only 20 hours per week. Then, the weekly amount would be $240.

How Much is $12 per Hour Bi-Weekly

For this calculation, take the average weekly pay of $480 and double it.

$480 per week x 2 = $960

Also, the other way to calculate this is:

40 hours x 2 weeks x $12 an hour = $960

Work Part Time?

Only 20 hours per week. Then, the bi-weekly amount would be $480.

How Much is $12 Per Hour Per Day

This depends on how many hours you work in a day. For this example, we are going to use an eight hour work day.

8 hours x $12 per hour = $96 per day.

If you work 10 hours a day for four days, then you would make $120 per day. (10 hours x $12 per hour)

Work Part Time?

Only 4 hours per day. Then, the daily amount would be $48.

$12 Per Hour is…

$12 per Hour – Full Time	Total Income
Yearly Salary (52 weeks)	$24,960
Yearly Wage (50 weeks)	$24,000
Monthly Wage (173 hours)	$2,080
Weekly Wage (40 Hours)	$490
Bi-Weekly Wage (80 Hours)	$960
Daily Wage (8 Hours)	$96
Net Estimated Monthly Income	$1,588

^{**These are assumptions based on simple scenarios.}

Paid Time Off Earning 12 Dollars an Hour

Does your employer offer paid time off?

As an hourly, close to minimum wage employee, more than likely you will not get paid time off.

So, here are the scenarios for both cases.

For general purposes, we are going to assume you work 40 hours per week over the course of the year.

Case # 1 – With Paid Time Off

Most hourly employees, get two weeks of paid time off which is equivalent to 2 weeks of paid time off.

In this case, you would make $24960 per year.

This is the same as the example above for an annual salary making $12 per hour.

Case #2 – No Paid Time Off

Unfortunately, not all employers offer paid time off to their hourly employees. While that is unfortunate, it is best to plan for less income.

Life happens. There will be times you need to take time off for numerous reasons – sick time, handling an emergency, or even vacation.

So, let’s assume you take 2 weeks off without paid time off.

That means you would only work 50 weeks of the year instead of all 52 weeks. Take 40 hours times 50 weeks and that equals 2,000 working hours. Then, multiple the hourly salary of $12 times 2,000 working hours, and the result is $24,000.

40 hours x 50 weeks x $12 = $24000

You would average $96 per working day and nothing when you don’t work.

$12 an Hour is How Much a year After Taxes

Let’s be honest… Taxes can take up a big chunk of your paycheck. Thus, you need to know how taxes can affect your hourly wage.

This is why you always wondering why your take-home pay is so much less.

Also, every single person’s tax situation is different.

On the basic level, let’s assume a 12% federal tax rate and a 4% state rate. Plus a percentage is taken out for Social Security and Medicare (FICA) of 7.65%.

Gross Annual Salary: $24,960

Federal Taxes of 12%: $2,995
State Taxes of 4%: $998
Social Security and Medicare of 7.65%: $1,909

$12 an Hour per Year after Taxes: $19,057

This would be your net annual salary after taxes.

To turn that back into an hourly wage, the assumption is working 2,080 hours.

$19057 ÷ 2080 hours = $9.16 per hour

After estimated taxes and FICA, you are netting $9.16 an hour. That is $2.84 an hour less than what you planned.

This is a very highlighted example and can vary greatly depending on your personal situation. Therefore, here is a great tool to help you figure out how much your net paycheck would be.

$12 an Hour Budget Example

You are probably wondering can I live on my own making 12 dollars an hour? How much rent can you afford on 12 an hour?

Using our Cents Plan Formula, this is the best case scenario on how to budget your $12 per hour paycheck.

When using these percentages, it is best to use net income because taxes must be paid.

In this example, above we calculated $12 an hour was $9.16 after taxes. That would average $1588 per month.

According to the Cents Plan Formula, here is the high level view of a $12 per hour budget:

Basic Expenses of 50% = $794
Save Money of 20% = $318
Give Money of 10% = $159
Fun Spending of 20% = $318
Debt of 0% = $0

Obviously, that is not doable when living so close to minimum wage. So, you have to be strategic on ways to decrease your basic expenses and debt. Then, it will allow you more money to save and fun spending.

To further break down an example budget of $12 per hour, then using the ideal household percentages is extremely helpful.

recommended budget percentages based on $12 per hour wage:

Category	Ideal Percentages	Sample Monthly Budget
Giving	10%	$62
Savings	15-25%	$104
Housing	20-30%	$645
Utilities	4-7%	$125
Groceries	5-12%	$187
Clothing	1-4%	$21
Transportation	4-10%	$125
Medical	5-12%	$208
Life Insurance	1%	$18
Education	1-4%	$10
Personal	2-7%	$31
Recreation / Entertainment	3-8%	$52
Debts	0% – Goal	$0
Government Tax (including Income Tatumx, Social Security & Medicare)	15-25%	$492
Total Gross Income		$2,080

^**^{In this budget, prioritization was given to basic expenses. Thus, some categories like giving and saving were less.}

$12 an Hour Calculator

Now, you get to figure out how much you make based on your hours worked or if you make a wage between $12.01-12.99.

Here is a handy calculator to use if you make $12.60, $12.30, or $12.75 an hour.

Living on $12 Per Hour

Living close to minimum wage can be a very difficult situation.

Is it doable? Probably not for long.

You just have to be wiser (or frugal) with your money and how you spend the hard-earned cash you have been blessed with.

A lot of times when people are making under near the minimum wage mark, they feel like they are in this constant cycle that they can never keep up with (which completely makes sense it is hard!).

When your thoughts are constantly focused on how you are struggling to keep up with bills and expenses, that is all you focus on.

You need to realize that your mindset is everything.

This is what you say to yourself… Okay, I am making near minimum wage for now. I have aspirations and goals to increase how much I make. For now, I am going to make sure that I am able to live on my 12 dollars per hour. I’m going to try and avoid debt and payday loans at all costs.

Other Tips to Help You:

Check your minimum wage for your state and city. You might find a higher minimum wage in a nearby city.
Look to living in a lower cost of living area to stretch your money.
Find ways to minizine your basic expenses.
Thrive with a minimalist lifestyle.
Decide if a roommate or moving back with your parents would help.
Bike or walk to work.

In the next section, we will dig into ways to increase your income, but for now, you must focus on living on $12 an hour.

5 Ways to Increase Your Hourly Wage

This right here is the most important section of this post.

You need to figure out ways to increase your hourly income because I’m going to tell you…you deserve more. You do a good job and your value is higher than what your employers pay you.

Even an increase of 50 cents to $12.50 will add up over the year. Even better $13 an hour or $15 an hour!

1. Ask for a Raise

The first thing to do is ask for a raise. Walk right in and ask for a raise because you never know what the answer will be until you ask.

If you want the best tips on how specifically to ask for a raise and what the average wage is for somebody doing your job, then check out this book. In this book, the author gives you the exact way to increase your income. The purchase is worth it or go down to the library and check that book out.

2. Look for A New Job

Another way to increase your hourly wage is to look for a new job. Maybe a completely new industry.

It might be a total change for you, but many times, if you want to change your financial situation, then that starts with a career change. Maybe you’re stressed out at work. Making $12 an hour is too much for you and you’re not able to enjoy life, maybe changing jobs and finding another job may increase your pay, but it will also increase your quality of life.

3. Find a New Career

Because of student loans, too many employees feel like they are stuck in the career field they chose. They feel sucked into the job that they don’t like or have the potential they thought it would.

For many years, I was in the same situation until I decided to do a complete career change. I am glad I did. I have the flexibility that I needed in my life to do what I wanted when I needed to do it. Plus I am able to enjoy my entrepreneurial spirit.

4. Find Alternative Ways to Make Money

In today’s society, you need to find ways to make more money. Period.

There is no way to get around it. You need to find additional income outside a traditional nine to five position or typical 40-hour-a-week job. You will reach a point where you are maxed on what you can make in your current position or title. There may be some advancement to move forward, but in many cases, there just is not much room for growth.

So, you need to find a side hustle – another way to make money.

Do something that you enjoy, turn your hobby into a way to make money, turn something that you naturally do, and help others into a service business. In today’s society, the sky is the limit on how you can earn a freelancing income.

5. Earn Passive Income

The last way to increase your hourly wage is to start earning passive income.

This can be from a variety of ways including the stock market, real estate, online courses, book sales, etc. This is where the differentiation between struggling financially and being financially sound happens.

By earning money passively, you are able to do the things that you enjoy doing and not be loaded down, with having a job that you need to work, and a place that you have to go to. And you still make money doing nothing.

Here is an example:

You can start a brokerage account and start trading stocks for $50. You need to learn and take the one and only investing class I recommend. Learn how the market works, watch videos, and practice in a simulator before you start using your own money.

One gentleman started with $5,000 in his trading account and now has well over $75,000 in a year. Just from practice and being consistent, he has learned that passive income is the way for him to increase his income and also not be a slave to his job.

Tips to Live on $12 an Hour

In this last section, grasp these tips on how to live on $12 an hour. On our site, you can find lots of money saving tips to help stretch your income further.

Here are the most important tips to live on $12 an hour. Highlight these!

1. Spend Less Than you Make

First, you must learn to spend less than you make.

If not you will be caught in the debt cycle and that is not where you want to be. You will be consistently living paycheck to paycheck.

In order to break that dreadful cycle, it means your expenses must be less than your income.

And when I say income, it’s not the $12 an hour. As we talked about earlier in the post, there are taxes. The amount of taxes taken out of your paycheck is called your net income which is your home $12 an hour minus all the taxes, FICA, social security, and Medicare are taken out. That is your net income.

So, your net income has to be less than your net income.

2. Living Below Your Means

You need to be happy. And living on less can actually make you happier. Studies prove that less is better.

Finding contentment in life is one thing that is a struggle for most.

We are driven to want the new shiny toy, the thing next door, the stuff your friend or family member got. Our society has trained you that you need these things as well.

Have you ever taken a step back and looked at what you really need?

Once you are able to find contentment with life, then you are going to be set for the long term with your finances.

Here is our story on owning less stuff. We have been happier since.

3. Make Saving Money Fun

You need to make saving money fun. Period.

