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Apache is functioning normally

July 7, 2024 by Brett Tams

Buying a home can be a wonderful experience. Yet as a first-time homebuyer, or even someone who hasn’t purchased a home in several years, there can also be a lot of stress involved in trying to qualify for a mortgage loan—whether that be high mortgage interest rates, saving enough for the down payment, or just the myriad of steps involved in the process.

The good news is, there are valuable resources that can make home buying easier and more affordable for first-time buyers. The following guide will help you understand how first-time homebuyer programs work and where to find some of the best options for your situation.

Learn more: How to buy a house step by step.

What is a first-time homebuyer program?

There are many different types of first-time homebuyer programs—at both the federal and state levels. In general, these types of programs and mortgages aim to make homeownership more affordable for borrowers who have either never bought a home in the past or those who haven’t owned a home for several years.

In some cases, a first-time buyer program may feature a low-interest mortgage, a lower down payment requirement, and credit score standards that are easier to satisfy. Depending on the program, your lender may also let you combine a first-time homebuyer loan with down payment and closing cost assistance to make the overall goal of homeownership more attainable.

“Talk to a local expert who knows both the nationally available first-time homebuyer programs and the locally funded down payment assistance programs,” says Casey Flemming, mortgage advisor at Silicon Valley Mortgage and author of Buying and Financing Your New Home.

Types of first-type homebuyer programs

Below are nine programs and loans to consider if you’re in the market to purchase a home as a first-time homebuyer. Researching your choices in advance can help you make sure you find the best financing option for your situation when you’re ready to start the homebuying process.

Government-backed home loans

There are several federal homebuyer programs available that could work well for first-time homebuyers and repeat borrowers alike. The federal government doesn’t issue the mortgages below, but rather insures them.

If you take out a government-backed home loan and default, the federal government repays a portion of the loan to the lender. This arrangement reduces the risk involved for the lender and can make homeownership more accessible to borrowers.

Here are some of the most common types of government-backed mortgage loans and some basic details on how the loans work.

FHA loans: The Federal Housing Administration backs FHA loans and requires borrowers to have a FICO® Score of at least 580 plus a minimum 3.5% down payment for this type of mortgage. Some lenders may work with borrowers with a FICO Score as low as 500 if they provide a 10% down payment. But it’s important to understand that not all lenders are willing to approve borrowers under these conditions.
VA loans: The U.S. Department of Veterans Affairs backs loans for eligible active-duty military service members, qualified veterans, and surviving spouses. If you qualify for a VA loan, you may be able to purchase a home with no down payment, limited closing costs, and no private mortgage insurance. You may, however, have to pay a VA funding fee. It’s also worth noting that there’s no minimum credit score requirement for VA loans, but different lenders may set their own loan qualification criteria.
USDA loans: The U.S. Department of Agriculture insures USDA loans. These loans don’t require a down payment and feature no minimum credit score requirement. But some lenders may require a FICO Score of 620 or higher for USDA mortgages. You must also buy in a USDA-designated eligible rural area to qualify for this type of financing. And, know that these loans are meant for lower income homebuyers, so high earners likely will not qualify.

As you can see above, credit score and down payment requirements tend to be more forgiving with government-backed home loans. But it’s still important to make sure you don’t rush into purchasing a home unless you’re confident you can afford the financial commitment.

“Homebuyers who just barely squeak in to qualify should use caution,” says Fleming of Silicon Valley Mortgage. “In my opinion, loans are sometimes made to people who are almost certainly going to fail in the long run. If a homebuyer has a credit score that is just enough to qualify and debt-to-income ratios that are just under the limit, I recommend they work on their finances before jumping into homeownership.”

Low-down payment conventional loans

Conventional loans are another option first-time homebuyers can consider when searching for mortgage programs. But trying to save the traditionally recommended 20% down payment for this type of loan (to avoid private mortgage insurance) could be a challenge for many people, especially if you’re trying to buy a home for the first time.

On a positive note, both Fannie Mae and Freddie Mac—privately held mortgage companies that were created by Congress and are backed by the government—offer conventional loan programs designed to make homeownership more affordable for first-time homebuyers. Below are four low-down payment conventional loan programs and some basic details about how they work.

Fannie Mae HomeReady®: This conventional loan program features a down payment requirement that can go as low as 3%. Low-income borrowers can also apply for a $2,500 credit to use toward their down payment and closing costs. (Note: This credit is only available for a limited time, as of this writing.)
Fannie Mae Conventional 97 Mortgage: Fannie Mae also offers a 97% LTV (loan to value) mortgage with a 3% down payment requirement. Even high-income borrowers may qualify for this program, but you need to be either a first-time homebuyer or someone who hasn’t owned a home in the last three years to be eligible. All first-time buyers must complete a homeownership education class.
Freddie Mac Home Possible®: This conventional mortgage program helps qualified low-income borrowers purchase a home with a down payment as low as 3% of the purchase price. Gifts from family members and financial assistance from an employer can also count toward down payment fund sources. The program is available for first-time homebuyers and repeat borrowers.
Freddie Mac HomeOne®: This home loan program also features a 3% down payment requirement for qualified first-time homebuyers and borrowers who haven’t owned a home in the last three years. If you’re a first-time borrower, you’ll need to complete a homebuyer education course to be eligible for financing.

