Credit unions Archives - Page 52 of 66

Apache is functioning normally

May 8, 2023 by Brett Tams

About our Mortgage Rate Tables: The above mortgage loan information is provided to, or obtained by, Bankrate. Some lenders provide their mortgage loan terms to Bankrate for advertising purposes and Bankrate receives compensation from those advertisers (our “Advertisers”). Other lenders’ terms are gathered by Bankrate through its own research of available mortgage loan terms and that information is displayed in our rate table for applicable criteria. In the above table, an Advertiser listing can be identified and distinguished from other listings because it includes a “Next” button that can be used to click-through to the Advertiser’s own website or a phone number for the Advertiser.

Availability of Advertised Terms: Each Advertiser is responsible for the accuracy and availability of its own advertised terms. Bankrate cannot guaranty the accuracy or availability of any loan term shown above. However, Bankrate attempts to verify the accuracy and availability of the advertised terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. Click here for rate criteria by loan product.

Loan Terms for Bankrate.com Customers: Advertisers may have different loan terms on their own website from those advertised through Bankrate.com. To receive the Bankrate.com rate, you must identify yourself to the Advertiser as a Bankrate.com customer. This will typically be done by phone so you should look for the Advertisers phone number when you click-through to their website. In addition, credit unions may require membership.

Loans Above $726,200 May Have Different Loan Terms: If you are seeking a loan for more than $726,200, lenders in certain locations may be able to provide terms that are different from those shown in the table above. You should confirm your terms with the lender for your requested loan amount.

Taxes and Insurance Excluded from Loan Terms: The loan terms (APR and Payment examples) shown above do not include amounts for taxes or insurance premiums. Your monthly payment amount will be greater if taxes and insurance premiums are included.

Consumer Satisfaction: If you have used Bankrate.com and have not received the advertised loan terms or otherwise been dissatisfied with your experience with any Advertiser, we want to hear from you. Please click here to provide your comments to Bankrate Quality Control.

Source: thesimpledollar.com

Apache is functioning normally

May 6, 2023 by Brett Tams

A bank account is a cornerstone of personal finance management. Whether you’re depositing your paycheck, saving for a rainy day, or managing expenses, understanding the costs associated with opening and maintaining a bank account is essential.

This article will guide you through the types of bank accounts, typical fees, strategies for minimizing costs, and factors to consider when choosing a bank to help you make informed decisions.

Types of Bank Accounts and Their Costs

Checking Account

Definition and Purpose

A checking account is a type of bank account that allows you to deposit money, make withdrawals, pay bills, and access funds via a debit card or checks. It is designed for frequent transactions and everyday spending.

Typical Fees

Monthly Maintenance Fee

Checking accounts often come with a monthly maintenance fee, which is a fee charged by the bank for maintaining your account. The fee can range from $5 to $15 per month, depending on the financial institution and the specific account. Some banks offer tiered accounts, where higher-tier accounts have more features but also higher fees.

Overdraft Fees

Overdraft fees are charged when you spend more money than you have in your checking account. These fees can be quite expensive, ranging from $25 to $35 per overdraft. Some banks offer overdraft protection, which links your checking account to another account, such as a savings account or credit card, to cover overdrafts and avoid fees. However, this service may come with its own fees.

ATM Fees

When using an ATM outside your bank’s network, you may be charged a fee by both the ATM owner and your financial institution. These fees can range from $2 to $5 per transaction. Some banks and credit unions participate in shared ATM networks, which provide access to thousands of ATMs without additional fees.

Minimum Balance Requirements

Some checking accounts require you to maintain a minimum balance to avoid fees. If your balance falls below the minimum, you may be charged a fee, typically ranging from $5 to $15.

How to Avoid or Minimize Fees

Savings Account

Definition and Purpose

A savings account is a type of bank account designed for long-term savings and earning interest on your deposits. It is not intended for frequent transactions, and in fact, federal regulations limit the number of withdrawals or transfers to six per month.

Typical Fees

Monthly Maintenance Fees

Similar to checking accounts, savings accounts may also have monthly fees. However, these fees are often lower, ranging from $2 to $10 per month. The fee may be waived if you maintain a minimum balance or set up automatic transfers from a linked checking account.

Excess Withdrawal Fee

Exceeding the limit of six withdrawals or transfers per month may result in an excess withdrawal fee, usually around $5 to $15 per transaction. Repeatedly exceeding this limit could lead to account closure or conversion to a checking account.

Minimum Balance Requirements

Some savings accounts require a minimum balance to avoid fees or earn interest. Falling below the minimum may result in a fee or reduced interest rates. These balance requirements can vary, with some accounts requiring as little as $25, while others may require $100 or more.

How to Avoid or Minimize Fees

Choose a bank or credit union that offers free savings accounts and has no minimum deposit requirement.
Monitor your withdrawal frequency to avoid excess withdrawal fees. Use a checking account for more frequent transactions.
Maintain the required account balance to avoid fees and earn interest.

Money Market Account

Definition and Purpose

A money market account is a hybrid between a checking and savings account, offering higher interest rates than traditional checking or savings accounts while still providing limited check-writing and debit card capabilities. These accounts are an excellent option for those who want to earn more interest on their deposits but still need occasional access to their funds.

Typical Fees

Monthly Maintenance Fee

Money market accounts may have monthly maintenance fees ranging from $5 to $15, similar to checking accounts. The fee may be waived if you meet balance requirements or set up automatic transfers from a linked checking account.

Minimum Balance Requirements

These accounts often have higher minimum balance requirements than checking or savings accounts, sometimes as high as $1,000 or more. Falling below this balance may result in a fee or reduced interest rates.

How to Avoid or Minimize Fees

Shop around for a financial institution that offers low-fee or no-fee money market accounts.
Maintain the required minimum balance to avoid fees and earn interest.
Set up automatic transfers to help you maintain the minimum balance.