It could be participating in a no spend challenge for the month.
Check out the 200 envelope challenge (which is doable on your income)
It could be challenging friends not to go to Target for a week.
Maybe changing your habits and not picking up takeout and planning meals.
Whatever it is challenge yourself.

Find new ways of saving money and have fun with it.

Even better, get your family and kids involved in the challenge to save money. Tell them the reason why you are saving money and this is what you are doing.

Here are 101 things to do with no money. Free activities without costing you a dime. That is an amazing resource for you and you will never be bored.

And you will learn a lot of things in life you can do for free. Personally, some of the best ones are getting outside and enjoying some fresh air.

4. Make More Money

If you want if you do not settle for less, then find ways to make more money. If you want more out of life, then increase your income.

You need to be an advocate for yourself.

Find ways to make more money.

It could be a side hustle, a second job, asking for a raise, going to school to change careers, or picking up extra hours.

Whatever path you take, that’s fine. Just find ways to make more money. Period.

5. No State Taxes

Paying taxes is one option to increase what you take home in each paycheck.

These are the states that don’t pay state income taxes on wages:

Alaska
Florida
Nevada
New Hampshire
South Dakota
Tennessee
Texas
Washington
Wyoming

It is very interesting if you take into account the amount of state taxes paid compared to a state with income taxes.

Also, if you live in one of the higher taxed states, then you may want to reconsider moving to a lower cost of living area. The higher taxes income tax states include California, Hawaii, New Jersey, Oregon, Minnesota, the District of Columbia, New York, Vermont, Iowa, and Wisconsin. These states tax income somewhere between 7.65% – 13.3%.

6. Stick to a Budget

You need to learn how to start a budget. We have tons budgeting resources for you.

While creating a budget is great, you need to learn how to use one.

You do not have to budget down to every last penny.

You need to make sure your expenses are less than your income and you are creating sinking funds for those irregular expenses.

Budget Help:

7. Pay Off Debt Quickly

The amount that you pay interest on debt is absolutely absurd.

Unfortunately, that is how many of these companies make their money from the interest you pay on debt.

If you are paying 5% to even 20-21% or higher, you need to find ways to lower that debt quickly.

Here’s a debt calculator to help you. Figure out your debt free date.

Make that paying off debt fast is your target and main focus. I can tell you from personal experience, it was not until week paid off our debt that we finally rounded the corner financially. Once our debt was paid off, we could finally be able to save money. Set money aside in separate bank accounts and pay for cash for things.

It took us working hard to pay off debt. We needed persistence and patience while we had setbacks in our debt free journey.

Jobs that Pay $12 an Hour

You can always find jobs that pay $12 per hour. Polish up that smile, fill out the application and be prepared with your interview skills.

Job Search Hint: Always send a written follow-up thank you note for your interview. That will help you get noticed and remembered.

First, look at the cities that require a minimum wage in their cities. That is the best place to start to find jobs that are going to pay higher than the federal minimum wage rate. Many of the cities are moving towards this model so, target and look for jobs in those areas.

Possible Ideas for Jobs Paying $12 an hour:

Cashiers
Back of the house restaurant staff
Landscape Laborer
Retail jobs
Virtual Assistant – learn how to get started now!
Paraeducators at schools
Janitors
Farm help
Warehouse workers
Call center
Hotel Housekeeper
Delivery driver
Product demonstrator
Caregiver
Busser at restaurants

companies paying $12 an hour

Target
Amazon
Walgreens
Great Wolf Lodge
Olive Garden
Sonic

$12 Per Hour Annual Salary

In this post, we detailed 12 an hour is how much a year. Plus all of the variables that can impact your net income. This is something that you can live off.

How much is 12 dollars an hour annually…

$24,960

This is under $30000 per year and you need to make at least $38k a year.

In this post, we highlighted ways to increase your income as well as tips for living off your wage.

Use the sample budget as a starting point with your expenses.

You will have to be savvy and wise with your hard-earned income. But, with a plan, anything is possible!

Spend your time wisely and make money doing it. All of these quick ways to make money are simple and easy to do!

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Apache is functioning normally

June 8, 2023 by Brett Tams

Wondering what to do when you can’t pay your bills can be a horrible feeling. You may feel stressed, tired, angry, along with 1,000 other emotions.

Falling behind on your bills can also impact many areas of your financial life. It may lead to:

Late fees
Interest charges
High interest rates when you need a loan later on
A damaged credit score and credit report
Non-stop calls from collection agencies
Bills piling on bills piling on bills
Debt

You may have fallen behind on your bills due to many different reasons. You could have recently lost your job, taken a pay cut, or had surprise expenses pop up.

Whatever your reason may be, there are steps you can take to get back on track.

Here are my tips on what to do when you can’t pay your bills.

Don’t ignore the problem.

Ignoring the problem isn’t going to help you at all. Many people get extremely stressed about being unable to pay their bills, which can lead to completely ignoring the problem in hopes that it will go away.

You have to do something.

By facing the problem, you will be able to dig yourself out of debt, get rid of late bills, and have a better grasp of your financial situation.

Try to relax when figuring out what to do when you can’t pay your bills.

You may feel very panicky if you can’t pay your bills, but remember that wasting time on worrying won’t help you at all.

Being negative, panicky, regretful, etc. leads to feeling as if you will never get out of the mess you are in. Those feelings may cause you to give up and let the bills pile up, because you can’t see a way out.

Instead, you need to take action.

Try to relax, stay positive, and focus on making changes.

Related: Why I Believe Being Positive Can Change Your Financial Situation And Your Life

Call the company.

Call the company as soon as you can. By calling them, you may be able to have late fees waived, receive a discount, and/or get more time to pay your bills.

You won’t know what they can do for you until you ask.

The worst thing that can happen is that they say no.

The best thing that can happen is they say yes and help you out!

And, yes, some companies will help you out. They aren’t all out to get you. You may want to try explaining your situation, to tell them how great of a customer you’ve been over the years, to ask what your options are, and so on.

Evaluate your income and spending.

You need to get organized so you know exactly where your money is coming from and where it is going.

This will help you spot your financial problems, and see whether working towards earning more money or cutting expenses is a better use of your time. By finding expenses to cut or areas to make more money, you will be able to put more money towards your bills and savings which can help you work through the bills you need to pay.

Related: How to Live On One Income

Cut your expenses as much as you can.

Even if it seems like there is nothing to cut from your budget, by digging deeply you can probably find a spot you can cut.

Something needs to be done so that you are no longer behind on your bills.

You may want to consider completely cutting expenses related to your:

Monthly car payment
Cable
Any memberships or subscriptions
Entertainment (there are plenty of ways to have free fun!)
Eating at restaurants

You may want to consider lowering or negotiating expenses related to your:

Car, home, or other insurance
Cell phone (you may even want to cut this completely)
Internet
Utility bills
Groceries

Related: 30 Ways To Save Money Each Month

Increase your income.

My recommendation for the best way to pay your past bills is to work on making more money. There is really no limit to the amount of money you can make. Earning more money can be a great way to get ahead a little more quickly than if you were to just cut your budget (you should still do that too, though).

To make extra money you can find a part-time job, ask for a raise or additional hours at the job you already have, start a side business, and so on.

Related: 75+ Ways To Make Extra Money

Think carefully about extreme options.

Some people put everything on their credit cards or take out payday loans when they are having a hard time paying their bills.

This can be a huge mistake. Occasionally there is a positive story about someone able to use one of these methods to their advantage, but the average person will experience a lot of money lost and increased stress.

Using a payday loan or credit cards when you fall behind on your bills can lead to digging a hole that feels nearly impossible to get out of.

I recommend analyzing the other options listed in this blog post before taking any extreme options.

Prioritize your bills.

One of the most important steps is deciding what order you should pay your bills.

You should write (or type) out all of the bills you owe, how much you owe, how late you are, and negatives that you may experience if you don’t pay a bill.

This will help you with the next action you will need to take.

Pay off your bills.

I couldn’t forget this one. Actually paying your bills is what you are working towards and what you will eventually need to do.

I recommend finding the bill that’s going to impact you the worst, then pay that one first. Then, go down the list you made prioritizing each, then pay each one off as described above. Keep paying your bills until you are done.

Prepare for the future.

You should make a plan so you don’t fall behind on your bills again.

Without a plan, there is a chance you will fall into the same habits again and again, possibly getting yourself into an even bigger financial mess.

You should:

What other tips would you give to someone who is wondering what to do when you can’t pay your bills?

Apache is functioning normally

June 8, 2023 by Brett Tams

Real estate has the power to change your life for the better, but it can do so much more than that. Today’s guest, Jen McConnell, used her commissions to fight pediatric cancer, and she later created a foundation to help further the cause. On this podcast, Jen shares how real estate changed her life and has given her the ability to impact the lives of countless others. Jen also covers the advantages of running your own brokerage, ways to deliver five-star customer service, and more.

Listen to today’s show and learn:

Jen McConnell’s start in real estate [1:34]
What agents learn selling homes for builders [5:31]
The Charleston real estate market [6:47]
McConnell Real Estate Partners’ sales and team structure [8:04]
The advantages of running your own brokerage [13:32]
Social media as a tool for real estate agents [15:20]
The financial crisis compared to this correction [17:17]
About The McConnell Foundation and donating to causes that matter [18:33]
Restarting in real estate after major life challenges [22:18]
Advice on starting a non-profit foundation [26:53]
Advice for agents on giving five-star service to get referrals [27:29]
Jen’s favorite CRM: Follow-Up Boss [30:19]
The post-closing checklist: When to follow up with buyers [31:13]
Transitioning from paid leads to referrals [34:42]
Where to find and follow Jen McConnell [36:25]

Jen McConnell

Jen was fortunate enough to start her real estate career when she was a junior in college. Now with over 17 years of experience in the industry, she has a particular expertise in luxury real estate and custom home building. She moved to Charleston in 2006 after receiving her B.A. in Marketing from Ashland University. In 2022 Jen was awarded the South Carolina Women in Business Award, and chosen as a Top 40 Under 40 Real Estate Agent in Charleston. Jen has also been featured on Charleston Home Showcase & Lowcountry Live and has been featured in Charleston Real Producers Magazine, Charleston Style & Design Magazine, Southern Living Magazine, The Post & Courier, Charleston City Paper, Charleston Regional Business Journal, Charleston Daily, Greenville Business Journal, Columbia Business Journal and many others. She is a Certified Luxury Home Marketing Specialist through the Institute for Luxury Home Marketing where she has been awarded the prestigious Million Dollar Guild award. Jen has also earned the coveted Realtor of Distinction Award achieving the highest rank possible as a Platinum Award winner through the Charleston Trident Association of Realtors. The Platinum Award places Jen in the Top 2% of agents in Charleston.