Other first-time homebuyer programs

In addition to the national first-time homebuyer programs and loans mentioned above, there are numerous state-level programs to consider. Nonprofit organizations and other agencies may be good resources for borrowers as well.

Here are a few options to help guide your research.

State-based first-time homebuyer programs

Many states offer down payment assistance for first-time homebuyers. These programs may come in the form of grants, low-interest loans, or loans with forgivable interest or deferred payments for first-time borrowers.

You may be able to find information about homebuyer programs in your area by searching the U.S. Department of Housing and Urban Development (HUD) website. It may also be worthwhile to seek out a HUD-certified housing counseling agency to get advice on what resources are available to you. The Consumer Financial Protection Bureau (CFPB) offers a Find a Counselor tool, or you can call the CFPB at 855-411-2372, or the HOPE Hotline at 888-995-4673.

Also, you can visit the National Council of State Housing Finance Agencies website to see if programs are available from your local state housing finance agency. Last but not least—another valuable resource could be your loan officer or realtor.

“A skilled lender should know all about the programs available in the market they serve,” says Matthew Dunbar, senior vice president of the Southeast Region for Churchill Mortgage. “Realtors should know about these programs as well.”

Nonprofit programs

In general, nonprofit homebuyer programs exist to serve low-income families or those with specific housing needs. Below are two well-known nonprofit homebuyer programs.

Neighborhood Assistance Corporation of America (NACA): NACA is a nonprofit program that aims to make homeownership more accessible for low- to moderate-income borrowers in underserved communities. The program offers low-interest mortgages with no down payment requirements, no closing costs, and no mortgage insurance. You don’t have to be a first-time homebuyer to qualify for financing and the program also doesn’t consider your credit score.
Habitat for Humanity: Habitat for Humanity is a program that helps low-income families (households whose incomes don’t exceed 60% of the area median income) secure safe and affordable housing. Qualified prospective homeowners partner with the program and provide “sweat equity” throughout the process by either helping to build homes (theirs and the homes of others), taking homeownership classes, or volunteering at a Habitat ReStore.

The takeaway

With home prices having skyrocketed over the past several years, buying your own place can feel out of reach. But first-time homebuyer programs and loans have the ability to help make homeownership more accessible for many would-be borrowers.

So, take the time to do your research and explore your options to see if the available resources could save you money or help you reach your goals faster.

“Diligence is the most important step in the homebuying process for a first-time buyer,” says Churchill Mortgage’s Dunbar. “Go online. Do your own research. And once you find a lender you’re comfortable working with, don’t be afraid to ask questions. At the end of the day, this transaction is about the borrower—and your lender should be providing you expertise.”

Source: fortune.com

Apache is functioning normally

July 7, 2024 by Brett Tams

Paid and unpaid internships can provide students with relevant work experience in their field of choice. But while both opportunities offer knowledge and training, only one rewards you with a paycheck.

Although paid internships are more common, it doesn’t mean everyone can land one. So if you want the experience and don’t want to pass up a chance to beef up your resume, you may have to work for free. Spending several months at an unpaid internship can be difficult, especially if you’re already carrying debt, dealing with high living expenses, or need to work a paying job.

Whether interns should be paid or not is an ongoing debate with a lot to consider before committing to one. Find out about the pros and cons of an unpaid internship to see if it’s worth the investment.

What Is an Unpaid Internship?

An unpaid internship is a temporary work arrangement offered to graduate or college students, or as internships for high school students, so they can gain training and knowledge by working in their area of interest. Interns are able to perform duties related to their chosen career, observe professionals in a workplace setting, and receive direct guidance from mentors.

These non-compensated arrangements differ from an apprenticeship, which is designed to provide hands-on training in a specific trade or industry. Apprenticeships are paid and wage increases occur as new skills are acquired.

Are Unpaid Internships Legal?

Yes, according to the The Fair Labor Standards Act (FLSA), which states that “for-profit” employers must pay employees for their work. However, interns and students may not be “employees,” in which case the law doesn’t require payment for their work. If an internship qualifies as paid, companies must pay their interns at least minimum wage for their services plus any overtime.

💡 Quick Tip: Help your money earn more money! Opening a bank account online often gets you higher-than-average rates.

How Do Unpaid Internships Work?

Unpaid internships typically require you to work for a specific period of time during the school year or during the summer. The program may ask you to work on site, but with the increase in some employees working from home, remote internships have become more of a possibility.

Before you start your internship, you’ll likely discuss what you’ll be doing and when you’ll be able to work with your supervisor. Since you’re not being compensated, you’ll probably have more flexibility with scheduling.