Certificate of Deposit (CD)

Definition and Purpose

A certificate of deposit is a type of time deposit account where you agree to deposit a fixed amount of money for a set period, earning interest at a higher rate than traditional savings accounts. CDs typically have terms ranging from a few months to several years, with longer terms generally offering higher interest rates.

Typical Fees

Early Withdrawal Penalty

Withdrawing funds from a CD before its maturity date will often result in an early withdrawal penalty. This penalty may be calculated as a percentage of the amount withdrawn or as a certain number of months’ worth of interest. The penalty can be quite substantial, sometimes erasing all the interest earned on the CD.

How to Avoid or Minimize Fees

Choose a CD term that aligns with your financial goals and needs to avoid the need for early withdrawals. Consider using a CD ladder strategy, which involves investing in multiple CDs with varying terms to provide more frequent access to funds.
Compare CD rates and terms across different financial institutions to find the best fit.

Factors That Affect Bank Account Costs

Bank Size and Type

Traditional Banks

Traditional banks, such as national and regional banks, may have higher fees due to their extensive branch networks and operational costs. However, they often provide a wide range of services and products, including personal loans, mortgages, and credit cards.

Credit Unions

Local credit unions are member-owned, not-for-profit financial institutions that typically offer lower fees and higher interest rates on deposits. They may also offer more personalized customer service and a sense of community. However, they may have fewer branches and limited product offerings compared to traditional banks.

Online Banks

Online banks, which operate without physical branches, generally have lower overhead costs, allowing them to offer lower fees and higher interest rates. They often provide a user-friendly mobile banking experience but may have limited customer service options, such as no in-person assistance.

See also: Are Online Banks Safe?

Customer’s Financial Habits

Your financial habits can significantly impact the cost of maintaining a bank account. Maintaining minimum balances, using in-network ATMs, and setting up direct deposit can help you avoid or minimize fees. Additionally, monitoring your spending and keeping track of your account activity can help you identify and address potential issues before they result in fees or penalties.

Bank Promotions and Offers

Some financial institutions may waive fees or offer sign-up bonuses to attract new account holders. These bonuses can range from cash rewards to promotional interest rates or waived fees for a certain period. Taking advantage of these promotions can help reduce the cost of opening and maintaining a bank account, but it’s essential to read the fine print and understand any requirements or limitations associated with the promotion.

Tips for Choosing the Right Bank and Account for Your Needs

Researching Bank Account Options

Use comparison websites, customer reviews, and recommendations from friends or family to compare bank account features, fees, and interest rates across different financial institutions. Look for banks that have a history of low fees, competitive interest rates, and positive customer experiences.

Evaluating Bank Account Features

When choosing a new bank account, consider factors such as interest rates, accessibility, customer service, and digital services to ensure it meets your needs and preferences. Evaluate the convenience of branch and ATM locations, the quality of mobile and online banking platforms, and the availability of customer support when making your decision.

Considering Additional Products and Services

Some banks offer additional products and services that may be of interest to you, such as credit cards, mortgages, or investment accounts. If you think you may need these services in the future, consider opening a bank account with a financial institution that offers competitive rates and terms on these products.

Bottom Line

Opening a bank account is an essential step in managing your personal finances. By understanding the various types of bank accounts, their associated fees, and strategies for minimizing costs, you can make informed decisions and take control of your financial future. Researching your options, evaluating account features, and considering your financial habits will help you find the right bank and account to meet your needs and maximize your savings potential.

Source: crediful.com

Apache is functioning normally

May 6, 2023 by Brett Tams

About our Mortgage Rate Tables: The above mortgage loan information is provided to, or obtained by, Bankrate. Some lenders provide their mortgage loan terms to Bankrate for advertising purposes and Bankrate receives compensation from those advertisers (our “Advertisers”). Other lenders’ terms are gathered by Bankrate through its own research of available mortgage loan terms and that information is displayed in our rate table for applicable criteria. In the above table, an Advertiser listing can be identified and distinguished from other listings because it includes a “Next” button that can be used to click-through to the Advertiser’s own website or a phone number for the Advertiser.

Availability of Advertised Terms: Each Advertiser is responsible for the accuracy and availability of its own advertised terms. Bankrate cannot guaranty the accuracy or availability of any loan term shown above. However, Bankrate attempts to verify the accuracy and availability of the advertised terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. Click here for rate criteria by loan product.

Loan Terms for Bankrate.com Customers: Advertisers may have different loan terms on their own website from those advertised through Bankrate.com. To receive the Bankrate.com rate, you must identify yourself to the Advertiser as a Bankrate.com customer. This will typically be done by phone so you should look for the Advertisers phone number when you click-through to their website. In addition, credit unions may require membership.

Loans Above $726,200 May Have Different Loan Terms: If you are seeking a loan for more than $726,200, lenders in certain locations may be able to provide terms that are different from those shown in the table above. You should confirm your terms with the lender for your requested loan amount.

Taxes and Insurance Excluded from Loan Terms: The loan terms (APR and Payment examples) shown above do not include amounts for taxes or insurance premiums. Your monthly payment amount will be greater if taxes and insurance premiums are included.

Consumer Satisfaction: If you have used Bankrate.com and have not received the advertised loan terms or otherwise been dissatisfied with your experience with any Advertiser, we want to hear from you. Please click here to provide your comments to Bankrate Quality Control.

Source: thesimpledollar.com

Apache is functioning normally

May 5, 2023 by Brett Tams

[embedded content] Calyx Software is mortgage loan origination software designed to help users with mortgage loan and marketing processes. To help you streamline your processes, Calyx offers multiple tools, including, among others: Calyx Point Portfolio Producer Calyx Network INK-it WebCaster tools Calyx Point’s features include template creation, monthly SaaS pricing, pipeline management, prospect database, and … [Read more…]

Apache is functioning normally

May 3, 2023 by Brett Tams

Is My Money Safe in the Bank?