Jen is the Co-Founder of King Tide Investment Group and Blue Ocean Investments, both residential real estate investment companies based in Charleston, SC and Greenville, SC respectively. In 2021 Jen and her husband Josh opened their own brokerage on Isle of Palms and formed McConnell Real Estate Partners where she is the broker-in-charge.

Jen met her husband, Josh, in Charleston and was married at Wild Dunes on Isle of Palms in 2010. They now live on Isle of Palms and welcomed their daughter Bennett in 2016 and their son Bodhi in 2017. They have embraced all Charleston has to offer but most especially the outdoor living, the amazing restaurants and long summer days at the beach. The McConnell’s are avid Clemson Tigers, strong supporters of MUSC Children’s Hospital, the South Carolina Aquarium, Pet Helpers Adoption Center and are members of First United Methodist Church on Isle of Palms.

Jen prides herself on being persistent, utilizing her experience to always find the most advantageous terms for her clients, and providing unparalleled professionalism and expertise for her clients in each and every transaction. Whether you’re looking to buy, sell or invest in real estate throughout the Charleston area, Jen would love to share her passion and market knowledge with you.

Related Links and Resources:

Thank You Rockstars!

It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.

-Aaron Amuchastegui

Source: realestaterockstarsnetwork.com

Apache is functioning normally

June 8, 2023 by Brett Tams

Referral and Marketing Tools; TPO Products; U/W, Doc Custodian Review; DSCR and 2nd Program News

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By:
Rob Chrisman

Wed, Jun 7 2023, 10:50 AM

Mortgage news temporarily aside, how about the government contemplating a law that would require cars to have AM radio?! AM radio goes farther than FM or cellular streaming services which is why, in out-of-the-way places, like in mountains, you can tune in to an AM station for traffic reports. If you think radio, or the mortgage process, is confusing, try visual entertainment, with too many cable channels and media outlets to fill with 24-7 options and opinions. Too many shows cast across streaming channels. Too many hours on cable TV with financial pundits offering crazy predictions, just to get on TV. I wish that I had an org chart showing who is in charge of what, and how they fit together. I now have three remotes and need to figure out the relationship between Roku, Apple TV+, Prime Video, VUDU, Discovery, YouTubeTV, Sling, Disney+, HBO Max (“Max”), Hulu, Netflix, Paramount+, Peacock, Showtime, Starz… the list goes on and on. And what the heck is BritBox anyway? (Today’s podcast can be found here and this week’s is sponsored by Built Technologies. Join Built Technologies on June 20th at 12 PM CST for an exclusive webinar that will dive into proactive portfolio monitoring as Built’s experts share best practices for achieving greater visibility into your construction portfolio. Today’s includes an interview with Milo’s Josip Rupena on the impact pricing is having on young homeownership.)

Lender and Broker Software and Services

Summer is approaching, and every extra second counts when you’re working on your tan. Utilizing digital mortgage tools can save you a lot of time, reducing turnaround times and increasing operational efficiencies. Whether you are using a hybrid or fully digital eClosing process, it’s crucial to prioritize compliance and efficiency, ensuring the correct eSignature tools and processes is a major part of that. By leveraging advanced eSignature technology, you can simplify your operations, ensure compliance, and save time. Wolters Kluwer’s ClosingCenter and SmartSign Plus allow you to improve operational efficiency by as much as 50 percent, simultaneously improving the customer experience and collecting the key data you need to remain compliant with ever-changing regulations. Learn how advanced eSignature can improve your closing process now!

In today’s ever-changing mortgage landscape, the right lending partner is essential. That’s where Flagstar Bank comes in. As the second largest warehouse lender and a $124 billion asset bank, Flagstar offers the strength, stability, and best-in-class service you’ve been looking for. Flagstar warehouses most loan types, including conventional, NonQM, and construction. Our MSR, servicer advance, and EBO financing solutions are also available. Flagstar’s warehouse platform already gives approximately 400 warehouse clients of all sizes the flexibility to fund quickly and easily. In addition, our specialized mortgage banking team may be able to help streamline operations and provide greater value for cash balances. Don’t let market turbulence hinder your growth. Instead, choose Flagstar as your lending partner and unlock a world of opportunities for your business to thrive. Contact Jeff Neufeld or Patti Robins today to discuss what Flagstar can do for you.

It’s not news to you that lenders nationwide are facing rising interest rates and falling production volumes. Let’s give those decreased production volumes some perspective, shall we? Find out right now with MMI’s monthly Mortgage Industry Benchmarks newsletter, which lets lenders and LOs compare their recent performance to their peers via production-based tiers. After significant pipeline growth in March, lenders in every tier faced a decrease in production volume in April. Lenders in MMI’s Capital Tier ($500M-$5B production/year) averaged a 14.9 percent decrease in production from March to April while LOs in the Diamond Tier ($50-100M production/year) saw a 16.9 percent decrease in their monthly production. Now that you know how some lenders and LOs fared in April, find out how you stack up against your peers. Sign up for MMI’s monthly newsletter for to find out and for more insights like these!

“Unlock the secrets to consumer’s digital financial data with AccountChek® by Informative Research! Are you facing confusion and uncertainty regarding investor programs as they relate to verifications? Our expert consultation is here to guide you towards clarity and success. Navigating the complex landscape of asset, income, and employment verification can be challenging. Do not let it hinder your operations any longer. Let the experienced AccountChek team help you understand investor programs and streamline your verification processes. Book a consultation meeting today and gain access to our industry-leading expertise to provide you with the insights and answers you need to make more loan applications eligible for the many programs that leverage digital verification data. Say goodbye to confusion and hello to efficient verification processes that seamlessly feed into investor programs. Stop wasting time and resources on guesswork. Join the satisfied lenders who have already benefited from Informative Research’s consultation services and AccountChek. Click now to schedule your meeting and discover how we can revolutionize your mortgage operations.”

“Ensure Compliance with GNMA and Safeguard Investor Interests! Noncompliance is not an option: both your auditor and GNMA require that your Document Custodian undergo regular reviews. At Richey May, we are a step ahead and have scheduled reviews for four Document Custodians beginning in September 2023. Our team of experts is well-versed in Document Custodian Procedures and has years of experience helping mortgage companies comply with these requirements. We’ll conduct a comprehensive review of your Document Custodian to ensure compliance and identify any areas needing improvement. Trust us to safeguard the interests of investors and stay compliant. To schedule a comprehensive review, reach out to us.”

We all know volumes will return eventually, so why not get ahead of your competition during this slow season to optimize your operations with CandorPLUS? CandorPLUS builds upon the popular Candor LES underwriting engine and is a Lean Six Sigma Man + Machine solution spanning the entire loan fulfillment process. Why is now the best time? The current economic environment allows for favorable pricing. Manageable volume allows time to adapt and optimize. Right size operations for the last time… No more difficult layoffs. Instantly scale without additional headcount. Faster turn times increases market share and loyalty. Click here to learn more and take advantage of our introductory pricing!

Marketing and Referral Products

You have to apply for a license to become a bona fide Unicorn Hunter, but all you need on your quest for more referrals is a phone and SimpleNexus, an nCino company’s mortgage app. SimpleNexus’ all-in-one mobile technology empowers loan officers to implement a powerful referral strategy and establish quick and constant connections with real estate agents. By supporting ongoing digital collaboration between lenders, real estate agents, and consumers, SimpleNexus transforms the time-consuming process of engaging, nurturing, and converting leads into a single-sign-on experience. Download SimpleNexus’ latest white paper, Leveraging Digital for Smarter Referral Strategies, and make some magic in your pipeline.

Here’s a true story about the power of a SmartCRM™: a loan officer we know made the President’s Club… from a hospital bed. On a mortgage company’s production cruise not long ago, a winner slipped near the pool and landed on the back of his head. He was unconscious for 20 minutes, but when he woke up, he felt fine. Turns out he wasn’t fine. In fact, he almost died and spent a year in the hospital. That same year, from his hospital bed, he originated $12 million. How? Great relationships, a great assistant, and automated marketing. His Realtors and clients had no idea he was even sick. They continued to get great service from his assistant and targeted, personalized marketing from Usherpa. According to the Loan Officer, “Without Usherpa, I’d be out of business.” Find out how to originate more loans from anywhere with this free eGuide.

Free eBook: Winning Agent Business: The Lender’s Guide to a Strong Referral Network. In today’s volatile market, a steady stream of referrals means the difference between maintaining a pipeline and scrounging for leads. And as we move towards market recovery, a robust book of business will serve as an invaluable tool to take full advantage of profitable opportunities. Real estate agents still hold the keys to the referral kingdom. To create this eBook, Maxwell interviewed agents and broker-owners across the country. The result is firsthand advice to help you better network to create a strong funnel of referral leads. Download your free copy to learn the 4 qualities real estate agents value in their lending partners, agent networking dos and don’ts, 5 ways to become a go-to lender for real estate agents, and more. Click here to download “Winning Agent Business: The Lender’s Guide to a Strong Referral Network.”

Broker and Correspondent Programs

“U.S. Bank is dedicated to ongoing affordable housing efforts, and we believe sustainable homeownership is an important means of building wealth. Our commitment starts by empowering through education. As a trusted advisor, we’ve launched an educational breakthrough series aimed at providing lenders with the tools and resources to be successful. Join our upcoming breakthrough series “NextGen Homebuyers: How to Reach the Fastest Growing Homebuyer” or our “Affordable and Community Outreach” session to understand the challenges, opportunities and how to make a positive impact in growing communities. To learn more about participating, please contact your U.S. Bank account executive.”