It’s important to remember an unpaid internship isn’t volunteer work and should be more beneficial to you than the business or organization. After all, the reason you’re there is to receive training and education you simply can’t get by sitting in a classroom.

Pros of Taking Unpaid Internships

Building your professional resume can be priceless and let’s face it, your calling card once you hit the job market. Besides offering exposure to what it will be like working in your specialty, you’ll build potentially lifelong connections with people who may be able to open doors for you down the road.

There are many ways an unpaid internship can help prepare you for future career success. Here are some significant advantages:

Getting Valuable Experience

As an intern, you’ll get actual hands-on training that attracts future employers. According to the National Association of Colleges and Employers (NACE), applicants with industry internship experience have a leg up when it comes to employers’ hiring decisions.

Working as an intern allows you to develop crucial skills you’ll need in a professional setting, such as how to communicate effectively and collaborate with others. These abilities can make you even more of a stand out to prospective employers.

Valuable experience gained from an internship isn’t exclusive to undergrads. Already have your degree? You can still build upon your knowledge with an unpaid post graduate internship. These secondary education opportunities allow you to keep actively learning while you’re pursuing full-time employment or, if you want some down time after graduation.

Networking Equals Potential Opportunity

Making connections is one of the most important things you can do to grow your career. In fact, an estimated 80% of all positions are filled through networking. Many jobs aren’t publicly advertised so if you’ve left a positive impression, you may be the first person your past internship boss calls when a job opens up. Even if your internship doesn’t culminate in employment, building a solid network and maintaining relationships can pay off if you need a future job reference, letter of recommendation, mentoring, or career advice.

Companies Offering College Credit

Many companies will offer unpaid internships for college credits as compensation for your work. Knowing you’re receiving credits towards your degree, which can be a form of currency in its own right, may help justify the decision to take an unpaid internship.

Working in a Relevant Field

Internships give a preview of what it may be like working in your area of expertise, placing you in an environment where you’re exposed to the latest technology, industry norms, and business culture. With some concrete training spent working in your field, you may be more likely to be hired compared to someone with zero internship experience or those who have interned in an unrelated field.

Helps With Making Future Career Decisions

During an unpaid internship, you may come to the realization your selected career isn’t all you imagined. In this case, you could save yourself from wasting valuable time in the future and start exploring other career options. On the other hand, your internship could crystallize how much you love what you’re doing, validating you’ve made the right choice.

You may also decide to continue on with your education as something to do after college instead of entering the job market right away. This could be an ideal time to fit in an unpaid internship before pursuing a graduate degree.

Recommended: How to Make a Budget in 5 Steps

Cons of Taking Unpaid Internships

The main cons of unpaid internships center around the obvious: no financial compensation for your efforts. Unpaid internships can also create barriers for disadvantaged or low-income students, possibly eliminating some extremely qualified candidates from gaining training and having a shot at making a serious contribution to a company.

Consider these downsides when thinking about applying for unpaid internship:

No Money for Your Hard Work

Strapped with tuition and other college-related costs, many students simply can’t work without pay. Participating in an unpaid internship can require commuting or even relocation during the summer months, increasing your need to have money in a bank account or earning it at another job.

Often Not Receiving Company Benefits

As an unpaid intern and temporary worker, you’re not entitled to the same benefits of a paid employee, such as paid vacation days, medical insurance, or the ability to contribute to a 401(k). Performing duties similar to a permanent employee’s and not gleaning any of the perks may also lead to feeling resentful, unappreciated, or lonely, especially if you’re the only one working while employees get to leave early for a three-day holiday weekend.

Possible Inequalities in the Workplace

Student interns who aren’t paid may find themselves doing more menial tasks and feel looked down upon by other employees. Staffers may be dismissive, impatient, condescending, or exclude them from conversations because they’re the intern.

One major criticism of unpaid internships concerns the perpetuation of socioeconomic and racial inequities. For example, the National Association of Colleges and Employers 2023 study found that white students were more likely to have paid internships than Hispanic or Black students.

Potential Lower Future Income

Showing you’re willing to work for free may give employers the idea you might accept a lesser amount compared to someone who had a paid internship. Making this assumption on their part could lead to a lower salary offer.

Recent research by the Strada Education Network found having a paid internship as an undergraduate is linked with a predicted increase in annual wages of $3,096 just one year after graduation. Unpaid internships, practicums and cooperative learning aren’t associated with higher earnings post-graduation, the study reports.

Are Unpaid Internships Worth It?

Of course, it’s an individual choice based on a student’s particular circumstances, but unpaid internships can be worthwhile. Even if you’re not being compensated, these situations can provide training you can only get by working with professionals and mentors. Taking an unpaid internship could take the pressure off some of the expectations, duties, and necessary time commitment you’re more likely to have as a paid intern.

The Takeaway

An unpaid internship can pay off in significant ways such as offering college credits, meeting and networking with people in your field, and providing solid work experience to bolster your resume. Unpaid internships can also help you decide whether or not you’re on the right career path. But, interning without compensation can pose some major challenges for those who can’t afford to work for free. Before applying, think through the pros and cons to help you determine your best route to working toward your career and financial goals.