Close thin

Facebook

Twitter

Google plus

Linked in

Email

arrow-right-sm

arrow-right

Tap on the profile icon to edit
your financial details.

In recent months the FDIC has managed two of the largest bank failures in U.S. history. The collapse of Silicon Valley Bank (SVB) and Signature Bank happened shockingly fast. And First Republic wasn’t far behind. Consumers have plenty of questions, as the banking sector looks shakier than at any point since the 2008 recession. But perhaps the biggest is also the most basic: is my money safe? The good news is, yes. The federal government acts to protect bank deposits in a number of ways. The two most important, and effective, are insurance and liquidity. For help managing your money and preparing for potential future bank failures, consider working with a financial advisor.

The Federal Government Insures Deposits

The most direct way that the government acts is through depository insurance. For banks, this is managed by the FDIC (Federal Deposit Insurance Corporation). For credit unions, which operate similarly to banks, deposit insurance is managed by the NCUA (the “National Credit Union Administration”).

In both cases, the government insures each depositor at each institution for up to $250,000. This means that if the bank fails and its assets are wiped out, the government will reimburse you for any and all lost money up to $250,000. It periodically updates that amount for inflation.

This rule applies to each depositor, so the government won’t protect multiple accounts at the same bank. However it applies to each institution as well. So if you have three accounts with a single bank, you are only protected up to $250,000. However if you have accounts at three separate banks, your money at each institution is protected up to the limit. There are some instances in which you could have multiple accounts protected at one institution, if they are different types of accounts.

This also applies only to depository institutions, places which offer products like checking and savings accounts. It does not apply to investment banks. The government will reimburse you if your checking account is wiped out, but it won’t make you whole for stock market losses.

The Federal Reserve also has shown willingness to expand its footprint of protection. When Silicon Valley Bank collapsed, the government lifted this $250,000 cap. It guaranteed that it would reimburse all of the money that businesses and individuals had on deposit, including about $18 billion in uninsured cash. It did the same with Signature bank, guaranteeing about $1.6 billion in uninsured assets.

The FDIC and the Federal Reserve Backstop Liquidity

Depository insurance is the guarantee of last resort, and the government uses it very rarely. Before reimbursing consumers the FDIC and the Federal Reserve try to prop up a bank’s liquidity and keep it from failing. They do this in two main ways.

Lender of Last Resort

First, the Federal Reserve acts as a lender of last resort when banks need cash. This is the government’s preferred method of protecting deposits at healthy banks.

One of the major ways that a bank can fail is if too many depositors try to take their money out all at once. The bank might not have enough cash on hand to cover all of these demands, which can force it to sell off assets at a loss or even might bankrupt the institution altogether.

To prevent this, the Federal Reserve extends emergency loans to banks in need of cash. Banks can borrow money from the government to cover their immediate needs and make depositors whole. This is useful to solve cash flow crises, when an otherwise stable institution might be forced into insolvency by a short-term demand for money. The bank takes out a loan to meet its short-term demands and repays that loan with the returns on its long-term investments.

To cover particularly large liquidity issues, the Federal Reserve has recently created the Bank Term Funding Program. This was instituted in the wake of the SVB and Signature collapses, and it will act as a lender of last resort for large institutions.

Broker of Last Resort

As noted above, lending to banks can work well for a healthy institution that has cash flow issues. Any bank, no matter how well-managed, is vulnerable to a bank run and emergency loans can cover that short-term crisis.

Loans will not work for banks that are failing though. While the government will, typically, extend loans to try and shore up an immediate crisis (such as it did in the case of SVB and Signature), that is only a stopgap solution when the bank is going out of business. And that happens more often than most consumers realize. Banks may fail because they made bad investments, because they have lost too many customers or because their underlying business model has gone wrong in some way.

In this case, the Federal Reserve and the FDIC act as a broker of last resort to try and sell the bank to another, healthier institution. Their goal is to find a solvent bank that will take over the failing bank’s deposits and assets, effectively folding one institution into another.

When successful, the FDIC doesn’t need to reimburse depositors at all. Often, from the outside, this looks like a simple merger and individual consumers notice no change except for the name on the door. The new institution takes over the deposits and loans of the old one. This is particularly important because large depositors frequently have more than $250,000 on account with their banks. One estimate by the FDIC suggests that about 43% of all bank deposits are uninsured, so mergers are a critical tool for making sure that depositors are protected against bank failures.

Depositors Are Historically Well-Protected

Banking protections are an incredibly complicated issue, and the government has a wide range of regulatory and financial tools that it uses to protect depositors. For example, the Federal Reserve conducts regular oversight of banks to look for bad investments and risky assets that might cause a failure (although, as the case of SVB made clear, this system is far from foolproof).

The takeaway is this, though: As a depositor, your money is about as safe as it can be. Making sure that depositors feel like their money is secure is a huge priority for the government, and several different agencies and entities work to make sure of that. Banks are monitored to try and prevent failures, and the Federal Reserve acts to give them liquidity quickly and at need. When a bank does fail, the government moves quickly to find a buyer for those assets and deposits. And if all that doesn’t work, it simply cuts a check to reimburse depositors for cash that they’ve lost.

It’s not a perfect system, but depositors haven’t lost money to a bank failure in the United States since the 1930s.

The Bottom Line

Your money is as safe as it can be in the bank. Between depositor insurance, emergency loans and bank sales, the government works hard to protect what you have.