Happy National Homeownership Month! A month that highlights and celebrates the value that owning a home brings to families, communities, and neighborhoods across the Country. And what better way to celebrate then to announce AFR Wholesale’s next edition of our “Why Wait?” series. We invite you on June 21st at 2 PM EST. to join AFR and special guests from Fannie Mae to learn about HomeReady® and how to leverage this program. Register Today! Over our series, we want to highlight affordable financing solutions that provide homeownership opportunities to more families. This provides you with a platform to learn from and ask Fannie Mae directly how to interpret program guidelines while AFR will provide insight on how to use this program as a solution for your borrowers. This live webinar will not be recorded, so sign up today and don’t miss it! Contact AFR by going to afrwholesale.com, email [email protected] or call 1-800-375-6071.

Are you frustrated as a retail loan officer or mortgage banker with the lack of flexibility to provide custom loan options? Take control: follow the lead of over 24,000 MLOs like you who have joined the wholesale channel in the last year. Whether you open your own independent mortgage brokerage or join a team as a loan officer, you’ll have the ability to provide your clients with the personalized solutions they need. Contact our team at BeAMortgageBroker.com today and you’ll be well on your way to a more fulfilling tomorrow.

Citi Correspondent Lending continues to make supporting underserved communities and diverse markets a priority, which is why we’re very excited to announce the pilot launch of our new HomeRun program. The first in a series of planned Community Lending initiatives, this program is a portfolio Community Lending product that allows up to 97 percent LTV, requires as little as 1 percent borrower down payment contribution and has no mortgage insurance requirement. These features could help make the path to homeownership significantly more affordable for your borrowers. Please reach out to your Citi Account Executive or our National Client Services Team to learn more about this new program and timeline for participant expansion.

Non-Agency, DSCR, and 2nd Changes

A&D Mortgage launched its Second Mortgage Program, designed to help homeowners and real estate investors access affordable financing options. The program offers competitive rates and flexible terms for owner-occupied homes, second homes, and investment properties.

Max Slyusarchuk, Founder and CEO of A&D Mortgage says: “We understand that life happens, and credit scores don’t always reflect a person’s full financial picture. Our new program allows us to meet those customers where they are and provide them with the financing they need.” Borrowers can access up to 85 percent combined loan-to-value (CLTV) ratios on their primary residence or up to 75 percent CLTV on a vacation home or investment property. Borrowers must have a minimum credit score of 660 or higher, with a maximum debt-to-income (DTI) at 50 percent.

Champions Funding’s Accelerator Program has been consolidated to serve as a portfolio-building vehicle for your real estate investors. To further reduce friction in Underwriting, you are connected directly to decision-makers to further speed things up. With streamlined Non-QM products, you can qualify borrowers fast and close even faster, in as little as 5 business days.

Just a few examples of Hometown Equity Mortgage Niches: 100 percent FHA financing, VOE only FHA, 1-year 1099, 1- year P&L use to qualify non owner properties, business bank statements down to 20 percent expense factor, Foreign Nationals no credit, 2-1 buydown use seller concessions, Bridge first time home buyer no income / blanket loans, 5-25 units.

Gain An Edge with Angel Oak DSCR Loans: 6 Months title seasoning for cash out, calculate the Debt Service Coverage Ratio (DSCR) based on interest-only payments, Condotels allowed,

Non-permanent residents, Foreign Nationals, Business Purpose Loans (allows LOs to close DSCR loans in states that they are not licensed in).

Capital Markets

Not much to report yesterday in the absence of economic data and Federal Reserve speakers. There was some chatter that the economy may be able to avoid a recession, though I’m not quite ready to declare that it’s headed for a soft landing just yet. We did see a little “spread tightening” (Treasury yields unchanged, mortgage rates down), which is good news considering MBS spreads continue to remain at historically wide levels. That isn’t helping mortgage rates and LOs as the spread between the 30-year fixed rate mortgage and the 10-year bond yield has surpassed the highs of last year, the 2008 financial crisis, and is back at levels last seen nearly 40 years ago.

Today’s calendar kicked off with mortgage applications decreasing 1.4 percent from one week earlier, according to data from MBA. This week’s results include an adjustment for the Memorial Day holiday. We’ve also received the April trade deficit at $74.6 billion, where expectations were for $75.8 billion versus $64.2 billion in March. Later today brings the latest Bank of Canada policy decision as well as consumer credit. We begin the day with Agency MBS prices roughly unchanged from Tuesday and the 10-year yielding 3.69 after closing yesterday at 3.69 percent. The 2-year is still up around 4.52 percent, so the yield curve inversion is alive and well.

Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

June 8, 2023 by Brett Tams

If you’re saving for retirement, a broad market index portfolio is typically a good option. Investing in a target date fund or S&P 500 index fund, for instance, are low-cost ways to gain broad market exposure. However, newly published research indicates there may be a significantly more lucrative way to handle your nest egg.

A financial advisor can help find the right mix of investments for your retirement portfolio. Find a fiduciary advisor today.

An analysis from Dimensional Fund Advisors suggests retirement savers can do better than following the standard advice to use index funds, for instance, to get a balanced portfolio. Portfolios built with a focus on size, value and profitability premiums can generate more assets and better longevity than broad market portfolios, according to the DFA research. In fact, a DFA researcher calculated that a portfolio that emphasizes these premiums would leave a hypothetical investor with at least 20% more money by age 65, even if market returns were less than the historical average.

“These results are encouraging. A portfolio that incorporates controlled, moderate premium exposure can strike a balance between higher expected returns than the market and the cost of slightly higher volatility and moderate tracking error,” DFA’s Mathieu Pellerin wrote in his paper “How Targeting the Size, Value, and Profitability Premiums Can Improve Retirement Outcomes.”

“As a result, targeting these long-term drivers of stock returns is likely to increase assets at the beginning of retirement.”

What Are Size, Value and Profitability Premiums?

As part of its research, DFA compared the simulated performance of a broad market index portfolio – represented by the Center for Research in Security Prices (CRSP) 1-10 index – against that of the Dimensional US Adjusted Market 1 Index.

The DFA index comprises 14% fewer stocks than the CRSP index and places a greater emphasis on size, value and profitability premiums. Here’s how the firm defines each:

Size premium: The tendency of small-cap stocks to outperform large-cap stocks
Value premium: The tendency of undervalued stocks – those with low price-to-book-value ratios – to outperform
Profitability premium: The tendency of companies with relatively high operating profits to outperform those with lower profitability

As a result, the DFA index is more heavily weighted in small-cap and value stocks, as well as companies with higher profits.

Premiums Produce Better Retirement Outcomes

To test the long-term viability of its premium-based portfolio, DFA ran an extensive set of simulations and compared the results against the CRSP market index.

First, Pellerin calculated 40 years’ worth of hypothetical returns for each portfolio, assuming an investor starts saving at age 25 and retires at age 65. Both portfolios are part of a glide path that starts with a 100% equity allocation and beings to transition toward bonds at age 45. By age 65, the investor’s asset allocation eventually reaches a 50/50 split between stocks and bonds.

Then, he calculated how both portfolios would fare during the investor’s decumulation phase. To do this, DFA applied the 4% rule. This rule of thumb stipulates that a retiree with a balanced portfolio can withdraw 4% of their assets in their first year of retirement and adjust withdrawals in subsequent years for inflation, and have enough money for 30 years.

DFA tested the portfolios using both historical returns (8.1% per year) and more conservative returns (5% per year).

When applying the historical rate of return, the portfolio that targets premiums would be worth 22% more than the broad market portfolio by the time the hypothetical investor reaches age 65. In the lower growth environment, the DFA portfolios would still deliver 20% more median assets than its counterpart, according to the research.

The hypothetical investor would also have a lesser chance of running out of money with the DFA portfolio. Using historical returns, the premium-focused portfolio failed just 2.5% of the time over a 30-year retirement. That’s nearly half as many times as the market portfolio, which posted a 4.7% failure rate.

That spread grew even larger when Pellerin ran the simulations with more conservative return expectations. Over the course of a 30-year retirement, the DFA portfolio ran out of money in just 12.9% of simulations when annual returns averaged just 5%, while the market portfolio failed 19.9% of the time.

Bottom Line

Investing in index funds or target date funds that track the broad market can be an effective way to save for retirement, but Dimensional Fund Advisors found that targeting stocks with size, value and profitability premiums can produce better retirement outcomes. When comparing a broad market index to one that focuses on these factors, the latter produced at least 20% more median assets and had lower failure rates.

Retirement Planning Tips

How much will you have in savings by the time you retire? SmartAsset’s retirement calculator can help you estimate how much money you could expect to have by retirement age and how much you’ll potentially need to support your lifestyle.
Retirement planning can be complicated, but a financial advisor can help you through the process. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Photo credit: ©iStock.com/Tinpixels, ©iStock.com/PeopleImages, ©iStock.com/adamkaz

Patrick Villanova, CEPF®
Patrick Villanova is a writer for SmartAsset, covering a variety of personal finance topics, including retirement and investing. Before joining SmartAsset, Patrick worked as an editor at The Jersey Journal. His work has also appeared on NJ.com and in The Star-Ledger. Patrick is a graduate of the University of New Hampshire, where he studied English and developed his love of writing. In his free time, he enjoys hiking, trying out new recipes in the kitchen and watching his beloved New York sports teams. A New Jersey native, he currently lives in Jersey City.

Source: smartasset.com

Apache is functioning normally

June 8, 2023 by Brett Tams

Back in the day, if you wanted a loan to pay off your car or credit cards, you’d go to a bank or a credit union, sit down with a loan officer, and wait for them to tell you yes or no as they “crunched the numbers.”

But now peer-to-peer (P2P) lending has come onto the market, offering loans to borrowers directly from individuals — and usually carrying more favorable terms for those without a great credit profile. Borrowers can access up to $50,000 (or more) from lenders, with fixed term repayment scheduled and reasonable interest rates. Investors can also become lenders on P2P platforms, earning interest collected on loans as a passive form of investment income.

Let’s break down some of the best peer-to-peer lending sites for both borrowers and investors, so you can determine which option is best for you.