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FAQ

Are unpaid internships exploitation?

A criticism of unpaid internship programs is that they take advantage of a student’s free labor without providing any practical experience or educational benefits. While you may be asked to move some boxes or go on a coffee run, an unpaid internship that is not exploitative should mostly involve tasks that expand your skill set and teach you about your future career.

Is there a better workflow if interns are paid?

Interns help boost a company or organization’s workflow regardless, but paid interns may boost workflow more, since being financially compensated is associated with feeling satisfied and valued, which in turn is connected to productivity.

What percentages of companies offer unpaid internships?

Research shows that nearly 41% of interns in the U.S. are unpaid, and 59% are paid.

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4.60% APY
SoFi members with direct deposit activity can earn 4.60% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.60% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.60% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

Interest rates are variable and subject to change at any time. These rates are current as of 10/24/2023. There is no minimum balance requirement. Additional information can be found at https://www.sofi.com/legal/banking-rate-sheet.

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Source: sofi.com

Apache is functioning normally

July 7, 2024 by Brett Tams

Mortgage rates were mostly higher versus last week, according to rate data collected by Bankrate. Average rates for 30-year fixed, 15-year fixed and jumbo mortgages moved higher, while 5/1 ARM rates decreased.

Inflation has cooled somewhat, but homebuyers are still feeling crunched by high prices and rates. At the close of the Fed meeting on June 12, policymakers chose to hold rates at current levels.. The next Fed meeting concludes July 31.

“With [the June 12] announcement, the Fed confirms its higher-for-longer position on interest rates,” says Dr. Selma Hepp, chief economist at CoreLogic. “But the stance is looking more untenable as more American households continue to pull back on spending. As more economic indicators begin to confirm this and unemployment begins to rise, the Fed will then look to cut rates. What’s not clear yet is when exactly the disinflation signs will be consistent enough for the first rate cut — we hope it’s still this year.”

Often, though, the decision to buy a home isn’t based on what’s happening in the economy — it’s more personal. Depending on your situation, it might make sense to take a higher rate now and refinance later. This way you can start building equity, rather than hoping for a future of more favorable rates and home prices that might not materialize.

Rates last updated July 5, 2024.

The rates listed above are Bankrate’s overnight average rates and are based on the assumptions indicated here. Actual rates displayed within the site may vary. This story has been reviewed by Suzanne De Vita. All rate data accurate as of Friday, July 5th, 2024 at 7:30 a.m. ET.

Today’s 30-year mortgage rate goes up, +0.08%

The average rate for a 30-year fixed mortgage for today is 7.08 percent, an increase of 8 basis points over the last seven days. Last month on the 5th, the average rate on a 30-year fixed mortgage was lower, at 7.05 percent.

At the current average rate, you’ll pay $670.68 per month in principal and interest for every $100,000 you borrow. That’s up $5.38 from what it would have been last week.

The 30-year mortgage is the most popular home loan, and it has a number of advantages. Among them:

Lower monthly payment: Compared to a shorter term, such as 15 years, the 30-year mortgage offers lower, more affordable payments spread over time.
Stability: With a 30-year fixed mortgage, you lock in a set principal and interest payment, making it easier to plan your housing expenses for the long term. Remember: Your monthly housing payment can still change if your homeowners insurance premiums and property taxes go up or, less likely, down.
Buying power: With lower payments, you might qualify for a larger loan amountor a more expensive home.
Flexibility: Lower monthly payments can free up some of your monthly budget for other goals, like building an emergency fund, contributing to retirement or college tuition, or saving for home repairs and maintenance.

Learn more: What is a fixed-rate mortgage and how does it work?

15-year mortgage rate moves up, +0.06%

The average rate for the benchmark 15-year fixed mortgage is 6.53 percent, up 6 basis points over the last seven days.

Monthly payments on a 15-year fixed mortgage at that rate will cost roughly $873 per $100,000 borrowed. That may squeeze your monthly budget than a 30-year mortgage would, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

5/1 ARM moves down, -0.07%

The average rate on a 5/1 adjustable rate mortgage is 6.52 percent, falling 7 basis points from a week ago.

Adjustable-rate mortgages, or ARMs, are mortgage terms that come with a floating interest rate. To put it another way, the interest rate will change at regular intervals, unlike fixed-rate mortgages. These loan types are best for those who expect to sell or refinance before the first or second adjustment. Rates could be materially higher when the loan first adjusts, and thereafter.

While borrowers shunned ARMs during the pandemic days of super-low rates, this type of loan has made a comeback as mortgage rates have risen.

Monthly payments on a 5/1 ARM at 6.52 percent would cost about $633 for each $100,000 borrowed over the initial five years, but could ratchet higher by hundreds of dollars afterward, depending on the loan’s terms.