Banking Tips

In addition to traditional banks, online banks have become a new issue in finance, with many wondering if they are safe for consumers.
A financial advisor can help you plan to keep your money safe. 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 interview your advisor matches at no cost to decide which one 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/Henrik5000, ©iStock.com/mphillips007, ©iStock.com/mapodile

Eric Reed
Eric Reed is a freelance journalist who specializes in economics, policy and global issues, with substantial coverage of finance and personal finance. He has contributed to outlets including The Street, CNBC, Glassdoor and Consumer Reports. Eric’s work focuses on the human impact of abstract issues, emphasizing analytical journalism that helps readers more fully understand their world and their money. He has reported from more than a dozen countries, with datelines that include Sao Paolo, Brazil; Phnom Penh, Cambodia; and Athens, Greece. A former attorney, before becoming a journalist Eric worked in securities litigation and white collar criminal defense with a pro bono specialty in human trafficking issues. He graduated from the University of Michigan Law School and can be found any given Saturday in the fall cheering on his Wolverines.

Apache is functioning normally

May 3, 2023 by Brett Tams

Which Savings Account Will Earn You the Most Money? – SmartAsset

Close thin

Facebook

Twitter

Google plus

Linked in

Email

arrow-right-sm

arrow-right

Tap on the profile icon to edit
your financial details.

There are many types of savings accounts. Money market accounts can earn higher interest rates than traditional savings accounts. But CDs can often earn even higher rates. However, there are pros and cons to each type of account that goes beyond interest rates. Here’s what to know before you deposit your money.

If you have questions about how your savings account fits into your overall financial plan, consider working with a financial advisor.

High-Yield Savings Accounts

High-yield savings accounts are similar in many ways to traditional savings accounts and have many of the same advantages, including FDIC insurance on balances up to $250,000.

As their name suggests, high-yield savings accounts pay interest rates higher than traditional savings accounts. Interest rates change frequently, but generally, that equates to 10-20 times higher interest rates.

Other than interest rates, the biggest difference between high-yield savings accounts and traditional savings accounts is the presence of bank branches. Those that offer traditional savings accounts typically have them, while those with high-yield savings accounts don’t.

The latter is generally offered by online-only banks, and their lack of branches allows them to cut costs and offer better rates to their customers. However, the two are otherwise similar in most ways.

High-yield savings accounts, which at time of writing offered annual percentage yields above 4%, usually have a monthly transaction limit (typically six per month), and they often don’t have ATM access or check-writing privileges. Still, customers can access their money whenever they need it by transferring money electronically.

Money Market Accounts

Money market accounts are another type of saving product that offers higher interest rates than checking accounts and traditional savings accounts. The FDIC also insures balances up to $250,000.

In addition, these accounts sometimes have features like mobile check deposits and ATM withdrawals. Like high-yield savings accounts, there may be limits on the number of monthly transactions.

The best money market accounts generally have interest rates 10-20 times higher than traditional savings accounts. While some require a minimum deposit, several allow you to open an account with $0 to start.

However, some money market accounts may charge fees for maintaining a low balance or making too many withdrawals. Check the fine print and make sure you understand the terms before opening an account.

Certificates of Deposit (CDs)

Certificates of deposit (CDs) are another type of savings product that offers higher interest rates than traditional savings accounts. CDs, which are FDIC-insured, lock up your money for a certain period in exchange for a higher interest rate.

You will usually incur penalties if you want to withdraw your money before the end of the CD’s term. This makes CDs better for medium-term savings goals and for money you won’t need in the immediate future.

However, the best CD rates can be higher than rates on money market accounts or high-yield savings accounts, so keeping your money locked up could be worthwhile if you want the best rate. Plus, some CDs have no minimum to get started, so you can deposit as much as you want.

But unlike savings accounts, you often can’t make additional deposits to the account. Thus, they may not be the best choice if you don’t have a lump sum to deposit. Still, the interest rates CDs offer make them a good choice for those with funds to spare.

Comparing and Contrasting Savings Accounts

There are several things to keep in mind when deciding which type of savings account is right for you. Here are something things to keep in mind:

Interest rates: If you want to earn a return on your money, interest rates are the first thing to check. High-yield savings accounts, money market accounts and CDs can all offer high-interest rates today, with CDs having some of the highest rates. However, CDs require you to lock up your money for a certain period.
Fees: Some banks or credit unions might charge you maintenance fees or a fee if your balance falls below a certain level. These fees can eat into your earnings on the account, so it’s important to keep them in mind.
Minimum balance requirements: High-yield savings accounts, money market accounts and CDs can all have a minimum balance requirement to open an account, depending on the bank. Others might require a minimum balance to earn the highest interest rate.
Liquidity: The ease of accessing your money may vary depending on the type of account and the bank. For instance, money market accounts and some high-yield savings accounts may allow you to write checks or withdraw money from an ATM. In contrast, CDs usually require you to leave your money alone until the end of the term.

Each type of savings account has its own set of pros and cons. The best choice will depend on your savings goals.

Bottom Line

High-yield savings accounts, money market accounts and CDs can all have competitive interest rates that allow your money to grow. The best CDs offer some of the highest interest rates, but they require you to keep your money locked away to earn the best rate. Thus, it’s important to consider not only the interest rate but also factors like fees, minimum balance requirements and liquidity before deciding which type of savings account is best for you.

Tips for Opening a Savings Account

A financial advisor can help you work through your banking needs and put together a plan that works for your unique situation. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
The best savings accounts pay some of the highest rates and often do away with costly fees. See SmartAsset’s list of the best savings accounts to find one that’s right for you.

Photo credits: ©iStock.com/andresr, ©iStock.com/FilippoBacci, ©iStock.com/Jinda Noipho

Bob Haegele

Apache is functioning normally

May 2, 2023 by Brett Tams

Personal loans can have both positive and negative impacts on your credit score, depending on how you handle them.