What’s Ahead:

Overview of the best peer-to-peer lending sites

Best for those with high credit scores: Prosper
Best for crypto-backed loans: BlockFi
Best for young people: Upstart
Best for a payday loan alternative: SoLo Funds
Best for small businesses: FundingCircle
Best for first-time borrowers: Kiva

Prosper: Best for those with high credit scores

APR: 6.99% to 35.99%
Term: 2 to 5 years

Prosper is the OG peer-to-peer lender in the market. It was founded in 2005 as the very first peer-to-peer lending marketplace in the U.S. According to their website, they’ve coordinated over $22 billion in loans.

Borrowing with Prosper

If you’re a borrower, you can get personal loans up to $50,000 with a fixed rate and a fixed term from two to five years in length. Your monthly payment is fixed for the duration of the loan. There are no prepayment penalties, either, so if you can pay it off early, you won’t be penalized.

You can get an instant look at what your rate would be and, once approved, the money gets deposited directly into your bank account.

Investing with Prosper

As an investor, you have many options on loans to choose from. There are seven different “risk” categories that you can select from, each with their own estimated return and level of risk. Here’s a look at the risk levels and the estimated potential loss, according to Prosper:

AA – 0.00 – 1.99%
A – 2.00 – 3.99%
B – 4.00 – 5.99%
C – 6.00 – 8.99%
D – 9.00 – 11.99%
E – 12.00 – 14.99%
HR (High Risk) – ≥ 15.00%

As you can see, the lower the letter, the greater the risk of default, hence a higher estimated potential loss. With just a $25 minimum investment, you can spread your risk out across all seven categories to provide your portfolio some balance.

The borrowers that you’re lending to are also above U.S. averages regarding their FICO score and average annual income.

Learn more about Prosper or read our full review.

BlockFi: Best for crypto-backed loans

APR: 4.5% – 9.75%
Term: 12 months

BlockFi is a popular crypto lending platform that offers crypto-backed loans to borrowers and pays out interest to lenders. BlockFi offers instant loans and requires no credit checks for borrowers. All loans are collateralized, meaning borrowers will need to lock in their crypto to borrow against it.

Borrowing with BlockFi

If you’re a borrower, you can get a crypto loan for up to 50% of the value of your crypto, with rates ranging from 4.5% to 9.75% APR, depending on the amount of collateral. Payments are made monthly and are fixed for the duration of the loan.

Interest rates are determined by the amount of collateral deposited and the loan-to-value (LTV) of the overall loan. There is a 2% origination fee on all loans.

Loan rate – 9.75% (50% LTV)
Loan rate – 7.9% (35% LTV)
Loan rate – 4.5% (20% LTV)

Bitcoin (BTC), Ether (ETH), Paxos Gold (PAXG), or Litecoin (LTC) can be used as collateral for the loan, and can be liquidated if the LTV goes above the original LTV of the loan.

Investing with BlockFi

BlockFi offers interest accounts for users who deposit crypto. The funds are used for crypto lending, and interest is paid out in the native crypto deposited. Interest rates vary by cryptocurrency, and range from 0.10% APY up to 7.50% APY. Stablecoins (such as USDC) pay out the highest rates.

Crypto interest accounts are not available to U.S. investors, as BlockFi was sued by the SEC for violating securities laws.

Read our full review.

BlockFi Bankruptcy Notice -On November 10, 2022, BlockFi announced that it had to suspend withdrawals from its platform due to the FTX liquidity crisis. As a result, consumers should not be using the BlockFi platform. As of November 28, 2022, BlockFi officially declared bankruptcy.

Upstart: Best for young people

APR: 5.6% – 35.99%
Term: 3 or 5 years

Upstart is an innovative peer-to-peer lending company that was founded by three ex-Google employees. In addition to being a P2P lending platform, they’ve also created intuitive software for banks and financial institutions.

What’s unique about Upstart is the way they determine risk. Where most creditors will look at a lender’s FICO score, Upstart has created a system that uses AI/ML (artificial intelligence/machine learning) to assess the risk of a borrower. This has led to significantly lower loss rates than some of its peer companies. Combine that with an excellent TrustPilot rating, and this company is certainly making waves in the P2P marketplace.

Borrowing with Upstart

Borrowers can get loans from $1,000 up to $50,000 with rates as low as 5.6%. Terms are either three or five years, but there’s no prepayment penalty.

Using their AI/ML technology, Upstart looks at not only your FICO score and years of credit history, but also factors in your education, area of study, and job history before determining your creditworthiness. Their site claims that their borrowers save an estimated 43% compared to other credit card rates.

Investing with Upstart

Investing with Upstart is also pretty intuitive. Unlike other P2P platforms, you can set up a self-directed IRA using the investments from peer-to-peer lending. This is a unique feature that many investors should be attracted to.

Like other platforms, you can set up automated investing by choosing a specific strategy and automatically depositing funds.

Upstart claims to have tripled their growth in the last three years due heavily to their proprietary underwriting model, so it might be worth a shot to consider this option.

Learn more about Upstart or read our Upstart review.

SoLo Funds: Best for a payday loan alternative

APR: 0% (tipping optional)
Term: Up to 35 days

SoLo Funds is a peer-to-peer platform that functions as a short-term lender, similar to payday loans. With term lengths only lasting for up to 35 days, loans must be paid back in a narrow timeframe. But instead of charging fees, borrowers can leave an optional tip instead.

SoLo Funds is an affordable option for clients who are in a pinch and need an advance on payday, but there are hefty fees if loans are not paid back within 35 days. Users will need to pay a 10% penalty plus a third-party transaction fee if late.

Borrowing with SoLo Funds

Borrowers can take out loans up to $575 for a maximum of 35 days. Loans do not charge fees, but allow borrowers to select an optional tip amount to lenders.

Loan applications only take a few minutes, and while most loans post within a few days, some may be instantly approved, offering same-day funding with money transferred to borrowers within a few hours.

Loans must be paid back in full within 35 days, or there is a 10% penalty plus other transaction fees. There is no option to roll the loan over.

Investing with SoLo Funds

Lending is fairly straightforward, with a simple sign-up process and no pre-qualifications needed. Since the loans are smaller amounts (up to $575), there are no minimums required for lending.

SoLo Funds has a marketplace of loan requests from borrowers, with details specified on each. Each loan request shows the amount needed plus the tip given by the borrower for the loan. Each borrower also has a SoLo Score, on a scale from 40 to 99, with higher scores showing more “worthiness” for paying back a loan. Loans can go into default, and if needed, to collections through a third party. There is a risk of total loss with SoLo Funds investing, though the platform does offer insurance against loss for a fee.

Learn more about SoLo Funds.

FundingCircle: Best for small businesses

APR: 11.29% to 30.12%
Term: 6 months to 7 years

FundingCircle is a small business peer-to-peer platform. The company was founded with the goal of helping small business owners reach their dreams by providing them the funds necessary to grow.

So far, they’ve helped 130,000 small businesses across the world through investment funds by 71,000 investors across the globe. FundingCircle is different in that it focuses on more substantial dollar amounts for companies that are ready for massive growth. They also have an excellent TrustPilot rating.

Borrowing with FundingCircle

As a borrower, the minimum loan is $25,000 and can go all the way up to $500,000. Rates come as low as 5.99%, and terms can be anywhere from six months to seven years. There are no prepayment penalties, and you can use the funds however you deem necessary — as long as they are for your business.

You will pay an origination fee, but unlike other small business loans, funding is much quicker (you can be fully funded as quickly as 1 business day).

Investing with FundingCircle

As an investor, you’ll need to shell out a minimum of $25,000. If that didn’t knock you out of the race, then read on.

According to FundingCircle, you’ll “Invest in American small businesses (not start-ups) that have established operating history, cash flow, and a strategic plan for growth.” While the risk is still there, you’re funding established businesses looking for extra growth.

You can manage your investments and pick individual loans or set up an automated strategy, similar to Betterment, where you’ll set your investment criteria and get a portfolio designed for you.

Learn more about FundingCircle.

Kiva: Best for first-time borrowers

APR: 0%
Term: Up to 3 years

If you want to do some good in the world, you’ll find an entirely different experience in P2P with Kiva. Kiva is a San Francisco-based non-profit that helps people across the world fund their businesses at no interest. They were founded in 2005 with a “mission to connect people through lending to alleviate poverty.”

Borrowing with Kiva

If you’d like to borrow money to grow your business, you can get up to $15,000 with no interest. That’s right, no interest. After making an application and getting pre-qualified, you’ll have the option to invite friends and family to lend to you.

During that same time, you can take your loan public by making your loan visible to over 1.6 million people across the world. Like Kickstarter, you’ll tell a story about yourself and your business, and why you need the money. People can then contribute to your cause until your loan is 100% funded. After that, you can use the funds for business purposes and work on repaying your loan with terms up to three years.

Investing with Kiva

As a lender, you can choose to lend money to people in a variety of categories, including loans for single parents, people in conflict zones, or businesses that focus on food or health. Kiva has various filters set up so you can narrow down exactly the type of person and business you want to lend your money to. You can lend as little as $25, and remember, you won’t get anything but satisfaction in return — there’s no interest.

You can pick from a variety of loans and add them to your “basket,” then check out with one simple process. You’ll then receive payments over time, based on the repayment schedule chosen by the borrower and their ability to repay. The money will go right back into your Kiva account so you can use it again or withdraw it. There are risks to lending, of course, but Kiva claims to have a 96% repayment rate for their loans. Just remember, you’re not doing this as an investment, you’re doing it to help out another person.

Learn more about Kiva.

What is peer-to-peer lending?

As the name suggests, peer-to-peer lending involves private individuals making loans to other individuals. The system runs contrary to the traditional model of banks and credit unions providing financial services because it cuts out the middleman.

While peer-to-peer lending had a surge in users over the past decade, in the past few years, some P2P lending companies have shuttered their services, including StreetShares, Peerform, and LendingClub.

How does peer-to-peer lending work?

Peer-to-peer lending shares many similarities with traditional lending:

You fill out an application with your financial and personal information, including the loan’s size, tax returns, and government-issued identification.
The lender will review your application before posting it on the site for investors.
Investors get to play the part of a loan officer, reviewing a list of applications and deciding where they might want to contribute.
The platform will indicate how risky the loan is and the potential return on investment.
Funding takes anywhere from one day up to two weeks.