Current jumbo mortgage rate moves upward, +0.04%

Today’s average rate for jumbo mortgages is 7.14 percent, an increase of 4 basis points over the last week. Last month on the 5th, the average rate on a jumbo mortgage was higher at 7.16 percent.

At the current average rate, you’ll pay a combined $674.73 per month in principal and interest for every $100,000 you borrow. That’s an additional $2.70 per $100,000 compared to last week.

Mortgage refinance rates

Current 30 year mortgage refinance rate climbs, +0.12%

The average 30-year fixed-refinance rate is 7.11 percent, up 12 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was lower at 7.08 percent.

At the current average rate, you’ll pay $672.71 per month in principal and interest for every $100,000 you borrow. That’s up $8.08 from what it would have been last week.

Where are mortgage rates going?

The rates on 30-year mortgages mostly mirror the 10-year Treasury yield, which changes with the market. The yield curve is a tool used by investors to predict where interest rates could be headed.

“The yield curve remains inverted — no surprise here,” says Ken Johnson of Florida Atlantic University. “Until the yield curve reverts to its normal upward slope, we will not see significant downward pressure on mortgage rates.”

Besides bond yields, the Federal Reserve’s key benchmark rate also has an impact. The Fed has held this rate at a 23-year high since July 2023.

If and when the Fed cuts interest rates depends on evolving economic data, such as inflation and the jobs market. While inflation has dropped from its height in 2022, it’s still well above the Fed’s target rate of 2 percent. Unemployment is still low, though in May it hit 4 percent for the first time since 2022.

“Much like that flight where departure keeps getting delayed 15 minutes at a time with no end in sight, the timetable for when the Fed begins to cut rates is equally uncertain,” says Greg McBride, CFA, Bankrate’s chief financial analyst.

While the Fed bases its decisions on rate changes due to broader economic factors, your rate is also affected by personal finances. Depending on your credit score, down payment, debts and income, you could be quoted a rate that’s higher or lower than the trend.

What current rates mean for you and your mortgage

Mortgage rates fluctuate daily, but it appears that, for now, they will remain above the historical lows of recent years. If you’re shopping for a mortgage, it might be wise to lock your rate when you find an affordable loan. If your house-hunt is taking longer than anticipated, revisit your budget so you’ll know exactly how much house you can afford at prevailing market rates.

Keep in mind: You could save thousands over the life of your mortgage by getting at least three loan offers, according to Freddie Mac research. You don’t have to stick with your bank or credit union, either. There are many types of mortgage lenders, including online-only and local, smaller shops.

“All too often, some [homebuyers] take the path of least resistance when seeking a mortgage, in part because the process of buying a home can be stressful, complicated and time-consuming,” says Mark Hamrick, senior economic analyst for Bankrate. “But when we’re talking about the potential of saving a lot of money, seeking the best deal on a mortgage has an excellent return on investment. Why leave that money on the table when all it takes is a bit more effort to shop around for the best rate, or lowest cost, on a mortgage?”

More on current mortgage rates

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys we conduct: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent our overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.

Learn more about Bankrate’s rate averages, editorial guidelines and how we make money.

Source: bankrate.com

Apache is functioning normally

July 6, 2024 by Brett Tams

This post may contain affiliate links, which helps us to continue providing relevant content and we receive a small commission at no cost to you. As an Amazon Associate, I earn from qualifying purchases. Please read the full disclosure here.

The thrill of Christmas is right around the corner.

This is the year you made a fresh decision to start living by a budget. You have been diligent in tracking your spending and set limits designed to help them save more and spend less.

You are desperate for a debt free Christmas because you can’t afford anything more.

I like to shop for Christmas throughout the year. But, not every year can I find steeply discounted gifts for everyone on my list. That is when I have to get serious and start using my Christmas budget worksheet.

However, a Christmas budget template will keep you on track and enjoying a merry holiday season.

You can get fancy and put your Christmas list in Excel spreadsheet or google sheets. Or you can print off a copy and write the old-fashion way. Completely personal preference and either one will get the job done.

This year, you are more determined than ever to make sure you stick to your Christmas budget and be debt free for the holidays.

And that starts with a Christmas budget template.

Why Use a Christmas Budget Template?

Just like with any advantages of budgeting, you want to make a plan for your money.

Then, you won’t be caught overspending and you can avoid the debt hangover in January.

If you want to keep your money goals, then you need to diligent in each of the holiday buying decisions you make.

Did you know most millionaires use a budget?

Now, you have a choice. Do you want a debt free Christmas by using some simple Christmas budget worksheet?

Before we drive into all of the fun and cute Christmas budget templates, you need to learn the critical areas to avoid and make sure you don’t blow your holiday budget.

Christmas Budget Categories

Christmas is a time of celebration, giving, and joy.

However, there are many expenses that come with the holiday season.

The most obvious expense to think about is probably gifts for friends and family members.

If you’re planning on buying a present for someone who’s hard to buy for, make sure they know what it is before purchasing it!