When you first apply for a personal loan, the lender runs what’s known as a hard credit inquiry, which can temporarily lower your score by a few percentage points. However, getting approved for a personal loan can actually improve your credit score. That’s because it will add to your credit mix, which accounts for 10 percent of your FICO score.

Making timely payments on your personal loan can also have a positive impact on your credit, as payment history accounts for 35 percent of your FICO score. That said, if you miss your due date or if you default on your loan, your credit score can drop significantly.

To avoid this, make sure you only borrow what you can afford. If you’re struggling to make payments due to an unforeseen circumstance, contact your lender, as they can provide you with some short-term solutions, such as forbearance or a reduced monthly bill, to help you stay current while you get back on track.

Source: thesimpledollar.com

Apache is functioning normally

May 1, 2023 by Brett Tams

Knowing where you stand before applying for a mortgage is key to negotiating a better interest rate. Yes, you can negotiate your rate!

But if you don’t know what type of risk you present to a bank or lender, how can you be sure you’re getting a good deal?

While it may seem obvious to those in the industry, many prospective and existing homeowners don’t seem to know when they have the easiest approval on their hands, or the trickiest deal in the history of man.

Let’s take a look at some common loan scenarios to help you better understand your position.

Vanilla

This is your full doc
800 FICO score
W2 borrower
With a conforming loan amount
And no obvious red flags

This is the most common mortgage “flavor” you’ll hear about. When someone says the loan is “vanilla,” they’re basically saying it’s a flawless loan scenario.

In other words, the borrower has great credit, good income and assets, and plenty of home equity (or a sizable down payment).

The property is also an owner-occupied, single-family residence, meaning there should be no pricing adjustments whatsoever.

As a result, this type of mortgage presents very little risk to the originating lender, and pricing should be very favorable.

Expect mortgage rates at or below those advertised and fight for the lowest rate out there. Shop your rate with confidence, knowing everyone and their mother should be fighting tooth and nail over your loan.

For the record, the mortgage rates you see advertised assume your loan is premium, imported french vanilla…

Mint Chip

This borrower might have excellent credit
But display one or two nagging issues
Such as limited assets or occupancy concerns
Or perhaps they’re just self-employed

Most people like mint chip, and it’s a pretty common flavor, but it also means something isn’t exactly right, even if seemingly minor.

It could be that the borrower has good credit, but not a lot of money to put down, or very little equity.

Or it could be that the borrower has marginal credit, despite having a great job and tons of assets in the bank.

[What credit score do I need to get a mortgage?]

Perhaps they’ve changed jobs recently or have some other funky income structure (paid seasonally, on commission, self-employed), or their assets aren’t too impressive.

Maybe there are occupancy issues – think the homeowner buying a house down the street, but claiming they’re going to rent out the old property, even though the new house is smaller.

Whatever it is, the issue presents some difficulty, and as a result, some lenders may not want to touch it.

Put simply, the fewer banks willing to do the deal, the less you can shop around. And you may be stuck submitting the loan with a lender that offers less favorable interest rates.

You can still go nuts looking around for the best deal, but you may not have access to every bank out there. There may also be more snags along the way…so working with a reputable lender is more important.

Rocky Road

This is the flavor of subprime
And perhaps layered risk
But I’m not referring to nuts and marshmallows
We’re talking low credit score, low down payment, and other questionable stuff

Mint chip ain’t so bad when there’s Rocky Road around. While some people like the heavenly mix of chocolate ice cream, nuts, and marshmallows, not everyone will be so enthused.

In other words, you may have a hard time getting your deal to close with ANY bank or lender, even so-called subprime lenders (if they still exist).

This is your “bad news” loan scenario, one where multiple things are going wrong all at once.

Think poor credit score, minimal assets, low down payment/equity, funky job situation, and maybe even more serious issues like previous late mortgage payments or a short sale/foreclosure.

Long story short here is that approval is more of a concern than the mortgage rate you ultimately receive.

Your first priority is finding a lender that is willing to work with you. You should certainly shop around, but expect rates much higher than those advertised for the significant risk you present.

Bubble Gum

This is a special edition flavor
Dedicated to those who took out mortgages right before the bubble burst
Many are now in underwater positions (owe more than the mortgage is worth)
Thanks to those zero down home loans they used to buy homes at the height of the market

Here’s a bonus flavor in light of the ongoing mortgage crisis. Post-housing bubble, there are a ton of good homeowners out there with negative equity.

In other words, their loan-to-value ratios exceed 100%, making their loans very high-risk, even if they’ve got a great job, stellar credit, and plenty of money in the piggy bank.

Fortunately, there are numerous options for severely underwater homeowners, including the popular HARP Phase II.

So all hope is not lost, even if it’ll take you a decade or two to get back in the black…

You can even snag a super low mortgage rate when refinancing, so again, be sure to shop around with a variety of banks, credit unions, and mortgage brokers.

The moral of the story, regardless of your flavor, is to know it before you apply for a home loan.

This can help you prepare for the road ahead, and better align your expectations with reality.

Read more: What mortgage is right for me?

Source: thetruthaboutmortgage.com

Apache is functioning normally

May 1, 2023 by Brett Tams

You’ve probably had to exchange foreign currency when traveling to another country, whether you were on a vacation or a business trip. And you likely realized it can be expensive.

Though you typically have to pay fees to access foreign currency, it’s worthwhile to learn how to do so for as little money as possible. Just knowing the ropes can help you shave down the moolah you pay to get a supply of euros, yen, or pesos.

In this guide, you’ll learn:

• Where can you convert currency?

• How can you get a good rate of exchange on converting currency?

• What are the best and worst places to convert currency?

The Benefits of Exchanging Foreign Currency

Though many places will accept credit cards overseas, it can still be useful to convert your dollars to foreign currency. Here’s why:

• There may be places that only accept cash, such as when you buy food at markets, haggle for souvenirs, or shop at stores that don’t accept any other form of payment.