Is peer-to-peer lending safe?

No one would say that peer-to-peer lending is 100% safe. No form of investing is. Many of the best peer-to-peer lending sites vet borrowers and investors to mitigate risk. The review process helps eliminate untrustworthy candidates, so borrowers can receive their loan and investors can earn interest.

Read more: Should you invest in peer-to-peer loans?

Pros & cons of P2P lending for investors

Pros

An attractive alternative to more traditional investments — You can round out your portfolio that might exclusively include stocks, bonds, and mutual funds. Some platforms merge private and public equities, so you can make all your investments in one place.
Most lending platforms let you select multiple loans at once — The variation enables you to reduce your risk exposure while potentially earning higher yields than a CD or savings account.
Feel good about your contribution — With sites like Kiva, you know that your money is going toward a humanitarian purpose.

Cons

Risk of default — When you lend money to individuals, you risk them defaulting. Peer-to-peer lending sites don’t come with FDIC insurance like a CD or savings account.
P2P loans lack the liquidity of stocks or bonds — Most loans are for three to five years, so you would have to wait until then to withdraw money.
Inequality — Some platforms, such as Funding Circle, only give access to accredited investors, so not everyone has equal access to lending opportunities.

Pros & cons of P2P lending for borrowers

Pros

You can circumvent the traditional bureaucracy of brick-and-mortar banks — Instead of waiting in line and negotiating with a loan officer, you have access to a fast, online experience. Because online platforms don’t have to worry about physical overhead, many can give borrowers competitive interest rates.
P2P loans typically aren’t as strict as banks or credit unions — The lax approach makes it easier to secure a loan if you have fair or poor credit history.
Often no prepayment penalties — You don’t have to worry about prepayment penalties in many cases.

Cons

Borrowers face more hurdles if they have a low credit score — Interest rates can go as high as 36% for those with lower scores, while some platforms don’t offer financial services to anyone with a credit score below 630.
Possibly high fees — Some sites have origination fees of 6%.
Impersonal — If you want the old-fashioned face-to-face borrowing experience, peer-to-peer lending isn’t for you. You don’t have a chance to sit down with your lender and hash out terms.
Loan caps around $50,000 — If you need more money, you’ll likely have to go to a bank or credit union.

Summary

Peer-to-peer lending is a great option for borrowers with less-than-stellar credit who want access to capital with reasonable terms and rates. P2P lending is ideal for small businesses and individuals who are looking for a personal loan that does not require mountains of paperwork, and that is funded quickly (usually within a few days).

But not all P2P lending platforms operate the same, and some can charge high origination fees and interest rates. Others require high minimum loan amounts to borrow as well, making them less accessible to some borrowers.

Investors can earn decent returns with P2P lending, but there is also the risk of default and the mess of going through collections agencies occasionally. Finding a solid platform with detailed risk mitigation strategies (such as borrower scores), and insurance against default can help alleviate these concerns, but it may eat into your profits.

While peer-to-peer lending is not seeing the massive growth of a few years ago, it is still a solid option for borrowers and investors alike.

Apache is functioning normally

June 8, 2023 by Brett Tams

Have you been diagnosed with congestive heart failure? It can make applying for life insurance coverage becomes a bit difficult.

You may be able to get it approved, however insurance companies will be concerned about offering you coverage because of your potentially serious medical condition.

However, it is still very possible to get insured with congestive heart failure. Obviously it doesn’t mean your heart has actually failed and stopped working, or you wouldn’t be reading this information. It simply means it isn’t working as efficiently as it once did.

That being said, CHF, along with other heart diseases like heart attacks, congenital heart disease, and coronary heart disease, are the Number One cause of death of adults in the country. This includes both men and women.

Since this is the case, trying to get life insurance approved can be a longer process than it would normally take. This is because of additional underwriting requirements such as medical records having to be ordered. If the doctor’s office is slow in getting medical records to the insurance company, it will just take longer to get approved.

This means the SOONER you APPLY for coverage, the sooner the process will get started. You can complete our brief form on this page to get the ball rolling.

If the condition is severe then your type of coverage will be impacted. First off let’s look at some underwriting guidelines for life insurance on how they relate to congestive heat failure. Hopefully this gives you a idea on what is ahead on your application.

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Life Insurance Underwriting for Congestive Heart Failure

Your agent, knowing you have CHF, will ask you some pre qualifying questions when you first talk with them. Listed below are a few of them:

When was your congestive heart failure diagnosed?
Did any health issues contribute to your diagnosis of congestive heart failure?
Do you have high blood pressure or hypertension?
What tests have you had done to evaluate your condition?
Do you have high cholesterol?
Is there any history in your family with heart disease or death in the family due to heart conditions?
Tobacco user?
Are you prescribed any medicine to help with your issues?

Even though you might take some medications, beta blockers, inhibitors, or nitrates, for your condition, you still might be insurable as long as you don’t take multiples of each and have other issues that coincide with CHF.

When it comes to life insurance underwriting, the more information you can give the better. If your application doesn’t clearly describe your condition, your chances of a bad rating or rejection go way up. Make sure to fully answer all the application questions plus give any other details you think are important.

Life Insurance Quotes with Congestive Heart Failure

Congestive heart failure has a wide range of different severity levels. Your life insurance quote will depend on how serious your health issues are because of your condition. Insurance companies also do not accept applicants that have recently been diagnosed with congestive heart failure because they want some time to see how the condition develops.

To avoid rejections and get the best rate, its best putting off an application for twelve months after diagnosis.. From there, your rate will depend on your condition plus your overall health.

It is even possible that you may have CHF and not even realize it because the symptoms usually don’t show up initially. The reason they don’t is because your body and your heart can mask it at first, which is called compensation. The symptoms will start showing up when the heart just can’t pump enough blood to the rest of your body.

These are some standard rating classes that most life insurance companies use, though every carrier determines how you’d fall into each category, I’ll explain your chances with each class.

Preferred Plus: Generally impossible. Congestive heart failure is too serious a condition and carries too many health risks for applicants to receive the best possible insurance rating.
Preferred: Very difficult but not impossible. If your congestive heart failure has only mild health symptoms and you are in great health otherwise, you could get a preferred rating.
Standard: The likely best rating for most applicants. Applicants that only started having heart failure at 60 or older, are in good health, and have waited at least a year after being diagnosed to apply can get a standard rating.
Table Rating (substandard): Many of you will end up in this class due to the health issue.
Declines: Most applications within 3 to 6 months of a diagnosis for congestive heart failure. And other persons who deal with many health issues combined with history of health

If there is a situation where you do find that due to your medical condition you are declined for traditional life insurance, then our next recommendation is to look at a guaranteed issue life insurance policy. This type life insurance application only asks a few health questions, but not to decline your application but only to determine how much and when the death benefit would be paid out.

As you are thinking about applying for life insurance, you may also try to improve your chances of getting the best rate by doing some of the following:

Lower your sodium intake
Lower your cholesterol
Stop smoking
Exercise more often
Eat a healthier diet
Keep all other medical conditions under control with responsibly taking medications
Continue with proper medical care by your medical professionals

These recommendations are common sense, and your doctor may have other activities and guidelines. Even though there really isn’t a cure for congestive heart failure, the above lifestyle choices can minimize the degree of your heart deterioration, and allow you to get a lower life insurance rate.

Other Considerations as You are Applying for Life Insurance

This is common sense, but if you haven’t thought about it, now is the time to be thinking about how much death benefit you are looking to buy. Since you have a serious medical condition, you might not be able to afford what you would want, so be realistic in also considering how much money you have to budget for a monthly life insurance payment.

Also, how long a period will you need life insurance? Although typically no one knows for sure when their beneficiary might be filing a claim on the policy, you will need to consider whether to buy a term life insurance plan or a permanent life insurance plan. We can help you with making this decision.

Lastly, it would be a good idea not to drop or cancel any life insurance policy you presently own. As you get older, the premiums increase. So if you are comparing an old policy vs a new policy, the rates on the new policy will probably be higher than what you are paying now.

Congestive Heart Failure Life Insurance Case Studies

Its important to understand how filling out the application can hinder or help your approval percentage. Below are instances on how to and how not to go through the process.

Case Study: Female, 63 year old, non-smoker, diagnosed with congestive heart failure at age 61, taking Beta Blockers and Ace Inhibitors, no other health issues.

This applicant was only showing mild signs of congestive heart failure and was otherwise in very good health. She had no other health issues and no family history of heart disease. However, because of her condition, she was only receiving expensive, rated life insurance offers. We advised her to request an EKG to prove that her condition was under control. With this extra information, an insurance company gave her a much less expensive standard policy.

Case Study #2: Male, 54 year old, diagnosed with congestive heart failure at 51, father died young from heart disease, former smoker, improved health and weight since the diagnosis

This applicant had a very poor lifestyle prior to his heart failure diagnosis. He was smoking, overweight, and had high blood pressure. This combined with his family history of heart disease led to him being rejected from all his life insurance applications. However, since his diagnosis, this applicant dramatically improved his lifestyle. He lost a good deal of weight and quit smoking which made his condition much less severe. Since his health had improved we let him know it would be smart to get a written referral from his doctor stating how much healthier he is now. By reapplying with this extra certification, this applicant was able to receive a rated policy despite his relatively risky profile.

While congestive heart failure is quite serious, it is not enough to prevent you from taking out life insurance. You just need to handle your application well. To make sure the process goes smoothly, it helps to work with expert brokers that understand this condition.

Source: goodfinancialcents.com

Apache is functioning normally

June 8, 2023 by Brett Tams

If you have a mortgage, you may be unknowingly participating in a mortgage-backed security (MBS). That is, your humble home loan may be part of a pool of mortgages that has been packaged and sold to income-oriented investors on the secondary market.

Being part of an MBS won’t change much (if anything) about how you repay your home loan, but it’s helpful to understand how these investment products work and how they impact the mortgage and housing industries.

Key takeaways

A mortgage-backed security is an investment product that consists of thousands of individual mortgages.
Investors can purchase MBSs on the secondary market from the banks that issued the loans.
When MBS prices fall, residential mortgage rates tend to rise – and vice versa.