Another important factor in your Christmas budget plan should be your own personal spending habits – do not put all of your money into one category!

~ HUGE TIP ~
List your Christmas spending priorities, with #1 being the HIGHEST priority probably gifts.

Gifts

Christmas gifts are a lot more expensive this year, so you’ll want to be sure to have an idea of what people may need.

Make a list early on of who you’re buying for and try not to get carried away with the amount of money you spend.

You can also give homemade presents that are cheaper and more meaningful than store-bought ones.

Holiday Fun & Entertainment

Holiday fun and entertainment should be budgeted for.

Christmas plays and concerts, donuts and hot chocolate on Christmas Eve, visiting Santa are all things that can be budgeted to help make the holidays more enjoyable.

These activities tend to make you go over budget at Christmas because it is too hard to say no. So, set aside money for holiday fun and entertainment.

Holiday Food

Some of the budget categories to consider if you’re planning a Christmas dinner include appetizers, holiday food, and dessert.

And don’t forget the #1 priority of the gingerbread house!

Everyone entertains and hosts with their own style. Just make sure to budget for holiday food.

Planning for Holiday Decorations

If you want to get a head start on your holiday decorations, try buying them the week after Christmas. This is the best time to buy because you can find great deals and there are fewer out-of-stock items in stores.

Here are some tips for getting more affordable holiday decorations:

Make your own decorations!
Swap ornaments with friends!
Buy pre-made decorations from Amazon
Shop at thrift shops
Put up three strands of lights instead of one
Look through clearance racks
Ask in Buy Nothing groups

Planning to Send Christmas Cards

The cost of sending Christmas cards is getting more and more expensive. Most families plan to spend over $100 on this alone.

Here are ideas to cut down on the cost:

Take family pictures yourself for no cost
Trim your Christmas card list
Find a cheaper place to have Christmas cards made
Save on prints and stamps if you’re planning to email pictures.

Budgeting for Hosting Christmas Party

Hosting may include drinks, appetizers, main courses, desserts, prizes for games, party favors, and gifts.

Pitching in by bringing a side dish, dessert, or their favorite beverage. All are great ideas to help lower your cost.

Tips on saving when going to a party

While we all love to show off, you can easily find ways to save money.

Pick a dish to share that is budget-friendly and still a hit (beans based dishes and casseroles are cheap to make).

For gifts, look at re-gifting before buying new ones. No one else will know that you never used that gift before.

Budgeting for Holiday Travel

Planning ahead for holiday travel can help you avoid unnecessary costs.

Make sure to set aside enough money for lodging, car rentals, and airfare so that your budget will be on track all season long.

If you cannot afford to travel this year, then don’t stretch yourself.

Other Christmas expenses

Holiday expenses can add up, so it’s important to budget for them. Here are six tips on how to have a more adorable holiday season:

– Field trips: going out in the city with family and friends after dark is one of the most fun parts of Christmas!

– Gift wrapping: this is an investment that will pay off in the long run. It’ll give you time to be creative, and you’ll end up with beautiful gifts at the end of it!

– Photos with Santa: maybe not everyone has a photo session during Christmas, but if someone does need a quick photo op, snapping a picture outside somewhere might be worth it.

– Keep Track of Previous Year’s Expenses: Your family is likely to have holiday expenses that vary. So, write them down to include in next year’s Christmas budget.

How To Not Blow Your Budget This Christmas

Maybe you are weary of actually making a Christmas budget because you have struggled with your budgeting process before. Don’t worry, you are completely normal and will get the hang of how to budget.

More often than not, new budget-conscious families create ambitious financial plans with lofty goals of paying off debt. They split their family income up into budgeting categories and were doing just great. That is until the holiday season came along.

That is when you realized you weren’t as diligent as you thought about setting aside Christmas money into a sinking fund. The agreed-upon gift budget categories from earlier in the years just won’t cut it.

That is where a Christmas budget worksheet becomes so helpful!

You must make decisions about your holiday plans. What did you want more? Expensive Christmas gifts with a ballooned credit card balance or a Christmas you can truly afford?

Now, let’s dive into some simple secrets to keeping a budget during the holidays.

1. Post-Christmas Situation

Before you start spending Christmas money, you need a clear vision of your priorities.

Remind yourself and your entire family about the reasons you had for getting on a budget in the first place. During our journey to becoming debt free, we were completely honest with our kids that we had greater priorities than spending money on the small stuff.

Once the excitement of Christmas passes, do you want to have regrets or a little more money in the bank?

2. Prioritize your Christmas List

Our Christmas budget worksheet will help to make this step much easier.

Start making a complete gift shopping list. Think of everyone on your list. Next, review it and prioritize the list according to your relationship with that person. Just like with personal finances, take care of immediate family first. Then, decide if you have enough in your Christmas budget for extended family, friends, neighbors, and co-workers.

Start at the bottom and eliminate any names that absolutely don’t need to be there. If you want to spend more money, then assign a portion of your budget to each of the remaining names.