• Having some cash is a great backup form of payment in case you run across issues with your credit card.

• Cash can be a helpful way to create a budget while traveling. Say, if you give yourself $30 a day for food, having that cash in your pocket can help you avoid going overboard vs. swiping too much with a credit card. That can keep your budget in balance.

• Exchanging foreign currency also gives you the potential advantage of avoiding currency conversion fees and staying within your vacation budget. For instance, some international retailers give you the opportunity to pay in local or your own country’s currency. If you choose the latter, you may get a poor exchange rate.

By exchanging foreign currency ahead of time, you may be able to avoid paying more than necessary and better take advantage of more favorable exchange rates.

Finding Places to Exchange Currency

Now, for the question of where to exchange currency: In general, the best places to exchange foreign currency are locations you can visit before you head to the airport.

Banks and Credit Unions

Most major commercial banks will have foreign currency available for you to exchange. Your bank may only charge you the exchange rate and no additional fees depending on the currency you want to exchange. In this case, you may nab the most cost-effective method to exchange currency.

Your financial institution may offer several ways to request foreign currency — online, over the phone, or at your local branch.

Not all banks keep every possible currency on hand (and the same holds true for credit unions), so you may need to do some advance planning. It could take several business days to exchange currency.

Recommended: What Is a Foreign Currency Bank Account?

Withdrawing Cash Before You Leave On a Trip

It may be a good idea to have some cash on hand to exchange as you need it while traveling, especially if you’re unsure of how much you need. Keep in mind that you may have fewer options for saving on fees.

However, if you convert cash as you need it, you won’t be stuck wondering what to do with leftover foreign currency after you return home.

Another option is to withdraw cash in local currency at ATMs overseas. Ask your bank if it has any fee-free ATMS in international locations. If not, double-check to see if there are any fees, and what foreign exchange rate you may be subject to. Depending on what you learn, it could be a smart move and be a good solution to where to convert currency.

Online Currency Conversion

The last answer to “Where can I exchange currency” is with online currency conversion companies. Many offer competitive fees and exchange rates. Some may only charge you the mid-market rate — known as the “true” exchange rate or what banks charge each other. Conversion fees may be a flat rate or a percentage of the amount you exchange.

These services, like Travelex, may make cash available at their bricks-and-mortar locations or get funds to you at home.

Another advantage of online currency conversion companies is the convenience. In many cases, you may be able to initiate a currency conversion 24/7. You may also be able to receive the foreign currency as soon as within a few minutes.

If you choose to go this route, compare fees and exchange rates to see what the best fit is for your situation.

Recommended: How to Deposit Foreign Currency in Your Bank Account

Worst Ways to Exchange Foreign Currency

Now that you know where to exchange currency, take a closer look at some places to avoid, where converting currencies can wind up being more expensive than necessary.

Airport Kiosks

Exchanging your cash at kiosks at the airport usually results in some of the highest fees and less favorable exchange rates out of all the options mentioned above. However, they can be a convenient option, especially if you weren’t to exchange any currency ahead of time.

Prepaid Debit Cards

Though it depends on the prepaid debit card you choose, you may be able to use this kind of plastic outside the U.S. at international ATMs. If you do, however, you may be subject to fees such as third-party ATM fees and foreign transaction fees. Plus, the foreign currency exchange rate may not be great.

Some foreign currency conversion services may offer these cards; again, check fees and rates to see if this is a good deal.

Local Currency Conversion Kiosks

You may find currency exchange kiosks at highly-trafficked tourist attractions or even your hotel. Like airport kiosks, they’re a convenient place to exchange currency, but you could be paying high fees and facing lower than average exchange rates.

Alternatives to Exchanging Foreign Currency

Instead of exchanging cash and using it while traveling, you might use your credit or debit card if you’re traveling to another country.

Using Your Credit Card On Trips

When using your credit card overseas, try to choose one that doesn’t charge foreign transaction fees. That way, you’re not paying more fees than necessary. As mentioned above, choose to pay with your credit card in local currency to avoid paying more fees. (There is also the option of international credit cards you might explore.)

You’ll probably also want to avoid using your credit card for a cash advance during your trip. In most cases, you’ll end up paying a cash advance fee and interest starts to accrue immediately.

Before going on your trip, make sure to notify your credit card issuer or bank of your plans. That way, they don’t accidentally deny your transaction believing it’s fraudulent. Fortunately, though, credit card protection likely covers you if you are scammed while traveling.

Using Your Debit Card in a Foreign Country

Debit cards are typically backed by Mastercard or Visa, brands which are known around the world. You may find that you are able to use your debit card for transactions when traveling, especially where those brands are welcomed. Your debit card may also help you withdraw cash from an ATM internationally.

The Takeaway

Exchanging foreign currency before you go on your trip is most likely your best option as it tends to offer the best fees and exchange rates. Using your credit card is also great, either as a backup, or if you want fraud protection. Whichever option you choose, shop around to ensure you’re getting the best fees and rates.

Working with your bank is the best way to ensure you’re financially sound when you go on your trip. And having the right banking partner will also keep you in good shape every day when you’re home. A SoFi Checking and Savings account — though it doesn’t currently offer foreign currency exchange — has plenty of features designed to help you maximize your hard earned dollars. This includes no account fees, automatic saving features, and a competitive annual percentage yield (APY). Plus, you’ll spend and save in one place, which can simplify your money management.

Better banking is here with up to 4.20% APY on SoFi Checking and Savings.

FAQ

Do banks exchange foreign currency?

Yes, most banks will exchange foreign currency. However, the types of foreign currency available will differ from one bank to another. Your financial institution may need a few days to get the currency you need.

Is it better to go to a bank or currency exchange?

In general, it’s usually better to go to a bank because you may not have to pay conversion fees depending on the currency. However, currency exchanges may also offer competitive currency exchange rates.