What is a mortgage-backed security?

A mortgage-backed security (MBS) is a type of financial asset, somewhat like a bond (or a bond fund). It’s created out of a portfolio, or collection, of residential mortgages.

When a company or government issues a traditional bond, they are essentially borrowing money from investors (the people buying the bond). As with any loan, interest payments are made and then principal is paid back at maturity. However, with a mortgage-backed security, interest payments to investors come from the thousands of mortgages that underlie the bond — specifically, the repayments in interest and principal the mortgage-holders make each month.

Mortgage-backed securities offer key benefits to the players in the mortgage market, including banks, investors and even mortgage borrowers themselves. However, investing in an MBS has pros and cons.

How do mortgage-backed securities work?

While we all grew up with the idea that banks make loans and then hold those loans until they mature, the reality is that there’s a high chance that your lender is selling the loan into what’s known as the secondary mortgage market. Here, aggregators buy and sell mortgages, finding the right kind of mortgages for the security they want to create and sell on to investors. This is the most common reason a borrower’s mortgage loan servicer changes after securing a mortgage loan.

Mortgage-backed securities consist of a group of mortgages that have been organized and securitized to pay out interest like a bond. MBSs are created by companies called aggregators, including government-sponsored entities such as Fannie Mae or Freddie Mac. They buy loans from lenders, including big banks, and structure them into a mortgage-backed security.

Think of a mortgage-backed security like a giant pie with thousands of mortgages thrown into it. The creators of the MBS may cut this pie into potentially millions of slices — each perhaps with a little piece of each mortgage — to give investors the kind of return and risk they demand. Mortgage-backed securities typically pay out to investors on a monthly basis, like the mortgages underlying them.

Types of mortgage-backed securities

Mortgage-backed securities may have many features depending on what the market demands. The creators of MBSs think of their pool of mortgages as streams of cash flow that might run for 10, 15 or 30 years — the typical length of mortgages. But the bond’s underlying loans may be refinanced, and investors are repaid their principal and lose the cash flow over time.

By thinking of the characteristics of the mortgage as a stream of risks and cash flows, the aggregators can create bonds that have certain levels of risks or other characteristics. These securities can be based on both home mortgages (residential mortgage-backed securities) or on loans to businesses on commercial property (commercial mortgage-backed securities).

There are different types of mortgage-backed securities based on their structure and complexity:

Pass-through securities: In this type of mortgage-backed security, a trust holds many mortgages and allocates mortgage payments to its various investors depending on what share of the securities they own. This structure is relatively straightforward.
Collateralized mortgage obligation (CMO): This type of MBS is a legal structure backed by the mortgages it owns, but it has a twist. From a given pool of mortgages, a CMO can create different classes of securities that have different risks and returns (like different size slices, if we use our pie metaphor again). For example, it can create a “safer” class of bonds that are paid before other classes of bonds. The last and riskiest class is paid out only if all the other classes receive their payments.
Stripped mortgage-backed securities (SMBS): This kind of security basically splits the mortgage payment into two parts, the principal repayment and the interest payment. Investors can then buy either the security paying the principal (which pays out less at the start but grows) or the one paying interest (which pays out more but declines over time). These structures allow investors to invest in mortgage-backed securities with certain risks and rewards. For example, an investor could buy a relatively safe slice of a CMO and have a high chance of being repaid, but at the cost of a lower overall return.

How do mortgage-backed securities affect mortgage rates?

The cost of mortgage-backed securities has a direct impact on residential mortgage rates. This is because mortgage companies lose money when they issue loans while the market is down.

When the prices of mortgage-backed securities drop, mortgage providers generally increase interest rates. Conversely, mortgage providers lower interest rates when the price of MBSs goes up.

So, what causes mortgage-backed securities to rise or fall? Everything from stock market gains to higher energy prices and even unemployment numbers have the ability to influence the prices. A variety of factors that affect the course of mortgage-backed securities, and lenders are constantly monitoring it.

Mortgage-backed securities and the housing market

Why do mortgage-backed securities make sense for the players in the mortgage industry? Mortgage-backed securities actually make the industry more efficient, meaning it’s cheaper for each party to access the market and get its benefits:

Lenders: By selling their mortgages, lenders save on maintenance costs, and receive money they can then loan out to other borrowers, allowing them to more efficiently use their capital. They often require borrowers to meet conforming loan standards so that they can sell mortgages to aggregators. They can also sell the loans they might not want to keep, while retaining those they prefer.
Aggregators: Aggregators package mortgages into MBSs and earn fees for doing so. They may give mortgage-backed securities features that appeal to certain investors. A steady supply of conforming loans allows aggregators to structure MBSs cheaply.
Borrowers: Because aggregators demand so many conforming loans, they increase the supply of these loans and push down mortgage rates. So, borrowers may be able to enjoy greater access to capital and lower mortgage rates than they otherwise would.

Of course, easier access to financing is beneficial for the housing construction industry: Developers can build and sell more houses to consumers who are able to borrow more cheaply.

Investors like mortgage-backed securities, too, because these bonds may offer certain kinds of risk exposure that the investors, mainly big institutional players, want to have. Even the banks themselves may invest in MBSs, diversifying their portfolios.

While the lender may sell the loan, it may also retain the right to service the mortgage, meaning it earns a small fee for collecting the monthly payment and generally managing the account. So, you may continue to pay your lender each month for your mortgage, but the real owner of your mortgage may be the investors who hold the mortgage-backed security containing your loan.

Pros and cons of investing in MBSs

No investment is without risk. MBS have their advantages and disadvantages.

For instance, mortgage-backed securities typically pay out to investors on a monthly basis, like the mortgages behind the securities. But, unlike a typical bond where you receive interest payments over the bond’s life and then receive your principal when it matures, an MBS may often pay both principal and interest over the life of the security, so there won’t be a lump-sum payment at the end of the MBS’ life.

Here are some of the other advantages and disadvantages of investing in MBSs.

Pros

Pay a fixed interest rate
Typically have higher yields than U.S. Treasuries
Less correlated to stocks than other higher-yielding fixed income securities, such as corporate bonds

Cons

If a borrower defaults on their mortgage, the investor will ultimately lose money
The borrower may refinance or pay down their loan faster than expected, which can have a negative impact on returns
Higher interest rate risk because the cost of MBSs can drop as soon as interest rates increase

History of mortgage-backed securities

The first modern-day mortgage-backed security was issued in 1970 by the Government National Mortgage Association, better known as Ginnie Mae. These mortgage-backed securities were actually backed by the U.S. government and were enticing because of their guaranteed income stream.

Ginnie Mae began providing mortgage-backed securities in an effort to bring in extra funds, which were then used to purchase more home loans and expand affordable housing. Shortly after, government-sponsored enterprises Fannie Mae and Freddie Mac also began offering their version of MBSs.

The first private MBS was not issued until 1977, when Lew Ranieri of the now-defunct investment group Salomon Brothers developed the first residential MBS that was backed by mortgage providers, rather than a federal agency. Ranieri’s MBSs were offered in 5- and 10-year bonds, which was attractive to investors who could see returns more quickly.

Over the years, mortgage-backed securities have evolved and grown significantly. As of May 2023, financial institutions have issued $493.9 billion in mortgage-backed securities.

Mortgage-backed securities today

While mortgage-backed securities were notoriously at the center of the global financial crisis in 2008 and 2009, they continue to be an important part of the economy today because they serve real needs and provide tangible benefits to players across the mortgage and housing industries.

Not only does securitization of mortgages provide increased liquidity for investors, lenders and borrowers, it also offers a way to support the housing market, which is one of the largest engines of economic growth in the U.S. A strong housing market often bolsters a strong economy and helps employ many workers.

Mortgage Market

Bankrate insights

As of 2021, 65% of total home mortgage debt was securitized into mortgage-backed securities.

Bottom line on mortgage backed securities

While you might not deal with a mortgage-backed security in your daily life, your mortgage may be part of one. And if so, it’s a cog in the machinery that keeps the financial system running and helps borrowers access capital more cheaply. It can be useful to understand that the MBS market ultimately has a powerful influence over qualifications for mortgages, resulting in who gets a loan — and for how much.

Source: finance.yahoo.com

Apache is functioning normally

June 8, 2023 by Brett Tams

Editor’s Note: Since the writing of this article, President Biden signed the debt ceiling bill on June 4, canceling the federal student loan payment pause as of Aug 30, or “60 days after June 30.” Later this month, the Supreme Court will decide whether the Biden-Harris Administration’s Student Debt Relief Program can proceed. Loan payments are expected to resume in October.

Student loans are a significant issue in the United States, where consumers have more than $1.7 trillion in total student loan debt. In 2021, the average federal student loan debt per borrower was just over $37,000. And 20 years after students enter college, half of borrowers still owe $20,000 in student loans.

Broken down by degree levels, the debt increases. Graduate students who receive a degree leave school with an average of nearly $70,000 in debt. Law students are saddled with an average of $180,000; and medical students owe $250,000 on average for total student loan debt.

With so many borrowers and so much debt, it begs the question, “Should all student loan debt be forgiven?”

Who’s in Favor?

By a 2-to-1 margin, voters do support at least some student loans being forgiven, according to a poll from Politico and Morning Consult. And 53% of voters from the same poll support Biden’s extension of student loan payments through August.

Proponents of canceling student loan debt point out that the government is partially responsible for this debt crisis. Because many states slashed higher education funding after the 2008 recession, tuition at both public and private colleges has gone up steeply, and many students have been forced to take out even more in loans.

Unfortunately, the increase in student loan balances hasn’t gone hand in hand with a bump in post-college salary. The result is a national situation where borrowers owe increasingly more in student loans but don’t have the paycheck to aggressively tackle their balances.

Although the government has created income-driven repayment options that seek to keep monthly student loan payments affordable, signing up isn’t without its downsides.

Since these income-driven plans often lengthen loan terms, borrowers may pay significantly more interest on their loans over time. Also, any forgiven balance at the end of their loan term is typically treated as taxable income.