It is okay to keep the gift-giving to those you are closest too! Your friends may be relieved they don’t need to reciprocate too!

3. Become Creative with Gift Giving

The first rule of thumb… gifts don’t have to be materialistic items.

You can become creative and don’t need to make 101 DIY Pinterest perfect gifts.

Think outside the box.

Experiences can make some of the best gifts ever! Find gifts that are experiences. Plus you get to spend some quality time together.

4. Stop Trying to Keep up With the Joneses’

The surest path to a blown budget is to start comparing what you’re doing with what someone else is doing. Remember, they’ll likely be crying come January.

You are going after a debt free Christmas.

One of the most slippery slopes when it comes to personal finances is trying to cover up your situation and keep the appearance of a lavish life. This lifestyle creep will destroy your values and the things you care the most about.

Make this Christmas simple and something you can afford and treasure for many years to come!

Related reading: How to Spend ZERO at Christmas in a Materialistic Society

5. Know When to Stop Shopping

If you are a thrifty person, then you probably start shopping for gifts year-round.

Those are great ways to be frugal and find terrific gifts for a fraction of the price.

However, you must be able to stop buying and put blinders on for the cheap things to pick up.

If you have spent your entire holiday budget before Thanksgiving and know you are a smart cookie to get it all out of the way, you must be able to avoid more shopping. Those Christmas sales will be tempting, but don’t get in the trap of thinking I can spend just a little bit more can’t I?

Bonus Rule – No impulse buying

Honestly, impulse buying will ruin your budget throughout the year. Around the holidays, it will become more pronounced because you want to make the season magical.

If someone gives you an unexpected gift, it doesn’t mean you have to run out and buy them something as well. A simple Thank you note will suffice.

One of the best money rules is to wait 24 hours before you buy it. The same applies to Christmas.

Free Christmas Budget Template

Here is your free Christmas Budget template.

It is very easy to use. More importantly, it will help you to make sure everything is accounted for.

Get your PDF copy of the Christmas budget worksheet by subscribing to our email list and gaining access to our FREE printables area.

Christmas budget spreadsheet google sheets

For those who want to save everything electronically, then here you go.

This Christmas budget spreadsheet google sheets can be edited to suit your style. Plus you will be able to take your spending year to year!

In our free printables area, you can download all of our budget spreadsheet version that works for you – Excel, Google Sheets, or Pages.

Time to Make Your Christmas gift template

Throughout this post, we have given you the framework to make sure you have a debt free Christmas. Now, it is time to put everything together.

Download your gift template and Christmas budget from the email form below.

Take time and reflect on what gifts you want to give. More importantly, make sure it is a Christmas that you can afford.

By keeping your goals in mind, you can survive the holidays within your budget (and maybe even under).

Enjoy our Christmas Budget Template!

Did the post resonate with you?

More importantly, did I answer the questions you have about this topic? Let me know in the comments if I can help in some other way!

Your comments are not just welcomed; they’re an integral part of our community. Let’s continue the conversation and explore how these ideas align with your journey towards Money Bliss.

Source: moneybliss.org

Apache is functioning normally

July 6, 2024 by Brett Tams

A budget is an important tool to help you balance your income and your spending, keep your savings on track, and help you avoid debt. But like many good things, it sometimes goes off the rails. A person might start a budget with the best of intentions but then find it hard to stick to it. Or they might encounter an emergency expense and have a hard time getting back in the groove.

Learn what the common pitfalls are and how to avoid common budgeting mistakes to help your financial life thrive.

10 Budgeting Mistakes to Avoid

Here are 10 of the most common budget mistakes people make. Get familiar with them as a way to steer clear of them.

1. Not Having a Budget

Some people make the budget error of…not having a budget at all. Maybe it seems too hard, too time-consuming, or too boring; you’d rather be watching a hot new streaming series or playing with your dog.

Nevertheless, if you don’t create and follow a budget, you’re missing out on major benefits:

• You may not save enough in your bank account for your future

• You may feel stressed about reaching your long-term goals

• You might spend beyond your means, which could land you in debt and strain on your financial resources.

Recommended: Common Financial Mistakes First-Time Parents Make

2. Not Tracking Spending

Tracking your spending can be one of the more tedious tasks required for budgeting, but it’s also an incredible, truth-revealing tool. How else would you know when you are above or below your limits? You risk blowing past your limit by overspending in some categories, meaning you’ll have less (or none) for other categories. For example, overspend on eating out, and you might have less to put toward your retirement savings. Fortunately, there are an array of expense-tracking apps (many are free) that can help simplify this process.

3. Not Having Emergency Savings

The general recommendation is to save three to six months’ worth of expenses in a dedicated emergency fund. This is money you can draw on in case of emergency medical expenses and car repairs, for instance. It also provides a cash cushion should you lose your job, giving you time to get back on your feet without going into debt.

Not having an emergency fund can torpedo your budget, requiring you to draw money from other categories to cover unexpected expenses, or requiring you to take on debt.