Where can I change currency for free?

When wondering “Where can I exchange currency?” one place where you may be able to do so for free is at your bank. This, however, will depend on the currency and your bank’s policy.

Photo credit: iStock/Anurak Tepkhamtai

SoFi® Checking and Savings is offered through SoFi Bank, N.A. ©2023 SoFi Bank, N.A. All rights reserved. Member FDIC. Equal Housing Lender.

The SoFi Bank Debit Mastercard® is issued by SoFi Bank, N.A., pursuant to license by Mastercard International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

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.
SoFi members with direct deposit can earn up to 4.20% annual percentage yield (APY) interest on Savings account balances (including Vaults) and up to 1.20% APY on Checking account balances. There is no minimum direct deposit amount required to qualify for these rates. Members without direct deposit will earn 1.20% APY on all account balances in Checking and Savings (including Vaults). Interest rates are variable and subject to change at any time. These rates are current as of 4/25/2023. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
SOBK0223015

Source: sofi.com

Apache is functioning normally

April 30, 2023 by Brett Tams

Patti McConville/Getty Images

Becoming a homeowner doesn’t necessarily require a large down payment. The conventional wisdom is that buyers need 20 percent down, but there are options to help you get the keys without giving up every dollar in your savings.

How to get a mortgage with no money down

Here are three possibilities:

See if you qualify for a zero-down mortgage option. Bank of America’s zero-down program aims to help buyers purchase property in minority neighborhoods. USDA and VA loans allow you to get a mortgage without a down payment. To qualify, though, you’ll need to meet certain criteria related to where the property is located, how much money you earn, or whether you or a spouse has served in the military.
Explore low-down payment mortgage options. Both conventional mortgages and government backed mortgages are available for people putting down less than 20 percent.
Ask family or friends for help. Many lenders allow you to use gift funds from a family member — and in some cases, a close friend, labor union or an employer — for your down payment. You’ll need to provide a letter from the source of the gift that shows you don’t need to pay the money back.

Zero-down mortgage options

The easiest way to avoid a down payment is to qualify for one of the two no-down payment government-backed mortgage programs: USDA and VA loans. In addition to government options you may be able to get a zero down loan through your local credit union, especially if it’s one based on membership in a professional organization. These are relatively rare but are worth looking into if you can find one.

USDA loans

The U.S. Department of Agriculture (USDA) backs USDA home loans, a mortgage guarantee program for those buying a home in a designated rural area. USDA loans don’t require a down payment, but borrowers must meet credit and income requirements to qualify, and, in some cases, be a first-time homebuyer. You can verify your eligibility via the USDA website.

Although there’s no down payment with a USDA loan, there is an upfront guarantee fee, which borrowers can roll into the cost of the mortgage. While you won’t pay any money initially if you choose to roll it into the loan, keep in mind that it adds to the balance and will accrue interest over the loan term, which means you’ll pay more overall.

VA loans

If you’re a military servicemember, veteran or surviving spouse, you could be eligible for a VA loan backed by the U.S. Department of Veterans Affairs (VA) with no money down. There is no mortgage insurance with this type of loan, but like a USDA loan, you do have to pay an upfront funding fee, which can be rolled into the mortgage. (Note that you can reduce the funding fee by making a down payment, but no down payment is actually required.)

Another perk of VA loans is that many lenders offer more competitive rates for these products, which helps you save quite a bit of money over the life of the loan.

Low-down payment mortgage options

If you don’t qualify for one of the no-down payment home loans, you might still be able to buy a home with the next best thing: a low-down payment mortgage. Here are some of the options available:

FHA loans – Backed by the Federal Housing Administration (FHA), an FHA loan requires only 3.5 percent down with a credit sore as low as 580. (If you have a credit score between 500 and 579, you might be able to qualify with a higher down payment of 10 percent.) It’s a popular option for homebuyers with less-than-perfect credit. Like other government-insured programs, FHA loans are offered by private mortgage lenders, so you might also have to meet a lender’s criteria in order to qualify. Additionally, you have to pay for FHA mortgage insurance, which adds to your monthly payment and the cost of the loan.
HomeReady mortgage – The Fannie Mae HomeReady mortgage, available through many mortgage lenders, is backed by Fannie Mae. The down payment requirement on a HomeReady loan is 3 percent, and the loan itself offers flexible underwriting. While you’ll have to pay mortgage insurance to compensate for the low down payment, it’s often at a lower price tag than what you might see with a conventional loan.
Home Possible mortgage – Backed by Freddie Mac, Home Possible is a similar mortgage program to HomeReady, with a 3 percent down payment requirement. Borrowers do have to pay for mortgage insurance — again, at potentially a lower rate — but also enjoy the same credit flexibilities.
Conventional 97 mortgage – A Conventional 97 mortgage is another GSE-backed program, available from Fannie Mae and Freddie Mac, that only requires a 3 percent down payment. It’s important to note that conventional mortgages require a higher minimum credit score of 620. As with other low-down payment programs, you need to be financially prepared to pay for mortgage insurance each month.
Good Neighbor Next Door – The Good Neighbor Next Door (GNND) program is for borrowers who work in select public service professions — teachers, firefighters, law enforcement and emergency medical technicians — and are planning to buy a home in a qualifying area. The program, sponsored by the U.S. Department of Housing and Urban Development (HUD), provides a discount of up to 50 percent on a home with a down payment of just $100. Through the program, the borrower must qualify for a first mortgage, and the discounted portion of the home comes in the form of another loan. As long as the borrower continues to meet program requirements, the second mortgage won’t have to be repaid.

Pros and cons of a no-down payment mortgage

The ability to buy a home with no or very little money down can be appealing, but there are drawbacks, too.