Why Forgiving Student Loan Debt a Isn’t a Slam-Dunk

There are several reasons why forgiving student loan debt may not be a straightforward positive. The first is that, according to U.S. tax laws, debt that’s forgiven is a taxable event. Under income-driven student loan repayment plans, for instance, if you make consistent, on-time payments for the life of the loan (20 or 25 years, depending on when you borrowed), any balance remaining at the end of your loan term is forgiven — but whatever’s forgiven is considered taxable income.

The second issue pundits raise with this plan is that it’s being sold as a stimulus: If the government forgives people’s student loan debt, they’ll put money back into the economy, the thinking goes. But forgiving debt isn’t the same as handing people a check.

And finally, the federal government so far isn’t planning to forgive student loans that borrowers hold with private lenders, which average over $54,000 per borrower.

Alternative Options to Canceling Student Loan Debt

Instead of targeting only student loan borrowers who qualify for relief, the government could provide a stimulus check to all Americans, and Americans could decide for themselves how to use it.

If someone has $10,000 in outstanding student loans, for example, they might prefer to use a check to put a down payment on a house or pay off high-interest credit card debt.

Then there’s the higher education system itself. Canceling or forgiving student loan debt may provide only temporary relief as long as tuition levels continue to rise. As it stands, future generations will be saddled with just as much, if not more, student debt than Americans currently have today.

Tackling Your Student Loan Debt

There’s no telling when or if some form of more long-term relief might appear for student loan borrowers. If you’re struggling under the weight of your student debt, there are strategies that might help:

• Alternative payment plans: Federal student loans come with a variety of repayment options, one of which might suit your situation.

• Direction of overpayments: If you make extra payments on your student loans, you may instruct your servicer to apply them to your principal, rather than the next month’s payment plus interest. This will help pay off your loans faster.

• “Found” money: If you receive a work bonus or tax refund, applying it to your student loans can help reduce your balance faster.

• Refinancing: Refinancing student loans (private and/or federal) into one new loan with a private lender could lower your monthly payment and interest rate, and make it easier to manage payments. Just know that refinancing federal student loans with a private lender means losing access to federal repayment and forgiveness programs.

Recommended: Can Refinanced Student Loans Still Be Forgiven?

The Takeaway

There is no quick fix for student loan debt, which will take further discussion from stakeholders on all sides.

If you are struggling with your own student loan debt, there are options to consider. You can apply for an income-driven repayment plan, apply for student loan deferment or forbearance on your federal student loans, or refinance your loans with a private lender. Keep in mind, though, that refinancing disqualifies you from federal benefits you may otherwise be eligible for.

If you do decide to refinance, consider SoFi. SoFi has a quick online application process, competitive rates, and no origination fees or prepayment penalties.

See if you prequalify with SoFi in just two minutes.

SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

CLICK HERE for more information.

Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com

Apache is functioning normally

June 7, 2023 by Brett Tams

Loyalty? Not in the mortgage business. That is, if you actually want to save money on your home loan.

A few years back, an HSBC survey revealed that 52% of U.S. homeowners “switched providers” (sorry, they’re British) when obtaining subsequent mortgages.

This was mainly driven (53%) by the desire to get a better deal, aka a lower mortgage rate with fewer closing costs.

That survey also found that 46% of consumers investigated a mortgage switcheroo, again either to save money or to lock in a new low rate due to rising interest rates.

Other reasons homeowners decided to go with another mortgage company were because they moved and purchased a new property.

Or due to their current mortgage deal was expiring. I think they mean an adjustable-rate mortgage resetting.

Is It Bad to Switch Mortgage Lenders?

A new report from Black Knight claims that loan servicers retained just 18% of the estimated 2.8 million homeowners who refinanced a mortgage in the fourth quarter of 2020, the lowest share on record.

Interestingly, those who refinanced to improve their rate and/or term were retained at a higher rate (23%) versus those pulling cash out as part of the transaction (11%).

This could be due to cash out refinances being harder to come by lately, and thus offered by fewer lenders. Or it just feeling more complex to the homeowner.

But here’s the biggie – among higher-credit quality rate and term refinances, borrowers who switched mortgage lenders received more than an eighth of a percent lower rate than those who refinanced and remained with their current lender/servicer.

In other words, you might get a lower mortgage rate if you switch mortgage lenders, instead of remaining loyal.

So is it bad to switch mortgage lenders? Not if you want to save money! Of course, your old lender might not feel the same way.

Mortgages Are Mostly a Commodity

Home loans aren’t all that different from one another
This is why lenders are increasingly coming up with unique ways to sell you one
The vast majority are 30-year fixed products whose only difference might be the interest rate or fees involved
And the majority just follow the underwriting guidelines of Fannie Mae, Freddie Mac, or HUD

It’s really no surprise that a lot of consumers don’t stay with their original mortgage lenders and/or loan servicers.

Aside from some existing lenders sometimes talking borrowers out of a refinance, the product is mostly the same no matter where you get it.

That makes customer retention difficult, especially when other lenders are aggressively marketing to homeowners.

These days, the majority of home loans are backed by the agency guidelines of Fannie Mae, Freddie Mac, or the government via FHA loans and VA loans. I think it’s something like 90% of mortgages.

This means mortgage loans are pretty homogeneous, despite what channel they’re originated in, or which institution provides the financing.

You could get the same exact home loan from a local credit union, a big bank, an online mortgage banker, or a mortgage broker.

And who really cares where you get your mortgage as long as the company is competent enough to close the thing, and honest in terms of rate and fees?

It’s not like you’re going to walk around and brag about your cool mortgage from X bank after the fact. It’s certainly not a status symbol, or a conspicuous transaction.

I’m pretty sure I’ve never had a conversation about someone’s branded mortgage before.

And I doubt an “influencer” is going to post about theirs on Instagram. Well, I take that back, they might…because someone paid them.

Mortgage Advertising Is Following the Insurance Model

Like mortgages, most forms of insurance are similarly boring and unoriginal
But that doesn’t stop mega insurers like Geico from advertising to you 24/7
Other insurers create catchy new names for run-of-the-mill coverage that isn’t really unique
Mortgage lenders are beginning to do that too in a bid to separate themselves from the crowd

This is exactly why insurance companies use celebrity endorsements and smart marketing gimmicks to get you to switch, or conversely, to stick around.

Car insurance isn’t cool or exciting and never will be, nor are mortgages, as much as I want them to be.

Ultimately, we’re all being sold the same thing, it’s just that some companies try to differentiate themselves by slapping clever names onto their products.

For example, Quicken Loan’s Rocket Mortgage is about reinventing the mortgage process, not the mortgage itself.

You’re still probably going to get a 30-year fixed home loan or some other ordinary mortgage that you would get anywhere else.

It’s just the way you get it that might change. Instead of meeting face-to-face with a banker, you might upload documents on your smartphone and authorize the release of documents electronically.

This could make the experience a lot easier and more pleasant, but it doesn’t mean you’re necessarily getting anything different.

Because everyone is basically offering their customers same thing, it comes down to price, customer service, and now perhaps clever marketing.

The one exception is portfolio home loan programs, which are actually unique to the mortgage lender providing them. These are loans kept on the originating bank’s books that contain distinct underwriting guidelines.

We’re starting to see more of them, though most lenders remain fairly cautious with the mortgage crisis still a not-too-distant memory, despite taking place a decade ago.

For example, a lot of the zero down mortgages you see are unique to the companies offering them, the latest one I came across from Ideal Credit Union.

And some of the so-called fintech disruptors like SoFi Mortgage are actually providing unique offerings like a 5/1 ARM with an interest-only option and jumbo loans as high as $3 million with just 10% down.

Be Careful Not to Pay More for the Same Exact Mortgage

While it’s important to use a mortgage lender you can trust
Such as one that can actually close your home loan competently without major delays
It doesn’t really matter what “brand” the mortgage it is after it funds
And there’s a good chance it’ll be resold to a different company shortly after closing anyway

Those exceptions aside, many of us have very similar mortgages that are only unique in terms of where they originated from.

As noted, most of today’s mortgages are conforming loans, meaning they meet the guidelines of Fannie and Freddie. Or they’re simply backed by the government via the FHA, VA, or USDA.

And just about all of them are 30-year fixed-rate loans that function exactly the same.

That’s why you have to ask yourself – if the company isn’t offering anything different, why pay more?

Might as well bargain shop and find the best mortgage rate with the lowest closing costs, instead of simply going with a household name because of a funny commercial.

At the end of the day, as long as they get you to the finish line, you’ll probably never think about your mortgage company again. Just make sure they’re reputable first…

Chances are your mortgage will be sold off in a matter of months anyway, so the company you get it from likely won’t even service it.

In fact, your final correspondence might be a notice of your home loan changing hands…

(photo: lamdogjunkie)

Source: thetruthaboutmortgage.com

$12 an Hour is How Much a Year?

Breakdown Of 12 Dollars An Hour Is How Much A Year

Work Part Time?

How Much is $12 Per Month?

How Much is $12 per Hour Per Week

How Much is $12 per Hour Bi-Weekly

How Much is $12 Per Hour Per Day

$12 Per Hour is…

Paid Time Off Earning 12 Dollars an Hour

Case # 1 – With Paid Time Off

Case #2 – No Paid Time Off

$12 an Hour is How Much a year After Taxes

$12 an Hour Budget Example

recommended budget percentages based on $12 per hour wage:

$12 an Hour Calculator

Living on $12 Per Hour

5 Ways to Increase Your Hourly Wage

1. Ask for a Raise

2. Look for A New Job

3. Find a New Career

4. Find Alternative Ways to Make Money

5. Earn Passive Income

Tips to Live on $12 an Hour

1. Spend Less Than you Make

2. Living Below Your Means

3. Make Saving Money Fun

4. Make More Money

5. No State Taxes

6. Stick to a Budget

7. Pay Off Debt Quickly

Jobs that Pay $12 an Hour

Possible Ideas for Jobs Paying $12 an hour:

companies paying $12 an hour

$12 Per Hour Annual Salary

Here are my tips on what to do when you can’t pay your bills.

Don’t ignore the problem.

Try to relax when figuring out what to do when you can’t pay your bills.

Call the company.

Evaluate your income and spending.

Cut your expenses as much as you can.

Increase your income.

Think carefully about extreme options.

Prioritize your bills.

Pay off your bills.

Prepare for the future.

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