If you don’t have a rainy day fund yet, it may be wise to set up automatic deductions monthly. Even as little as $25 can begin building a buffer. Keep your emergency cash in a separate savings account so you aren’t tempted to touch it. And if you need to dip into the account, be sure to budget additional savings until you are able to replenish it.

4. Not Considering Cheaper Alternatives

Budgeting doesn’t necessarily mean giving things up. Sometimes it can mean looking for cheaper alternatives. For example, you could swap out a pricey gym membership for one at a more budget-friendly place instead. Instead of renewing the same car insurance you’ve always had, you could shop around online for a better deal. You might even call your credit card issuer to request a lower interest rate or try to negotiate a medical bill. All of these options can free up cash in your budget that can go toward meeting other goals.

5. Thinking That You Can’t Have Fun While on a Budget

One of the reasons people don’t budget is it can feel like a real slog and a buzzkill. They assume that in order to budget successfully, they have to give up doing things they like. However, that’s not necessarily true. While a budget ensures that your necessary expenses are taken care of first, it can also provide discretionary funds that can be used however you want, from going to see a movie to booking a weekend getaway.

You may also consider making budgeting more fun by rewarding yourself when you meet certain goals. For example, you may want to treat yourself when you pay off a credit card. Just be sure you’ve already earmarked funds to pay for your reward.

6. Saving for Too Many Things Simultaneously

Another budgeting mistake involves trying to save for too many things at once. In this situation, it’s easy to stretch yourself thin. You might start to feel like you’re spinning your wheels and are unable to follow your budget.

A solution can be to narrow your focus. To prioritize your savings, first consider wants versus needs. For example, you may want to drill down on a single need, like building an emergency savings fund, rather than upgrading your mobile phone (which is a want, after all). Once your need is taken care of, then you can consider allocating funds for a want. Delaying gratification a bit can be a valuable tool when successfully managing your money.

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7. Not Adjusting Varying Expenses Every Month

Some expenses, like rent and utility bills, are relatively fixed. Others, like how much you spend on groceries can vary from month to month. If you don’t compensate for that fluctuation, you may be making a budget mistake.

If you notice you are suddenly spending more each month in a certain category, be sure to adjust your budget accordingly, or look for ways to cut back on spending in that category. To protect yourself in times of high inflation, it can be especially important to monitor this. Your food, gas, and heating expenses may well run high for a while.

8. Not Taking Into Account One-Time Expenses

One-time expenses can be real budget busters if you don’t plan for them ahead of time. Estimate the cost of the expense, and spread out your savings over a couple of months.

For example, if you plan to attend a wedding that will cost $800, you could start saving $200 a month four months in advance so you don’t end up footing the bill all at once. Or let’s say you know you’ll be needing a set of new tires soon; start stashing away cash in advance so you don’t get hit with a major bill that sends your budget spiraling. Another category many budgeters overlook is gifts; birthday and holiday presents can add up, so remember to set aside funds to afford them without a hiccup.

9. Having an Unrealistic Budget

It’s easy to be optimistic and have the best intentions when you create your budget, but make sure it’s something you can realistically stick to. Otherwise, you may have a budget mistake on your hands.

You may be overly optimistic, for instance, if you allocate 20% of your take-home pay toward one goal. If you oversave in one area, like for a downpayment on a home, for example, it may mean that you could incur credit card debt in order to buy necessities like groceries. Be honest with yourself about how much you spend and how much you can save.

10. Having the Wrong Budget Method for You

There is no one-size-fits all budgeting strategy. As we mentioned above, there are a number of different budgeting strategies you can use to help you build and stick to your budget. The best one is the one that works for you. Just because a budget strategy sounds good when you first learn about it or your best friend swears by it doesn’t mean it will work for you. It’s a budgeting error to cling to a system that isn’t working. If the technique you are using isn’t right for you, acknowledge that, and try something else.

The Takeaway

Now you know what is a common mistake made in budgeting; 10 of them, in fact. By avoiding these pitfalls, you give yourself a better chance of sticking to your budget, saving money in your bank account, and meeting your financial goals. What’s more, you’re far less likely to be derailed by debt, and interest payments that could eat into your ability to save and manage your money.

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FAQ

What are some pitfalls of budgeting?

Budgeting pitfalls that can derail your financial goals include failing to have a budget, not tracking your expenses, forgetting to account for varying monthly expenses, and not building up an emergency fund.

What is improper budgeting?

Improper budgeting can occur if your budget is incomplete, if it’s overly ambitious (not recognizing how much you actually spend, for instance), or if you don’t update it with new sources of income or expenses, you’re not budgeting correctly.

Why do people fail in budgeting?

A budget may fail for a variety of reasons, such as trying to achieve too ambitious a goal or too many goals at once; not tracking your expenses; and sticking with a budgeting strategy that doesn’t fit your needs. If the latter is the case, try multiple strategies to find the one that suits you best.

Photo credit: iStock/Prostock-Studio