Pros

You can buy a home sooner. When you don’t have to come up with a substantial down payment, it’s easier to buy a home sooner, especially if you’re in an area where home prices are spiking. Alternatively, if you want to take advantage of a good deal or a dip in the market, you can move fast without having to spend time saving for a down payment.
You can keep more cash on hand. Even if you have enough to make a sizable down payment, you might want to keep cash on hand for remodeling or to reach some other goal. With a zero- or low-down payment mortgage, that extra cash remains available to you.

Cons

You’ll have no or little equity. When you start with a no-down payment home loan, you don’t have much or any equity in your home at the outset because you’ll owe nearly 100 percent of the home’s value. That means you won’t be able to tap into your equity in an emergency, and during a downturn in the real estate market, you could end up owing more on the home than it’s worth, making it difficult to sell and move if that becomes necessary.
Your interest rate might be higher. In some cases, you might have to pay a higher mortgage rate for a no- or low-down payment loan. That’s because with less money tied up in the home, a mortgage lender might view you as more of a risk. Of course, the higher your interest rate, the more you’ll pay overall.
You’ll need a bigger mortgage, which translates to higher costs. The less you put down, the more you’ll need to borrow, which means you’ll pay more in interest over the life of the loan.
Your offer for a home might not look as compelling. It’s a competitive housing market in most places around the country. If someone else makes an offer on a house with a large down payment, that buyer might look like a better bet for a smooth transaction in the seller’s eyes.
You might have to pay extra fees. Some no-down payment home loans come with extra fees, which add to the cost of the loan.

FAQs about no or low-down payment mortgages

- Calculate your budget. When you’re applying for a mortgage, lenders will take a deep look at your finances, so determine how much house you can realistically afford. Once you have an idea of your monthly budget, you can do the math to figure out your target goal for a down payment.
- Cut costs everywhere possible. Saving money isn’t just about earning more; it’s about spending less. As you start growing a down payment fund, scrutinize your monthly spending and think about how to shrink some expenses. Can you stop buying coffee each morning? How much can you save if you stop eating out and only cook at home? Even if you’re on a tight budget, you can still identify ways to save.
- Consider adjusting your other financial goals in the short term. If you’re 25 and want to buy a home, for example, consider reducing or pressing pause on your retirement contributions to shift those dollars toward your goal. Just remember that once you move in, you’ll want to focus on catching up on your retirement savings as soon as possible.
- Find savings matching programs. Saving for a down payment doesn’t have to all fall on your shoulders. Some mortgage lenders such as Lower offer a boost that matches your savings up to a certain dollar amount. There are also some dollar-matching programs through state housing finance agencies.
- Make sure your savings are also earning. While you’ll be hard-pressed to find a lucrative interest rate on a no-risk savings account, there are banks and credit unions that pay an above-average yield on your deposits. When you’re saving up to buy a house, every dollar counts.
There are down payment assistance programs in all 50 states. Some programs are available for particular counties or cities and some are limited to special populations like nurses or school teachers. Most are restricted to first time homebuyers and have income restrictions but income limits are higher in areas with higher housing costs.

Bottom line

As home prices rise, hitting that oft-quoted 20 percent down payment is becoming increasingly difficult for many homebuyers. Don’t let the need for a huge sum of money discourage you from trying to own a home. There are a range of programs that can help you buy a home with no money down or just a fraction of the purchase price. Compare all your loan options, and, more importantly, compare multiple lenders. By comparison-shopping for a mortgage, you’ll be able to land the best deal that makes sense with your savings and budget.

Source: thesimpledollar.com

Types of Bank Accounts and Their Costs

Checking Account

Definition and Purpose

Typical Fees

Monthly Maintenance Fee

Overdraft Fees

ATM Fees

Minimum Balance Requirements

How to Avoid or Minimize Fees

Savings Account

Definition and Purpose

Typical Fees

Monthly Maintenance Fees

Excess Withdrawal Fee

Minimum Balance Requirements

How to Avoid or Minimize Fees

Money Market Account

Definition and Purpose

Typical Fees

Monthly Maintenance Fee

Minimum Balance Requirements

How to Avoid or Minimize Fees

Certificate of Deposit (CD)

Definition and Purpose

Typical Fees

Early Withdrawal Penalty

How to Avoid or Minimize Fees

Factors That Affect Bank Account Costs

Bank Size and Type

Traditional Banks

Credit Unions

Online Banks

Customer’s Financial Habits

Bank Promotions and Offers

Tips for Choosing the Right Bank and Account for Your Needs

Researching Bank Account Options

Evaluating Bank Account Features

Considering Additional Products and Services

Bottom Line

The Federal Government Insures Deposits

The FDIC and the Federal Reserve Backstop Liquidity

Lender of Last Resort

Broker of Last Resort

Depositors Are Historically Well-Protected

The Bottom Line

Banking Tips

Categories

High-Yield Savings Accounts

Money Market Accounts

Certificates of Deposit (CDs)

Comparing and Contrasting Savings Accounts

Bottom Line

Tips for Opening a Savings Account

Categories

Vanilla

Mint Chip

Rocky Road

Bubble Gum

The Benefits of Exchanging Foreign Currency

Finding Places to Exchange Currency

Banks and Credit Unions

Withdrawing Cash Before You Leave On a Trip

Online Currency Conversion

Worst Ways to Exchange Foreign Currency

Airport Kiosks

Prepaid Debit Cards

Local Currency Conversion Kiosks

Alternatives to Exchanging Foreign Currency

Using Your Credit Card On Trips

Using Your Debit Card in a Foreign Country

The Takeaway

FAQ

Do banks exchange foreign currency?

Is it better to go to a bank or currency exchange?

Where can I change currency for free?

How to get a mortgage with no money down

Zero-down mortgage options

USDA loans

VA loans

Low-down payment mortgage options